SSS vs. SSS Supervisors' Union-CUGCO

The principle of "a fair day's wage for a fair day's labor" precludes the payment of wages to employees who did not actually perform work during a strike period where the employer is not at fault, there being no lockout or unfair labor practice; consequently, the economic loss arising from circumstances beyond the employer's control should not be shifted to the employer but must be borne by the employees.

The case is an offshoot of Case No. 46-IPA (49), a labor dispute certified to the Court of Industrial Relations (CIR) for compulsory arbitration between the Social Security System (SSS) and the Philippine Association of Free Labor Unions (PAFLU), a rank-and-file union. The dispute involved the interpretation of certain provisions of their Collective Bargaining Agreement. On August 29, 1968, the CIR issued an order enjoining the parties to maintain the status quo and refrain from staging strikes or lockouts. Despite this order, PAFLU staged a 17-day strike in 1968, prompting the SSS to file an Urgent Petition to declare the strike illegal. The SSS Supervisors' Union, a separate bargaining unit representing supervisory employees, was not a party to the labor dispute but filed a motion for intervention seeking wages for its members who were prevented from working during the strike.

• The Philippine Association of Free Labor Unions (PAFLU), representing rank-and-file employees of the SSS, staged a 17-day strike in 1968 in defiance of a CIR status quo order dated August 29, 1968.
• The SSS Supervisors' Union (respondent) was not a participant in the strike and its members manifested their desire to report for work.
• The supervisors were physically prevented from entering the work premises by the picket lines established by the striking PAFLU members.
• The Supervisors' Union filed a Motion for Intervention on September 26, 1968, averring that its members were willing and ready to work but were barred from doing so by circumstances beyond their control.
• The Union initially sought payment of salaries for the strike period to be charged against the accrued leave credits of its members.
• The CIR allowed intervention and, in its Order dated March 12, 1969, directed the SSS to pay the salaries chargeable to leave credits pending resolution of the strike's illegality.
• In a subsequent Order dated March 3, 1970, the CIR clarified that the payment should not be charged to leave credits, reasoning that the strike had been declared premature and the supervisors were not at fault.
• The CIR en banc denied the SSS motion for reconsideration on March 25, 1970, prompting the instant petition for certiorari.

• The Social Security System argued that since the members of the Supervisors' Union admittedly did not render any service during the 17-day strike period, they were not entitled to payment of salaries under the established principle of "no work, no pay."
• The SSS contended that the Court of Industrial Relations acted without authority and with grave abuse of discretion in issuing the orders dated March 3, 1970 and March 25, 1970, which compelled the employer to pay wages for services not actually rendered.
• The SSS maintained that it was not responsible for the economic loss suffered by the supervisors, as the work stoppage was not caused by any lockout, dismissal, or unfair labor practice on its part, and therefore the burden of the loss should not be shifted to the faultless employer.

• The SSS Supervisors' Union argued that its members had no participation in the illegal strike staged by PAFLU and had actually manifested their desire to report for work and perform their duties.
• The Union asserted that the members were prevented from entering the work premises solely by the picketers of the striking union, circumstances entirely beyond their control and not attributable to them.
• The Union contended that equity demanded payment of their salaries, as they were ready, willing, and able to work but were illegally barred from doing so, and the Supreme Court had already declared the PAFLU strike premature.

• Procedural Issues: Whether the Court of Industrial Relations acted with grave abuse of discretion or in excess of jurisdiction in issuing the orders dated March 3, 1970 and March 25, 1970 directing the SSS to pay wages to supervisory employees who did not render service during the strike period.
• Substantive Issues: Whether the Social Security System is liable to pay wages to members of the SSS Supervisors' Union for the 17-day strike period despite their non-participation in the strike and their inability to report for work due to the picket lines of another union.

• Procedural: The Supreme Court found that the Court of Industrial Relations committed grave abuse of discretion in ordering the payment of wages to employees who did not render service, as such orders were issued without sufficient legal basis and contrary to the fundamental principle of "a fair day's wage for a fair day's labor." The Court set aside the CIR orders dated March 3, 1970 and March 25, 1970.
• Substantive: The Court ruled in favor of the Social Security System, holding that the principle of "a fair day's wage for a fair day's labor" precludes payment of wages where no work was actually performed. The Court held that employees are not entitled to wages for the period they did not work unless they were illegally locked out, dismissed, or suspended. Since the supervisors' failure to work was due to circumstances not attributable to the employer (there being no lockout or unfair labor practice), and the SSS was equally faultless, the economic loss must be borne by the employees themselves and not shifted to the employer. Justice and equity demand that each party bear its own loss where neither is at fault.

• "Fair Day's Wage for a Fair Day's Labor" — This is the fundamental rule governing the relationship between labor and capital, which dictates that wages are compensation for work actually performed. If there is no work performed, there can be no wage or pay, unless the laborer was able, willing, and ready to work but was illegally locked out, dismissed, or suspended by the employer. In this case, the Court applied this doctrine to deny the claim for wages where the work stoppage was caused by a third party's strike and not by any fault of the employer.
• "No Work, No Pay" Principle — A corollary to the fair day's wage doctrine, this principle establishes that employees who do not render service are not entitled to compensation, except when the employer's own illegal act (such as a lockout or unfair labor practice) prevents them from working. The Court applied this to hold that the economic loss arising from a strike by another union, where the employer is not at fault, should not be shifted to the employer.

• "The age-old rule governing the relation between labor and capital or management and employee is that of a 'fair day's wage for a fair day's labor.'"
• "If there is no work performed by the employee there can be no wage or pay, unless of course the laborer was able, willing and ready to work but was illegally locked out, dismissed or suspended."
• "It is hardly fair or just for an employee or laborer to fight or litigate against his employer on the employer's time."
• "Under the circumstances, it is but fair that each party must bear his own loss."
• "Justice and equity demand that each must have to bear its own loss, thus placing the parties in equal footing where none should profit from the other there being no fault of either."

• J. P. Heilbronn Co. v. National Labor Union, 92 Phil. 577 (1953) — Cited as authority for the principle that there can be no wage or pay if there is no work performed by the employee, establishing the "fair day's wage for a fair day's labor" doctrine.
• Pan American World Airways, Inc. v. CIR, 17 SCRA 821 (1966) — Cited for the principle that where the work stoppage is not the direct consequence of the company's lockout or unfair labor practice, the economic loss should not be shifted to the employer, and each party must bear its own loss.