HIND SUGAR COMPANY, INC., PETITIONER, VS. HON. COURT OF INDUSTRIAL RELATIONS, AND HIND LABOR UNION (PLUM), RESPONDENTS.

This is a petition to set aside the decision rendered by the Court of
Industrial Relations in Case No. 8-IPA, entitled Hind Sugar Co., Inc. vs. Hind Labor Union (PLUM), on the ground that said decision was rendered beyond or in excess of its jurisdiction.

The record discloses that on December 18, 1955, the Hind Labor Union
presented a set of labor demands against the Hind Sugar Company among
which were union representatives, seniority preference, grievance
committee, union check-off, union meetings, hours of labor for workers
of the transportation department, non-discrimination against female
employees, overtime pay, vacation and sick leave, reinstatement of all
strikers, Christmas bonus, retirement and termination plan, etc. Upon
failure of the respondent to conform to its demands, the petitioner
union declared a strike on February 3, 1956. On February 25, 1956, the
President of the Philippines certified the labor dispute between the
labor union and respondent company to the Court of Industrial Relations
with the request that appropriate measures be taken. Thereupon the
court issued an order requesting the parties to appear before it with a
view to an arbitration of the differences existing between them. The
parties were able to reach an agreement which was submitted to the
court for approval. The same was approved on March 2, 1956. In said
agreement, the court was asked to adjudicate the claims of the union
grouped under five categories. Only three of these groups are involved
in the petition for certiorari and they are as follows—

“Group II:

To pay the claims duly proven for unpaid overtimes, Sunday and Holiday work of members of herein petitioner-union;

To pay all unpaid claims for ‘differentials’ under the minimum wage law
for both industrial and agricultural workers under its employ.” (Brief
for the Petitioner, p. 126-127).

“Group III:

To reinstate Alfonso Lalaquit (locomotive driver) and Bernardo Pesino’
(Mill Tender), with back wages from their respective dates of dismissal
or separation from work.” (Brief for the Petitioner, p. 128).

“Group V:

To reinstate Felix Soriano and Feliciano Sta. Ana to their respective
positions without changes in salary-rate and pay for any differentials
for wages from the date of reduction thereof.” (Brief for the
Petitioner, p. 131).

With respect to the
issue involved in the claim designated as group three, the respondent
court found that Alfonso Lalaquit, who had been working as a milling
season worker prior to the milling season of 1955-1956, was not
involved in any criminal case, as an accused, as claimed by the
respondent company, but merely as the offended party therein. For this
reason the court held that he may not be punished by a refusal to
reinstate him during the milling season of 1955-1956. As to Bernardo
Pesino the court found that his separation from service during the
milling season of 1955-1956 is not justifiable because he was a lineman
helping in electrical installations in 1952 and had an assignment as a
mill tender in the crop year 1954-1955.

As to group five,
the court found that the reduction in the pay of Feliciano Sta. Ana,
the personal driver of the manager of the company, from P175.00 to
P150.00 a month was not justifiable because Sta. Ana could be assigned
as driver of other vehicles or trucks of the company.

In
consonance with the above findings the court ordered the company to
reinstate Alfonso Lalaquit as locomotive driver, with back wages from
the time of the refusal of the company to rehire him during the milling
season in 1955-1956, until the time he is reinstated; and that Bernardo
Pesino be immediately reinstated as mill tender with back wages from
the milling season of 1955-1956 up to the termination of the season and
thereafter during every milling season; to reinstate Sta. Ana as driver
with P175.00 a month salary or a monthly wage differential of P25.00
from March 7, 1956 up to the time he actually starts to receive the
aforestated salary of P175.00.

Upon receipt of the decision
the respondent company moved to reconsider the same but the motion was
denied. Hence, the petition to review.

In this Court the
petitioner company claims that the respondent court acted without or in
excess of its jurisdiction with respect to the above indicated laborers
or workers for the reason that Alfonso Lalaquit and Bernardo Pesino
were seasonal workers and were laid off at the end of the milling
season of 1954-1955 (or since April 1955) and since then had ceased to
be employees of the petitioner, and were not actually strikers on
February 3, 1956; that the rehiring of Lalaquit and Pesino was not
among the demands of the union the denial of which precipitated the
labor strike of February 3, 1956.

