TALISAY-SILAY MILLING CO., INC., PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS AND TALISAY EMPLOYEES AND LABORERS ASSOCIATION (TELA), RESPONDENTS.

These are two petitions for certiorari filed by the Talisay-Silay
Milling Co., Inc. seeking to review and set aside the order of the
Court of Industrial Relations dated February 10, 1958 and the
resolution of the court en banc dated April 11, 1958 in CIR
Case No. 788-V (G. R. No. L-14023), and the orders of May 30, 1958 and
July 17, 1958 in Case No. 83-ULP Cebu (G. R. No. L-14135). The parties
in both cases being the same, and the actions being interrelated and
arising out of the same incident, we will take them up jointly and
resolve the questions raised therein in a single decision.

On December 17, 1952, the employees and laborers of the
Talisay-Silay Milling Co., Inc., members of the Talisay Employees &
Laborers Association, hereinafter referred to as the Union, went on
strike. On December 24 of the same year, the Talisay-Silay Milling Co.,
Inc., henceforth to be called the Company, filed with the Court of
Industrial Relations a petition to declare the strike illegal (Case No.
788-V). The Union filed its answer and the case was duly heard. During
the pendency of the case and by virtue of a stipulation entered into by
the parties on February 19, 1953, 400 of the striking laborers and
employees were reinstated.

On June 25, 1953, Judge Bautista, sustaining the Company’s charge
that the strike was illegal, issued an order the dispositive part of
which reads:

“For the above considerations, the Court hereby
orders that the rest of the strikers who were excluded to return to
work in accordance with the stipulation submitted by the parties on
February 19, 1953, be immediately reinstated to their former positions
in the company.

“The strikers who by virtue of said stipulation returned to their work on February 19, 1953 and those who will return to their former works in the company are not entitled to any compensation during said illegal strike“. (Emphasis supplied.)

The parties filed separate motions for reconsideration of said order, both of which were denied by resolution of the court en banc on August 12, 1953. The Company received copy of this order of denial on October 30, 1953.

On November 3, 1953, the Company filed notice to appeal to the
Supreme Court from that portion of the decision ordering reinstatement
of the strikers to their former positions, and the case was actually
filed and docketed in this Court as G. R. No. L-7228^[*].
The records show, however, that prior to this appeal, that is, on
October 7, 1953, the Company re-admitted to the service 74 more of the
laborers and employees who joined the strike.

On March 17, 1954, pending resolution by this Court of the matter on
appeal, the Union, invoking Section 14 of Commonwealth Act 103, as
amended, filed with the Court of Industrial Relations a motion for
execution of the order of June 25, 1953. The Company opposed this move
and offered “to file a bond in the amount (to be fixed by the court)
sufficient to cover the wages of the striking laborers who have not
been re-admitted to their work in the petitioner company”. These
motions, however, were not acted upon by the Industrial Court. On
November 29, 1955, this Court, holding that the strike was not illegal,
affirmed the order of reinstatement this wise:

“We are therefore of the opinion that the respondent
court, notwithstanding our diverging point of view, did not err in
ordering the reinstatement of the strikers who were excluded by the
management without back pay, and, hence, we affirm the decision
appealed from, without pronouncement as to costs.” (G. R. No. L-7228).

On January 16, 1956, the court issued a writ of execution by virtue
of which, of the 185 persons appearing in the list submitted by the
Union, 70 were re-instated on January 27 and another group of 46 on
January 30, 1956; 10 were refused admission allegedly for having been
found unfit for work; 3 separated for cause; 15 were laid off but given
separation pay; 3 were already dead; 15 were found already working; 5
were non-strikers; 10 were laid off even before the strike, and 8 were
discovered not in the payroll.

