G.R. No. L-11433, December 26, 1958
Cebu Portland Cement Company, petitioner, vs. Court of Industrial Relations and Philippine Land-Air-Sea Labor Union (PLASLU), respondents.

FACTS

The petitioner, Cebu Portland Cement Company, appealed by certiorari from a decision of the Court of Industrial Relations (CIR) ordering it to pay its employees, members of the respondent Philippine Land-Air-Sea Labor Union (PLASLU), one month’s salary each as a bonus for the years 1947, 1948, 1949, and 1950. This order arose from an “incidental motion” filed on February 10, 1953, in a previously decided case (CIR Case No. 241-V, decided April 27, 1951). The original incidental motion demanded a share in the company’s net profits (alleged to be over two million pesos annually from 1947 to 1950) equivalent to 12% as a bonus. The company had granted a Christmas bonus in 1952 via a resolution, but it was disapproved by the Cabinet. The company moved to dismiss, arguing that bonus payment was not a contractual obligation but a bounty, and that profits had been allocated for projects and obligations. On February 24, 1956, the union filed an “amended incidental motion,” changing the demand from profit-sharing to a Christmas bonus for the years 19471952, plus back bonus differentials for 19531955. The company again moved to dismiss, citing lack of jurisdiction under the Industrial Peace Act (Republic Act No. 875), specifically Section 7, which restricts courts from setting conditions of employment except as provided. The union contended that the motion was an incident of the main case filed before RA 875 took effect and thus fell under C.A. No. 103. The CIR denied the motion to dismiss, treating the demand as a separate case to prevent industrial dispute, and awarded a one-month salary bonus for the consolidated years 19471950, excluding other years due to prior grants or withdrawals.

ISSUE

Whether the Court of Industrial Relations had jurisdiction to entertain and grant the demand for Christmas bonus through an incidental motion filed after the enactment of the Industrial Peace Act (Republic Act No. 875).

RULING

The Supreme Court reversed the decision of the Court of Industrial Relations and dismissed the amended incidental motion. The Court held that the CIR lacked jurisdiction over the demand for Christmas bonus. The original incidental motion (for profit-sharing) and the amended motion (for Christmas bonus) were not a continuation or implementation of the original case (CIR Case No. 241-V), as they involved entirely new demands unrelated to the initial petition, which did not include bonus or profit-sharing claims. The CIR itself recognized the demand as a separate case. Since the amended incidental motion was filed on February 24, 1956, after the effectivity of the Industrial Peace Act, jurisdiction was governed by RA 875. Under Section 7 of RA 875, the CIR’s power to set conditions of employment (such as bonuses) is limited to industrial disputes certified by the Secretary of Labor or submitted by the parties for arbitration. There was no evidence that the bonus demand was causing or likely to cause a strike or lockout, nor was it certified by the Secretary of Labor or submitted by the parties for arbitration. Therefore, the CIR had no authority to adjudicate the bonus claim. The award was set aside without costs.