EN BANC

[G.R. No. L-27880. September 30, 1971.]

PHILIPPINE ENGINEERING CORPORATION, Petitioner, v. COURT OF INDUSTRIAL RELATIONS and

FREE LABOR UNION, Respondents.

Nicasio E. Martin for Petitioner.

David Victorino for respondent Union.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT THEREOF, CONCLUSIVE UPON SUPREME COURT. It is
a settled doctrine of this Court that matters touching on the weight and sufficiency of evidence and on the
credibility of witnesses involve questions of fact, and the findings of the CIR on such matters are conclusive
upon this Court. Thus Section 6 of the Act provides: "The findings of the Court with respect to question of
fact if supported by substantial evidence on the record shall be conclusive. The appeal to the Supreme Court
shall be limited to questions of law only." cralaw virtua 1aw lib rary

2. LABOR AND SOCIAL LEGISLATION; INDUSTRIAL PEACE ACT; UNFAIR LABOR PRACTICE;
DISCRIMINATION MOTIVE AS CONTRIBUTORY FACTOR FOR DISMISSAL SUFFICIENT TO SUPPORT CHARGES
THEREOF. "It is not necessary to support a finding that a particular discharge constitutes an unfair labor
practice to demonstrate that the dismissal was entirely and exclusively motivated by the employees union
activities or affiliations. It is enough to denounce the discharge if it established that the discrimination
motive was a contributing factor." cralaw virt ua1aw lib ra ry

3. REMEDIAL LAW; EVIDENCE; DEGREE OF PROOF REQUIRED IN LABOR CASES. The Industrial Peace Act
does not provide for the quantum or measure of evidence required in proceeding in cases of unfair labor
practice. It does not require preponderance of evidence as in ordinary civil cases, and much less proof
beyond reasonable doubt. The Act requires only substantial evidence with respect to findings of facts.

4. LABOR AND SOCIAL LEGISLATION; INDUSTRIAL PEACE ACT; REINSTATEMENT; MEANING AND CONCEPT
EXPLAINED. Reinstatement refers to a restoration to a state from which one has been removed, or a
return to the position from which one was taken out. Reinstatement presupposes that the previous position
from which one had been removed still exists, or that there is an unfilled position more or less of similar
nature as the one previously occupied by the employee.

5. ID.; ID.; ID.; NOT POSSIBLE WHERE POSITIONS ARE NO LONGER AVAILABLE. There being no more
positions in the machine shop to which the dismissed employees, mostly welders, drill press operators,
lathemen, tinsmith and carpenters could be returned, reinstatement is not possible. The CIR should not
have ordered reinstatement. The law itself can not exact compliance with what is impossible. "Ad imposible
nemo tenetur." cralaw virt ua1aw lib rary

6. REMEDIAL LAW; JURISDICTION OVER SUBJECT MATTER; DETERMINED BY ALLEGATION IN THE

COMPLAINT; CASE AT BAR. The jurisdiction of a court over the subject matter is determined by the
allegations in the complaint The complaint in the instant case alleges unfair labor practice on the part of
petitioner, who was the respondent in the court below, and the case involving unfair labor practice is
exclusively cognizable by the CIR pursuant to the explicit provision of Sec. 5 (a) of Republic Act 875, and as
repeatedly held in a long line of decisions of this Court.

DECISION

ZALDIVAR, J.:
Petition to review the decision, dated May 10, 1967, of the Court of Industrial Relations (CIR for short), in its
Case No. 3415-ULP, and its resolution en banc dated July 6, 1967 denying the motion for reconsideration.

Petitioner, Philippine Engineering Corporation, a domestic corporation engaged in the purchase, sale,
installation and repair of machineries, with offices at 1691 M. H. del Pilar, Malate, Manila, operated a
machine shop at 888 Raon St., Quiapo, Manila, where its marine and other departments, as well as the
offices of the corporation and the offices of its sister companies, were also located. It had in its employ
members of the respondent Free Labor Union, a legitimate labor organization, with which it had a collective
bargaining agreement, effective from January 1, 1960 to December 31, 1963. 1 After the expiry date of the
agreement, the union through its officers and members made repeated representations with the
management of the petitioner for the execution of a new collective bargaining agreement. The first request,
a letter dated January 6, 1964, was answered by the corporation on even date of the information that a
draft of a new agreement would soon be sent to the union. No draft having been received, the union once
more in October, 1964, asked to confer with management, but the request was denied by the President and
General Manager of petitioner. In December, 1964 the union president Amado Cuison talked to the President
of petitioner by phone about the execution of a new contract but the latter answered that he was very busy.
Subsequent representations were also of no avail as the President of petitioner always asked for deferment
of the execution of the new labor agreement.

