LEE TAY & LEE CHAY, INC., PETITIONER, VS. KAISAHAN NG MGA MANGGAGAWA SA KAHOY SA FILIPINAS, RESPONDENT.

Petitioner herein is a corporation engaged in sawing lumber under the
business name “General Sawmill,” while respondent is a labor union the members
of which were employed in petitioner’s sawmill. The business of the petitioner,
which had been established since 1946, appears to have encountered financial
difficulties, and by the end of 1950 its business had so deteriorated that the
working days of the- laborers had been reduced to three days a week. A labor
dispute also ensued between the petitioner and the union, docketed in the Court
of Industrial Pelations as Case No. 373-V. Fortunately, this was settled by an
agreement that the parties entered into with the court’s approval on March 31,
1951. The most important terms of the agreement are as follows:

“That, in the remote event that the petitioner sells or leases its lumber
business to a third party, the petitioner undertakes and obligates itself to see
to it that proper provision is made in the corresponding contract of sale or,
lease, as the case may be, that the vendee or lessee shall employ all the
laborers involved in this case, under the same terms and conditions of
employment existing at the time of the tempprary closing, if the said vendee or
lessee shall also engage in the lumber business, otherwise, the petitioner
agrees to pay the laborers involved in this case a gratuity equivalent to the
following schedule:

(a) Those who started working during or before the year 1946, shall receive
corresponding to 9 weeks pay;

(b) These who started working in .the year 1947, shall receive corresponding
to 8 weeks pay;

(c) Those who started working in the year 1948, shall receive corresponding
to 7 weeks pay.”

Sometime after the approval of the above agreement, petitioner leased the
sawmill to the Alaska Lumber Company. When the latter began the operation of the
sawmill in January, 1952, some 18 of the laborers of the petitioner were taken
in. Not all of the former laborers were employed as other new workers were taken
in. Of the 18 laborers taken in, all were satisfied with the conditions of their
new employment except three, who were found tc have been forced to accept less
pay than what they used to receive under petitioner. As not all of the laborers
were employed in the Alaska Lumber Company sawmill compliance with the agreement
between the petitioner and the union was demanded, and on January 28, 1953 the
Court of Industrial Relations issued a decision ordering petitioner to pay the
gratuities as per agreement, except as to those who were satisfied with their
new employment under the Alaska Lumber Company. In accordance with the
agreement, the gratuities were ordered to be computed by the Chief of the
Examining Division, the representatives of both parties being authorized to take
part in the computation. The three laborers who were forced to the new
employment were allowed differential pay, as the court found that they were
re-employed under different working conditions. Both parties asked for a
reconsideration of the decision but the court refused to alter or modify it. On
December 8, 1953, the Chief of the Examining Division submitted his report,
Annex A, fixing the annuities at six labor days a week. Petitioner moved that
the gratuities should be computed at the rate of three labor days a week, while
the respondent also moved that it should be at the rate of seven labor days a
week, but both motions were overruled by order of the Court dated May 4, 1954.
It is against this final order that the appeal is directed.

The petitioner claims on this appeal (1) that the gratuities should be
computed on the basis of three labor Jays a week, in accordance with the first
part of the agreement, as at the time of the closing of petitioner’s sawmills,
the laborers were working on a three-day a week basis; and (2) that the salary
differentials awarded in the decision to Benigno Senelaso, Ricardo Mallari and
Felix Miranda, the three laborers who were not satisfied with their new
employment, should be revoked, as they had waived their rights under the
agreement when they accepted lower rates of pay in the new sawmill. In answer to
the above claims, the respondent union contends (a) that the appeal was
made after the resolution of the court a quo had become final and
executory, and (b) that as petitioner had agreed to pay a gratuity and
not back pay, the computation thereof should be on the basis of six days a week,
not three days as claimed.

With respect to the award of salary differentials to the three laborers, the
record discloses that the said award was made in the court’s order of January
28, 1953. Petitioner filed a motion for reconsideration, though not attacking
this award of salary differentials directly, on February 3, 1953, and this
motion for reconsideration was denied on August 23, 1953. No appeal was taken
against this award until May 24, 1954, when the petition for review in this case
was filed. Therefore, the award of the salary differential was already final and
executory when the appeal was filed against it, as more than nine months had
elapsed from the time the motion to reconsider the ward was denied. The appeal
with respect thereto is, therefore, dismissed.

As to the award of gratuity on the basis of six days of work a week, it is to
be noted that while the granting of the gratuity was made in the court’s order
of January 28, 1953. Said grant did not fix the basis (number of workdays a
week) at which the weekly gratuity was to be paid. The basis was made for the
first time in Annex A, the report submitted by the Chief Examiner of the court
a quo on December 8, 1953. A motion to reconsider the computation was
filed by petitioner and this was denied in a resolution of the court a quo on
May 4, 1954 and the petition in this Court was presented before us on May 24,
1954. It does not appear when the order appealed from was served on the
petitioner. As no claim is made that the petition for review was filed beyond
the period prescribed by the Rules, we must assume that it was filed on time.
The appeal on this question must, therefore, be decided on its merits.

We find much merit in the claim of the respondent union that the gratuity
provided for in the second part of the agreement should be computed on the basis
of six labor days a week, and not on the basis of three daya cnly as claimed by
the petitioner, because the agreement provided for gratuity and not for
backpay. Backpay might justify a basis fixed on the number of actual labor days
a week in force at the time of the closing of the sawmill, but not gratuity. A
week of labor is to be understood to embrace the ordinary number of six labor
days, in the absence of an express agreement to the contrary. As there is no
such express agreement in the contract and an intention to mean three labor days
a week cannot otherwise be inferred from the terms of the agreement, we must
assume that the parties meant a week of six labor days instead of three
only.

There is another reason why petitioner’s claim of a three-day a week basis
for the gratuity can not be sustained. The provision for three labor days a week
ia I found in the first part of the contract, which first part is applicable if
all the laborers of the sawmill are to be employed by the vendee or lessee of
the business. This condition, where all of the employees of the sawmill were to
be employed also by the vendee or the lessee, did not take place because only 18
of the old employees were taken in, other new workers having been employed. The
portion of the agreement that was applicable, therefore, Is the second, which is
to apply in all other cases. The second portion of the agreement is preceded by
the term “otherwise.” As a matter of fact, demand for the payment ef
gratuities was made because the lessee of the sawmill did not employ all the
original employees or laborers of the petitioner. In this second portion of the
agreement, there is absolutely no mention even indirectly, of a week as
constituting only three days of labor. We, therefore, find that the basis of the
computation of the weekly annuity must be six days, and not three days as
contended by the petitioner.

For all the foregoing, the petition should be, as it hereby is, denied, with
costs against petitioner.

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

Petition denied.