20. Shell Oil Workers Union v.

Shell Oil Company AUTHOR: Gojar

G.R. No. L-28607, May 31, 1971
Topic: ULP by ER; Contracting out

CASE LAW/ DOCTRINE:

 There was a specific coverage in the CBA regarding the security guard EEs section in the premises of ER. That was an
assurance of security of tenure, at least, during the lifetime of the agreement.
o For what is involved is the integrity of the agreement reached, terms of which should be binding on both parties.
Such a state of affairs should continue during the existence of the contract.
o Hence the act of the ER transferring the 18 security guards to other department and hiring a private security
agency in return during the lifetime of the CBA, constitutes a violation of the CBA and is an ULP by the ER.
 Failure to comply such constitutes an unfair labor practice. The CBA doesn’t end with the execution of an agreement,
being a continuous process, the duty to bargain necessarily imposing on the parties the obligation to live up to the terms of
such a collective bargaining agreement if entered into.
EMERGENCY RECIT: ER Shell company dissolved the security guard sections at its Pandacan Installation NOTWITHSTANDING the
security guard section’s continuance, which is ASSURED by an existing CBA. ER then transferred 18 security guards to its other
department and hired a private security agency to undertake the work those security guards. ER Shell alleged that dissolution of
the security guard section to be replaced by an outside agency is a management prerogative. But Union argues otherwise, relying
on the assurance of the continued existence of a security section at least, during the lifetime of the CBA. Respondent Court
(Industrial Court Relations) ruled that even if such section would be abolished, the guard would not be left unemployed since they
would be transferred to another position with an increase in pay & with transfer bonus. ISSUE: Did the existing CBA on maintaining
security guard section, constitute a bar to the decision of the management to contract out security guards? YAAAAH!! HELD: There
was specific coverage concerning the security guard section in the collective bargaining contract, It is found not only in the body
thereof but in the two appendices concerning the age schedules as well as the premium pay and the night compensation to which
the personnel in such section were entitled. It was thus an assurance of security of tenure, at least, during the lifetime of the
agreement. For what is involved is the integrity of the agreement reached, terms of which should be binding on both parties. Such a
state of affairs should continue during the existence of the contract. IN THIS CASE, the stand of Shell company made it weaker since
as early as 1964, it was already studying the matter of dissolving the security guard section and contracting- out such service to an
outside agency. Then it reached a decision to implement it next year or on 1965. Then in July 1966, there was a joint consultation
b/w ER & union on that matter without any protest from the union. HOWEVER, on August 1966, a CBA was entered b/w the
parties which did assure the continued existence of the security guard section. ER didn’t even have to agree to such stipulation or
ER could have reserved the right to effect a dissolution & reassign the guards BUT it did not do so. Hence, it can’t now insist that it
was justified for pushing thru with the dissolution without violating the CBA. Failure to comply such constitutes an unfair labor
practice. The Shell Company, in failing to manifest fealty to what was stipulated in an existing collective bargaining contract, was
thus guilty of an unfair labor practice. The CBA doesn’t end with the execution of an agreement, being a continuous process, the
duty to bargain necessarily imposing on the parties the obligation to live up to the terms of such a collective bargaining agreement if
entered into, it is undeniable that non- compliance therewith constitutes an unfair labor practice.