It is further argued that
since the enactment of Republic Act No. 375, known as the Industrial
Peace Act, the Court of Industrial Relations may no longer consider the
rehiring of said laborers because their rehiring does not constitute a
labor dispute which the respondent court may legally adjudicate under
the Industrial Peace Act, supporting its contention by the following
authorities—

* * * * * * *

“The
National Labor Relations Act does not interfere with the normal
exercise of the right of an employer to select his employees or to
discharge them, so long as he does not under coyer of the right
intimidate or coerce his employees with respect to their
self-organization and representation. (National Labor Relations Board vs. Jones & L. Steel Co. (1937), 301 U.S. 1, 81 Law ed., 893, 57 S. Ct. 615, 108 A. L. R. 1352.”

“The
Act was not intended to empower the National Labor Relations Board to
substitute its judgment for that of the employer in the conduct of his
business and does not deprive the employer of the right to select or
dismiss his employees for any cause except where the employee was
actually discriminated against because of his union activities or
affiliations. (National Labor Relations Board vs. Union Pacific Stages (1938; C. C. A. 9th), 99 F. 2d. 153; Standard Lime & Stone Co. vs. National Labor Relations Board (1938: C. C. A. 4th) 97 F. 2d. 531; Martel Mills Corporation vs. National Labor Relations Board, C. C. A. 1940, 114 F. 2d 624.).”

“Neither
does the Act require the employment of anyone or preclude the discharge
of an employee for any reason other than union activities or agitation
for collective bargaining with employees. Associated Press vs. National Labor Relations Board (1937), 301 U.S. 103, 81 Law ed. 953, 57 S. Ct. 650).”

* * * * * *

“This
chapter does not interfere with the normal exercise of employer’s right
to select or discharge employees, but is directed solely against abuse
of that right by interfering with the countervailing right of
self-organization. (29 USCA, No. 151, p. 103,—citing: National Labor
Relations Board vs. Blue Bell-Glove Mfg. Co., C.C.A. 1941, 120 F. 2d 974.)” (Brief for the Petitioner, pp. 62-63).

It is argued in conclusion that the respondent court no longer has
jurisdiction to exercise its powers of arbitration and conciliation
under Commonwealth Act No. 103, so that in ordering the reinstatement
of said workers it went beyond the power granted to it by the
Industrial Peace Act.

Answering the above contention, we must state
that the certification of the labor dispute causing the strike by the
President of the Philippines was made by virtue of Section 10 of the
Industrial Peace Act, which provides as follows:

“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, pending an investigation by the Court, and if no other
solution to the dispute is found, the Court may issue an order fixing
the terms and conditions of employment.”

Under this provision the Court of Industrial Relations is authorized to
exercise the broad powers and jurisdiction granted to it by
Commonwealth Act 103.—

“We cannot subscribe
to the above contention. We agree with counsel for the Philippine
Marine 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 in 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 the employment” (The Philippine
Marine Radio Officers’ Association vs. The Court of Industrial Relations, et al.; Compañia Maritima, Philippine Steam Navigation & Madrigal Shipping Co., Inc., vs. Philippine Marine Radio Officers’ Association & Court of Industrial Relations, et al., 102 Phil., 873.

In the above quoted Section 10 of the Industrial Peace Act the Court of
Industrial Relations is empowered, when a strike has been referred to
it by the President of the Philippines, to issue an order “fixing the
terms and conditions of employment.” This clause is broad enough to
authorize the Court to order the return to work not only of the actual
workers who were so at the time of the strike but all other regular
workers of the company, even though not actually at work or working
during the day of the strike because they are seasonal workers. In
other words, the Court of Industrial Relations under Section 10 of the
Industrial Peace Act may, as a solution to a strike, order the
reinstatement of workers whether on strike or riot, and whether
permanent or seasonal, as a condition for the settlement of the strike.
So the mere fact that Lalaquit and Pesino were not actually working at
the time of the strike in February 1956 is no ground or reason for
depriving the Court of Industrial Relations of jurisdiction to include
their case or reinstatement in the settlement of the said strike. So
that there is no merit in the claim that the order of the Court of
Industrial Relations to rehire or reinstate Lalaquit and Pesino is
beyond the court’s jurisdiction, this power of reinstatement being
clearly implied in the express authority granted in Section 10 of the
Industrial Peace Act.

