DIWA NG PAGKAKAISA-PAFLU, PETITIONER, VS. HON. AMADO G. INCIONG, AS ACTING SECRETARY OF THE DEPARTMENT OF LABOR, AND HON. BLAS OPLE, AS SECRETARY OF THE DEPARTMENT OF LABOR, AND…

This is a petition for certiorari under Rule 65 of the
Rules of Court which seeks to nullify the Order of 22 June 1977 of the Acting
Secretary of Labor^[1]
setting aside the Order of 9 October 1974 of the Court of Industrial Relations
(CIR) in Cases Nos. 2735-ULP and 2741-ULP^[2]
directing the computation of backwages for members of the petitioner Diwa ng
Pagkakaisa-PAFLU, hereinafter referred to as DIWA.

The facts and proceedings which gave rise to this petition are
undisputed.

In 1961, two (2) labor cases were filed in the then Court of
Industrial Relations (CIR) involving DIWA, a legitimate labor
organization, and Filtex International Corporation (formerly the
Yupangco Cotton Mills, Inc.), a textile company, hereinafter referred to as FILTEX.

In Case No. 2735-ULP,^[3]
DIWA charged FILTEX with unfair labor practice in that the latter
refused to give work to the officers as well as the listed members of the
former because of alleged illegal union activities. DIWA prayed, inter alia, that the dismissed
members be reinstated to their former positions with full backwages from the
time of their dismissal up to the time of their actual reinstatement.

In Case No. 2741-ULP,^[4]
FILTEX charged DIWA and its officers and members named therein
with unfair labor practice for declaring an illegal strike on 19 February 1961
in violation of the existing collective bargaining agreement, particularly the
no-strike and grievance machinery clauses.

After a joint trial of the two (2) cases, the CIR rendered a
decision dated 29 August 1964, the dispositive portion of which reads:

“IN VIEW OF ALL THE FOREGOING ESTABLISHED FACTS, the Court
hereby declares the strike, staged by members of the Diwa ng Pagkakaisa against
the Filtex International Corporation (formerly Yupangco Cotton Mills) as
illegal, and likewise declares the termination of the status of those employees
and workers of the company responsible therefor. All the rest shall be reinstated. Those who have pending criminal cases
connected with, or related to the deliberation of, or in carrying out the
strike shall, in the meanwhile, in view thereof, be suspended.”^[5]

DIWA filed a motion for reconsideration of the aforesaid
CIR decision, except insofar as the portion ordering the reinstatement of the
rest of the workers is concerned. It
likewise filed a motion for the execution of the reinstatement aspect of the
decision, to wit: “All the rest shall be reinstated,” in the light of
GSIS vs. Olase.^[6]
FILTEX opposed both motions.

The first motion for reconsideration filed by DIWA was
denied by the CIR en banc on 23 November 1964; hence, it filed with this
Court a special civil action for certiorari which was docketed as G.R.
Nos. L-23960-61. In its petition, DIWA
did not question that part of the CIR decision ordering reinstatement of
“the rest” of the workers; it prayed that the decision, except for
the reinstatement portion, be set aside and another be promulgated “x x x
ordering also the reinstatement of the officers of the union and ordering
further the payment of backwages to all so ordered reinstated including the
officers of the petitioner union, from February 26, 1961 to date of their
actual reinstatement, by the respondent company, or in the alternative, even
only from March 3, 1963, supposed last day for the rendition of the decision of
respondent Court according to Republic Act 875 in these cases, to date of their
reinstatement.”^[7]

On 13 July 1967, DIWA again moved for the issuance by the
CIR of a writ of execution of its decision insofar as it relates to the
reinstatement of “all the rest.”

On 14 September 1967, DIWA filed in G.R. Nos. L-23960-61 a
motion for issuance of a writ of execution for the payment of backwages to 142
members ordered to be reinstated but not so reinstated by FILTEX. In the Resolution of 20 September 1967,
this Court ordered FILTEX to comment on said motion. Complying thereto, FILTEX, on 11 October
1967, filed an Opposition alleging that the whole decision has not yet become
final and executory and that not all the members and officers are entitled to
reinstatement as the strike had been declared illegal. In the Resolution of 20 October 1967, this
Court ordered FILTEX to reinstate within thirty (30) days from receipt
of the same DIWA members not declared in the CIR decision to be
responsible for the strike. For failure
to comply with the Order, this Court, in its Resolution of 26 February 1968,
declared FILTEX in contempt of court.

