FEATI UNIVERSITY, PETITIONER, VS. HON. JOSE S. BAUTISTA, PRESIDING JUDGE OF THE COURT OF INDUSTRIAL RELATIONS, AND FEATI UNIVERSITY FACULTY CLUB-PAFLU, RESPONDENTS.[G.R. No. L-2…

This Court, by resolution,
ordered that these three cases be considered together, and the parties were
allowed to file only one brief for the three cases.

On January 14, 1963, the
President of the respondent Feati University Faculty
Club PAFLU—hereinafter referred to as Faculty Club—wrote a letter to Mrs.
Victoria L. Araneta, President of petitioner Feati University—hereinafter referred to as
University—informing her of the organization of the Faculty Club into a
registered labor union. The Faculty Club is composed of members who are
professors and/or instructors of the University. On January 22,
1963, the
President of the Faculty Club sent another letter containing twenty six demands
that have connection with the employment of the members of the Faculty Club by
the University, and requesting an answer within ten days from receipt thereof.
The President of the University answered the two letters, requesting that she be
given at least thirty days to study thoroughly the different phases of the
demands. Meanwhile counsel for the University, to whom the demands were
referred, wrote a letter to the President of the Faculty Club demanding proof of
its majority status and designation as a bargaining representative. On February
1, 1963, the President of the Faculty Club again wrote the President of the
University rejecting the latter’s request for extension of time, and on the same
day he filed a notice of strike with the Bureau of Labor alleging as reason
therefor the refusal of the University to bargain
collectively. The parties were called to conferences at the Conciliation
Division of the Bureau of Labor but efforts to conciliate them failed. On
February 18, 1963, the members of the Faculty Club declared a strike and
established picket lines in the premises of the University, resulting in the
disruption of classes in the University, Despite further efforts of the
officials from the Department of Labor to effect a settlement of the differences
between the management of the University and the striking faculty members no
satisfactory agreement was arrived at. On March 21,
1963, the
President of the Philippines certified to the Court of
Industrial Relations the dispute between the management of the University and
the Faculty Club pursuant to the provisions of Section 10 of Republic Act No.
875.

In connection with the dispute
between the University and the Faculty Club and certain incidents related to
said dispute, various cases were filed with the Court
of Industrial Relations – hereinafter referred to as CIR. The three cases now
before this Court stemmed from those cases that were filed with the
CIR;

Case No. G. R. No.
L-21278

On May
10, 1963,
the University filed before this Court a “petition for certiorari and
prohibition with writ of preliminary injunction”, docketed as G. R. No. L-21278,
praying: (1) for the issuance of a writ of preliminary injunction enjoining
respondent Judge Jose S. Bautista of the CIR to desist from proceeding in CIR
Cases Nos. 41-IPA, 1183-MC, and V-30; (2) that the proceedings in Cases Nos.
41-IPA and 1183-MC be annulled; (3) that the orders dated March 30, 1963 and
April 6, 1963 in Case No. 41-IPA, the order dated April 6, 1963 in Case No.
1183-MC, and the order dated April 29, 1963 in Case No. V-30, all be annulled;
and (4) that the respondent Judge be ordered to dismiss said cases Nos. 41-IPA,
1183-MC and V-30 of the CIR.

On May 10, 1963, this Court
issued a writ of preliminary injunction, upon the University’s filing a bond of
P1,000.00, ordering respondent Judge Jose S. Bautista, as Presiding Judge of the
CIR, until further order from this Court, “to desist and refrain from further
proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of
Industrial Relations).^[1]” On December 4,
1963, this Court ordered the injunction bond increased to P100,000.00; but on
January 23, 1964, upon a motion for reconsideration by the University, this
Court reduced the bond to P50,000.00.

A brief statement of the three
cases—CIR Cases 41—IPA, 1183—MC and V-30—involved in the Case G. R. No. L-21278, is here necessary.

CIR Case No. 41-IPA, relates to the case in
connection with the strike staged by the members of the Faculty Club. As we have
stated, the dispute between the University and the Faculty Club was certified on
March 21,
1963 by
the President of the Philippines to the CIR. On the strength of
the presidential certification, respondent Judge Bautista set the case for
hearing on March 23,
1963.
During the hearing, the Judge endeavored to reconcile the parties, and it was
agreed upon that the striking faculty members would return to work and the
University would readmit them under a status quo arrangement. On that very
same day, however, the University, thru counsel filed a motion to dismiss the
case upon the ground that the CIR has no jurisdiction over the case, because (1)
the Industrial Peace Act is not applicable to the University, it being an
educational institution, nor to the members of the Faculty Club, they being
independent contractors; and (2) the presidential certification is violative of Section 10 of the Industrial Peace Act, as the
University is not an industrial establishment and there was no industrial
dispute which could be certified to the CIR. On March
30, 1963
the respondent Judge issued an order denying the motion to dismiss and declaring
that the Industrial Peace Act is applicable to both parties in the case and that
the CIR had acquired jurisdiction over the case by virtue of the presidential
certification. In the same order, the respondent Judge, believing that the
dispute could not be decided promptly, ordered the strikers to return
immediately to work and the University to take them back under the last terms
and conditions existing before the dispute arose, as per agreement had during
the hearing on March 23, 1963; and likewise enjoined the University, pending
adjudication of the case, from dismissing any employee or laborer without
previous authorization from the CIR. The University filed on April 1,
1963 a
motion for reconsideration of the order of March 30,
1963 by
the CIR en banc, and at the
same time asking that the motion for reconsideration be first heard by the CIR
en banc. Without the motion
for reconsideration having been acted upon by the CIR en banc, respondent Judge set the case
for hearing on the merits for May 8,
1963. The
University moved for the cancellation of said hearing upon the ground that the
court en banc should first
hear the motion for reconsideration and resolve the issues raised therein before the case is heard on the merits. This
motion for cancellation of the hearing was denied. The respondent Judge,
however, cancelled the scheduled hearing when counsel for the University
manifested that he would take up before the Supreme Court, by a petition for
certiorari, the matter regarding the actuations of the respondent Judge and the
issues raised in the motion for reconsideration,
specially the issue relating to the jurisdiction of the CIR. The order of
March 30,
1963 in
Case 41-IPA is one of the orders sought to be annulled in the case, G. R. No.
L-21278.

Before the above-mentioned order
of March 30,
1963 was
issued by respondent Judge, the University had employed professors and/or
instructors to take the places of those professors and/or instructors who had
struck. On April 1, 1963, the Faculty Club filed with the CIR in Case 41-IPA a
petition to declare in contempt of court certain parties, alleging that the
University refused to accept back to work the returning strikers, in violation
of the return-to-work order of March 30, 1963. The University filed, on
April 5,
1963, its
opposition to the petition for contempt, denying the allegations of the Faculty
Club and alleging by way of special defense that there was still the motion for
reconsideration of the order of March 30,
1963
which had not yet been acted upon by the CIR en banc. On April
6, 1963,
the respondent Judge issued an order stating that “said replacements are hereby
warned and cautioned, for the time being, not to disturb nor in any manner
commit any act tending to disrupt the effectivity of
the order of March 30,
1963,
pending the final resolution of the same.”^[2] On April 8,
1963, the
replacing professors and/or instructors concerned filed, thru counsel, a motion
for reconsideration by the CIR en
banc of the order of respondent Judge of April
6, 1963.
This order of April 6,
1963 is
one of the orders that are sought to be annulled in case G.R. No. L-21278.

CIR Case No.
1183—MC relates
to a petition for certification election filed by the Faculty Club on March 8,
1963 before the CIR, praying that it be certified as the sole and exclusive
bargaining representative of all the employees of the University. The University
filed an opposition to the petition for certification election and at the same
time a motion to dismiss said petition, raising the very same issues raised in
Case No. 41-IPA, claiming that the petition did not comply with the rules
promulgated by the CIR; that the Faculty Club is not a legitimate labor union;
that the members of the Faculty Club cannot unionize for collective bargaining
purposes; that the terms of the individual contracts of the professors,
instructors, and teachers, who are members of the Faculty Club, would expire on
March 25 or 31, 1963; and that the CIR has no jurisdiction to take cognizance of
the petition because the Industrial Peace Act is not applicable to the members
of the Faculty Club nor to the University. This case was assigned to Judge Baltazar Villanueva of the CIR. Before Judge Villanueva
could act on the motion to dismiss, however, the Faculty Club filed on April 3,
1963 a motion to withdraw the petition on the ground that the labor dispute
(Case No. 41-IPA) had already been certified by the President to the CIR and the
issues raised in Case No. 1183-MC were absorbed by Case No. 41-IPA. The
University opposed the withdrawal, alleging that the issues raised in Case No.
1183-MC were separate and distinct from the issues raised in Case No. 41-IPA;
that the questions of recognition and majority status in Case No. 1183-MC were
not absorbed by Case No. 41-IPA; and that the CIR could not exercise its power
of compulsory arbitration unless the legal issue regarding the existence of
employer-employee relationship was first resolved. The University prayed that
the motion of the Faculty Club to withdraw the petition for certification
election be denied, and that its motion to dismiss the petition be heard. Judge
Baltazar Villanueva, finding that the reasons stated
by the Faculty Club in the motion to withdraw were well taken, on
April 6,
1963,
issued an order granting the withdrawal. The University filed, on
April 24,
1963, a
motion for reconsideration of that order of April 6,
1963 by
the CIR en banc. This order
of April 6,
1963 in
Case No. 1183-MC is one of the orders sought to be annulled in the case, G. R.
No. L-21278, now before Us.