But there is another reason for
rejecting the contention that the Court of Industrial Relations had no
power to order the reinstatement of Lalaquit and Pesino. When the Court
of Industrial Relations called the parties to a hearing on February 29,
1956 in pursuance of the order of the President of the Philippines, the
parties agreed upon the subjects which are to be considered in the
negotiation, and among these matters were those asking for the
reinstatement of Lalaquit and Pesino. The agreement provides among
others, the following—

“21. Matters for
Court of Industrial Relations Adjudication. The parties hereby agree to
submit for consideration and adjudication by the Court of Industrial
Relations under Section 10, Republic Act 875, the following matters:

* * * * * * *

7. Other subject-matters contained in the Union demands of Dec. 18,
1955 including the reinstatement of Alfonso Lalaquit (Locomotive
driver) and Bernardo Pesino (mill tender).” (No. 21, (7) pp. 116-117,
Brief for the Petitioner).

So that by
express agreement, the reinstatement of Lalaquit and Pesino was
expressly made by the union and the company the subject of negotiation
By consenting that the matter of the reinstatement of these workers be
submitted to the court for resolution, the company is now estopped from
denying the jurisdiction of the Court of Industrial Relations over the
said subject matter. Otherwise speaking, as the workers agreed that the
matter of the reinstatement of these workers be submitted for the
resolution of the court, the union is now estopped from denying the
power and jurisdiction of the court to make the corresponding decision
or resolution on the matter submitted to it.

It is also
argued, vigorously, that Alfonso Lalaquit and Bernardo Pesino were
seasonal workers; hence, the company may not be required to return them
to work after the last season in which they worked, that is in the
1954-1955 season. We must note that in the decision rendered by the
respondent court, in a case between the same parties to this
proceeding, namely, Hind Sugar Central Laborers Union vs. Hind Sugar Company, the respondent court made the following pronouncement—

“SEASONAL CHARACTER OF EMPLOYMENT; REEMPLOYMENT DISCRETIONARY ON THE PART OF THE MANAGEMENT:—

‘A careful consideration of the nature of the work of the laborers
above-named, including those that were re-admitted subsequently to the
commencement of 1947-1948 milling season, leads to no other conclusion
than that, strictly speaking, their employment has always been
considered seasonal in character in the sense that at the end of each
milling season, their employment relationship with the company is
severed, and that in the succeeding milling season the management may
admit them or not if they apply for re-employment. However, the
management in this case has always tried to give preference to its
former employees and laborers in the matter of hiring, and this
practice should be continued as a matter of policy.” (p. 4, Annex J-1).

The petitioner, however, overlooks the last part of the ruling to the
effect that the practice of preferring former laborers should be
followed by industrial concerns as a matter of policy. The respondent
court was only following the directive contained in its decision above
quoted when it ordered the reinstatement of Lalaquit and Pesino. This
act must have been considered necessary or useful in the settlement of
the labor dispute.

However, we do not agree with the court
below that the said workers, who were merely seasonal workers, should
receive pay during the period of time in which they did not actually
work or render service to the company. If, as it had decided in the
above quoted case of Hind Sugar Central Laborers Union vs. Hind
Sugar Company, seasonal workers may be laid off at the end of the
milling season, the company should not as a matter of justice be
required to pay such seasonal laborers or workers wages in a season in
which they did not actually work or perform service for the employer.
To require that they be paid when not in actual work would be
inconsistent with its own holding that the reemployment of seasonal
workers is discretionary with the employer. The employer may be
compelled to pay for their services only from the time that the company
refuses to employ them, after the decision of the Court of Industrial
Relations to that effect or for their reinstatement has been rendered.
Even then, the compensation to which they should be entitled is only
for the regular or ordinary milling season of work whatever it may be.
That portion of the decision of the court below requiring the company
to pay the wages of Lalaquit and Pesino during the milling season of
1955-1956 should be set aside.