On February 5, 1958, the Union represented by a new counsel, filed
in the Court of Industrial Relations an urgent ex-parte motion for
immediate execution of back wages, claiming that therein subject
laborers were entitled to back pay from June 25, 1953, when they were
ordered reinstated, up to January 30, 1956, when they were actually
re-admitted to the service. And over the Company’s opposition thereto,
the court in its order of February 10, 1958, directed the Chief
Examiner of the court to make the necessary computation of the back
wages due the laborers concerned, preparatory to the issuance of the
writ prayed for. The Company moved to reconsider said order on the
ground that it was not justified either by the order of June 25, 1953
or of the decision of the Supreme Court in G. R. No. L-7228, which
motion was denied by resolution of April 11, 1958, although following
the ruling laid down by this Court in the case of Rizal Cement Company
vs. Bautista, G. R. No. L-10312, promulgated July 26, 1957, the order
of February 10, 1958 was modified as to cover back wages due the
laborers only from November 10, 1953 (10 days after the Company
received notice of the denial of its motion for reconsideration of the
order of June 25, 1953) up to the date of their actual reinstatement.
The Company thus filed with this Court a petition to review the
aforesaid orders (G. R. No. L-14023). Upon petitioner’s filing a bond
in the sum of P10,000.00, this Court issued a writ of preliminary
injunction enjoining the respondent Court of Industrial Relations from
executing the orders of February 10 and April 11, 1958 in CIR Case No.
788-V.

Upon the other hand, the records in G. R. No. L-14135 (CIR Case No.
83-ULP-Cebu) disclose that while the Company, in compliance with the
writ of execution issued by the lower court, reinstated strikers on
January 27 and 30, 1956, these laborers were assigned not to their
former positions but were employed on “rotation basis”. And a few days
after their reinstatement, 143 members of the Union that participated
in the strike each received written notice of separation, and in fact
were actually dismissed in March, 1956. These acts of the Company
became the subject of a new complaint for unfair labor practice lodged
by the Union against the Company in the Court of Industrial Relations,
which was later docketed as Case No. 83-ULP-Cebu.

In its answer to this complaint, the Company denied the charges of
discrimination and unfair labor practice, contending that the dismissal
of the complainants was brought about by economic necessity in the
sense that with their (the laborers) reinstatement, the Company became
overmanned. After due hearing, the court held on December 28, 1957:

“After due consideration of the evidence adduced by
the parties, this Court is convinced that the 143 individual
complainants in this case were discriminated against by reason of their
membership in the complainant union and the intended effect of their
dismissal Was to discourage their continuous membership in the said
union. It is clear from the said evidence that respondents did not
adopt reasonable bases for determining the persons to be laid off
assuming that there was an imperative necessity to do so. Instead of
apportioning proportionately among the members of the three (3) unions,
the employees to be laid off or taking into consideration seniority and
efficiency the respondent singled out all the members of the
complainant union. The uncontradicted evidence for the complainants
also shows that the majority of those laid off had been working for
over ten (10) or fifteen (15) years had been working for thirty (30) or
thirty-five (35) years (t.s.n., July 24, 1957, p. 61).

“WHEREFORE,
to remedy effects of such unfair labor practice and to effectuate the
policies of Republic Act No. 875, the respondent is hereby ordered to
reinstate immediately the following 143 individual complainants to
their former positions without lose of seniority and other rights and
privileges with full back wages from the time of their actual dismissal
up to their actual reinstatement: * * *.”

The Company sought reconsideration of this order, but was denied.
Then it filed a petition in this Court to review the said order; the
petition was dismissed by resolution of this Court of March 18, 1958
for being factual and for lack of merit (G. R. No. L-13576).

On March 31, 1958, the lower court directed the Chief Examiner of
the Court of Industrial Relations to proceed to the Company premises
and make the necessary computation of the back wages due the laborers,
and on April 22, 1958, the Examiner submitted his report placing the
Company’s liability at P298,956.74. The Company interposed an objection
to this report, claiming that the computation of back wages should have
been based not on the payrolls for 1951 and 1952, but those for 1956
and the years thereafter. It was also alleged that the computation was
excessive, because it included wages allegedly due certain laborers
named in the motion whose conditions preclude the payment of such back
salaries and, by computing the back wages for the off-season period on
the basis of 6 working days a week instead of the actual practice of
only 5 days a week. The Company, therefore, prayed the Court to reject
the report, or that it be modified to the extent indicated in its
objection.

