G.R. No. L-73721 March 30, 1987
AHS/PHILIPPINES EMPLOYEES UNION [FFW], B.A. AGANON, D.T. GUILLES, E.G. SULIT and E.C. RODRIGUEZ, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION and AHS/PHILIPPINES, INC., respondents.

FACTS

Petitioner AHS/Philippines Employees Union (FFW) was the recognized collective bargaining agent for the rank-and-file employees of respondent AHS/Philippines, Inc. A collective bargaining agreement (CBA) was in effect from December 1, 1981, to November 30, 1984. On July 26, 1984, the union filed a notice of strike citing unfair labor practices, including diminution of benefits, union busting, illegal termination, and harassment. A second notice was filed on August 3, 1984, adding charges of refusal to bargain, CBA violation, and dismissal of union officers. The union went on strike on August 15, 1984. The company subsequently filed a petition to declare the strike illegal. The Labor Arbiter ruled the strike illegal, declaring union officers to have lost their employment status. The National Labor Relations Commission (NLRC) affirmed the illegality but modified the penalty, ordering the reinstatement of individual petitioners or payment of separation pay.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the Labor Arbiter’s decision that declared the strike staged by the petitioner union as illegal.

RULING

Yes. The Supreme Court granted the petition, set aside the NLRC decision, and declared the strike legal. The Court found that the grounds for the strike were not trivial but constituted valid unfair labor practices by the company. The legal logic centered on the substantive validity of the strike grounds and the company’s bad faith. The dismissal of fourteen employees, who were engaged through a placement agency but performed functions necessary to the company’s business, was a violation of the Labor Code’s provisions on labor-only contracting, constituting an illegal dismissal and union-busting tactic. The unilateral increase of sales quotas for union officers was an act of discrimination and harassment aimed at undermining the union. The company’s refusal to negotiate the closure of its Pharmaceutical Division and its termination of employees therein without the required notice and separation pay further demonstrated bad faith and violation of the duty to bargain collectively. The Court held that these acts, taken together, eroded the employment relationship and justified the strike as a legitimate response to the company’s unfair labor practices. Consequently, the company was found guilty of unfair labor practices. Since the company had ceased operations, reinstatement was impossible. The Court ordered the payment of backwages and separation pay to the individual petitioners and to the affected employees of the Pharmaceutical Division.