We next come to the next
subject of the appeal, namely, the return of the original salary of the
driver Feliciano Sta. Ana of P175.00 and the differential pay of P25.00
when he was not receiving the said salary. The reason given by the
petitioner company for disputing this order of the court is that the
manager had lost confidence In Sta. Ana by reason of the strike, and
that Sta. Ana had signed an agreement for the reduction of his pay.
Sta. Ana used to be a driver of the manager of the company before the
strike-but when the strike came, the manager refused to employ him as
his personal driver because of the tension caused by the strike and
because of the fear entertained by him because of the strike. We note
that Sta. Ana had given no cause for the fear or apprehension of him by
the manager; if any legal cause or reason can be found for the refusal
of the manager to employ him as his driver it is the mere fact of the
strike alone. If Sta. Ana himself has not given cause for the fears of
the manager he should not be penalized for it. Admitting that the
manager had a right to fear for his own life, the cause for such fear
can not be attributable to Sta. Ana personally; the cause for the fear
was the strike. But the strike is an instrument recognized by law in
labor; resort thereto should not be taken advantage of as excuse for
reducing the pay of the striker. In order to give force and effect to
the legal right of labor to strike, fears caused by such strike to
management personnel should not be considered as a just ground for
reduction in pay. As the court below explained, Sta. Ana could very
well be employed as a driver for other vehicles of the company. We find
this solution made by the court below as just. So is its ruling that
the salary differential of P25.00 be paid and the salary of Sta. Ana
returned to the original P175.00 a month.

In so far as the
contract that Sta. Ana signed wherein he consented to the reduction in
his pay, we believe Sta. Ana evidently entered the agreement for fear
of losing his work. Even though the contract was signed by him, the
matter was agreed expressly to be the subject of negotiation to be
submitted to the court for resolution. The court disregarded the
contract and under the circumstances we have stated, that Sta. Ana may
have been forced into it against his will. We come to the conclusion
that the solution made by the court below is proper.

The
last question raised for our consideration refers to the payment of
overtime to 17 employees named in the decision of the court below. The
said court found that said 17 employees worked in the “hacienda”
receiving from P2.50 to P5.00 per day, working ten hours daily.
Petitioner argues that the decision ordering the payment of overtime is
not justified for these reasons: first, because respondent union had
withdrawn the union’s demands for payment of claims under both the
Minimum Wage Law and the Eight Hour Labor Law, such withdrawal
appearing in paragraphs two and three of respondent union’s answer to
the petition; second, because Commonwealth Act No. 444, which
establishes the Eight Hour Labor Law, is expressly not made applicable
to farm laborers or agricultural employees. In amplification of the
first reason petitioner argues that the ruling of the court below
declaring that it could not be bound by the withdrawal is Incorrect. We
find both reasons well founded. The respondent court had power to rule
only on issues set forth in the pleadings of the parties, and its award
of pay for overtime for ordinary days and holidays is beyond the issues
contained in the pleadings. The award should therefore be set aside
especially as it appears that the award applies the Eight Hour Labor
Law to workers in the “hacienda” or farm laborers, and these are
expressly exempted from the provisions of the said law. The award for
such overtime pay should therefore be set aside.

For the
foregoing considerations, the decision of the court sought to be
reviewed is hereby modified thus: the reinstatement of Alfonso Lalaquit
and Bernardo Pesino are affirmed, but the order for the payment of
backpay to them is set aside; the order for the return of the nay of
Feliciana Sta. Ana to P175.00 with the corresponding differential of
P25.00 for the months in which he did not receive the pay of P175.00 is
affirmed; and the order for the payment of overtime to the 17 hacienda
workers specified in the decision is set aside. Without costs.

Paras, C. J., Bautista Angelo, Concepcion, Reyes, J. B. L., Endencia, and Barrera, JJ., concur.

David, J., concurs in the result.
Bengzon and Montemayor, JJ., took no part.