CIR Case
No.
V-30 relates to
a complaint for indirect contempt of court filed against the administrative
officials of the University. The Faculty Club, through the Acting Chief
Prosecutor of the CIR, filed with the CIR a complaint, docketed as Case No.
V-30, charging President Victoria L. Araneta, Dean
Daniel Salcedo, Executive Vice-President Rodolfo Maslog, and Assistant to the President Jose Segovia, as
officials of the University, with indirect contempt of court, reiterating the
same charges filed in Case No. 41-IPA for alleged violation of the order dated
March 30,
1963.
Based on the complaint thus filed by the Acting Chief Prosecutor of the CIR,
respondent Judge Bautista issued on April 29, 1963 an order commanding any
officer of the law to arrest the above named officials of the University so that
they may be dealt with in accordance with law, and at the same time fixed the
bond for their release at P500.00 each. This order of April
29, 1963
is also one of the orders sought to be annulled in the case, G.R. No. L-21278.

The principal
allegation of the University in its petition for certiorari and prohibition with
preliminary injunction in Case G. R. No. L-21278, now before Us, is that
respondent Judge Jose S. Bautista acted without, or in excess of, jurisdiction,
or with grave abuse of discretion, in taking cognizance of, and in issuing the
questioned orders in, CIR Cases Nos. 41-IPA, 1183-MC and V-30. Let it be noted
that when the petition for certiorari and prohibition with preliminary
injunction was filed on May 10, 1963 in this case, the questioned orders in CIR
Cases Nos. 41-IPA, 1183-MC and V-30 were still pending action by the CIR
en banc upon motions for
reconsideration filed by the University.

On June 10, 1963, the Faculty
Club filed its answer to the petition for certiorari and prohibition with
preliminary injunction, admitting some allegations contained in the petition and
denying others, and alleging special defenses which boil down to the contentions
that (1) the CIR had acquired jurisdiction to take cognizance of Case No. 41-IPA
by virtue of the presidential certification, so that it had jurisdiction to
issue the questioned orders in said Case No. 41-IPA; (2) that the Industrial
Peace Act (Republic Act 875) is applicable to the University as an employer and
to the members of the Faculty Club as employees who are affiliated with a duly
registered labor union, so that the Court of Industrial Relations had
jurisdiction to take cognizance of Cases Nos. 1183-MC and V-30 and to issue the
questioned orders in those two cases; and (3) that the petition for certiorari and prohibition with preliminary injunction was
prematurely filed because the orders of the CIR sought to be annulled were still
the subjects of pending motions for reconsideration before the CIR en banc when said petition for
certiorari and prohibition with preliminary injunction was filed before this
Court.

Case G. R. No.
L-21462

This case, G.
R. No.
L-21462, involves also CIR Case No. 1183-MC. As already stated Case No. 1183-MC
relates to a petition for certification election filed by the Faculty Club as a
labor union, praying that it be certified as the sole and exclusive bargaining
representative of all employees of the University. This petition was opposed by
the University, and at the same time it filed a motion to dismiss said petition.
But before Judge Baltazar Villanueva could act on the
petition for certification election and the motion to dismiss the same, Faculty
Club filed a motion to withdraw said petition upon the ground that the issues
raised in Case No. 1183-MC were absorbed by Case No. 41-IPA which was certified
by the President of the Philippines. Judge Baltazar
Villanueva, by order of April 6,
1963,
granted the motion to withdraw. The university filed a motion for
reconsideration of that order of April 6,
1963 by
the CIR en banc. That motion
for reconsideration was pending action by the CIR en banc when the petition for
certiorari and prohibition with preliminary injunction in Case G. R. No. L-21278
was filed on May 10,
1963.
As earlier stated this Court, in Case G. R. No.
L-21278, issued a writ of preliminary injunction on May 10, ‘1963, ordering
respondent Judge Bautista, until further order from this Court, to desist and
refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and
V-30 of the Court of Industrial Relations).

On June 5,
1963,
that is, after this Court has issued the writ of preliminary injunction in Case
G. R. No. L-21278, the CIR en
banc issued a resolution denying the motion for reconsideration of
the order of April 6,
1963 in
Case No. 1183-MC.

On July 8, 1963, the University
filed before this Court a petition for certiorari, by way of an appeal from the
resolution of the CIR en
banc, dated June 5, 1963, denying the motion for reconsideration of
the order of April 6, 1963 in Case No. 1183-MC. This petition was docketed as G.
R. No. L-21462. In its petition for certiorari, the
University alleges (1) that the resolution of the Court of Industrial Relations
of June 5, 1963 was null and void because it was issued in violation of the writ
of preliminary injunction issued in Case G. .R. No.L-21278; (2) that the issues
of employer-employee relationship, the alleged status as a labor union, majority
representation and designation as bargaining representative in an appropriate
unit of the Faculty Club should have been resolved first in Case No. 1183-MC
prior to the determination of the issues in Case No. 41-IFA and therefore the
motion to with-draw the petition for certification election should not have been
granted upon the ground that the issues in the first case have been absorbed in
the second case; and (3) the lower court acted without or in excess of
jurisdiction in taking cognizance of the petition for certification election and
that the same should have been dismissed instead of having been ordered
withdrawn. The University prayed that the proceedings in Case No. 1183-MC and
the order of April 6,
1963 and
the resolution of June 5,
1963
issued therein be annulled, and that the CIR be ordered to dismiss Case No.
1183-MC on the ground of lack of jurisdiction.

The Faculty Club filed its
answer, admitting some, and denying other, allegations in the petition for
certiorari; and specially alleging that the lower court’s order granting the
withdrawal of the petition for certification election was in accordance with
law, and that the resolution of the court en banc on June 5, 1963 was not a
violation of the writ of preliminary injunction issued in Case G. R. No.L-21278
because said writ of injunction was issued against Judge Jose S. Bautista and
not against the Court of Industrial Relations, much less against Judge Baltazar Villanueva who was the trial judge of Case No.
1183-MC.

CASE G. R. No.
L-21500

This case, G.
R. No.
L-21500, involves also CIR Case No. 41-IPA. As earlier stated, Case No. 41-IPA
relates to the strike staged by the members of the Faculty Club and the dispute
was certified by the President of the Philip pines to the CIR. The University
filed a motion to dismiss that case upon the ground that the CIR has no
jurisdiction over the case, and on March 30, 1963 Judge Jose S. Bautista issued
an order denying the motion to dismiss and declaring that the Industrial Peace
Act is applicable to both parties in the case and that the CIR had acquired
jurisdiction over the case by virtue of the presidential certification; and in
that same order Judge Bautista ordered the strikers to return to work and the
University to take them back under the last terms and conditions existing before
the dispute arose; and enjoined the University from dismissing any employee or
laborer without previous authority from the court. On April
1, 1963,
the University filed a motion for reconsideration of the order of
March 30,
1963 by
the CIR en banc. That motion
for reconsideration was pending action by the CIR en banc when the petition for
certiorari and prohibition with preliminary injunction in Case G. R. No. L-21278
was filed on May 10,
1963. As
we have already stated, this Court in said case G. R. No.L-21278, issued a writ
of preliminary injunction on May 10, 1963 ordering respondent Judge Jose S.
Bautista, until further order from this Court, to demist and refrain from
further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the
Court of Industrial Relations).

On July 2, 1963, the University
received a copy of the resolution of the CIR en banc, dated May 7, 1963 but actually
received and stamped at the Office of the Clerk of the CIR on June 28, 1963,
denying the motion for reconsideration of the order dated March 30, 1963 in Case
No. 41-IPA.

