G. R. No. L-7201. September 22, 1954

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95 Phil. 837

[ G. R. No. L-7201. September 22, 1954 ]


[G. R. No. L-7211, September 22, 1954]




These two cases concern two petitions for review of the decision
rendered by the Court of Industrial Relations on May 5, 1953, which was
affirmed by a resolution of the court en banc on August 10,
1955, which orders Dee G. Chuan & Sons, Inc., hereinafter referred
to as Company, to pay one month separation pay to Benito Nahag and to
each of his 92 co-workers based on their respective basic wages on the
date of their lay-off, and approves the closing of the lumber
department of said Company as requested with the understanding that, in
case that department is thereafter reopened, the laid-off employees
would be given priority in the employment of its laborers.

The Company appeals from that portion of the decision which directs
it to pay one month separation pay to the 93 laborers of its lumber
department on the ground that the same is unfair and unjust, while the
93 laborers are appealing from that portion of the decision which
approves the closing of the lumber department wherein they are employed
upon the plea that said department was not losing as found by the court.

The important facts which gave rise to the incidents which are now
before this Court for determination are briefly outlined in the
decision of the Court of Industrial Relations which, for purposes of
the issues herein raised, are quoted hereunder:

“The evidence shows that the petitioners, members of
an unregistered labor union, had succeeded in securing decisions of
this Court favorable to them in CTR cases Nos. 71-V, V(1), V(2) and
V(4), (Exhibits “A” to, “G”). These various cases were finally decided
by the Supreme Court on January 28, 1950 and on July 9, 19.50, and an
entry of judgment was made when the decision of the Supreme Court
became final on July 6, 1950. Meanwhile, on April 1, 1950, the
respondent filed a motion for modification of the award and the same
was docketed as Case No. 71-V(6). On July 24, 1950, the union filed a
motion for execution of the award of July 23, 1948 as confirmed by the
Supreme Court on January 23, 1950—Exhibit “F”. On Nov. 24, 1950 an
order was issued for a writ of execution to satisfy the award of this
Court (Exhibit “10”). In the meantime in 1951, the parties began to
negotiate for the settlement of the case, which was1 not finally
concluded for reasons only known to the parties. Pending any further
settlement, the respondent company on December 15, 1951 has prepared
its business for closing on January 15, 1952, and of such fact,
respondent advised the laborers affected in the lumber (retail)
department that they will fold up on January 15, 1952 (Exhibit, “E”).
The company, in acting on the resolution of its stockholders, advised
the parties concerned (laborers), but did not advise the Court of its
intention to fold up on January 15, 1952. In view of that situation, oh
December 28, 1951, petitioners filed their urgent petition for
injunction and on, January 12, 1952, an order was issued, enjoining the
respondent not to cI6!se its lumber (retail) department or from
dismissing, its laborers without the previous authority of this Court.
When January 15, 1952 came, the company actually ceased operation of
its lumber (retail) department on the claimed shortage of materials and
by virtue of the resolution adopted by the stockholders. The
petitioners filed on January 22, 1952 an incidental, motion or petition
now docketed as Case No. 641-V(1), claiming that the company has
violated an order of the Court restraining the respondent to close Its
business without proper permission.”

The main contention of the petitioning laborers refers to the
portion of the decision which approves the closing of the lumber
department of the Company wherein the court found from the evidence
submitted that that department has incurred in 1951 a net loss
amounting to P245,922.90. The laborers contend that this finding is not
justified and that the proposal to close the lumber department is but a
mere scheme to circumvent a final decision of the court which gives
them a general increase of P0.30 a day, plus 15 days vacation and sick

The finding of the court a quo which is now assailed is as follows:

“Now, let us examine the evidence on the
justification of respondent closing its business in accordance with the
resolution of the stockholders on December 12, 1951. It is claimed that
the company sustained losses in its lumber (retail) department. After a
careful examination of the Examiner’s report dated April 4, 1952, the
Court observed that the company really suffered a net loss for the year
1951 “amounting to P245,922.90 (pages 2 of the Examiner’s report, April
4, 1952). It is also observed in the Examiner’s report that the total
current assets of the company was P1,354,622.25 as shown in Appendix
“4” thereof and with the deferred charges to operation amounting to
P44, 975.87 totaling P1,399,598.10. In the same re port, it appears
that the total liabilities of the said department of the respondent
amounted to P1,944,766.91. From this, it could readily be seen that the
total assets are not enough even to meet the total liabilities, a
situation showing the financial weakness of the respondent. Even the
exhibits showing the financial status of the company, it is also
observed that the company suffered losses in 1951 (folio 175 to 178).”

