Republic Savings Bank vs. Court of Industrial Relations

A dismissal of employees for concerted activity for mutual aid and protection—such as a letter-charge demanding the employer’s president resign over nepotism, favoritism, discrimination, and working conditions—constitutes an unfair labor practice under Section 4(a) of the Industrial Peace Act, even if the activity is not union activity and no collective bargaining is contemplated. The employer’s right to discharge for cause does not justify summary discharge where the dismissal interferes with the employees’ right to self-organization.

Republic Savings Bank employed the eight respondents, who held positions in the bank’s supervisors’, employees’, and security guards’ unions affiliated with the Federation of Free Workers. The Industrial Peace Act (Republic Act No. 875) governed labor relations at the time and defined unfair labor practices, including interference with the right to self-organization and refusal to bargain collectively. Collective bargaining agreements between the Bank and its unions provided for a grievance committee. The dispute concerned the scope of protected concerted activity and the employer’s right to discipline employees for a letter-charge against management.

Republic Savings Bank employed Rosendo T. Resuello, Benjamin Jara, Florencio Allasas, Domingo B. Jola, Diosdado S. Mendiola, Teodoro de la Cruz, Narciso Macaraeg, and Mauro A. Rovillos. The letter involved in the case identified them as officers or members of the RSB Supervisors’ Union, RSB Employees’ Union, and RSB Security Guard Union, all affiliated with the Federation of Free Workers. The bank president was Ramon Racelis.

On July 9, 1958, the respondents wrote a letter-charge to Racelis demanding his resignation as President and Member of the Board of Directors of the Bank. The letter stated that they acted on behalf of the members and employees of the Bank and presented charges of (a) immorality, including alleged illicit relations with Edita Castro and the promotion of Pacita Mato and Edita Castro; (b) nepotism in the appointment of relatives; (c) favoritism and discrimination in promotions and in the sending of pensionados; and (d) tolerance of dishonesty and irregularities, with specific amounts and employees named. Copies of the letter were given to the chairman of the board of directors of the Bank and to the Governor of the Central Bank.

On July 12, 1958, the Bank discharged Jola. A few days later, on July 18, 1958, it discharged the remaining respondents. The Bank stated that they had written and published “a patently libelous letter . . . tending to cause the dishonor, discredit or contempt not only of officers and employees of this bank, but also of your employer, the bank itself.”

The Bank defended the discharges as an exercise of its right to discipline the respondents for the alleged libel and undue publicity given to the letter-charge. The respondents admitted at the hearing that the writing of the letter-charge was not a “union action” but merely their “individual” act. The Court of Industrial Relations found that the dismissal was made on account of the letter the respondents had written, in which they demanded the resignation of the bank president for reasons touching labor-management relations.

• No Union Activity / Individual Act: The Bank argued that the complaint should have been dismissed because the discharge had nothing to do with union activities; the respondents themselves admitted that the writing of the letter-charge was not a “union action” but merely their “individual” act. It relied on Royal Interocean Lines vs. CIR and Lakas ng Pagkakaisa sa Peter Paul vs. CIR.
• Discharge for Cause — Libel: The Bank maintained that the discharge was for cause: the respondents wrote and published a patently libelous letter tending to cause dishonor, discredit, or contempt of the Bank and its officers, and it invoked its right to discipline for libel and undue publicity.
• Employer’s Right to Select and Discharge: The Bank defended its action by invoking the employer’s right to discharge for cause, arguing that the Industrial Peace Act does not touch the normal exercise of the right to select or discharge employees and is directed only against abuse of that right by interfering with self-organization.

• Violation of Section 4(a)(5): Through prosecutor A. Tirona, the respondents alleged that the Bank violated Section 4(a)(5) of the Industrial Peace Act, which makes it an unfair labor practice for an employer to dismiss, discharge, or otherwise prejudice or discriminate against an employee for having filed charges or for having given or being about to give testimony under the Act.
• Protected Grievance: The respondents’ letter-charge demanded the bank president’s resignation on grounds of immorality, nepotism, favoritism, discrimination, and management irregularities; the CIR found these reasons touched labor-management relations, and the respondents maintained that their dismissal for the letter-charge was an unfair labor practice.

• Unfair Labor Practice: Whether the dismissal of the eight respondents by Republic Savings Bank constituted an unfair labor practice within the meaning of the Industrial Peace Act (Republic Act No. 875).
• Protected Concerted Activity: Whether the respondents’ letter-charge demanding the bank president’s resignation was protected concerted activity for mutual aid and protection even though it was not a union action and no collective bargaining was contemplated.
• Employer’s Right to Discharge for Cause: Whether the Bank’s claim that the discharge was for cause—the alleged libelous letter—justified the dismissal notwithstanding the employees’ right to self-organization.
• CIR’s Determination of Motive: Whether the Court of Industrial Relations properly determined that the dismissal was on account of the letter-charge and thus an unfair labor practice.