On 6 March 1968, FILTEX filed a “Compliance”
indicating that it had reinstated nine (9) members of DIWA; the
members were not named.

On 12 February 1972, this Court promulgated its decision in G.R.
Nos. L-23960-61^[8]
wherein it made the following findings:

“From all the facts and circumstances, as shown by the
pleadings and by the decision of the trial court itself, we find no reason to
consider the stoppage of work in the night of February 19, 1961 as a strike
declared in violation of the no-strike clause of the collective bargaining
agreement or which should have been preceded by a recourse to the grievance
procedure established, let alone a strike for which the officers of the union
should be held responsible. They took
steps to get the situation back to normal as soon as they were notified about
it; and good labor-management relations as well as the broader imperatives of
industrial peace dictated that the spontaneous recalcitrance of some employees,
which after all had been settled without unnecessary delay, should not be made
an excuse to punish the union officers. If the said employees were readily admitted back to work there is no
reason why the officers, through whose efforts the incident was settled, should
deserve a different treatment.

The trial court found that the strike of February 26, 1971 was
merely a continuation of the strike of February 19. This finding is not justified. As already noted, work was resumed in the afternoon of February 20,
1961, and all the employees were readmitted except the union officers. In other words the incident of February 19
was already closed; and if a strike was called on February 26 it was because
the readmission of said officers, as demanded in the letter of the union dated
February 22, was refused. Since such
refusal appears to be groundless, the fact that a strike was called on February
26, 1961 would not affect the resolution of this case, the only issue here
being the legality or illegality of the alleged strike of February 19.”

and disposition modifying the challenged
decision, to wit:

“Wherefore, the decision appealed from is hereby modified by
ordering the reinstatement of the officers of the union who were refused
admission by the respondent, with backwages from the date of such refusal less
whatever amounts earned by them from other employment during the same period or
could have earned with the exercise of reasonable diligence. In assessing the backwages the guidelines indicated
by this Court in the case of Itogon­-Suyac Mines, Inc. vs. Sañgilo-Itogon
Workers’ Union, G.R. No. L-24189, August 30, 1968, and subsequently applied in
East Asiatic Co., Ltd., et al. vs. CIR, G.R. No. L-29068, August 31, 1971,
should be observed, as follows:

‘First. To be
deducted from the backwages 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. Besides, there is the ‘law’s abhorrence for
double compensation.’

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. 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.'”^[9]

This Court also ordered that the records of the case be remanded
to the CIR with instruction to the latter to ascertain the amount of backwages
due the union officers involved in accordance with the above guidelines.

On 29 March 1972, DIWA filed with the CIR a motion for
computation of backwages for the employees therein enumerated, categorized
under three (3) groups: (1) officers of DIWA, (2) suspended
employees, and (3) the “rest” of the employees.^[10]

On 9 October 1974, the CIR issued an Order^[11]
directing:

“(1) the Chief of the
Examining Division of this Court and/or his assistant to proceed to the offices
of the Filtex International Corporation and/or Yupangco Cotton Mills, Inc. to
examine the payrolls and other pertinent records thereof, to compute the
backwages of the union officers, as well as the other employees herein-above
mentioned, in accordance with the disposition of the Court in the body of this
Order, and upon termination of said computation, to submit his Report to the
Court; and (2) the Yupangco Cotton Mills, Inc. and/or Filtex International
Corporation to reinstate immediately the union officers and the other employees
referred to in the body of this Order to their former positions or to
substantially equivalent positions, and to report to the Court within five (5)
days from receipt hereof compliance herewith.”

