Title
Far Eastern University vs. Court of Industrial Relations
Case
G.R. No. L-17620
Decision Date
Aug 31, 1962
FEU reduced Aguirre's teaching load and terminated him due to union activities, committing unfair labor practice. SC upheld reinstatement, back wages, and emoluments, ruling his alternative employment was not substantially equivalent.
unfair labor practice
union activities
reinstatement

Case Summary (G.R. No. L-17620)

Factual Background

Aguirre’s compensation and teaching status changed within the relevant period. Initially employed at P6.00 per hour, he was later contracted to teach in the Boy’s High School Department at P30.00 per class, producing an average monthly income of P500.00 to P600.00. After joining the PACUP, Aguirre recruited members, influencing seven faculty members (Exhibits ‘B’, ‘B-1’ to ‘B-6’). Despite his campaigning efforts, other faculty members feared retaliation from the University if they joined the union.

In 1953, the University classified faculty and determined fixed compensation. From that process, ninety-six of more than four hundred faculty members were classified as full time instructors, including Aguirre, assigned as full time instructor in the Institute of Education. His fixed monthly salary was P450.00, effective September 1, 1953.

Between December 1953 and May 1954, Aguirre received teaching-related pay. Specifically, the quoted record states that he was paid: December 1953 — P210.00; January 1954 — P302.40; February 1954 — P313.20; and March 1954 — P249.00. In June 1954, the University stopped giving him teaching assignments.

Aguirre claimed that the stoppage of assignments was because of his PACUP union activities. The University countered that the stoppage resulted from decreased enrolment in the Institute of Education, particularly in the Filipino Language class in which he taught. The dean of the Institute of Education, Luz A. Zafra, testified and admitted that the reason for the absence of assignments in June 1954 was steadily decreasing enrolment in the Filipino Language class. She further testified that, in assigning subjects, length of service, experience, preparation and professional growth, and student-faculty relation were considered. She also noted that other Filipino Language instructors included Baldomero de Jesus, Teodoro Gener, Rosario Bernardo, Dolores Gupit, Inigo Regalado, and Flordeliza Mendoza. The record reflects that most of these instructors were older than Aguirre, except Regalado, Bernardo, and Mendoza.

The trial record also addressed the University’s assertion of business necessity by reference to its finances. The court below examined the University’s balance sheets and found that the University’s net profit increased in successive fiscal years, including from P153,035.25 in 1952–1953 and P258,619.98 in 1953–1954, rising further in later years. The record accordingly questioned whether the asserted enrolment decline plausibly justified removing Aguirre’s teaching assignments while other instructors, including part time professors, received assignments and Aguirre, a full time instructor on fixed monthly salary, was abruptly reduced.

A further factor concerned the status of Aguirre’s academic specialization and union context. The trial judge and the CIR treated Aguirre as specialized in Tagalog. The University’s narrative that reduced enrolment required the curtailment of his teaching load was placed against the evidence that full time instructors not belonging to the PACUP did not suffer the same abrupt reduction and the fear exhibited by other faculty who declined to join the union.

Procedural History Before the Court of Industrial Relations

On September 28, 1954, at the instance of PACUP and/or Aguirre, an Acting Prosecutor of the Court of Industrial Relations filed a complaint for unfair labor practice against the University. The University later moved to dismiss the complaint on November 17, 1954. On February 4, 1955, Aguirre filed a motion to withdraw the complaint on the ground that there had already been a decision of the Director of Private Schools ordering the University to reinstate him and pay back wages and wage differential, and alleging that the University was using the pendency of the CIR case to avoid compliance.

Acting on that motion, the CIR dismissed the complaint on March 29, 1955. However, on August 30, 1955, the order of dismissal was set aside upon the complainant’s motion, dated April 22, 1955, because an expected amicable settlement had not materialized. The University then filed a supplemental pleading on October 10, 1955, both of which were denied by the CIR on June 23, 1956. The case then proceeded to trial, with issues joined.

Judge Arsenio I. Martinez rendered the initial decision finding the University guilty of unfair labor practice. The University was sentenced to pay Aguirre: (a) the salary differential due from December 1, 1953 to May 31, 1954, based on P450.00 per month; and (b) back wages at the same monthly rate from June 1, 1954 to November 17, 1955, subject to deductions for compensation paid to Aguirre by the Philippine College of Commerce from June 1, 1955 to November 17, 1955. The University was also directed to cease and desist from further unfair labor practices.

