INTERNATIONAL HARDWOOD VS PANGIL FEDERATION

Nov 25, 1940 | J. Laurel | Justice Equity and Substantial Merits of the Case | Rai

The Secretary of Labor certified to the Court of Industrial Relations that an industrial dispute
existed between petitioner International Hardwood and some of its employees, who were members
of respondent Pangil Federation (a union) and that the dispute should properly be dealt with by CIR
in the public interest under Sec 4 of Commonwealth Act 103.
the industrial dispute referred to certain demands made by respondent, among them the ff:
- (2) set minimum daily wages of common laborers at 1 peso
- (3) devise a proper schedule of rate of wages for all laborers
- (4) the rate of wages for the mountain camps should be higher by 20% over those given in
the town

(Background) the minimum wage paid by petitioner to its employees was P0.70 per day, regardless
of whether the employee was working in the towns or in the mountain camps.

CIR: (seems to have decided against International Hardwood, the decision was in Spanish)

Petitioner filed a motion with the CIR en banc praying for reconsideration. While this was pending,
the petitioner filed a motion praying that the Court hold itself without jurisdiction to decide demands
(2) and (4) as they alleged that:
CIR has no authority to determine minimum wages for an individual employer in connection
with a particular and specific industrial dispute under the provisions of CA 103, Sec 4
that such authority would constitute an undue delegation of legislative power to the CIR and
would deny petitioner the equal protection of laws, rending said section unconstitutional and
void

CIR en banc: denied the motion for reconsideration and the motion re: jurisdiction. Hence petition
for certiorari.

ISSUES:
1. W/N the CIR has the power to determine minimum wages for an individual employer in
connection with an industrial dispute which said court might take cognizance of under the
provisions of Sec 4 of CA 103 - YES

P ARG: When the National Assembly granted the CIR general power to decide any industrial
dispute under CA 103 Sec 4, they couldnt have granted within such general power the authority to
decide something that was made determinable in another specific manner. The determination of
minimum wages for each employer in a given locality or given industry is specially provided for in
CA 103 Sec 5.
In Sec 5, minimum wages are determinable in reference to a given industry or a given locality,
which should be of general application and have the force and effect of law, after approval by the
President of the Philippines
the section doesnt contemplate arbitration and settlement of industrial/agricultural disputes
causing or likely to cause a strike or lockout and is designed only to provide a workable device
to evolve a scheme of minimum wage or share for laborers in a given industry/locality

CA 103 as originally drafted didnt have Sec 5, but it was embodied in the explanatory statement of
a separate bill.

Sec 4, together with other complementing sections, is designed to provide for compulsory
arbitration in order to prevent non-specific methods in the determination of industrial/agricultural
disputes
CA 103 and the various sections within it are the means provided to give life to the declaration
in Ang Tibay vs CIR of the governments role as intervenor and peacemaker between parties
in an industrial dispute
In Sec 4 - the CIR is empowered to take cognizance for purposes of prevention, arbitration,
decision and settlement of any industrial or agricultural dispute causing or likely to cause a
strike or lockout, arising from differences as regard wages, shares, or compensation,
dismissals, lay-offs, or suspensions of employees or laborers, tenants or farm-laborers, hours
of labor or conditions of tenancy or employment between employers and employees or
laborers and between landlords and tenants or farm-laborers.
In Sec 1 - the CIR has jurisdiction over the entire Philippines, to consider, investigate, decide
and settle all questions, matters, controversies or disputes arising between and/or affecting
employers and employees or laborers and landlords and tenants or farm-laborers, and
regulate the relations between them, subject to the provisions of this Act
In Sec 13 - it is provided that in making an award, order or decision, under the provisions of
Sec 4 of the Act, the court shall not be restricted to the specific relief or demands made by the
parties to the industrial or agricultural dispute, but may include in the award, order or decision
any matter or determination which may be deemed necessary to expedient for the purpose of
settling the dispute or of preventing further industrial agricultural dispute.

Under the view suggested by petitioner, if there is an industrial dispute between an employer and
their employees causing/likely to cause a strike or lockout that arises from differences as regards
minimum wage, the CIR wouldnt have authority to take cognizance of the dispute for arbitration
and settlement unless the President of the Philippines directs it to investigate and study all
pertinent facts related to the industry concerned, with a view to determine the necessity and
fairness of fixing a minimum wage which shall apply generally to all employers engaged in the
industry.

This is too narrow a construction > would make useless the plenary powers conferred to the CIR
to settle all questions, matters, controversies or disputes arising between, and/or affecting
employers and employees and will frustrate the very objective of the law, which is to create an
instrumentality through which the Government could intervene to prevent non-pacific methods to
determine industrial/agricultural disputes.

2. And if it does, W/N such grant of power is unconstitutional and therefore void - NO

P ARG: If Sec 4 was held to empower the CIR to determine minimum wages in connection with an
industrial dispute, the section is unconstitutional since is constitutes an undue delegation of
legislative power to the court that would deprive petitioner of the equal protection of the laws.
to support this, petitioner argues that the determination of minimum wages is a legislative
function and that Sec 4 doesnt indicate in what manner, by what standards or in accordance
with what rules, the CIR shall determine minimum wages

SC: Sec 20 of CA 103 prescribes that in the hearing, investigation and determination of any
question or controversy and in exercising any duties and power under the Act, the court shall act
according to justice and equity and substantial merits of the case, without regard to technicalities or
legal forms.
there is a sufficient standard furnished by the National Assembly
already ruled before that the discretionary power thus conferred is judicial in character and
does not infringe on the principle of separation of powers, the prohibition against the
delegation of legislative function and the equal protection clause of the Constitution

PETITION FOR CERTIORARI DENIED.