• Unfair Labor Practice: Yes. The Bank’s conduct constituted an unfair labor practice within the meaning and intendment of Section 4(a) of the Industrial Peace Act; the CIR decision and resolution were affirmed.
• Protected Concerted Activity: Yes. The employees were engaged in concerted activity for mutual aid and protection, which is protected even if no union activity is involved and no collective bargaining is contemplated.
• Employer’s Right to Discharge for Cause: No. The employer’s right to discharge for cause does not justify summary discharge where it interferes with the right of self-organization; the CIR found the dismissal was on account of the letter-charge touching labor-management relations.
• CIR’s Determination of Motive: Yes. The CIR, as the administrative agency knowledgeable in labor-management relations, was competent to weigh the employer’s motive; its finding of discriminatory discharge was sustained.

• Unfair Labor Practice: The Court was unanimous that the Bank’s conduct—whether characterized as interference with the employees’ right of self-organization, as retaliatory action, or as refusal to bargain collectively—constituted an unfair labor practice within the meaning and intendment of Section 4(a) of the Industrial Peace Act. The Act does not undertake to specify every incident constituting an unfair labor practice; it leaves to the court the work of applying its general prohibitory language to the infinite combinations of events that may be charged as violative of its terms. The CIR found that the dismissal was made on account of the letter the respondents had written, and the Bank’s conduct fell within Section 4(a). Although members of the Court differed on the specific subsection violated, unanimity existed as to Section 4(a).
• Protected Concerted Activity: The Bank argued that no union activity was involved because the respondents admitted that writing the letter-charge was their individual act. The Court rejected this position. Section 3 of the Industrial Peace Act protects the employees’ right to self-organization and to engage in concerted activities for collective bargaining and other mutual aid or protection. The joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is concerted activity protected by the Act; it is not necessary that union activity be involved or that collective bargaining be contemplated. When the respondents complained against nepotism, favoritism, and other management practices, they were acting within an area marked out by the Act as a proper sphere of collective bargaining. Even the reference to immorality was not irrelevant because it supported the charge that the bank president had failed to provide wholesome working conditions and had practiced discrimination and favoritism in appointments and promotions. The Court found the case similar to National Labor Relations Board vs. Phoenix Mutual Life Insurance Co., where employees’ concerted letter objecting to the transfer of a cashier was protected concerted activity.
• Employer’s Right to Discharge for Cause: The right of self-organization of employees is not unlimited, and the right of an employer to discharge for cause is undenied. The Industrial Peace Act does not touch the normal exercise of the employer’s right to select or discharge employees; it is directed solely against the abuse of that right by interfering with the countervailing right of self-organization. The difficulty lies in determining whether the discharges are made because of a separable cause or because of activities engaged in by employees for collective bargaining. It is for the CIR, in the first instance, to make that determination and to weigh the employer’s expressed motive. Here, the CIR found that the dismissal was on account of the letter demanding the bank president’s resignation for reasons touching labor-management relations. The Bank’s judgment that the respondents had committed libel could not excuse it for making summary discharges in disregard of its duty to bargain collectively. Royal Interocean Lines vs. CIR and Lakas ng Pagkakaisa sa Peter Paul vs. CIR were distinguished: in Royal Interocean, the letter complained of the local manager’s “inconsiderate and untactful attitude,” which had nothing to do with union activities; in Lakas ng Pagkakaisa, the letter denounced “wastage of company funds” in violation of the local company’s rule. In contrast, the respondents’ letter touched labor-management relations.
• CIR’s Determination of Motive: Determining the legality of a dismissal necessarily involves an appraisal of the employer’s motives. Motivations are seldom expressly avowed, and avowals are not always candid; there must therefore be reliance on the administrative agency knowledgeable in labor-management relations and on the trial examiner who receives the evidence firsthand. The CIR’s finding that the dismissal was on account of the letter-charge was sustained.

• Concerted Activity for Mutual Aid and Protection — Under Section 3 of the Industrial Peace Act, the employees’ right to self-organization includes concerted activities for collective bargaining and other mutual aid or protection. The doctrine does not require union activity or contemplated collective bargaining; joining in protests or demands, even by a small group of employees, if in furtherance of their interests as employees, is protected. The Court applied this to the respondents’ letter-charge demanding the bank president’s resignation over nepotism, favoritism, discrimination, and working conditions; their dismissal therefore interfered with protected activity.
• Unfair Labor Practice under Section 4(a) of the Industrial Peace Act — An employer commits an unfair labor practice when it interferes with, restrains, or coerces employees in the exercise of self-organization, discriminates in regard to hire or tenure to encourage or discourage union membership, or refuses to bargain collectively. The Act does not enumerate every incident; courts apply its general prohibitory language to varied factual combinations. The Court unanimously held that the Bank’s conduct—characterized as interference, retaliation, or refusal to bargain—fell within Section 4(a).
• Employer’s Right to Discharge for Cause Is Not Absolute — The employer retains the normal right to select and discharge employees for cause, but the Industrial Peace Act prohibits abuse of that right when it interferes with the countervailing right of self-organization. Where the employer’s motive is disputed, the CIR must weigh the employer’s expressed motive to determine whether the discharge rests on a separable cause or on protected activity. The Court sustained the CIR’s finding that the Bank discharged the respondents because of their letter-charge.

