EAST ASIATIC COMPANY, LTD., E. JAKOBSEN, P. SORENSEN AND K. R. NIELSEN, PETITIONERS, VS. THE COURT OF INDUS­TRIAL RELATIONS, THE EAST ASIATIC CO. EM­PLOYEES UNION (PTUC) AND SOL…

Appeal by way of a petition for certiorari, from the May 12, 1967
order of Associate Judge Emi­liano C. Tabigne and the en banc resolution on the
motion for reconsideration of the said order, is­sued by the respondent Court
of Industrial Relations in connection with the proceeding on execution had
therein relative to the reinstatement of and payment of back wages to
respondent Soledad A. Dizon, as or­dained in the
final and executory judgment rendered by it against
petitioners in its Case No. 1796-ULP, dated February 10, 1960, which was
affirmed on appeal by this Court on April 30, 1966 in G. R. No. L-17037.^[1]

Respondent Soledad A. Dizon was, from February 8, 1951 to August 31, 1958, continuously
employed by the petitioner East Asiatic Co. Ltd., a corporation licensed to
engage in the import, export and shipping business in the Philippines.  Having been dismissed on September 1, 1958
from the service of the said company, through its managers E. Jakobsen and K. R. Nielsen and its assistant-manager P. H.
Sorensen, respondent Dizon filed with the respondent
Court of Industrial Relations the aforemen­tioned Case No. 1796-ULP – a charge
of unfair labor practice against said petitioner company and its above-named
officials; and the court a quo, after appropriate proceed­ings,
rendered judgment against petitioners (respondents below) with the following dispositive portion:

“WHEREFORE, the Court, finding the respondents guilty of the
un­fair labor practices complained of, hereby orders them to cease and desist
from further committing the same and to reinstate Soledad A. Dizon immediately to her former position with back wages
from September 1, 1958 until actually reinstat­ed, with all the rights and
privi­leges acquired and due her, includ­ing seniority and such other terms and
conditions of employment existing at the time of her lay-off.”

This decision was affirmed by Us in G. R. No. L-­17037, supra,
on April 30, 1966 in the
following terms:

“WHEREFORE, her reinstatement with back pay was correctly
ordered.  Judgment affirmed, with
costs.”

It appears further that before this Court could return the
records of the case to the lower court for execution, the petitioner company
filed a manifesta­tion dated June 14, 1966, making known its willingness to
reinstate respondent Soledad A. Dizon to her former
position with the same salary she was receiving at the time of her dismissal
from its service.  To that mani­festation
respondent Dizon filed a counter-manifestation
wherein she averred that she was willing to be re­instated to her former
position, but her monthly salary should be the amount she was receiving on the
date of her dismissal plus the yearly general wage increases petitioners have
given to their employees from 1958 to 1965. 
Petitioners made a reply to the said counter-manifestation, reiterating
their previous offer to re­instate respondent Dizon
to her former position as stated in their previous manifestation, and pointing
out that by the terms of the decision ordering her re­instatement the same is
to be made on the basis of what said respondent was receiving at the time of
her lay­off.  Acting thereon, on June 30, 1966, this Court is­sued a
resolution worded as follows:

“In G. R. No. L-17037 (The East Asiatic Co., Ltd., et al. vs.
Court of Industrial Relations, et al.) the Court resolved:  Petitioners’ reply to respondents’
counter-manifestation of June 16, 1966 is here­by noted, with the observation
that the matter treated of therein, as well as in the previous manifesta­tions
of the parties, may be taken up on the lower court in connection with the
implementation of its deci­sion, which has been affirmed by this Court.”

Meanwhile, a motion to compute the backwages
due her under the decision in her favor appears to have been filed by respondent
Dizon on June 8, 1966, which motion became the
subject of an opposition submitted by the petitioners before the Court of
Industrial Rela­tions, and whereupon, the trial court issued the fol­lowing
order:

“Acting on the motion to com­pute filed by the complainants,
through counsel, alleging among others that the decision of this Court in the
above-entitled case dated February 10, 1960, affirmed by the Supreme Court in a
final entry of judgment dated April 30, 1966, is now final and executory and, therefore, the computation of her backwages is now in order and finding the motion
well-taken.

“WHEREFORE, as prayed for, the Chief of the Examining Divi­sion
of this Court or his autho­rized representative, is hereby directed to proceed
to the offices of the respondent East Asiatic Co., Ltd. at Hongkong
& Shanghai Build­ing, Juan Luna, Manila, which is requested to make its
record per­tinent in this case available to said Examiner – and verify and
compute from such records the backwages of the
individual complain­ant in accordance with the final decision of this Court
dated Feb­ruary 10, 1960 and immediately upon termination to submit a re­port
thereof for further disposi­tion of this Court.”

Pursuant to the order above-quoted, the Chief Exa­miner of the
examining division of the court a quo made the required
computation and, thereafter, submitted the corresponding report thereon, dated
March 2, 1967, in­forming the trial court that the backwages
to which re­spondent Dizon should be entitled for the
period from September 28, 1958 (date of her dismissal) to February 28, 1967
(apparently, this was the date the examination was concluded, up to which,
respondent was still not re­instated) would amount to P30,090.00, while her
earn­ings from other employers during the same period that she was separated
from the service of petitioners amount to P42,881.44 (P6,691.44 – earned in the
Philippines; and, P36,190.00 – the peso value of respondent’s alleged dollar
earnings in the United States, computed at the exchange rate of P3.90 to $1.00)
And on the basis of these figures, the said examiner concluded in his report
that “If the total amount of P42,881.44 representing the earnings
elsewhere of Mrs. Soledad Dizon were allowed by the
Honorable Court as proper deductions from her comput­ed total backwages of P30,090.00, she will no longer re­ceive any
back wages.” After a hearing was had on the said report, and after
considering the various pleadings commenting thereon (Annexes P, Q, R and S,
Petition) filed by the parties, Judge Emiliano C. Tabigne of the respondent Court issued an order, dated May
12, 1967, approving the P30,090.00 – backwages
computed by the examiner, but disallowing the P42,881.44 alleged out­side
earnings of respondent Soledad A. Dizon mentioned in
his report.  His Honor reasoned thus:

“The matter now before this Court is whether to approve or disapprove
the report of the Examiner dated March 2, 1967, especially that portion thereof
which computed alleged outside earnings of complainant Dizon
using as basis thereof alleged affi­davits of persons living in the United
States of America, copies of which are attached to the various manifesta­tions
filed by the respondents in this case.

