596 SUPREME COURT REPORTS ANNOTATED

Asuncion Bros. & Co., Inc. vs. Court oflndustrial Relations

*
No. L-39514. July 27,1988.

ASUNCION BROS. & CO., INC., and JOSE ASUNCION,

petitioners, vs. COURT OFINDUSTRIAL RELATIONS,
JUAN B. CEPE, et al., respondents.

Labor Law; Unfair Labor Practice; Date of the Effectivity of

Labor Code was on Nouember 1, 1974.·The date of effectivity of
the Code, fixed at November 1,1974, this was reaffirmed by
Presidential Decree No. 570-A. There can thus be no doubt that the
Labor Code still had jurisdiction of the case at the time it rendered
its judgment on June 27,1974.
Same; Same; Refutation by employers.·The charge of unfair
labor practice against petitioners was refuted by failure of the Court
of Industrial Relations to consider: The evidentiary foundation for

________________

33 Gimeno v. CA, No. L-22747, Dec. 29, 1977, 80 SCRA 623; Vallarta v. IAC,
No. L-74957, June 30,1987,151 SCRA 679.

* FIRST DIVISION.

597

VOL. 163, JULY 27, 1988 597

Asuncion Bros. & Co., Inc. vs. Court oflndustrial Relations

the dismissal of complainants from employment and that

complainants disregarded the "grievance procedure" prescribed in
their collective bargaining agreement with petitioners dated
February 19,1969.
Same; Same; Unfair Labor Pmctice by Union.·Disregard by
the complainant employees and their union of the "grievance
procedure" prescribed in their collective bargaining agreement with
the employer, dated February 19, 1969, which is the law between
the parties, is a violation of the duty to bargain collectively,
constituting "unfair labor practice" on the part of the union.

PETITION for certiorari, to review the judgment of the

Court of Industrial Relations.

The facts are stated in the opinion of the Court.

Enrique O. Chan for petitioners.
Basilio A. Carpio for private respondents.

NARVASA, J.:

In the case at bar, the defunct Court of Industrial Relations

is shown to have sanctioned the disregard of the grievance
procedure set forth in a collective bargaining agreement,
and to have failed to take account of material evidence. It
thereby incurred in serious error, impelling reversal of its
decision.
The petitioners, Asuncion Bros. & Co., Inc. and Jose
Asuncion were charged with unfair labor practice in the
C.I.R. by the Court Prosecutor, on complaint of certain of
their employees and the latter's labor organization, the
Asuncion Bros. Woodcraft Employees and Laborers Union.
The complaint substantially alleged that because the
individual complainants had organized a labor organization
which later affiliated itself with the Philippine Transport
and General Workers Organization (PTGWO), the
company, thru its general manager, Jose Asuncion, had
made the members work on rotation basis and eventually
dismissed them on various dates.
In their answer, the petitioners denied the accusation;
they claimed that the rotation of workers was resorted to
on account of circumstances beyond their control, not the
least of which was the "systematic" acts of the
complainants' absenting themselves at will, reporting late,
and "moonlighting" with other firms; and they set up
certain affirmative defenses including

598

598 SUPREME COURT REPORTS ANNOTATED

 Asuncion Bros. & Co., Inc. vs. Court of Industrial
Relations

the failure of the complaint to state

1
a cause of action and
the Court's lack of jurisdiction. Evidence was thereafter
presented by the parties before a Hearing Examiner 2
in
accordance with the procedure obtaining in the CIR. The
Hearing Examiner3 found petitioners guilty as charged and
recommended that ·

"x x since respondent business firm x x is only a small and growing

business entity which may not be in a position to immediately
implement a return to work order of complainants, we respectfully
recommend that reinstatement be gradual to minimize the idea of
economic dislocation by integrating a labor force that it cannot
possibly absorb. This may be arranged by, say, two (2) complainants
every month, depending on the need and exigency of the business.
And considering further the precarious situation that may ensue
because of anticipated award of huge amount of damages, which
will eat up the assets of the respondents business and since some of
the complainants have found casual or temporary employment
elsewhere, the amount of back-wages be limited to a period of six (6)
months computed at the rate of the employees were enjoying at the
time of their dismissal. x x"

This recomrnendation, and the factual and legal

conclusions of the Hearing Examiner on which it was
founded, were adopted by the C.I.R. in its decision dated
June 27, 1974. The C.I.R. thereafter 4
also denied the
petitioners' motion for reconsideration.
The case is now before this Court on an appeal by
certiorari seasonably taken by the petitioners. They seek to
make two basic points: (1) the C.I.R. lost jurisdiction of the
case on promulgation of the Labor Code (PD 442) on May
1,1974, and (2) the judgment is not reasonably supported
by the evidence.
The first point is grounded on Article 338 of the Code
providing that "All cases pending before the Court of
Industrial Relations and the National Labor Relations
Commission established under Presidential Decree No. 21
at the time of the

_________________

1 Rollo, pp. 65-66.

2 Id.,p. 72.
 3 Id., p. 75-76.
4 By Order dated October 10,1974.

599

VOL. 163, JULY 27, 1988 599

Asuncion Bros. & Co., Inc. vs. Court oflndustrial Relations

passage of this Code should be transferred to and processed

by the National Labor Relations Commission created under
this Code in accordance with the procedure laid down
herein." The petitioners set the passage of the Code at May
1, 1974 and argue that the C.I.R. had already lost
jurisdiction by the time it rendered judgment on June 27,
1974. The point is not well taken.
While it is true that the Labor Code5 was promulgated on
May 1, 1974, it expressly provided that its effectivity
would commence six months thereafter, or on November 1,
1974. Moreover, Artide 338 relied upon by the petitioners
was amended by PD 570-A by inter alia changing the work
"passage" to "effectivity."The amendment made the
provision read as follows:

