G.R. No. L-39546. November 29, 1977.
PROGRESSIVE DEVELOPMENT CORPORATION, JORGE L. ARANETA, JUDY A. ROXAS, MANUEL B. JOVER, RAMON LLORENTE and PROGRESSIVE EMPLOYEES UNION, petitioners, vs. COURT OF INDUSTRIAL RELATIONS and ARANETA COLISEUM EMPLOYEES ASSOCIATION, respondents.

FACTS

In September 1962, the Araneta Coliseum Employees Association (ACEA), a legitimate labor union, filed an unfair labor practice case (Case No. 3304-ULP) with the Court of Industrial Relations (CIR) against Progressive Development Corporation (PDC), its corporate officers, and the Progressive Employees Union (PEU). The complaint alleged that PDC, through its officers, interfered with ACEA’s representation by attempting to disauthorize its counsel. It further accused PDC supervisors of actively encouraging and assisting in the formation of the PEU, a rival union, and of coercing employees to disaffiliate from ACEA and join the PEU. The core accusation was that in July and August 1962, PDC discriminated against 48 individual complainants, members of ACEA, by reducing their work schedules and ultimately dismissing them due to their refusal to abandon ACEA and affiliate with the PEU.
The respondents countered that the individual complainants were merely casual or temporary employees whose work depended on the availability of shows at the Araneta Coliseum. They denied interfering with ACEA or assisting the PEU, claiming the PEU was organized independently by a majority of employees. They asserted the dismissals were for lawful causes, such as the closure of an office (for complainant Gregorio Viray) and collecting salary without rendering work (for Reynaldo Asis). Respondent Ramon Llorente also claimed he had severed employment with PDC in June 1962 and could not have committed the alleged acts in July and August.

ISSUE

Whether the petitioners committed unfair labor practice by dismissing employees for their union membership and activities, and by interfering with and assisting in the formation of a rival union.

RULING

Yes, the Supreme Court affirmed the CIR’s finding of unfair labor practice with modification on the award of back wages. The Court upheld the CIR’s factual conclusions, which are generally binding unless unsupported by substantial evidence. The evidence established that PDC, through its officers, engaged in union-busting activities. The formation of the PEU was not independent; it was initiated and supported by management. Supervisors actively solicited membership for the PEU and pressured employees to join, making membership a condition for continued employment. The dismissals of the individual complainants, including Viray and Asis, were directly linked to their refusal to disaffiliate from ACEA. The proffered reasons for their termination were deemed pretextual. For instance, the claim that Viray was dismissed due to office abolition was belied by the fact he was the only janitor dismissed, and his functions were absorbed by another supervisor.
The legal logic is grounded on the violation of the fundamental right to self-organization under the Industrial Peace Act. An employer commits unfair labor practice by interfering with, restraining, or coercing employees in the exercise of their right to organize, and by discriminating in tenure to encourage or discourage membership in any labor organization. The petitioners’ actions—assisting a company-dominated union and dismissing employees for loyalty to their chosen union—constituted a clear infringement of these statutory protections. Given the egregious nature of the union-busting and the significant passage of time since the 1962 dismissals, the Court modified the back wage award. Applying the equitable formula from precedent, it ordered PDC to reinstate the complainants and pay them