As a consequence of this opposition, an amended report was submitted
on May 29, 1958, computing the amount due the laborers whose claims
were not objected to at P234,974.96, while those claims that were
opposed amounted to P41,291.84.

On May 30, 1958, upon motion of the Union, the court ordered the
Company to deposit in said court the sum of P234,974.96. The Company
once again moved to reconsider this order and prayed that the
computation of the back wages be referred to the Wage Administration
Service of the Bureau of Labor. This motion having been denied on July
17, 1958, the Company filed in this Court a petition to review the
aforementioned orders (of May 30 and July 17, 1958, docketed as G. R.
No. L-14135). As prayed for by petitioner, this Court also issued to
writ of preliminary injunction enjoining the respondent court from
carrying into effect the said orders.

It may well be remembered, before proceeding with the discussion of
the issues raised herein that the petitioner in these cases is seeking
to review only the orders of February 10, 1958 (computation of back
wages) and April 11, 1958 (denying the motion for reconsideration in
CIR Case No. 788-V), and the orders of May 30, 1958 (requiring the
Company to deposit in court the sum of P234,974.96) and of July 17,
1958 (denying its motion for reconsideration). Thus, the questions
presented for our determination are: (1) whether the strikers who were
ordered reinstated on June 25, 1953 but were actually returned to the
service only on January 27 and 30, 1956 are entitled to back wages for
the duration of the appeal instituted by the Company; (2) whether the
Company has the right to dismiss these strikers, reinstated by order of
the court, because of a retrenchment policy adopted by the Company and
after complying with the 30-day notice of separation required by
Republic Act 1052; and (3) whether the Court of Industrial Relations
may lawfully order the Company to deposit the amount allegedly due the
striking laborers.

(1) Regarding the first question, that is, whether the laborers are
entitled to their wages from the time their immediate reinstatement to
their former positions was ordered up to their actual re-instatement in
January, 1956, after this Court affirmed the said order, the Company
contends that neither the order of June 25, 1953 nor the decision of
this Court affirming the latter order justified the payment of such
back wages, because although the order of June 25, 1953, as affirmed by
this Court, specifically provides for the immediate reinstatement of
the laborers, yet no obligation on its part to pay the laborers any
such wages was created until the order of reinstatement was affirmed by
the Supreme Court. We find no merit in this contention.

Section 14 of Commonwealth Act 103, as amended by Commonwealth Act 559, provides:

“SEC. 14. Enforcement of awards, orders, and decisions.
At the expiration of ten days from the date of the award, order, or
decision, in cases brought under the provisions of section four hereof,
judgment shall be entered in accordance therewith, unless during said
ten days an aggrieved party shall appeal therefrom to the Supreme Court
of the Philippines by writ of certiorari as hereinafter provided. The
institution of such an appeal shall not, however, stay the execution of
the award, order, or decision sought to be reviewed, unless for special
reasons the Court shall order that the execution be stayed, in which
event the Court in its discretion, may require the appellant to deposit
with the clerk of the Court such amount of salaries or wages due the
employees, laborers, tenants or farm laborers concerned under the
award, order, or decision appealed from or require him to give bond in
such form and of such amount as to insure compliance with the award,
order, or decision in case of the same is affirmed. The Court may
also require the appellant to deposit with the clerk of the Court every
week, on a day therein to be fixed by the Court, an amount equivalent
to the salaries or wages to be earned during the time of the appeal by
the employees or laborers, or tenants or farm laborers whose
reinstatement in, or readmission to, their employment has been decreed
by the Court. The failure to make such deposit shall vacate the order
for stay of execution. When writs of execution are so issued the
proceeds thereof shall be kept by the Clerk of the Court of Industrial
Relations in his custody, pending decision of the appeal, to be
disposed of in conformity with the final judgment of the Supreme Court.
(Italics supplied.)