• "It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter acted in their individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the exercise of their right of self-organization that includes concerted activity for mutual aid and protection, interference with which constitutes an unfair labor practice under section 4(a)(1)." — This passage states the core rationale that employees may be protected even when they act individually rather than through a union, because the right of self-organization includes concerted activity for mutual aid and protection.
• "The joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated." — This is the Court’s canonical formulation of protected concerted activity, frequently cited for the proposition that union activity or collective bargaining is not a prerequisite to protection.
• "In final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an interference with the employees' right of self-organization, or as a retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair labor practice within the meaning and intendment of section 4(a) of the Industrial Peace Act." — This passage states the final holding and clarifies that the Court was unanimous as to Section 4(a) even though members differed on the specific subsection violated.
• "The Industrial Peace Act does not touch the normal exercise of the right of an employer to select his employees or to discharge them. It is directed solely against the abuse of that right by interfering with the countervailing right of self-organization." — This passage defines the boundary between the employer’s lawful right to discharge for cause and the statutory prohibition against interference with the employees’ right to self-organization.

• Royal Interocean Lines vs. Court of Industrial Relations, G.R. No. L-11745, Oct. 31, 1960 — The Bank relied on this case; it held that the charge, the filing of which caused the dismissal, must be related to the employee’s right to self-organization to give rise to unfair labor practice under Section 4(a)(5). The Court distinguished it because the letter there complained of the local manager’s “inconsiderate and untactful attitude” and had nothing to do with union activities, whereas the respondents’ letter here touched labor-management relations.
• Lakas ng Pagkakaisa sa Peter Paul vs. Court of Industrial Relations, G.R. No. L-10130, Sept. 30, 1957 — Also cited by the Bank; no discriminatory discharge was found because the letter denounced “wastage of company funds” in violation of the local company’s rule. Distinguished on the ground that the present letter demanded the bank president’s resignation for reasons affecting labor-management relations.
• National Labor Relations Board vs. Phoenix Mutual Life Insurance Co., 167 F.2d 983 (7th Cir. 1948) — Persuasive precedent followed; the court held that employees’ concerted letter objecting to the transfer of a cashier was protected concerted activity for mutual aid or protection even though no union activity or collective bargaining was involved, and their discharge was an unfair labor practice.
• Mariano vs. Royal Interocean Lines, Case 527-ULP — CIR decision relied upon in denying the Bank’s first motion to dismiss; it ruled that Section 4(a)(5) applies to dismissal for having filed “any charges against his employer.” This ruling was later overruled by Royal Interocean Lines vs. CIR.
• NLRB vs. M & B Headwear Co., 349 F.2d 170 (4th Cir. 1965) — Quoted for the principle that determining the legality of a dismissal involves appraising the employer’s motives and that reliance is placed on the administrative agency and trial examiner, especially where they agree. The Court used it to support deference to the CIR’s finding.

• Section 4(a)(5), Republic Act No. 875 (Industrial Peace Act) — Makes it an unfair labor practice for an employer to dismiss, discharge, or otherwise prejudice or discriminate against an employee for having filed charges or for having given or being about to give testimony under the Act. The complaint originally invoked this provision; the Court noted that some members viewed the Bank’s conduct as a violation of it.
• Section 3, Republic Act No. 875 — Employees’ Right to Self-Organization. Employees have the right to self-organization and to form, join, or assist labor organizations of their own choosing for collective bargaining and to engage in concerted activities for collective bargaining and other mutual aid or protection. The Court applied this to protect the respondents’ letter-charge even though it was not a union action.
• Section 4(a)(1), Republic Act No. 875 — Makes it an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of their right to self-organization. Some members of the Court characterized the Bank’s dismissal of the respondents as interference under this subsection.
• Section 4(a)(6), Republic Act No. 875 — Makes it an unfair labor practice for an employer to refuse to bargain collectively with the representatives of its employees. Some members of the Court believed the Bank’s failure to refer the letter-charge to the grievance committee violated this subsection.
• Section 13, Republic Act No. 875 — Provides that the duty to bargain imposes on the parties the mutual obligation to meet and confer promptly and expeditiously and in good faith for the purpose of adjusting grievances or questions arising under the agreement. Cited in the discussion that collective bargaining is a continuous process.
• Section 4(a), Republic Act No. 875 — The general unfair labor practice provision under which the Court was unanimous that the Bank’s conduct—whether as interference, retaliation, or refusal to bargain—constituted an unfair labor practice.
• Section 4(b)(3), Republic Act No. 875 — Mentioned as making a violation of the duty to bargain an unfair labor practice.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, and Angeles, JJ., concurred. Fernando, J., filed a separate concurring opinion. Bengzon, J.P., J., took no part.

In his concurrence, Fernando, J., agreed that an unfair labor practice was committed but disagreed with characterizing the dismissal as a refusal to bargain collectively. He viewed the dismissal as “interference, restraint or coercion” under the Industrial Peace Act because the mass dismissal left the supervisors’ union, employees’ union, and security guards’ union leaderless; for collective bargaining to be meaningful, there must be two parties, and management cannot select who would represent the union. He also observed that if the letter were indeed libelous, dismissal might not have been unjustified, but the mass dismissal still constituted interference.