Illegal Strike and Backwages: What Workers Should Know Under Philippine Law

The Supreme Court recently clarified the rules on backwages and separation pay for employees who join an illegal strike. In Escario v. National Labor Relations Commission (G.R. No. 160302, September 27, 2010), the Court ruled that rank-and-file employees who participate in an illegal strike may be reinstated, but they are not automatically entitled to backwages. The decision balances the rights of workers with the long-standing principle of "a fair day's wage for a fair day's labor."

The Case: A Walkout That Became an Illegal Strike

The case involved employees of Pinakamasarap Corporation who walked out of work in March 1993 to support a union officer facing a criminal complaint. The company treated this as an illegal walkout and later terminated the union officers. The union responded by filing a notice of strike, and a strike was held in June 1993.

The company charged the striking employees with unfair labor practice and abandonment of work. The Labor Arbiter declared the strike illegal. However, the National Labor Relations Commission (NLRC) later ruled that the rank-and-file employees did not abandon their jobs and ordered their reinstatement—but without backwages.

The Issue: Are Striking Workers Entitled to Backwages?

The employees argued that because they were reinstated and found not to have abandoned their work, they should receive full backwages under Article 279 of the Labor Code. The Supreme Court disagreed.

The Court distinguished between two provisions of the Labor Code:

• Article 279 (Security of Tenure) applies to employees who are unjustly dismissed. It entitles them to reinstatement and full backwages.
• Article 264(a) (Prohibited Activities) governs employees who participate in illegal strikes. It allows reinstatement of rank-and-file workers who were merely induced to join the strike, but it does not grant them backwages.

Because the employees were terminated for joining an illegal strike—not unjustly dismissed—Article 264(a) applied. The Court explained that the only instance where full backwages are awarded under Article 264(a) is when an employee is terminated due to an unlawful lockout.

The Principle: No Work, No Pay

The Court applied the principle of "a fair day's wage for a fair day's labor." Since the employees did not render work during the strike period, they could not claim wages for that time. As the Court noted, if there is no work performed, there can be no wage—unless the worker was willing and able to work but was illegally prevented from doing so.

This principle applies even if the strike might have been legal. The Court cited prior rulings holding that striking workers are entitled only to reinstatement, not backwages, because they did not work during the strike.

Separation Pay in Lieu of Reinstatement

The Court also addressed the alternative remedy of separation pay. While reinstatement is the general rule, it may not always be feasible. In this case, the company argued that reinstatement was no longer possible because:

• The employees had been away for more than 15 years
• The company's machines had been replaced
• The positions related to sales and distribution had been abolished

The Court agreed that separation pay was proper under these circumstances. It increased the award from one-half month to one month of salary per year of service, considering that the case had dragged on for almost 17 years. This aligns with prior rulings where long delays justified higher separation pay.

Practical Takeaways

• Joining an illegal strike has consequences. Rank-and-file workers who participate in an illegal strike may be reinstated, but they are not entitled to backwages for the strike period.
• Article 279 vs. Article 264(a). Full backwages under Article 279 apply only to unjust dismissal. Participation in an illegal strike falls under Article 264(a), which does not provide for backwages.
• No work, no pay. The principle of "a fair day's wage for a fair day's labor" means workers cannot claim wages for periods when they did not render service.
• Separation pay may substitute for reinstatement. When reinstatement is no longer feasible due to the passage of time or changed circumstances, separation pay of one month per year of service may be awarded.
• Union officers face stricter penalties. Union officers who knowingly participate in an illegal strike may lose their employment status entirely, unlike rank-and-file members who were merely induced to join.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.