On July 23, 1963, the University
filed before this Court a petition for certiorari, by way of ah appeal from the
resolution of the Court of Industrial Relations en banc dated May 7, 1963 (but actually
received by said petitioner on July 2, 1963) denying the motion for
reconsideration of the order of March 30, 1963 in Case No. 41-IPA. This petition
was docketed as G. R. No. L-21500. In its petition for
certiorari the University alleges (1) that the resolution of the CIR en banc, dated May 7, 1963 but filed
with the Clerk of the CIR on June 28, 1963, in Case No. 41-IPA, is null and void
because it was issued in violation of the writ of preliminary injunction issued
by this Court in G. R. No. L-21278; (2) that the CIR, through its Presiding
Judge, had no jurisdiction to take cognizance of Case No. 41-IPA and the order
of March 30, 1963 and the resolution dated May 7, 1963 issued therein are null
and void; (3) that the certification made by the President of the Philippines is
not authorized by Section 10 of Republic Act 875, but is violative thereof; (4) that the Faculty Club has no right to
unionize or organize as a labor union for collective bargaining purposes and to
be certified as a collective bargaining agent within the purview of the
Industrial Peace Act, and consequently it has no right to strike and picket on
the ground of petitioner’s alleged refusal to bargain collectively where such
duty does not exist in law and is not enforceable against an educational
institution; and (5) that the return-to-work order of March 30, 1963 is improper
and illegal. The petition prayed that the proceedings in Case No. 41-IPA be
annulled, that the order dated March 30, 1963 and the resolution dated May 7,
1963 be revoked, and that the lower court be ordered to dismiss Case 41-IPA on
the ground of lack of jurisdiction.

On September 10, 1963, the
Faculty Club, through counsel, filed a motion to dismiss the petition for
certiorari on the ground that the petition being filed by way of an appeal from
the orders of the Court of Industrial Relations denying the motion to dismiss in
Case No. 41-IPA, the petition for certiorari is not proper because the orders
appealed from are interlocutory in nature.

This Court, by resolution of
September 26,
1963,
ordered that these three cases (G.R. Nos. L-21278, L-21462 and L-21500) be
considered together and the motion to dismiss in Case G. R. No. L-21500 be taken up when the cases are decided on the merits after
the hearing.

Brushing aside certain technical
questions raised by the parties in their pleadings, We
proceed to decide these three cases on the merits of the issues
raised.

The University has raised several
issues in the present cases, the pivotal one being its claim that the Court of
Industrial Relations has no jurisdiction over the parties and the subject matter
in CIR Cases 41-IPA, 1183-MC and V-30, brought before it, upon the ground that
Republic Act No. 875 is not applicable to the University because it is an
educational institution and not an industrial establishment and hence not an
“employer” in contemplation of said Act; and neither is Republic Act No. 875
applicable to the members of the Faculty Club because the latter are independent
contractors and, therefore, not employees within the purview of the said
Act.

In support of the contention that
being an educational institution it is beyond the scope of Republic Act No. 875,
the University cites cases decided by this Court: Boy Scouts of the Philippines
vs. Juliana Araos, L-10091, Jan. 29, 1958; University of San Agustin
vs. CIR et al., L-12222, May
28, 1958; Cebu Chinese High School vs. Philippine Land-Air-Sea Labor
Union, PLASLU, L-12015, April 22, 1959; La Consolacion
College, et al., vs. CIR, et
al., L-13282, April 22, 1960; University of the Philippines, et al., vs. CIR et al., L-15416, April 28,
1960; Far Eastern University vs. CIR, L-17620, August 31, 1962. We
have reviewed these cases, and also related cases subsequent thereto, and We find that they do not sustain the contention of the
University. It is true that this Court has ruled that certain educational
institutions, like the University of Santo Tomas, University of San Agustin, La
Consolacion College, and other juridical entities,
like the Boy Scouts of the Philippines and Manila Sanitarium, are beyond the
purview of Republic Act No. 875 in the sense that the Court of Industrial
Relations has no jurisdiction to take cognizance of charges of unfair labor
practice filed against them, but it is nonetheless true that the principal
reason of this Court in ruling in those cases that those institutions are
excluded from the operation of Republic Act 875 is that those entities are not
organized, maintained and operated for profit and do not declare dividends to
stockholders. The decision in the case of University of San
Agustin vs. Court of Industrial.. Relations, G. R. No. L-12222,
May 28,
1958, is
very pertinent. We quote a portion of the decision:

“It appears that the
University of San
Agustin, petitioner herein, is an
educational institution conducted and managed by a ‘religious non-stock
corporation duly organized and existing under the laws of the
Philippines.’ It was organized not for
profit or gain or division of the dividends among its stockholders, but solely
for religious and educational purposes. It likewise appears that the Philippine
Association of College and University Professors, respondent herein, is a
non-stock association composed of professors and teachers in different colleges
and universities and that since its organization two years ago, the university
has adopted a hostile attitude to its formation and has tried to discriminate,
harass and intimidate its members for which reason the association and the
members affected filed the unfair labor practice complaint which initiated this
proceeding. To the complaint of unfair labor practice, petitioner filed an
answer wherein it disputed the jurisdiction of the Court of Industrial Relations
over the controversy on the following grounds:

‘(a) That complainants therein
being college and/or university professors were not “industrial” laborers or
employees, and the-Philippine Association of College and University Professors
being composed of persons engaged in the teaching profession, is not and cannot
be a legitimate labor organization within the meaning of the laws creating the
Court of Industrial Relations and defining its powers and
functions;

‘(b)
That the University of San
Agustin, respondent therein, is not an
institution established for the purpose of gain or division of profits, and,
consequently, it is not an
“industrial” enterprise and the members of its teaching staff are not engaged in
“industrial” employment (U.S.T. Hospital Employees Association vs. Sto.
Tomas
University
Hospital, G. R.
No. L-6988,
24 May
1954; and
San Beda College vs. Court of Industrial Relations and
National Labor Union, G. R. No. L-7649, 29 October
1955; 51
O.G. (Nov. 1955) 5636-5640);

‘(c)
That, as a necessary consequence, alleged controversy between therein
complainants and respondent is not an “industrial” dispute, and the Court of
Industrial Relations has no
jurisdiction, not only on the parties but also over the subject matter of the
complaint.’

“The issue now before us is:
Since the University of San Agustin is not an institution established for profit
or gain, nor an industrial enterprise, but one established exclusively for
educational purposes, can it be said that its relation with its professors is
one of employer and employee that comes under the jurisdiction of the Court of
Industrial Relations? In other words, do the provisions of the Magna Carta on unfair labor practice apply to the relation between
petitioner and members of respondent association?”

“The issue is not new. Thus, in the case of Boy Scouts of the
Philippines v. Juliana V.
Araos, G. R. No. L-10091, promulgated on January 29,
1958,
this Court, apeaking thru Mr. Justice Montemayor, answered the query in the negative in the
following wise:

‘The main issue involved in the
present case is whether or not a charitable institution or one organized not for
profit but for more elevated purposes, charitable, humanitarian, etc., like the
Boy Scouts of the Philippines, is included in the definition of “employer”
contained in Republic Act 875, and whether the employees of said institution
fall under the definition of “employee” also contained in the same Republic Act.
If they are included, then any act which may be considered unfair labor
practice, within the meaning of said Republic Act, would come under the
jurisdiction of the Court of Industrial Relations; but if they do not fall
within the scope of said Republic Act, particularly, its definitions of employer
and employee, then the Industrial Court would have no jurisdiction at
all.

‘On the basis of the foregoing
considerations, there is every reason to believe that our labor legislation from
Commonwealth Act No. 103, creating the Court of Industrial Relations, down
through the Eight Hour Labor Law, to the Industrial Peace Act, was intended by
the Legislature to apply only to industrial employment and to govern the
relations between employers engaged in industry and occupations for purposes of
profit and gain, and their industrial employees, but not to organizations and
entities which are organized, operated, and maintained not for profit or gain,
but for elevated and lofty purposes, such as, charity, social service, education
and instruction, hospital and medical service, the encouragement and promotion
of character, patriotism and kindred virtues in youth of the nation,
etc.

‘In conclusion, we find and hold
that Republic Act No. 875, particularly, that portion thereof regarding labor
disputes and unfair labor practice, does not apply to the Boy Scouts of the
Philippines, and consequently, the Court of Industrial Relations had no
jurisdiction to entertain and decide the action or petition filed by respondent
Araos. Wherefore, the appealed decision and resolution
of the CIR are hereby set aside, with costs against
respondent.’

“There being a close analogy
between the relation and facts involved in the two cases, we cannot but conclude
that the Court of Industrial Relations has no jurisdiction to entertain the
complaint for unfair labor practice lodged by respondent association against
petitioner and, therefore, we hereby set aside the order and resolution subject
of the present petition, with costs against respondent
association.”

The same doctrine was confirmed
in the case of University of Santo Tomas vs. Hon. Baltazar Villanueva, et al., G. R. No.L-13748, October 30,
1959, where this Court ruled that:

“In the present case, the record
reveals that the petitioner University of Santo Tomas is not an
industry organized for profit but an institution of learning devoted exclusively
to the education of the youth. The Court of First Instance of Manila in its
decision in Civil Case No. 28870, which has long become final and consequently
the settled law in the case, found as established by the evidence adduced by the
parties therein (herein petitioner and respondent labor-union) that while the
University collects fees from its students, all its Income is used for the
improvement and enlargement of the institution. The University declares no
dividend, and the members of the corporation who founded it, as ordained in its
articles of incorporation, receive no material compensation for the time and
sacrifice they render to the University and its students. The respondent union
itself in a case before the industrial Court (Case No. 314-MC) has averred that
‘the University of Sto. Tomas, like the San Beda College, is an educational institution operated not for
profit but for the sole purpose of educating young men.’ (See Annex ‘B’ to
petitioner’s motion to dismiss.). It is apparent, therefore, that on the face of
the record the University of Santo Tomas is not a corporation created for profit
but an educational institution and therefore not an industrial or business
organization.”