“On this question and from the re­cords of this case, the
Court finds that the report of the Examiner in so far as it computed the backwages of complainant Dizon in
the amount of P30,090.00 is correct.  On
the point, however, of whether or not to deduct the amount of P42,881.44 from
the backwages due complainant Dizon,
the Court is of the considered opinion that the same may not be deducted therefrom.  This is
so because respond­ents failed to adduce any evidence in support of their claim
that complain­ant Dizon earned that much from other
employers.  The Examining Division of
this Court, in arriving at such figure, made use of alleged affidavits of
persons in the United States
copies of which are attached to the manifest­ation filed by respondent in this
case.  The Examiner of the Court in so
doing, exceed his authority, as stated in the Court order dated December 13, 1966.  Said Examiner was not directed to com­pute
any other wages against said claim. 
Furthermore, when the respondents were given the opportunity to present
competent evidence in support of their allegation that complainant Dizon earned that amount during the time of her dismissal,
they failed to do so.  The alleged
affidavits attached to the various manifesta­tions filed with this Court were
not even identified by witnesses.  So
that such alleged affidavits are merely pieces of paper and do not have any
value as evidence.  In passing the Court
also is of the considered opinion that claims for wages earned outside the
jurisdic­tion of this country and necessarily this Court, are not those wages
that may properly be considered to offset any computed claims for backwages.  The law
envisions that these claims should be within the jurisdiction of this Court and
not otherwise.  The claims of respondents
for Dizon’s earnings elsewhere find no merit.

“WHEREFORE, this Court finds that the computed backwages of Sole-dad A. Dizon in
the amount of P30,090.00 is hereby approved; and respond­ents are ordered to
pay said sum to complainant Dizon’s backwages.  Fur­ther,
the alleged outside earnings of complainant Dizon are
hereby de­nied for lack of merit.  The
Exami­ning Division of this Court is fur­ther directed to compute the backwages due complainant Dizon
from March 1, 1967 up to the
date she is actually reinstated.

“In view of the fact, however, that complainant Dizon did not pre­sent any evidence in support of her claim
that she is entitled to fringe benefits, etc., cited in her motion to compute
dated June 8, 1966, the same
is hereby denied.”

Petitioners filed a motion for reconsideration of this order with
the Court of Industrial Relations en banc which resolved the said
motion with a divided vote of three to two. 
In a resolution dated June 27, 1967, Asso­ciate Judge Emiliano C. Tabigne, with the
concurrence of Presiding Judge Arsenio I. Martinez,
voted to deny the motion; while Associate Judge Amando
C. Bugayong, in a separate concurring and dissenting
opinion which was concurred in (in the result) by Associate Judges Ans­berto P. Paredes and Joaquin
M. Salvador, voted to mo­dify the order sought to be reconsidered in the sense
that respondent Dizon was held to be no longer
entitled to reinstatement, nor to backwages from the
time she left the Philippines for the United States.  Pertinent portions of this majority opinion,
read as follows:

“In a ‘Summary of Arguments’ filed with this Court dated July 10, 1967, it is submitted and
not denied that certain undisputable developments took place in that Dizon went to the United
States. 
In a pleading filed with the Supreme Court while this case was on appeal
therein, a copy of which was furnished counsel for Dizon
then in the United States,
she was formally asked to report for work the next day, June 15, 1966. 
She came back to the country.  One
day, counsel for respondents met her at the office of her lawyers and there she
was told to report to re­spondents for work, which she never did.  Again, she went to the United
States.

“Forthwith, the issue is whether Soledad A. Dizon is still entitled to reinstatement with backwages and how much. 
Her refusal to report for work and her continued stay in the United
States, it is believed, is a waiver of her
right to be reinstated.  Respondent
employer, or for that mat­ter any employer, could not be made to wait for her
to report at her pleasure.  She could not
dilly-dally with her presentation to management to work in order to make her backwages run until she chooses to report for work.

“On the matter of backwages, re­gardless
of whether she worked in the United States
or not and regardless of whether this Court has jurisdiction over her earnings
abroad, it is undisputable that while she was in the United
States, she could not have worked in the Philippines.  Con­sequently, although Soledad A. Dizon is entitled to backwages,
the same should commence from the time she was dismissed until she left the
country for the first time.  Hence, this
modification of the Order sought to be reconsidered because of the
above-mentioned developments that took place in the premises.”

In brief, in the lower court’s resolution en banc,
while the trial judge, with the concurrence of the presiding judge, ruled that
respondent Dizon is entitled to full payment of her backwages without any deduction of any kind, but at the
same time without any right to fringe benefits and general increases which the
peti­tioners might have given to their employees, from the date of her
dismissal to the date of her actual reinstatement, on the other hand, the three
other judges, constituting the majority, were in agreement that respondent’s backwages should be limited only to the period from her dismissal
to the date she first left for the United States, regardless of whether or not
she se­cured gainful employment there. 
Premise of the minori­ty’s conclusion is that no competent evidence was
pre­sented by petitioners to prove respondent’s other al­leged employments
whether here or in the United States, while the majority considered the fact of
respondent’s having left for America as undisputed and the proof of her
earnings there as irrelevant and immaterial, for “while she was in the
United States, she could not have worked in the Philippines.”

After a review of the record, the Court holds that neither of
these two views is entirely correct.

