Escario v. National Labor Relations Commission
REITERATIONFacts
1. The Antecedents: The petitioners, employees of Pinakamasarap Corporation (PINA) and members of the Malayang Samahan ng mga Manggagawa sa Balanced Foods (Union), were involved in a series of labor disputes. Initially, on March 13, 1993, a walkout occurred in support of a union officer, which led to the preventive suspension and subsequent termination of union officers. Subsequently, on April 28, 1993, the Union filed a notice of strike, and a strike commenced on June 15, 1993. PINA responded by charging the striking employees with unfair labor practice and abandonment of work, citing violations of their collective bargaining agreement, including sabotage, slowdowns, misconduct, disobedience, workplace disruption, abandonment, and illegal picketing. 2. Procedural History: The initial complaint for unfair labor practice filed by PINA resulted in a ruling that the March 13, 1993 incident was an illegal walkout, leading to the loss of employment for most union officers. The subsequent strike initiated by the Union was declared illegal by Labor Arbiter Jose G. de Vera on August 18, 1998. On appeal, the National Labor Relations Commission (NLRC) affirmed the illegality of the strike but reversed the finding of abandonment, ordering PINA to reinstate the employees without backwages or to pay separation pay. The petitioners challenged the NLRC's decision before the Court of Appeals (CA), arguing for full backwages and the declaration of their strike as a good faith strike. The CA affirmed the NLRC's decision on August 18, 2003, holding that Article 264(a) of the Labor Code, not Article 279, was applicable and that reinstatement without backwages was proper. 3. The Petition: The petitioners are seeking a review of the Court of Appeals' decision through a petition for review on certiorari. They contend that their reinstatement entitles them to full backwages from the date of dismissal until actual reinstatement, arguing that the CA erred in applying Article 264(a) of the Labor Code instead of Article 279 and in denying them backwages. They assert that the CA's decision is contrary to law and established jurisprudence. The core of their argument is that since they were not found to have abandoned their jobs, they should be compensated for the entire period they were out of work, as if they were illegally dismissed.
Issue(s)
Whether the petitioners are entitled to full backwages from the date of dismissal until actual reinstatement, and whether Article 279 of the Labor Code, or the third paragraph of Article 264(a), is applicable to the petitioners' situation. On the principle of "a fair day's wage for a fair day's labor", as it relates to backwages during an illegal strike. Whether the petitioners are entitled to separation pay in lieu of reinstatement, and if so, the appropriate amount.
Ruling
The Supreme Court affirmed the Court of Appeals' decision but modified the award of separation pay. The Court held that the petitioners, as mere members who participated in an illegal strike, were not entitled to backwages for the period they did not render work. However, in lieu of reinstatement, the petitioners were granted separation pay equivalent to one month's salary for every year of service, considering the long duration of the case and the infeasibility of reinstatement.
Ratio Decidendi
On the entitlement to full backwages and the applicable statute: The Court ruled that Article 264(a) of the Labor Code, not Article 279, was applicable. Article 279 pertains to employees who are "unjustly dismissed," meaning dismissed without just or authorized cause or without due process. In contrast, Article 264(a) specifically addresses dismissals arising from illegal strikes. The third paragraph of Article 264(a) provides for reinstatement with full backwages only in cases of unlawful lockout. For illegal strikes, it distinguishes between union officers, who may lose employment status, and union members. Mere participation of a union member in an illegal strike does not automatically result in loss of employment, unless they commit illegal acts during the strike. However, even in cases of reinstatement after participation in an illegal strike, backwages are not awarded because the principle of "a fair day's wage for a fair day's labor" dictates that employees are not entitled to wages for periods when they did not render work. The petitioners did not deny their participation in the illegal strike, thus they did not suffer any loss of earnings during their absence from work. On the principle of "a fair day's wage for a fair day's labor": The Court reiterated that backwages are not granted to employees participating in an illegal strike because they do not render work for the employer during that period. This principle ensures that employees are compensated only for services actually rendered. The Court cited G&S Transport Corporation v. Infante and Philippine Marine Officers’ Guild v. Compañia Maritima to support the view that backwages are only awarded when an employee is illegally prevented from working, such as in cases of illegal lockout, suspension, or dismissal, and not when the absence is due to participation in an illegal strike. Therefore, the petitioners' reinstatement sans backwages was in order, conforming to the policy of fair compensation for labor performed. On the award of separation pay in lieu of reinstatement: The Court found that reinstatement of the petitioners was no longer feasible due to several factors, including the passage of almost 17 years since the strike, the obsolescence and replacement of company machinery, and the abolition of positions related to sales and distribution. The Court noted that separation pay is a measure of social justice, granted even in cases of valid dismissal, provided the dismissal was not due to serious misconduct. Given the circumstances and the long duration of the litigation, the grant of separation pay was deemed proper. The Court further held that the appropriate amount for separation pay should be equivalent to one month's salary for every year of service, citing precedents like G&S Transport and Association of Independent Unions in the Philippines v. NLRC, where similar awards were made after significant periods had elapsed since the illegal strike.
Main Doctrine
Employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike, even if reinstated, as they did not render work during that period. However, separation pay equivalent to one month's salary per year of service may be granted in lieu of reinstatement when feasible.