In the case of
La Consolacion College et al. vs, CIR, et al., G. R. No. L-13282, April 22,
1960,
this Court repeated the same ruling when it said:

“The main issue in this appeal by
petitioner is that the industrial court committed an error in holding that it
has jurisdiction to act in this case even if it involves unfair labor practice
considering that the La Consolacion College is not a
business enterprise but an educational institution not organized for
profit.

“If the claim that petitioner is
an educational institution not operated for profit is true, which apparently is
the case, because the very court a
quo found that it has no stockholder, nor capital x x x then we are of the opinion
that the same does not come under the jurisdiction of the Court of Industrial
Relations in view of the ruling in the case of Boy Scouts of the Philippines
vs. Juliana V. Araos, G. R. No. L-10091, decided on January 29,
1958.”

It is noteworthy that the cases
of the University of San Agustin, the University of Santo Tomas, and La Consolacion College, cited above, all involve charges of
unfair labor practice under Republic Act No. 875, and the uniform rulings of
this Court are that the Court of Industrial Relations has no jurisdiction over
the charges because said Act does not apply to educational institutions that are
not operated or maintained for profit and do not declare dividends. On the other
hand, in the case of Far Eastern University vs. CIR et al, G. R. No. L-17620,
August 31,
1962,
this Court upheld the decision of the Court of Industrial Relations finding the
Far Eastern University, also an educational institution, guilty of unfair labor
practice. Among the findings of fact in said case was that the Far Eastern
University made profits from the school year 1952-1953 to 1958-1959. In
affirming the decision of the lower court, this Court had thereby ratified the
ruling of the Court of Industrial Relations which applied the Industrial Peace
Act to educational institutions that are organized, operated and maintained for
profit.

It is also noteworthy that in the
decisions in the cases of the Boy Scouts of the
Philippines, the
University of San
Agustin, the
University of Sto. Tomas, and La Consolacion College, this Court was not unanimous in the
view that the Industrial Peace Act (Republic Act No. 875) is not applicable to
charitable, eleemosynary or non-profit organizations—which include educational
institutions not operated for profit. There are members of this Court who hold
the view that the Industrial Peace Act would apply also to non-profit
organizations or entities—the only exception being the Government, including any
political subdivision or instrumentality thereof, in so far as governmental
functions are concerned. However, in the Far Eastern University case this Court
is unanimous in supporting the view that an educational institution that is
operated for profit comes within the scope of the Industrial Peace Act. We
consider it a settled doctrine of this Court, therefore, that the Industrial
Peace Act is applicable to any organization or entity—whatever may be its
purpose when it was created—that is operated for profit or
gain.

Does the University operate as an
educational institution for profit? Does it declare dividends for its
stockholders? If it does not, it must be declared beyond the purview of Republic
Act No. 875; but if it does, Republic Act No. 875 must apply to it. The
University itself admits that it has declared dividends.^[3]
The CIR in its order dated March 30, 1963 in CIR Case No. 41-IPA—which order was
issued after evidence was heard, also found that the University is not for
strictly educational purposes and that “It realizes profits and parts of such
earning is distributed as dividends to private stockholders or individuals
(Exh. A and also 1 to 1-F, 2-x 3-x and 4-x)^[4] Under this circumstance, and in consonance
with the rulings in the decisions of this Court, above cited, it is obvious that
Republic Act No. 875 is applicable t o herein petitioner Feati University.

But the University claims that it
is not an employer within the contemplation of Republic Act No. 875, because it
is not an industrial establishment. At most, it says, it is only a lessee of the
services of its professors and/or instructors pursuant to a contract of services
entered into between them. We find no merit in this claim. Let us clarify who is
an “employer” under the Act. Section 2 (c) of said Act
provides:

“Sec.
2.
Definitions.—As used in this Act—

(c) The term employer includes
any person acting “in the interest of an employer, directly or indirectly, but
shall not include any labor organization (otherwise than when acting as an
employer) or any one acting in the capacity or agent of such labor
organization.”

It will be noted that in defining
the term “employer” the Act uses the word “includes”, which it also used in
defining “employee” (Sec. 2[d], and “representative” (Sec. 2 [h] ); and not the
word “means” which the Act uses in defining the terms “court” (Sec. 2 [a]),
labor organization” (Sec. 2 [e] ), “legitimate labor organization (Sec. 2[f]),
“company union” (Sec. 2 [g]), “unfair labor practice” (Sec. 2 [i] ), “supervisor” (Sec. 2 [k] ), “strike” (Sec. 2[l]), and
“lockout” (Sec. 2 [m]). A methodical variation in terminology is manifest. This
variation and distinction in terminology and phraseology cannot be presumed to
have been the inconsequential product of an oversight; rather, it must have been
the result of a deliberate and purposeful act, more so when we consider that as
legislative records show, Republic Act No. 875 had been meticulously and
painstakingly drafted and deliberated upon. In using the word “includes” and not
“means”, Congress did not intend to give a complete definition of “employer”,
but rather that such definition should be complementary to what is commonly
understood as employer. Congress intended the term to be. understood in a broad
meaning because, firstly, the statutory definition includes not only “a
principal employer but also a person acting in the interest of the employer”;
and, secondly, the Act itself specifically enumerates those who are not included
in the term “employer”, namely: (1) a labor organization (otherwise than when
acting as an employer), (2) anyone acting in the capacity of officer or agent of
such labor organization (Sec. 2 [c]), and (3) the Government and any political
subdivision or instrumentality thereof insofar as the right to strike for the
purpose of securing changes or modifications in the terms and conditions of
employment is concerned (Section 11). Among these statutory exemptions,
educational institutions are not included; hence, they can be included in the
term “employer”. This Court, however, has ruled that those educational
institutions that are not operated for profit are not within the purview of 5
Republic Act No. 875.^[5]

As stated above, Republic Act No.
875 does not give a comprehensive but only a complementary definition of the
term “employer.” The term encompasses those that are in ordinary parlance
“employers.” What is commonly meant by “employer”? The term “employer” has been
given several acceptations. The lexical definition is “one who employs; one who
uses; one who engages or keeps in service;” and “to employ” is “to provide work
and pay for; to engage one’s service; to hire.” (Webster’s New
Twentieth Century Dictionary, 2nd ed., 1960, p. 595). The Workmen’s
Compensation Act defines employer as including “every person or association of
persons, incorporated or not, public or private, and the legal representative of
the deceased employer” and “includes the owner or lessee of a factory or
establishment or place of work or any other person who is virtually the owner or
manager of the business carried on in the establishment or place of work but
who, for reason that there is an independent contractor in the same, or for any
other reason, is not the direct employer of laborers employed there.” (Sec. 39 (a) of Act No. 3428.). The Minimum Wage Law states
that “employer includes any person acting directly or indirectly in the interest
of the employer in relation to an employee and shall include the Government and
the government corporations”. (Rep. Act No. 602, Sec. 2 (b)
). The Social Security Act defines employer as “any person, natural or
juridical, domestic or foreign, who carries in the Philippines any trade,
business, industry, undertaking, or activity of any kind and uses the services
of another person who is under his orders as regards the employment, except the
Government and any of its political subdivisions, branches or instrumentalities,
including corporations owned or controlled by the Government.” (Rep. Act No. 1161, Sec. 8 [c]).

This Court, in
the cases of The Angat River Irrigation System et al.,
vs. Angat River Workers’ Union (PLUM) et al., G. R.
Nos. L-10934
and 10944, December 28,
1957,
which cases involve unfair labor practices and hence within the purview of
Republic Act No. 875, defined the term employer as
follows:

“An employer is one who employs
the services of others; one for whom employees work and who pays their wages or
salaries (Black Law Dictionary, 4th ed., p. 618).

“An employer includes any person
acting in the interest of an employer, directly or indirectly (Sec. 2-c, Rep.
Act 875).”

Under none of the above
definitions may the University be excluded, especially so if it is considered
that every professor, instructor or teacher in the teaching staff of the
University, as per allegation of the University itself, has a contract with the
latter for teaching services, albeit for one semester only. The University
engaged the services of the professors, provided them work, and paid them
compensation or salary for their services. Even if the University may be
considered as a lessee of services under a contract between it and the members
of its Faculty, still it is included in the term “employer”. “Running through
the word ’employ’ is the thought that there has been an agreement on the part of
one person to perform a certain service in return for compensation to be paid by
an employer. When you ask how a man is employed, or what is
his employment, the thought that he is under agreement to perform some
service or services for another is predominant and paramount.” (Ballentine Law Dictionary, Philippine ed., p. 430, citing
Pinkerton National Detective Agency v. Walker, 157 Ga. 548, 35 A.L.R. 557,
560, 122 S.E. Rep. 202).

