G.R. No. 99266 March 2, 1999
SAN MIGUEL CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN MIGUEL CORPORATION EMPLOYEES UNION (SMCEU) — PTGWO, respondents.

FACTS

In July 1990, petitioner San Miguel Corporation (SMC) shut down some plants and declared 55 positions redundant due to financial losses. The respondent union filed grievance cases for the retrenched employees, praying for their redeployment. The grievance proceedings were conducted pursuant to the 1990 Collective Bargaining Agreement (CBA), which outlined a three-step procedure ending with a Conciliation Board and, if unresolved, arbitration. During the proceedings, most employees were redeployed or accepted early retirement, leaving only 17 employees at the third level (Step 3). In a meeting on October 26, 1990, SMC informed the union that if the 17 employees could not be redeployed by October 30, their services would be terminated on November 2, 1990. The meeting adjourned after a union representative declared a deadlock. On November 7, 1990, the union filed a notice of strike with the National Conciliation and Mediation Board on grounds of bargaining deadlock, union busting, gross violation of the CBA, failure to provide a list of vacant positions, and defiance of a voluntary arbitration award. SMC moved to dismiss the notice, but the NCMB failed to act. On December 21, 1990, SMC filed a complaint with the National Labor Relations Commission (NLRC) seeking dismissal of the notice of strike, an order compelling the union to submit to grievance and arbitration, and recovery of litigation expenses. On April 16, 1991, the NLRC issued a resolution dismissing SMC’s complaint for lack of merit. SMC filed the present petition for certiorari.

ISSUE

Whether the NLRC gravely abused its discretion in dismissing SMC’s complaint to dismiss the union’s notice of strike and to compel compliance with the CBA’s grievance and arbitration procedures.

RULING

Yes. The Supreme Court granted the petition. The grounds for the notice of strike were non-strikeable. A collective bargaining deadlock was non-existent as the parties were still at the third step of the grievance procedure with a Conciliation Board assigned to resolve the issues. Alleged violations of the CBA, except flagrant and malicious refusal to comply with its economic provisions, are not strikeable under the implementing rules of the Labor Code. The union’s unilateral declaration of a deadlock and filing of a notice of strike, while the grievance machinery was still ongoing, constituted a violation of the CBA’s no-strike clause. The NLRC gravely abused its discretion in dismissing SMC’s complaint. The Court directed SMC and the union to complete the third level of the grievance procedure and proceed to arbitration if necessary.