"x x All cases pending before the Court of Industrial &elations and
the National Labor Relations Commission established under
Presidential Decree No. 21 on the date of effectivity of this Code
shall be transferred to and processed by the corresponding labor
relations division of the regional labor office, the Bureau of Labor
Relations or the National Labor Relations Commission created
under this Code having cognizance of the same in accordance with
the procedure laid down herein, and its implementing rules and
regulations. x x"

And the tfate of effectivity of the Code, fixed at November6

1, 1974, as above stated, was reaffirmed by PD 570-A.
There can thus be no doubt that the Labor Court still had
jurisdiction of the case at the time it rendered its judgment
on June 27,1974.
As the Court sees it, the error of the Labor Court lies in
its omission to take account of relevant evidence on record
and the quite material fact that the employees and their
union had completely disregard the grievance procedure set
forth in their collective bargaining agreement with the
petitioner company.
The Court a quo ignored the evidence given by two
impartial witnesses: Gilbert Tumlos, personnel manager of
Permaline, and Eustaquio Kerr, manager of Kawayan
Woodcraft, who both testified to the employment of a
majority of the complain-

________________

5 Sec. 2.
6 Sec. 71.

600

600 SUPREME COURT REPORTS ANNOTATED

Asuncion Bros. & Co., Inc. vs. Court oflndustrial Relations
7
ants in their respective firms. Their sworn declarations
are fully corroborative and8 confirmatory of the testimony of
the petitioners' witnesses, as well as the documents listing
the names of those workers whose employment had been
terminated, the specific infractions of company rules
constituting the respective causes therefor,
9
and the dates of
the commission of said infractions. No reason is given by
the Court for refiising to take account of suchwnaterial
proofs, and none in truth appears on record to justify it.
The evidence satisfactorily establishes the petitioners'
claim that their woodcraft plant "operates under an
integrated assembly line system ([where] assignments [are
integrated: e.g.] pattern, cutting, carving, lathe machine,
disc sanding, spindle sanding, di-um sanding, varnishing
and finishing, packing). Failure of one unit or set of
workers to perform in time its assigned functions hampers
the whole operation and will cause stoppage of work, to the
damage and prejudice 10
of the enterprise, a small and
budding one at that." The record thus contains adequate
evidentiary foundation for the dismissal of the
complainants from employment, a circumstance that at the
time constitutes persuasive refutation of the theory that
said complainants were fired simply because of their union
activities.
Further disclosed by the record is the disregard by the
complainant employees and their union of the grievance
procedure prescribed in their collective bargaining 11
agreement with the employer, dated February 19,1969.
Article XIII of that agreement states that·
"In the event that grievances or differences arise between the Union
and the Company or between a worker or group of workers on the
one hand and the Company on the other, as regards the application,
implementation of this agreement, or other differences which any of
the parties desire to resolve, the Company and the Union shall

________________

7 Rollo, p. 71; TSN, Aug. 30,1972, pp. 3-4; TSN, Nov. 25,1972, p. 6.
8 Id., pp. 70-71; Exhibits "22" and "23", and "41".
9 Id., pp. 13-16, 70; Exhibits "2" to "29".
10 Rollo, pp. 11-12; Petition, pp. 6-7.
11 ld., pp. 5-6; Petitipn, pp. 10-11.

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VOL. 163, JULY 27, 1988 601

Asuncion Bros. & Co., Inc. vs. Court oflndustrial Relations

take immediate steps to settle the difference in the following

manner:

1. A grievance committee composed of four (4) members shall

be created, two (2) of which shall come from the Company
and the other two (2) x x from the Union. Any grievance
shall be resolved by the said committee within two (2) days
after the grievance is submitted to them.
2. In case of disagreement, parties agree to submit the
differences to the Bureau of Labor Relations, Department of
Labor, for resolution.
3. If it cannot be resolved by the Bureau of Labor Relations,
then the case may be submitted to an arbitrator agreed
upon by both the Company and the Union whose decision
shall be fmal and unappealable.
4. If however the parties cannot agree to arbitration, then the
same shall be considered as a labor dispute."

No reason whatever is given by the Union and the other

complainants for ignoring this procedure for the settlement
of their grievance relating to their work rotation which, as
petitioners have pointed out, could have been 12
"easily
threshed out in the Grievance Committee," or their
subsequent dismissal from their employment. The
collective bargaining13 agreement was, of course, the law
between the parties, and the refusal to comply therewith
 is a violation of the duty to bargain collectively, 14
constituting unfair labor practice on the part of a union. It
thus seems that it was not the petitioners, but the
employees and their union, against whom the charge of
unfair labor practice might properly have been laid in this
case. In any event, there is nothing in the record
warranting condemnation of the petitioners for unfair labor
practice in having terminated the employment of the
complainants, such termination of work being, on the
contrary, justified by the material circumstances.
WHEREFORE, the judgment of the Court a quo is
REVERSED AND SET ASIDE and another entered,
absolving the

_________________

12 Id., p. 17; Petition, p. 22.

13 Kapisanan ng mga Manggagawa sa La Suerte-FOITAF v. Noriel, 77
SCRA-414.
14 NDC v. NDC Employees and Workers' Union, 66 SCRA 181.

602

602 SUPREME COURT REPORTS ANNOTATED

People vs. Sato

petitioners from any unfair labor practice or any liability to

the private respondents. No costs.

Cruz, Gancayco, Aquino and Medialdea, JJ., concur.

Judgment reversed and set aside.

Note.·Regular Courts have no jurisdiction over labor

dispute. (Alo vs. Rovira, 138 SCRA 261.)

··oOo··

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