G.R. No. 47776 ; March 11, 1941
DY PAC AND COMPANY, petitioner, vs. KATIPUNAN NG MGA MANGGAGAWA SA KAHOY SA FILIPINAS, and LEOPOLDO ROVIRA, respondents.

FACTS

Prior to July 30, 1940, Benito Nahag was a laborer employed by Dy Pac and Company and was the President of the branch of the respondent union, Katipunan ng mga Manggagawa sa Kahoy sa Filipinas, within the petitioner’s establishment. On or about July 29, 1940, a fight occurred between Benito Nahag and a fellow employee, truck driver Martin Hollman. After an investigation by the company’s management, both Hollman and Nahag were dismissed. Hollman did not contest his dismissal. The respondent union, however, protested Nahag’s discharge and demanded his reinstatement. The dispute was referred to the Department of Labor, but no agreement was reached, leading the union to declare a strike. On August 19, 1940, the Department of Labor certified the dispute to the Court of Industrial Relations. After a hearing, the Court ordered the petitioner to immediately reinstate Benito Nahag and pay him back wages from August 1, 1940. The petitioner now seeks a review of this decision, arguing the Court of Industrial Relations acted in excess of its jurisdiction.

ISSUE

Whether or not the Court of Industrial Relations erred in ordering the reinstatement of Benito Nahag.

RULING

The Supreme Court ruled that the Court of Industrial Relations erred in ordering the reinstatement. The Court found that a collective bargaining contract existed between the petitioner and the respondent union, which empowered the petitioner to dismiss any laborer guilty of disorderly conduct. The cause of Nahag’s dismissal was his improper conduct in engaging in a fight. Furthermore, it was established that Nahag had been previously discharged for cause and was only taken back on the condition that union officials guaranteed his good conduct. Under these circumstances, the petitioner, in discharging Nahag for the second time due to his failure to maintain exemplary conduct, was acting in the normal exercise of its right to hire and discharge employees and in strict accordance with the collective bargaining contract. Citing precedent (Manila Trading & Supply Co. vs. Zulueta, et al.), the Supreme Court held that while the State may regulate an employer’s right to select or discharge employees, an employer cannot be compelled to continue employing a person guilty of misfeasance, especially when such continuance is patently against the employer’s interest. The dismissal in this case was not found to be whimsical, unjustified, or illegal. Therefore, the writ of certiorari was granted, and the order of the Court of Industrial Relations was reversed.