FILTEX moved for its
reconsideration. On 20 March 1975, the National
Labor Relations Commission (NLRC), which took over the functions of the CIR,
denied the motion.^[12]

Thereafter, DIWA filed a motion for the implementation of
the 9 October 1974 Order.^[13]

In compliance with the CIR’s 9 October 1974 Order, the NLRC examiner,
Ricardo Atienza, filed a report, dated 1 August 1975, on the computation of the
backwages of members and officers of DIWA who were earlier ordered
reinstated.^[14]
The total amount involved was P2,877,124.00. FILTEX filed an Opposition to the report.

DIWA then filed on 1 August 1975 a motion for a writ of
execution^[15]
contending therein that it was denied due process of law when it was not
afforded an opportunity to adduce evidence on deductions consisting of earnings
obtained elsewhere by the parties to be reinstated.

On 30 September 1975, the NLRC, thru Labor Arbiter F. de los
Reyes, issued a writ of partial execution directing FILTEX to pay
P1,963,703.40 in backwages to the employees who were ordered reinstated.^[16]

Following an Appeal^[17]
interposed by FILTEX from the Labor Arbiter’s order of partial
execution, the NLRC promulgated on 29 December 1975 a decision modifying the
appealed order.^[18]
The Commission also ordered that the records of the case be remanded to the
Labor Arbiter for reception of evidence on the proper deductions.

Not satisfied, DIWA appealed the NLRC decision to the
Secretary of Labor.^[19]
Then Acting Secretary Amado Inciong, in his decision of 20 February 1976,
affirmed the assailed ruling, stating thus:

“While the evidence on record is persuasive that respondent
had resorted to dilly-dallying maneuvers in several stages of the proceedings,
we hold that the interests of justice and equity will be served best by
affording respondent a final opportunity to submit evidence on the computation
of back wages awarded to complainants.

ACCORDINGLY, let the entire record of this case be remanded to the
Labor Arbiter a quo for the reception of evidence bearing on the
computation of back wages, pursuant to the guidelines set by the Supreme Court
in this case. Respondent Filtex
International Corporation (Formerly Yupangco Cotton Mills, Inc.) is hereby
ordered to present its evidence within one (1) day from receipt of this Order
and two (2) days for the complainants Diwa ng Pagkakaisa-PAFLU, et al., and the
Labor Arbiter a quo is hereby directed to render his computation
within three (3) days after the reception of evidence. Thereafter, let execution issue immediately.

SO ORDERED.”^[20]

In pursuance of this Order, Labor Arbiter De los Reyes issued an
Order on 18 March 1976,^[21]
the dispositive portion of which reads:

“WHEREFORE, in view of the foregoing, the respondent company
upon the finality of this Order is required to deposit with this Commission the
amount of P205,417.40 plus the amount equivalent to one year backwages for 12
employees (sic) referred, herein, which under decisions by the Commission in
numerous cases is based on rates at the time of termination which in this case
will be P4.00 and hence a total of P14,544.00, making a final total of
P219,961.40, to be so deposited.”

DIWA and FILTEX filed separate motions for the
reconsideration of the above Order with the NLRC. However, on 5 October 1976,^[22]
the NLRC en banc promulgated a Resolution finding the Order of 18 March
1976 to be in “adherence to the Supreme Court decision sought to be
implemented and the backwages due the employees arrived at in accordance with
the guidelines set therein, except in the case of 3 officers, namely: Erlinda
de Leon, Ismael Dionisio and Celso Santiago who were awarded full backwages x x
x,” which the NLRC reduced at the rate of 30% each because it did not
believe that they were unable to find any means of livelihood in 15 years; the
total award was reduced from P219,961.40 to P196,907.00.

Subsequently, DIWA and FILTEX both appealed to the
Secretary of Labor.

In its Memorandum,^[23]
DIWA claimed that the NLRC committed grave abuse of discretion in
sustaining with modification the 5 October 1976 Order of the Labor Arbiter; it
then prayed that the questioned ruling be set aside and a new one be entered
awarding backwages to the DIWA officers and members named in the list of
movants with computation of their wages in the total sum of P1,306,623.50. Upon the other hand, FILTEX, in its
Notice and Memorandum,^[24]
contended that the NLRC Order of 5 October 1976 and that of the Labor Arbiter
of 18 March 1976 are contrary to law and the facts of the case and, in support
thereof, asserted that pursuant to the decision in G.R. Nos. L-23960-61, promulgated on 12
February 1972, this Court directed the remanding of the case to the CIR only
to ascertain the amounts of backwages
due the union officers involved
in accordance with the guidelines therein
set forth, and to nobody else. In short, it is the position of FILTEX
that this Court did not grant any award of backwages to the employees
involved.

