G.R. No. L-25389 & L-25390 June 27, 1968
LIBERATION STEAMSHIP CO., INC., petitioner, vs. COURT OF INDUSTRIAL RELATIONS and THE UNLICENSED CREW MEMBERS OF THE THREE (3) DONA VESSELS, ALL AFFILIATES WITH THE PHILIPPINE MARITIME INDUSTRIAL UNION (PMIU), et al., respondents. / NATIONAL DEVELOPMENT COMPANY, petitioner, vs. UNLICENSED CREW MEMBERS of THREE (3) DONA VESSELS (PMIU) and the COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

The National Development Company (NDC), a government-owned corporation, owned and operated three vessels: M/S “Dona Alicia”, “Dona Nati”, and “Dona Aurora”. In 1961, NDC decided to sell these vessels, and Liberation Steamship Co., Inc. (LISTCO) won the bidding. The crew members, through their union (PMIU), requested both NDC and LISTCO to retain them in service. When the final deed of sale contained no provision for hiring the existing crew, the crew declared a strike on April 15, 1961. On April 25, 1961, the President certified the dispute to the Court of Industrial Relations (CIR). On April 29, 1961, the CIR, noting the sale, ordered LISTCO to be summoned as an indispensable party. On May 3, 1961, the CIR issued a return-to-work order directing strikers to return and the “management” to take them back under the last terms, and further ordered that during the pendency of the case, “the management shall refrain from dismissing any employee or laborer, unless with the express authority of this Court.” On June 17, 1961, LISTCO posted notices on the M/S “Dona Alicia” that crew not appointed by the new owner would be ejected, and on June 21, 1961, security guards ejected the original crew. The crew petitioned the CIR for a restraining order, which was issued on June 30, 1961, but it covered only the “Dona Nati” and “Dona Aurora,” as the ejection from the “Dona Alicia” had already been carried out. An agreement was later reached, approved by the court on November 29, 1961, for the readmission of the laid-off “Dona Alicia” crew. However, on August 14, 1962, NDC repossessed and resumed operation of the vessels. The CIR trial judge rendered a decision on May 13, 1964, which, among other things, held NDC solely liable for the back wages of the ejected “Dona Alicia” crew and exonerated LISTCO, reasoning that the layoff occurred before LISTCO was subject to the June 30 restraining order. On September 2, 1965, the CIR en banc modified this decision, holding NDC and LISTCO solidarity liable for the back wages. The en banc court also increased the allowable accumulated vacation and sick leaves with pay from 5 to 10 months pursuant to Republic Act 1081, and ordered the case reopened to determine the merits of the crew’s demand for gratuity pay, having been informed of a resale of the vessels.

ISSUE

1. Whether the CIR had jurisdiction over LISTCO.
2. Whether the CIR’s May 3, 1961 return-to-work and non-dismissal order was binding on LISTCO.
3. Whether LISTCO could be compelled to retain the services of the original crew.
4. Whether the CIR en banc correctly held LISTCO solidarity liable with NDC for the back wages of the ejected “Dona Alicia” crew.
5. Whether the CIR correctly ordered the reopening of the case to receive evidence on the demand for gratuity pay.

RULING

1. Yes, the CIR had jurisdiction over LISTCO. As a certified case, the CIR, in the exercise of its arbitration powers, had authority to direct the inclusion of indispensable parties to make its jurisdiction effective. LISTCO was properly impleaded as an indispensable party on April 29, 1961, as the sale of the vessels meant no final determination could be had without it.
2. Yes, the May 3, 1961 order was binding on LISTCO. The order was directed at the “management,” and by the time LISTCO was impleaded as an indispensable party on April 29, 1961, it was charged with knowledge of all subsequent orders issued in the case, including the May 3 order. LISTCO, having been brought into the case, was bound to obey the court’s directives.
3. No, LISTCO could not be compelled to retain the original crew. The CIR did not order such retention. The issue was the liability for back wages arising from the illegal dismissal that violated the CIR’s order.
4. Yes, the CIR en banc correctly held LISTCO solidarity liable. LISTCO, as an indispensable party bound by the May 3, 1961 order prohibiting dismissals without court authority, acted in defiance of that order when it ejected the crew on June 21, 1961. Its claim of good faith was untenable. NDC was also liable for failing to secure the crew’s retention in the deed of sale despite LISTCO’s requests. Both were responsible for the illegal dismissal.
5. Yes, the CIR correctly ordered the reopening. While a gratuity is generally discretionary, it may become part of regular compensation if granted long and regularly. To determine if such conditions existed, it was proper to reopen the case for the reception of evidence on this demand.
The resolution of the CIR en banc dated September 2, 1965, was affirmed.