UNITED STATES LINES, INC., PETITIONER, VS. ACTING MINISTER OF LABOR AMADO INCIONG, ASSOCIATED WATCHMEN AND SECURITY UNION, BERNARDO ABADILLOS, WILFREDO AGUILAR, ROMEO ALAFRIZ, P…

United States Lines versus Acting Minister of Labor Inciong

The Case

This is a special civil action on certiorari brought by United States Lines, Incorporated against the Acting Minister of Labor, Amado Inciong, and the Associated Watchmen and Security Union together with its individual watchmen members. The company asks the Supreme Court to set aside the orders of the Acting Minister of Labor that dismissed its appeal and denied its motion for reconsideration, thereby affirming the decision of the Labor Arbiter. The case matters because it draws the boundary between the relief of reinstatement and the affirmative relief of separation pay in a labor case where the unfair labor practice charge itself was dismissed. It teaches when a labor tribunal may still grant relief even after absolving the employer of unfair labor practice.

Procedural History

The complaint for unfair labor practice was filed before the Court of Industrial Relations. Labor Arbiter Tito Genilo rendered a decision dismissing the unfair labor practice aspect but directing reinstatement without backwages, and ordering Narciso Lim to pay financial assistance equivalent to six months of backwages. The company appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter's decision. The company then elevated its appeal to the Secretary, later Minister, of Labor, but the appeal was denied in an order issued by Acting Minister Amado Inciong. The company filed a motion for reconsideration, which was likewise denied. Hence, the company came to the Supreme Court by this special civil action on certiorari.

Facts

The Associated Watchmen and Security Union, a duly registered labor organization affiliated with the Union de Obreros Estibadores de Filipinas, composed of watchmen guarding the vessels of several shipping companies in the port of Manila, had a collective bargaining agreement with United States Lines, Incorporated, executed on December 7, 1967 for a term of three years, and subsequently renewed for another three years. The agreement contained a union security clause requiring watchmen to remain members of good standing in the Union as a condition of employment, and a work assignment clause providing that the assignment of watchmen shall be made by the Union upon request of the Company.

The Union was registered in 1964 with Narciso Lim as president. No election had been held among the general members in 1965, 1966 and 1967. In 1968 an intra-union dispute split the members into two factions. A regular meeting was noticed for May 7, 1968, but without waiting for that date, a meeting was held on May 1, 1968, at which a new set of officers was elected, with Apolinar Bernardo as president. The dispute thus produced two Union presidents, Narciso Lim and Apolinar Bernardo, both asserting the right of selection or nomination of watchmen under the collective bargaining agreement. Narciso Lim refused to recognize the May 1 election and continued assigning watchmen. Apolinar Bernardo presented a list of assignments, but the Company did not honor it and instead gave assignments to watchmen recommended by Narciso Lim. Those watchmen refused to render service because the assignments were not made by Apolinar Bernardo.

Faced with two sets of nominees, the Company sought the intercession of the mother federation, which informed the Company that the forty-nine watchmen, including the private respondents, were considered resigned and no longer members of the Union effective May 1, 1968 for acts inimical to the Union, and advised the Company to honor only the assignments of Narciso Lim. As a consequence, the Company refused the services of the watchmen starting June 3, 1968, invoking the closed shop provision of the collective bargaining agreement. On April 30, 1970, the Union and thirty-five members filed a complaint for unfair labor practice against the Company and others.

Issues

• Whether or not the Court of Industrial Relations has jurisdiction to order the reinstatement of the private respondents in the same decision that absolved the petitioner Company of the unfair labor practice charge, where the private respondents were found to have been validly refused re-employment on grounds of good faith under the closed shop provision of the collective bargaining agreement.

Applicable Provisions

Section 5, paragraph (c) of the Industrial Peace Act, Republic Act Number 875, provides:

If, after investigation, the Court shall be of the opinion that any person named in the complaint has engaged in or is engaging in any unfair labor practice, then the Court shall state its findings of fact and shall issue and cause to be served on such person an order requiring such person to cease and desist from such unfair labor practice and take such affirmative action as will effectuate the policies of this Act, including (but not limited to) reinstatement of employees with or without backpay and including rights of the employees prior to dismissal including seniority.

This provision defines the affirmative relief, including reinstatement, that the Court may grant upon a finding of unfair labor practice, and the company invoked it to argue that no such relief may issue once the charge is dismissed.

The same Section 5, paragraph (c) further provides:

If after investigation the Court shall be of the opinion that no person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Court shall state its findings of fact and shall issue an order dismissing the said complaint.

This provision states the consequence of a finding that no unfair labor practice was committed, namely the dismissal of the complaint, and frames the question of whether any affirmative relief may still be granted.

Ruling

On the sole issue, the Court held that the dismissal of the complaint for unfair labor practice, based on the Company's refusal to honor the assignments made by the newly elected president and its recognition of the assignments made by the incumbent president, logically precludes the relief of reinstatement. To order reinstatement would be obviously inconsistent with the finding that the services of the private respondents were validly refused. As the Court put it, an employee found to have been validly refused re-employment may not demand reinstatement.

Nevertheless, the Court held that the private respondents are not left without any relief. Where the alleged unfair labor practice acts were not proved, or where the complaint for unfair labor practice was dismissed, the private respondents may be entitled to affirmative relief which is not inconsistent with the finding that no unfair labor practice was committed by the employer. The Court relied on its earlier ruling in the Colgate-Palmolive case, where it sustained the power of the Court of Industrial Relations to order payment of the money equivalent of unused sick leave in the same decision that absolved the employer of the unfair labor practice charge, because that award was not inconsistent with the finding of no unfair labor practice.

Applying this principle, the Court noted that the private respondents had at one time or another served the Company as members of the Union prior to the intra-union dispute, and that their status as employees of the Company had long been settled in the earlier case of United States Lines against the Associated Watchmen and Security Union. Considering their past services as watchmen and on equitable considerations, the Court held that they are entitled to separation pay. The award of separation pay would not be inconsistent with the absolution of the Company of the unfair labor practice charge, because the private respondents were not, in a real sense, dismissed for just cause, but were not accepted for re-employment because of non-membership in the Union.

Doctrine

A labor tribunal may not order reinstatement in the same decision that dismisses the unfair labor practice charge and finds that the employees were validly refused re-employment. Reinstatement presupposes an unlawful refusal of work, and it is inconsistent with a finding that the refusal was valid.

However, the dismissal of the unfair labor practice charge does not leave the employees without remedy. The tribunal may still grant affirmative relief that is not inconsistent with the finding of no unfair labor practice, such as separation pay on equitable considerations, especially where the employees were not dismissed for just cause but were merely not accepted for re-employment because of non-membership in the Union.

Disposition

The petition was resolved by ordering the Company to pay the private respondents separation pay equivalent to one month pay or at least one-half month pay for every year of service, whichever is higher, with a fraction of at least six months considered one whole year, and the decision was declared immediately executory upon promulgation and notice to the parties, with no costs.

Remember This

Memorize this line: an employee found to have been validly refused re-employment may not demand reinstatement, but may still receive affirmative relief consistent with the employer's absolution, such as separation pay. Examiners use this case to test the distinction between reinstatement and separation pay, and the principle that affirmative relief may survive the dismissal of an unfair labor practice charge.