Lexal Laboratories v. National Chemical Industries Workers Union-PAFLU (Lexal Laboratories Chapter)
REITERATIONFacts
The Antecedents: Guillermo Ponseca, an employee of Lexal Laboratories (Lexal), was dismissed. The Court of Industrial Relations (CIR) ordered his reinstatement with full back wages from the date of dismissal until actual reinstatement, without loss of seniority and other rights. Procedural History: The CIR, through its Chief Examiner and Economist, determined Ponseca's back wages. The order of February 16, 1965, stipulated back wages from November 5, 1958, to November 24, 1963. It included a daily rate of P4.50, with an additional P4.00 per diem for days Ponseca was supposed to be in the provinces. A subsequent resolution on May 22, 1965, modified the order by deducting P5,000.00 previously paid and P610.00 earned from other sources. The Appeal: Petitioners Lexal Laboratories and Jose Angeles appealed to the Supreme Court, objecting to the inclusion of the P4.00 per diem in the back pay computation, arguing that Ponseca did not actually spend for meals and lodgings as he remained in Manila, his station. The CIR had justified the per diem inclusion by stating it was paid regularly.
Issue(s)
Whether per diems are included in the computation of back wages. Whether the number of days credited for back pay computation was accurate.
Ruling
The Supreme Court modified the order of the Court of Industrial Relations. It ruled that per diems should not be included in the back wages as they are intended to reimburse actual expenses incurred when an employee is away from their home base, and Ponseca did not incur such expenses. The Court also corrected the number of days for back pay computation.
Ratio Decidendi
On Issue 1: The Court ruled that per diems are not automatically included in back wages. Per diem is defined as a daily allowance for expenses such as lodging and subsistence when an employee is on duty away from their home base. Since Guillermo Ponseca did not leave Manila, his permanent station, he did not incur any expenses for meals and lodging outside of Manila. Therefore, there was nothing to reimburse, and he was not entitled to per diems as part of his back wages. Back wages are specifically for lost wages, and Ponseca only lost his daily wage of P4.50, nothing more. On Issue 2: The Court found an error in the CIR's computation of the number of days for back pay. The CIR credited Ponseca with 1,856 days from November 5, 1958, to November 24, 1963. Upon review, the Supreme Court determined that the correct number of days within this period is 1,846 days. The Court meticulously broke down the calculation by month and year to arrive at the accurate figure. Consequently, the total net backpay due to Ponseca was recalculated based on 1,846 days at P4.50 per day, less previous payments and earnings from other sources, resulting in a net backpay of P2,697.00.
Main Doctrine
The Court of Industrial Relations (CIR) erred in including per diems in the computation of back wages for an employee who did not incur expenses for meals and lodging outside his home station. Back wages are meant to cover actual lost earnings, and per diems are reimbursements for actual expenses incurred while away from the home base.