The Insular Life Assurance Co., Ltd.
, The CIR prosecutor filed a complaint for unfair
Employees Association - NATU, FGU
Insurance Group Workers and Employees
Association - NATU, and Insular Life
Building Employees Association - NATU,
petitioners
vs.
The Insular Life Assurance Co., Ltd., FGU
Insurance Group, Jose M. Olbes, and Court
of Industrial Relations, respondents.
G.R. No. L-25291, January 20, 1971
FACTS:
The Insular Life Assurance Co., Ltd., Employees
Association - NATU, FGU Insurance Group
Workers and Employees Association - NATU,
and Insular Life Building Employees Association
- NATU (herein referred to as the Unions), while
still members of the Federation of Free Workers
(FFW), entered into separate collective
bargaining agreements with the Insular Life
Assurance Co., Ltd., and the FGU Insurance
Group (herein referred to as the Companies).
Two of the lawyers and officers of the Unions
namely Felipe Enaje and Ramon Garcia, tried to
dissuade the Unions from disaffiliating with the
FFW and joining the National Association of
Trade Unions (NATU), to no avail. Enaje and
Garcia soon left the FFW and secured
employment with the Anti-Dummy Board of the
Department of Justice and were thereafter
hired by the companies - Garcia as assistant
corporate secretary and legal assistant, and
Enaje as personnel manager and chairman of
the negotiating panel for the Companies in the
collective bargaining with the Unions.
On October 1957, negotiations for the
collective bargaining was conducted but
resulted to a deadlock. From April 25 to May 6,
1958, the parties negotiated on the labor
demands but with no satisfactory results due to
the stalemate on the matter of salary
increases. This prompted the Unions to declare
a strike in protest against what they considered
the Companies unfair labor practices. On May
20, 1958, the Unions went on strike and
picketed the offices of the Insular Life Building
at Plaza Moraga.
On May 21, Jose M. Olbes, the acting manager
and president, sent individual letters to the
striking employees urging them to abandon
their strike with a promise of free coffee,
movies, overtime pay, and accommodations.
He also warned the strikers if they fail to return
to work by a certain date, they might be
replaced in their jobs. Further, the Companies
hired men to break into the picket lines
resulting in violence, and the filing of criminal
charges against some union officers and
members. When eventually, the strikers called
off their strike to return to their jobs, they were
subjected to a screening process by a
management committee, among the members
were Garcia and Enaje. After screening, eighty-
three (83) strikers were rejected due to
pending criminal charges, and adamantly
refused readmission of thirty-four (34) officials
and members of the Unions who were most
active in the strike.
labor practice against the Companies,
specifically (1) interfering with the members of
the Unions in the exercise of their right to
concerted action; and (2) discriminating
against the members of the Unions as regards
readmission to work after the strike on the
basis of their union membership and degree of
participation in the strike. After the trial, the
Court of Industrial Relations dismissed the
Unions complaint for lack of merit.
ISSUES:
I. Whether or not the Companies are
guilty of unfair labor practice when
they sent individual letters to the
strikers with the promise of
additional benefits, and notifying
them to either return to work, or
lose their jobs; and
II. Whether or not the Companies are
guilty of unfair labor practice for
discriminating against the striking
members of the Unions in
readmission of employees after the
strike.
HELD:
First issue.The Companies contended that by
sending those letters, it constituted a
legitimate exercise of their freedom of
expression. That contention is untenable. The
Companies are guilty of unfair labor practice
when they sent individual letters to the
strikers.It is an act of interference with the
right to collective bargaining through dealing
with the strikers individually instead of through
their collective bargaining representatives.
Although the Unions are on strike, the
employer is still obligated to bargain with the
union as the employees bargaining
representative. Further, it is also an act of
interference for the employer to send
individual letters to the employees notifying
them to return to their jobs, otherwise, they
would be replaced. Individual solicitation of the
employees urging them to cease union activity
or cease striking consists of unfair labor
practice. Furthermore, when the Companies
offered to bribe the strikers with
comfortable cots, free coffee, and movies,
overtime work pay so they would abandon
their strike and return to work, it was guilty of
strike-breaking and/or union busting which
constitute unfair labor practice.
Second Issue.Some of the members of the
Unions were refused readmission because they
had pending criminal charges. However,
despite the fact they were able to secure
clearances, 34 officials and members were still
refused readmission on the alleged ground that
