Title
Magdalena Estate, Inc. vs. Kapisa ng mga Manggagawa sa Magdalena Estate, Inc.
Case
G.R. No. L-18336
Decision Date
May 31, 1963
A union challenged unfair labor practices by an estate company, alleging dismissals linked to union activities. The Supreme Court upheld reinstatement and back wages for dismissed employees, finding substantial evidence of unfair practices and rejecting the company's retrenchment defense.
unfair labor practice
reinstatement
full back wages

Case Summary (G.R. No. L-18336)

Factual Background and Allegations of Unfair Labor Practice

Acting CIR Prosecutor Pedro M. Ligaya filed on June 6, 1958, on behalf of respondent union, a complaint for unfair labor practice docketed as Case No. 1616-ULP. The complaint alleged, in substance, that petitioners locked out the union’s 66 members on November 25, 1957, which led to the filing of a separate CIR unfair labor practice case, Case No. 1517-ULP. It further alleged that the union later caused the dismissal of Case No. 1517-ULP after the workers were readmitted on December 9, 1957.

The complaint then focused on additional events. It asserted that shortly before December 25, 1957, the corporate officers and agents of petitioners required union members to sign an application form (identified as Annex E), with the stated condition that otherwise they would not receive Christmas bonus. It alleged that on and after February 28, 1958, petitioners required the union members to sign another application form (identified as Annex F) under threat of dismissal, and that the members refused.

As consequences, the complaint alleged that on April 13, 1958, petitioners dismissed without just cause a list of union officers and/or members, including Buenaventura de la Cruz, Ramon Veloso, Potenciano Lerios, Serapio Gasigan, Nicolas Benigno, Manuel Orbien, Rosendo Manuel, Domingo Limbauan, Andres Mayuga, Amando Lozana, Nicasio Palogan, Roberto Lopez, Geronimo Gilliaco, Isidro Gatan, Antonio Tandaya, Candido Quilang, Eugenio Narabe, and Cenon Galvez, because of their union affiliations and activities, their refusal to sign Annex F, and their filing of charges and anticipated testimonies. The complaint added that on March 6, 1958, another union member, Nelson Helican, was likewise unjustly dismissed.

Petitioners’ Answer and Special Defenses

Petitioners denied all material allegations but admitted two employment facts: that the laborers described in Paragraph 13 were laid off on April 13, 1958, and that the service of Nelson Helican was terminated on March 6, 1958.

As special defenses, petitioners argued: first, that the controversy had been submitted for conciliation to the Department of Labor’s Conciliation Service, that the union ceased attending while conferences were held, and that the workers resumed after an “overhauling and inventory” of petitioners’ equipment, giving the impression that the union desisted from pursuing demands.

Second, they contended that Republic Act No. 875 did not require written employer replies to employee proposals or demands, and thus that their verbal responses on October 24 and 29, 1957, and on November 19 and 26, 1957 constituted substantial compliance.

Third, they asserted that the union was not yet qualified to be an exclusive bargaining representative because it had not been selected by the majority of employees through a certification election.

Fourth, they maintained that the workers in the Road Department were employed on a day-to-day basis and depending on business needs, and that the corporation reserved the right to determine who and how many laborers would be hired from day to day.

CIR Decision on the Merits

After issues were joined, the CIR heard the case. On September 5, 1960, the CIR, through Judge Arsenio Martinez, rendered a decision declaring petitioners guilty of unfair labor practice. The CIR directed petitioners to cease and desist from further unfair labor practice and ordered the reinstatement of four union members—Candido Quilang, Buenaventura de la Cruz, Eugenio Narabe, and Nelson Helican—to their former Road Department positions.

The CIR ordered payment of back wages from April 13, 1958 for Quilang, Cruz, and Narabe, and from March 6, 1958 for Helican, up to actual reinstatement. It further directed that the reinstated employees would receive all rights, privileges, and benefits, including seniority. The CIR also suggested that if openings arose or business exigencies required additional laborers, the other complainant-union members who did not testify could be given an opportunity to work again.