The specific basis of the minority in ruling against petitioners’
claim for deduction of alleged earnings elsewhere of respondent after her
lay-off is that the affidavits submitted by them were nothing but mere copies
of originals, the existence of which has not been shown, and, in any event, the
said affidavits and even the testimony of the lone witness, a certain G.
Francisco, from Standard Vacuum Oil Company, are either hearsay or inconclusive
or vague.  It is obvious that such ruling
is overtechnical and does not conform with the
provisions of the law, much less the spirit inform­ing them.  Not only does Section 20 of Commonwealth Act
103 creating the Court of Industrial Relations precisely endow the said court
with such plenitude of authority “(T)hat in the hearing, investigation and
determination of any question or controversy and in exercising any du­ties and
power under this Act, the Court shall act accord­ing to justice and equity and
substantial merits of the case, without regard to technicalities or legal forms
and shall not be bound by any technical rules of legal evi­dence but may inform
its mind in such manner as it may deem just and equitable”, but Section
5(b) of the Indus­trial Peace Act pointedly provides that in unfair labor
proceedings,

“x x x the
rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of this Act that the Court and
its members and Hearing Examiners shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively and with­out regard
to technicalities of law or procedure. 
In rendering its de­cision, the Court shall not be bound solely by the
evidence pre­sented during the hearing but may avail itself of all other means
such as (but not limited to) ocular inspections and questioning of well?informed
persons which results must be made a part of the record.  In the proceeding before the Court or a
Hearing Examiner thereof, the parties shall not be required to be represented
by legal counsel and it shall be the duty and obligation of the Court or Hearing
Examiner to examine and cross-examine witnesses on behalf of the parties and to
as­sist in the orderly presentation of evidence.”

The determination of how much should be paid as backwages when payment thereof is ordered in an unfair
labor practice case constitutes either an inevitable sequel or a part and
parcel of the whole proceeding.  Conse­quently,
there is no reason why the same simple, liberal and non-technical procedure
indicated in Section 5(b) just quoted should not be observed in such
determination, particularly if it is considered that under Section 5 (c), the
discretion granted to the court in the imposi­tion of the appropriate sanction
against any party guilty of unfair labor practices is so broad that it is not
confined merely to the issuance of an “order requir­ing such person to cease
and desist from such unfair la­bor practice” but includes also the
authority to “take such affirmative action as will effectuate the policies
of (the) Act, including (but not limited to) reinstate­ment of employees with
or without backpay and including rights of the
employees prior to dismissal including se­niority.”, and having in view,
further, the limited time of thirty (30) days within which the matters
“relative to such disputes” is mandatorily
required to be decided by the Court, (Section 5 [d],which considerations unmis­takably
indicate the policy of the law to make all un­fair labor practice proceedings
and the incidents there­of as simple, speedy and expeditious as possible, to
the end that they may be undertaken without regard to proce­dural technicalities
save as may be indispensable for due process and decided strictly according to
the sub­stantial merits of the respective claims of the parties.  (Ang Tibay vs. CIR, G. R. No. 46496, February 27,1940, 69 Phil.
635; Kapisanan Ng Mga Manggagawa sa MRR vs. Her­nandez,
G. R. No. L-19791, August 14, 1968,
24 SCRA, 591.)

Thus, much of the delay in the disposition of this case could
have been avoided had the Industrial Court
adopted a more practical and less technical approach to the problem before it,
as envisioned by the law. In principle, respondent’s right to backwages was not being seriously denied by
petitioners.  The only question raised by
them was as to the amount thereof; in other words, how much, on the one hand,
should be added to the basic pay by way of restoration of “all rights and
pri­vileges acquired and due her, including seniority and such other terms and
conditions of employment existing at the time of her lay-off” as ordained
in the judgment and as contemplated in the above-quoted provisions of the law
and, on the other, how much should be deducted therefrom
by way of earnings elsewhere pursuant to the guidelines set down in Itogon-Suyoc, infra, and the long/line of decisions,
to be more appropriately cited later, on the same point.

In connection with such position of petitioners, it appears that
they had manifested to the court below their willingness to immediately
reinstate respondent “in her former position with the salary she was receiving
at the date of her separation from its service.” Of course, such
manifestation was hardly of any legal significance, since the judgment to be
implemented was already final and executory and could
not be subjected to conditions inconsistent therewith, and neither was the
subsequent counter-manifestation of respondent imposing her own conditions for
her return to work of any legal consequence, as she had no right to ask for
more than what the deci­sion granted her. 
The point is that in such a situation, it is implicit in the law that
what the court should have done as the initial step was to order immediate
implemen­tation of the ordered reinstatement, without prejudice to resolving
the question of backwages afterwards.  In that manner, all of these questions vexing
the parties and the court could have been avoided or at least minimized.  After all, it is the long lay-off that
creates problems not only for the employer, with regard to how much has to be
paid in backwages, but also, and this is worse, for
the discharged employee or worker, as to whom naturally the damage is always
bound to be beyond complete repair since during the uncertain period of
lay-off, he and his family have to undergo the difficulties, hardships and
vicissitudes of unemployment until he can have some kind of earning
elsewhere.  On the other hand, with
immediate reinstatement upon the court’s finding of just and legal ground therefor no injury is caused to either employer or
employee, for the former gets the benefit of the lat­ter’s work and the latter
receives due compensation therefor.  The obvious advantages of this arrangement in
terms of industrial peace and economic and social progress, and to the larger
interests of the nation as a whole, are in­calculable.

