G.R. No. L-47653; April 18, 1941
MANILA TRADING & SUPPLY COMPANY, petitioner, vs. PHILIPPINE LABOR UNION, respondent.

FACTS

During the pendency of an industrial dispute before the Court of Industrial Relations (CIR) between Manila Trading & Supply Company (petitioner) and the Philippine Labor Union (respondent), an employee and union member, Felix Alcantara, was dismissed by the company on December 29, 1939, for alleged disorderly conduct. The incident involved laborers in the company’s used car department blowing car horns, ostensibly in celebration of the New Year. The evidence presented before the CIR investigator revealed that this practice had been tolerated by the company for two years prior. It was not clearly established whether Alcantara was among those who blew the horns. Based on the investigator’s report, the CIR found the dismissal without just cause and ordered Alcantara’s reinstatement with back wages. The company’s motion for reconsideration was denied, prompting this petition for certiorari.

ISSUE

1. Whether a CIR decision based on a commissioner’s report without a prior hearing on the report constitutes a deprivation of the right to a “fair and open hearing.”
2. Whether an employer, under Commonwealth Act No. 103 , may discharge an employee at pleasure, provided the discharge is not due to union affiliation or activities.
3. Whether the CIR lost jurisdiction to order reinstatement after the main labor dispute was finally decided.
4. Whether the CIR’s finding that the dismissal was without just cause is supported by evidence.

RULING

1. On the procedural question: The Supreme Court, citing a prior case involving the same parties ( G.R. No. 47486 , Nov. 16, 1940), held that when the CIR refers a case to a commissioner for investigation, report, and recommendation, and the parties are duly represented by counsel and given an opportunity to be heard at such investigation, the requirements of due process and a “fair and open hearing” are satisfied, even if the court does not set the report for a separate hearing before deciding.
2. On the power to discharge: The Court, referencing another prior case involving the same parties, ruled that while an employer cannot be compelled to retain an employee if a justifiable cause for discharge exists, the CIR has the authority, incidental to a pending industrial dispute under Section 19 of Commonwealth Act No. 103 , to determine whether such cause exists. The doctrine of absolute employer prerogative (as suggested in Manila Trading & Supply Co. vs. Zulueta) is not applicable when the CIR finds the dismissal groundless and unjustified. The government has the right to intervene in contractual relations affected with public interest.
3. On jurisdiction over the incidental dispute: The Court held that when an incidental dispute (like an individual dismissal) is submitted to the CIR under Section 19 of Commonwealth Act No. 103 during the pendency of a main labor dispute certified under Section 4, the court retains jurisdiction to decide such incidental dispute even after the final adjudication of the main question. This is because the jurisdiction exercised under Section 19 is an extension of the jurisdiction previously acquired under Section 4.
4. On the factual finding: The Supreme Court found no whimsical abuse of discretion in the CIR’s appreciation of the evidence and its conclusion that the dismissal was without just cause.
DISPOSITIVE:
The order of the Court of Industrial Relations is affirmed, with costs against the petitioner.