In Nissan Motors Philippines, Inc. vs. Secretary of Labor and Employment, the Supreme Court addressed the legality of strikes and lockouts during labor disputes, especially after the Secretary of Labor and Employment assumes jurisdiction. The Court balanced the rights of workers to engage in concerted activities and the employer’s need to maintain business operations. This decision clarifies the extent to which union members can be disciplined for participating in illegal strikes and slowdowns, providing essential guidance for both employers and employees in navigating labor disputes within the bounds of Philippine law.

When Slowdowns Stall Progress: Can Employers Discipline Workers During Labor Disputes?

The case began with a collective bargaining deadlock between Nissan Motor Philippines, Inc. and its union, Bagong Nagkakaisang Lakas sa Nissan Motor Philippines, Inc. (BANAL-NMPI-OLALIA-KMU). This deadlock led to multiple strike notices filed with the National Conciliation and Mediation Board (NCMB). The initial strike notice was triggered by the suspension of approximately 140 employees following a protest over the delayed payment of their 13th-month pay. Subsequent notices addressed issues such as alleged illegal lockouts and deadlocks in collective bargaining, encompassing both economic and non-economic concerns.

As the dispute escalated, the Department of Labor and Employment (DOLE) intervened by issuing an order assuming jurisdiction over the matter. This order explicitly prohibited any strikes or lockouts and directed both parties to refrain from actions that could worsen the situation. Despite the DOLE’s directive, the union allegedly engaged in a work slowdown, prompting further action from the company. The DOLE Secretary ultimately issued a decision affirming the suspension of the 140 employees involved in the initial protest, sustaining the dismissal of union officers, but recalling the dismissal of union members, subject to a one-month suspension.

Both Nissan Motor and the Union sought partial reconsideration of the DOLE Secretary’s decision, but their motions were denied. This led to separate petitions for certiorari filed with the Court of Appeals (CA). The CA upheld the DOLE Secretary’s decision, prompting Nissan Motor and the Union to file separate petitions for review with the Supreme Court. The central issue before the Supreme Court was whether the CA erred in affirming the DOLE Secretary’s decision regarding the dismissal and suspension of union members, as well as the award of economic benefits, in light of the alleged illegal strike and the company’s financial condition. Furthermore, the Court was asked to rule on the contempt citation against the Union’s counsel.

The Supreme Court began its analysis by affirming the principle that factual determinations of administrative agencies like the DOLE are generally accorded respect and finality if supported by substantial evidence. The Court noted that the DOLE Secretary and the CA both found that the Union and its members engaged in a work slowdown, which, under the prevailing circumstances, constituted an illegal strike. The Court recognized that the DOLE’s repeated admonitions against actions that could exacerbate the labor dispute applied to both the company and the union. Nissan Motor’s suspension of a significant number of Union officers/members, along with alleged illegal lockouts and union-busting tactics, were viewed as actions that fueled the volatile situation.

However, the Court also scrutinized the Union’s claim that its officers and members did not engage in a work slowdown. The Court found this claim to be unconvincing, citing evidence presented by the company, which demonstrated a significant reduction in production during the period in question. Specifically, the Court referenced the DOLE Secretary’s observations, which noted that production fell by at least 50% during the week when the CBA deadlock occurred and the second strike notice was filed. The Court found the Union’s explanations for the production setback, such as worker training and lack of parts, to be unpersuasive.

Given these findings, the Supreme Court addressed the penalties imposed on the union members who participated in the illegal strike. The Court turned to Article 263(g) in relation to Article 264 of the Labor Code, which governs the effects of a strike or similar prohibited acts in assumption cases. Article 263(g) allows the Secretary of Labor and Employment to assume jurisdiction over labor disputes that could affect national interests and automatically enjoins any intended or impending strike or lockout. Article 264 outlines prohibited activities and specifies that any union officer who knowingly participates in an illegal strike may be declared to have lost their employment status.

However, the Supreme Court emphasized a crucial distinction between union officers and union members or ordinary workers. While an employer is authorized to terminate a union officer who participated in an illegal strike, the options are more limited when dealing with union members. The Court held that an ordinary striking worker or union member cannot be terminated for mere participation in an illegal strike; there must be proof that the worker committed illegal acts during the strike. Moreover, the Court recognized that the Secretary of Labor and Employment has the prerogative to moderate the consequences of defying an assumption order, such as imposing a suspension rather than dismissal.

The Supreme Court ultimately upheld the DOLE Secretary’s decision to spare the striking workers from the penalty of dismissal, citing several factors. These factors included the fact that the employees reported for work and did not abandon their jobs, that they were following orders from their leaders, and that there was no evidence to prove their participation in illegal activities during the strike. The Court also considered the fact that Nissan Motor appeared to have exacerbated the situation by engaging in the mass termination of Union members. Thus, the Court affirmed the one month suspension of the union members.

Finally, regarding the economic aspects of the CBA, the Court modified the DOLE Secretary’s awards due to the Company’s precarious financial position. The Court reduced the annual salary increases and vacated the award for gratuity bonus of P3,000.00 per employee for lack of basis. The Court upheld the transportation allowance, 14th-month pay, seniority pay, separation pay, and the effectivity of the new CBA.

FAQs

What was the key issue in this case?	The key issue was whether the dismissal of union members who participated in a work slowdown, despite a DOLE order assuming jurisdiction, was justified. The Supreme Court also addressed the propriety of awarding economic benefits given the company’s financial condition.
What is an assumption of jurisdiction order?	An assumption of jurisdiction order is issued by the Secretary of Labor and Employment when a labor dispute threatens national interests. It enjoins strikes and lockouts and directs parties to return to work under previous conditions.
Can union members be dismissed for participating in an illegal strike?	Union members can’t be dismissed solely for participating in an illegal strike. There must be evidence they committed illegal acts during the strike, distinguishing them from union officers.
What is the difference in treatment between union officers and members in illegal strikes?	Union officers face stricter penalties (potential loss of employment) for participating in illegal strikes. Members require proof of illegal acts to warrant dismissal.
What is a work slowdown?	A work slowdown is a concerted activity by employees to reduce productivity without a formal strike. It can be considered an illegal strike if it violates a DOLE order.
What is the ‘pari delicto’ doctrine?	The ‘pari delicto’ doctrine applies when both parties are equally at fault. However, this doctrine is not always applicable in labor disputes due to the imbalance of power between employers and employees.
What factors did the Court consider in mitigating the penalty for union members?	The Court considered that the employees reported for work, followed leaders’ orders, and had no proven involvement in illegal activities. The Company’s actions that exacerbated the situation were also a factor.
How did the Court address the economic benefits awarded?	The Court modified the economic benefits due to the company’s financial state. It reduced salary increases and removed the gratuity bonus, balancing worker welfare and business viability.

This case underscores the delicate balance between protecting workers’ rights to organize and engage in concerted activities and ensuring the stability and viability of businesses. The decision emphasizes the importance of due process and fair treatment in labor disputes. It clarifies the responsibilities and potential liabilities of both employers and employees during strikes and lockouts.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Nissan Motors Philippines, Inc. vs. Secretary of Labor and Employment, G.R. Nos. 158190-91, June 21, 2006