It is clear from the foregoing legal provision that a decision,
award, or order of the Court of Industrial Relations becomes
self-executory 10 days after its promulgation notwithstanding the
institution of an appeal therefrom, unless at the discretion
of the court, the execution thereof is expressly ordered suspended (1)
for special reasons, and (2) upon the appellant’s depositing in court
either the amount of salaries or wages due the laborers or employees
under the order, decision or award appealed from, or a bond of such
amount that would insure its compliance. It must be for this purpose
that the Company, in opposing the execution of the order of
reinstatement during the pendency of the appeal, prayed for by the
Union, offered to file a bond in an amount sufficient to cover the
wages of the striking laborers, which bond, pursuant to Commonwealth
Act 103, as amended, would guarantee full satisfaction of the order
appealed from in the event that the same is affirmed by the appellate
court. The petitioner Company at this stage cannot, therefore, deny the
existence of the laborers’ right to reinstatement and compensation from
the date such order became executory because by offering to file a
bond, it had in effect recognized the existence of such right. And
although it is true that the lower court failed to act on the Union’s
motion, neither did it order the stay of the execution of the order of
reinstatement. Hence, 10 days after the Company was notified of the
resolution denying its (the Company’s) motion for reconsideration of
the order of June 25, 1953, the laborers’ right to re-employment and
wages accrued.^[1]
Consequently, and by reason of its failure to abide by the aforesaid
order, the Company is liable for back wages due the laborers from the
date their right to reinstatement accrued up to the time they were
actually reinstated.

Petitioner Company’s contention that the aforequoted Section 14 of
Commonwealth Act 103, as amended, is unconstitutional when it provides
that appeal of an award, order, or decision of the Court of Industrial
Relations to the Supreme Court shall not stay the execution of the
award, order, or decision unless the Court of Industrial Relations
shall order such execution stayed, because it infringes upon the
Supreme Court’s plenary jurisdiction under the Constitution to review,
revise, reverse, modify or affirm on appeal, certiorari or writ of
error, final judgments and decrees of inferior courts, needs no serious
consideration. The questioned section of Commonwealth Act 103, as
amended, is similar to the provisions of the Rules of Court empowering
the courts of first instance to order the execution of their judgment
pending the appeal if for some special reasons, such execution is
warranted.^[2] This rule has
been applied in cases without number and to our knowledge it has never
been seriously contended that it imposes a limitation upon the
constitutional appellate jurisdiction of the Supreme Court.

(2) With respect to the subsequent separation of 143 of the striking
laborers after their reinstatement as ordered by the Court, the Company
claims that such action can not be considered as an unfair labor
practice because aside from the fact that the dismissal was brought
about by economic necessity, Republic Act 1052 allows such termination
of employment upon serving notice on the employee at least one month in
advance, which was complied with in these cases. This theory cannot be
sustained.

Passing upon the identical question of whether an employee who was
previously dismissed by the employer but was reinstated by court order
may again be dismissed under Republic Act 1052, this Court said:

“* * *. While Republic Act No. 1052 authorizes a
commercial establishment to terminate the employment of its employee by
serving notice on him one month in advance, or, in the absence thereof,
by paying him one month compensation from the date of the termination
of his employment, such Act does not give to the employer a blanket
authority to terminate the employment regardless of the cause or
purpose behind such termination. Certainly, it cannot be made use of as
a cloak to circumvent a final order of the court or as a scheme to
trample upon the right of an employee who has been the victim of an
unfair labor practice. In other words, the privilege given by that Act
to an employer cannot be resorted to if to do so would infringe the law
that Congress had enacted to protect labor as against the abuses of
capital. One of such abuses which our law condemns, and which has given
rise to the many social problems which mar the relationship of labor
and capital is unfair labor practice, and this is the act of which said
petitioners were condemned. To allow them to take refuge under that Act
and obtain by indirect action what they had been expressly enjoined by
an express order of the court would be a mockery of law and a travesty
of justice. * * *.”” (Yu Ki Lam, et al. vs. Micaller, 99 Phil., 902; 52 Off. Gaz. (14), 6146.

