G.R. No. L-19778. September 30, 1964.
CROMWELL COMMERCIAL EMPLOYEES AND LABORERS UNION (PTUC), petitioner, vs. COURT OF INDUSTRIAL RELATIONS and CROMWELL COMMERCIAL CO., INC., respondents.

FACTS

Cromwell Commercial Co. and the petitioner Union entered into a collective bargaining agreement (CBA) on July 10, 1956. Key provisions included granting permanent status after three months of service, establishing a Grievance Committee, and agreeing in principle to salary increases and profit-sharing based on the company’s financial position. Crucially, the company agreed to restore salesmen to a straight salary basis and reinstate their helper’s allowances, reversing previous cuts. However, the company subsequently breached the agreement. It failed to grant general salary increases despite profits, only partially restored salesmen’s salaries, and, by March 1957, reverted salesmen to a commission basis while discontinuing allowances. The company also refused to appoint its representatives to the Grievance Committee, rendering it inoperative. After the dismissal of two union leaders, the union declared a strike on March 11, 1957. The company declared the strike illegal under the CBA’s no-strike clause and dismissed strikers who failed to return by a set deadline.

ISSUE

Was the strike declared by the Union illegal, thereby justifying the dismissal of the striking employees and warranting the denial of their back wages upon reinstatement?

RULING

The Supreme Court affirmed the Court of Industrial Relations’ decision, ruling the strike was illegal. The legal logic hinges on the violation of the CBA’s no-strike clause. The CBA established a specific grievance machinery—a committee requiring company and union representatives—to resolve disputes. The Court found that while the company initially breached the CBA and obstructed the grievance process by not appointing its committee members, this did not justify the union’s immediate recourse to a strike. The union’s proper course was to seek the intervention of the Court of Industrial Relations to compel the company to comply with the grievance procedure or to resolve the underlying disputes. By striking without exhausting this available administrative remedy, the union violated the express terms of the CBA it entered into. Consequently, the company acted within its rights in dismissing the strikers for cause due to this violation. However, considering the company’s prior breaches which provoked the strike, the Court ordered the reinstatement of the employees as an act of equity to prevent severe hardship, but without back wages. The denial of back wages serves as a sanction for the union’s illegal strike action, placing the economic loss from the work stoppage on the strikers. The Court noted the company’s offer to accept the strikers back under pre-strike conditions mitigated against awarding back pay.