To bolster its claim of exemption
from the application of Republic Act No. 875, the University contends that it is
not an industrial establishment within the scope of Sec. 2 (c) of the Act. This
contention can not be sustained. In the first place, Sec. 2 (c) of Republic Act
No. 875 does not state that the employers included in the definition of the term
“employer” are only and exclusively “industrial establishments”; on the
contrary, as stated above, the term “employer” encompasses all employers except
those specifically excluded by the Act. In the second place, even the Act itself
does not refer exclusively to industrial establishments and does not confine its
application thereto. This is patent inasmuch as several provisions of the Act
are applicable to non-industrial workers, such as Sec. 3, which deals with
“employees right to self-organization”; Section 4 and 5 which enumerate unfair
labor practices; Section 8 which nullifies private contracts contravening
employee rights; Section 9 which relates to injunctions in any case involving a
labor dispute; Section 11 which prohibits strikes in the government; Section 12
which provides for the exclusive collective bargaining representation for labor
organizations; Section 14 which deals with the procedure for collective
bargaining; Section 17 which treats of the rights and conditions of membership
in labor organizations; Sections 18, 19, 20 and 21 which provide respectively
for the establishment of conciliation service, compilation of collective
bargaining contracts, advisory labor-management relations; Section 22 which
empowers the Secretary of Labor to make a study of labor relations; and Section
24 which enumerates the rights of labor organizations. (See Dissenting Opinion
of Justice Concepcion in Boy Scouts of the
Philippines v. Juliana Araos, G. R. Nos. L-10091, January 29,
1958.)

This Court, in the case of Boy
Scouts of the Philippines v. Araos,
supra, had occasion to state
that the Industrial Peace Act “refers only to organizations and entities created
and operated for profit, engaged in a profitable trade, occupation or industry”.
It cannot be denied that running a university engages time and attention; that
it is an occupation or a business from which the one engaged in it may derive
profit or gain. The University is not an industrial establishment in the sense
that an industrial establishment is one that is engaged in manufacture or trade
where raw materials are changed or fashioned into finished products for use. But
for the purposes of the Industrial Peace Act the University is an industrial
establishment because it is operated for profit and it employs persons who work
to earn a living. The term “industry”, for the purposes of the application of
our labor laws should be given a broad meaning so as to cover all enterprises
which are operated for profit and which engage the services of persons who work
to earn a living.

“The word ‘industry’ within State
Labor Relations Act controlling labor relations in industry, cover labor
conditions in any field of employment where the objective is earning a
livelihood on one side and gaining of a profit on the other. Labor Law, Sec. 700 et
seq.
State Labor
Relations Board vs. McChesney, 27 N.Y.S. 2d 866,
868.” (Words and Phrases, Permanent Edition, Vol. 21, 1960 edition p.
510).

The University urges that even if
it were an employer, still there would be no employer-employee relationship
between it and the striking members of the Faculty Club because the latter are
not employees within the purview of Sec. 2 (d) of Republic Act No. 875 but are
independent contractors. This claim is untenable.

Section 2 (d) of Republic Act No.
875 provides:

“(d) The term ’employee’ shall
include any employee and shall not be limited to the employee of a particular
employee unless the act explicitly states otherwise and shall include any
individual whose work has ceased as a consequence of, or in connection with, any
current labor dispute or because of any unfair labor practice and who has not
obtained any other substantially equivalent and regular
employment.”

This definition is again, like
the definition of the term “employer” [Sec. 2(c)], by the use of the term
“include”, complementary. It embraces not only those who are usually and
ordinarily considered employees, but also those who have ceased as employees as
a consequence of a labor dispute. The term “employee”, furthermore, is not
limited to those of a particular employer. As already stated, this Court in the
cases of The Angat River Irrigation System, et al.,
v. Angat River Workers’ Union (PLUM) et al., supra, has defined
the term “employer” as “one who employs the services of others; one for whom
employees work and who pays their wages or salaries.” Correlatively, an employee
must be one who is engaged in the service of another; who performs services for
another; who works for salary or wages. It is admitted by the University that
the striking professors and/or instructors are under contract to teach
particular courses and that they are paid for their services. They are,
therefore, employees of the University.

In support of its claim that the
members of the Faculty Club are not employees of the University, the latter
cites as authority Francisco’s Labor Laws, 2nd ed. p. 3, which
states:

“While the term ‘workers’ as used
in a particular statute, has been regarded as limited to those performing
physical labor, it has been held to embrace stenographers and bookkeepers.
Teachers are not included, however.”

It is evident from the
above-quoted authority that “teachers” are not to be included among those who
perform “physical labor”, but it does not mean that they are not employees. We
have checked the source of the authority, which is 31 Am. Jur., Sec. 3, p. 835, and the latter cites Huntworth v. Tanner, 87 Wash 670, 152 P523, Ann Cas 1917 D 676. A reading of the last case confirms Our view.

That teachers are “employees” has
been held in a number of cases (Aebli v. Board of Education of City and
County of San Francisco, 145 P. 2d 601, 62 Col. App. 2.d 706; Lowe &
Campbell Sporting Goods Co. v. Tangipahoa Parish School Board, La.
App., 15 So 2d 98, 100; Sister Odelia v. Church of St. Andrew, 263 N. W. Ill,
112, 195 Minn. 357, cited in Words and Phrases, Permanent ed., Vol. 14, pp.
806-807). This Court in the Far Eastern University case, supra, considered university
instructors as employees and declared Republic Act No. 875 applicable to them in
their employment relations with their school. The professors and/or instructors
of the University neither ceased to be employees when they struck, for Section 2
of Rep. Act 875 includes among employees any individual whose work has ceased as
a consequence of, or in connection with a current labor dispute. Striking
employees maintain their status as employees of the employer. (Western Cartridge Co. v. NLRB, CCA. 7, 139 F2d 855,
858).

The contention of the University
that the professors and/or instructors are independent contractors, because the
University does not exercise control over their work, is likewise untenable.
This Court takes judicial notice that a university controls the work of the
members of its faculty; that a university prescribes the courses or subjects
that professors teach, and when and where to teach; that the professors’ work is
characterized by regularity and continuity for a fixed duration; that professors
are compensated for their services by wages and salaries, rather than by
profits; that the professors and/or instructors cannot substitute others to do
their work without the consent of the university; and that the professors can be
laid off if their work is found not satisfactory. All these indicate that the
university has control over their work; and professors are, therefore, employees
and not independent contractors. There are authorities in support of this
view.

“The principal consideration in
determining whether a workman is an employee or an independent contractor is the
right to control the manner of doing the work, and it is not the actual exercise
of the right by interfering with the work, but the right to control, which
constitutes the test. (Amalgamated Roofing Co. v. Travelers’ Ins. Go., 133 N.E. 259,
261, 300 111. 487, quoted in Words and Phrases, Permanent ed., Vol. 14, p.
576).

“Where, under Employers’
Liability Act, A was instructed when and where to work x x x he is an employee, and not a
contractor, though paid specified sum per square.” (Heine v.
Hill, Harris & Co., 2 La. App. 384, 390,
in Words and Phrases, loc. cit.)

“Employees are those who are
compensated for their labor or services by wages rather than by profits.” (People vs.
Distributors Division, Smoked Fish Workers Union, Local No. 20377, Sup. 7 N. Y.
S. 2d 185, 187 in Words and Phrases, loc. cit.)

“Services of employee or servant,
as distinguished from those of a contractor, are usually characterized by
regularity and continuity of work for a fixed period or one of indefinite
duration, as contrasted with employment to do a single act or a series of
isolated acts; by compensation on a fixed salary rather than one regulated by
value or amount of work; x x x” (Underwood v. Commissioner of Internal Revenue,
C.C.A., 56 Fi 2d 67, 71 in Words and Phrases, op.
cit., p. 579.)

“Independent contractors can
employ others to work and accomplish contemplated result without consent of
contractee, while ’employee’ cannot substitute another
in his place without consent of his employer.11 (Luker
Sand & Gravel Co. v.
Industrial Commission, 23 P. 2d 225, 82 Utah, 188, in Words and Phrases, Vol. 14
p. 576).

Moreover, even if university
professors are considered independent contractors, still they would be covered
by Rep. Act No. 875. In the case of the Boy Scouts of the
Philippines v. Juliana Araos, supra, this Court observed that
Republic Act No. 875 was modelled after the Wagner
Act, or the National Labor Relations Act, of the
United
States, and this Act did not exclude
“independent contractors” from the orbit of “employees”. It was in the
subsequent legislation—the Labor Management Relation Act (Taft-Hartley Act)—that
“independent contractors” together with agricultural laborers, Individuals in
domestic service of the home, supervisors, and others were excluded. (See Rotheoberg on Labor Relations, 1949,
pp. 330-331).