As to the exact amount of her backwages,
it is unquestionable that under the decision being executed, respondent, as
already stated, is entitled to “all the rights and privileges acquired and
due her, including seniority, and such other terms and conditions of employ­ment
existing at the time of her lay-off.” In Philip­pine Air Lines, Inc. vs.
PALEA, et al., G. R. No. L-­21120, Feb. 28, 1967, involving an almost
identically worded judgment as in this case, We held such judgment to mean
“backwages for the lay-off period, coupled with
the ‘seniority or other rights and privileges’ attached to the status of the
employees when they were dismissed, (or) (T)o put it differently, said
employees (should be treated) as if they had not been absent from work and had
been uninterruptedly working during the lay-off period.” Having in view
the spirit of the law, the court should not have expected respondent to assume
the whole burden of proving the factual bases of the relief to which she is
entitled.  From their very nature, such
matters are more or less within the peculiar knowledge of her employer, since
they are necessarily found in the books and records of the latter.  In any event, it was incumbent upon both
parties to disclose to the court all the material facts, within their respective
particular knowledge instead of ex­pecting the other to follow the ordinary
procedure of pre­senting evidence to prove them.  As may be noted in the procedure for unfair
labor practice proceedings outlined in Section 5(b), supra, in cases of
this nature, the court, unlike in ordinary cases, does not act merely as a
referee but is supposed to take active part in drawing out the true facts from
the parties concerned, exercising thus more of the administrative than the
judicial aspect of its au­thority.  Accordingly, in the face of seeming inadequacy
of respondent’s evidence relative to the “rights and privi­leges”
which the basic decision recognized she is entitled to and/or the apparent, if
natural, hesitancy of petitioners to disclose facts connected therewith within
their pe­culiar knowledge, it was incumbent upon the court to take the needed
steps to compel the petitioners to cooperate with it by being candid and frank
about such facts and not to hide behind the usual cloak of the technicality
that it is respondent’s exclusive responsibility to establish her claim.  Under the law, such responsibility for the
discovery of the material facts is not of the worker or employ­ee alone, but of
the employer and, in a sense, of the court as well.  Hence, it is the duty of the Examiner charged
by the court to compute backwages, as in this case,
to look into the books and records of the employer and report to the court the
relevant facts appearing therein connected with the claim of the discharged
employee or worker and it is the correlative obligation of the employer to
allow such examination.

Now, turning to the deductions claimed by petition­ers, although
the basic decision in this case did not say so expressly, it is well settled
that an employer is enti­tled to deduct from what the court orders to be paid
as backwages, privileges, etc., whatever an employee
has earn­ed elsewhere during the period for which backwages
are supposed to be paid, hence such qualification must be con­sidered implied
in all judgments ordering reinstatement, unless otherwise expressly ordered for
reasons the court may deem justified.  In
a rather long line of decisions involving payment of backwages
to employees who have been illegally dismissed in consequence of unfair labor
prac­tices on the part of their employers, We have uniformly held that whatever
the dismissed laborer had actually earned during the period of his illegal
dismissal should be deducted from his computed backwages
for the same period,^[2]
on the principle that no one should be allowed to enrich himself at the expense
of another.^[3]
And in this connection, We stated in precise terms the guide­lines to be
observed in the ascertainment of total backwages
payable in Itogon-Suyoc Mines, Inc., supra,
thus

“Since the dismissal of re­spondents in 1958, more than ten
years had elapsed.  It would not seem out
of place to restate the guidelines to be observed in the ascertainment of the
total backwages payable under the judgment
below.  These are:

“First.  To be
deducted from the back wages accruing to each of the laborers to be reinstated
is the total amount of earnings obtained by him from other em­ployment(s) from
the date of dis­missal to the date of reinstate­ment.  Should the laborer decide that it is
preferable not to return to work, the deduction should be made up to the time
judgment becomes final.  And these, for
the reason that em­ployees should not be permit­ted to enrich themselves at the
expense of their employer.  (Philippine
Air Lines, Inc. vs. Philippine Air Lines Employees Association, L-15544, July
26, 1960 and cases cited therein.) Besides, there is the ‘law’s
abhorrence for double compensation.’ (Republic Savings Bank vs. Court of
Industrial Rela­tions, 1967D Phild. 198, 202
[Resolution]).

“Second. 
Likewise, in miti­gation of the damages that the dismissed respondents
are enti­tled to, account should be ta­ken of whether in the exercise of due
diligence respondents might have obtained income from suitable remunerative em­ployment.  (Sotelo vs. Behn, Meyer & Co., H. Mij.,
57 Phil. 775, 778-779, citing Garcia Palomar vs. Hotel de France Co., 42
Phil. 660. See:  Sta. Cecilia
Sawmills, Inc. vs. Court of Industrial Relations, L-19273 & L-19274, February 29, 1964; Mindanao Motor
Line, Inc. vs. Court of Industrial Relations (L-18418) and Aboitiz
and Company, Inc. vs. Court of Indus­trial Relations (L-18419), No­vember 29, 1962; Durable Shoe
Factory vs. Court of Industrial Relations, 99 Phil. 1043; Aldaz
vs. Gay, 7 Phil. 268, 271.) We are prompted to give out this last reminder because
it is really unjust that a discharged employee should, with folded arms, remain
inactive in the ex­pectation that a windfall would come to him.  A contrary view would breed idleness; it is
conducive to lack of initiative on the part of a laborer.  Both bear the stamp of undesirability.”

Again, it must be emphasized that it is inconsistent with the
intent of the law to permit the parties to play hide-and-seek in connection
with the determination of the bases and the amounts of the deductions to be made.  In the same manner that the employer must
disclose the material facts within his peculiar knowledge affecting the rights
and privileges of the discharged employee or work­er during the period of
lay-off so that the corresponding amounts to be added to the basic backwages may be speed­ily and justly determined, so also,
it is the correspond­ing duty of the employee or worker to be honest and fully
comprehensive in informing the court, with the least pos­sible delay, the
circumstances of any gainful employment or work he or she has had during the
lay-off period, par­ticularly the true income derived therefrom,
thereby to enable the court to make the corresponding deductions to which the
employer is entitled pursuant to the jurispru­dence abovecited.  Indeed, this duty of the employee or worker
to assist the court by frank and candid disclosure of his earnings elsewhere
during the period of lay-off is but a corollary of his obligation to minimize
his own da­mages consequent to the action, if unwarranted and illegal, of the
employer.  There is no sense in
construing the law in such a way as to permit or oblige the parties to engage
in protracted and complicated proceedings which can only result in probable
flaring up of emotions and the multiplication of reasons for discord, and more
im­portantly, the waste of man hours otherwise needed in the productive
enterprise or industry to which the employer is dedicated, when, after all,
what is sought cannot be anything more than what is fair and equitable.

