San Miguel Brewery, Inc. vs. Santos

Reinstatement, in its generally accepted sense, refers to restoration to a state from which one has been removed or separated; it is the return to the position from which the employee was removed. An employer cannot be compelled to appoint a dismissed employee to a position he had not previously occupied, even if the dismissal constituted unfair labor practice.

San Miguel Brewery, Inc. employed security guards, including temporary guards, through its Security Officer, Col. Jose P. Rueda. The SMB Special Police Union represented the security guards, and Republic Act No. 875 (Industrial Peace Act) governed labor relations, prohibiting unfair labor practices. The Court of Industrial Relations had jurisdiction over unfair labor practice cases under the Industrial Peace Act.

Peter C. Santos was employed off and on as a temporary security guard at San Miguel Brewery from December 16, 1952, to February 3, 1955, when he was dismissed, with total actual service of eight and a half months. On April 11, 1954, Santos was appointed confidential agent of the SMB Special Police Union, and on October 23, 1954, he formally became a member. On August 1, 1954, the union filed charges against Col. Rueda, the company's Security Officer, with Santos gathering the materials for some of the charges; the union simultaneously demanded that positions vacated by union members be filled with applicants recommended by the union's board of directors.

On September 26, 1955, the union's board of directors recommended Santos to take the place of Carlos Abelardo, a permanent guard and union member. Santos was called or employed for the last time on October 23, 1954. He was physically examined on November 3, 1954, to determine if he could be made a permanent guard, and again on January 27, 1955. On February 3, 1955, he was dismissed instead of being made permanent. Between October 29 and December 11, 1954, Santos was investigated regarding his possession of firearms, conducted by Col. Rueda himself and by MIS and PC agents, either at Rueda's instance or on their own volition.

Col. Rueda sent Santos to the company's medical department for physical examination, ostensibly to determine if he could be made a regular guard. Dr. Horilleno allegedly found Santos suffering from chronic O.M.P.C. on his left ear, described as a "decided liability" impairing hearing. The CIR found it suspicious that Dr. Horilleno did not inform Santos of the defect, no treatment was given, no prescription was issued, Santos was allowed to continue working for three months with the condition, and he was re-examined after three months without having been advised of or treated for the ailment. Rueda explained he let Santos stay to give him time to be cured, expressing disappointment that Santos, whom he had employed and given "bread and butter," would work against him.

The CIR found that Rueda knew Santos was a confidential agent of the union, saw the charges filed against him, and knew Santos gathered materials supporting the charges. The Court concluded that because of Rueda's disappointment, the respondents dismissed Santos for his union activities with the physical defect as a pretext. It was uncontradicted that when examined by private specialists in February and March 1955, Santos' left ear was found to be normal. Santos' efficiency record was commendable, and there was no showing that his ear condition caused anything untoward in his performance of duties during more than two years of off-and-on service.

• Procedural Error (Motion for Reconsideration): Petitioners argued that the CIR committed an error of law in denying their motion for reconsideration without hearing oral arguments by the court en banc and notwithstanding that the CIR was without full membership, contrary to the provisions of law.
• Substantial Evidence: Petitioners argued that the CIR made findings and conclusions not supported by substantial evidence on the record taken as a whole, contrary to the decision in Ang Tibay vs. Court of Industrial Relations and Section 6 of the Industrial Peace Act.
• Personal Motives: Petitioners argued that the differences between Santos and Col. Rueda were purely personal and did not concern the company, and that there was no evidence of hostility between the management and the union or any of its members.
• Grave Abuse of Discretion (Reinstatement): Petitioners argued that the CIR acted with grave abuse of discretion and in excess of its jurisdiction by directing the employment of Santos as a permanent security guard when he was discharged as a temporary security guard — an affirmative action exceeding the basic objective of "effectuation of the policies" of Republic Act No. 875.

• Union Activities as Cause of Dismissal: Respondent Santos, through the court prosecutor, charged that the dismissal was attributable to his union activities, including his role as confidential agent of the union and his gathering of materials for charges filed against Col. Rueda.
• Pretextual Physical Defect: The CIR found that the physical defect (chronic O.M.P.C.) was a pretext for dismissal, noting the suspicious circumstances surrounding the medical examination and the fact that private specialists later found Santos' left ear normal.

• Procedural Validity of Resolution: Whether the CIR erred in resolving the motion for reconsideration by the vote of four of five judges when one judge was on leave.
• Substantial Evidence: Whether the CIR's findings and conclusions that the dismissal was attributable to union activities were supported by substantial evidence on the record.
• Scope of Reinstatement: Whether the CIR acted with grave abuse of discretion and in excess of its jurisdiction in directing the employment of Santos as a permanent security guard when he had been discharged as a temporary security guard.

• Procedural Validity of Resolution: No. The requirement that a motion for reconsideration be resolved by the court en banc simply demands that all available judges take part, and as long as three judges attending concur, it is enough for the pronouncement of a decision, order, or award under Commonwealth Act No. 559.
• Substantial Evidence: No. The Court was not prepared to conclude that there was lack of substantial evidence to support the finding that the dismissal of Santos was attributable to his union activities; the established facts bore out this conclusion.
• Scope of Reinstatement: Yes, meritorious. The company cannot be required to appoint the dismissed employee to a position he had not previously occupied; reinstatement refers to restoration to the position from which one was removed.

• Procedural Validity of Resolution: The Court found no merit in the contention that the lower court erred in resolving the motion for reconsideration by the vote of four of the five judges, with Judge Canting, who penned the original decision, on leave at the time. The statutory requirement that a motion for reconsideration be resolved by the court in banc, with judges sitting together, demands only that all available judges take part; as long as at least three judges attending concur, it is sufficient for the pronouncement of a decision, order, or award under Commonwealth Act No. 559.