On February 1, 1965, the employees in the machine shop of petitioner were served by management with
written notice that their services would be terminated within the month of February, although the regular
employees would still be paid for the period from February 1, 1965 to March 31, 1965. The union members
then complained twice to the Department of Labor, and on the occasion of the second complaint the
representatives and counsel of management told them, in the presence of the labor conciliator, that the
formal letter regarding the final decision on the closing of the machine shop would not yet be released, so
that there was nothing to be alarmed at. The conciliator told them that since the corporation was not closing
the shop there was no point to be discussed. The union members, therefore, withdrew the case that they
filed in the Department of Labor.

In the meantime, the union members continued their efforts to negotiate with the petitioner corporation for
a new collective bargaining agreement.

On May 31, 1965 the corporation closed the machine shop at Raon Street, dismantled the machineries and
transferred them, together with the equipment and tools, to its bodega at Carpena Street. Effective June 1,
1965, about 70% of the union members (about 57 of them) were dismissed, but the remaining 30% of the
union members, mostly mechanics and mechanic helpers, including union president Amado Cuison, union
adviser Francisco Sanga and union board member Tomas Pea, were retained for the maintenance of
customers equipment. The corporation started selling its machineries that came from Raon Street, but
continued accepting machine jobs and service and repair works which it turned over, on a sub-contract basis
to other machine shops. Before and after the closure of the Raon machine shop a number of employees and
laborers had been, and were being, hired by the corporation.

The respondent union, on behalf of its laid off 57 members, through a complaint dated July 28, 1965, filed
by the acting prosecutor of the CIR, charged petitioner with unfair labor practice under Section 4(a), sub-
paragraphs 1 and 4 of Rep. Act No. 875, for having discriminatorily dismissed the 57 members of the union
for no other reason than because of their membership and activities in the union, and praying, among other
things, their reinstatement to their former positions with full back wages from the date of their dismissal to
the date of their actual reinstatement.

The corporation, in its answer, denied all the material averments of the complaint and alleged, by way of
special and affirmative defenses, that the 57 subject employees were dismissed for just and lawful cause
upon prior notice; that the machine shop wherein they used to work was closed; that the court lacked
jurisdiction over the complaint, there being no employer-employee relationship between the complainants
and the corporation, or that the case simply involved the legality or illegality of the termination of the
services of the employees.

After trial, respondent CIR rendered a decision declaring petitioner Philippine Engineering Corporation guilty
of unfair labor practice as charged, and ordering it to cease and desist from further committing acts of unfair
labor practice and to reinstate the complaining employees to their former or equivalent positions with
backwages for three months, computed on the basis of the respective rates of wages that received on the
date of their dismissal, without deduction, and without loss of seniority and other privileges appertaining to
their respective positions.
A motion for reconsideration having been denied by the CIR en banc on July 6, 1967, the instant petition for
review was filed, to which respondent union filed an answer dated October 28, 1967 2 . This answer upon
request of said respondent is considered as its brief. 3

Petitioner, in its brief, contends that respondent CIR erred, and gravely abused its discretion and/or acted
without or in excess of jurisdiction:cha nro b1es vi rtua l 1aw lib ra ry

1. In not finding that petitioners machine shop was closed due to financial losses and therefore due to
legitimate cessation of business;

