THE INSULAR LIFE ASSURANCE COMPANY, LTD. AND FGU INSURANCE GROUP, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, THE INSULAR LIFE ASSURANCE COMPANY, LTD. EMPLOYEES ASSOCI…

Insular Life Assurance versus Insular Life Employees Association

The Case

This is a petition for certiorari brought by the Insular Life Assurance Company and the FGU Insurance Group against the National Labor Relations Commission and the Insular Life Assurance Company Employees Association. The dispute is not about the merits of a labor case but about the meaning and extent of a final judgment — specifically, the judgment this Court rendered in January 1971 ordering the reinstatement of dismissed union members with backwages, and the later resolutions explaining that award. The question is who exactly is covered by that judgment: only the workers who were never taken back, or also those who were refused readmission on the day the strike ended but were in fact readmitted within the following months. The case matters because it teaches how a final judgment is read and executed, and why backwages cannot be paid twice for the same period.

Procedural History

The original unfair labor practice complaint was filed before the Court of Industrial Relations, which dismissed it in August 1965. On certiorari, this Court reversed that dismissal in January 1971 and ordered reinstatement with backwages. In March 1977 and again in May 1977, this Court issued resolutions in the same case explaining the backwages award, fixing it at the equivalent of three years without qualification and deduction. When the unions moved to implement the judgment, a Labor Arbiter issued an order in May 1977 holding that the twenty-nine strikers who were not readmitted on the day the strike ended but were readmitted during June, July and August of 1958 were also entitled to the three-year back pay, together with the thirty-four who were never readmitted. The National Labor Relations Commission affirmed that order in a resolution in August 1978. The companies then came to this Court on certiorari in November 1978, questioning the Commission's interpretation of the judgment.

Facts

In May 1958, the unions went on strike and picketed the Insular Life Building at Plaza Moraga. The striking employees soon decided to call off the strike and report back to work on June 2, 1958. When they reported, sixty-three union members were refused readmission because they had pending criminal charges.

In July 1958, the prosecutor filed an unfair labor practice complaint against the companies, naming the sixty-three strikers who had not been readmitted. By August 1958, twenty-nine of them had been readmitted after the companies were satisfied that they had not committed unlawful acts during the strike. Only thirty-four remained absolutely refused readmission.

The Court of Industrial Relations dismissed the unfair labor practice charge, but this Court reversed and ordered the companies to reinstate the dismissed members with backwages from June 2, 1958. In later resolutions, the Court fixed the backwages at the equivalent of three years. In the implementation proceedings, the Labor Arbiter and then the National Labor Relations Commission ruled that the twenty-nine strikers readmitted during June, July and August of 1958 should also receive the three-year back pay, prompting the companies to file this petition.

Issues

• Whether or not the judgment ordering reinstatement with backwages covers the twenty-nine strikers who were refused readmission on June 2, 1958 but were readmitted during June, July and August of 1958.
• Whether or not those twenty-nine strikers are entitled to three years of backwages despite their reinstatement within the same period.

Applicable Provisions

The decision does not quote a statute; it construes its own final judgment. The dispositive portion of the January 1971 judgment, as quoted in the decision, provides:

Accordingly, the decision of the Court of Industrial Relations dated August 17, 1965 is reversed and set aside, and another is entered, ordering the respondents to reinstate the dismissed members of the petitioning Unions to their former or comparatively similar positions, with backwages from June 2, 1958 up to the dates of their actual reinstatements.

The Court reads the phrase "dismissed members" in this judgment as referring only to those actually dismissed, not to those already readmitted.

The March 1977 resolution, as quoted, provides:

Court considers the fixing and limitation of the backwages award to their total equivalent of three years without qualification and deduction as applicable and fully justified in the case at bar.

This fixes the measure of backwages but does not enlarge the class of workers entitled to them.

Ruling

On the first issue, the Court held that the judgment could only refer to the thirty-four strikers who were refused readmission, excluding the twenty-nine who had already been readmitted during June, July and August of 1958. The Court reasoned that it could not have intended to order the reinstatement of, and payment of backwages to, members who had admittedly been reinstated long before the judgment. The judgment spoke of "dismissed members," and those already readmitted were not dismissed at the time of the judgment.

On the second issue, the Court held that the twenty-nine were not entitled to backwages for the period after their reinstatement. To grant it would be unjust enrichment at the expense of the employers. The Court adopted the comment of the Commission's Chief of Research and Legal Services:

The fact of payment of wages after reinstatement naturally precludes the assessment of backwages for the same period. This is elementary, otherwise that would be double pay.

Backwages compensate for wages lost; once wages are paid upon reinstatement, there is nothing left to compensate for that same period.

Doctrine

A final judgment is executed according to its actual terms and the facts it presupposes. Where the judgment orders reinstatement of "dismissed members," it covers only those who remained dismissed, not those already readmitted. Backwages are awarded to make whole a worker who lost wages; they cannot be recovered for a period during which the worker was already reinstated and paid. To award them would be unjust enrichment and amount to double pay. The three-year limitation in the resolution fixes the ceiling of the award but does not expand the class of beneficiaries.

Disposition

The Court granted the writ of certiorari, reversed and set aside the Labor Arbiter's order and the National Labor Relations Commission resolution, and held that only the thirty-four strikers never readmitted were entitled to reinstatement and backwages.

Remember This

The line to memorize: backwages cannot be paid for a period already covered by wages upon reinstatement, for that would be double pay. Examiners use this case on the execution of final judgments in labor cases and on the proper computation of backwages.