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Some Notes on

Strikes & Lockouts

Attty. PFFallar Jr
SSC-R College of Law

Part 2

VII. Assumption of Jurisdiction

The secretary's assumption of jurisdiction over a labor dispute is meant to be used sparingly
and only if the national interest demands it. Indeed, the Court has consistently ruled that the
secretary's assumption of Jurisdiction is intended not to interfere with or impede workers' rights,
but to obtain speedy settlement of labor disputes and only if national interests will be affected
(see Concurring Opinion of J. Panganiban in Phimco industries vs Sec, Brillantes, GR No.
120751, 17 March 1999)

The SC has sanctioned assumption of jurisdiction in disputes involving companies engaged in

the manufacture of drugs, tire production, automotive assembly, export of goods, and operation
of domestic airlines and schools. It has reversed or disapproved of the assumption orders in
disputes involving companies engaged in match production and publication of telephone
directories (see ibid.,)
Even for labor, it is not always beneficial to allow the secretary's intervention in a labor dispute
under Art. 263. Although the intention may be to find a balance between the demands of labor
and the resources of management, intervention from the state and the derogation of the right to
strike are not always the solutions to the just demands of labor. More often than not, the
intervention is more to the advantage of management, which would not incur overhead
expenses that would otherwise be wasted during a work stoppage. For the same reason, it does
not necessarily follow that intervention works for the protection of labor(ibid.) .
Even without compulsory arbitration, other remedies for resolving their labor disputes are still
available to labor and management. Striking employees can file illegal dismissal cases if they
are dismissed without cause. On the other hand, management can dismiss employees engaged
in illegal strikes, or it can negotiate with those involved in legal strikes(ibid.) .

 Extent of authority of the Secretary to resolve labor dispute

The DOLE Secretary has “great breadth of discretion" in order to find a solution to a labor
dispute" (ibid.) The most obvious of these powers is the automatic enjoinment of an impending
strike or lockout or the lifting thereof if one has already taken place. Assumption of Jurisdiction
always coexists with an order for workers to return to work immediately and for employers to
readmit all, workers under the same terms and conditions prevailing before the strike or
lockout. Defiance of a return-to-,work order produces forfeiture of 'workers' employment. Thus,
not only does it diminish the right of labor to strike; it also limits the prerogatives of management
to hire workers under its own terms and conditions (ibid) .
The Secretary is conferred other powers, including jurisdiction over all incidents arising from the
labor dispute, in order to avoid the undesirable result of diametrically opposed rulings being

issued by the secretary and the labor arbiter. These powers comprehend those that the
secretary needs to dispose of the primary dispute effectively and efficiently(ibid.) .
The almost unlimited breadth of such powers calls for caution on the part of its possessor and
strict scrutiny of the excesses of government on the part of the judiciary.
 Plenary authority

The Labor Secretary’s authority to assume jurisdiction over a labor dispute must include and
extend to all questions and controversies arising therefrom, including cases over which the labor
arbiter has exclusive jurisdiction ( Interphil Laboratories Employees Union vs Interphil,GR No.
142842, 19 December 2001)

Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto.
This is evident from the opening proviso therein reading (e)xcept as otherwise provided under
this Code x xx. Plainly, Article 263(g) of the Labor Code was meant to make both the Secretary
(or the various regional directors) and the labor arbiters share jurisdiction, subject to certain
conditions. Otherwise, the Secretary would not be able to effectively and efficiently dispose of
the primary dispute. To hold the contrary may even lead to the absurd and undesirable result
wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings.
As we have said, (i)t is fundamental that a statute is to be read in a manner that would breathe
life into it, rather than defeat it.

 Legality of strike

The Secretary properly took cognizance of the issue on the legality of the strike which is
not merely an issue incidental to, but is essentially involved in the labor dispute itself in
which he assumed jurisdiction (Philcom Employees Union vs Philcom, GR No. 144315,17
July 2006)

 Resolve economic issues

The Secretary of DOLE could resolve economic issues of the CBA s uch as wage
increases , transportation allowance, 14th month pay, seniority pay, separation pay, sigining
bonus, salary loan for educational purposes, and the effectivity of the new CBA.