Accordingly, both views in the court below must be rectified and
the decision appealed from accordingly mo­dified.  We hold that the ruling of the majority in
the court below to the effect that the respondent Dizon
is entitled to backwages only from the time of her dismissal
to the date she left for the United States on July 15, 1964 is not good law, in
the sense that it fails to con­sider that in this particular case it is
undisputed that respondent’s departure for the United States was to look for
employment, fulfillment precisely of her obligation to minimize her damages
resulting from her unjusti­fied dismissal. 
As long as the reinstatement of an ille­gally dismissed worker or
employee has not been carried out he can seek employment or work anywhere,
including in a foreign country.  Surely,
his departure from the Philippines for such purpose should not constitute a
waiver of his right to reinstatement; it is only if he unjustifiedly
or unreasonably refuses to report for work with his former employer after his
reinstatement has been ordered or after his employer has offered to reinstate
him pur­suant to the judgment of the court that he could be con­sidered as
having renounced such right.  The bare
fact of his being actually employed elsewhere in any capacity cannot affect his
right to reinstatement, for the option is his to return or not to return to his
former work upon knowing of the order or offer of reinstatement; if he opts to
return, he has to be reinstated, subject to the conditions as to his backwages already elucidated above; if he refuses to return
or imposes uncalled for conditions therefor, then and
only then would his right to reinstatement cease, although he would nonetheless
be entitled to the same backwages already discussed
up to the time of such refusal.  In the
light of these crite­ria, the important question is, when should respondent be
considered as having waived her right to reinstatement, independently of when
she left for the United States and when she secured employment there, or, in
other words, when did she manifest her option to waive reinstatement either
expressly or by conduct unmistakably implying her option to forego the same?

In this respect, according to the lower court, it is

“x x x not
denied that certain un­disputable developments took place in that (respondent) Dizon went to the United States.  In a pleading filed with the Supreme Court
while this case was on appeal therein, a copy of which was furnished counsel
for Dizon then in the United States, she was formally
asked to report for work the next day, June 15, 1966.  She came back to the country.  One day, counsel for respondents met her at
the office of her lawyers and there she was told to re­port to respondents for
work, which she never did.  Again, she
went to the United States.”

Ordinarily, these findings of fact should
bind this Court, particularly because in unfair labor practice cases, the rule
to this effect in regard to cases appealed from the Court of Industrial
Relations which has long been established in the law and jurisprudence is
specifically reite­rated in Section 6 of the Industrial Peace Act thus:

“The findings of the (Indus­trial) Court with respect to
questions of fact if supported by substantial evidence on the record shall be
conclusive.  The appeal to the Supreme
Court shall be limited to questions of law only.”

In this case, however, the record reveals
that it is equal­ly undisputed that upon receipt of the offer of reinstate­ment,
which, by the way, was actually made on July 14,1966 or already after this Court
had rendered its judgment of April 30, 1966, respondent’s counsel lost no time
in mani­festing that she was

“willing to be reinstated to her former position but not with
the monthly salary she was receiv­ing on the date of her dismissal (as
stipulated in the offer).  Re­spondent Dizon should receive a monthly salary of P295.00 plus the
yearly general wage increases from 1958 to 1965 given by the petitioners to all
its employees.  To serve as gauge of what
respond­ent Dizon should receive as month­ly salary
effective on the date of her reinstatement, the respond­ents respectfully
inform the Honor­able Tribunal that the employee who replaced respondent Dizon in her position is presently receiv­ing the monthly
salary of P425.00, whereas at the time she assumed said position she was
receiving the monthly salary of P250.00.”

and that, in turn, counsel for
petitioners counter-manifested that pursuant to the decision of this Court
affirm­ing that of the lower court all that was ordered was that respondent be
reinstated “to her former position with backwages
from September 1, 1958 until actually reinstated, with all the rights and
privileges acquired and due her, including seniority and such other terms
and conditions of  employment existing at
the time of her lay-off.”

Otherwise stated, it was not exactly true that re­spondent
disregarded petitioners’ offer for reinstatement, as the lower court’s finding
would seem to imply.  On the contrary,
she indicated readiness to accept the same but; rather over-cautiously, she
wanted to be sure first that she was not going to lose any of the other rights
she wad accorded by the standing judgment in her favor.  For their part, petitioners must have been
motivated by the same feeling when they filed their counter-manifestation.  While their respective positions are somehow
understandable, it cannot be said that either of them acted in accordance with
the spirit of the law; and much less the court below.  As already explained above, under the
circumstances, what the court should have immediately done was to forthwith
implement the order of reinstatement, and the parties should have known better
than not to trust that the court would resolve all matters relative to the
other parts of the judgment in accordance with the law and jurisprudence
discussed above.  We reiterate that the
implementation of an order of reinstatement should not be delayed, much less
subjected to conditions proposed by the parties but not consistent with the
judgment and manifestly violative of their substantial
rights, since long periods of unjustified and illegal lay-offs are economically
and socially unwise and prejudicial to everyone concerned, most importantly to
the laboring or working classes.

Thus, in the circumstances of this particular case, We hold that
the court a quo should have seen to it that respondent returned
to the Philippines
by the earliest reasonable means as soon as she was notified of the judgment of
this Court and the offer of petitioners to rein­state her and reported for work
as soon as possible.  She should not have
been allowed to quibble about the terms of her reinstatement, nor the
petitioners to qualify the same, since the judgment and the law and
jurisprudence regarding them had necessarily to be followed.  Hence, to avoid further delay as regards this
particular point, all relevant things extant in the record considered, We hold
that respondent Dizon is entitled to backwages, computed together with her other rights and
privileges as above indicated, from the date of her dismissal to the date she
left the Philippines to return to the United States to resume her teaching job
thereat, which date she should reveal to the court a quo with
competent proof, subject to verification by petitioners and the court.  By failing to report for work with
petitioners when she had an opportunity to do so and leaving instead for the United
States with intent to resume her teaching
job, she must be deemed to have effectively waived reinstate­ment by
petitioners from said date.

