HSBC Employees Union v. NLRC

THE HONGKONG & SHANGHAI BANKING CORPORATION On December 22, 1993, at around 12:30 p.m.
, the Union's
EMPLOYEES UNION et al v. NLRC and HSBC [2016] officers and members walked out and gathered outside the
premises of HSBC's offices on Ayala Avenue, Makati and
[Bersamin, J.] Ortigas Center, Pasig. According to HSBC, the Union
members blocked the entry and exit points of the bank
I.FACTS premises, preventing the bank officers, including the chief
executive officer, from entering and/or leaving the
In the period material to this case, petitioner Hongkong & premises. This prompted HSBC to resort to a petition for
Shanghai Banking Corporation Employees Union (Union) habeas corpus on behalf of its officials and employees thus
was the duly recognized collective bargaining agent of the prevented from leaving the premises, whom it airlifted on
rank-and- file employees of respondent HSBC. A CBA December 24, 1993 to enable them to leave the bank
between the Union and its members, and HSBC was premises.
effective April 1, 1990 until March 31, 1993 for the
economic aspect, and effective April 1, 1990 until March 31, On December 24, 1993, HSBC filed its complaint to declare
1995 for the representational aspect. The CBA included a the strike illegal. In the meantime, HSBC issued return-to-
salary structure of the employees comprising of grade work notices to the striking employees on December 22,
levels, entry level pay rates and the individual pays 1993. Only 25 employees complied and returned to work.
depending on the length of service. Due to the continuing concerted actions, HSBC terminated
the individual petitioners on December 27, 1993. The
On January 18, 1993, HSBC announced its implementation latter, undeterred, and angered by their separation from
of a job evaluation program (JEP) retroactive to January 1, work, continued their concerted activities.
1993. The JEP consisted of a job designation per grade level
with the accompanying salary scale providing for the On August 2, 1998, LA declared the strike illegal for failure
minimum and maximum pay the employee could receive of the Union to file the notice of strike with DOLE; to
per salary level. By letter dated January 20, 1993, the Union observe the cooling-off period; and to submit the results of
demanded the suspension of the JEP, which it labeled as an the strike vote to the NCMB pursuant to Article 263 of the
unfair labor practice (ULP). In another letter dated January Labor Code. He concluded that because of the illegality of
22, 1993, the Union informed HSBC that it would exercise the strike, the Union members and officers were deemed to
its right to concerted action. On the same day of January 22, have lost their employment status.
1993, the Union members started picketing during
breaktime while wearing black hats and black bands on On appeal, the NLRC modified the ruling of LA, and
their arms and other appendages. In its letter dated January pronounced the dismissal of the 18 Union members
25, 1993, HSBC responded by insisting that the JEP was an unlawful for failure of HSBC to accord procedural due
express recognition of its obligation under the CBA. The process to them. HSBC failed to give them sufficient
Union's concerted activities persisted for 11 months, opportunity to present their side and adequate opportunity
notwithstanding that both sides had meanwhile started the to answer the charges against them. The Union filed MR but
re-negotiation of the economic provisions of their CBA on was denied by the NLRC.
March 5, 1993. The continued concerted actions impelled
HSBC to suspend the negotiations on March 19, 1993, and On certiorari, the CA deleted the award of indemnity, but
to issue memoranda, warnings and reprimands to remind ordered HSBC to pay backwages to the 18 employees. On
the members of the Union to comply with HSBC's Code of MR, CA denied HSBC’s motion to delete the award of
Conduct. backwages.
II. ISSUES
Due to the sustained concerted actions, HSBC filed a
complaint for ULP in the Arbitration Branch of the NLRC. 1. WON the strike was illegal- YES
NLRC remanded the case to the Labor Arbiter for further 2. WON there was illegal dismissal- YES
proceedings and was affirmed by the Court. III. RATIONALE
The Union conducted a strike vote on December 19, 1993 Illegal strike
after HSBC accorded regular status to Patrick King, the first
person hired under the JEP. The majority of the members of The procedural requirements for a valid strike are: (1) a
the Union voted in favor of a strike. The following day, the notice of strike filed with the DOLE at least 30 days before
Union served its letter on HSBC in protest of the continued the intended date thereof, or 15 days in case of ULP; (2) a
implementation of the JEP, and insisted that HSBC's strike vote approved by the majority of the total union
modification of the salary structure under the JEP membership in the bargaining unit concerned, obtained by
constituted ULP.
secret ballot in a meeting called for that purpose; and (3) a IV. DISPOSITIVE
notice of the results of the voting at least seven days before
Petition partly granted.
the intended strike given to the DOLE.
These requirements are mandatory, such that non-

compliance therewith by the union will render the strike
illegal.
According to the CA, the petitioners neither filed the notice

of strike with the DOLE, nor observed the cooling-off period,
nor submitted the result of the strike vote. Moreover,
although the strike vote was conducted, the same was done
by open, not secret, balloting, in blatant violation of Article
263 and Section 7, Rule XIII of the Omnibus Rules
Implementing the Labor Code.
The Union asserts their good faith by maintaining that their

strike was conducted out of their sincere belief that HSBC
had committed ULP in implementing the JEP. The Union’s
disregard of the procedural requirements for conducting a
valid strike negated their claim of good faith. For their claim
to be upheld, it was not enough for them to believe that
their employer was guilty of ULP, for they must also
sufficiently show that the strike was undertaken with a
modicum of obeisance to the restrictions on their exercise
of the right to strike prior to and during its execution as
prescribed by the law. They did not establish their
compliance with the requirements specifically for the
holding of the strike vote and the giving of the strike notice.
Illegal Dismissal
As a general rule, the mere finding of the illegality of the

strike does not justify the wholesale termination of the
strikers from their employment. To avoid rendering the
recognition of the workers' right to strike illusory, the
responsibility for the illegal strike is individual instead of
collective.
The officers may be deemed terminated from their

employment upon a finding of their knowing participation
in the illegal strike, but the members of the union shall
suffer the same fate only if they are shown to have
knowingly participated in the commission of illegal acts
during the strike. Article 264 expressly requires that the
officer must have "knowingly participated" in the illegal
strike.
In this case, HSBC was not able to prove participation of the

impleaded union members in the strike. HSBC did not
discharge its burden to prove that the acts of the employees
constituted any of the just causes under the Labor Code or
were prohibited under the company's code of conduct as to
warrant their dismissal.

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THE HONGKONG & SHANGHAI BANKING CORPORATION On December 22, 1993, at around 12:30 p.m.

These requirements are mandatory, such that non-

According to the CA, the petitioners neither filed the notice

The Union asserts their good faith by maintaining that their

As a general rule, the mere finding of the illegality of the

The officers may be deemed terminated from their

In this case, HSBC was not able to prove participation of the

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