SUBJECT: Labstan

IBM vs NLRC & San Miguel Corporation

(GR 91980, June 27, 1991)
FACTS:
1. IBM, representing 4500 employees of
SMC, demanded for correction of the
significant distortion in the workers
wages pursuant to Sec. 4 (d), RA 6727.
2. IBM alleged that SMC ignored the demand
by offering a measly across-the-board
wage increase of P7/day as against the
IBMs proposal of P25/day, which was
later reduced to P15/day by way of an
amicable settlement.
3. Because of SMCs rejection, IBM members
refused to render overtime services as
their means of compelling SMC to correct
the wage distortion.
4. SMC claimed that the abandonment of
the long-standing work schedule caused
substantial losses (P174,657,598 in sales
and P48,904,311 in revenues), work
disruption, and lower efficiency to the
prejudice of SMC. Hence, it filed a
complaint before the NLRC to declare the
strike or slowdown illegal.
ISSUE:
W/N IBMs concerted acts of reducing their
work time, thereby causing financial losses
to SMC in order to compel it to yield to the
demand for correction of wage distortions,
are illegal.

Moreover, under the CBA, IBM was

prohibited to declare and hold a strike
or otherwise engage in non-peaceful
concerted activities for the settlement
of its controversy with SMC in respect
of wage distortions.

IBMs acts are in the nature of a

slowdown which is a strike on
the installment plan, a willful
reduction in the rate of work by
concerted action of workers for the
purpose of restricting the output of
the employer, in relation to a labor
dispute; an activity by which workers,
without a complete stoppage of work,
retard production or their performance
of duties and functions to compel
management to grant their demands.

Thus, the partial strike or concerted

refusal by the IBM to follow the 5-yearold work schedule is tantamount to a
slowdown which is forbidden by law
and contract, hence, illegal.

HELD:
YES. IBMs concerted acts are illegal. It is
prohibited under RA 6727 and the CBA.
SMCs contention: The concerted acts are
contrary to law and to the CBA between it
and IBM.
SC ruling: CORRECT.
Although Art. 263, LC gives the
workers the right to engage in
concerted activities for purposes of
CBA or for their mutual benefit and

protection, these activities may be

forbidden or restricted by law or
contract.
Sec. 3, RA 6727 prescribes a
specific, detailed, and comprehensive
procedure for the correction of wage
distortion. And it implicitly excludes
strikes,
lockouts,
or
other
concerted activities as modes of
settlement of the issues.
The legislative intent that solution of
the problem of wage distortion 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 Sec. 16, Chapter I, RA
6727 IRR: Any issue involving wage
distortion shall NOT be a ground for a
strike/lockout.