The SC nonetheless could modify such arbitral awards (Nissan Motors vs Secretary, GR No.
158190-91,21 June 2006).

 Legality of dismissal

As the term assume jurisdiction connotes, the intent of the law is to give the Labor Secretary full
authority to resolve all matters within the dispute that gave rise to or which arose out of the
strike or lockout; it includes and extends to all questions and controversies arising from or
related to the dispute, including cases over which the labor arbiter has exclusive jurisdiction
such as illegal termination ( Bagong Pagkakaisa ng Manggagawas sa Triumph vs Sec. of Labor,
GR No. 167401, 05 July 2010).

 Wage increases

Where an employer refuses to bargain, without valid and sufficient cause, the Secretary of
Labor may, in the exercise of his powers under Article 263(i) of the Labor Code to decide and
resolve labor disputes, properly grant wage increases. (San Pedro Hospital of Digos vs Sec. of
Labor, GR No.104624, 11 October 1996)

 Limitations- Use of confidential information

The SC disallowed the Secretary of DOLE , in setting the wage increases, from utilizing the
confidential position supposedly disclosed by the management to the NCMB Administrator. The
reason for this is simple. Article 233 of the Labor Code prohibits the use in evidence of
confidential information given during conciliation proceedings (Nissan Motors vs Secretary, GR
No. 158190-91,21 June 2006).

.VIII. Employment Status of Strikers & Salaries

 Employment status

A strike involves temporary stoppage of work. Hence, the employer-employee relations remains.
But certain statutory obligations (e.g., remittance of SSS contributions) will necessarily be

 General rule on salaries

Since there is work stoppage, the "no work no pay " principle applies (C. Alcantara & Sons vs
CA, GR No. 155109, 14 March 2012). The rule is the same whether the strike is later on judged
either legal or illegal.

What happens to the period in which the employee is on strike? Would it be considered
in the computation of the period for purposes of probation, service incentive leave, and
retirement ? My opinion is, they should not be counted since there is no actual service

 Exception

Jurisprudential law, however, recognizes several exceptions to the "no backwages rule," to wit:

a) when the employees were illegally locked to thus compel them to stage a strike;

b) when the employer is guilty of the grossest form of ULP;

c) when the employer committed discrimination in the rehiring of strikers by refusing to

readmit those against whom there were pending criminal cases while admitting non-strikers who
were also criminally charged in court;

d) or when the workers who staged a voluntary ULP strike offered to return to work
unconditionally but the employer refused to reinstate them ( Philippine Diamond Hotel vs
Manila Damond Hotel Employees Union, GR No. 15807, 30 June 2006).
Union officers and members, who were suspended for eight (8) months in accordance with the
Secretary of Labor's order but were not thereafter returned to service by the management, were

judged entitled to immediate reinstatement and payment of backwages and other accrued
benefits counted from the time they have served their respective suspensions until actual
reinstatement (Philippine Airlines vs Sec of Labor, GR No. 119360, 10 October 1997

VIII. Illegal Strike

Ludwig Teller lists six (6) categories of an illegal strike, viz.:

(1) [when it] is contrary to a specific prohibitionof law, such as strike by employees performing
governmental functions;

(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on
the requisites of a valid strike];

(3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an
unfair labor practice against non-union employees;

(4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread
terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code];

(5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or
order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or

(6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive
arbitration clause.

(Toyota Motors Phil. Employees Association, et al. vs. NLRC et al., GR No. 158786, 19 October

 Not based on ULP or Bargaining deadlock

The union/employer may not file a notice based on grounds other than ULP and CBD. Violations
of Collective Bargaining Agreements, except flagrant and/or malicious refusal to comply with its
economic provisions, shall not be considered unfair labor practice and shall not be strikeable
and no strike or lockout may be declared on grounds involving inter-union and internal union
disputes or on issues brought to voluntary or compulsory arbitration including legislated wage
orders and labor standard cases.

