RUPERTO SANCHEZ, DOING BUSINESS UNDER THE NAME AND STYLE OF PRESERVER SHOE COMPANY AND MODESTO SANCHEZ, PETITIONERS, VS. THE COURT OF INDUSTRIAL RELATIONS, PRESERVER SHOE WORKER…

Sanchez versus Court of Industrial Relations

The Case

This is Sanchez versus Court of Industrial Relations, a petition for review brought by Ruperto Sanchez, doing business under the name and style of Preserver Shoe Company, and Modesto Sanchez against the Court of Industrial Relations and the Preserver Shoe Workers Union. The petitioners had earlier been ordered, in a decision of this Court that had long become final, to reinstate their workers and to pay them back wages from May 18, 1958 until compliance. The present incident is the sequel: the question is whether the industrial court could still order a fresh computation of back wages for ten workers who had been left out of the first computation, and on what basis that computation must be made. The case matters because it draws the line between the industrial court's wide power to reopen and modify its awards, on the one hand, and the law of the case and the demands of due process, on the other.

Procedural History

In the parent case, the Court of Industrial Relations rendered a decision finding an unfair labor practice and ordering reinstatement with back wages. That decision was affirmed by this Court in July 1963 and became final. The industrial court then directed its Examining Division to compute the back wages. A report was submitted, back pay of 49,774.11 pesos was paid to the employees covered, and the order approving that report became final and was fully satisfied. Ten workers, however, had been excluded from that computation because their names did not appear in the payrolls and time cards examined.

On December 7, 1965, those ten workers filed a motion asking that their back wages be computed from May 18, 1958. Over the petitioners' opposition, the industrial court issued an order on September 27, 1966 directing the Examining Division to compute the back wages of seven of them at specified daily or weekly rates, six days a week, from May 21, 1958 up to November 2, 1963, and dismissing the claims of the three others who had been convicted of crimes against the petitioners. The examiner reported total back wages of 52,705.83 pesos for the seven. The petitioners' motion for reconsideration was denied on November 3, 1966. The petitioners then came to this Court by petition for review.

Facts

Preserver Shoe Company was found guilty of an unfair labor practice. This Court affirmed the industrial court's award of reinstatement and back wages from May 18, 1958 until actual compliance. When the award was implemented, the company's business had already ceased operations as of November 2, 1963, so reinstatement had become impossible. Back pay of 49,774.11 pesos was in fact paid to the employees covered by the first computation, except for ten persons whose names did not appear in the payrolls and time cards examined.

Those ten later sought their own back wages. After hearings at which only two of them testified, the industrial court issued the order of September 27, 1966, covering seven claimants and excluding three who had been convicted of offenses against the company. The order fixed the computation at six days a week from May 21, 1958 to November 2, 1963, producing 1,653 working days and a total of 52,705.83 pesos.

The petitioners protested that this was a virtual reversal of final and fully satisfied orders, that the seven had not proven their entitlement, and that the new computation was grossly out of proportion to the first. The earlier computation had credited the first group with only 803.47 working days, and the 49,774.11 pesos paid to twenty-seven workers averaged about 1,844 pesos each, while the new figure averaged more than 7,817 pesos for each of seven persons, a ratio of more than four to one.

Issues

• Whether or not the industrial court's order of September 27, 1966 constituted a virtual reversal and setting aside of its own previous and long final orders.
• Whether or not the seven claimants failed to prove their right to back wages, only two of them having testified.
• Whether or not the industrial court erred in computing the back wages on the basis of six days a week, producing 1,653 working days and 52,705.83 pesos.

Applicable Provisions

Section 17 of Commonwealth Act Number 103, the law creating the Court of Industrial Relations, provides:

The Court of Industrial Relations shall have power to alter, modify in whole or in part, or set aside any such award, order or decision, or reopen any question involved therein.

This is the source of the industrial court's power to reopen the question of the excluded workers' back wages, and the Court construes it liberally.

Section 20 of the same Act provides:

The Court of Industrial Relations shall act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable.

This answers the objection that only two of the seven claimants testified, since the court is not bound by technical rules of evidence.

Ruling

On the first issue, the Court held that there was no virtual reversal of final orders. The order of September 27, 1966 merely implemented the final judgment in the parent case, which had expressly decreed back wages from May 18, 1958 until reinstatement. The earlier report itself had disclosed that ten workers could not be included because their names did not appear in the payrolls and time cards examined. The power to alter, modify, or reopen should be liberally construed to give full effect to its purpose and policy, and this Court has never construed it in a niggardly sense. The first assigned error therefore afforded no basis for reversal.

On the second issue, the Court held that the testimony of only two witnesses did not invalidate the award. A grave abuse of discretion must be shown before findings of fact may be disturbed, and the industrial court is directed by law to act according to justice and equity and the substantial merits of the case, free of technical rules of evidence. The Court put the point thus:

This Court fully agrees with the respondent that quality and not quantity of witnesses should be the primordial consideration in the appraisal of evidence.

On the third issue, the Court sustained the petitioners. The industrial court had departed from the very criterion it had followed in implementing the final judgment, and the resulting disproportion, more than four to one, bore on its face the element of arbitrariness. The Court applied the law of the case: a final ruling, even if erroneous, may no longer be disturbed or modified, and the law of the case covers not only the decision itself but its implementation carried out in fealty to what was decreed. The Court also invoked the cardinal primary right recognized in Ang Tibay versus Court of Industrial Relations, the necessity for substantial evidence to support the decision reached. There was no evidence that the seven had worked six days a week throughout the period, and the failure to observe that requirement deprived the petitioners of due process, which requires reasonableness and fair play.

Doctrine

First, the power of the Court of Industrial Relations to alter, modify, or set aside its awards and to reopen any question involved is comprehensive and must be liberally construed, never in a niggardly sense, so that a final judgment in a labor case may be implemented as to workers omitted from an earlier computation.

Second, the law of the case binds not only the final decision but also the manner of its implementation; a subsequent computation that departs from the criterion already applied in satisfying the judgment is error.

Third, administrative agencies must observe the cardinal primary rights of procedural due process, foremost among them the requirement of substantial evidence; an award resting on assumption rather than proof is marred by arbitrariness and violates due process.

Fourth, under Section 20 of Commonwealth Act Number 103, the industrial court acts according to justice and equity and the substantial merits of the case, and quality rather than quantity of witnesses is the primordial consideration in appraising evidence.

Disposition

The petition was partly granted: the orders of September 27, 1966 and November 3, 1966 were set aside, and the case was remanded to the Court of Industrial Relations so that the back pay of the seven workers be computed on the same basis followed for their co-employees whose claims had already been satisfied, without costs.

Remember This

Memorize the line that the power of the industrial court to reopen is comprehensive and has never been construed in a niggardly sense, but that the law of the case binds its implementation and substantial evidence is a cardinal primary right. Examiners use this case on the liberal construction of the Court of Industrial Relations' reopening power, on the law of the case in labor awards, and on substantial evidence as a requirement of due process.