2. In finding that the dismissal of some personnel was due to union membership and union activities;

3. In not dismissing the charge of unfair labor practice;

4. In ordering reinstatement of the dismissed employees;

5. In awarding back wages; and

6. In not dismissing the case for lack of jurisdiction.

1. Petitioner contends, in the first error assigned, that the CIR committed error and gravely abused its
discretion in not finding that the machine shop was closed due to financial losses, and in support of that
contention argues that the "evidence amply shows that the machine shop had been losing money for at least
two years before it was shut down for good on May 31, 1965" ; that the losses, with concrete figures, were
made known to the members of the respondent union through notices, circulars, letters and note 4; that the
poor business was confirmed by manifold circumstances admitted by witnesses, such as delays and partial
payments of wages for years up to the time the shop went out of business, the adoption of rotation system
of work of the laborers from 1958 to the time of the closure, the amount of arrears in the payment of
rentals for the shop buildings for about one year in the sum of P125,747.61, the uncollected accounts of
customers running to several hundred thousand pesos, the inability to remit the monthly contributions to
the Social Security System from 1962 to 1966 totalling about P120,000.00 and the loss of distributorship of
several of its major profitable machinery lines, that, notwithstanding and evidence, the respondent CIR
minimized, contrary to the evidence, the effect of the rotation system by saying that it was not put into
effect because there was enough work and much overtime; lessened the significance of the unpaid rentals
by saying that petitioner did not pay the rentals because the landlord failed to reduce the same; speculated
that the failure to remit the contributions to the Social Security System was due to mismanagement;
belittled the losses of the company by stating that said losses were not conclusive as petitioner failed to
present its accountant as witness, and its statements of profit and loss; that, in the light of said evidences of
continuing losses of the shop, it should not be difficult to conclude that the machine shop was closed due to
financial reverses, and that, consequently, the subsequent dismissal of the members of the respondent
union was due to legitimate cessation of business. 5

Respondent union, in its answer, contends that the finding of the CIR, on the basis of the evidence before it.
that petitioners machine shop was not closed due to financial losses is a finding of fact which this Court may
not disturb on appeal.

After a careful study of the record, We can not sustain the stand of petitioner. Petitioner asserts that the
machine shop at Raon folded up because of financial losses. The CIR, however, did not consider the
evidence presented by petitioner sufficient to support that assertion. It is a settled doctrine of this Court that
matters touching on the weight and sufficiency of evidence 6 and on the credibility of witnesses 7 involve
questions of fact, and the findings of the CIR on such matters are conclusive upon this Court.

It can not be said that the CIR abused its discretion when it did not consider petitioners evidence credible
and sufficient. We find that the testimonies of petitioners witnesses Antonio Tamparen and Gilbert Gullen,
regarding the losses were not given credit by the CIR because they failed to state specifically the amount of
the alleged losses in 1965 or 1961, and in prior years. The corporation, according to the CIR, did not present
its books of account and its statements of profit and loss which would clearly demonstrate the alleged
financial losses, nor did petitioner present its accountant or auditor to testify on that matter. The failure of
petitioner to present the best evidence in its possession, concluded the CIR, gives rise to the presumption
that there was suppression on its part of evidence unfavorable to its interests. 8 This Court has ruled that
the matters regarding the financial condition of a company to justify the closing of its business and whether
a company is losing in its operations are questions of fact. 9

2. In the second error assigned by petitioner, it contends that the trial court erred in finding that the
dismissal of some personnel was due to union membership and activity, claiming that such findings is
"patently contrary to the evidence and circumstances of record as fully discussed under the preceding first
assignment of error." Petitioner claims that union activity could not have been the cause of the dismissal
because 30% of the members of the union were retained after the shop was closed, that the finding of the
CIR was based primarily on the based testimonies of the vice-president and the secretary of the union to the
effect that they had been pressing for a new collective bargaining agreement to replace the old one that
expired on December 31, 1963 but that petitioner deferred negotiations. In short, petitioner claims that the
dismissal of the 57 union members was based on justifiable ground and not because they were
discriminated against due to their union membership and activity.

Again We find that the issue raised in the second assignment of error involves questions of fact. It is evident
upon reading the arguments of petitioner in its brief and the decision appealed from that there is conflicting
evidence regarding the cause of the dismissal. In this connection, the decision states that "there is,
however, variance in their respective assertions as to the cause of dismissal from employment of the herein
subject workers." 10 To reach a finding on the cause of the dismissal, there must be an evaluation of the
conflicting evidence of the parties, 11 a determination of the weight and sufficiency of evidence, as well as
the credibility of witnesses, all of which, as this Court has held, involve questions of fact.