However, if improvidently filed and it appears on the face of the notice that the issues raised are
non-strikeable or the real issues discovered during conciliation proceedings are not proper
subjects of a Notice of Strike or Lockout, the NCMB Regional Branch shall dismiss motupropio
the notice without prejudice to further conciliation, or upon the request of either or both parties,
in which case, the Notice of Strike or Lockout is treated as a Preventive Mediation Case
(NCMB Primer on Strike, Picketing and Lockout)

 Undertaken not by certified bargaining agent or legitimate labor organization

For ULP strikes , any legitimate labor organization may stage a strike. A strike filed by an
illegitimate labor organization is illegal due to want of legal personality. (Visayas Community
MediCal Center vs Yballe, GR No. 196156, 15 January 2014)

For economic strike, only the certified bargaining agent may file a notice of strike on such
ground. In Masdala Multipurpose & Livelihood Coop vs KLLMS ( GR No.s191138- 39, 19
October 2011) the mandatory notice of strike and the conduct of the strike-vote report were
deemed ineffective for having been filed and conducted before the employees association
gained legal personality.

 Violation of CBA grievance procedure

Strikes held in violation of the terms contained in a CBA are illegal especially when they provide
for conclusive arbitration clauses. These agreements must be strictly adhered to and respected
if their ends have to be achieved. (San Miguel Corp vs NLRC, GR No. 119293, 10 June 2003)

 No strike, no lockout clause

An economic strike staged in violation of a “no strike, no lockout” provision in the CBA is illegal (
A Soriano Aviation vs. Employees Association, GR No. 166879, 14 Aug 2009)

 Violation of Assumption Order:

The Union’s assertion of a well-settled practice that the SOLE always gives twenty-four hours
(24) to the striking workers within which to return to work, offers no refuge. Aside from the fact
that this alleged well-settled practice has no basis in law and jurisprudence, Article 263(g) of the
Labor Code, supra, is explicit that if a strike has already taken place at the time of assumption of
jurisdiction or certification, all striking or locked out employees shall immediately return to work
and the employer shall immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lock-out. This is compounded further by this
Court’s rulings which have never interpreted the phrase “immediately return to work” found in
Article 263(g) to mean “within twenty four (24) hours.” On the other hand, the tenor of these
ponencias indicates an almost instantaneous or automatic compliance for a striker to return to
work once an AJO has been duly served (Univ. of San Agustin Employees Union vs. CA, GR
No. 169632, 28 March 2006).

 Good faith strike

The prevailing doctrine states that a union's good faith belief in the employer's commission of
ULP will not save the strike from being declared illegal, if it disregarded the mandatory
procedures of the Labor Code like the cooling off period (Piltel vs PILTEA, GR No. 160058,22
June 2007).

 Reinstatement

Even if a strike is declared illegal, the striking workers do not necessarily lose their employment.
Only those union officers who knowingly particpate in the illegal strike, and union members who
committed illegal acts durring the stike, may be declared to have lost ther employment.
Otherwise, a striking employee will be entiled to reinstatement but without backwages.

IX. Illegal acts during strike

A specific prohibtion is found in Art. 279 (264), par .e of the LC which states:

"No person engaged in picketing shall commit any act of violence, coercion or intimidation
or obstruct the free ingress to or egress from the employer’s premises for lawful purposes,
or obstruct public thoroughfares".

Photographs, videos, and affidavits of witnesses could constitute evidence of illegal acts during
a strike or picket.

What constitutes unlawful intimidation depends on the totality of the circumstances. Force
threatened is the equivalent of force exercised. There may be unlawful intimidation without
direct threats or overt acts of violence. Words or acts which are calculated and intended
to cause an ordinary person to fear an injury to his person, business or property are
equivalent to threats.The manner in which the respondent union officers and members
conducted the picket in the present case had created such an intimidating atmosphere that non-
striking employees and even company vehicles did not dare cross the picket line, even with
police intervention. (Phimco Industries vs Phimco Ind. Labor Assn, GR No. 170830, 11August

A union has no right to prevent employes of another company from geting in and out of its
rented premises; such would be an unlawful act against innocent bystanders ( Liwayway
Publications vs Permanent Concrete Workers Union , GR No. L-25003, 23 October 1981).

Commission of crimes and other unlawful acts, like shouting bakero (fool) at the Japanese
executives and bad mouting people getting into company premsies, are likewise illegal acts.
(Toyota Motors Phils. Workers Assn. vs NLRC, GR No. 158786& 158789, 19 October 2007).

