Philippine Refining Company Workers' Union vs. Philippine Refining Co.

The Court of Industrial Relations may, under Section 19 of Commonwealth Act No. 103, enjoin a strike or order striking workers to return to work after hearing when public interest so requires or when the dispute cannot, in its opinion, be promptly decided or settled, without offending the constitutional prohibition against involuntary servitude because an employee entering into a contract of employment after the law’s effectivity voluntarily accepts the implied statutory condition that he shall not strike or walk out when so enjoined by the court under those circumstances.

A labor dispute arose between Philippine Refining Company and its workers’ union, resulting in a strike. The case was filed before the Court of Industrial Relations as Case No. 32-V. On September 26, 1946, the court sought to achieve a temporary settlement without immediately reaching the merits. After a series of conferences with both parties, the court concluded that, for the public interest and because the case could not be promptly decided in view of the issues involved, an order directing the striking laborers to return to work was necessary.

• The Initial Labor Dispute and September 26, 1946 Order: Case No. 32-V was pending before the CIR, with the Philippine Refining Company seeking relief against its workers’ union. On September 26, 1946, the CIR conducted a series of conferences with both parties, assisted by an attorney from the Division of Investigation, in an effort to secure a temporary settlement. Finding that the court might not be able to decide the case promptly due to the issues involved and that the public interest required avoiding a protracted stoppage, the CIR ordered the striking laborers to return to work by 7:00 a.m. on September 27, 1946, and directed the company to accept them. The order further enjoined the union, pending final determination of the case, from staging any strike or walkout without first submitting grievances to and obtaining authority from the court, and correspondingly enjoined the company from laying off, dismissing, or hiring new employees without prior court authorization.
• The April 30, 1947 Strike and Contempt Proceeding: On April 30, 1947, the union declared a strike at the company’s Manila plant. The company promptly filed an urgent report with the CIR. On July 24, 1947, the CIR ruled that the strike was contemptuous and illegal, as it violated both the September 26, 1946 injunction and the law. The court authorized the company to hire such striking laborers and new workers as it saw fit, dismissed the union’s counter-petition for contempt against the company, and directed a court attorney to prosecute contempt against the responsible parties.
• Union’s Challenge: The union moved for reconsideration, which was denied twice. It then elevated the matter to the Supreme Court, essentially contending that the CIR lacked jurisdiction to issue the injunction, that Section 19 of Commonwealth Act No. 103 was unconstitutional, and that the July 24, 1947 order was issued without due process.

• Lack of Jurisdiction: Petitioner maintained that the CIR’s injunction order of September 26, 1946 was issued without or in excess of jurisdiction because it did not comply with the requirements of Section 19 of Commonwealth Act No. 103, the sole source of any such authority.
• Constitutional Infirmity: Petitioner argued that the September 26, 1946 order, which served as the basis for the subsequent contempt order, was null and void because it infringed the workers’ constitutional rights and liberties and was repugnant to the constitutional prohibition against involuntary servitude.
• Denial of Due Process: Petitioner contended that the July 24, 1947 order and the subsequent resolutions denying reconsideration were invalid for having been issued without a legal and fair hearing, in violation of the due process clause.

• Validity of the Injunction: Respondent company maintained that the CIR’s order was issued in accordance with Section 19 of Commonwealth Act No. 103 after the required hearing, and that the antistrike injunction was therefore a lawful exercise of the court’s jurisdiction.
• Contempt: Respondent asserted that the April 30, 1947 strike was a deliberate defiance of a valid and subsisting court order, warranting the declaration of contempt and authorization to hire replacement workers to prevent complete disruption of operations.

• Jurisdiction: Whether the Court of Industrial Relations had jurisdiction to enjoin the strike under Section 19 of Commonwealth Act No. 103, despite the union’s claim that the order was not issued in accordance with that section’s requirements.
• Constitutionality of Section 19: Whether Section 19 of Commonwealth Act No. 103 violates the constitutional prohibition against involuntary servitude by compelling employees to work against their will.
• Due Process: Whether the July 24, 1947 order, which declared the strike contemptuous and authorized the hiring of replacements, was issued in violation of procedural due process for lack of a fair hearing.

• Jurisdiction: The CIR’s order was a valid exercise of jurisdiction under Section 19. The provision authorizes an order for the return of striking workers “only after hearing when public interest so requires or when the dispute can not, in its opinion, be promptly decided or settled.” The injunction was issued after a series of conferences with both parties, which constituted the required hearing. Furthermore, the CIR explicitly grounded its order on the impossibility of a prompt decision, stating that “the court may not be able to decide this case promptly, in view of the issues involved.” Under the Court’s construction in Kaisahan ng mga Manggagawa sa Kahoy sa Pilipinas vs. Gotamco Saw Mill, the very impossibility of promptly deciding or settling a dispute confers upon the CIR the power to issue a return-to-work order because the public has an interest in preventing undue stoppage of industry.
• Constitutionality of Section 19: Section 19 of Commonwealth Act No. 103 does not offend the constitutional prohibition against involuntary servitude. The act of entering into a contract of employment after the law took effect carries with it the voluntary acceptance of the conditions prescribed in that section, including the implied condition that when a dispute is submitted to the CIR, the employee shall not strike or walk out when so enjoined by the court after hearing and when public interest so requires, or when the dispute cannot be promptly decided. The employee’s freedom to choose whether to enter such employment—and to resign instead of striking—negates any claim of compulsion.
• Due Process: The challenge to the July 24, 1947 order on due process grounds was unavailing. The CIR had conducted conferences with both parties before issuing the September 26, 1946 injunction, and the subsequent contempt order was predicated on a full report of the strike. Moreover, under Section 15 of Commonwealth Act No. 103, as amended, and Rule 44 of the Rules of Court, the Supreme Court is not authorized to review the factual findings of the Court of Industrial Relations. The denial of the union’s motions for reconsideration did not constitute a denial of due process, as the material facts were sufficiently established.

