Facts:

The case is titled "Ang Tibay, Represented by Toribio Teodoro, Manager and Proprietor, and National Workers' Brotherhood, Petitioners, vs. The Court of Industrial Relations and National Labor Union, Inc., Respondents." It was decided by the Supreme Court of the Philippines on February 27, 1940. The controversy originated from the Court of Industrial Relations, where Ang Tibay, a manufacturing company represented by its Manager Toribio Teodoro, was engaged in a collective bargaining dispute with labor organizations. The National Labor Union, Inc. (NLU), representing a group of workers employed by Ang Tibay, claimed that the employer terminated their contract under false pretenses, specifically alleging that Toribio Teodoro unjustly laid off workers due to a fabricated shortage of leather materials necessary for production. These workers ceased operations following a declared “paralysis” in the workplace, claiming unfair labor practices against their employer for dis

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Facts:

Parties Involved

• Petitioners:
• Ang Tibay, represented by Toribio Teodoro, Manager and Proprietor
• National Workers’ Brotherhood
• Respondents:
• The Court of Industrial Relations
• National Labor Union, Inc.

Nature of the Dispute

• The dispute centers on controversies arising out of labor relations, particularly concerning the termination of employment contracts that lack a fixed duration.
• The case involves claims and counterclaims regarding whether a temporary work cessation constitutes termination and, consequently, whether the affected workers lose their employee status.
• Allegations were made regarding an alleged shortage of leather soles that purportedly justified the lay-off of employees, a claim which was firmly contested by the National Labor Union, Inc.

Background and Claims

• The petitioner, Ang Tibay (through its representative Toribio Teodoro), contended that:
• There was indeed a shortage of leather soles on a specific date (September 26, 1938), necessitating a temporary lay-off.
• Certain actions taken, such as a letter to the Philippine Army dated September 29, 1938, were strategic maneuvers to forestall forfeiture of bonds and to manage the contractual breach with the Philippine Army.
• The respondent National Labor Union, Inc. argued that:
• The alleged shortage was unsubstantiated by official records (e.g., Bureau of Customs and Books of Accounts of native leather dealers).
• The cited shortage was merely a pretext for systematically discharging members of the union.
• The existence and operations of the National Workers’ Brotherhood, said to be dominated by Teodoro, were illegal.
• The exhibits and documents supporting Ang Tibay’s claim were difficult to obtain and therefore prejudiced the fairness of the original proceedings.

Procedural History and Motions

• The Court of Industrial Relations rendered a decision that was challenged by both parties.
• The Solicitor-General, on behalf of the respondent Court of Industrial Relations, filed a motion for reconsideration of selected legal conclusions in the majority opinion.
• National Labor Union, Inc. also moved for the vacation of the judgment and a remand for a new trial, arguing that the evidentiary record was deficient and prejudicial.
• In response, Ang Tibay filed an opposition to both the motion for reconsideration and the motion for a new trial.

Observations on the Administrative Tribunal

• The decision elaborates on the powers and functions of the Court of Industrial Relations as provided under Commonwealth Act Nos. 103 and 213.
• It highlights that the tribunal adopts a flexible approach by not strictly adhering to technical evidentiary rules, while still underscoring essential due process rights such as the right to a hearing and the necessity of substantial supporting evidence.

Issue:

Validity of Termination under Indefinite Contracts

• Whether an employment contract without a fixed term terminates automatically upon reaching customary wage payment dates or when a work stoppage (or forced lay-off) occurs.

Effect of Forced Work Cessation on Employee Status

• Whether workers who are laid off due to a forced stoppage (purportedly justified by alleged material shortages) lose their status as employees by operation of the contract terms.

Allegation of Unfair Labor Practice

• Whether an employer, having entered a collective bargaining agreement without a fixed term or specific work designation, is guilty of unfair labor practice if it declines to readmit workers discharged due to a forced stoppage.
• Whether favoritism—based on union affiliation—by readmitting members of one union over another constitutes an illegal or unfair practice.

Evidentiary Sufficiency and Procedural Fairness

• Whether the evidentiary record, which includes conflicting testimonies and disputed documentary evidence, is adequate to support the conclusions reached in the original decision.
• Whether the administrative tribunal properly observed fundamental due process principles when deciding the case, including the necessity of substantial evidence in support of its findings.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)