Anent her earnings here and/or abroad during the period of her
lay-off, the motion to compute the backwages due the
respondent was filed as early as June 8, 1966 and it was only after almost a
year, or on May 12, 1967, that the trial judge resolved the matter and only
shortly before May 23, 1968^[4]
that the court en banc rendered the decision now on appeal.  Such delay is, to say the least, deplorable,
if only because the reason therefor is that in
dealing with the issues before it, the court a quo failed to
adhere to the spirit and intent of the legal provisions aforementioned
prescribing the procedure for the purpose. 
The record evinces an unex­plainable indifference on the part of the
trial judge in the face of the technical maneuvers of the parties not in
keeping with the nature of the proceedings. 
Each kept urging the other to prove facts, which each one knew very well
was within its own peculiar knowledge, and the court did nothing to compel both
of them to be more ho­nest and candid to it by disclosing the real facts within
their respective peculiar knowledge. 
Thus, instead of requiring petitioners to reveal on the basis of their
records what general increases, benefits and bonuses were granted to their
employees which respondent would have been entitled to share had she not been
laid-off, the Court merely waited for evidence to be presented by the
respondent, only to later on disregard them, rightly or wrongly, as
incompetent, by applying the strict rules of evidence for ordinary courts.  Consequently, the rul­ing of the lower court
denying respondent’s claim for fringe benefits, etc. on the ground that she
“did not present evidence in support” thereof cannot stand.

Likewise, when it came to the turn of the peti­tioners to prove
respondent’s earnings during the lay­off period, the court made no move to
compel respondent to disclose the facts pertinent thereto which were within her
peculiar knowledge.  In the situation in
which petitioners were found, it was only natural that they had to depend on
affidavits and certifications from knowledgeable people in the United States,
the taking of depositions thereat or the bringing here of competent witnesses
and records for the purpose being obviously impractical, but the court below
ruled out said affidavits and certifications, holding in utter non-chalance, surely unjustified, that

x x x when the
respondents (herein petitioners) were given the opportunity to present compe­tent
evidence in support of their allegations that complainant Dizon
earned (that amount) during the time of her dismissal, they failed to do
so.  The alleged affidavits attached to
the various manifesta­tions filed with this Court were not even identified by
witnesses.  So that such alleged
affidavits are merely pieces of paper and do not have any value as evidence, x x x.”

which holding is not even correct,
considering that in Luzon Brokerage Co. v. Luzon Labor Union, G. R. No. L-­17085,
July 31, 1963, 8 SCRA 509,
510, a case involving also backwages, We ruled
that:  “an affidavit is admis­sible
as evidence before the Court of Industrial Rela­tions for the reason that the
same is an administrative body.”

Worse, when petitioners availed a request for ad­missions, the
trial judge failed to observe the proce­dure governing this means of discovery
existing under the Rules of Court.  It
appears that in their effort to prove the earnings of respondent during the
lay-off, pe­titioners made a request to respondent for admission of pertinent
facts such as:

“1.  On January
8, 1962, you were employed by Warner, Barnes & Co., at a monthly
salary of P215.00.

“2.  On June
1, 1962, your above monthly salary in the said firm was increased
to P250.00.

“3.  On July
15, 1964, you volun­tarily resigned your said position in Warner,
Barnes & Co.

“4.  During the entire period of your employment by
Warner, Barnes & Co., you received during the periods mentioned hereinabove
the salary referred to hereinabove.

“5.  Furthermore, during the pe­riod of your
employment by Warner, Barnes & Co., you were granted Christmas bonuses,
vacation leave and all other privileges incidental to your employment by said
company.

“6.  After resigning from your position on July 15, 1964, you left for the United
States with your children.

“7.  As a matter of fact, you are now a permanent
resident of the United States.

“8.  While in the United
States, you have been employed by a teach­ing
institution and/or by travel agency, receiving from these two sources a total
income in dollars which when translated to pesos ex­ceeds the amount that you
would have received during the entire pe­riod of your separation from ser­vice
of the East Asiatic.

“9.  You returned to the Philip­pines
this year during the school summer vacation of the United
States and left again some time ago for the United
States to resume your various
employments.”

Instead of complying with said request,
respondent filed a reply excusing herself from compliance by contending that:

“1.  That the matters treated in the request are
improper and irrelevant at this stage of the proceed­ing in this case;

“2.  That request for admission is proper only
after issues have been joined and before any decision is issued in the case and
not after the decision has been promulgated and has become final and executory.”

To be sure, there was some deviation by
both parties from the procedure prescribed by Rule 26, since such a request
need not have been filed with the court and should have been addressed directly
to the respondent instead of her being merely furnished with copy thereof, and,
on the other hand, instead of the “reply” of respondent excusing
herself on the above-quoted grounds, the said grounds should have been
submitted formally for the resolution of the court as objections to the
request, pursuant to Sec­tion 2 of said rule, but such departure was no excuse
for the court not to play the part designed for it by Common­wealth Act 103 and
the Industrial Peace Act.  Instead of
ignoring the formal departure by the parties from Rule 26 and considering the
reply of respondent as her objection to the request for admission and correspondingly
ruling thereon so that the parties may be guided accordingly, the trial judge
appears to have completely disregarded both the request and the reply and did
not even make any men­tion thereof in his final order.  Said attitude is clear­ly erroneous.  The discovery procedures authorized by the
Rules of Court are by their very nature precisely suitable to proceedings of
the kind now before Us, since the main objective of discovery is to enable one
party to acquire knowledge of relevant facts which otherwise would be in the
peculiar knowledge of the adverse party alone and for that party to afterwards
make use of such acquired know­ledge either as evidence itself or as a means of
prepar­ing evidence in its favor, and it is in proceedings for the determination
of backwages in cases of reinstatement of illegally
discharged employees that the parties usual­ly indulge in the practice of
unnecessarily trying to conceal evidentiary facts from each other.  As a matter of fact, under the broad control
that the Industrial Court has over procedural matters and in order to expe­dite
proceedings and go directly to the substantial me­rits of the claims of the
parties, it can even adjust and modify the application of the modes of
discovery in cases before it accordingly as the demands of the particular
situation before it may require

