G.R. No. 48346 ; June 29, 1943
DESTILERIA AYALA Y CIA., INC., petitioner, vs. LIGA NACIONAL OBRERA DE FILIPINAS, and COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

An industrial dispute between Destileria Ayala y Cia., Inc. (petitioner) and its laborers affiliated with the Liga Nacional Obrera de Filipinas was certified to the Court of Industrial Relations (CIR). Among the demands was the restoration of an old scale of salaries, which included employee Francisco Serrano, whose monthly salary was allegedly reduced from P120 to P77. Serrano was a signatory to a union motion dated December 4, 1940, supplementing this demand. On December 11, 1940, the petitioner filed a motion with the CIR seeking authority to dismiss Serrano as cashier on grounds of negligence, specifically for failing to demand Bill No. 2049 from collector Antonio Valdez on August 12, 1940. Valdez later confessed to misappropriating funds from that bill and another collection. The petitioner subsequently petitioned for Serrano’s suspension, which the CIR granted on December 24, 1940, with the petitioner’s assurance to pay his salary during suspension if reinstatement was later ordered. After a hearing, the CIR, in an order dated March 13, 1941, found Serrano not negligent and that there was no valid reason for his discharge. The CIR concluded that the real motive for seeking his dismissal was Serrano’s union affiliation and his participation in the movement to restore salaries, as no action was taken against other non-union employees who might also have been negligent in the same matter. The CIR denied the petition for dismissal and directed the petitioner to reinstate Serrano and pay his salary during the suspension period.

ISSUE

Whether the Court of Industrial Relations committed an error in denying the petitioner’s request for authority to dismiss Francisco Serrano and in ordering his reinstatement with back pay.

RULING

The Supreme Court affirmed the modified order of the CIR. The Court held that the findings of fact by the CIR, which concluded Serrano was free from blame and that the real motive for dismissal was his union activities, were conclusive and could not be inquired into. The CIR’s authority was based on Section 19 of Commonwealth Act No. 103 and Section 5 of Commonwealth Act No. 213 , which were in full force at the time of the order. These provisions implied a condition in employment contracts preventing employers from dismissing employees for joining labor organizations while a dispute was pending before the CIR. However, the Court noted that the CIR had been abolished by Executive Order No. 1 dated January 30, 1942, and no successor agency was created. Consequently, the CIR’s order was effective only until that date. The Supreme Court modified the CIR’s order, ruling that the petitioner must pay Serrano’s salary during his suspension only up to and including January 30, 1942, and was under no obligation to reinstate him after that date. As modified, the order was affirmed.