St. Louis College Of Tuguegarao v. National Labor Relations Commission
REITERATIONFacts
1. The Antecedents: St. Louis College of Tuguegarao sought to terminate the employment of its faculty members, Bernabe Avera and Jose Simangan, on the grounds of old age. Avera was employed in 1974 at age 66, and Simangan in 1978 at age 68. Simangan's employment contract was for a definite period ending March 13, 1979. The private respondents opposed the termination, leading to a dispute over their dismissal. 2. Procedural History: The labor arbiter upheld Simangan's dismissal but ordered Avera's reinstatement with back wages. Both Simangan and the College appealed to the National Labor Relations Commission (NLRC). The NLRC dismissed the College's appeal for lack of an oath but ordered Simangan's reinstatement with back wages. The College's subsequent petition for certiorari to the Supreme Court was dismissed. Following a fire that destroyed NLRC records, the records were reconstituted, and a new NLRC decision on July 18, 1984, awarded back pay to both Simangan and Avera from 1979 to July 1984 and ordered their reinstatement. This decision was also affirmed by the Supreme Court. The private respondents then complained that the back wage computation excluded certain benefits, leading the NLRC to remand the case for recomputation. The NLRC later granted the College's motion for reconsideration on specific issues regarding the computation of back wages. 3. The Petition: St. Louis College of Tuguegarao filed a third petition for certiorari, arguing that the NLRC committed grave abuse of discretion by including fringe benefits in the back wage computation and by not limiting the award to three years, contrary to established doctrine. The private respondents contended that the previous decisions were final and executory. The Supreme Court, while acknowledging the finality of prior decisions, focused on the correct interpretation of these decisions regarding the computation of awards. The Court ruled that fringe benefits should be included in back wages, citing precedent. However, it modified the award of back wages to be limited to three years, citing the advanced age of the respondents and the Mariners Polytechnic School v. Leogardo case. The Court also ruled that reinstatement was no longer feasible due to their age and ordered separation pay instead.
Issue(s)
Whether the NLRC committed grave abuse of discretion in including fringe benefits in the computation of back wages. Whether the NLRC committed grave abuse of discretion in not limiting the award of back wages to three years, considering the age and circumstances of the employees.
Ruling
The Supreme Court modified the challenged decision. The award of back wages was limited to three years only, and the private respondents were entitled to separation pay in lieu of reinstatement.
Ratio Decidendi
On the inclusion of fringe benefits in back wages: The Court held that the weight of authority is against the petitioner's position that including vacation and sick leaves would constitute double compensation. It is settled that an employer must pay an illegally dismissed employee the full amount of salaries or wages, plus all other benefits and bonuses they would have normally received. Citing established jurisprudence, the Court affirmed that the computation of back wages must take into account not only the basic salary but also transportation and emergency allowances, as well as regular allowances. Furthermore, the decree on back wages is understood to be inclusive of leave benefits, as the grant of back wages without qualification considers all working days, regardless of holidays or leave days. Therefore, the NLRC did not commit grave abuse of discretion in including fringe benefits. On the limitation of back wages to three years: The Court resolved this issue against the private respondents, acknowledging that while the NLRC decision ordered back wages from dismissal until reinstatement (over three years), this period could be reduced. The open-ended duration of the period prescribed in the NLRC decision made it subject to the three-year limitation doctrine. The Court invoked the case of Mariners Polytechnic School v. Leogardo, which reiterated the consistent application of the three-year doctrine for back wages, even if not explicitly imposed in the original judgment, considering it a clerical omission. The Court found it only fair that Avera and Simangan, who were already 71 and 73 years old at the time of dismissal, be allowed back pay only for three years, as they could not be expected to continue indefinitely in employment and could not easily obtain other employment at their age. The Court also noted that the order for reinstatement was no longer feasible due to their advanced age, thus warranting separation pay instead.
Main Doctrine
The computation of back wages for illegally dismissed employees must include all benefits and allowances they would have normally received, not just the basic salary. However, the duration of back wages, even if not explicitly limited in the original decision, is subject to a three-year limitation in accordance with established jurisprudence, especially in cases involving employees of advanced age.