We note, however, that this is an appeal by way of certiorari from a
decision of the Court of Industrial Relations if which is authorized
under Rule 44 of the Rules of Court, and that in section 2 of said rule
it is expressly provided that in such a case, “only questions of law,
which must be distinctly set forth, may be raised in the petition.” On
the other hand, Section 14, of Commonwealth Act 103, which is the
fountain or source of the authority under which this case was litigated
before the Court of Industrial Relations, provides that the Supreme
Court may require by certiorari that the case be certified to it for
review only in any case involving a question of law. And, because of
these express provisions of our law and rules, this Court, in a number
of cases, has laid down the ruling that as long as there is some
evidence to support a decision of the Court of Industrial Relations,
this Court should not interfere, nor modify or reverse it, just because
it is not based on overwhelming or preponderant evidence. Its only
province is to resolve or pass upon questions of law.”[1]

We are, therefore, prevented from disturbing the findings oil fact
made by the Court of Industrial Relations on the matter touching the
financial status of the lumber department of the Company. That finding
should stand and is binding upon this Court. However where it appears
that the Court of Industrial Relations, has decided a question, of fact
with, grave abuse of discretion, or when it is claimed that its
findings find absolutely no support in, or is contrary to, the evidence
of record, then the remedy is not appeal by certiorari but the
interposition of a special civil action of certiorari filed with the
Supreme Court. (Manila Trading & Supply Co. vs. Manila
Trading laborers Association, April 12, 1949, 46 O. G. 4874.) But even
if we consider the present appeal as a special civil action for
certiorari, as intimated, the situation would not materially change, it
appearing that in concluding that the lumber department of the Company
has sustained substantial losses in 1951, the court did not rely merely
on the reports of the accountants of the Company, or on the documentary
evidence submitted by it, but rather on the report and findings made
and submitted by its own accountant who made a careful examination of
the books of the Company upon its order and reported that in 1951 it
incurred a loss amounting to P245,922. 90. This is an indication that
the court a quo acted with outmost impartiality in appraising the evidence submitted by the parties on the matter.

The foregoing disproves the claim that the closing of the business
of the lumber department was in the nature of a lockout adopted merely
to coerce the laborers to yielding to the demands of the Company in
their labor dispute as regards wages, vacation and sick leave. This
claim finds no basis in the evidence, and is contrary to the finding
made by the court a quo that the closing was done in good
faith. This refutes the idea of a lockout. True, there is a belated
intimation that the Company has set up another corporation concerning
lumber business in an attempt to defeat the claim of the laborers and
deprive them altogether of their employment,—referring to the Philippine
Lumber Manufacturing Company which, it is claimed, is being operated by
the Dee C. Chuan family,—but, again, this claim has no basis in the
evidence for, as found by Judge Lanting of the Court of Industrial
Relations, among the members who appear to be interested in the two
corporations, only Dee C. Chuan and Francisco Gochuico appear as
incorporators of both, whose relationship does not appear in the record
or the evidence, and so it can hardly be said, as contended, that the
Philippine Lumber Manufacturing Company has been set up by the Dee C.
Chuan family with the only purpose of defeating the claim of the
laborers. This is a question of fact which we cannot now look into.

We will now take up the issue raised by the Company covering the
award of one month separation pay made by the court to petitioning
laborers as a result of the closing of the lumber department which the
Company now disputes as unfair and unjust considering the finding of
the court that the closing of that department was made in good faith
and for a justifiable cause.

