Social Security System v. Social Security System Supervisors' Union-CUGCO
REITERATIONFacts
The Antecedents: The case originated from a labor dispute between the Social Security System (SSS) and the Philippine Association of Free Labor Unions (PAFLU) concerning the interpretation of their Collective Bargaining Agreement. The PAFLU staged a strike despite a Court of Industrial Relations (CIR) order enjoining strikes and dismissals, prompting the SSS to file a petition to declare the strike illegal. Procedural History: The SSS Supervisors' Union-CUGCO (respondent Union) intervened, claiming its members wanted to work but were prevented by picketers and thus were entitled to salaries, deductible from their leave credits. The CIR allowed intervention and directed the SSS to pay the salaries, chargeable to leave credits. Subsequent orders from the CIR directed the computation and deposit of these salaries. The SSS challenged these orders, but the Supreme Court denied their petition. The CIR later modified its order, directing payment of salaries not chargeable to leave credits, reasoning that the strike was premature and the respondent Union members did not participate and were prevented from working. The SSS moved for reconsideration, arguing that no work rendered meant no pay, but the CIR en banc denied it. The Petition: The SSS filed a petition for certiorari, assailing the CIR's orders dated March 3, 1970, and March 25, 1970, for allegedly exceeding its authority.
Issue(s)
Whether the Social Security System (SSS) may be held liable for the payment of wages of members of the respondent Union who did not work during the 17-day strike. Whether the Court of Industrial Relations (CIR) had the authority to issue the orders directing the payment of salaries to employees who did not render service during the strike.
Ruling
The Supreme Court set aside the CIR's Order dated March 3, 1970, as affirmed by its Resolution en banc dated March 25, 1970. The petition for certiorari was granted.
Ratio Decidendi
On the issue of SSS liability for wages during the strike: The Court invoked the equitable tenet of a "fair day's wage for a fair day's labor." It held that if no work is performed, no wage is due, unless the employee was able, willing, and ready to work but was illegally locked out, dismissed, or suspended. In this case, while the failure to work was not attributable to the respondent Union members, the burden of the economic loss could not be shifted to the SSS, which was equally faultless. The situation was not a direct consequence of the employer's lockout or unfair labor practice. Therefore, justice and equity demand that each party bear its own loss, placing them on equal footing where none should profit from the other, as neither party was at fault for the work stoppage. On the authority of the CIR: The Court implicitly found that the CIR exceeded its authority by ordering the payment of wages for services not rendered, contrary to the established principle of 'fair day's wage for a fair day's labor' and the equitable distribution of economic loss in situations not caused by the employer's fault.
Main Doctrine
An employer is not liable for the payment of wages of employees who did not render service during a strike, unless the employees were able, willing, and ready to work but were illegally locked out, dismissed, or suspended. In situations where the work stoppage is not a direct consequence of the employer's lockout or unfair labor practice, and both parties are equally faultless, each party must bear their own economic loss.