Macleod v. Progressive Federation of Labor
REITERATIONFacts
1. The Antecedents: The underlying dispute arose when Macleod & Company of the Philippines (petitioner) notified thirty-eight members of the outside gang, employed by the Progressive Federation of Labor (respondent union), of their dismissal effective June 1, 1952. This notice followed the union's submission of grievances and demands for improved labor conditions on April 18, 1952. The company's action was perceived by the union as a retaliatory measure and a lockout, leading to a strike declared by the union on May 22, 1952. 2. Procedural History: The Progressive Federation of Labor filed a petition with the Court of Industrial Relations (CIR) on May 28, 1952, seeking an injunction against the company's planned dismissals. The company opposed the petition, questioning the union's legitimacy as a bargaining agency and asserting the legality of its dismissal notices. After conciliation efforts failed, the CIR heard the case. The CIR ultimately ordered the petitioner to reinstate the thirty-eight members of the outside gang with backwages from the date of the strike to their reinstatement, a decision now under review by this Court. 3. The Petition: This case comes before the Supreme Court via a petition for review of the CIR's decision. The petitioner raises two main issues: (1) whether an employer can terminate employee services with only 30 days' notice, irrespective of motive, and (2) whether strikers are entitled to wages during a strike. The petitioner argues for the right to terminate based on Article 302 of the Code of Commerce and prior case law. The respondent union contends that the dismissals were illegal and improper, constituting a lockout, and that the strike was justified. The petition seeks to overturn the CIR's order for reinstatement and backwages.
Issue(s)
Whether an employer may terminate the services of employees upon 30 days' notice of termination, regardless of motives. Whether strikers are entitled to their wages during the strike.
Ruling
The petition is denied. The Court affirmed the decision of the Court of Industrial Relations ordering the reinstatement of the thirty-eight members of the outside gang with payment of their wages from the date of the strike to the date of their reinstatement, subject to deduction for any earnings they may have obtained during that period.
Ratio Decidendi
On the issue of termination of services: The Court held that Macleod's contention that it could terminate the services of the thirty-eight laborers by giving a 30-day notice, invoking Article 302 of the Code of Commerce and cited cases, could not be sustained. This is because Article 302 of the Code of Commerce has been repealed by the new Civil Code, and the doctrine in the invoked cases, being an elaboration of said article, is likewise inapplicable. Furthermore, after the approval of the new Civil Code, the relations between labor and capital are impressed with public interest, requiring considerations of moral and social character to promote industrial peace, in keeping with the spirit of social justice. The Court found Macleod's action of terminating the services unjustified and improper. It was illegal because it contravened Section 19 of Commonwealth Act No. 103, which prohibits employers from laying off laborers when a labor union presents a petition regarding matters likely to cause a strike. It was improper because Macleod practically locked out its employees, forcing them to strike. The union was therefore justified in resorting to a strike to protect its interests. The company's action of ignoring the union's grievances and demands, and proceeding with the termination despite advice that Article 302 was repealed, demonstrated a disregard for legal and proper procedures. The Court emphasized that the company's actions were not sanctioned by law. On the issue of wages during the strike: The general rule that strikers are not entitled to wages for days they did not work, based on the principle of "a fair day's wage for a fair day's labor," does not apply in this case. The Court found that the thirty-eight laborers did not voluntarily strike but were practically locked out. They were notified of their impending termination, and despite their efforts to compromise, the company maintained a stern attitude, leaving them no alternative but to walk out. Moreover, the company indirectly forced them to join another labor union, the Davao Stevedore Mutual Benefit Association, as a condition for readmission, which the Court considered an unfair labor practice aimed at busting the union. Since the walkout was not voluntary but a consequence of the company's actions, it was deemed fair that they be reinstated with backwages. However, to mitigate the company's liability and adhere to the principle of no unjust enrichment, the Court ruled that any earnings the thirty-eight laborers may have obtained during the more than two years they were out of the company's service could be deducted from their backwages.
Main Doctrine
An employer cannot terminate the services of employees by giving a 30-day notice when such action is taken in retaliation to the filing of grievances by the labor union, as this constitutes an illegal and improper act, tantamount to a lockout, and contravenes provisions prohibiting lay-offs during the pendency of labor disputes. Strikers who are practically locked out are entitled to their wages during the strike, subject to deduction for earnings elsewhere.