The dismissal of the criminal case against the employee accused of throwing a stone on a
running company vehicle , which rammed into a nearby beauty parlor killing three persons,
does not preclude the company from termining his services for commission of an illegal act
during a strike ( Chua vs NLRC, GR No. 105775, 08 February 1993).

Commission of unlawful acts during a strike is a ground for disciplinary sanction, including

X. Innocent Bystander

They are the third party in a picketing who has no existing connection or interest with the
picketing union. (MSF Tire & Rubber v. CA, G.R. No. 128632, 05 August 1999)

While peaceful picketing is entitled to protection as an exercise of free speech, the courts are
not without power to confine or localize the sphere of communication or the demonstration to
the parties to the labor dispute, including those with related interest, and to insulate
establishments or persons with no industrial connection or having interest totally foreign to the
context of the dispute. Thus, the right may be regulated at the instance of third parties or
"innocent bystanders" if it appears that the inevitable result of it is to create an impression that a
labor dispute with which they have no connection or interest exists between them and the
picketing union or constitute an invasion of their rights. (ibid.)

A picketing labor union has no right to prevent employees of another company from
getting in and out of its rented premises. Otherwise it will be held liable for damages for

its acts against an innocent by-stander (Liwayway Publishing vs Permanent Concrete
Workers Union, GR No.L- 25003, 23 October 1981).

An innocent by stander will be entiled to an injunction from the courts.

X. Liability of Striking employees (Illegal strike)

 Termination of union officers vis-a-vis union members

A distinction exists between the ordinary union member's liability for illegal strike and that of
the union officers who participated in it. The ordinary worker cannot be terminated for merely
participating in the strike. There must be proof that he committed illegal acts during its conduct.
On the other hand, a union officer can be terminated upon mere proof that he knowingly
participated in the illegal strike. Still, the participating union officers have to be properly
identified. (Fadrequelan vs Monterey Food Corp., GR No. 178409, 08 June 2011).

 Defiance of RTW Order

Striking employees who defy the RTW of the Secretary of Labor, regardless of whether they are
officers or mere members of the union, may be deemed to have lost their employment status.
(National Federation of Labor vs NLRC, GR No. 113466, 15 December 1997). The dismissed
emplyee however may adduce evidence that there was no deliberate defiance, as when they
did not have sufficient time to immediately report back for work as they had gone to the
province in the meantime ( BLTB vs NLRC, GR No. 101858, 21 August 1992) or wthen there are
physical or legal impossibility which would excuse non-complaince (eg., employee was on
maternity leave, was sick/injured/hospitalized, was not in the country, or even detained by

Is the company required to comply with the two-notice and hearing rule before it declares the
non-returning strikers to have lost ther employment status? My opinion is that, upon proof that
the strikers had notice of the RTW and they failed to report within the deadline given, the
company may classify the stats of non-returnings strikers as having impliedly resigned from
employment. Thus, the due process requirements do not find application.

 Suspension instead of termination

When both the union and the management are equally guilty of exacerbating the industrial
dispute, the penalty imposed on striking empoyees otherwise guilty of participating in an illegals
strike or committing illegal acts may be reduced from termination to suspension by the
Secretary of DOLE or the SC ( Nissan Motors V Secretary of Labor, GR Nos. 158190-91, 21
June 2006).

When the company terminated en masse the employment of 183 union officers and members of
PALEA on 6 July 1994 in violation of the order of the Secretary enjoining the parties to cease
and desist from committing any and all acts that might exacerbate the situation, the SC decided
not to mete upon the concerned members and officers of the union he capital punishment of
dismissal from office, notwithstanding the law's sanction for such a consequence. The SC
invoked its judicial prerogative to resolve disputes in a way to render to each interested party
the most judicious solution, and in the ultimate scheme, a resolution of a dispute tending to
preserve the greater order of society. The peculiar nature of the judicial treatment of labor

disputes urges the arbiter of the issues involved to maintain a careful eye, if not a caring hand,
to the interests of the parties, such that industrial peace and labor-management stability is
preserved(Philippine Airlines vs Sec. of Labor, GR No. 119360, 10 October 1997).

