Ilaw at Buklod ng Manggagawa (IBM) v.

NLRC)
198 S 586 (91)

Facts. IBM representing 4500 employees of SMC working at various plants, offices and warehouses in NCR
presented to the company a demand for correction of the significant distortion in the workers’ wages
pursuant to the Wage Rationalization Act.

Demand unheeded by company hence the union members refused to render overtime services until the
distortion has been corrected by SMC.

It appears that the employees working hours/schedule has been freely observed by the employees for the
past 5 years and due to the abandonment of the longstanding schedule of work and reversion to the eight-
hour shift substantial losses were incurred by SMC.

SMC filed a complaint with arbitration branch of NLRC then before the NLRC for the latter to declare the
strike illegal.

Union’s contention: workers’ refusal to work beyond 8 hours was a legitimate means of compelling SMC
to correct distortion.

SMC: The coordinated reduction by the Union’s members of the work time in order to compel SMC to
yield to the demand was an illegal and unprotected activity.

Issue. W/N the strike was legal

Held. ILLEGAL. The strike invoking the issue of wage distortion is illegal. The legality of these activities
depends on the legality of the purposes sought to be attained. These joint or coordinated activities may
be forbidden or restricted by law or contract.

The legislative intent that solution of the problem of wage distortions shall be sought by voluntary
negotiation or arbitration, and not by strikes, lockouts, or other concerted activities of the employees or
management, is made clear in the rules implementing RA 6727 issued by the Secretary of Labor and
Employment pursuant to the authority granted by Section 13 of the Act. Section 16, Chapter I of these
implementing rules, after reiterating the policy that wage distortions be first settled voluntarily by the
parties and eventually by compulsory arbitration, declares that, “Any issue involving wage distortion shall
not be a ground for a strike/lockout.”

Moreover, the collective bargaining agreement between the SMC and the Union, relevant provisions of
which are quoted by the former without the latter’s demurring to the accuracy of the quotation, also
prescribes a similar eschewal of strikes or other similar or related concerted activities as a mode of
resolving disputes or controversies, generally, said agreement clearly stating that settlement of “all
disputes, disagreements or controversies of any kind” should be achieved by the stipulated grievance
procedure and ultimately by arbitration.