G.R. No. L-6491 October 20, 1954
LAKAS NG PAGKAKAISA SA PETER PAUL, petitioner, vs. COURT OF INDUSTRIAL RELATIONS and PETER PAUL (PHILIPPINES) CORPORATION, respondents.

FACTS

The petitioner labor union sought review of an order from the Court of Industrial Relations (CIR) dismissing its petition for the reinstatement of 58 members laid off by the respondent corporation. The lay-off was authorized by the CIR in prior cases due to mechanical improvements and decreased demand for products. The CIR later modified its order, reducing the number authorized for lay-off to 55. The union’s petition for reinstatement was dismissed after trial. The union appealed, arguing that the CIR abused its discretion by ignoring evidence that the corporation hired more “extras” and “helpers” after the lay-off, indicating a continued labor need, and that the CIR erred in holding that Article 302 of the Code of Commerce (requiring payment of one month’s salary if dismissed without a month’s notice) was repealed by the New Civil Code. The CIR found the hiring of extras was an emergency measure due to increased absences of regular employees. However, the record established that after the lay-off, the company adopted a practice of allowing regular laborers to select “helpers” (not on the company payroll) to assist in their work, with the laborers sharing their pay with these helpers.

ISSUE

1. Whether the Court of Industrial Relations abused its discretion in dismissing the petition for reinstatement by failing to consider evidence regarding the hiring of “helpers” after the lay-off.
2. Whether Article 302 of the Code of Commerce, regarding payment of one month’s salary upon dismissal without notice, was repealed by the New Civil Code, and whether the laid-off employees were entitled to such pay.

RULING

1. Yes, the Court of Industrial Relations abused its discretion. The failure to consider the established fact that the company permitted regular laborers to use “helpers” after the lay-off was an infringement of the petitioner’s cardinal primary rights. This practice, which effectively increased the labor force, violated the condition in the CIR’s lay-off order that laid-off workers would have first priority for reemployment if more workers were needed due to increased production. The excuse that helpers were not on the company payroll was invalid, as it allowed the employer to circumvent the reemployment condition.
2. The Court found no practical need to decide whether Article 302 of the Code of Commerce was repealed. For the 55 employees laid off on September 3, 1950, they were given one month’s notice, so Article 302 would not entitle them to severance pay anyway. However, for the three employees (Antero Barrion, Florentino Bunga, and Norberto Hernandez) dismissed on August 3, 1950 without one month’s notice, the CIR erred in denying their claim for separation pay based on a finding of serious want of respect. Their refusal to report to the office, likely due to suspicion they were being laid off (as their names were on a posted lay-off notice), did not constitute such serious disrespect as to justify dismissal without notice or pay.
The Court reversed the CIR orders and directed the respondent corporation: (1) to pay Barrion, Bunga, and Hernandez severance pay equivalent to thirty days’ wages; (2) to reinstate the 58 laborers laid off on September 3, 1950, without back wages; and (3) to pay the costs.