In his Order of 22 June 1977, Hon. Amado Inciong, then Acting
Secretary of Labor, after quoting the dispositive portion of this Court’s
decision in G.R. Nos. L-23960-61, the last paragraph of which is underscored by
him and hereby reiterated for emphasis:

“The record of this case is ordered remanded to the Court of Industrial
Relations with instruction to ascertain the amount of backwages due to the union
officers involved, in accordance with the guidelines hereinabove set forth. (Underscoring ours)”

and alluding to the CIR’s Order of 9
October 1974, made the following findings:

“From the foregoing circumstances, it is crystal clear that
the defunct Court of Industrial Relations acted with grave abuse of discretion
amounting to lack of jurisdiction when it expanded the tenor of the Supreme
Court Decision by including in the award of back wages those employees not
contemplated in the said Supreme Court Decision. While it is conceded that the Order of reinstatement of all
employees directed to be reinstated in the Decision of August 29, 1964 was
within the jurisdictional competence of the CIR to pursue for the reason that
this aspect of the Decision had already become final and executory, it was, however,
bereft of any authority to grant back wages to employees other than those
ordered by the Supreme Court to be reinstated with back wages. It is in this context, that we are setting
aside the CIR decision of October 9, 1974.”

and then resolved the appeals, thus:

“WHEREFORE, with the modification above indicated, the
Resolution appealed from is affirmed. Accordingly, the CIR Decision of October 9, 1974 is hereby set aside,
with respect the (sic) award of backwages to the members of the union and
respondent is ordered to reinstate the officers of the union with backwages
amounting to NINETY-NINE THOUSAND and TWENTY-SEVEN (P99,027.00) PESOS in
accordance with the Commission’s Resolution of October 5, 1976.

SO ORDERED.”

On 11 August 1977, DIWA filed a special civil action for certiorari
alleging therein, as principal ground therefor, that Acting Secretary
Inciong “erred gravely as to amount to a deliberate disregard of law and
jurisprudence and to want of jurisdiction” when, in his above Order, he
set aside the award of backwages to the members of DIWA on the ground
that it expanded the tenor of the abovementioned decision of this Court and
failed to rule on the issue of backwages as regards the three (3) officers.

On 28 December 1977, FILTEX filed its Comment to the
Petition^[25]
while the Office of the Solicitor General, as counsel for public respondents,
filed its Comment on 4 February 1978.^[26]

In its Comment, FILTEX contends that after the decision of
this Court in G.R. Nos. L-23960-61 was promulgated, nothing more but that
decision could be executed because as early as 1 August 1969, the reinstatement
of the strikers-members of DIWA other than the officers and members
found responsible for the strike had already been complied with; hence, the
Acting Secretary of Labor was correct in holding that the CIR acted with grave
abuse of discretion when it extended the tenor of the said decision.

The Office of the Solicitor General asserts that this Court, in
G.R. Nos. L-23960-61, convinced that the employees affected had already been
admitted back to work shortly thereafter, directed the payment of backwages and
reinstatement only of the officers; hence, the CIR cannot extend its
application to others.

On 24 February 1978, this Court considered the Comments as
Answers and required the parties to file their respective Memoranda.

The principal issues raised are whether or not (a) the employees
ordered reinstated by the CIR are entitled to backwages from the date the
decision became final and until they were reinstated and (b) respondent Acting
Secretary committed grave abuse of discretion in setting aside the CIR Order of
9 October 1974.