All that this Court is called upon to do regarding this issue is to find out whether the finding of fact of the
CIR is supported by substantial evidence in the record such relevant evidence as a reasonable mind may
accept as adequate to support the conclusion arrived at

The CIR found that the dismissal of the 57 employees could not have been due to the precarious financial
condition of the shop, for there was plenty of work at the time of their dismissal; that during the whole year
of 1964, the employees in the machine shop rendered overtime work such that additional employees, or
casuals, were sometimes hired, and on January 5, 1964, petitioner published in the Sunday Times that it
"wanted ten diesel installation and repair mechanics;" that petitioner at that time purchased from Deutz
Company $349,068.71 worth of spare parts; that even after the closure of the shop, the corporation had
been accepting jobs, some of them big ones, hiring new employees and giving salary increases to its new
employees. 12

Contrary to petitioners claim, the trial court found that the complaining employees were discriminatorily
dismissed, for after they asked the management verbally and in writing for a new collective bargaining
agreement which would embody new rates of pay, terms and conditions of employment, the corporation
began issuing "pass around" notes announcing the precarious financial condition and losses in the machine
shop, which notes were considered by the CIR as "a systematic approach intended to dampen the
enthusiasm of the union members;" 13 that after the closure of the shop, the corporation continued to
accept job orders and repair work which it subcontracted to other repair shops; that after the dismissal of
the complaining employees the corporation hired new employees to perform its contracts, like the
installation of escalators and construction of air-conditioning units at the Shoe World, which job was finished
in September, 1965; that salary increases were given by petitioner to its employees after the herein
complaining workers were no longer in the service. 14

The fact that 30% of the union members were retained might indeed show that "union membership and
activity" was not the exclusive cause for dismissal, but the CIR also found that "those who were retained in
the service upon the closure of the machine shop on May 31, 1965 were also dismissed on October 31,
1965," and after their dismissal, the corporation gave promotions to its employees by way of salary
increases. 15 But even if it be granted, for the sake of argument, that there was another reason for the
dismissal, such other reason would not help petitioners cause. It has been said, anent this matter that: jgc:chanro bles.c om.ph

"It is not necessary to support a finding that a particular discharge constitutes an unfair labor practice to
demonstrate that the dismissal was entirely and exclusively motivated by the employees union activities or
affiliations. It is enough to denounce the discharge if it is established that the discrimination motive was a
contributing factor." (Rothenberg on Labor Relations, p. 415 citing Cupples Mfg. Co. v. N.L.R.B., 106 F (2d)
100; N.L.R.B. v. Polson Logging Co., 136 F. (2d) 314; Carter Carburetor Corp. v. N.L.R.B., 140 F (2d) 714;
Onan v. N.L.R.B., 139 F. (2d) 728; N.L.R.B. v. Davies Co., 135 F. (2d) 179).

This Court has also said that if it can be established that the true and basic inspiration for the employers act
is derived from the employees union affiliation or activities, the assignment by the employer of another
reason, whatever its semblance of validity, is unavailing. 16

3. In the third error assigned by petitioner, it contends that the CIR erred in not dismissing the charge of
unfair labor practice, arguing that the evidence required to prove a charge of unfair labor practice should be
proof beyond reasonable doubt a situation which does not obtain in the instant case. This contention has
no merit. While this Court has held that complaints for unfair labor practice are prosecuted as in complaints
for criminal offenses 17 it did not declare that proceedings in cases of unfair labor practice should be
equated to prosecutions of offenses punishable under the Revised Penal Code such that proof beyond
reasonable doubt is required in order to make a finding of guilt. 18 Section 5, paragraph (b) of the Industrial
Peace Act (R.A. 875) in relation to unfair labor practice cases party provides as follows: jgc:chan roble s.com.p h

". . . In any such proceeding, the rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of this Act that the Court and its members and Hearing
Examiners shall use every and all reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law or procedure. . ." 19

The Industrial Peace Act does not provide for the quantum or measure of evidence required in proceeding in
cases of unfair Labor practice. It does not require preponderance of evidence as in ordinary civil cases, 20
and much less proof beyond reasonable doubt. The Act requires only substantial evidence with respect to
findings of facts. Thus Section 6 of the Act provides: "The findings of the Court with respect to question of
fact if supported by substantial evidence on the record shall be conclusive. The appeal to the Supreme Court
shall be limited to questions of law only." To issue an order requiring a Person to cease and desist from an
unfair labor practice, and take further affirmative action as may be necessary, the Industrial Peace Act
requires only that the Court be of the opinion that an unfair labor practice has been engaged in. This is clear
from the provision of its Section 5 paragraph (c) which, in part, provides as follows: jgc:chan rob les.com.p h

"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. . ." cralaw virtua1aw l ibra ry

4. In the fourth error assigned by Petitioner it contends that the CIR erred in ordering the reinstatement of
the dismissed employees. The petitioner argues that in the absence of unfair labor practice, which has not
been conclusively shown in the instant case, the CIR could not order reinstatement; and that even if it is
shown that the employer is guilty of unfair labor practice, reinstatement can not be ordered of employees
who are no longer needed or there would be more employees than that required by the economic operation
of the business. The petitioner further argues that its shop having been closed, machinery installations
dismantled and partly sold, it can not reinstate the discharged employees, most of them being welders, drill
press operators, lathemen, tinsmith and carpenters.

