G.R. Nos. L-19273-74, February 29, 1964
STA. CECILIA SAWMILLS, INC., petitioner, vs. COURT OF INDUSTRIAL RELATIONS and TAGKAWAYAN LABOR UNION, respondents.

FACTS

The Chief Prosecutor of the Court of Industrial Relations (CIR) charged Sta. Cecilia Sawmills, Inc. with unfair labor practice. The allegations included persuading employees to join a rival union (National Labor Union or NLU), threatening discharge for membership in the respondent Tagkawayan Labor Union (TLU), dismissing members for such affiliation, and refusing to bargain with TLU. The company defended that it had a valid closed-shop agreement with the NLU, and the dismissals were due to lawful causes like seasonal lay-offs or the agreement’s operation. The CIR found that TLU had made various demands for better working conditions in early 1954. The company responded by invoking its collective bargaining agreement with the NLU. The CIR held this agreement was used to silence TLU’s demands and that the subsequent strike by TLU was valid.
The CIR ruled the company committed unfair labor practice, ordering the reinstatement with back wages of 113 dismissed employees and also ordering the reinstatement of 288 strikers. The company’s motion for new trial, citing business cessation and inability to pay accrued wages, was denied. The company appealed, contesting the procedural investigation, the dismissal of charges against the NLU, the finding of unfair labor practice, and the award of back wages and reinstatement for the 288 strikers.

ISSUE

The primary issues were: (1) whether the CIR’s preliminary investigation was sufficient; (2) whether the closed-shop agreement with the NLU justified the dismissal of TLU members; (3) whether the award of back wages should be indefinite; and (4) whether the 288 strikers were entitled to reinstatement.

RULING

The Supreme Court affirmed the CIR’s decision with modifications. On procedure, the Court held the prior hearings conducted by the CIR itself constituted a sufficient investigation to support the filing of the complaint. On the substantive labor issue, the Court upheld the ruling that the closed-shop agreement with the NLU could not validly affect employees already members of the TLU. Citing established doctrine, the Court reiterated that such agreements apply only to future hires, not to compel existing employees to disaffiliate from their chosen union, as this would violate the constitutional and statutory right to self-organization.
Regarding back wages, the Court modified the CIR’s indefinite award. It established the doctrine that a dismissed employee has a duty to mitigate damages by seeking alternative employment. Holding that three months is a reasonable period for a laborer to find new work, the Court limited the back pay award for the 113 unlawfully dismissed employees to three months from their dismissal. Finally, the Court set aside the order for reinstating the 288 strikers. It found no evidence they were actually employed and dismissed by the company; they were merely contract workers or sympathizers who joined the strike. Since they were not discharged, there was no basis for their reinstatement.