FILTEX and the public respondents maintain that since this
Court, in the decision of 12 February 1972 in G.R. Nos. L-23960-61, did not
award backwages for employees other than the officers of the union from the
date they were refused admission, less whatever amounts they earned from other
employment during the same period or which they would earn with the exercise of
reasonable diligence, it goes without saying that all others ordered reinstated
in the CIR decision of 23 November 1964 should not be granted backwages, there
being no specific award therefor. The
dispositive portion of the CIR decision reads:

“IN VIEW OF ALL THE FOREGOING ESTABLISHED FACTS, the Court
hereby declares the strike, staged by the members of the Diwa ng Pagkakaisa
against the Filtex International Corporation (formerly Yupangco Cotton Mills)
as illegal, and likewise declares the termination of the status of those
employees and workers of the company responsible therefor. All the rest shall be reinstated. Those who have pending criminal cases connected
with, or, related to the deliberation of, or in carrying out the strike shall,
in the meanwhile, in view thereof, be suspended.”

As stated earlier, this Court, in the decision of 12 February
1972, found no reason to consider the stoppage of work on the night of 19
February 1961 as a strike and accordingly modified the decision appealed from
by likewise ordering the reinstatement of the union officers.

It must be emphasized that DIWA did not include in its
Appeal the reinstatement aspect of the CIR decision. Upon the other hand, FILTEX did not appeal therefrom. Accordingly, the matter of reinstatement
became final after the lapse of ten (10) days from receipt of the decision by FILTEX. FILTEX admits in its Comment that
“[a]s early as August 1, 1969, the reinstatement of
the strikers-members of petitioner DIWA, other than officers and members
found responsible for the strike, had already been complied with.”^[27]

Section 14 of Commonwealth Act No. 103, otherwise known as the
Court of Industrial Relations Act, as amended by Commonwealth Act No. 559,
which is the governing law in this case, provides:

“SECTION 14. Enforcement
of Awards, Orders, and Decisions. At the expiration of ten days from the date of the award, order, or
decision, in cases brought under the provisions of section four hereof, judgment
shall be entered in accordance therewith, unless during said ten days an
aggrieved party shall appeal therefrom to the Supreme Court of the Philippines
by writ of certiorari as hereinafter provided. The institution of such an appeal shall not, however, stay the
execution of the award, order, or decision sought to be reviewed, unless for
special reasons the Court shall order that execution be stayed, in which event
the Court, in its discretion, may require the appellant to deposit with the
Clerk of the Court such amount of salaries or wages due the employees,
laborers, tenants, or farm-laborers concerned under the award, order, or
decision appealed from or require him to give bond in such form and of such
amount as to insure compliance with the award, order, or decision in case the
same is affirmed. The Court may also
require the appellant to deposit with the Clerk of the Court every week, on a
day therein to be fixed by the Court, an amount equivalent to the salaries or
wages to be earned during the time of the appeal by the employees or laborers,
or tenants or farm-laborers whose reinstatement in, or readmission to, their
employment has been decreed by the Court. The failure to make such deposit shall vacate the order for stay of
execution. When writs of execution are
so issued the proceeds thereof shall be kept by the Clerk of the Court of
Industrial Relations in his custody, pending decision of the appeal, to be
disposed of in conformity with the final judgment of the Supreme Court.”

In accordance with the abovementioned statute, this Court, in Rizal
Cement Co. vs. Bautista, et al.,^[28]
held that an order of the CIR requiring the reinstatement of discharged
employees following the company’s receipt of the resolution denying its motion
for reconsideration, became executory ten (10) days thereafter and backwages
should be awarded to the employees to be reinstated effective the day following
said tenth day:

“x x x As regards decisions of the Court of Industrial
Relations, appeal from a judgment of the court shall not stay the execution of
the award, order or decision sought to be reviewed, unless the court itself
shall order said stay. In instant (sic)
case, it did not do so. The company was
notified of the resolution of the court en banc denying its motion for
reconsideration, on March 16, 1955. The
period of ten days for the appeal ended ten days thereafter, namely, March 26,
1955. The payment of back wages to
Balignasay and Aponio should therefore start the day following, that is, on
March 27, 1955, instead of July 14, 1954.”

