G.R. No. L-21278 - Feati University vs. Bautista

Case Summary (G.R. No. L-21278)

Applicable Laws and Key Dates

Republic Act No. 875 (Industrial Peace Act), defining employer-employee relations, labor organization rights, and the jurisdiction of the CIR.
Commonwealth Act No. 103, governing the powers of the CIR including contempt powers and compulsory arbitration.
Key Dates: Faculty Club organized and notified the University on January 14, 1963; strike declared on February 18, 1963; Presidential certification of dispute to CIR on March 21, 1963; subsequent cases filed in CIR and petitions for certiorari lodged with the Supreme Court between May and July 1963. Decision rendered December 27, 1966.

Formation of the Labor Dispute and Initial Proceedings

The Faculty Club, a union representing university faculty, formally declared itself a registered labor union and presented collective bargaining demands to Feati University in January 1963. The University requested additional time to study these demands, and subsequently sought evidence of the Faculty Club’s status as a majority representative. The Faculty Club rejected extension requests, filed a strike notice citing refusal to bargain collectively, and declared a strike on February 18, 1963, leading to disruptions in university operations. Efforts at conciliation failed, prompting Presidential certification of the labor dispute to the CIR on March 21, 1963 pursuant to Section 10 of Republic Act No. 875.

Jurisdiction of the Court of Industrial Relations

The University challenged the jurisdiction of the CIR on grounds that it is an educational institution, not an industrial establishment, and that the Faculty Club members are independent contractors, not employees, thus excluding them from coverage under Republic Act No. 875. The CIR, through Judge Bautista, denied motions to dismiss, asserting jurisdiction based on the presidential certification and applicability of the Industrial Peace Act to the University. The Supreme Court reviewed prior jurisprudence holding that educational institutions not operated for profit are exempt from the Industrial Peace Act, but distinguished these cases by noting that Feati University is a profit-making entity that declared dividends to stockholders. Therefore, the Industrial Peace Act applies to Feati University.

Definition of Employer and Employee Under the Industrial Peace Act

The term “employer” in RA 875 is defined broadly, including any person acting in the interest of an employer, directly or indirectly, excluding labor organizations and government entities only in specified contexts. The University, which engages the services of professors under contracts and pays compensation, fulfills the role of employer under the Act. The faculty members are likewise “employees” because they perform services under contract and receive wages, maintaining an employer-employee relationship despite contention to the contrary. Notably, the status of employee is preserved during strikes, according to Section 2(d) of RA 875 and established labor jurisprudence, and independent contractor status was refuted based on the University's control over faculty work conditions.

Validity of the Presidential Certification of the Labor Dispute

The Supreme Court upheld the validity of the presidential certification under Section 10 of RA 875, which requires only that a labor dispute exists in an industry indispensable to national interest. The presence of a labor dispute was shown by the Faculty Club’s organized strike, demands for collective bargaining, and the disruption to the university's large student body and operations, thus justifying the President’s certification. The Court affirmed that the CIR gains exclusive jurisdiction once certification is made and that judicial interference in the President's discretionary certification is improper.

Legality of the Return-to-Work Orders and Related Proceedings

The CIR issued a return-to-work order directing the striking faculty members to resume duties under pre-strike terms and conditions and enjoined the University from dismissing employees without prior court authorization. The University contested this order alleging it impaired contracts with replacement professors and exceeded the CIR’s authority since the legality of the strike was not yet determined. The Supreme Court upheld the CIR’s authority to issue return-to-work orders following certification, clarifying that these orders are part of the Court’s broad remedial powers to effect prompt dispute resolution under Commonwealth Act No. 103 and RA 875, including power to issue such orders even post-strike declaration. The Court rejected the argument that replacement hires created binding contracts displacing strikers, citing labor law principles that strikers retain employment status and replacements hold only temporary status subject to CIR orders.