One thing is the right to cease in business for a good or
justifiable cause and another is the privilege that should be accorded
to the employees or laborers employed in said business upon its
termination. The former is a privilege of the management considering
the many factors that are linked with the business and the capital
which can and should only be solved and determined by the management
provided that the cessation of the business is done in good faith, or
with no intent to lockout its employees as a means of coercing them to
submit to its demands; while the latter is a sort of an aid given to a
laborer upon his separation from the service so that he may have
something on which to fall back when he loses his means of livelihood.
While the management shut down its business when convenient, it should
not however disregard the interest of its deserving laborers. Something
must be given to the latter to help them tide over in their hour of
need. It is in this spirit that this Court has said in one case:

“There is nothing novel in this demand. This is in
keeping with the policy long observed by our Government with regard to
the retirement of its employees who are either given pension or
separation pay. We see no reason why this beneficent policy should not
be extended to the laborers of a commercial firm in the same way as
they are given sick and vacation leave with pay although there is no
legal provision authorizing its payment.” (Manila Trading Supply
Company vs. Manila Trading Laborers Association, supra.) And of a similar vein is the following pronouncement of this Court:

* * In the second place, regardless of the strict applicability or
non-applicability of article 302, the Court of Industrial Relations by
reason of.its general jurisdiction and authority to decide labor
disputes, the amount of salary or vyages to be paid laborers and
employees, to determine their living conditions, has been deciding not
only the minimum that the employer should pay its employees but also
granting them even sick and vacation leave with pay without any express
legal provision. A month’s pay upon separation from service without
just cause and without notice may also. In the discretion of the Indus
trial “Court be granted provided that said discretion” is “not abused.”
(Italics supplied) (Sta. Mesa Slipways Engineering Company, Inc. vs. The Court of Industrial Relations, et al., 48 O.G. p. 3353).

It is true that, according to the Company, petitioning laborers are
no longer entitled to this separation pay because they had been
sufficiently notified by the Company 30 days in advance of its
resolution to close the business of its lumber department, and that
such notice has the effect of relieving it of paying such separation
pay and it is a substantial compliance with the law, but, contrary to
this claim, the Court of Industrial Relations has found that no such
notice was given and, what is more, the Company decided to stop the
business without notifying the court with sufficient time in advance in
order that it could take the necessary appropriate action to protect
the interest of the laborers in view of the pendency of a labor dispute
which was then peing litigated between the Company and the laborers.
The record shows that the Company only notified the court of the
closing of the business on the very day of its closing, (January 15,
1952) notwithstanding the injunction issued by the court prohibiting
the Company from so closing two days before.

This is a violation of the letter and spirit of the law which
prohibits the laying-off of any laborer during the pendency of a labor
dispute (Section 19, Commonwealth Act 103, as amended). And because of
this disregard of the law, apart from the lack of the requisite notice,
we cannot but hold that the Court of Industrial Relations acted
properly in adjudging one month separation pay to the laborers
effective January 16, 1952. In other words, whether the cause of the
termination of the employment is the closing of the business or other
justifiable cause, a laborer is entitled to one month separation pay if
the requisite notice is not given him one month in advance, or his
separation is made without the sanction of the court. This is in
keeping with the spirit of social justice enshrined in our Constitution.

The petitions are dismissed, without pronouncement as to costs.

Paras, C. J., Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo, Bautista Angelo, Concepcion, and Reyes, J.B.L., JJ., concur.

[1] Insurefco Paper Pulp & Project Workers’ Union vs. Insular Sugar Refining Corporation Insular Sugar. Refining Corporation vs.
Hon. Court of Industrial Relations, et al., G. R. Nos. L-7594 &
L-7596. promulgated September 8, 1954. See also Phil. Newspaper Guild vs. Evening News. Inc., Off Gaz. 6188, 86 Phil. 303; Bardwill Bros. vs. Phil. Labor Union and Court of Industrial Relations (1940), 70 Phil., 672; Antamok Goldfields Mining vs. Court of Industrial Relations and national Labor Union, Inc., (1940) 70 Phil. 340.

Date created: October 09, 2014


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