G.R. No. L-18058; August 30, 1962
NATIONAL RICE AND CORN CORPORATION (NARIC), petitioner, vs. NARIC WORKERS UNION and COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

The NARIC Workers Union, representing daily-paid laborers and capataces (foremen) performing handling work in NARIC warehouses, filed an unfair labor practice charge. The dispute arose from the implementation of Republic Act No. 1880 (the Forty-Hour Week Law), which mandated a wage adjustment to prevent diminution in pay due to the reduction of the work week. NARIC adjusted the wages of other daily-wage employees (non-union members and security guards) from P4.00 to P4.80 daily, effective July 1, 1957, and paid them differentials.
For the union members, however, NARIC delayed the adjustment. Following union demands, the corporation raised the wages of the laborers (but not the capataces) only in March 1958, making the increase effective February 1, 1958, and granted only a one-month differential. The capataces, who were union organizers and leaders, received no wage adjustment at all. This disparate treatment prompted the union to stage a strike in May 1958.

ISSUE

Was NARIC guilty of unfair labor practice for discriminating against the union-member capataces and laborers in the implementation of the wage adjustments required by Republic Act No. 1880 ?

RULING

Yes, the Court affirmed the CIR’s finding that NARIC committed unfair labor practice. The legal logic centers on the discriminatory application of a statutory benefit based on union membership and activity, which constitutes a violation under Section 4(a)(4) of Republic Act No. 875 (The Industrial Peace Act).
The Court rejected NARIC’s defenses. First, it upheld the CIR’s factual finding that an employer-employee relationship existed, as the workers were continuously hired under a rotation system based on a master list submitted by the union and were paid through corporate payrolls. Second, the Court found that Republic Act No. 1880 applied to these government corporate employees, as they worked continuously for the whole week and thus suffered a diminution in wages due to the reduced workweek. The core of the ruling is that the differential treatment in granting the wage adjustment—immediate for non-union members but delayed or denied for union members, particularly the capataces who were union leaders—constituted clear discrimination. This discrimination was motivated by the employees’ union membership and activities, which is a classic form of unfair labor practice designed to discourage union affiliation. The CIR’s order for NARIC to adjust the wages retroactively was therefore upheld as a proper remedy.