Resolution En Banc on Motion for Reconsideration

Respondent union moved for reconsideration from the portion of the decision omitting the 15 other complainant-members from the reinstatement order. On March 27, 1961, the CIR en banc issued a resolution by a vote of three against two, affirming the finding of unfair labor practice and extending the affirmative relief. The CIR en banc declared that, because there was substantial evidence of unfair labor practice committed against the 15 employees, the action applied to the four who testified should be applied also to the 15, namely, reinstatement with back wages from April 13, 1958 until reinstated.

The decision records that Judges Villanueva and Bugayong concurred with the majority opinion of Presiding Judge Bautista, while Judge Martinez dissented and Judge Tabigne concurred with the dissent.

Issues Raised in the Petition for Review

Petitioners challenged the CIR’s action as extending relief to employees who did not testify. They asserted that the case was not a class suit under Section 12, Rule IS of the Rules of Court, and thus the reinstatement and back wages awarded to the four employees who appeared and testified could not be extended to the fifteen others. Petitioners also invoked alleged errors in the CIR’s treatment of the reasons for dismissal, particularly the claim of a retrenchment policy and the claimed failure to consider evidence on the dismissal of the fifteen employees.

The Court’s Treatment of the “Class Suit” and Participation Argument

The Court held that the petitioners’ class-suit argument did not control the outcome. The Court reasoned that petitioners’ position might have been correct if this had been an ordinary proceeding governed strictly by the technicalities of the Rules of Court. The Court emphasized, however, that the CIR, in the exercise of its duties and powers under Commonwealth Act No. 103, was “not bound by any technical rules of evidence,” and could inform its mind “as it may deem just and equitable.”

The Court found that, although not strictly compliant with the class-suit requirements under the Rules of Court, the complaint substantially complied. It noted that the complaint was filed in the name of the respondent union and that all dismissed laborers, except Nelson Helican, were regular employees and members of the complainant union. The Court quoted CIR findings that the dismissed laborers were union members known to petitioners through exhibits reflecting membership, and that the fifteen non-testifying laborers were also regular employees as shown by exhibits reflecting periods of employment and positions held.

The Court further found that the causes of action were common to all complainants: the requirement to sign application forms that would place employees under a temporary status removable at company pleasure; the employees’ refusal to sign; and their dismissal in consequence. It also found that the relief sought—reinstatement with full back wages to former positions—was a matter of general or common interest to the 19 dismissed employees.

Substantial Evidence of Unfair Labor Practice as to the Fifteen Non-Testifying Employees

The Court addressed whether the CIR erred in finding substantial evidence of unfair labor practice against the fifteen employees who did not testify. It referred to specific CIR factual findings indicating that these employees worked continuously for a long time without being required to sign any contract, but that they were required at later dates to sign application forms. The Court highlighted CIR findings that signing would place employees under company discretion because after expiry the company could dismiss them, and that after the company learned of the existence of the union on November 10, 1957, the fifteen non-testifying employees were required to sign forms similar to those required of the four who testified.

The Court also stressed that respondents’ exhibits showed that the fifteen employees did not sign the contract. It added that notices of separation and letters of dismissal were given to the fifteen employees on April 12, 1958, in the same manner as for the four who testified. The Court noted the CIR observation that the letters contained expressions of “gratitude” that did not align with petitioners’ claim of inefficiency or misconduct.

The Court treated these factual findings as providing substantial evidence supporting the CIR’s unfair labor practice determination as to all nineteen employees, even though only four had testified. It stated that the complaint alleged that all nineteen were dismissed because of union affiliation and activities, refusal to sign Annex F, and for filing charges against the petitioners, as well as for being about to give testimonies.

Rejection of Petitioners’ Reliance on Dimayuga, et al. vs. CIR, et al.

Petitioners invoked Dimayuga, et al. vs. CIR, et al. (101 Phil., 590). The Court held that the reliance was misplaced. It reasoned that in Dimayuga, the case was filed in the individual names of the petitioners there as individual complainants, unlike the present complaint filed in the name of the union for its dismissed members. The Court also noted that Dimayuga involved a CIR warning requiring the complainants to appear and testify to justify their individual claims, while in the present case no such warning existed and neither the court nor petitioners requested that the fifteen others give testimony.

The Court further observed that in the present case the four dismissed employees testified not only on their own behalf but also on behalf of the fifteen others.

Treatment of Petitioners’ “Retrenchment Policy” Theory

Petitioners argued that the dismissals were compelled by a r

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