We find merit in the stand of petitioner. There is no doubt that employees who were discriminatorily
dismissed can be ordered reinstated by the CIR, with or without backpay pursuant to section 5(c) of the
Industrial Peace Act and the decisions of this Court. 21 Reinstatement refers to a restoration to a state from
which one has been removed, or a return to the position from which one was taken out. Reinstatement
presupposes that the previous position from which one had been removed still exists, or that there is an
unfilled position more or less of similar nature as the one previously occupied by the employee.

In the instant case, as found by the CIR, the machine shop at Raon- Street was closed, the machineries
were dismantled and transferred to the bodega at Carpena Street, and some of the machineries were
already sold. There being no more positions in the machine shop to which the dismissed employees, musty
welders, drill press operators, lathemen, tinsmith and carpenters, could be returned, reinstatement is not
possible. The CIR should not have ordered reinstatement. The law itself can not exact compliance with what
is impossible. "Ad impossible nemo tenetur." 22

5. In the fifth error assigned, the petitioner contends that the CIR error in awarding back wages. In support
of its contention petitioner argues that back wages can not extend beyond the closure of the business, and
in the instant case the machine shop was closed on May 31, 1966; and that, assuming that the workers
were entitled to back wages, any amount that the discharged shop workers had earned during the period of
their dismissal should have been ordered deducted by the CIR.

We believe that no error has been committed by the CIR in ordering the payment of three months back
wages. In the case of Sta. Cecilia Sawmills, Inc. v. CIR, Et Al., 1.19273-74, May 25, 1964, 23 this Court
ordered the employer to pay the dismissed employees their three months backpay where reinstatement was
not possible by way of penalty because it was shown that the employees were dismissed without just cause.

6. In the sixth error assigned, petitioner contends that the CIR should have dismissed the case for lack of
jurisdiction. The petitioner asserts that the evidence shows clearly that the case relates to the termination of
service under Rep. Act No. 1787, and it is one that is not within the jurisdiction of the CIR because petitioner
had disposed of his business for economic reasons, and petitioner had an undeniable right to do what it did
even if it meant dismissing its employees. On the other hand, respondent union contends that, as shown in
the decision of the CIR, petitioner did not insist on this issue. The respondents avers that jurisdiction over
the subject matter is determined by the allegations of the complaint, and in the instant case, the complaint
alleges unfair labor practice on the part of the petitioner.

The stand of petitioner can not be sustained. It is the settled rule that the jurisdiction of a court over the
subject matter is determined by the allegations in the complaint. 24 The complaint in the instant case
alleges unfair labor practice on the part of petitioner, who was the respondent in the court below, and the
case involving unfair labor practice is exclusively cognizable by the CIR pursuant to the explicit provision of
Sec. 5(a) of Republic Act 875, and as repeatedly held in a long line of decisions of this Court.25 cralaw:red

IN VIEW OF THE FOREGOING, the decision of the CIR appealed from is modified by eliminating therefrom
the order of reinstatement. In all other respects the said decision is affirmed. No pronouncement as to costs.
It is so ordered.

Concepcion, C.J., Dizon, Makalintal, Castro, Barredo, Villamor and Makasiar, JJ., concur.

Reyes, J.B.L., Fernando and Teehankee, JJ., did not take part.

Sta. Cecilia Sawmills, inc. vs. Court of Industrial Relations, L-19273-74, February 29 and May 25,
1964, 10 SCRA 433 and 11 SCRA 4

G.R. Nos. L-19273-74 February 29, 1964

STA. CECILIA SAWMILLS, INC., petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and TAGKAWAYAN LABOR UNION, respondents.

Sabido and Sabido Law Offices for petitioner.

Vicente A. Rafael and Associate for respondent Tagkawayan Labor Union.
Mariano B. Tuason for respondent Court of Industrial Relations.

