Mercury Drug v. Court of Industrial Relations
REITERATIONFacts
The Antecedents: Nardo Dayao was employed by Mercury Drug Co., Inc. (Mercury Drug) and its manager, Mariano Que, from February 13, 1956, holding various positions until he became assistant chief checker. Days before April 10, 1961, Dayao urged petitioners to pay overtime pay and criticized the employees' association for failing to protect employee welfare. He also campaigned among co-employees to organize another labor union. On April 10, 1961, Mariano Que allegedly called Dayao, told him to resign, and persuaded him to accept P562.50 as termination pay and sign a clearance stating he had no claims against the company. Dayao claimed he was forced to sign and accept the money due to Que's threat that he would be dismissed regardless of signing. Procedural History: On April 25, 1963, Dayao filed a complaint for unfair labor practice (ULP) against Mercury Drug and Que, alleging dismissal due to his union activities. Petitioners' defense was that Dayao was separated for cause due to creating trouble with another employee and that he received compensation pay, relieving them of further claims. Laches was not initially invoked. The Court of Industrial Relations (CIR) rendered a decision on January 17, 1964, finding petitioners guilty of ULP and ordering reinstatement with back wages. A motion for reconsideration was denied on February 25, 1964. Petitioners filed a petition for review with the Supreme Court on August 28, 1964, raising laches and estoppel as defenses for the first time. The Petition: Petitioners sought reversal of the CIR decision and order, arguing that Dayao's acceptance of separation pay and signing of a clearance barred his ULP charge, and that the charge was filed beyond a reasonable time (laches).
Issue(s)
Whether the acceptance of separation pay and signing of a clearance by Nardo Dayao bars his claim for unfair labor practice. Whether the filing of the unfair labor practice charge by Nardo Dayao was barred by laches. Whether Nardo Dayao was dismissed from employment due to his union activities, constituting unfair labor practice. What is the proper award for back wages and reinstatement.
Ruling
The petition is dismissed. Petitioners are directed to pay private respondent Nardo Dayao back wages equivalent to one year, eleven months, and fifteen days, and to reinstate him after certification of his physical fitness by a government physician. Costs are to be paid by petitioners.
Ratio Decidendi
On the issue of acceptance of separation pay and signing of clearance barring the ULP charge: The Court held that the acceptance of separation pay and signing of a clearance by an employee does not divest them of the right to prosecute an employer for unfair labor practice acts. Such waivers of labor rights are considered contrary to public policy and therefore null and void, especially when the underlying cause of the employee's actions was a demand for compensation under the Eight-Hour Labor Law. The principle of estoppel or laches is unavailing in such circumstances. The Court cited the principle that an employee, often in a weaker bargaining position, may accept benefits out of necessity, but this does not preclude them from pursuing legitimate claims. The Court emphasized that acceptance of termination pay does not divest a laborer of the right to prosecute for unfair labor practice acts, nor does signing a clearance paper under duress or undue pressure. On the issue of laches: The Court found that laches should have been expressly alleged as a defense in the answer, and its failure to do so in the initial pleadings constituted a renunciation of the defense. Furthermore, the lapse of two years and fifteen days from separation to the filing of the ULP charge was not considered an unreasonable period under the circumstances, especially considering the applicable prescriptive periods under the Civil Code for actions based on injury to rights (four years) or other actions not specifically fixed (five years). The Court also highlighted the constitutional mandate to afford protection to labor and promote social justice, which would be undermined by sustaining the petitioners' position based on laches. On whether Nardo Dayao was dismissed due to union activities: The Court affirmed the findings of the Court of Industrial Relations that Dayao was dismissed because of his union activities, constituting unfair labor practice. The Court found the petitioners' defense of dismissal due to a quarrel with another employee to be unsubstantiated by clear and positive proof. The testimony of respondent Mariano Que was based on surmise and belief, and the testimonies of other company officials were hearsay, derived from Que. Crucially, the alleged protagonist in the quarrel, Apolinario Ranin, was not presented as a witness, which militated against the petitioners' claim. The Court also reasoned that even if a quarrel occurred outside company premises and time, it would not be a sufficient basis for dismissal, especially given Dayao's long tenure and satisfactory service record. The Court found that Dayao was coerced into resigning and accepting termination pay due to threats of dismissal, which was a direct result of his union organizing activities. On the award of back wages and reinstatement: The Court directed the payment of back wages equivalent to one year, eleven months, and fifteen days. This period was determined by deducting the delay in filing the ULP charge from the applicable prescriptive period, to balance the employee's right to claim and the employer's potential burden. The Court also ordered reinstatement upon certification of physical fitness, noting that the delay in the resolution of the case was not attributable to the parties. The Court adopted a new formula for back wages, fixing a specific amount without further qualifications or deductions to expedite execution and avoid protracted hearings on earnings during the period of dismissal.
Main Doctrine
Acceptance of separation pay and signing of a clearance does not divest a laborer of the right to prosecute an employer for unfair labor practice acts, as such waiver of rights contravenes public policy. Laches or estoppel must be expressly alleged as a defense in the answer to be considered.