G.R. No. L-24267-8 May 31, 1966
PERFECTO FERRER, OSCAR FLORES, JULIAN AGUSTIN, FELICISIMO LICHUCA, PIO SUMAGIT and INHELDER LABORATORIES, INC. and SISTER COMPANIES EMPLOYEES UNION, petitioners, vs. COURT OF INDUSTRIAL RELATIONS, INHELDER LABORATORIES, INC., SAN ROQUE TRADING CORPORATION AND/OR HANS INHELDER, PRESIDENT AND GENERAL MANAGER, respondents.

FACTS

Two interrelated unfair labor practice cases were filed in the Court of Industrial Relations (CIR). One was filed by the Management of Inhelder Laboratories, Inc. and its sister companies against the Labor Union and some of its officers and members. The other was filed by the Union against the Management. The trial judge dismissed both complaints. On the Management’s motion for reconsideration, the CIR en banc reversed the trial judge’s decision regarding the Management’s complaint. It ruled that the officers and members of the Union who participated in a peaceful strike from July 1 to July 15, 1963, “be considered to have lost their status as employees.” The Union and its affected members appealed via certiorari.
The strike followed collective bargaining negotiations. After winning a certification election on March 27, 1963, the Union submitted demands for a collective bargaining agreement. Negotiations lasted for weeks, producing successive drafts. On May 29-31, 1963, a draft (Exhibit D) was prepared and initialed by representatives of both parties, with an understanding to sign formally on June 1. However, the Union later refused to sign because the draft did not include a union shop or union security clause, which was part of its original demands. The Management then issued a memorandum to all employees about the negotiations and subsequently took disciplinary actions against several Union members. The Union filed a notice of strike on June 13, 1963, citing unfair labor practices, and staged a strike from July 1 to July 15, 1963, which ended with a return-to-work agreement.

ISSUE

The main issue is whether the strike staged by the Union from July 1 to July 15, 1963, was illegal.

RULING

The Supreme Court ruled that the strike was NOT illegal. It modified the CIR en banc resolution.
The Court held that the strike was called to offset what the petitioners, in good faith, believed to be unfair labor practices by the Management. The Court found that the draft agreement (Exhibit D) initialed by the parties was not a perfected contract but merely a draft, as negotiations on several original demands, including the union security clause, were still pending. The Union’s refusal to sign without this clause was not an act of bad faith. Furthermore, the Management’s disciplinary actions against Union members, taken during the negotiations, reasonably justified the Union’s belief that the Management was engaged in unfair labor practices to discourage union membership and compel acceptance of its terms. Consequently, the strike, being provoked by perceived unfair labor practices, did not require the Union to wait for the expiration of the 30-day strike notice period. Therefore, the strikers did not lose their status as employees. However, since the Management was absolved from the charge of unfair labor practice, the reinstatement of the strikers was ordered without backpay.