LABRADOR, J.:

In a complaint dated August 28, 1957 the Chief Prosecutor of the Court of Industrial Relations
charged the petitioner herein, the Sta. Cecilia Sawmills, Inc., and the National Labor Union, with
unfair labor practice, for having committed the following acts: (1) trying to persuade the members of
the respondent Tagkawayan Labor Union to join the National Labor Union; (2) threatening them with
discharge if they become or remain members of the Tagkawayan Labor Union; (3) discharging many
members for having affiliated with the Tagkawayan Labor Union; (4) refusing to bargain with
respondent labor union on wages, transportation facilities, hours of work, etc., etc.
On February 25, 1958 petitioner Sta. Cecilia Sawmills, Inc. answered the complaint (1) denying the
charge that it had tried to persuade the respondent laborers to join the National Labor Union, and
alleging that on March 1, 1954 it entered into a bargaining agreement with the National Labor Union
and thereupon informed the laborers of its said agreement and the closed-shop provision thereof; (2)
that the laborers said to have been dismissed or separated were either separated because of
seasonal lay-off, temporary lay-off due to business reverses, operation of closed-shop agreement, or
because they were merely independent contractors, etc.

The Court of Industrial Relations after trial found that the respondent union early in March, 1954 had
been making demands of different kinds, such as better working conditions, abolition of vales or
chips and refund of percentage deductions, free transportation facilities from poblacion to logging
area, non-compulsion in purchases of tickets for popularity contests, etc. The petitioner company
answered these demands on March 19 alleging that it had entered into a collective bargaining
agreement with the National Labor Union. So the court held that the company entered into an
agreement with the National Labor Union to silence the demands of respondent union members. It
also held that the existence of the contract did not authorize the company to dismiss the old
employees, but should refer only to future employment.

It also held that the strike that was made by respondent labor union was valid because it was
preceded by various demands, like improvement of working conditions, vacation leaves, grievance
committee and previous notice.

The court dismissed the claim that complainants left their jobs; and ordered the reinstatement of 113
employees with back wages from their dismissal to their reinstatement, etc.

The decision of the Court of Industrial Relations is dated April 18, 1961, and is affirmed by the
court in banc on May 24, 1961. On June 20, 1961 the petitioner company filed a motion for new trial,
alleging that after the company had presented its evidence and in 1959 the company ceased
operating all its three sawmills, thereby laying off all its employees and laborers in said sawmills, and
in 1960 it operated only one sawmill. Reason given for closing was the drop in prices; that it owes
f76,832.46 as accrued wages. This motion for new trial was denied.

The company appeals from the judgment and from the order denying the motion for new trial, raising
same questions on the appeal.

It is first contended that there was no investigation conducted by the prosecutor before the charges
were filed against petitioner. The record shows that on March 19, 1954 the Tagkawayan Labor
Union thru its officers, filed the complaint with the Court of Industrial Relations, charging petitioner
with preventing them from union activities, requiring the members to join the National Labor Union,
discrimination against its members, etc. (Exh. A, Petition). A motion to dismiss was filed against the
petition, on the ground that the persons who committed the acts were not officers of the company.
(Exh. B, Id.) The motion was denied (Exh. C, Id.). On March 4, the company answered denying the
charges (Exh. D). The charges were set for hearing, and at said hearing another motion to dismiss
was again filed on September 14, 1954. Action on the case was first suspended but later, on March
15, 1957, the court ordered the case referred to the Prosecution Division for investigation with the
instruction that since the evidence already adduced at previous hearing establish a prima facie case
to warrant the filing of a complaint the chief prosecutor is directed to file the complaint with said
evidence (Exh. 1, March 23, 1957). Thereupon the Prosecutor filed the complaint. We hold that the
previous hearing conducted by the court itself was a sufficient investigation to support the
information.
It is next contended that the court below erred in dismissing the case against the National Labor
Union: that such dismissal amounted to admitting the validity, of the agreement with the National
Labor Union. The argument is without merit. Admitting that the agreement with the National Labor
Union for a closed-shop is valid, the said closed-shop agreement cannot affect the laborers already
employed, like the members of the Tagkawayan Labor Union. This is the ruling laid down in a series
of decisions of this Court, starting with the case of Local 7, Press & Printing Free Workers (FFW), et
al. vs. Hon. Judge Emiliano Tabigne, etc., et al., G.R. No. L-16073, November 29, 1960.

