G.R. No. L-27079 and L-27080, August 31, 1977
Manila Cordage Company and Manco Labor Union (NLU), petitioners, vs. The Court of Industrial Relations and Manila Cordage Workers Union, respondents.

FACTS

The Manila Cordage Workers Union (MCWU) filed an unfair labor practice case against Manila Cordage Company (the Company) and the Manco Labor Union (MLU). The complaint alleged that the Company, in connivance with MLU, dismissed union members Silvino Rabago, Natalio Nisperos, and Ricardo Trajano for their activities in forming a rival union. The Court of Industrial Relations (CIR) found substantial evidence of unfair labor practice. It ruled that the Company violated Section 4(a) of the Industrial Peace Act by interfering with employee rights and discriminating in dismissal, while MLU violated Section 4(b) by restraining employees and causing their dismissal. The CIR ordered the Company and MLU to cease and desist from the unfair practices and to reinstate the three employees with back wages.
Both the Company and MLU filed separate petitions for review, which were consolidated by the Supreme Court. The petitioners challenged the CIR’s findings, arguing a lack of substantial evidence and claiming the dismissals were for valid causes such as violation of a collective bargaining agreement’s union security clause and poor health. They also contested the award of back wages, arguing it was excessive given the case’s protracted nature.

ISSUE

The primary issue was whether the CIR correctly found the Company and MLU guilty of unfair labor practice, warranting the reinstatement of the dismissed employees with back wages.

RULING

The Supreme Court affirmed the CIR’s decision with modification regarding the computation of back wages. The Court upheld the finding of unfair labor practice, emphasizing that the CIR’s factual conclusions, supported by substantial evidence, are binding. The evidence established that the dismissals were motivated by the employees’ union activities in support of MCWU, not by the alleged just causes presented by the petitioners. The Company’s actions, including the refusal to bargain with MCWU despite its claim of majority status and the subsequent dismissal of active members, constituted interference and discrimination under the law.
Regarding reinstatement, the Court rejected the Company’s precondition that the employees undergo a medical examination, ruling that such a requirement would unfairly prejudice workers whose employment relationship is deemed continuous from the time of illegal dismissal. However, the Court modified the back wage award. Applying the rule of limiting back wages to a reasonable period to avoid windfall and account for the natural vicissitudes of business, the Court fixed the back wages at the equivalent of two years’ pay for each complainant, computed based on their wages at the time of dismissal, without deductions. This balanced the need to make the employees whole for the illegal act while recognizing equitable considerations. The decision underscored the constitutional and statutory policy to protect labor and the right to self-organization.