Granting arguendo that the reinstatement of the strikers,
as ordered by the court, made the dismissal of a certain number of
laborers imperative, the fact that those who were laid off were
precisely the reinstated strikers can hardly be considered merely
coincidental especially if we take into account the finding of the
lower court that petitioner Company did not adopt reasonable bases to
determine the persons to be so separated from the service. That the
notice of separation was furnished the laborers a few days after their
much delayed, much resisted reinstatement further supports the finding
that the dismissal was resorted to rid the Company of the service of
these strikers. Certainly, such course of action contravenes the spirit
of the Industrial Peace Act, and the court a quo, therefore,
committed no error in declaring the same discriminatory and in ordering
the reinstatement of the laborers affected to their former positions
without losing their seniority and other privileges.

(3) The third issue raised is the correctness and validity of the
court’s order approving the examiner’s computations of back salaries
based on the 1951 and 1952 payrolls. The Company contends that as the
laborers should have been re-admitted in 1956, their back wages must be
based on the payroll for said year and thereafter.

In the first place, the laborers should have been reinstated since
November 10, 1953, when the order of immediate reinstatement became
executory. Secondly, an order of reinstatement issued by the court
after investigating a complaint for unfair labor practice, includes not
only back salaries but also other rights and privileges prior to
dismissal (Sec. 5-c, Rep. Act 875). The working conditions in the
Company in 1951 and 1952, i.e., before the introduction of the
so-called retrenchment policy, and wherein the laborers worked on full
time basis cannot be but looked at as a right and, therefore,
contemplated by the order of the court declaring the complainants
entitled not only to reinstatement but to “other rights and privileges
with full back wages from the time of their actual dismissal up to
their reinstatement”.

Furthermore, it may be observed that in the stipulation entered into
by the parties on February 19, 1953, the Company even obligated itself
to reinstate strikers to “their salaries and their status should be the same as that which they enjoyed before the strike.” This means not only reinstatement to their formal status but also to the salaries that they enjoyed before the strike^[3]
was declared, that is, before the so-called retrenchment policy was
implemented by the Company. As the respondent Industrial Court
observed, the computation undertaken by the Court Examiner was in
consonance with the leading doctrine in American jurisprudence, thus:

“In determining the rate of pay to be used in computing the award, where there is no fixed wage, or where the work is seasonal or part time, the Board customarily uses as the criterion the employee’s average pay in a given period prior to his improper discharge”. (Rothenberg on Labor Relations, p. 583, citing authorities).

Anent the validity of the retrenchment system, introduced by the
Company after the Court of Industrial Relations took cognizance of the
dispute (CIR Case No. 788-V), the record reveals that it was never
sanctioned nor authorized by said court. Such actions contravenes
Section 19, Commonwealth Act No. 103, as amended by Commonwealth Acts
Nos. 335 and 559, which provides that during the pendency of a dispute
between the employer and employee, the employer or landlord shall
refrain from accepting other employees, and shall permit the
continuation in the service of his employees under the last terms and
conditions existing before the dispute arose, unless expressly
authorized by the court, otherwise the same shall constitute contempt
of the Court of Industrial Relations,

In view of all the foregoing, and finding no error in the appealed
orders of the Court of Industrial Relations, the same are hereby
affirmed, and the writs of preliminary injunction heretofore issued are
dissolved, with costs against the petitioner in both cases. So ordered.

Paras, C. J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia and Gutierrez David, JJ., concur.
Montemayor, J., took no part.

---

^[*] Talisay-Silay Milling Co. vs. C.I.R., 98 Phil., 17, 51 Off. Gaz., (12), 6200.

^[1] Rizal Cement Company vs. Bautista, G. R. No. L-10276, promulgated July 27, 1957.

^[2] SEC. 2. Execution discretionary.—Before
the expiration of the time to appeal, execution may issue, in the
discretion of the court, on motion of the prevailing party with notice
to the adverse party, upon good reasons to be stated in a special
order. If a record on appeal is filed thereafter, the special order
shall be included therein. Execution issued before the expiration of
the time to appeal may be stayed upon the approval by the court of a
sufficient supersedeas bond filed by the appellant, conditioned for the
performance of the judgment or order appealed from in case it be
affirmed wholly or in part. (Rule 39, Rules of Court).

^[3] Although the strike
was declared illegal by the Court of Industrial Relations,
nevertheless, the Supreme Court reversed this finding considered the
strike legal. See G. R. No. L-7228, supra.