PHILIPPINE SUGAR INSTITUTE, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS AND INSUREFCO & PAPER PULP PROJECT WORKERS’ UNION, RESPONDENTS.

Philippine Sugar Institute versus Court of Industrial Relations and Insurefco and Paper Pulp Project Workers' Union

The Case

This is a petition for certiorari filed by the Philippine Sugar Institute, known as PHILSUGIN, against the Court of Industrial Relations and the Insurefco and Paper Pulp Project Workers' Union. PHILSUGIN asks the Supreme Court to set aside two orders of the industrial court: the order of the thirty first of July, nineteen sixty one, and the resolution en banc of the seventh of September, nineteen sixty one. Both orders directed the company to pay four policemen the money value of certain privileges and facilities for a period when they were illegally laid off. The case matters because it draws a clean line between two things that are often confused in labor law: the privileges that follow a worker who is reinstated with back wages, and the facilities that are tied to the actual performance of duty and therefore fall away when no duty is rendered.

Procedural History

The dispute began in the Court of Industrial Relations. On the second of August, nineteen fifty four, that court rendered judgment ordering the company to pay the six remaining policemen additional compensation for night work and for work on Sundays and legal holidays, together with all the privileges and facilities they had enjoyed when the partial award was made effective. On the ninth of December, nineteen fifty seven, the same court, finding the four remaining policemen to be victims of discrimination, ordered their reinstatement with back wages from the eleventh of October, nineteen fifty four, until actual reinstatement, without loss of seniority and other privileges enjoyed as of the thirty first of March, nineteen fifty four. That judgment was affirmed by the Supreme Court, and the motion for reconsideration was denied. The four policemen were reinstated on the twenty ninth of November, nineteen sixty, and paid their back wages. The union then filed a petition for execution of judgment regarding privileges and facilities. The company moved to dismiss. On the thirty first of July, nineteen sixty one, the industrial court issued the order now challenged, and on the seventh of September, nineteen sixty one, it denied reconsideration. PHILSUGIN came to the Supreme Court by petition for certiorari.

Facts

On the eleventh of June, nineteen forty nine, the union and the Insular Refining Corporation, the predecessor of PHILSUGIN, entered into a partial agreement. The company granted its worker members fifteen days vacation leave and fifteen days sick leave with pay for every year of service, additional compensation for overtime and for work on Sundays and legal holidays, and additional compensation for night work. The industrial court approved this agreement. The agreement, however, was not made applicable to the twenty six members of the company's police force, who were also union members. The union therefore petitioned for extra compensation. While that petition was pending, seventeen of the twenty six policemen accepted the company's offer of the same additional compensation, and this was approved. Six policemen refused to be bound and pressed their petition. The company answered that the partial agreement did not apply to the police force, and that the policemen already enjoyed free uniforms, shoes, helmets, and other benefits.

On the thirty first of March, nineteen fifty four, before the industrial court rendered its judgment of the second of August, nineteen fifty four, the six policemen and other personnel were laid off. They were paid one month separation pay, their regular salaries to the last day of service, and all accumulated leave pay. The company resumed operations on the eleventh of October, nineteen fifty four, but refused to reinstate the policemen. Four of them filed a petition for reinstatement and contempt. The industrial court ruled that they were victims of discrimination and ordered reinstatement with back wages, and the Supreme Court affirmed. After reinstatement, the union sought execution of the judgment, claiming the policemen were entitled to the privileges and facilities for the entire period of the illegal lay off, and to two extra days leave every month thereafter.

Issues

• Whether or not the industrial court gravely abused its discretion in acting on the petition for execution without first conducting a hearing on the motion to dismiss.
• Whether or not the four policemen, who were reinstated with back wages but rendered no actual service from the eleventh of October, nineteen fifty four to the seventh of November, nineteen sixty, are entitled to the facilities of shoes, khaki suitings, helmets and ponchos, or their money value, for that period.
• Whether or not the same policemen are entitled to vacation and sick leave privileges for that period, in addition to their back wages.