they committed acts inimical to the
Companies. It should be noted, however, that
non-strikers who also had criminal charges
pending against them in the fiscals office,
arising from the same incidents whence
against the criminal charges against the
strikers are involved, were readily readmitted
and were not required to secure clearances.
This is an act of discrimination practiced by the
Companies in the process of rehiring and is
therefore a violation of Sec. 4(a)(4) of the
Industrial Peace Act. notwithstanding its (guard
The respondent Companies did not merely section) continuance and that
discriminate against all strikers in general since
they separated the active rom the less active such is assured by an existing
unionists on the basis of their militancy, or lack
of it, on the picket lines. Discrimination exists collective bargaining contract.
where the record shows that the union activity
of the rehired strikers has been less prominent The respondent company
than that of the strikers who were denied
reinstatement.
transferred 18 security guards
to its other department and
SHELL OIL consequently hired a private
WORKERS UNION security agency to undertake
the work of said security
vs. SHELL guards. This resulted in a strike
COMPANY OF THE called by petitioner Shell Oil
PHILIPPINES, Workers Union (UNION), The
President certified it to
LTD., and THE respondent Court of Industrial
COURT OF Relations (CIR). CIR declared
INDUSTRIAL REL the strike illegal on the ground
that such dissolution was a
ATIONS valid exercise of a
OCTOBER 23, 2012 ~ VBDIAZ
management prerogative. Thus
this appeal is taken.
SHELL OIL WORKERS
UNION vs. SHELL COMPANY Petitioner argued that the 18
OF THE PHILIPPINES, LTD., security guards affected are
and THE COURT OF part of the bargaining unit and
INDUSTRIAL RELATIONS covered by the existing
collective bargaining contract,
G.R. No. L-28607, May 31, as such, their transfers and
1971. eventual dismissals are illegal
being done in violation of the
existing contract. The Company
maintained that in contracting
FACTS: out the security service and
redeploying the 18 security
Respondent Shell Company of guards affected, it was merely
the Philippines (COMPANY) performing its legitimate
dissolved its security guard prerogative to adopt the most
section stationed at its efficient and economical
Pandacan Installation,
method of operation, that said
action was motivated by
business consideration in line
with past established practice
and made after notice to and
discussion with the Union, that
the 18 guards concerned were
dismissed for wilfully refusing
to obey the transfer order, and
that the strike staged by the
Union is illegal.
ISSUE:
Whether 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.
RULING:
YES. The strike was legal
because there was a violation
of the collective bargaining
agreement by 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. It was thus an
assurance of security of tenure,
at least, during the lifetime of
the agreement. For what is
involved is the integrity of the
agreement reached, the terms
of which should be binding on
both parties
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. It
cannot be denied the faculty of
promoting efficiency and
attaining economy by a study
of what units are essential for
its operation. 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 by a labor union or
its agent by its refusal to
bargain collectively with the
employer. 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.
The right to self-organization
guarded by the Industrial Peace
Act explicitly includes the right
to engage in concerted
activities for the purpose of
collective bargaining and to the
mutual aid or protection. The
employee, tenant or laborer is
inhibited from striking or
walking out of his employment
only when so enjoined by the
CIR and after a dispute has
been submitted thereto and
pending award or decision by
the court of such dispute.
In the present case, the
employees or laborers may
strike before being ordered not
to do so and before an
industrial dispute is submitted
to the CIR, subject to the power
of the latter, after hearing
when public interest so
requires or when the dispute
cannot, in its opinion, be
promptly decided or settled, to
order them to return to work,
with the consequence that if
the strikers fail to return to
work, when so ordered, the
court may authorize the
employer to accept other
employees or laborers. Thus a
strike may not be staged only
when, during the pendency of
an industrial dispute, the CIR
has issued the proper
injunction against the laborers
(section 19, Commonwealth Act
No. 103, as amended).
WHEREFORE, the decision of
respondent Court of Industrial
Relations of August 5, 1967 is
reversed.
-
**NOTE:
BELIEF IN GOOD FAITH THAT
EMPLOYER COMMITTED UNFAIR
LABOR PRACTICE RENDERS
STRIKE LEGAL:
It is not even required that
there be in fact an unfair labor
practice committed by the
employer. It suffices, if such a
belief in good faith is
entertained by labor, as the
inducing factor for staging a
strike. So it was declared: As a
consequence, we hold that the