• Substantial Evidence: The Court applied the oft-repeated doctrine that it is not for the Supreme Court to review the findings of fact of the Court of Industrial Relations absent a showing of abuse of discretion amounting to lack or excess of jurisdiction. The following established facts supported the trial court's conclusion: (1) Santos was appointed confidential agent of the Union on April 11, 1954; (2) Santos gathered data forming the basis of the complaint filed against Col. Rueda on August 1, 1954, charging him with unfair labor practices; (3) Col. Rueda learned of this complaint and became prejudiced against Santos; (4) the union petitioned that vacancies be filled by its recommendees; and (5) Santos was recommended by the union to fill the vacancy created by Carlos Abelardo's resignation. The Court found it "not at all far-fetched" to conclude that because of Santos' activities, Rueda would oppose Santos' appointment as permanent guard and work for his dismissal. The Court also rejected the argument that the differences were purely personal, holding that Rueda's acts, even if prompted by personal motives, were executed in his capacity as Security Officer and in the course of his duties; the company, in dismissing Santos with full knowledge of Rueda's actuations, in effect ratified Rueda's acts and became liable. The Court cited Rothenberg on Labor Relations for the proposition that where attendant circumstances and the history of the employer's conduct raise suspicion as to motivation, the failure of the employer to ascribe a valid reason may justify an inference that the conduct was inspired by union membership or activities.

• Scope of Reinstatement: The Court found this error meritorious. Santos was employed as temporary guard, on and off for short durations between December 16, 1952, and February 3, 1955, and on the date of his separation he was still occupying the position of temporary guard. While Santos was entitled to reinstatement as the subject of unfair labor practice, the company could not be required to appoint him to a position he had not previously occupied. Reinstatement, in its generally accepted sense, refers to restoration to a state from which one has been removed or separated; it is the return to the position from which he was removed. Santos should therefore be ordered reinstated to his former position of temporary guard.

• Reinstatement — Reinstatement refers to restoration to a state from which one has been removed or separated; it is the return to the position from which the employee was removed. An employer cannot be compelled to appoint a dismissed employee to a position he had never previously occupied, even where the dismissal constituted unfair labor practice; the remedy is restoration to the former position.

• Employer Ratification of Supervisory Acts — Where a supervisory employee commits an unfair labor practice, even if prompted by personal motives, and the employer dismisses the employee with full knowledge of the supervisor's actuations and the circumstances of the case, the employer in effect ratifies the acts complained of and becomes liable therefor.

• Inference from Employer's Unexplained Conduct — Where attendant circumstances, the history of the employer's past conduct, and an intimate connection between the employer's action and the union affiliations or activities of the employee raise a suspicion as to the motivation for the employer's action, the failure of the employer to ascribe a valid reason may justify an inference that the unexplained conduct was inspired by the employee's union membership or activities. Such suspicion, when coupled with other facts that might have been inadequate to support an adverse finding, may suffice to sustain a finding that the employer's actions violated the prohibition of the Act.

• "Reinstatement, in its generally accepted sense, refers to a restoration to a state from which one has been removed or separated, it is the return to the position from which he was removed." — This passage defines the controlling doctrine on the scope of reinstatement and forms the basis for modifying the CIR's order to restore Santos to his former position as temporary guard rather than to a permanent position.

• "In dismissing the complainant, with full knowledge of the actuations of Col. Rueda and the circumstances of Santos' case, the petitioner company in effect ratified the acts of Col. Rueda complained of and, consequently, became liable therefore." — This passage establishes the principle of employer ratification of supervisory acts constituting unfair labor practice, rejecting the argument that the differences were purely personal.

• "While the presence of this mere suspicion neither takes the place of evidence that the employer's conduct was improperly motivated nor dispenses with the requirement of proof of the fact, such suspicion, when coupled with other facts which, in themselves, might have been inadequate to support an adverse finding against the employer, may suffice to sustain a finding that the employer's actions violated the prohibition of the Act." — This passage articulates the standard for drawing inferences from circumstantial evidence in unfair labor practice cases, citing Rothenberg on Labor Relations.

• Ang Tibay vs. Court of Industrial Relations, 40 O.G. pp. 35, 37 — Cited by petitioners for the proposition that CIR findings must be supported by substantial evidence; the Court applied the related doctrine that factual findings of the CIR are not reviewable absent abuse of discretion amounting to lack or excess of jurisdiction.
• Olaivar vs. Manila Electric Co., Off Gaz. 14th Supp. 73 — Cited by petitioners as contrary authority; the Court did not find it controlling on the facts of this case.
• N.L.R.B. vs. Chicago Apparatus Co., 116 F. 2d 753 — Cited in the Court's footnote supporting the principle that an employer ratifies the acts of its supervisory employee when it dismisses an employee with knowledge of the circumstances.

• Section 6, Industrial Peace Act (Republic Act No. 875) — Cited by petitioners regarding the requirement of substantial evidence in CIR decisions; the Court found the CIR's findings supported by substantial evidence on the record.
• Commonwealth Act No. 559 — Applied to uphold the validity of the CIR's resolution of the motion for reconsideration by the vote of four of five judges, requiring only that all available judges take part and that at least three concur.
• Republic Act No. 875 (Industrial Peace Act) — The statute prohibiting unfair labor practices and governing the CIR's jurisdiction; the Court noted that the CIR's affirmative action in ordering appointment to a permanent position exceeded the basic objective of "effectuation of the policies" of the Act.

Bengzon, C.J., Concepcion, Reyes, J.B.L., Paredes, Dizon, De Leon, and Natividad, JJ., concurred. Padilla, J., took no part. Bautista Angelo, J., on leave, took no part.