G.R. No. L-20303 October 31, 1967
REPUBLIC SAVINGS BANK (now REPUBLIC BANK), petitioner, vs. COURT OF INDUSTRIAL RELATIONS, ROSENDO T. RESUELLO, BENJAMIN JARA, FLORENCIO ALLASAS, DOMINGO B. JOLA, DIOSDADO S. MENDOZA, TEODORO DE LA CRUZ, NARCISO MACARAEG, and MAURO A. ROVILLOS, respondents.

FACTS

The petitioner Republic Bank filed a motion for reconsideration of the Supreme Court’s decision dated September 27, 1967. The Bank was found guilty of unfair labor practice for discharging the respondent employees. The complaint originally charged the Bank with violation of section 4(a)(5) of the Industrial Peace Act (refusal to bargain). The Bank argues that the Court erred in finding it liable under other provisions of section 4(a), specifically paragraphs (1) (interference/restraint/coercion) and (6) (discriminatory discharge), claiming this deprived it of due process as it departed from the issues defined in the complaint. The Bank also contends it could not be found guilty of refusal to bargain because the employees did not follow the grievance procedure in their collective bargaining agreement, and pleads for a mitigation of the awarded backwages.

ISSUE

1. Whether the Supreme Court erred in finding the Bank guilty of unfair labor practice under provisions of section 4(a) of the Industrial Peace Act other than the specific paragraph (refusal to bargain) charged in the complaint, thereby violating the Bank’s right to due process.
2. Whether the Bank could be found guilty of refusal to bargain when the respondent employees did not follow the grievance procedure outlined in a collective bargaining agreement.
3. Whether the award of backwages should be mitigated by deducting amounts the employees earned or could have earned during their dismissal.

RULING

1. The Supreme Court denied the motion for reconsideration. On the first issue, it held that the argument lacked merit. The essence of the complaint was the Bank’s act of discharging the employees. The specific legal characterization of the act—whether as restraint, interference, coercion, discriminatory discharge, or refusal to bargain—is inconsequential. What matters is whether the Bank committed the act charged. The Bank was fully aware that the issue was discrimination against the employees, and it had ample opportunity to present its defense. Citing National Labor Relations Board v. Mackay Radio & Telegraph Company, the Court ruled that a technical variance between the complaint’s allegation and the findings does not violate due process when the party understood the issue and was afforded a full hearing.
2. On the second issue, the Court found the Bank’s argument fallacious. The grievance procedure in the collective bargaining agreement with the R.S.B. Employees Union was inapplicable because the respondent employees were officers of different unions from three bargaining units and, as a group, were not governed by any collective bargaining agreement with the Bank. Their concerted activity was protected, and interference with it constituted an unfair labor practice. Furthermore, the Bank’s refusal to bargain was based on its failure to process its own grievance (regarding alleged libel by the employees) through a grievance committee, which was part of its duty to bargain collectively. Even if the employees failed to observe a procedure, the Bank was not justified in unilaterally discharging them; at most, it could have ignored their demand.
3. On the third issue, the Court agreed that backwages should be mitigated by deducting actual earnings and amounts the employees could have earned during the period of dismissal, following the precedent in Philippine Air Lines v. Philippine Air Lines Employees Association. However, this plea for mitigation should be addressed to the Court of Industrial Relations during the execution of the judgment, as the only issue before the Supreme Court was the illegality of the dismissal. The question of deductions becomes relevant only after the dismissal is finally declared illegal.