G.R. No. L-30964 May 9, 1988
Sy Chie Junk Shop and Sy Chie Seng, petitioners, vs. Federacion Obrera de la Industria y Otros Trabajadores de Filipinas (FOITAF), Ismael Casidsid, Bienvenido Javier, Jose Obado, Jose Macatangay, Rodolfo Rubio and The Court of Industrial Relations, respondents.

FACTS

Petitioner Sy Chie Seng owned and operated Sy Chie Junk Shop in Binondo, Manila. Private respondents were his employees until their dismissal. They filed an unfair labor practice case before the Court of Industrial Relations, alleging their termination was due to their union affiliation, that the petitioner interfered with their right to self-organization, and refused to bargain in good faith. The petitioners denied the charges, asserting the business closure and consequent dismissals were due to the landlord’s repeated demands to vacate the leased premises, constituting a justifiable cause for termination.
The Court of Industrial Relations ruled in favor of the employees, finding the petitioners guilty of unfair labor practices. It ordered the petitioners to cease and desist from such practices, bargain in good faith with the union, and reinstate the complaining workers with full backwages. The petitioners’ motion for reconsideration was denied, prompting this petition for review.

ISSUE

The core issue is whether the closure of the junk shop business was a valid and non-discriminatory cause for the dismissal of the employees, or whether it constituted an unfair labor practice motivated by the employees’ union activities.

RULING

The Supreme Court dismissed the petition and affirmed the Industrial Court’s decision, with modification regarding the remedy. The Court sustained the factual findings that the closure was a pretext to bust the union. The records showed the union presented its labor demands in early February 1967, and the petitioner had urged employees to disaffiliate from the union. The decision to close the business was made in late February 1967, only after these union activities, despite the landlord’s demands to vacate having been received months earlier. This timing revealed a clear motivation to interfere with the right to self-organization.
The petitioners’ new argument on appeal—that the Nationalization of Retail Trade Act prohibited them, as aliens, from transferring the business—was unavailing. This was raised for the first time and, regardless, the law restricts establishing new business sites, not relocating an existing one. The closure was therefore not justified. However, as reinstatement was impossible due to the business closure, the Court modified the award. The petitioners were ordered to pay the employees an amount equivalent to three years of backwages plus separation pay in lieu of reinstatement, consistent with prevailing jurisprudence on compensating illegally dismissed workers when reinstatement is no longer feasible.