National Labor Union v. Court of Industrial Relations
REITERATIONFacts
The Antecedents: The underlying dispute concerns allegations of unfair labor practice by Everlasting Manufacturing, its proprietor Ang Wo Long, and general manager Benito S. Estanislao, against twenty-one members of the National Labor Union. The union alleged that the company, following the execution of a collective bargaining agreement on May 3, 1963, dismissed all its members on July 8, 1963, under the pretext of closing the business. The company continued operations with newly hired workers, and the dismissed employees were allegedly unable to find substantial employment elsewhere. The core of the dispute revolves around whether the sale of the business from Estanislao to Ang Wo Long prior to the dismissal absolved the new owner of responsibility for the alleged unfair labor practices and the breach of the collective bargaining agreement. Procedural History: A complaint for unfair labor practice was filed by the National Labor Union on August 10, 1963, against Everlasting Manufacturing and Ang Wo Long. After several hearings and motions, including the inclusion of Benito Estanislao as a party respondent, the Court of Industrial Relations (CIR) issued a decision on March 22, 1966, finding both Everlasting Manufacturing and Ang Wo Long guilty of unfair labor practice and ordering their reinstatement with back wages. However, a motion for reconsideration led to a resolution on November 7, 1966, reopening the case to determine Estanislao's liability. Subsequently, on September 14, 1968, the CIR issued an order finding Benito Estanislao guilty and ordering him to pay backwages, but dismissing the case against Ang Wo Long. This order was affirmed by a Resolution en banc on March 7, 1969, denying the union's motion for reconsideration. The Petition: The National Labor Union filed this petition for review, seeking to set aside the CIR's September 14, 1968 order and March 7, 1969 resolution, and to reinstate the original March 22, 1966 decision that held Ang Wo Long liable. The petitioner argued that the later findings and conclusions of the CIR were not supported by substantial evidence, unlike the original decision. The petition contends that the respondent court erred in completely reversing its prior ruling, particularly in absolving Ang Wo Long despite evidence suggesting his knowledge of the collective bargaining agreement and the union's activities at the time of his acquisition of the business. The union seeks joint and several liability of Ang Wo Long and Benito Estanislao for the unfair labor practices committed.
Issue(s)
Whether the respondent court was justified in completely overturning its March 22, 1966 ruling on the liability of Ang Wo Long under the May 3, 1963 collective bargaining contract; and whether Ang Wo Long is liable for backwages and reinstatement. Whether Ang Wo Long, as the new owner, is jointly and severally liable with Benito S. Estanislao for unfair labor practices.
Ruling
The petition is GRANTED. The questioned Order and Resolution of the respondent court are SET ASIDE. Ang Wo Long and Benito S. Estanislao are ORDERED jointly and severally to pay the complaining employees three (3) years backwages without deduction or qualification. Ang Wo Long is further ORDERED to reinstate the complaining employees, requiring certifications of their physical fitness. Ang Wo Long and Benito S. Estanislao shall pay the costs.
Ratio Decidendi
On the liability of Ang Wo Long and the award of backwages and reinstatement: The Supreme Court found that the respondent court's modification of its decision, absolving Ang Wo Long due to a supposed lack of evidence showing his knowledge of the CBA and the union, was irrational and contrary to reason and common sense. The Court held that knowledge of the labor situation, union existence, CBA negotiations, and employee efforts could be determined from surrounding facts and circumstances. It was deemed irrational to assume Ang Wo Long bought the business without inquiring into its labor-management situation, and that his dismissal of all union members and replacement with new employees was anything other than an attempt to rid the firm of unwanted union activity. The Court found substantial evidence to sustain a finding of Ang Wo Long's knowledge of the CBA negotiations and the resulting CBA, and consequently, of unfair labor practice on his part. The Court noted that Ang Wo Long performed acts indicative of normal care and caution in purchasing the firm, and the same care should have extended to the sensitive aspect of labor relations. The Court agreed with the initial findings that Ang Wo Long dismissed the complainants to break the union and do away with the existing CBA, which was obtained after a strike and negotiations. The Court also found it mystifying that full responsibility was placed on Benito Estanislao, who had conveniently disappeared, while Ang Wo Long, who could provide affirmative relief, was absolved. Considering practical considerations and the length of time elapsed, the Court granted three (3) years backwages without deduction or qualification. Following similar considerations and in fairness to Ang Wo Long, reinstatement was ordered based on the employees' physical fitness for their respective jobs from which they were illegally ousted. On the joint and several liability for unfair labor practices: The concatenation of circumstances indicated the participation of both Estanislao and Ang in the unfair labor practice, making Ang Wo Long jointly and severally liable.
Main Doctrine
A new owner of a business establishment is jointly and severally liable with the previous owner for unfair labor practices committed, particularly the dismissal of union members to bust the union and avoid the collective bargaining agreement, if there is substantial evidence indicating the new owner's knowledge of the union's existence and the existing collective bargaining agreement, despite claims of ignorance.