I. Introduction

This memorandum provides an exhaustive analysis of the rules governing strikes and lockouts under Philippine labor law, with a primary focus on the distinctions between lawful and unlawful actions. The right to engage in concerted activities, including strikes and lockouts, is a constitutionally guaranteed right of workers and employers, respectively. However, this right is not absolute and is subject to statutory regulations and procedural requirements designed to balance the interests of labor and management, and to protect the public welfare. The legal framework is primarily codified in the Labor Code of the Philippines (Presidential Decree No. 442, as amended), its Implementing Rules and Regulations, and pertinent jurisprudence. This memo will outline the definitions, procedural requisites, grounds, and consequences of lawful versus unlawful strikes and lockouts.

II. Definitions and Conceptual Framework

A strike is defined as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. It is a weapon of labor to compel management to accede to their demands regarding terms and conditions of employment.
A lockout is the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. It is the counterpart weapon of management to compel workers to accept its position regarding employment terms.
The overarching concept governing both is the principle of collective bargaining, where strikes and lockouts are considered ultimate recourses when negotiations reach an impasse. The law seeks to regulate these economic weapons to ensure they are used fairly and responsibly.

III. Prerequisites for a Lawful Strike

For a strike to be considered lawful, the following mandatory procedural and substantive requirements must be strictly observed:
a. Notice of Strike: A written notice of strike must be filed with the National Conciliation and Mediation Board (NCMB) at least 15 days prior to the intended date of strike in cases of bargaining deadlock, and at least 30 days prior in cases of unfair labor practice.
b. Strike Vote: A majority vote of the members of the bargaining unit obtained by secret ballot in a meeting called for that purpose must authorize the declaration of strike.
c. Cooling-off Period: From the moment of filing the notice of strike, a mandatory cooling-off period must be observed: 30 days for bargaining deadlock and 15 days for unfair labor practice. During this period, no strike may be undertaken, and the NCMB conciliates.
d. Notice to the NCMB of the Strike Vote Result: The union must report the results of the strike vote to the NCMB at least seven days before the intended strike.
e. Grounds: The strike must be based on a valid ground, which is limited to: (1) bargaining deadlock; or (2) unfair labor practice committed by the employer.
Failure to comply with any of these requirements renders the strike unlawful.

IV. Prerequisites for a Lawful Lockout

The procedural requirements for a lawful lockout mirror those for a strike:
a. Notice of Lockout: A written notice of lockout must be filed with the NCMB at least 15 days prior (for bargaining deadlock) or 30 days prior (for unfair labor practice by the union).
b. Cooling-off Period: The same cooling-off periods apply: 30 days for bargaining deadlock, 15 days for unfair labor practice.
c. Grounds: The lockout must be based solely on (1) bargaining deadlock; or (2) unfair labor practice committed by the bargaining union.
The requirement for a lockout vote among employers is not statutorily specified in the same manner as for a strike vote.

V. Grounds for Declaring a Strike or Lockout Unlawful

A strike or lockout may be declared unlawful by the National Labor Relations Commission (NLRC) or the Secretary of Labor and Employment on the following grounds:
a. Procedural Defects: Non-compliance with the requirements for notice, cooling-off period, or strike vote.
b. Substantive Defects: If it is based on a non-strikeable issue (e.g., demands for changes in terms and conditions of employment that are not bargainable, or issues outside the employer-employee relationship).
c. Strike-breaking or Contracting-out: The employment of strike-breakers or the contracting-out of work performed by the striking workers to circumvent the strike.
d. Violence, Coercion, or Intimidation: The commission of acts of violence, coercion, intimidation, or sabotage by any party.
e. Illegal Acts: Engaging in illegal acts during the strike or lockout.
f. Violation of Duty to Bargain: If undertaken without first bargaining in good faith.
g. Involving Non-Bargaining Unit Members: Participation in the strike by employees who are not members of the bargaining unit concerned.
h. Defiance of an Assumption or Certification Order: If conducted despite the Secretary of Labor issuing an assumption of jurisdiction order or a certification order to the NLRC.

VI. Effects and Consequences of an Unlawful Strike or Lockout

The declaration of a strike or lockout as unlawful carries severe consequences:
a. Loss of Employment Status: Participants in an unlawful strike may be deemed to have lost their employment status and can be legally dismissed. Union officers who knowingly participate in or lead an unlawful strike may be held liable for illegal acts committed during the strike.
b. Liability for Damages: The union and its officers may be held liable for actual, moral, and exemplary damages suffered by the employer due to the unlawful strike. Conversely, an employer who conducts an unlawful lockout may be liable for damages to the employees.
c. No Entitlement to Backwages and Reinstatement: Employees dismissed for participation in an unlawful strike are generally not entitled to backwages or reinstatement.
d. Criminal Liability: Certain acts, such as violence, coercion, and intimidation, may give rise to separate criminal charges.
e. Injunction: The employer may seek a temporary restraining order or injunction from the NLRC to stop an unlawful strike.

VII. Comparative Table: Lawful vs. Unlawful Strike/Lockout

VIII. Special Jurisdiction: Assumption and Certification Powers

The Secretary of Labor and Employment possesses extraordinary powers that can suspend or terminate a strike or lockout:
a. Assumption of Jurisdiction: Under Article 263(g) of the Labor Code, the Secretary may assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. The order is immediately executory and renders any ongoing strike or lockout illegal. Compliance is mandatory.
b. Certification to the NLRC: The Secretary may also certify the dispute to the NLRC for compulsory arbitration. Such certification has the effect of automatically enjoining the intended or ongoing strike or lockout.
Defiance of an assumption or certification order is a ground for declaring the strike or lockout unlawful and for the dismissal of participating workers.

IX. The Concept of a “Strike-Bound” Establishment and Picketing

During a lawful strike, the premises may be deemed strike-bound. Peaceful picketing is a constitutionally recognized right of striking workers. However, picketing becomes illegal if it involves: (1) obstruction of ingress/egress to the establishment; (2) acts of violence; (3) coercion of non-striking employees; or (4) public disorder. The employer may continue operations using non-striking personnel and, under strict conditions, may hire strike-breakers or contract-out work, provided it is not done to defeat the strike.

X. Conclusion

The right to strike and lockout is a fundamental but highly regulated component of Philippine industrial relations. Lawfulness is contingent upon strict compliance with procedural formalities, the existence of a statutory ground, and the maintenance of peaceful conduct. The distinction between lawful and unlawful actions is critical, as it carries profound implications for the job security of workers and the liability of both unions and employers. The state, through the Department of Labor and Employment and the NLRC, maintains a supervisory and interventionist role, particularly through the assumption of jurisdiction power, to prevent disruptions vital to the national interest. Parties are strongly advised to exhaust all conciliatory and bargaining processes and to seek legal counsel before resorting to these extreme economic weapons.