SHELL OIL WORKER'S UNION (SOWU) vs SHELL COMPANY OF THE PHILS.

& COURT OF
INDUSTRIAL RELATIONS (CIR)
Facts:

Shell wanted to dissolve its security guard section and use private agencies to bolster corporate
savings, proposing to SOWU, the transfer of the guards to the Pandacan installation with added
benefits.
SOWU argued over the transfer uttering that such was in violation with the existing collective
bargaining agreement.
Shell insisted such transfer maintaining that it was merely performing its legitimate prerogative
to adopt the most efficient and economical method of operation. Furthermore, the transferees
would be given bonuses and better terms.
SOWU warned company if it continued to dissolve the section there would be a strike.
The company released notice of reassignment. On the next day SOWU went on strike when the
guards from the new agency were trying to pass the main gate.
Shell terminated the complainants on grounds of illegal strike.
SOWU filed a complaint on ground of unfair labor practice, but CIR rendered that there were
no violation of such, since the transfer was a management prerogative. Hence, strike was illegal,
there being no compliance with the statutory requisites before an economic strike could be
staged. Furthermore, that such was unjustifiable and that it was carried out with violence,
which validates the termination.

Issue:
WON the existing collective bargaining contract on maintaining security guard section, among others,
constitute a bar to the decision of the management to contract out security guards.
Held:
Yes. The strike was legal because there was a violation of the collective bargaining agreement by the
company. It was part of the CBA that the Security Guard Section will remain. Yet, the Company did not
comply with the stipulation in CBA.
The stand of Shell Company as to the scope of management prerogative is not devoid of plausibility,
management prerogative of the Company would have been valid if it were not bound by what was
stipulated in CBA. The freedom to manage the business remains with management. To it belongs the
ultimate determination of whether services should be performed by its personnel or contracted to
outside agencies. However, while management has the final say on such matter, the labor union is not
to be completely left out.
An unfair labor practice is committed upon violation of a collective bargaining agreement. Collective
bargaining does not end with the execution of an agreement, being a continuous process. The duty to
bargain necessarily imposing on the parties the obligation to live up to the terms of such a collective
bargaining agreement if entered into. It is undeniable that non-compliance therewith constitutes an
unfair labor practice.