G.R. No. L-17717; July 31, 1963
UBALDO BARON, TEOFILO CANO, LORENZO DE LA CRUZ, MANUEL GUTIERREZ, JULIO PEREZ, ET AL., petitioners, vs. COURT OF INDUSTRIAL RELATIONS, CHENG BAN YEK & COMPANY, INC., OPERATOR AND OWNER OF INTERNATIONAL OIL FACTORY and INTERNATIONAL OIL FACTORY WORKERS UNION (FFW), respondents.

FACTS

The petitioners were employees of Cheng Ban Yek & Co., Inc. In a prior labor case (NLU vs. International Oil Factory), the Court of Industrial Relations (CIR) issued a partial decision on May 11, 1951, with two key awards. First, it ordered a general wage increase of P0.50 effective January 4, 1949, to correct discrimination where only union members had previously received it. Second, it decreed a further 10% increase for all employees earning between P5.00 and P7.00 daily, effective from the decision’s date. The company, however, computed the 10% increase based on the petitioners’ old, pre-P0.50 increase salaries, effectively nullifying the retroactive general increase.
Subsequently, the respondent Union entered into a collective bargaining agreement with the company on April 6, 1957. Several petitioners challenged this agreement, alleging their consent was obtained through misrepresentation or threat, and filed petitions for exclusion. The Union, citing this dissent, expelled these petitioners and, pursuant to the union security clause in the CBA, demanded their dismissal. The company complied, terminating the petitioners’ employment.

ISSUE

The primary issues were: (1) whether the company correctly computed the 10% wage increase; and (2) whether the dismissal of the petitioners, based on the union’s demand under the CBA, constituted a valid termination.

RULING

The Supreme Court ruled partially in favor of the petitioners on the wage issue but upheld their dismissal. On the wage computation, the Court found the company’s method erroneous. The CIR’s partial decision intended for the P0.50 increase to be fully integrated into the wage base as of January 4, 1949. Therefore, by May 11, 1951, the petitioners’ salaries for the purpose of computing the 10% increase should have been their old rate plus the P0.50. Computing the 10% on the old, lower salaries effectively revived the very discrimination the CIR sought to correct. The Court ordered the correct computation: the 10% increase must be applied to the already-adjusted salaries (e.g., P5.50 or P6.50), not the original pre-1949 rates.
Regarding the dismissal, the Court affirmed the CIR’s decision granting the petitioners only a priority right to reinstatement, not immediate reinstatement with backpay. The Court deferred to the CIR’s factual finding that the company acted in good faith in dismissing the petitioners upon the Union’s demand under the CBA, and that their positions had been permanently filled. The validity of the CBA itself and the petitioners’ claims for exclusion from its terms were matters remanded to the CIR for further determination in the pending main case. The dismissal, under these specific circumstances, was not deemed an unfair labor practice by the company.