Now, respondent’s above-quoted grounds of objection to
petitioners’ request are obviously untenable. 
While it is true that as a rule, discovery is best used before or during
the trial and before judgment, there can be no valid objection to allow
recourse thereto in proceedings in aid of execution of a judgment when the need
therefor arises because of the material issues of
fact more or less numerous or complicated, as in the case at bar, and specially
in cases before the Court of Indus­trial Relations wherein the court is free to
adopt the procedure it deems most conducive to attain its objective under the
law.  Accordingly, respondent’s
objections should have been overruled and she should have been prompt­ly
ordered to properly reply to the petitioners’ request for admissions.

Considering all the foregoing, We have no recourse but to return
this case to the court a quo for further proceedings.  This may entail further delay, but We have no
alternative because even the facts which petitioners requested to be admitted
are not as sufficiently detail­ed as to accurately and comprehensively include
all the circumstances of respondent’s employment and earnings during the
lay-off period in question; hence, even if We were to hold, as was prayed for
by petitioners in the court below, that the said facts be deemed admitted pur­suant
to Section 2 of Rule 26, in view of respondent’s failure to properly comply
with petitioners’ request and considering that anyway, her objections to the
request are completely untenable, there would still be no basis for a complete
judgment in this case.

Before closing, however, We consider it necessary to advert to
the attempt of the Court Examiner assigned to compute the income of respondent
from her employment in the United States
to determine the peso value of said income by multiplying her dollar earnings
by the rate of exchange of the American dollar to the Philippine peso.  Such a method of computation is uncalled for.  While viewed in terms of the rate of exchange
of our peso to the U.S. dollar, one’s income in the United States may appear to
be lucrative compared to one’s income in the Philippines, not to be overlooked
is the fact that, in more or less similar proportion, the living expenses and
the standard of living in said country are also relatively high.  As a result, dollar earnings should not be
computed on any exchange rate basis at all.

Furthermore, as a result of the erroneous basis thus used by the
Court Examiner, he also concluded that what respondent earned in the United
States is equiva­lent to P36,190.00, and since this is more than P30,190.00,
the total, according to his computation, of what respondent would have earned
from petitioners from the date of her dismissal to the date of computation,
respondent is no longer entitled to any payment from pe­titioners.  Again, this method of computation is erro­neous.

On this point, Northwest Airlines Employees Asso­ciation vs.
Northwest Airlines, Inc., supra, while not exactly identical in
circumstances with this case, in­dicates the governing, principle.  In that case, peti­tioner was a permanent
employee – as a flight steward­ess with a salary of P445.07 a month – of
therein re­spondent Northwest Airlines, Inc.  The company dismissed her from its service on September 23, 1960, in conse­quence
of which, petitioner filed an unfair labor prac­tice charge with the Court of
Industrial Relations against said respondent. 
On June 28, 1962,
while the case was pending in the CIR, petitioner applied to and was reemployed
by the same company on a temporary basis as passenger sales agent with the same
monthly salary of P445.07.  This,
notwithstanding, petitioner pursued her case further; and on September 30,
1963, the CIR decided the same, finding the respondent company guilty of the
unfair labor practice charge and ordering it to rein­state her to her former
job as flight stewardess “with full backwages
and without loss to (sic) her seniority and other acquired rights therein.”
When the company moved to reconsider, the CIR en banc resolved
that pe­titioner should be paid backwages from
September 24, 1960, the day after her dismissal, to June, 1962, when she was
reemployed on temporary basis, and, as it was shown that petitioner received a
number of salary increases as passenger sales agent, ordered that “the ex­cess
over P445.07 that she received from the company under the new designation
should also be deducted” from said backwages.  Thus, on August 9, 1965, when pursuant to a
motion for execution pending appeal, petitioner was reinstated to her former
position of flight steward­ess, she was paid her back salaries for the period
of her lay-off (from September 23, 1960 to June 27, 1962) at the rate of
P445.07 a month, minus all that she had received in excess of that rate during
the period of her employment as passenger sales agent from June 28, 1962 to
August 8, 1965.  The validity of this
deduction was put in issue in the petition with this Court and We held:

“The first issue raised in this petition is the validity of
such de­duction as ordered in the respond­ent Court’s resolution of July 21, 1964.  To justify the said order the respondent
company cites seve­ral decisions of this Court (Philip­pine Airlines vs. PALEA,
L-15544, July 26, 1960, 60 O.G. 8269; MacLeod & Co. vs. Progressive Federa­tion
of Labor, L-7881, May 31, 1955; Western Mindanao Lumber Co., Inc. vs. Western
Mindanao Federation of Labor, L-10170, April 25, 1957), wherein it was held
that whatever the dismissed laborers had actually earned during the period of
their illegal dismissal should be deduct­ed, on the principle that no one
should be allowed to enrich him­self at the expense of another.

“Several reasons militate against the application of those
decisions in the case now before us. 
First, whatever Louise Mateu earned during the
time she was work­ing as passenger sales agent was for services rendered to the
re­spondent company; she did not un­duly enrich herself at its expense in being
paid for them; on the contrary, it is the company that would be unduly enriched
if, after having received the benefit of such services, it should be allowed to
pay less than what they were worth. 
Secondly, since the parties are agreed that the period of the peti­tioner’s
dismissal was only from September 23,
1960 to June 1962, and since she was adjudged entitled to back
salaries only during such period, there is neither logic nor equity in taking
into account, for purposes of deduction the income she received
thereafter.  x x
x.”