In the case of Freeman Shirt Manufacturing Co., Inc., et al. vs. Court of Industrial Relations, et al.,
G.R. No. 1, 16561, Jan. 28, 1961, We held:

The closed-shop agreement authorized under Sec. 4 subsec. a(4) of the Industrial Peace Act
above quoted should however, apply only to persons to be hired or to employees who are
not yet members of any labor organization. It is inapplicable to those already in the service
who are members of another union. To hold otherwise, i.e., that the employees in a company
who are members of a minority union may be compelled to disaffiliate from their union, and
join the majority or contracting union, would render nugatory the right of all employees to
self-organization and to form, join or assist labor organization of their own choosing, a right
guaranteed by the Industrial Peace Act (Sec. 3. Rep. Act No. 875) as well as by the
Constitution (Art. III, sec. 1[6]).

The next error imputed to the court a quo is its finding that the company committed an unfair labor
practice because the National Labor Union was not certified by the Court of Industrial Relations. The
import of the decision is that since the National Labor Union was not chosen by all the employed of
the company in a certification election, its agreement was not binding on the members of the
Tagkawayan Labor Union. We find no error in this ruling. The claim that the National Labor Union
was designated by the Majority of the members is without proof or foundation, because the members
of the Tagkawayan Labor Union were not in any manner consulted before the closed-shop
agreement was entered into.

Still insisting on the validity of the closed-shop agreement with the National Labor Union the
petitioner argues that the provision of the agreement to the effect that non-members of the National
Labor Union are given two months from the signing of the contract to become members is valid. The
provision compels all laborers, especially the members of the Tagkawayan Labor Union, to join the
National Labor Union. Precisely such provision destroys the freedom of the laborers to choose the
union that will represent them and this constitutes unfair labor practice.

It is also contended that the ruling of the court finding the strike valid if erroneous. We find that the
strike is legal, even if resorted to only because the members of the Tagkawayan labor Union were
being forced to join the rival Union (National Labor Union). Furthermore, the strike was preceded by
various demands which were not granted.

We next come to the supposed error in not granting a new trial. While We agree with the court below
that the facts alleged in the said motion for new trial could not effect the findings of the court and its
ruling on the existence of an unfair labor practice and the further finding that the strike was valid, the
facts presented therein could very well justify a modification of the decision insofar as said
decision orders the reinstatement without limitation as to time. In the motion for new trial, which is
verified, it is stated that the sawmills of petitioner stopped its operation for July, 1954 and did not re-
open until January, 1957. We can not agree to the insinuation of the court that the sawmill business
of petitioner was profitable. The closing of the mills shows that the petitioner had been losing as it is
impossible to believe that the business would close for two years if it had not suffered losses. With
the fact of the closing of the sawmills in mind, the court should have modified its decision as to the
period of time during which the respondent members of the union should be allowed to received
back wages. The court could not in justice, for example, order payment of wages up to the date of
the decision in banc on May 24, 1961. If the decision were to be enforced the respondents would be
receiving back wages from March, 1954 until May, 1961, inspite of the closing of the mills, which We
believe to be unjust.

On the subject of how long the order for back wages should be received, We believed that the court
should fix a reasonable period, especially as the sawmills had been closed in the same year July,
1954. When laborers have been dismissed without any possibility of being re-employed, as in the
case at bar, they should have taken steps to find other work for themselves; to allow them to receive
back wages during the whole time the case was pending is unjust and improper. In all probability
they must have located some other work to tide them over, especially in this case since the sawmills
closed in July, 1954, or a few months after their separation, and recovery should be limited to said
period of time.

A ruling that would permit a dismissed laborer to earn back wages for all time, or for a very long
period of time, is not only unjust to the employer but the same would foster indolence on the part of
the laborers. The laborer is not supposed to be relying on a court judgment for his support, but
should do everything a reasonable man would do; he should find employment as soon as an
employment has been lost, especially when the employment has to depend on a litigation. He should
try to minimized the loss that may be caused to the employer by looking for other work in which he
can be employed.