In Government Service Insurance System vs. Olase,
et al.,^[29]
this Court likewise ruled that where an employee is ordered reinstated, he
shall be entitled to backwages from the day immediately following the tenth day
provided for in the aforesaid Section 14 of C.A. No. 103, regardless of any
appeal which the parties may interpose:

“Appellant’s contention that because of the appeal taken by
Pedro Olase (the employee) from the CIR decision there was no decision to be
enforced pending said appeal, is against the express provision of Section 14 of
Commonwealth Act 103.

x x x

Regardless, therefore, of the pendency of the appeals, taken both
by GSIS (the employer) and Pedro Olase, the CIR decision became effective and
self-executory on July 27, 1960, after the lapse of the ten-day period stated
in the law.”

This Court therefore rules that the reinstatement portion of the
CIR decision of 29 August 1964 became final and executory ten (10) days
following its promulgation. The
employees concerned should have been reinstated as early as 9 September
1964. If reinstated at a later date,
they will be entitled to backwages from 9 September 1964 until their actual
reinstatement.

The foregoing does not, however, apply to those who remained
suspended by virtue of a CIR declaration to that effect. Since this Court did not declare the work
stoppage a strike, they should likewise be reinstated. However, their reinstatement would only be
effective from the finality of this Court’s decision in C.R. Nos. L-23960-61.

The CIR then acted correctly in issuing the Order of 9 October
1974.

The Acting Secretary of Labor committed grave abuse of discretion
when he partially set aside, as abovestated, the CIR Order of 9 October
1974. Such abuse is attended with capriciousness
considering that such Order had long become final as FILTEX did not
appeal to the Secretary from the NLRC Resolution of 20 March 1975 denying its
motion to reconsider it. What it
subsequently appealed was the Labor Arbiter’s Order of 30 September 1975
concerning the report of the examiner made pursuant to the 9 October 1974 Order
principally on the ground of violation of due process.

As to the en banc Resolution of the NLRC of 5 October
1976, this Court is at a loss to find any acceptable justification for the
arbitrary reduction by 30% of the computed backwages for the three (3) officers
therein mentioned. Such reduction then
was capriciously and whimsically imposed. Hence, the NLRC committed grave abuse of discretion.

WHEREFORE, the foregoing premises considered, this
petition is hereby GRANTED. The
assailed Order of respondent Acting Secretary of Labor dated 22 June 1977 is
SET ASIDE, and the Order of the CIR of 9 October 1974 is hereby REINSTATED. Furthermore, the Resolution of the NLRC of 5
October 1976 is AFFIRMED, subject to the foregoing modification. As modified, the reduction of the computed
backwages of union officers Erlinda de Leon, Ismael Dionisio and Celso Santiago
is SET ASIDE.

IT IS SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin, and
Romero, JJ., concur.

^[1]
Rollo, 352-356.

^[2]
Id., 131-138.

^[3]
Entitled Diwa ng Pagkakaisa-PAFLU,
et al. vs. Filtex International Corp. (formerly
Yupangco Cotton Mills, Inc.).

^[4]
Entitled Filtex International Corp.
(formerly Yupangco Cotton Mills, Inc.) vs. Diwa ng
Pagkakaisa-PAFLU, et al.

^[5]
Rollo, 16.

^[6]
19 SCRA 1 (1967).

^[7]
Rollo, 75-76.

^[8]
Rollo, 115-120.

^[9]
Rollo, 119-120.

^[10]
Rollo, 122-124.

^[11]
Id., 131-138.

^[12]
Id., 139.

^[13]
Rollo, 140-141.

^[14]
Id., 143-144.

^[15]
Id., 150.

^[16]
Id., 152-159.

^[17]
Id., 160, et seq.

^[18]
Rollo, 152-159.

^[19]
Id., 196, et seq.

^[20]
Id., 228.

^[21]
Rollo, 230, et seq.

^[22]
Id., 306, et seq.

^[23]
Rollo, 310, et seq.

^[24]
Id., 345, et seq.

^[25]
Rollo, 398, et seq.

^[26]
Id., 428, et seq.

^[27]
Rollo, 404.

^[28]
101 Phil. 1254.

^[29]
Supra.