G.R. No. 173252 - Unisource Commercial and Development Corp. vs. Chung

Case Summary (G.R. No. 173252)

Factual Background

On December 16, 1948, affiliates of La Union Labor Union, who were working with petitioners (except the security guards), staged a strike to obtain payment of unpaid wages and salaries. After representation by the respondent union, the unpaid wages and salaries of the striking workers and employees were paid on December 28, 1948. Reinstatement, however, was not carried out.

On December 29, 1948, petitioners discovered that many radios, tires, and other equipment deposited in their bodega at San Fernando, La Union were stolen, including the generator used in the area. The Court of Industrial Relations later treated as significant that the thefts were not reported to management by the security guards. Petitioners therefore laid off the security guards, employed new ones, and ordered that the other workers and employees not be re-admitted, except for a skeleton force, pending investigation by the Constabulary.

After petitioners failed to re-admit the workers and after they refused to re-employ the security guards dismissed for cause, the respondent union invoked the jurisdiction of the Court of Industrial Relations.

Court of Industrial Relations Petition and Company’s Answer

Upon petition of the respondent union, the Court of Industrial Relations required petitioners, among others, to reinstate the workers who had struck and to re-employ the security guards who had been fired, with payment of wages and salaries during the period of lay-off and suspension.

Petitioners answered on February 2, 1949, asserting three points: first, that the firing of the security guards was for good cause; second, that because of substantial losses from thefts and pilferages, the company could only resume limited operations and engage only a few workers; and third, that the discharged security guards had been guilty of breach of trust and their re-employment would prejudice the company.

Decision of April 3, 1950 and Finality

After trial, Presiding Judge Arsenio Roldan rendered a decision on April 3, 1950. The decision ordered petitioners to reinstate the laborers and the security guards to their former jobs, or, if reinstatement was not possible, to grant one month separation pay.

The decision became final and executory because counsel for the company failed to perfect the appeal within the reglementary period. The company then filed an original petition for a writ of certiorari with the Supreme Court, while the respondent union moved for execution of the decision.

On June 10, 1950, the Court of Industrial Relations denied the motion for execution but required petitioners to post a bond of P10,000. Petitioners sought to reduce the bond, but the Supreme Court dismissed the petition for certiorari for lack of merit. The subsequent attempts by the company to reconsider the bond requirement did not prosper.

Post-Finality Developments and Amendment of the Award

The Court of Industrial Relations ultimately proceeded with clarification and amendment proceedings after further developments. On August 20, 1950, petitioners filed another motion for reconsideration, opposed by the respondent union. The union informed the court that petitioners were preparing to close their business at San Fernando, La Union and to resume operations in Manila, asserting that this would prejudice the laborers. The union thus requested clarification of the award in the April 3, 1950 decision.

Following a re-hearing, the Court of Industrial Relations amended the original decision by a resolution dated September 30, 1950. The amendment changed the manner of reinstatement by requiring reinstatement in Manila for those who wanted re-employment there, while requiring the payment of thirty (30) day separation pay for those who did not want to be re-employed in Manila. It was this amended disposition, later reflected in the resolution dated September 20, 1950 (as characterized in the petition), that prompted the present petition for review.

The Issues Raised on Review

Petitioners framed three issues. First, they claimed the Court of Industrial Relations gravely abused its discretion and acted in excess of jurisdiction when it ordered reinstatement or one-month separation pay for all workers indiscriminately, “honest men and thieves alike.” Second, they alleged a violation of their right to equal protection of the laws because the workers were given the entire choice between reinstatement and one-month separation pay, disregarding petitioners’ rights and interests. Third, they contended that one-month separation pay was ordered without regard to whether laborers were on salary basis or not.

Respondents, in contrast, urged that: (A) the Court of Industrial Relations possessed power to amend its decision in a case already declared final and executory by the Supreme Court, and (B) the amendment did not amount to grave abuse of discretion or excess of jurisdiction, nor to deprivation of equal protection.

Res Judicata and the Court’s Continued Power to Amend

After studying the parties’ positions, the Court held that respondents’ contention was correct at that stage of the proceedings. The Court ruled that it could no longer review the merits of the original petition on reinstatement, wages, and separation-related awards because the Court of Industrial Relations had already decided these matters in the April 3, 1950 decision, which had become final and executory due to the company’s failure to appeal in time. The Court characterized these matters as having acquired the character of res judicata.

The Court then addressed an important qualification. After the decision became final, the award was amended in light of developments occurring later, which allegedly changed the relative situation of the parties—particularly the laborers’ situation. The laborers claimed that without clarification, their interests would be jeopardized. Petitioners argued that the Court of Industrial Relations lacked power to amend a final judgment.