• Implied Voluntary Acceptance Doctrine (Involuntary Servitude) — An employee who enters into a contract of employment after the enactment of Section 19 of Commonwealth Act No. 103 is deemed to have voluntarily accepted the implied statutory condition that, pending a CIR award or decision, he shall not strike or walk out when so enjoined by the court after hearing and when public interest so requires or when the dispute cannot be promptly decided or settled. The employee retains the free choice not to enter such employment or to resign, which negates the element of compulsion necessary for involuntary servitude.
• Alternative Ground for Return-to-Work Order Under Section 19 — The CIR’s authority under Section 19 is not confined to situations where public interest strictly requires an injunction; the law provides an independent and equally sufficient ground when the dispute cannot, in the court’s opinion, be promptly decided or settled. The very impossibility of prompt adjudication empowers the court to act, precisely to prevent the prolonged paralysis of industry.
• Non-Reviewability of CIR Factual Findings — Findings of fact made by the Court of Industrial Relations are not subject to review by the Supreme Court, consistent with Section 15 of Commonwealth Act No. 103, as amended, and Rule 44 of the Rules of Court.

• “An employee entering into a contract of employment after said law went into effect, voluntarily accepts, among other conditions, those prescribed in said section 19, among which is the ‘implied condition that when any dispute … has been submitted to the Court of Industrial Relations for settlement or arbitration … the employee … shall not strike or walk out of his employment when so enjoined by the court after hearing and when public interest so requires …’ The voluntariness of the employee's entering into such a contract of employment … negatives the possibility of involuntary servitude ensuing.”
• “We construe the provision to mean that the very impossibility of prompt decision or settlement of the dispute confers upon the court the power to issue the order for the reason that the public has an interest in preventing undue stoppage or paralyzation of the wheels of industry.”
• “The power conferred upon the Court of Industrial Relations by section 19 of its organic law to enjoin … a strike or walk out, or to order the return of the striking workers … is one of the most important virtues of this capital-labor legislation. … the general welfare requires that it be upheld and enforced.”

• Kaisahan ng mga Manggagawa sa Kahoy sa Pilipinas vs. Gotamco Saw Mill, G.R. No. L-1573 — Followed as controlling precedent. The Court expressly adopted its rulings on the constitutionality of Section 19 and the interpretation of the alternative ground for issuing a return-to-work order when the dispute cannot be promptly decided.
• National Labor Union vs. Phil. Match Co., 40 Off. Gaz., 8th Supp. 134; Bardwell Brothers vs. Phil. Labor Union, 39 Off. Gaz. 1032; Pasumil Workers’ Union vs. Court of Industrial Relations, 40 Off. Gaz., 6th Supp. 71 — Cited for the rule that findings of fact by the CIR are not reviewable by the Supreme Court.

• Section 19, Commonwealth Act No. 103 — Provided the statutory authority for the CIR to enjoin strikes and order the return of striking workers after hearing when public interest so requires or when the dispute cannot be promptly decided or settled. The Court interpreted the disjunctive “or” as an independent alternative ground for the exercise of CIR power.
• Section 15, Commonwealth Act No. 103, as amended by Commonwealth Act No. 559, Section 2 — Established the finality of CIR factual findings and barred Supreme Court review of such findings.
• Rule 44, Rules of Court — Implemented the limitation on the scope of review of CIR decisions, restricting the Supreme Court to questions of law.
• Constitutional Prohibition Against Involuntary Servitude — Invoked by the union but held inapplicable because the employee’s entry into employment after the law’s enactment constituted voluntary acceptance of the antistrike condition.

Moran, C.J., Paras, Feria, Pablo, Bengzon, Briones, Padilla, and Tuason, JJ., concurred. Justice Briones reserved his opinion on the constitutionality of the relevant statutory and regulatory provisions. Justice Perfecto filed a separate opinion concurring in the result and in the ruling on constitutionality, but dissenting from the pronouncement that the Supreme Court is deprived of power to review the CIR’s findings of fact, arguing that such curtailment denies an aggrieved party a full remedy in the highest tribunal.

• Justice Perfecto (concurring and dissenting) — While concurring that Section 19 is constitutional and that the petition should be denied, Justice Perfecto objected to the majority’s limitation of the Supreme Court’s power to review factual findings of the Court of Industrial Relations. He maintained that many labor disputes center on contested facts, and the Supreme Court should retain full revisory power to prevent a denial of substantial justice to any party aggrieved by erroneous factual determinations.