G.R. No. L-17600; July 31, 1963
BIG FIVE PRODUCTS WORKERS UNION-CLP, petitioner, vs. COURT OF INDUSTRIAL RELATIONS, BIG FIVE PRODUCTS and/or PAULA RICARO, respondents.

FACTS

The petitioner union filed an unfair labor practice case against the company and its manager, Paula Ricaro. The charges stemmed from actions taken against employees following the union’s organization in November 1956. Specifically, the company dismissed four elected union officers—Chona Avila, Luisa Escalera, Purificacion Sillos, and Macaria Peregrino—on December 3, 1956. Furthermore, the company dismissed Perlito Palomata on February 26, 1957, after manager Ricaro advised him not to testify in the preliminary investigation of the case and he insisted he would. Additionally, union members were collectively ordered to vacate company premises and were subsequently given reduced work schedules compared to non-union employees.
The Court of Industrial Relations (CIR) trial judge initially dismissed the complaint for lack of substantial evidence. However, upon motion for reconsideration, the CIR en banc reversed this decision. It found the respondents guilty of unfair labor practice under Republic Act No. 875 for interfering with the employees’ right to self-organization and for discriminatory dismissal. The CIR en banc ordered the company to cease such practices and to reinstate the five dismissed employees but denied them an award of back wages.

ISSUE

Whether the Court of Industrial Relations committed a grave abuse of discretion or error in ordering the reinstatement of the unfairly dismissed employees without granting them back pay.

RULING

The Supreme Court ruled that the CIR en banc committed an error in denying back pay. While Section 5(c) of the Industrial Peace Act ( Republic Act No. 875 ) grants the CIR discretion to order reinstatement “with or without back pay,” this discretion is not absolute or arbitrary. It must be exercised soundly, in accordance with justice, reason, equity, and the evident purpose of the law, which is to protect the freedom of employees to engage in union activities by remedying the consequences of unfair labor practices.
The Court found that the CIR en banc’s resolution established that the dismissals were motivated by the employees’ union activities and, in Palomata’s case, by his intention to testify—acts constituting unfair labor practice committed with malice. The resolution cited no factual circumstances that would justify exempting the employer from the liability for back wages. Denying back pay under these conditions would be inconsistent with the law’s remedial purpose and would fail to make the employees whole for the losses suffered due to the illegal dismissals.
The Supreme Court modified the CIR resolution, ordering that the reinstatement of Chona Avila, Luisa Escalera, Purificacion Sillos, Macaria Peregrino, and Perlito Palomata be with full back pay. This ruling aligns with established jurisprudence where the Court awarded full back pay in cases of unfair labor practice dismissals, ensuring the act’s prohibitions are meaningful and effective.