In consonance with this view We hold that a period of three months should be enough time for a
laborer to locate another work different from that from which he was separated. Consequent with
this opinion, the back wages that should be awarded respondents laborers should be limited to three
months, and not for an indefinite period as the decision seems to imply. 1wph1.t

One more point need be taken up and that is in connection with the ruling of the respondent court
that the 288 strikers be admitted back to work and given back wages. From the statement of counsel
as well as from the decision of the court it does not appear that the supposed strikers were actually
working at the time of the strike and were dismissed from their work. In a motion for reconsideration
of the decision it is claimed that of the 288 alleged strikers only 10 were actually working at the time
of the strike. These ten must have been included among the 113 dismissed employees. It is difficult
to understand how the court has gone to the extent of ordering the reinstatement of the 288 strikers
when they were not actually employed at the time of the strike. Our understanding is that they were
mere contract workers, independent workers, not actually employed at the time of the strike, who
sympathized with the dismissed laborers and therefore joined the strike. We are inclined to believe
that their joining the strike was to show their sympathy for the fate of the dismissed employees. The
court itself did not find that they were actually dismissed. Those that were actually dismissed must
be included in the 113 who had already been declared entitled to receive pay for a period of three
months from the time of their dismissal. As they were merely strikers without having been actually
discharged from employment there is no reason why they should be entitled to be readmitted to work
from which they had not been dismissed. The portion of the decision ordering that the 288 strikers
be reinstated is, therefore, set aside.

WHEREFORE, the judgment ordering reinstatement with back wages is affirmed but it is modified as
to the length of time for their payment to only three months back wages. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion. Reyes, J.B.L., Barrera, Paredes, Dizon,
Regard and Makalintal, JJ., concur.
G.R. Nos. L-19273-74 May 25, 1964

STA. CECILIA SAWMILLS, INC., petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS and TAGKAWAYAN LABOR UNION, respondents.

RESOLUTION

LABRADOR, J.:

In its motion for reconsideration, petitioner prays that (the order requiring) the reinstatement of the
113 laborers should not be ordered because of the impossibility of the reinstatement and the losses
it will cause petitioner. Precisely the Court, taking into account the impossibility of reinstating the
laborers by reason of the fact alleged in its motion for new trial, instead of ordering their
reinstatement, decreed that they should be entitled to three months back pay. Petitioner therefore
should have no ground for complaint. The losses suffered by reason of the grant of three months
pay is the petitioner's penalty for dismissing the employees without just cause.

WHEREFORE, the motion for reconsideration filed by petitioner St. Cecilia Sawmills, Inc., is hereby
denied. 1wph1.t

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Paredes, Dizon and Makalintal, JJ., concur.
Reyes, J.B.L., Barrera and Regala, JJ., took no part.

EN BANC

[G.R. Nos. L-19273-74. May 25, 1964.]

STA. CECILIA SAWMILLS, INC., Petitioner, v. COURT OF INDUSTRIAL RELATIONS and

TAGKAWAYAN LABOR UNION, Respondents.

RESOLUTION ON RESPONDENT UNIONS

MOTION FOR RECONSIDERATION

LABRADOR, J.:

The respondent Tagkawayan Labor Union seeks the reconsideration of Our decision allowing members
thereof wages for a period of three months, arguing that they should have been reinstated and allowed to
continue working after reinstatement, contrary to Our decision granting the three months wages.

The main ground of objection is that there was no evidence submitted at the trial on the supposed closing of
the sawmills of the petitioner Sta. Cecilia Sawmills. That there was no evidence of such closing may be
explained by the fact that the issue at the time of the trial was whether or not the removal of the members
of the respondent union could be effected unless they affiliate with the National Labor Union, because of the
existence of a contract of the company with the latter containing a closed-shop agreement. That no evidence
of the closing of the sawmills was presented is due to the fact that such matter had nothing to do with the
question at issue during the trial.

But when the decision came ordering the reinstatement of the members of the respondent union, the
petitioner herein came face to face with the impossibility of carrying out the order of the court and therefore
presented the motion for new trial, which however was denied on the ground that its presentation was late.
We, however, hold that inasmuch as the motion for new trial does not affect the issue decided in the case,
but only tends to justify a modification of the period of time within which the judgment of the court would be
made effective, the Court thought it just and proper that the motion should be allowed and We would so
permit it; and upon considering it We found sufficient reason for believing that it was well-founded, that
losses in the business of the petitioner justified the closing of its sawmills during two years following the
strike (1955 & 1956) and, therefore, the order of the court could be modified so that the members of the
respondent union would be granted salaries for the period of three months, instead of being authorized to
be reinstated in the sawmills which had already been closed. (Erlanger & Gallinger, Inc. v. CIR & Flores, G.R.
No. L-15118, Dec. 29, 1960).

The motion for reconsideration is, therefore, denied.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Paredes, Dizon and Makalintal, JJ., concur.

Reyes, J.B.L., Barrera and Regala, JJ., took no part.