GR L 1377; (May, 1948) (Digest)
G.R. No. L-1377; May 12, 1948
Leyte Land Transportation Company, Inc. vs. Leyte Farmer’s and Laborer’s Union
FACTS
The Leyte Land Transportation Company, Inc. (petitioner) appealed a decision of the Court of Industrial Relations (CIR). The CIR ordered the company to grant salary increases to its employees (drivers, conductors, and laborers), as well as 15 days of vacation leave with pay and 15 days of sick leave with pay. The company argued that the CIR erred in granting these increases, contending that the mandated increases, on top of its existing financial losses, would lead to bankruptcy. It also challenged the CIR’s authority to fix wages and grant leaves, claiming it infringed on freedom of contract.
ISSUE
1. Whether the Court of Industrial Relations acted within its authority in ordering salary increases and granting paid vacation and sick leaves.
2. Whether such orders constitute an unconstitutional deprivation of the company’s right to freely contract.
RULING
The Supreme Court AFFIRMED the decision of the Court of Industrial Relations.
1. The CIR acted within its statutory authority under Commonwealth Act No. 103 . Its power to consider the “high cost of living” and to fix minimum wages to ensure workers a “just compensation” and “adequate income” is implied from its mandate to act according to justice, equity, and the substantial merits of the case. The Court had previously upheld the constitutionality of this wage-fixing power, anchored on the constitutional principles of promoting social justice and protecting labor. The factual question of whether the increases would bankrupt the company is beyond the Supreme Court’s review authority, and the CIR’s decision noted the increases were temporary, allowing for future reconsideration.
2. The orders do not constitute an unconstitutional deprivation. The State retains the power to regulate contracts, especially where inequality between parties exists or public welfare demands it. The doctrine of laissez-faire has yielded to state intervention in contracts affecting public interest. Furthermore, the CIR correctly extended the benefits to all company employees, not just union members who initiated the case, to avoid unjust discrimination. The comparison to lower government salaries was deemed inapposite, as the government operates not for profit.
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