XI. Liability of Union ( Damages)

 Need of proof of actual damages

The alleged losses suffered by the company , on the mere basis of the 2-months that its
operations were paralyzed, were never substantially proved. No hearing was
conducted and no real evidence was ever presented on the matter. The only thing that
appears on record is an unsigned summary of actual and estimated losses, certified by
a certified public accountant that he had examined and reviewed the same. (City Fair
Corp. vs. NLRC, GR No. 95711, 21 April 1995).

 Nominal damages
In order that damages may be recovered, the best evidence obtainable by the injured party
must be presented.Actual or compensatory damages cannot be presumed, but must be duly
proved, and so proved with reasonable degree of certainty. A court cannot rely on speculation,
conjecture or guesswork as to the fact and amount of damages, but must depend upon
competent proof that they have been suffered and on evidence of the actual amount thereof. If
the proof is flimsy and insubstantial, no damages will be awarded.
However, the strike dragged on for nearly 50 days, paralyzing respondents operations; thus,
there is no room for doubt that some species of injury was caused to private respondent. In the
absence of competent proof on the actual damages suffered, private respondent is
entitled to nominal damages which, as the law says, is adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered."The amount of P300,00.00 was deemed just and reasonable under the
circumstances. (National Federation of Labor vs NLRC, GR No. 113466, 15 December 1997).

 Contempt of counsel

The SC sustained the CA's penalizing the union's lawyer for indirect contempt for his uncalled-
for and disrespectful remarks directed the CA justices(Nissan Motors V Secretary of Labor, GR
Nos. 158190-91, 21 June 2006)

 Hunger strike

In another case, the SC admonished the striking workers who camped in front of the Supreme
Court Building and commenced a hunger strike saying "the Court will not hesitate in future similar
situations to apply the full force of the law and punish for contempt those who attempt to pressure the
Court into acting one way or the other in any case pending before it [because] grievances, if any, must be
ventilated through the proper channels, i.e., through appropriate petitions, motions or other pleadings in
keeping with the respect due to the Courts as impartial administrators of justice entitled to proceed to the
disposition of its business in an orderly manner, free from outside interference obstructive of its functions
and tending to embarrass the administration of justice.' (Telefunken Semiconductors Employees
Union vs Secretary of Labor, GR No. 122743, 12 December 1997)

XII. Employer Action

 Lock out

A ’lockout’ is a term commonly used to express an employer’s act of excluding from his
plant union members hitherto employed by him. The act may affect all or less than all of
the employee-union members. Lockout, in the sense in which it is universally used, is
an act directed at the union itself rather than at the individual employer- members of the
union (Sta. Mesa Slipways & Engineering Co., v. CIR , G.R. No. L-4521. August 18, 1952).

The Labor Code requires that a decsion to declare a lock out must be approved by the majority
of the board of directors or association or of the partners obtained by secret ballot in a meeting
called for that purpose. I have no idea why it has to be by secret ballot; there seems to be no
provision in the Corporation Code requiring such mode of voting.

The same 30/15-day cooling off period and 7-day strike vote report (strike ban) imposed on the
union are also imposed on the employer in case of a lock out.

 Closure/retrenchment

Instead of a formal lock out, employers have been known to instead effect a closure (total or
partial) of the company or else implement a retrenchment as a response to union organizing or
a labor dispute.
In one case, the company closed a department after it received the union’s CBA proposals and
the Secretary of DOLE assumed jurisdiction. The partial closure was judged a ULP and the
dismissals illegal ( Digitel vs Digitel Employees Union, GR No. 18490, 10 October 2012).
The discriminatory selection of unionists in retrenchment program, while excluding non-
unionists, was also judged a ULP and the dismissals illegal.(Bataan Shipyard vs NLRC, GR No.
L-78604, 09 May 1988).

Any employee terminated due to an unlawful lock out is entitled to reinstatement and
backwages (Art. 279[264], par.a).
Moral and exemplary damages may be awarded ( SONEDCO Workers Free labor Union vs
Universal Robina Corp., GR No. 220383, 05 October 2016) as well as nominal damages
( Employees Union of Bayer vs Bayer Phil;, GR No. 162943, 06 December 2010). Since a union
is an artificial being , it cannot probably be entitled to moral damages. Attorney’s fees may also
be awarded , provided the conditions set forth under the Labor Code (withholding of wages)
and Civil Code are present.