G.R. No. L-13464; May 25, 1960
PHILIPPINE SUGAR INSTITUTE, petitioner, vs. COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.

FACTS

The petitioner, Philippine Sugar Institute (a semi-public corporation), purchased the assets of the Insular Refining Corporation. Prior to this purchase, the employees of the Insular Sugar Institute and the refinery, through their union (the Insurefco Paper Pulp Project Workers’ Union, later the National Sugar Workers’ Union-PAFLU), had made demands for wage increases and other employment conditions. These disputes were brought before the Court of Industrial Relations (CIR). To facilitate resolution, the parties entered into a partial agreement dated June 11, 1949, which was approved by the CIR on June 20, 1949. The specific issue of wage increases was submitted for arbitration before the CIR, which subsequently granted an increase of fifty centavos to all daily workers in its order of February 10, 1951. The petitioner complied with these awards for over three years. On January 8, 1955, the petitioner filed a notice with the CIR to terminate the partial agreement of June 20, 1949, and the award of February 10, 1951, praying that the termination be effective on the date of the notice.

ISSUE

Whether, under Section 17 of Commonwealth Act No. 103 , the petitioner can unilaterally terminate the effectiveness of the CIR-approved partial agreement and award by mere notice to the Court, given that the awards did not specify a period of effectivity and had been complied with for more than three years.

RULING

No. The Supreme Court affirmed the order of the Court of Industrial Relations. Section 17 of Commonwealth Act No. 103 provides that an award, order, or decision of the CIR is valid for the time specified therein. If no period is specified, any party may terminate its effectiveness after three years from its date by giving notice to the Court. While the law only mentions giving “notice to the Court” for such termination and does not explicitly require a “due hearing” or notice to the opposing party, the necessity of a due hearing is implicit in the phrase “notice to the Court.” The purpose of such notice is to give the Court an opportunity to evaluate the merits of the proposed termination. The Supreme Court cited its ruling in Katipunan Labor Union vs. Caltex (Phil.) Inc., which held that when an agreement (or award) sought to be terminated resulted from a compromise between the parties and was approved by the court, a hearing is necessary to determine if supervening conditions justify setting aside the contract. The Court found no error in the CIR’s conclusion that no cause existed to justify terminating the award. The appealed order was affirmed.