Title
Manila Sanitarium and Hospital vs. Gabuco
Case
G.R. No. L-14311
Decision Date
Jan 31, 1963
A hospital dismissed an employee for union activities; the Supreme Court ruled it a non-profit entity, exempt from labor laws, reversing the unfair labor practice decision.

Case Summary (G.R. No. L-16904)

Complaint and Allegations

Fausto Gabuco filed a complaint for Unfair Labor Practice against the Manila Sanitarium and Hospital, asserting that he was unjustly dismissed on September 30, 1956, due to his activities related to forming a labor union. Gabuco claimed that he and his co-employees requested the restoration of certain employment benefits through a petition on August 2, 1956. Following the union's establishment and his election as president, his dismissal was allegedly aimed at discouraging union membership.

Respondent's Defense

In their Answer, the petitioners denied the allegations, contending that Gabuco’s dismissal was appropriate on the grounds that his position was no longer necessary and he was provided with an equity separation allowance. The hospital later filed a Motion to Dismiss, arguing that the case fell outside the jurisdiction of the CIR as it operated as a non-profit organization with charitable purposes.

Court Findings and Orders

After hearings and examination of evidence, the CIR concluded that Gabuco was dismissed as a means of discrimination against his union activities, thus constituting an unfair labor practice according to the Industrial Peace Act. The court ordered his reinstatement along with back wages and mandated the hospital to cease such unfair labor practices.

Subsequent Motions and Reconsiderations

Following the decision, the petitioners filed a Motion for Reconsideration, asserting errors in both law and factual assessments. This motion was subject to procedural issues, as the court denied requests for extensions and ultimately dismissed the motion for reconsideration on the basis of late filing.

Jurisdiction and Nature of the Hospital

On appeal, the Manila Sanitarium and Hospital contended that the CIR acted beyond its jurisdiction, claiming that the institution operated solely for charitable and educational purposes, thus exempting it from such labor laws. A key assertion was that the hospital operated without profit motives, which should preclude it from the jurisdiction of the Industrial Peace Act.

Nature of Operations and Findings

The evidence presented indicated that the Manila Sanitarium and Hospital, backed by the religious organization Seventh Day Adventists, was not established for profit. Testimonies from hospital officials emphasized that its operations were geared towards charitable healthcare without profit distribution among individuals. The court's original claim that the hospital functioned similar to a for-profit entity was deemed unfounded.

Misapplication of Legal Standards

The court observed that the criteria used to determine whether an institution operates for profit were misapplied. The mere collection of fees did not imply profit motivation; rat

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