G.R. No. L-37687 March 15, 1982
People’s Industrial and Commercial Employees and Workers Organization (FFW), Ernesto Pagayatan, Antonio Eriño, Rodrigo Boado and Lino Francisco, petitioners, vs. People’s Industrial and Commercial Corporation, Federation of Tenants and Laborers Organization, and the Court of Industrial Relations, respondents.

FACTS

Petitioners were employees of respondent People’s Industrial and Commercial Corporation (PINCOCO) and members of the Federation of Tenants and Laborers Organization (FTLO), which had a collective bargaining agreement (CBA) with PINCOCO containing a union security clause and a no-strike provision. In October 1964, petitioners were elected as officers of the FTLO Rizal Chapter. Subsequently, in January 1965, they and other employees executed a certification changing their union’s name to People’s Industrial and Commercial Employees and Workers Organization (PICEWO) and affiliating with the Federation of Free Workers. In March 1965, petitioner Pagayatan, purporting to act as FTLO chapter president, sent a notice to terminate the CBA, followed by new bargaining proposals under PICEWO’s name. PINCOCO’s reply was deemed evasive by petitioners. FTLO then expelled the individual petitioners for disloyalty. Invoking the union security clause, PINCOCO dismissed the petitioners upon FTLO’s request. This prompted PICEWO to declare a strike, which PINCOCO argued violated the CBA’s no-strike clause.

ISSUE

The core issue is whether the strike staged by PICEWO was illegal, thereby justifying the dismissal of the individual petitioners.

RULING

The Supreme Court reversed the Court of Industrial Relations and declared the strike legal. The legal logic hinges on the presence of a good faith belief in an unfair labor practice, which excuses non-compliance with the no-strike clause and the statutory cooling-off period. PINCOCO’s dismissal of the petitioners, based solely on FTLO’s expulsion request without an independent verification of the validity of the expulsion cause, constituted an improper application of the union security clause. This act, coupled with PINCOCO’s evasive reply to the new union’s bargaining proposals, provided a reasonable basis for the petitioners to believe in good faith that PINCOCO was refusing to recognize and bargain with their newly formed union—an unfair labor practice. Consequently, the strike was a protected concerted activity against perceived unfair labor practices. The Court ordered the reinstatement of the individual petitioners with three years of backwages, emphasizing the constitutional protection of labor rights to self-organization and security of tenure.