Cebu Portland Cement Company v. Savellano
REITERATIONFacts
The Antecedents: The Cebu Portland Cement Company (CEBUPROCEM) was ordered by the Court of Industrial Relations (CIR) to reinstate Maximo S. Savellano, Sr., and other employees, with back salaries from November 16, 1950, up to the date of reinstatement. During the pendency of the case, CEBUPROCEM granted whole-scale and general salary increases to its officials and employees for the fiscal year 1951-1952. Savellano was reinstated on March 14, 1956, and paid back salaries at his old rate of P9,600 per annum. However, he was denied the benefit of the general salary increases that were given to other employees, including those in his department and his former co-petitioners. Procedural History: The CIR issued an order of execution directing CEBUPROCEM to pay Savellano P6,300, representing salary differential for back wages from October 1, 1951, to December 31, 1956. This was based on the fact that the salary of the first assistant general manager, who previously received the same salary as Savellano, was increased under the general increases granted by the company. The Petition: CEBUPROCEM filed a petition for review, assailing the CIR's order of execution. The company argued that it had satisfied the reinstatement order by paying back salaries at the rate Savellano was receiving at the time of his dismissal, and that the CIR lacked jurisdiction to grant salary increases.
Issue(s)
Whether the employer satisfied the order of reinstatement and back pay by paying the salary at the rate prior to dismissal, despite granting general salary increases to other employees during the pendency of the case. Whether the Court of Industrial Relations had the jurisdiction to grant salary increases to the respondent.
Ruling
The Supreme Court affirmed the order of execution issued by the Court of Industrial Relations, holding that the petitioner company failed to satisfy the judgment in full by not including the general salary increases in the back pay awarded to the respondent. The Court also affirmed that the CIR had the power to enforce the company's own act of granting general increases without unjustified discrimination.
Ratio Decidendi
On the issue of whether the employer satisfied the order of reinstatement and back pay: The Court held that the petitioner company did not satisfy the judgment in full. The company's argument that "backpay" only refers to what an employee has lost at the rate he was receiving at the time of dismissal was rejected. The Court emphasized that CEBUPROCEM itself granted whole-scale and general increases to its officials and employees during the pendency of the case. Therefore, Savellano lost not only what he would have received at his old rate but also what he would have received at the corresponding increased rate. To pay him only at the old rate meant he was prejudiced by his illegal dismissal, a result the labor court had the power to prevent. On the issue of the Court of Industrial Relations' jurisdiction to grant salary increases: The Court clarified that the CIR, in ordering the execution for the salary differential, was not assuming jurisdiction to grant a salary increase. Instead, it was enforcing the company's own act of granting whole-scale and general increases. The Court reasoned that the company exercised its discretion by granting these increases and could not subsequently claim to have intended to exclude Savellano from these benefits. Such exclusion, especially after an illegal dismissal, would constitute unjustified discrimination, which the labor court is empowered to prevent.
Main Doctrine
An employer who grants whole-scale and general salary increases to its employees during the pendency of an illegal dismissal case cannot exclude a reinstated employee from the benefit of such increases without unjustified discrimination, as the back pay should include what the employee would have earned at the increased rate.