strike in question had been
called to offset what petitioners
were wanted in believing in
good faith to be unfair labor
practices on the part of
Management, that
petitioners were not bound,
therefore, to wait for the
expiration of thirty (30) days
from notice of strike before
staging the same, that said
strike was not, accordingly,
illegal and that the strikers had
not thereby lost their status as
employees of respondents
herein.
epublic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 76989 September 29, 1987
MANILA MANDARIN EMPLOYEES
UNION, petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISSION, and MELBA C.
BELONCIO, respondents.
GUTIERREZ, JR., J.:
This is a petition to review on certiorari the
National Labor Relations Commission's
(NLRC) decision which modified the Labor
Arbiter's decision and ordered the Manila
Mandarin Employees Union to pay the wages
and fringe benefits of Melba C. Beloncio from
the time she was placed on forced leave until
she is actually reinstated, plus ten percent
(10%) thereof as attorney's fees. Manila
Mandarin Hotel was ordered to reinstate
Beloncio and to pay her whatever service
charges may be due her during that period,
which amount would be held in escrow by the
hotel.
The petition was filed on January 19, 1987.
The private respondent filed her comment on
March 7, 1987 while the Solicitor General filed
a comment on June 1, 1987 followed by the
petitioner's reply on August 22, 1987. We treat
the comment as answer and decide the case
on its merits.
The facts of the case are undisputed.
Herein private respondent, Melba C. Beloncio,
an employee of Manila Mandarin Hotel since
1976 and at the time of her dismissal,
assistant head waitress at the hotel's coffee
shop, was expelled from the petitioner Manila
Mandarin Employees Union for acts allegedly
inimical to the interests of the union. The
union demanded the dismissal from
employment of Beloncio on the basis of the
union security clause of their collective
bargaining agreement and the Hotel acceded
by placing Beloncio on forced leave effective
August 10, 1984.
The union security clause of the collective
bargaining agreement provides:
Section 2. Dismissals.
xxx xxx xxx
b) Members of the Union who
cease to be such members
and/or who fail to maintain
their membership in good
standing therein by reason of
their resignation from the
Union and/or by reason of
their expulsion from the
Union in accordance with the
Constitution and By-Laws of
the Union, for non-payment of
union dues and other
assessment for organizing,
joining or forming another
labor organization shall, upon
written notice of such
cessation of membership or
failure to maintain membership
in the Union and upon written
demand to the company by
the Union, be dismissed from
employment by the Company
after complying with the
requisite due process
requirement; ... (Emphasis
supplied) (Rollo, p. 114)
Two days before the effective date of her
forced leave or on August 8, 1984, Beloncio
filed a complaint for unfair labor practice and
illegal dismissal against herein petitioner-
union and Manila Mandarin Hotel Inc. before
the NLRC, Arbitration Branch.
Petitioner-union filed a motion to dismiss on
grounds that the complainant had no cause of
action against it and the NLRC had no
jurisdiction over the subject matter of the
complaint.
This motion was denied by the Labor Arbiter.
After the hearings that ensued and the
submission of the parties' respective position
papers, the Labor Arbiter held that the union
was guilty of unfair labor practice when it
demanded the separation of Beloncio. The
union was then ordered to pay all the wages
and fringe benefits due to Beloncio from the
time she was on forced leave until actual
reinstatement, and to pay P30,000.00 as
exemplary damages and P10,000.00 as
attorney's fees. The charge against the hotel
was dismissed.
The Union then appealed to the respondent
NLRC which modified the Labor Arbiter's
decision as earlier stated.
A subsequent motion for reconsideration and
a second motion for reconsideration were
denied.
Hence, this present petition.
The petitioner raises the following assignment
of errors:
I Beloncio or steps leading
THAT RESPONDENT NLRC
ERRED IN NOT DECLARING
THAT THE PRESENT
CONTROVERSY INVOLVED
INTRA-UNION CONFLICTS
AND THEREFOR IT HAS NO
JURISDICTION OVER THE
SUBJECT-MATTER
THEREOF.
II
DISMISSAL, AND DAMAGES.
(Rollo, pp. 6-9)
On the issue of the NLRC jurisdiction over the
case, the Court finds no grave abuse of
discretion in the NLRC conclusion that the
dispute is not purely intra-union but involves
an interpretation of the collective bargaining
agreement (CBA) provisions and whether or
not there was an illegal dismissal. Under the
CBA, membership in the union may be lost
through expulsion only if there is non-payment
of dues or a member organizes, joins, or
forms another labor organization. The charge
of disloyalty against Beloncio arose from her
emotional remark to a waitress who happened
to be a union steward, "Wala akong tiwala sa
Union ninyo." The remark was made in the
course of a heated discussion regarding
Beloncio's efforts to make a lazy and
recalcitrant waiter adopt a better attitude
towards his work.
We agree with the Solicitor General when he
noted that:
... The Labor Arbiter explained
correctly that "(I)f the only
question is the legality of the
expulsion of Beloncio from the
Union undoubtedly, the
question is one cognizable by
the BLR (Bureau of Labor
Relations). But, the question
extended to the dismissal of
thereto. Necessarily, when the
hotel decides the
recommended dismissal, its
acts would be subject to
scrutiny. Particularly, it will be
asked whether it violates or
not the existing CBA.
Certainly, violations of the CBA
would be unfair labor practice."
Article 250 of the Labor Code
provides the following:

