THE HONGKONG & SHANGHAI BANKING CORPORATION EMPLOYEES UNION, et.

al
vs.
NATIONAL LABOR RELATIONS COMMISSION AND THE HONGKONG SHANGHAI
BANKING CORPORATION, LTD,
G.R. No. 156635 January 11, 2016

FACTS:

Petitioner Hongkong & Shanghai Banking Corporation Employees Union (Union) was a duly
recognized collective bargaining agent of the rank-and-file employees of respondent Hongkong &
Shanghai Banking Corporation (HSBC). A Collective Bargaining Agreement (CBA) governed the
relations between the union and its members, and HSBC. The CBA included a salary structure of the
employees comprising of grade levels, entry level pay rates and individual pays depending on the
length of service.

On January 18, 1993, HSBC announced its implementation of a Job Evaluation Program (JEP) which
consisted a job designation per grade level with a salary scale providing the minimum and
maximum pay an employee could receive. The Union demanded the suspension of the JEP and
labelled it as an unfair labor practice (ULP). The Union further informed HSBC that it would
exercise its right to concerted action and started picketing during breaktime. HSBC responded by
insisting that the JEP was an express recognition of its obligations under the CBA.

The Union’s concerted activities persisted for 11 months, notwithstanding that both sides had
started re-negotiating their CBA. The continued concerted action impelled HSBC to suspend the
negotiations and issued memoranda, warnings and reprimands to remind Union members to
comply with HSBC’s Code of Conduct.

The Union conducted a strike vote against JEP in which majority of the members of the Union voted
in favor of a strike. They insisted that HSBC’s modification of the salary structure under the JEP
constituted ULP. Together with the Union’s Officer, the members walked out and gathered outside
the premises of HSBC’s offices. They blocked the entry and exit points of the bank premises,
preventing the bank officers from entering and/or leaving the premises. This prompted HSBC to
resort to a petition for habeas corpus on behalf of its officials and employees.

HSBC filed a complaint to declare the strike illegal before the National Labor Relations Commission
(NLRC). Likewise, HSBC issued return-to-work notices to the striking employees which only 25
employees complied and returned to work. Due to the continuing concerted actions, HSBC
terminated the herein petitioners. Undeterred and angered by their separation from work,
continued their concerted activities.

The Labor Arbiter declared that strike illegal for the failure of the Union to file that notice of strike
with the Department of Labor and Employment (DOLE); failure to observe the cooling-off period;
and failure to submit the results of the strike vote to the National Conciliation and Mediation Board
(NCMB). With the illegality of the strike, the Union members and officers were deemed to have lost
their employment status.

On appeal, the NLRC modified the ruling and pronounced the dismissal of some Union members
unlawful for failure of HSBC to accord procedural due process. HSBC was ordered to pay separation
pay to 18 union members. Petitioners filed their motion for reconsideration but was denied by the
NLRC.

On appeal, the Court of Appeals (CA) upheld the termination of the Union members but ordered
HSBC to pay backwages to 18 Union members for not having complied with the requirement of
notice and hearing.

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ISSUE:

1. Whether or not the strike was lawfully conducted despite the failure to comply with the
procedural requirements as required by the Labor Code.
2. Whether or not the petitioners were lawfully dismissed for joining the illegal strike.

RULING:

The petition is partly granted.

Issue No. 1:

The right to strike is a constitutional and legal right of all workers because it seeks to
advance their right to improve the terms and conditions of their employment. However, the
right to strike as a means for the attainment of social justice is never meant to oppress or destroy
the employers. Thus, the law prescribes limits on the exercise of the right to strike.

The procedural requirements for a valid strike are the following:

(1) a notice of strike filed with the DOLE at least 30 days before the intended date thereof, or
15 days in case of ULP;
(2) a strike vote approved by the majority of the total union membership in the bargaining
unit concerned, obtained by secret ballot in a meeting called for that purpose; and
(3) a notice of the results of the voting at least 7 days before the intended strike given to DOLE.

These requirements are mandatory, such that non-compliance therewith by the union will render
the strike illegal. As such, the petitioners committed a prohibited activity in violation of the Labor
Code, and rendered their strike illegal.

Issue No. 2:

A strike staged without compliance with the requirements of the Labor Code is illegal, and may
cause the termination of the employment of the participating union officer and members. However,
the liability for the illegal strike is individual, not collective.

To warrant the termination of an officer of the labor organization on that basis, the employer must
show that the officer knowingly participated in the illegal strike. By mere virtue of being officers of
the Union and for lack of proof of having participated in the strike is not a ground for dismissal. But
when said officers urged and made their members violate the law, their dismissal is an appropriate
penalty for their unlawful act.

Unlike the Union’s officers, an ordinary striking employee cannot be terminated based solely on his
participation in the illegal strike, for the employer must further show that the employee committed
illegal acts during the strike.

The Supreme Court partially affirmed the decision promulgated by the CA but ordered HSBC
to pay some Union Officers and members’ backwages and separation pay in lieu of
reinstatement for having illegally dismissed.

***SIMLIFIED FACTS:

The Hongkong & Shanghai Banking Corporation Employees Union (Union) was the
recognized collective bargaining agent for HSBC's rank-and-file employees under a
Collective Bargaining Agreement (CBA). When HSBC introduced a Job Evaluation Program
(JEP), the Union opposed it, labeling it as an unfair labor practice (ULP). The Union

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conducted concerted activities and picketed for 11 months, leading HSBC to suspend
negotiations and issue warnings to comply with its Code of Conduct.

The Union organized a strike vote against the JEP, and the majority voted in favor.
Members, along with Union officers, walked out, blocking entry and exit points of HSBC,
prompting HSBC to file a petition for habeas corpus. HSBC also filed a complaint with the
NLRC to declare the strike illegal. Only 25 employees returned to work after return-to-
work notices were issued, and eventually, HSBC terminated the petitioners.

The Labor Arbiter declared the strike illegal due to procedural failures. On appeal, the
NLRC modified the ruling, finding some dismissals unlawful. The NLRC ordered HSBC to
pay separation pay to 18 Union members. The petitioners' motion for reconsideration was
denied.

The Court of Appeals upheld the terminations but directed HSBC to pay backwages to the
18 Union members, citing non-compliance with notice and hearing requirements.

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