Philippine Air Lines v. Philippine Air Lines Employees Association
REITERATIONFacts
The Antecedents: On July 22, 1954, the Court of Industrial Relations (CIR) ordered Philippine Air Lines, Inc. (PAL) to reinstate four dismissed employees, Fortunato Biangco, Hernando Guevarra, Bernardino Abarrientos, and Onofre Griño, with back pay from the date of dismissal to reinstatement. This resolution was affirmed by the Supreme Court. Procedural History: Respondent Philippine Air Lines Employees Association (Association) filed a motion for partial execution with the CIR, seeking back wages for the four employees. The employees were reinstated on January 14, 1959. The Association calculated the back wages based on the period of dismissal from May 5, 1950, to January 13, 1959, totaling P158,485.33. Petitioner PAL opposed this, arguing that any salaries or wages earned by the employees from other sources during their dismissal should be deducted. The CIR, in an order dated February 12, 1959, directed the issuance of a writ of execution for back wages without deduction of salaries earned elsewhere. The CIR en banc, on May 22, 1959, denied PAL's motion for reconsideration. The Petition: PAL appealed the CIR's order and resolution via certiorari, contending that earnings from other employment during the dismissal period should be deducted from the back wages.
Issue(s)
Whether earnings from other employment during the period of dismissal should be deducted from the back wages awarded to illegally dismissed employees. Whether the CIR's order to pay back wages without deduction of earnings elsewhere constituted an amendment or modification of a final and executory judgment.
Ruling
The Supreme Court modified the order and resolution of the CIR. It directed the CIR to hold a hearing to allow parties to prove any wages and pay earned by the four dismissed employees elsewhere and to deduct such amounts from their respective backpay.
Ratio Decidendi
On the issue of deducting earnings from other employment: The Court held that earnings from other employment during the period of dismissal should be deducted from the back wages. The Court cited the principle that no one should be allowed to enrich himself at the expense of another. This principle is rooted in equity and the duty of an employee to mitigate damages. The Court noted that in previous cases, it had consistently allowed such deductions to mitigate the liability of the employer. The Court emphasized that it is not fair for an employee who has not rendered service to receive full back wages while also keeping earnings from other sources, especially when the dismissal was based on grounds that the CIR itself suggested could be valid. The Court clarified that it was not asking for deductions of what employees might have earned, but what they actually earned during the layoff period. On whether the CIR's order modified a final judgment: The Court found that the issue of deduction was not the subject of the appeal in G.R. No. L-8197, which affirmed the CIR's resolution ordering backpay. The question of deduction was only relevant and material if the dismissal was found to be illegal, making it premature to raise earlier. The Court also noted that its denial of PAL's motion to dismiss the present petition implied that the question of deduction was still open for determination. Therefore, the CIR's order allowing deduction was not an amendment of a final judgment but a proper determination of the amount of back wages due.
Main Doctrine
Earnings of dismissed employees from other sources during the period of illegal dismissal should be deducted from their back wages to prevent unjust enrichment, applying the principle of equity and mitigation of damages.