Applicable Provisions

Section 14 of the Rules of Court of Industrial Relations provides:

After the petition or motion is filed, the Clerk of Court shall set it for hearing at 9:00 A.M. on the available date immediately following the third day after the filing thereof, and where an earlier setting is necessary due to the urgency of the case, the same may be made upon previous knowledge of the judge trying the case.

The Court reads this provision as prescribing the setting of hearings, not the period for filing an opposition to a motion to dismiss.

Section 3 of Rule 16 of the Revised Rules of Court provides:

After hearing the court may deny or grant the motion or allow amendment of pleading, or may defer the hearing and determination of the motion until the trial if the ground alleged therein does not appear to be indubitable.

The Court holds that the hearing contemplated here is unnecessary when the motion to dismiss is grounded on the failure of the petition to state a cause of action.

Section 20 of the Rules of Court of Industrial Relations provides that the industrial court:

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

This provision supports the Court's refusal to annul the proceedings on procedural technicalities.

Ruling

On the first issue, the Court holds that there was no grave abuse of discretion. Section 14 does not fix a period for filing an opposition to a motion to dismiss, so the opposition may be filed within a reasonable time. The industrial court acted within its mandate to decide according to justice and equity and the substantial merits of the case. On the need for a hearing, the Court rules that no hearing was required, because the motion to dismiss rested on the failure of the petition to state a valid cause of action, and in testing the sufficiency of a cause of action one need not go beyond the petition itself. The petition for execution quoted the dispositive portions of the judgments sought to be enforced, so it plainly stated a valid cause of action. The order of the thirty first of July, nineteen sixty one, therefore operated as a denial of the motion to dismiss.

On the second issue, the Court rules for the company. The portion of a decision that may be executed is that ordained in the dispositive part. The judgment of the second of August, nineteen fifty four awarded privileges and facilities, but the judgment of the ninth of December, nineteen fifty seven deleted the word facilities and awarded only the privileges hitherto enjoyed as of the thirty first of March, nineteen fifty four. The deleted facilities are the shoes, khaki suitings, helmets and ponchos. These were given free for official use only, during the official tour of duty and while rendering police work within the company premises, and were never intended for private use. Not having performed actual police work during the period, the four policemen were not entitled to these facilities, even if they were technically in the service.

On the third issue, the Court rules for the union. The company's arguments had been raised before and rejected, and the Supreme Court had already approved the industrial court's declaration that since the policemen were reinstated and paid back wages, it is only just and proper that they enjoy the leave benefits they would have enjoyed had they not been discriminated against. The law decrees that vacation and sick leave are cumulative, and any part not taken within the calendar year may be carried over to succeeding years. The policemen are entitled to these cumulative leaves because their separation was not of their own choosing nor due to their own fault. The cases cited by the company are inapplicable: in one, the leave was a mere concession of the employer, and in the other, the laborer was lawfully dismissed.

Doctrine

First, only the dispositive part of a judgment may be executed, and a petition for execution must track exactly what that dispositive part decrees. Second, facilities granted for the official use of employees during actual performance of duty, such as uniforms, shoes and helmets, are not demandable for a period when no actual service was rendered, even if the employee is deemed technically in the service by reason of reinstatement with back wages. Third, privileges such as vacation and sick leave are different: they are cumulative, and an employee illegally laid off through no fault of his own does not forfeit them, because his separation was not voluntary and not due to his own fault. Fourth, procedural rules before the industrial court yield to its mandate to act according to justice and equity and the substantial merits of the case, and no hearing is needed on a motion to dismiss grounded on failure to state a cause of action.

Disposition

The Supreme Court affirmed the order of the industrial court in all other respects but deleted the portions awarding shoes, khaki suitings, helmets and ponchos, or their money value, for the period from the eleventh of October, nineteen fifty four to the seventh of November, nineteen sixty, with no pronouncement as to costs.

Remember This

Memorize this line: back wages restore the privileges of an illegally dismissed worker, but they do not restore the facilities that are earned only by actual performance of duty. Examiners use this case to test the distinction between privileges and facilities in the execution of labor judgments, and the rule that only the dispositive part of a decision is enforceable.