Similarly, We cannot see any justification for Us to uphold here
the Examiner’s theory and virtually allow petitioners to escape the sanction
intended by the law for the unfair labor practice they were found guilty of by
final judgment of this Court, specially because to adopt such view would enable
petitioners in effect to enrich themselves from what the very victim of their
un­just and illegal act of dismissing her without suffi­cient cause earned thru
her own work and effort.  It is indeed
the height of inequity and injustice for any em­ployer to take advantage of a
favorable turn of fortune of his worker, laborer or employee he has dismissed
in violation of law and use such lucky break to elude the penalty provided by
the law for such violation.  It would be
a travesty of the Constitutional injunction that “the State shall afford
protection to labor (Section 6, Art. XIV, Constitution of the Philippines) if
the principle that a party damaged by another has the obligation to try to
minimize his damages were to be extended in the sense that what a laborer or
employee, after being op­pressed and illegally treated by his employer, has
earned by his own efforts, over and above the wages or salaries such employer
would have paid him had he not been laid off should be used in reducing the
award of damages to the worker.

In other words, the just and equitable rule re­garding the point
under discussion is this:  It is the
obligation of the employer to pay an illegally dismissed employee or worker the
whole amount of the salaries or wages, plus all other benefits and bonuses and
general increases, to which he would have been normally entitled had he not
been dismissed and had not stopped working, but it is the right, on the other
hand, of the employer to deduct from the total of these, the amount equivalent
to the salaries or wages the employee or worker would have earned in his old
employment on the corresponding days that he was actually gainfully employed
elsewhere with an equal or higher salary or wage, such that if his salary or
wage in his other employment was less, the em­ployer may deduct only what has
been actually earned.  For instance, if
the lay-off period is one year and the monthly salary of the employee or worker
is P300.00, which is equivalent to P10.00 a day, he would be enti­tled to backwages of P3,600.00, plus benefits, bonuses and general
increases, but, if during the year of lay­off, he was employed off and on, and
at one time earned P12.00 a day but at another time only P8.00 a day, what
should be deducted would be P10.00 for everyday that he was earning P12.00 and
only P8.00 for everyday that he was earning such amount.  Otherwise stated, all earning of the
dismissed employee or worker elsewhere over and above what he would have earned
with his old employer dur­ing the corresponding period belong to the employee
or worker to the exclusion of any right on the part of the employer to use the
same to minimize the damages he has to pay.

IN VIEW OF ALL THE FOREGOING, the en banc
resolution appealed from is hereby modified and the judgment of this Court is
that:

(a)  
Respondent Dizon
is entitled to backwages only up to her return to the
United States
to resume her teach­ing job there, the exact date of which she must forthwith
inform the court a quo;

(b)  
Respondent Dizon
is further entitled to all ge­neral increases and bonuses she would have
received during the period of her lay-off specified in the next preceeding paragraph of this judgment, as if she had never
been dis­charged, the amount of such benefits to be disclosed forth­with to the
court a quo by petitioners on the basis of what appears in their
books and records which may be examined by the Court Examiner together with
respondent or her duly authorized representative, if she so desires; and

(c)  
Petitioners may deduct from the
total amounts of (a) and (b) of this judgment, all the earnings of respond­ent
during her lay-off as above-defined, whether here or abroad, the exact details
of which the respondent must forthwith furnish the court a quo,
provided that all her earnings in dollar in the United States shall be computed
on a 1 to 1 basis, and provided also that the amount to be deducted shall not
exceed what she would have been entitled to have received from the petitioners
during the correspond­ing period of her actual gainful employment elsewhere.

It is further ordered that the records of this case be remanded
to the Court of Industrial Relations for fur­ther proceedings consistent with
this judgment and the above opinion. 
Both parties shall pay the costs, share and share alike.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Villamor, and Makasiar, JJ., concur.

Castro and Teehankee, JJ., in the
result.

Dizon, J., did not take part.

^[1]
The East Asiatic Co., Ltd., E. Jakobsen, P.H. Soren­sen
and K.R. Nielsen vs. Court of Industrial Rela­tions, The East Asiatic
Co. Employees’ Union (PTUC) and Soledad A. Dizon,
decided April 30, 1966 (16 SCRA 820).

^[2]
MacLeod & Co. vs. Progressive Federation of Labor, 97 Phil. 205,
211; Durable Shoe Factory vs. CIR and NLU, 99 Phil. 1043; Phil. Air
Lines vs. PALEA, 108 Phil. 1129, 1133, and cases cited therein.  See, also:  Mindanao Motor Line, Inc. vs. CIR,
L-18418, Nov. 29, 1962, 6 SCRA 710, 715-716; Rizal
Labor Union vs. Rizal Cement Co., Inc.,
L-19779, July 30, 1966, 17 SCRA 858, 863; Republic Savings Bank vs. CIR,
L-20303, Oct. 31, 1967, 21 SCRA 661, 665; Itogon-Suyoc
Mines, Inc. vs. Sangilo-Itogon Workers’ Union,
L-24189, Aug. 30, 1968, 24 SCRA 873, 888; G. Liner vs. National Labor Union,
L-24963, Nov. 29, 1968, 26 SCRA 282; Northwest Air­lines Employees Asso. vs. Northwest Airlines, Inc., L-­24592, May
29, 1970, 33 SCRA 143, 146; Dy Pac Pakiao Workers Union vs. Dy
Pac & Co., Inc., L-27377, March 31, 1971; Elegance, Inc. vs. CIR, et
al., L-24096, April 30, 1971; Castillo, et al. vs. CIR, et al., L-­26124
& L-32725, May 29, 1971.

^[3]
Northwest Airlines Employees Association versus North­west Airlines,
Incorporated, supra, and cases therein cited.

^[4]
The record does not show when the en banc resolution was
promulgated.