It having been shown that the
members of the Faculty Club are employees, it follows that they have a right to
unionize in accordance with the provisions of Section 3 of the Magna Carta of Labor (Republic Act No. 875) which provides as
follows:

“Sec.
3. Employees’ right to
self-organization.—Employees shall have the right to
self-organization and to form, join or assist labor organizations of their own
choosing for the purpose of collective bargaining through representatives of
their own choosing and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection. x x x“

We agree with the statement of
the lower court, in its order of March 30, 1963 which is sought to be set aside
in the instant case, that the right of employees to self-organization is
guaranteed by the Constitution, that said right would exist even if Republic Act
No. 875 is repealed, and that the employees are entitled to that right
regardless of whether their employers are engaged in commerce or not. Indeed, it
is Our considered view that the members of the faculty or teaching staff of
private universities, colleges, and schools in the Philippines, regardless of
whether the university, college or school is run for profit or not, are included
in the term “employees” as contemplated in Republic Act No. 875 and as such they
may organize themselves pursuant to the above-quoted provision of Section 3 of
said Act. Certainly, professors, instructors or teachers of private educational
institutions who teach to earn a living are entitled to the protection of our
labor laws—and one such law is Republic Act No. 875.

The contention of the University
in the instant case that the members of the Faculty Club can not unionize and
the Faculty Club can not exist as a valid labor organization is, therefore,
without merit. The record shows that the Faculty Club is a duly registered labor
organization, and this fact is admitted by counsel for the University.^[6]

The other issue raised by the
University is the validity of the Presidential certification. The University
contends that under Section 10 of Republic Act No. 875 the power of the
President of the Philippines to certify is subject to the
following conditions, namely: (1) that there is a labor dispute, and (2) that
said labor dispute exists in an industry that is vital to the national interest.
The University maintains that those conditions do not obtain in the instant
case. This contention has also no merit.

We have previously stated that
the University is an establishment or enterprise that is included in the term
“industry” and is covered by the provisions of Republic Act No. 875. Now, was
there a labor dispute between the University and the Faculty
Club?

Republic Act No. 875 defines a
labor dispute as follows:

“The term ‘labor dispute’
includes any controversy concerning terms, tenure or conditions of employment,
or concerning the association or representation of persons in negotiating,
fixing, maintaining, changing, or seeking to arrange terms for conditions of
employment regardless of whether the disputants stand in proximate relation of
employer and employee.”

The test of whether a controversy
comes within the definition of “labor dispute” depends on whether the
controversy involves or concerns “terms, tenure or condition of employment” or
“representation.” It is admitted by the University, in the instant case, that on
January 14, 1963 the President of the Faculty Club wrote to the President of the
University a letter informing the latter of the organization of the Faculty Club
as a labor union, duly registered with the Bureau of Labor Relations; that again
on January 22, 1963 another letter was sent, to which was attached a list of
demands consisting of 26 items, and asking the President of the University to
answer within ten days from date of receipt thereof; that the University
questioned the right of the Faculty Club to be the exclusive representative of
the majority of the employees and asked proof that the Faculty Club had been
designated or selected as exclusive representative by the vote of the majority
of said employees; that on February 1, 1963 the Faculty Club filed with the
Bureau of Labor Relations a notice of strike alleging as reason therefor the refusal of the University to bargain
collectively with the representative of the faculty members; that on February
18, 1963 the members of the Faculty Club went on strike and established picket
lines in the premises of the University, thereby disrupting the schedule of
classes; that on March 1, 1963 the Faculty Club filed Case No. 3666-ULP for
unfair labor practice against the University, but which was later dismissed (on
April 2, 1963 after Case 41-IPA was certified to the CIR); and that on March 7,
1963 a petition for certification election, Case No. 1183-MC, was filed by the
Faculty Club in the CIR.^[7] All these
admitted facts show that the controversy between the University and the Faculty
Club involved terms and conditions of employment, and the question of
representation. Hence, there was a labor dispute between the University and the
Faculty Club, as contemplated by Republic Act No. 875. It having been shown that
the University is an institution operated for profit, that it is an employer,
and that there is an employer-employee relationship between the University and
the members of the Faculty Club, and it having been shown that a labor dispute
existed between the University and the Faculty Club, the contention of the
University, that the certification made by the President is not only not
authorized by Section 10 of Republic Act 875 but is violative thereof, is groundless.

Section 10 of Republic Act No.
875 provides:

“When in the opinion of the
President of the Philippines there exists a. labor dispute in. an industry
indispensable to the national interest and when such labor dispute is certified
by the President to the Court of Industrial Relations, said Court may cause to
be issued a restraining order forbidding the employees to strike or the employer
to lockout the employees, and if no other solution to the dispute is found, the
Coutt may issue an order fixing the terms and
conditions of employment.”

This Court had occasion to rule
on the application of the above-quoted provision of Section 10 of Republic Act
No. 875. In the case of Pampanga
Sugar Development Co. v. CIR,
et al., G. R. No. L-13178, March 24,
1961, it
was held:

“It thus appears that when in the
opinion of the President a labor dispute exists in an industry indispensable to
national interest and be certifies it to the Court of Industrial Relations the
latter acquires jurisdiction to act thereon in the manner provided by law. Thus
the court may take either of the following courses: it may issue an order
forbidding the employees to strike or the employer to lockout its employees, or,
failing in this, it may issue an order fixing the terms and conditions of
employment. It has no other alternative. It can not throw the case out in the
assumption that the certification was erroneous.

“x x
x“

“The fact, however, is that
because of the strike declared by the members of the minority union which
threatens a major industry the President deemed it wise to certify the
controversy to the Court of Industrial Relations for adjudication. This is
the power that the law gives to the President the propriety of its exercise
being a matter that only devolves upon him. The same is not the concern of the
industrial court. What matters is that by virtue of the certification made by
the President the case was placed under the jurisdiction of said court.”
(Italics supplied)

To certify a labor dispute to the
CIR is the prerogative of the President under the law, and this Court will not
interfere in, much less curtail, the exercise of that prerogative. The
jurisdiction of the CIR in a certified case is exclusive (Rizal Cement Co., Inc. v. Rizal
Cement Workers Union (FFW), et al., G. R. No. L-12747, July 30,
1960).
Once the jurisdiction is acquired pursuant to the presidential certification,
the CIR may exercise its broad powers as provided in Commonwealth Act 103. All
phases of the labor dispute and the employer-employee relationship may be
threshed out before the CIR, and the CIR may issue such order or orders as may
be necessary to make effective the exercise of its jurisdiction. The parties
involved in the case may appeal to the Supreme Court from the order or orders
thus issued by the CIR.

And so, in the instant case, when
the President took into consideration that the University “has some 18,000
students and employed approximately 500 faculty members”, that “the continued
disruption in the operation of the University will necessarily prejudice the
thousand of students”, and that “the dispute affects the national
interest”,^[8] and certified the dispute to
the CIR, it is not for the CIR nor this Court to pass upon the correctness of
the reasons of the President in certifying the labor dispute to the
CIR.

The third issue raised by the
University refers to the question of the legality of the return-to-work order
(of March 30,
1963 in
Case 41-IPA) and the order implementing the same (of April
6, 1963).
It alleges that the orders are illegal upon the grounds: (1) that Republic Act
No. 875, supplementing Commonwealth Act No. 103, has withdrawn from the CIR the
power to issue a return-to-work order; (2) that the only power granted by
Section 10 of Republic Act No. 875 to the CIR is to issue an order forbidding
the employees to strike or forbidding the employer to lockout the employees, as
the case may be, before either contingency had become a fait accompli; (3) that the taking in
by the University of replacement professors was valid, and the return-to-work
order of March 30, 1963 constituted Impairment of the obligation of contracts;
and (4) the CIR could not issue said order without having previously determined
the legality or illegality of the strike.

The contention of the University
that Republic Act No. 875 has withdrawn the power of the Court of Industrial
Relations to issue a return-to-work order exercised by it under Commonwealth Act
No. 103 can not be sustained. When a case is certified by the President to the
Court of Industrial Relations, the case thereby comes under the operation of
Commonwealth Act No. 103, and the Court may exercise the broad powers and
jurisdiction granted to it by said Act. Section 10 of Republic Act No. 875
empowers the Court of Industrial Relations to issue an order “fixing the terms
of employment.” This clause is broad enough to authorize the Court to order the
strikers to return to work and the employer to readmit them. This Court, in the cases of the Philippine Marine Officers
Association vs. The Court of
Industrial Relations, Compania Maritima, et al.; and Compania
Maritima, et al. vs. Philippine Marine Radio Officers
Association and CIR et al., G. R. Nos. L-10095 and L-10115,
October 31,
1957,
declared:

“We cannot subscribe to the above
contention. We agree with counsel for the Philippine Radio Officers’ Association
that upon certification by the President under Section 10 of Republic Act 875,
the case comes under the operation of Commonwealth Act 103, which enforces
compulsory arbitration in cases of labor disputes in industries indispensable to
the national interest when the President certifies the case to the Court of
Industrial Relations. The evident intention of the law is to empower the Court
of Industrial Relations to act in such cases, not only in the manner prescribed
under Commonwealth Act 103, but with the same broad powers and jurisdiction
granted by that act. If the Court of Industrial Relations is granted authority
to find a solution to an industrial dispute and such solution consists in the
ordering of employees to return back to work, it cannot be contended that the
Court of Industrial Relations does not have the power or jurisdiction to carry
that solution into effect. And of what use is its power of conciliation and
arbitration if it does not have the power and jurisdiction to carry into effect
the solution it has adopted? Lastly, if the said court has the power to fix the
terms and conditions of employment, it certainly can order the return of the
workers with or without backpay as a term or condition
of employment.”

