G.R. No. L-15827 and L-15828; May 31, 1961
NATIONAL LABOR UNION, petitioner, vs. ZIP VENETIAN BLIND and/or EUSEBIO NAZARIO, General Manager, respondents.

FACTS

Respondent Zip Venetian Blind, owned by Eusebio Nazario, employed factory workers and sales/office personnel. In April 1956, the twenty factory workers affiliated with the National Labor Union (NLU), though they did not form a registered local union. The NLU presented demands and, after unsatisfactory negotiations, filed a notice of strike. Meanwhile, a separate union of sales and clerical employees, the Zip Workers Union (ZWU), also made demands. During conciliation, a dispute arose over the appropriate bargaining unit, with the employer wanting a single unit and the NLU seeking a separate unit for factory workers. Before this was resolved, the employer, citing the non-registration of the factory workers’ group with the NLU, ceased negotiations with the NLU.
On July 2, 1956, the employer executed a collective bargaining agreement with the ZWU containing a closed-shop provision applicable to all employees except supervisors. Subsequently, five supervisors were demoted to factory workers, bringing them under the closed-shop clause. The ZWU then demanded the dismissal of all non-members. The employer issued a notice giving non-members 48 hours to join the ZWU. The 19 factory workers (one having resigned earlier) refused to join and were dismissed. Their leader, Florentino Santos, was earlier dismissed for alleged interference with management. The NLU filed two unfair labor practice cases against the employer.

ISSUE

Whether the Court of Industrial Relations erred in denying the claim of the 19 dismissed factory workers for back wages.

RULING

The Supreme Court affirmed the order of the Court of Industrial Relations, denying the claim for back wages. The lower court had invalidated the closed-shop provision as applied to the already-employed factory workers, holding such provisions have only prospective effect and cannot adversely affect existing members of another union. However, it found the employer acted in good faith in dismissing the workers to comply with the clear terms of the collective bargaining agreement it had signed with the ZWU. The Supreme Court held that this finding of good faith is a factual determination which it cannot review on appeal by certiorari, as the lower court is in a better position to assess the credibility and weight of the evidence.
The legal logic rests on the principle that factual findings of the Court of Industrial Relations, when supported by evidence, are conclusive. The Court emphasized that the agreement explicitly bound the employer not to maintain any laborer who was not a member of the ZWU. The employer could not have been expected to anticipate a judicial ruling that the clause was invalid as applied to existing employees. Furthermore, the award of back pay under the Industrial Peace Act ( Republic Act No. 875 ) is discretionary with the court. Citing precedent in Confederated Sons of Labor vs. Anakan Lumber Co., the Court upheld the denial of back pay where an employer, under analogous conditions, was found to have acted in good faith. Therefore, absent a showing of grave abuse of discretion, the Supreme Court sustained the lower court’s exercise of its discretion in refusing to grant back wages.