United Employees Welfare Association v. Isaac Peral Bowling Alleys
REITERATIONFacts
The Antecedents: Thirty-six pinboys of Isaac Peral Bowling Alleys declared a strike on October 10, 1952. Through mediation by the Court of Industrial Relations (CIR), the parties entered into a temporary agreement, leading to an order enjoining the union from striking and the respondent from accepting new pinboys, while allowing the 36 pinboys to continue their service under existing terms. The striking pinboys returned to work. Procedural History: On November 11, 1952, while Case No. 751-V was pending, the management dismissed four pinboys (Ramon Arevalo, Claro Bordones, Petronio Beriña, and Carlos Menodiado) on grounds of grave and wilful insubordination, grave misconduct, and drunkenness (for the last two). The Union filed a motion seeking contempt against the management and reinstatement with backpay for the dismissed pinboys. The CIR denied the contempt motion but ordered the reinstatement of the four pinboys with back wages from November 11, 1952, up to December 22, 1954 (when the case was submitted for decision), based on their average earnings one month prior to dismissal. The Petition: Both parties appealed. The bowling alleys assailed the reinstatement and backpay order, while the Union contended that back wages should extend until actual reinstatement and that the basis for calculating back wages was erroneous. The petition for certiorari by the bowling alleys was dismissed for lack of merit. The appeal by the Union is the subject of this decision.
Issue(s)
Whether the Court of Industrial Relations erred in limiting back wages to the date the case was submitted for decision. Whether the Court of Industrial Relations erred in basing back wages on the average earnings of the dismissed pinboys one month prior to their dismissal, without accounting for the strike period.
Ruling
The Supreme Court affirmed the order of the Court of Industrial Relations with a clarification. The order denying contempt was upheld. The reinstatement of the four pinboys was affirmed. The award of back wages was affirmed up to the date the case was submitted for decision, but the basis for calculating these back wages was clarified to exclude the strike period.
Ratio Decidendi
On the issue of limiting back wages to the date of submission for decision: The Court held that the right to backpay is not absolute and is subject to the discretion of the Industrial Court. Section 5(c) of Republic Act 875 empowers the CIR to order reinstatement with or without backpay, implying the lesser power to mitigate backpay. The Court noted circumstances warranting mitigation, including the long delay in the case's disposal and the financial condition of the bowling alleys, which reported losses during 1952-1953. Therefore, the Court found no reason to disturb the CIR's order limiting backpay to the submission date. On the issue of the basis for calculating back wages: The Court agreed with the appellant Union that the calculation of earnings for the month preceding dismissal must account for the strike period. The order was clarified to mean that the 'month referred to' should be a full working month, excluding the 12 days the pinboys were on strike. Consequently, the backpay awarded should be based on their earnings for such a full working month prior to their dismissal.
Main Doctrine
The Court of Industrial Relations has the discretion to mitigate backpay awards, and its determination of the period for calculating back wages, considering factors like delays in proceedings and the financial condition of the employer, will not be disturbed absent grave abuse of discretion. However, the calculation of average earnings for backpay must exclude periods of strike.