Visayan Stevedore Transp. Co. v. Court of Industrial Relations
REITERATIONFacts
The Antecedents: The Visayan Stevedore Transportation Company (VISTRANCO) engaged in loading and unloading vessels, with workers supplied by the United Workers' and Farmers' Association (UWFA). On November 11, 1955, VISTRANCO terminated the services of 138 UWFA members. A complaint for unfair labor practice was filed against VISTRANCO, which was found guilty by the Court of Industrial Relations (CIR). This Court affirmed the CIR's decision in G.R. No. L-21696 on February 25, 1967. Procedural History: Following the finality of the decision, the CIR directed the Chief Examiner to compute the backwages for the 138 UWFA members. The Chief Examiner initially sought guidance, and the CIR, with the conformity of both parties, adopted a basis for computation from VISTRANCO's motion, using the percentage of earnings from available payrolls of vessels handled before the stoppage. The Chief Examiner submitted a report on August 20, 1969, computing backwages at P78,468.48 from November 12, 1955, to July 31, 1969. Both UWFA and VISTRANCO opposed this report. Subsequently, the Chief Examiner submitted further reports, including one on October 10, 1970, which computed backwages based on total milling days of sugar centrals, yielding significantly higher amounts (P1,634,711.10 and P1,473,427.60). The CIR, in its October 30, 1972 order, approved the August 20, 1969 report and ordered VISTRANCO to deposit P78,468.48, with further computation for backwages up to actual reinstatement. The CIR en banc denied motions for reconsideration in a September 26, 1973 resolution. The Petition: Both UWFA and VISTRANCO filed petitions for review. UWFA and intervenors argued that the P78,468.48 award was unfair and an abuse of discretion, seeking a higher computation based on the October 10, 1970 report. VISTRANCO contended that backwages should not extend beyond June 27, 1961, when its Hinigaran branch ceased operations.
Issue(s)
Whether the Court of Industrial Relations committed an abuse of discretion in its method of computing backwages for seasonal stevedoring workers. Whether the 'Mercury Drug Rule' (Fixed Backwages) should be applied to finally resolve a backwages dispute that had been pending for over two decades.
Ruling
The Supreme Court modified the order of the Court of Industrial Relations. It ordered Visayan Stevedore Transportation Company to pay a total amount of P361,000.00 without qualification or deduction to the 138 petitioners-workers, representing their backwages.
Ratio Decidendi
On Issue 1: The Court found that there was no accurate or agreed-upon basis for computing the backwages due to the irregular nature of stevedoring operations at Hinigaran. The workers argued for a computation based on a standard 30-day work month, while the company argued the work was strictly seasonal and based on a rotation system that only activated when vessels were in port. The Court noted a 'wide divergence' between the parties' claims—ranging from P78,468.48 to over P2,800,000.00. Because the labor supply exceeded demand and the schedule was irregular, a strict mathematical computation based on hypothetical full-time work would be 'fantastic and unrealistic,' yet the CIR's approved amount was deemed insufficient. Consequently, the Court found it necessary to adopt a pragmatic approach to resolve the impasse. On Issue 2: To end the 'protracted delay' in the execution of an award for a 1955 dismissal, the Court applied the precedent set in Mercury Drug Co. vs. CIR and FEATI University Faculty Club (Paflu) vs. FEATI University. These cases establish the rule of fixing backwages at a 'just and reasonable level' without qualification or deduction. This approach 'obviates the twin evils' of employee idleness and the 'attrition and protracted delay' caused by employers who hold extended hearings to determine actual earnings (aliunde earnings) during the layoff period. By applying this formula, the Court fixed the backwages at an amount equivalent to five years of work for each category of worker (Cabo, Winchman, Signalman, and Stevedore), totaling P361,000.00. This fixed sum rendered it unnecessary for the Court to determine exactly when the Company stopped its Hinigaran operations or to audit the workers' other earnings over the 20-year span.
Main Doctrine
The Court modified the order of the Court of Industrial Relations by fixing the total amount of backwages to P361,000.00 without qualification or deduction, applying the precedent of awarding a just and reasonable level to avoid protracted delays in execution.