G.R. No. 91980 - Ilaw at Buklod ng Manggagawa vs. National Labor Relations Commission

The controversy arose from alleged "wage distortions" affecting employees of San Miguel Corporation (SMC), caused by the implementation of Republic Act No. 6727 (Wage Rationalization Act), effective June 5, 1989.
The union, Ilaw at Buklod ng Manggagawa (IBM), representing approximately 4,500 SMC employees in the National Capital Region, made a demand for correction of wage distortions pursuant to Section 4(d) of RA 6727.
The Union’s proposal for wage increase was P25.00 per day per employee; SMC offered only P7.00. Eventually, the Union reduced its demand to P15.00, which was also rejected.
Following the rejection, starting October 16, 1989, about 800 daily-paid IBM members at the Polo Plant's production line, including others in statistical quality control and warehouse, refused to render overtime services, observing only the eight-hour work shift as a legitimate protest.

The existing work schedule prior to October 1989 involved 10 hours for the first shift and 10 to 14 hours for the second shift, Monday through Friday, and 8 hours on Saturdays. This schedule included automatic overtime, which workers had welcomed for the steady extra income.
The workers’ temporary adoption of the eight-hour shift disrupted work, causing significant losses for SMC: from October 16 to November 30, 1989, the company lost production amounting to 2,004,105 cases of beer, equivalent to P174,657,598 in sales and P48,904,311 in revenues, plus P42 million in lost excise tax to the government.
Despite organizing a third shift and engaging in dialogue, SMC could not persuade the workers to return to the previous schedule.

On October 18, 1989, SMC filed a complaint with the Arbitration Branch of the NLRC to declare the strike/slowdown illegal and to terminate union officers’ employment.
On December 8, 1989, SMC filed another complaint before the NLRC seeking to enjoin and restrain the slowdown and for damages, including a cease-and-desist order and TRO.
The NLRC First Division conducted an ex parte hearing on December 19, 1989, then issued a TRO ordering the union to cease their refusal to comply with the established work schedule, valid for 20 days upon posting of a P50,000 bond. The incident was set for hearing before Labor Arbiter Carmen Talusan.
Subsequent hearings were delayed or postponed due to the Union's counsel’s unavailability and refusal to recognize the NLRC’s jurisdiction.

On February 14, 1990, IBM filed a special civil action for certiorari and prohibition against the NLRC, contesting the TRO, alleging:

The key issue was the application of the Eight-Hour Labor Law and the employer’s alleged coercion to work beyond eight hours daily.
The TRO was improvidently issued on ex parte evidence, effectively forcing overtime work.
The NLRC Commissioners acted without confirmation by the Commission on Appointments and lacked jurisdiction to issue injunctions.

The Union prayed to annul the TRO, declare the necessity of Commission confirmation for NLRC Commissioners, expunge disciplinary records against workers for refusal to work overtime, and restrain NLRC officials from enforcing the TRO.
SMC filed a counter-petition asserting:

The workers’ refusal to follow the work schedule constituted an illegal slowdown, which the NLRC had jurisdiction to enjoin.
The NLRC had the legal duty to stop such slowdown to enforce the national policy of dispute resolution through arbitration.
The NLRC abused discretion by failing to act on injunction application within the TRO’s 20-day validity.

Whether the workers’ refusal to render overtime work by adopting an eight-hour shift constitutes a legal concerted activity or an illegal slowdown/partial strike.
Whether the NLRC had jurisdiction and authority to issue the temporary restraining order enjoining the Union’s concerted work stoppage or slowdown.
Whether the appointments of the NLRC Commissioners were valid in the absence of confirmation by the Commission on Appointments.
Whether the strike or slowdown was a permissible mode of resolving wage distortion disputes under RA 6727 and the parties’ collective bargaining agreement (CBA).