Significantly, Judge Martinez did not order reinstatement. The rationale was that Aguirre’s employment in the Central Bank of the Philippines fell within the coverage of the Industrial Peace Act as a substantial equivalent of his position as full time instructor in the University.

On motion for reconsideration, the CIR sitting en banc affirmed the finding of unfair labor practice and upheld the award of salary differential and back wages. The CIR, however, modified the aspect concerning reinstatement. It held that Aguirre’s Central Bank and Philippine College of Commerce employment was not a substantial equivalent of his position as a full time instructor in the University. Consequently, it ordered reinstatement and ordered payment of wage differential and back wages, together with “other emoluments.”

The University’s Theory and the CIR’s Modification

The Supreme Court noted the procedural posture as an appeal by certiorari. The CIR, as appellee, sought dismissal of the appeal for lack of merit on the ground that the appellant raised no question of law. The University’s contention on appeal centered on the argument that the employment of Aguirre in the Central Bank of the Philippines, and his teaching load in the Philippine College of Commerce, were substantial equivalents of his former position in the University.

The resolution appealed from had expressed multiple reasons for rejecting substantial equivalence:
First, Aguirre’s work in the University was that of a professor while his work in the Central Bank was clerical in nature. Second, as a professor his maximum teaching period was five (5) hours daily, whereas in the bank he worked eight (8) hours a day. Third, although his Central Bank employment allowed him to teach part time at the Philippine College of Commerce for one hour, the resolution reasoned he could do similarly if he had remained employed in the University. Fourth, it emphasized a disparity in annual earnings: P5,400.00 per year from the University versus P3,000.00 per year from the Central Bank, treating that as decisive.

The resolution cited labor authorities for the proposition that any employment at a lower wage rate is not substantially equivalent employment.

Even though Aguirre was described in the CIR’s resolution as not a professor but a full time instructor in the University, the Supreme Court agreed with the CIR en banc. The Supreme Court added another decisive factor not mentioned in the appealed CIR resolution. It focused on the nature of Aguirre’s specialization: he was an instructor in Tagalog, and, therefore, his work as researcher in the Central Bank had no equivalent career prospects in the Central Bank. The Court reasoned that the situation might have differed if Aguirre’s specialization were in economics, but given his Tagalog specialization, his role in the Central Bank was inferior to his full time instructional work in the University, not principally because of salary differences, even when those were combined with his Philippine College of Commerce emoluments, but because the University provided a career track as an instructor that did not exist in the Central Bank setting.

Legal Issues Framed by the Disposition

The decisive legal issue turned on whether, under the Industrial Peace Act, Aguirre’s later employment—particularly his position as a Central Bank employee and his part time teaching at the Philippine College of Commerce—should be regarded as a substantial equivalent of his prior position as a full time instructor in the University. This issue controlled whether reinstatement was warranted.

The Supreme Court treated the CIR en banc’s conclusion on substantial equivalence as correct, thereby affecting the remedy. The Court also implicitly treated the factual matrix bearing on unfair labor practice and the evidentiary basis for the wage awards as already affirmed by the CIR en banc, given that the Supreme Court’s analysis centered on substantial equivalence and the reinstatement consequence.

Findings on Unfair Labor Practice and the Remedy of Back Wages

The factual findings supporting the unfair labor practice finding were grounded in the record summarized in the appealed proceedings. The University’s explanation of reduced enrolment was weighed against evidence that: Aguirre had union activity with recruitment efforts; the abrupt reduction of his teaching assignments did not similarly affect other faculty; teaching subject assignments reflected considerations such as experience and service; and the University’s profit performance did not readily support the asserted necessity for the action taken against Aguirre.

The CIR also addressed the normal rule that back wages are granted when there is a finding of unfair labor practice. At the same time, the trial court record reflected that Aguirre obtained alternative employment. The lower decision’s narration stated that since June 1955, Aguirre had started teaching at the Philippine College of Commerce with an income of P100.00 a month. It further stated that on November 17, 1955, he began working as a permanent employee in the Central Bank of the Philippines, with

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