The foregoing ruling was
reiterated by this Court in the case of Hind Sugar Co. v. CIR, et al., G. R. No. L-13364,
July 26,
1960.

When a case is certified to the
CIR by the President of the Philippines pursuant to Section 10 of Republic Act
No. 875,the CIR is granted authority to find a solution
to the industrial dispute; and the solution which the CIR has found under the
authority of the presidential certification and conformable thereto cannot be
questioned (Radio Operators Association of the Philippines, vs. Philippine Marine Radio Officers
Association, et al., L-10112, Nov. 29, 1957, 54 0.6.
3218).

Untenable also is the claim of
the University that the CIR cannot issue a return-to-work order after a strike
has been declared, it being contended that under Section 10 of Republic Act No.
875 the CIR can only prevent a strike or a lockout—when either of this situation
had not yet occurred. But in the case of Bisaya Land
Transportation Co. Inc. vs.
Court of Industrial Relations, et al., No. L-10114, Nov.
26, 1957,
50 O.G. 2518, this Court declared:

“There is no reason or ground for
the contention that Presidential certification of labor dispute to the CIR is
limited to the prevention of strikes and lockouts. Even after a strike has been
declared where the President believes that public interest demands arbitration
and conciliation, the President may certify the case for that purpose. The
practice has been for the Court of Industrial Relations to order the strikers to
work, pending the determination of the union demands that impelled the
strike. There is nothing in the law to indicate that this practice is
abolished.” (Italics supplied)

Likewise untenable is the
contention of the University that the taking in by it of replacements was valid
and the return-to-work order would be an impairment of its contract with the
replacements. As stated by the CIR in its order of March
30, 1963,
it was agreed before the hearing of Case 41-IPA on March
23, 1963
that the strikers would return to work under the status quo arrangement
and the University would readmit them, and the return-to-work order was a
confirmation of that agreement. This is a declaration of fact by the CIR which
We cannot disregard. The faculty members, by striking,
have not abandoned their employment but, rather, they have only ceased from
their labor (Keith Theatre v. Vachon, et al., 187 A. 692). The striking faculty members
have not lost their right to go back to their positions, because the declaration
of a strike is not a renunciation of their employment and their employee
relationship with the University (Rex Taxicab Co. v. CIR, et al., 40 0.6., No.
13, 138). The employment of replacements was not authorized by the CIR. AC most,
that was a temporary expedient resorted to by the University, which was subject
to the power of the CIR to allow to continue or not. The employment of
replacements by the University prior to the issuance of the order of
March 30,
1963 did
not vest in the replacements a permanent right to the positions they held.
Neither could such temporary employment bind the University to retain
permanently the replacements.

“Striking employees maintained
their status as employees of the employer (Western Castridge Co. v. National Labor Relations Board, C.C.
A. 139 F. 2d 855, 858); that employees who took the place of strikers do not
displace them as ’employees.'” (National Labor Relations Board v. A. Sartorius & Co., CCA. 2, 140 F. 2d 203, 206,
207.)

It is clear from what has been
said that the return-to-work order cannot be considered as an impairment of the
contract entered into by petitioner with the replacements. Besides, labor
contracts must yield to the common good and such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and similar
subjects (Article 1700, Civil Code).

Likewise unsustainable is the
contention of the University that the Court of Industrial Relations could not
issue the return-to-work order without having resolved previously the issue of
the legality or illegality of the strike, citing as authority therefor the case of Philippine Can Company v. Court of Industrial Relations, G. R.
No. L-3021, July 13,
1950. The
ruling in said case is not applicable to the case at bar, the facts and
circumstances being very different. The Philippine Can Company case, unlike the
instant case, did not involve the national interest and it was not certified by
the President. In that case the company no longer needed the services of the
strikers, nor did it need substitutes for the strikers, because the company was
losing, and it was imperative that it lay off such laborers as were not
necessary for its operation in order to save the company from bankruptcy. This
was the reason of this Court in ruling, in that case, that the legality or
illegality of the strike should have been decided first before the issuance of
the return-to-work order. The University, in the case before Us, does not claim that it no longer needs the services of
professors and/or instructors; neither does it claim that it was imperative for
it to lay off the striking professors and instructors because of impending
bankruptcy. On the contrary, it was imperative for the University to hire
replacements for the strikers. Therefore, the ruling in the Philippine Can case
that the legality of the strike should be decided first before the issuance of
the return-to-work order does not apply to the case at bar. Besides, as We have adverted to, the return-to-work order of
March 30,
1963, now
in question, was a confirmation of an agreement between the University and the
Faculty Club during a pre-hearing conference on March
23, 1963.

The University also maintains
that there was no more basis for the claim of the members of the Faculty Club to
return to their work, as their Individual contracts for teaching had expired on
March 25 or 31, 1963, as the case may be, and consequently, there was also no
basis for the return-to-work order of the CIR because the contractual
relationships having ceased there were no positions to which the members of the
Faculty Club could return to. This contention is not
well taken. This argument loses sight of the fact that when the professors and
Instructors struck on February 18, 1963, they continued to be employees of the
University for the purposes of the labor controversy notwithstanding the
subsequent termination of their teaching contracts, for Section 2(d) of the
Industrial Peace Act includes among employees “any individual whose work has
ceased as a consequence of, or in connection with, any current labor dispute or
of any unfair labor practice and who has not obtained any other substantially
equivalent and regular employment.”

The question raised by the
University was resolved in a similar case in the
United
States. In the case of Rapid Roller Co.
v. NLRB, 126 F. 2d 452, we
read:

“On May 9,
1939 the
striking employees, eighty-four in number, offered to the company to return to
their employment. The company, believing it had not committed any unfair labor
practice, refused the employees’ offer and claimed the right to employ others to
take the place of the strikers, as it might see fit. This constituted
discrimination in the hiring and tenure of the striking employees. When the
employees went out on a strike because of the unfair labor practice of the
company, their status as employees for the purpose of any controversy growing
out of that unfair labor practice was fixed. Sec. 2 (3) of the
Act. Phelps Dodge Corp. v. National Labor Relations Board, 313
U.S. 177, 61
S.
Ct. 845, 85 L. ed. 1271, 133 A.L.R.
1217.

“For the purpose of such
controversy they remained employees of the company. The company contended that
they could not be their employees in any event since the ‘contract of their
employment expired by its own terms on April 23,
1939.’

“In this we think the company is
mistaken for the reason we have just pointed out, that the status of the
employees on strike became fixed under Sec. 2 (3) of the Act because of the
unfair labor practice of the company which caused the
strike.”

The University, furthermore,
claims that the information for indirect contempt filed against the officers of
the University (Case No. V-30) as well as the order of April 29, 1963 for their
arrest were improper, irregular and illegal because (1) the officers of the
University had complied in good faith with the return-to-work order and in those
cases that they did not, it was due to circumstances beyond their control; (2)
the return-to-work order and the order implementing the same were illegal; and
(3) even assuming that the order was legal, the same was not yet final because
there was a motion to reconsider it.

Again we find no merit in this
claim of petitioner. We have already ruled that the CIR had jurisdiction to
issue the order of March 30,
1963 In
CIR Case 41-IPA, and the return-to-work provision of that order is valid and
legal. Necessarily the order of April 6,
1963
implementing that order of March 30,
1963 was
also valid and legal.

Section 6 of Commonwealth Act No.
103 empowers the Court of Industrial Relations or any Judge thereof to punish
direct and indirect contempts as provided in Rule 64
(now Rule 71) of the Rules of Court, under the same procedure and penalties
provided therein. Section 3 of Rule 71 enumerates the acts which would
constitute indirect contempt, among which is “disobedience or resistance to a
lawful writ, process, order, judgment, or command of a court,” and the person
guilty thereof can be punished after a written charge has been filed and the
accused has been given an opportunity to be heard. The last paragraph of said
section provides:

“But nothing in this section
shall be so construed as to prevent the court from issuing process to bring the
accused party into court, or from holding him in custody pending such
proceedings.”