THAT RESPONDENT NLRC Art. 250. Unfair

SERIOUSLY ERRED IN labor practices
HOLDING PETITIONER of labor
LIABLE FOR THE PAYMENT organizations.
OF PRIVATE It shall be
RESPONDENT'S SALARY unfair labor
AND FRINGE BENEFITS, practice for a
AND AWARD OF 10% labor
ATTORNEY'S FEES, AFTER organization,
FINDING AS its officers,
UNMERITORIOUS HER agents or
PRETENDED CLAIMS OR representatives
COMPLAINTS FOR UNFAIR :
LABOR PRACTICE, ILLEGAL
xxx xxx xxx
 (b) To cause or shall have
attempt to exclusive
cause an appellate
employer to jurisdiction
discriminate over all cases
against an decided by
employee, Labor Arbiters.
including (Rollo, pp. 155-
discrimination 157.)
against an
employee with The petitioner also questions the factual
respect to findings of the public respondent on the
whom reasons for Beloncio's dismissal and,
membership in especially, on the argument that she was on
such forced leave; she was never dismissed; and
organization not having worked, she deserved no pay.
has been
denied or to The Court finds nothing in the records that
terminate an indicates reversible error, much less grave
employee on abuse of discretion, in the NLRC's findings of
any ground facts.
other than the
usual terms
It is a well-settled principle that findings of
and conditions
facts quasi-judicial agencies like the NLRC,
under which
which have acquired expertise because their
membership or
jurisdiction is confined to specific matters, are
continuation of
generally accorded not only respect but at
membership is
times even finality if such findings are
made available
supported by substantial evidence. (Akay
to other
Printing Press vs. Minister of Labor and
members.
Employment, 140 SCRA 381; Alba Patio de
(Emphasis
Makati vs. Alba Patio de Makati Employees
supplied)
Association, 128 SCRA 253; Dangan vs.
National Labor Relations Commission, 127
Article 217 of the Labor Code SCRA 706; De la Concepcion vs. Mindanao
also provides: Portland Cement Corporation, 127 SCRA
647).
Art. 217.
Jurisdiction of The petitioner now questions the decision of
Labor Arbiters the National Labor Relations Commission
and the ordering the reinstatement of the private
Commission respondent and directing the Union to pay the
(a) The wages and fringe benefits which she failed to
Labor Arbiters receive as a result of her forced leave and to
shall have the pay attorney's fees.
original and
exclusive
We find no error in the questioned decision.
jurisdiction to
hear and
decide ... the The Hotel would not have compelled Beloncio
following cases to go on forced leave were it not for the
involving all union's insistence and demand to the extent
workers, that because of the failure of the hotel to
whether dismiss Beloncio as requested, the union filed
agricultural or a notice of strike with the Ministry of Labor
nonagricultural; and Employment on August 17, 1984 on the
issue of unfair labor practice. The hotel was
then compelled to put Beloncio on forced
(1) Unfair labor
leave and to stop payment of her salary from
practice cases;
September 1, 1984.
xxx xxx xxx
Furthermore, as provided for in the collective
bargaining agreement between the petitioner-
