San Pablo Oil Factory v. Court of Industrial Relations
REITERATIONFacts
The Antecedents: Petitioner San Pablo Oil Factory, Inc. (Factory) was found guilty of discriminatory lockout by the Court of Industrial Relations (CIR) in a previous decision, which ordered the reinstatement of workers with back wages corresponding to the period of their unemployment. Procedural History: The Kapatirang Manggagawa Association (NLU) (Union) moved for the execution of the back wages. Initially, the CIR ordered computation based on wages earned by other employees doing the same work. However, upon motion for reconsideration, the CIR en banc set aside this order and directed computation based on what the dismissed employees should have earned had they not been dismissed, deeming the earnings of other workers immaterial. The CIR Chief Examiner computed the back wages based on 85 working days, amounting to P54,132.25. The Factory objected, and the CIR Examiner reported that the Factory actually operated and milled for only 39 days during the lockout period. Despite this, the CIR en banc, adhering to its January 23, 1964 resolution, adopted the 85 working days as the basis and ordered the Factory to deposit P50,790.20. This order was affirmed by the CIR en banc upon reconsideration. The Petition: The Factory appealed, questioning whether the back wages should be computed on the basis of working days during the lockout period or limited to the 39 days the Factory was actually in operation.
Issue(s)
Whether back wages should be computed based on the total working days during the period of the lockout or limited to the days the Factory was actually in operation.
Ruling
The Supreme Court modified the order of the CIR, reducing the computation of back wages to the 39 days the Factory was actually in operation. The Court affirmed the order in all other respects.
Ratio Decidendi
On Issue 1: The Supreme Court reasoned that the objective of back wages is to restore the earnings the laborers would have received if they had not been illegally locked out. Applying the principle of equity and factual reality, the Court noted that even if there had been no lockout, the laborers could not have possibly worked during the days the Factory was not in actual operation. Since it was undisputed that the laborers were paid daily wages for services actually rendered and did not have a fixed monthly salary, their potential to earn was contingent upon the Factory's production activity. The evidence clearly established that the Factory produced oil and copra cake for only thirty-nine (39) days during the relevant period. Consequently, the workers would not have earned any wages for the remaining forty-six (46) days of the 85-day lockout period because the facility was closed. To base the award on 85 days would be to compensate the workers for time they would not have been paid for even under normal circumstances. Therefore, the order was modified to reduce the award to match the 39 days of actual operation.
Main Doctrine
Back wages for illegally dismissed workers should be computed based on the number of days the employer was actually in operation and milling, not on the basis of calendar working days during the period of lockout, especially when workers are paid daily wages for services actually rendered.