Contempt Proceedings Against University Officials

The CIR issued an order for the arrest of certain university officials charged with indirect contempt for alleged violations of the return-to-work order. The University claimed the contempt actions were improper due to the order’s purported illegality and pending motions for reconsideration. The Supreme Court validated the CIR’s contempt authority pursuant to Commonwealth Act No. 103, which empowers the CIR to enforce its orders and punish contempt even if challenged by appeal, especially in cases involving strikes and lockouts. The arrest order was a procedural measure to secure presence for hearing, not a penalty per se, and was found to be within CIR’s jurisdiction and discretion.

Issues Regarding the Petition for Certification Election (Case No. 1183-MC)

The Faculty Club filed a petition for certification election to be recognized as the exclusive bargaining representative, which the University opposed. The Faculty Club later moved to withdraw this petition on the grounds that the issues raised were absorbed by the certified strike case (41-IPA). The CIR granted the withdrawal, which the University challenged. The Supreme Court held that the CIR did not err in permitting withdrawal because all related labor dispute issues could be addressed in the certified main case, rendering separate resolution of the certification petition unnecessary. The withdrawal effectively produced the outcome the Uni

Case Syllabus (G.R. No. L-21278)

Background and Parties Involved

The dispute arose between Feati University (petitioner) and the Feati University Faculty Club-PAFLU (respondent), a labor union composed of university professors and instructors.
The Faculty Club formally organized as a registered labor union and presented demands for collective bargaining to the University.
The University questioned the Faculty Club’s majority status and legitimacy as a bargaining representative.
The Faculty Club declared a strike after the University refused to bargain collectively, disrupting classes.
The President of the Philippines certified the labor dispute to the Court of Industrial Relations (CIR) pursuant to Section 10 of Republic Act No. 875 (Industrial Peace Act).

Cases Before the Supreme Court and Preliminary Orders

Three related cases were consolidated for consideration:
- G.R. No. L-21278: Petition for certiorari and prohibition with writ of preliminary injunction challenging CIR’s jurisdiction and orders.
- G.R. No. L-21462: Petition for certiorari appealing the CIR order granting withdrawal of the Faculty Club’s petition for certification election.
- G.R. No. L-21500: Petition for certiorari appealing CIR orders in the labor dispute case concerning the strike.
The Supreme Court issued a preliminary injunction restraining the presiding CIR judge from proceeding with the cases.
The University sought annulment of several CIR orders regarding jurisdiction, return-to-work orders, contempt proceedings, and certification election withdrawal.

Nature of Labor Dispute and CIR Proceedings

CIR Case No. 41-IPA related to the strike and labor dispute certified by the President.
The Faculty Club asserted its right to collective bargaining and conducted a strike due to the University’s refusal to bargain.
The CIR Judge denied motions to dismiss the cases for lack of jurisdiction, ruled the Industrial Peace Act applicable, and issued return-to-work orders.
The Faculty Club filed contempt complaints against University officials for noncompliance with CIR orders.
CIR Case No. 1183-MC involved the Faculty Club’s petition for certification election as exclusive bargaining representative.
CIR Case No. V-30 was the contempt case against University officials.

Issues on CIR Jurisdiction and Application of the Industrial Peace Act

The University claimed:
- It was not an "industrial establishment" under Republic Act No. 875.
- The Faculty Club members were independent contractors, not employees.
- Therefore, the CIR lacked jurisdiction.
The Court reviewed precedents involving educational institutions and labor law, notably:
- Institutions organized and operated not for profit (e.g., University of San Agustin, Boy Scouts of the Philippines, La Consolacion College) were held not to be under the Industrial Peace Act.
- Institutions operated for profit (e.g., Far Eastern University) were held to be covered by the Industrial Peace Act and subject to CIR jurisdiction.
The Court found Feati University declared dividends and operated for profit, thus falling within the ambit of Republic Act No. 875.
The term "employer" under the Act is to be interpreted broadly and includes any person acting in the interest of the employer, not limited to industrial establishments.
Professors and instructors were held to be employees, not independent contractors