(b) The the Union and the Manila Mandarin Hotel "the
Commission Union shall hold the Company free and
blameless from any and all liabilities that may
arise" should the employee question the
dismissal, as has happened in the case at bar.
It is natural for a union to desire that all
workers in a particular company should be its
dues-paying members. Since it would be
difficult to insure 100 percent membership on
a purely voluntary basis and practically
impossible that such total membership would
continuously be maintained purely on the
merits of belonging to the union, the labor
movement has evolved the system whereby
the employer is asked, on the strength of
collective action, to enter into what are now
familiarly known as "union security"
agreements.
so as to serve hotel customers in the coffee
shop expeditiously and cheerfully. Union
membership does not entitle waiters, janitors,
and other workers to be sloppy in their work,
inattentive to customers, and disrespectful to
supervisors. The Union should have
disciplined its erring and troublesome
members instead of causing so much
hardship to a member who was only doing her
work for the best interests of the employer, all
its employees, and the general public whom
they serve.
WHEREFORE, the petition is hereby
DISMISSED. The questioned decision of the
National Labor Relations Commission is
AFFIRMED. Costs against the petitioner.

The collective bargaining agreement in this SO ORDERED.

case contains a union security clause a
closed-shop agreement.
Manila Mandarin EU vs. NLRC & Beloncio
A closed-shop agreement is an agreement
whereby an employer binds himself to hire
only members of the contracting union who
must continue to remain members in good
standing to keep their jobs. It is "the most
prized achievement of unionism." It adds
membership and compulsory dues. By holding
out to loyal members a promise of
employment in the closed-shop, it welds
group solidarity. (National Labor Union vs.
Aguinaldo's Echague, Inc., 97 Phil. 184). It is
a very effective form of union security
agreement.

This Court has held that a closed-shop is a

valid form of union security, and such a
provision in a collective bargaining agreement
is not a restriction of the right of freedom of
association guaranteed by the Constitution.
(Lirag Textile Mills, Inc. vs. Blanco, 109 SCRA
87; Manalang vs. Artex Development
Company, Inc., 21 SCRA 561).

The Court stresses, however, that union

security clauses are also governed by law and
by principles of justice, fair play, and legality.
Union security clauses cannot be used by
union officials against an employer, much less
their own members, except with a high sense
of responsibility, fairness, prudence, and
judiciousness.

A union member may not be expelled from her

union, and consequently from her job, for
personal or impetuous reasons or for causes
foreign to the closed-shop agreement and in a
manner characterized by arbitrariness and
whimsicality.

This is particularly true in this case where Ms.

Beloncio was trying her best to make a hotel
bus boy do his work promptly and courteously