The Court held otherwise. It ruled that the Court of Industrial Relations possessed such power in view of sections 7 and 17 of Commonwealth Act No. 103, as amended. Under section 7, the Court of Industrial Relations could correct, amend, or waive any error, defect, or irregularity, whether in substance or in form, and could give directions necessary or expedient for determination of disputes. Under section 17, the same court could alter, modify, or set aside, during its effectiveness, any award, order, or decision it rendered, upon application and after due hearing, and an award, order, or decision was deemed effective for at least three years unless a shorter period was fixed. The Court emphasized that the clear object of these provisions was to maintain continuing control over the case in the interest of both management and labor, to accord substantial justice while remaining consistent with the liberal legislative policy that the Court should act according to justice and equity and should not be bound by technical rules of legal evidence, citing section 20 of Commonwealth Act No. 103, as amended.

The Court relied on prior decisions discussed in the text—Pasumil Workers Union vs. Court of Industrial Relations and Andres Goseco vs. Court of Industrial Relations—as supporting authority for the approach described.

Merits of the Amendment: Reinstatement in Manila or Separation Pay

Turning to the merits of the amendment itself, the Court compared the original award and the amended award. The original award required petitioners to reinstate the striking workers to their former jobs or, if reinstatement could not be done, to give them one month’s pay in lieu of notice of separation. The amended award, in contrast, required reinstatement in Manila for those who wished re-employment there, and required payment of one month separation pay for those who did not wish to be re-employed in Manila.

Petitioners argued that the amendment deprived them of the right to equal protection because it gave the workers an absolute choice. The Court rejected this contention

Case Syllabus (G.R. No. 173252)

Parties and Procedural Posture

Petitioners were C. E. Church, Joseph Abelow and K. H. Hemady, doing business under the name and style of Church and Company.
Respondent was La Union Labor Union, an association authorized to act as a collective bargaining agency by the Department of Labor, together with Judges of the Court of Industrial Relations.
Petitioners sought a petition for review of a resolution of the Court of Industrial Relations dated September 20, 1950, which amended a prior decision by adding a new clause to the dispositive part.
The underlying labor controversy was decided by Presiding Judge Arsenio Roldan, whose decision dated April 3, 1950 ordered reinstatement or, alternatively, one month separation pay.
The April 3, 1950 decision had become final and executory due to petitioners’ failure to perfect an appeal within the reglementary period.
Despite finality, the Court of Industrial Relations later amended the award through a resolution dated September 30, 1950, after developments allegedly changing the parties’ relative situation.
The Supreme Court ultimately considered whether the industrial court still had authority to amend its final award and whether the amendment violated grave abuse of discretion or equal protection.

Key Factual Allegations

Petitioners operated a business repairing, overhauling, and selling machinery and radios formerly known as surplus property, located at the Signal Depot at San Fernando, La Union.
La Union Labor Union had affiliates employed by petitioners and represented them as a collective bargaining agency.
On December 16, 1948, the affiliates staged a strike to secure payment of unpaid wages and salaries, and payments were made on December 28, 1948.
For reasons described as unknown, the striking workers’ reinstatement did not follow despite wage payment.
On December 29, 1948, petitioners discovered numerous stolen items in their bodega, including radios, tires, equipment, and the generator used in the area.
Petitioners alleged that the theft incident was never reported to management by the security guards, whose alleged omission formed the basis for laying them off and hiring replacements.
Petitioners issued orders not to re-admit the other workers and employees, except a skeleton force, pending a Constabulary investigation of irregularities.
After settlement of the strike and refusal to re-employ discharged security guards, respondent union filed a labor petition seeking reinstatement and compensation during lay-off and suspension.
The union’s petition demanded: reinstatement of the workers who struck, re-employment of the security guards fired, and payment of wages and salaries during the period of lay-off and suspension.

Court of Industrial Relations’ Original Award

On February 2, 1949, petitioners answered the union’s petition by asserting: (a) that firing the security guards was for good cause; (b) that the company suffered vast losses from thefts and could only resume limited operations and employ few workers; and (c) that reinstating fired security guards would prejudice the company because of alleged breach of trust.
On April 3, 1950, after trial, Presiding Judge Arsenio Roldan ordered petitioners to reinstate the laborers and the security guards to their former jobs, or, if reinstatement was impossible, to give them one month separation pay.
The decision became final and executory because petitioners’ counsel did not perfect the appeal within the prescribed period.
The company later sought certiorari in the Supreme Court, and the Supreme Court dismissed the petition for lack of merit, leaving the requirement to file a bond in place after litigation before the industrial court.

Post-Finality Developments and Amended Dispositive Clause

After the final April 3, 1950 decision, respondent union sought execution.
The Court of Industrial Relations denied execution at first on June 10, 1950, but required petitioners to post a bond of P10,000.
Petitioners sought to reduce the bond amount, but the request was opposed by the union and the opposition was sustained.
On August 20, 1950, petitioners filed another motion for reconsideration, which was again objected to by the union.
The union informed the court that petitioners intended to close the San Fernando, La Union business and resume operations in Manila, which the union argued would prejudice the laborers.
The industrial court held a re-hearing and amended the original award through a resolution dated September 30, 1950.
The amended dispositive clause required that petitioners