That was a season 1 episode, and the strike wasn't about their working conditions, it was because the three main tender engines (Gordon, Henry and James) decided they were too important to be shunting or fetching their own passenger coaches. They believed it to be beneath them, something only a lowly tank engine like Thomas should do. Since Thomas was away to work on his new branch line, they refused to work.

The Fat Controller got fed up with their jackassery and hostility towards another tender engine, Edward, and ended up buying Percy to do the shunting work. He then locked the three engines in the shed to teach them a lesson while letting Thomas, Percy and Edward do their work so they could think about how silly their actions were.

It's worth noting that Sodor didn't have much of a road system, and it was entirely reliant on the railway to move goods and passengers around. Having over half of the railway's motive power on strike for such a silly reason put Sodor and its people in a very precarious position. The engines were let out a few episodes later once they realized their own egos had put everything at risk.