Liberation Steamship Co. v. Court of Industrial Relations
REITERATIONFacts
1. The Antecedents: The underlying dispute originated from the sale of three vessels, the M/S "Dona Alicia," "Dona Nati," and "Dona Aurora," by the National Development Company (NDC) to Liberation Steamship Co., Inc. (LISTCO). The unlicensed crew members of these vessels, represented by the Philippine Maritime Industrial Union (PMIU), sought assurances of continued employment from both the seller and the purchaser. When the deed of sale did not include provisions for their retention, the crew members initiated a strike on April 15, 1961. 2. Procedural History: The labor dispute was certified to the Court of Industrial Relations (CIR) by the President on April 25, 1961. The CIR initially ordered LISTCO, as the new owner, to be summoned as an indispensable party. Subsequently, the CIR issued a return-to-work order on May 3, 1961, directing strikers to return and management to rehire them under previous terms, while prohibiting dismissals without court authority. LISTCO proceeded to eject the crew of the M/S "Dona Alicia" on June 21, 1961, leading to a restraining order against further ejections for the other two vessels. The crew members sought various payments, including gratuity, strike pay, and commutation of leaves. An agreement for the reinstatement of some crew members was approved on November 29, 1961. NDC reacquired the vessels on August 14, 1962. The CIR's trial judge issued a decision on May 13, 1964, denying some claims, granting others, and holding NDC responsible for the ejection of the "Dona Alicia" crew. The CIR en banc, on September 2, 1965, modified this decision, holding LISTCO jointly and severally liable with NDC for back wages and increasing the allowable leave credits, while also ordering the case reopened for gratuity claims. 3. The Petition: Both LISTCO and NDC filed separate petitions for review. LISTCO challenged the CIR en banc's ruling holding it jointly and severally liable for back wages, arguing lack of jurisdiction, that the restraining order did not apply to it, and that it could not be compelled to retain the original crew. NDC contested the legality of the strike and strike-duration pay, its liability for reinstatement and back wages, the CIR's jurisdiction over vessel officers, the entitlement to accumulated leaves, and the reopening of the case for gratuity claims. The Supreme Court affirmed the resolution, finding LISTCO liable due to its indispensable party status and knowledge of the restraining order, and upholding the CIR's findings on leave credits and the reopening for gratuity claims.
Issue(s)
Whether the Court of Industrial Relations (CIR) acquired jurisdiction over LISTCO despite it not being named in the presidential certification. Whether LISTCO and NDC can be held solidarily liable for back wages for the ejection of the crew in violation of a 'no-dismissal' order. Whether the crew members are entitled to the accumulation of sick and vacation leaves despite the absence of such provisions in the collective bargaining agreement. Whether the reopening of the case for the determination of gratuity pay was proper.
Ruling
The Supreme Court affirmed the resolution of the Court of Industrial Relations en banc, holding LISTCO and NDC solidarily liable for the back wages of the ejected crew members of the M/S "Dona Alicia". The Court upheld the CIR's jurisdiction over LISTCO as an indispensable party and found LISTCO liable for damages due to its disregard of the return-to-work order, despite not being an original party to the certified dispute. The claims for gratuity pay were ordered reopened for further determination.
Ratio Decidendi
On Issue 1: The Court held that the Court of Industrial Relations (CIR) did not lack jurisdiction over Liberation Steamship Co., Inc. (LISTCO) simply because it was not named in the original presidential certification. Under Section 10 of Republic Act No. 875, the court's jurisdiction is triggered by the referral of an industrial dispute, not by the specific nomenclature used in the certification. The court, in the exercise of its arbitration powers under Commonwealth Act No. 103, has the authority to implead any party whose presence is necessary for a final determination of the case. Thus, when LISTCO acquired the vessels during the pendency of the dispute, it became an indispensable party. The names in the presidential directive are merely descriptive of the disputants, and the transfer of ownership made LISTCO the actual employer in contemplation of law. On Issue 2: The Court affirmed the solidary liability of the National Development Company (NDC) and LISTCO for the back wages of the ejected crew members of the M/S 'Dona Alicia.' Although the May 3, 1961 restraining order specifically mentioned 'the management of the National Development Company,' LISTCO had already been impleaded as an indispensable party and had actual knowledge of the injunction against unauthorized dismissals. By proceeding with the ejection of the crew on June 21, 1961, LISTCO acted in bad faith and in defiance of the court’s order. Concurrently, the NDC actively cooperated in this violation by issuing a letter through its General Manager enjoining the crew to debark and turn over management to LISTCO. This concerted action between the seller and the purchaser to circumvent the 'return-to-work' order justifies the imposition of solidary liability. On Issue 3: Regarding the accumulation of sick and vacation leaves, the Court ruled that the petitioning crew members were entitled to up to 10 months of leave under Republic Act No. 1081. The National Development Company (NDC), being a government-owned and controlled corporation, is subject to the provisions of the Administrative Code and Government Enterprises Counsel Circular No. 4. The Court emphasized the legal principle that existing laws are read into every contract unless they are clearly and validly excluded by the parties. Since the collective bargaining agreement was silent on leave credits, it is rational to assume that the parties intended for the statutory rules to apply rather than to waive such benefits. On Issue 4: The Court upheld the reopening of the case to determine the merits of the demand for gratuity pay following the resale of the vessels. While the grant of a gratuity or bonus is normally discretionary on the part of the employer, it can be regarded as part of regular compensation if there has been a long and regular history of concession. The trial judge's initial denial of the claim as 'moot and academic' based on the NDC's temporary reacquisition of the vessels was premature given the subsequent change in circumstances. By remanding the case, the Court of Industrial Relations (CIR) allows for the reception of evidence to establish whether such gratuity had matured into a demandable right through established practice.
Main Doctrine
Both the seller (NDC) and the purchaser (LISTCO) of vessels can be held solidarily liable for back wages of ejected crew members when their actions, in concert, disregard a return-to-work order from the Court of Industrial Relations, even if the purchaser was not an original party to the certified dispute but was later impleaded as an indispensable party.