The provision authorizes the
judge to order the arrest of an alleged contemner
(Francisco, et al. v.
Enriquez, L-7058, March 20, 1954, 94 Phil., 603) and this, apparently, is the
provision upon which respondent, Judge Bautista relied when he Issued the questioned order of arrest.

The contention of petitioner that
the order of arrest is illegal is unwarranted. The return-to-work order
allegedly violated was within the court’s jurisdiction to
issue.

Section 14 of Commonwealth Act
No. 103 provides that in cases brought before the Court of Industrial Relations
under Section 4 of the Act (referring to strikes and lockouts) the appeal to the
Supreme Court from any award, order or decision shall not stay the execution of
said award, order or decision sought to be reviewed unless for special reason
the court shall order that execution be stayed. Any award, order or decision
that is appealed is necessarily not final. Yet under Section 14 of Commonwealth
Act No. 103 that award, order or decision, even if not yet final, is executory, and the stay of execution is discretionary with
the Court of Industrial Relations. In other words, the Court of Industrial
Relations, in cases involving strikes and lockouts, may compel compliance or
obedience of its award, order or decision even if the award, order or decision
is not yet final because it is appealed, and it follows that any disobedience or
non-compliance of the award, order or decision would constitute contempt against
the Court of Industrial Relations which the court may punish as provided in the
Rules of Court. This power of the Court of Industrial Relations to punish for
contempt an act of non-compliance or disobedience of an award, order or
decision, even if not yet final, is a special one and is exercised only in cases
involving strikes and lockouts. And there is reason for this special power of
the industrial court because in the exercise of its jurisdiction over cases
involving strikes and lockouts the court has to issue orders or make decisions
that are necessary to effect a prompt solution of the labor dispute that caused
the strike or the lockout, or to effect the prompt creation of a situation that
would be most beneficial to the management and the employees, and also to the
public—even if the solution may be temporary, pending the final determination of
the case. Otherwise, if the effectiveness of any order, award, or decision of
the industrial court in cases involving strikes and lockouts would be suspended
pending appeal then it can happen that the coercive powers of the industrial
court in the settlement of the labor disputes in those cases would be rendered
useless and nugatory.

The University points to Section
6 of Commonwealth Act No. 103 which provides that “Any violation of any order,
award, or decision of the Court of Industrial Relations shall after such order,
award or decision has become final, conclusive and executory constitute contempt of court”, and contends that
only the disobedience of orders that are final (meaning one that is not
appealed) may be the subject of contempt proceedings. We believe that there is
no inconsistency between the above-quoted provision of Section 6 and the
provision of Section 14 of Commonwealth Act No. 103. It will be noted that
Section 6 speaks of order, award or decision that is executory. By the provision of
Section 14 an order, award or decision of the Court of Industrial Relations in
cases involving strikes and lockouts are immediately executory, so that a violation
of that order would constitute an indirect contempt of
court.

We believe that the action of the
CIR in issuing the order of arrest of April 29,
1963 is
also authorized under Section 19 of Commonwealth Act No. 103 which provides as
follows:

“SEC.
19. Implied condition in every contract of
employment.—In every contract of employment whether verbal or
written, it is an implied condition that when any dispute between the employer
and the employee or laborer has been submitted to the Court of Industrial
Relations for settlement or arbitration pursuant to the provisions of this Act .
. . and pending award, or decision by the Court of such dispute . . . the
employee or laborer shall not strike or walk out of his employment when so
enjoined by the Court after hearing and when public interest so requires, and if
he has already done so, that he shall forthwith return to it, upon order of the
Court, which shall be issued only after hearing when public interest so requires
or when the dispute cannot, in its opinion, be promptly decided or settled; and
if the employees or laborers fail to return to work, the Court may authorize the
employer to accept other employees or laborers. A condition shall further be
implied that while such dispute . . . is pending, the employer shall refrain
from accepting other employees or laborers, unless with the express authority of
the Court, and shall permit the continuation in the service of his employees or
laborers under the last terms and conditions existing before the dispute arose .
. . A violation by the employer or by the employee or laborer of such an order
or the implied contractual condition set forth in this section shall constitute
contempt of the Court of Industrial Relations and shall be punished by the Court
itself in the same manner with the same penalties as in the case of contempt of
a Court of First Instance. . . . .”

We hold that the CIR acted within
its jurisdiction when it ordered the arrest of the officers of the University
upon a complaint for indirect contempt filed by the Acting Special Prosecutor of
the CIR in CIR Case V-30, and that order was valid. Besides those ordered
arrested were not yet being punished for contempt; but, having been charged,
they were simply ordered arrested to be brought before the Judge to be dealt
with according to law. Whether they are guilty of the charge or not is yet to be
determined in a proper hearing.

Let it be noted that the order of
arrest dated April 29,
1963 in
CIR Case V-30 is being questioned in Case G. R. No.L-21278 before this Court in
a special civil action for certiorari. The University did not appeal from that
order. In other words, the only question to be resolved in connection with that
order in CIR Case V-30 is whether the CIR had jurisdiction, or had abused its
discretion, in issuing that order. We hold that the CIR had jurisdiction to
issue that order, and neither did it abuse its discretion when it issued that
order.

In Case G. R.
No. L-21462
the University appealed from the order of Judge Villanueva of the CIR in Case
No. 1183-MC, dated April 6,
1963,
granting the motion of the Faculty Club to withdraw its petition for
certification election, and from the resolution of the CIR en banc, dated June 5,
1963,
denying the nation to reconsider said order of April
6, 1963.
The ground of the Faculty Club in asking for the withdrawal of that petition for
certification election was because the issues involved in that petition were
absorbed by the issues in Case 41-IPA. The University opposed the petition for
withdrawal, but at the same time it moved for the dismissal of the petition for
certification election.

It is contended by the University
before this Court, in G. R. No. L-21462, that the issues of employer-employee
relationship between the University and the Faculty Club, the alleged status of
the Faculty Club as a labor union, its majority representation and designation
as bargaining representative in an appropriate unit of the Faculty Club should
have been resolved first in Case No. 1183-MC prior to the determination of the
issues in Case No. 41-IPA, and, therefore, the motion to withdraw the petition
for certification election should not have been granted upon the ground that the
issues in the first case were absorbed in the second case.

We believe that these contentions
of the University in Case G. R. No. L-21462 have been
sufficiently covered by the discussion in this decision of the main issues
raised in the principal case, which is Case G. R. No. L-21278. After all, the University wanted CIR Case 1183-MC
dismissed, and the withdrawal of the petition for certification election had in
a way produced the situation desired by the University. After considering the
arguments adduced by the University in support of its petition for certierari by way of appeal in Case G. R. No. L-21278, We hold that the CIR did not commit any error when it granted
the withdrawal of the petition for certification election in Case 1183-MC. The
principal case before the CIR is Case No. 41-IPA and all the questions relating
to the labor disputes between the University and the Faculty Club may be
threshed out, and decided, in that case.

In Case G. R.
No. L-21500
the University appealed from the order of the CIR of March 30, 1963, issued by
Judge Bautista, and from the resolution of the CIR en banc promulgated on June 28, 1963,
denying the motion for the reconsideration of that order of March 30, 1963, in
CIR Case No. 41-IPA. We have already ruled that the CIR has jurisdiction to
issue that order of March 30, 1963, and that order is valid, and We, therefore,
hold that the CIR did not err in issuing that order of March 30, 1963 and in
issuing the resolution promulgated on June 28, 1963 (although dated May 7, 1963)
denying the motion to reconsider that order of March 30,
1963.

IN VIEW OF
THE FOREGOING,
the petition for certiorari and prohibition with preliminary injunction in Case
G. R. No.
L-21278 is dismissed and the writs prayed for therein are denied. The writ of
preliminary injunction issued in Case G. R. No. L-21278 is dissolved. The orders
and resolutions appealed from, in Cases Nos. L-21462 and L-21500, are affirmed, with costs in these three cases against
the petitioner-appellant Feati University.

IT IS SO ORDERED.

Concepcion, C.J., Dizon, Regala, Makalintal, Bengzon, J.P.,
Sanchez and
Ruiz Castro, JJ., concur.
Reyes, J.B.L., J., concurs but reserves his vote on
the teacher’s right to strike.

^[1] As quoted from the writ of
preliminary injunction issued this Court.

^[2] As quoted from the order of April 6,
1963.

^[3] Petitioner’s brief p. 29; also pp. 8-9
petitioner’s reply brief.

^[4]
See order as copied on p. 118 of petitioner’s brief.

^[5] We have pointed out that this is not a
unanimous view of this Court.

^[6] See p. 140, Record of G. R. No. L-21278.

^[7] Petitioner’s Brief, pp. 1, 2, 3, 7 and
8.

^[8] Words in
quotation marks are as quoted from the letter of certification of the President
dated March 21,
1963
addressed to the Presiding Judge of the CIR.