ST. LOUIS COLLEGE OF TUGUEGARAO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, JOSE SIMANGAN AND BERNABE AVERA, RESPONDENTS.

The petitioner is questioning the award to the private
respondents of back wages as excessive in amount and duration.  The private respondents contend that the
challenged decision has long become final and executory
and can no longer be amended at this late hour.

The petitioner had earlier employed the private respondents as
members of its faculty, Bernabe Avera
in 1974 when he was 66 years old and Jose Simangan in
1978 when he was 68 years old.  Simangan’s appointment was for a definite period ending on March 13, 1979.

The case arose on May
31, 1979, when
the petitioner filed an application to terminate the services of the private
respondents on the ground of old age. 
The labor arbiter, to whom the matter was referred because of the private respondent’s
opposition, upheld the dismissal of Simangan but not
of Avera.

Both Simangan
and the petitioner appealed to the National Labor Relations Commission.  The public respondent dismissed the
petitioner’s appeal on the ground that it was not under oath but upheld Simangan and ordered his immediate reinstatement.

The dispositive
portion of the labor arbiter’s decision dated March 11, 1980, read as follows:

IN VIEW OF THE FOREGOING FACTS, applicant is hereby ordered to
reinstate respondent Bernabe Avera
to his former position with full backwages from the time of his dismissal up to actual
reinstatement without loss of seniority rights.

With respect to respondent Jose Simangan,
the cash deposit made by applicant in respondent’s name is proper as separation
pay.

This Decision will take effect after 10 days from receipt hereof.^[1]

The dispositive
portion of the decision of the NLRC dated November 26, 1982, read as follows:

WHEREFORE, in view of the foregoing, the appealed Decision is
hereby MODIFIED only in the sense that the applicant St. Louis College of Tuguegarao is hereby directed to reinstate respondent Jose Simangan to his former position with full backwages from the time that his contract should have been renewed without loss of seniority rights and
other privileges formerly appertaining thereto, instead of paying said
respondent Jose Simangan his separation pay.^[2]

St.
Louis College came to this Court on certiorari,
but we dismissed its petition for lack of merit on August 15, 1983. 
Entry of judgment was made on September 21, 1983.^[3]

The decision of the public respondent could not be enforced,
however, because the records of the case were burned in a fire that gutted the
main office of the NLRC at Intramuros, Manila,
on December 13, 1984.

On petition of the private respondents,^[4]
these records were reconstituted and on the basis thereof a decision^[5]
was rendered on July 18, 1984,
awarding back pay of P58,050.00 to Simangan
and P59,910.00 to Avera computed from 1979 to July
1984.  The petitioner was also ordered to reinstate both Simangan and Avera without loss
of seniority and other rights.

This decision was also elevated to this Court, which again denied
certiorari.  For their
part, the private respondents went to the NLRC and complained that the
computation of their back wages was not in accordance with law because it took
into account only their basic salaries. 
They contended that the other benefits, such as their sick and vacation
leaves, should have also been included.

The NLRC agreed and
remanded the case to the Executive Labor Arbiter for recomputation
of the awards.^[6]

The petitioner moved for
reconsideration, contending that the back wages:  (1) should not include fringe benefits; (2)
should be limited to three years; (3) should be reckoned by academic school
years and not calendar years; and (4) should not include the separation pay
already withdrawn by the private respondents.^[7]

In its decision dated December
27, 1985, the NLRC
granted the motion for reconsideration on the last two issues but not on the
first two.^[8]

St.
Louis
is now before us again, on a third petition for certiorari, claiming that the public respondent committed grave abuse of discretion
in:

(1)   including fringe  benefits in the computation of the award of
back wages; and

(2)   in not limiting the
said award to three years in accordance with existing doctrine.

The private respondents
argue that the decisions of the public respondent dated November
26, 1982, and July 18,
1982, can no longer
be disturbed, the same having become final and executory.  For his part, the Solicitor General, while
conceding that the above-stated issues are “decided matters,” invokes
equity in the proper implementation of the NLRC decision, considering the
factual antecedents.^[9]

Actually, what is
involved here is not the validity of the original decisions of November
26, 1982, and July 18,
1984, which have
indeed already become final.  We are
concerned in this petition only with the correct interpretation thereof in
connection with the computation of the awards.

On the first issue, the
weight if not uniformity of authority is against the petitioner.

Its position is that
payment of additional vacation and sick leaves to the private respondents would
constitute double compensation as these are already included in the computation
of the back wages due them for the full academic year whether or not such
leaves are taken.^[10] It is settled, however, that –

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.^[11]

x                      x                      x

In the computation of back
wages and separation pay, account must be taken not only of the basic salary of
the employee but also of her transportation and emergency allowances.^[12]

x                      x                      x

The salary base properly used in computing the separation pay and
the back wages due to petitioner
should include not just the basic salary but also the regular allowances that petitioner had been receiving.^[13]

x                      x                      x

Anent the respondent Arbiter’s award of leave benefits, the decree
on back wages is understood to be inclusive of such benefits.  The grant of three years back wages without qualification
and deduction by the court necessarily takes into consideration holidays,
vacation leaves and service incentive leaves, paying for all working days
regardless of whether or not the same fall on holidays or employees’ leave days.^[14]

The second issue must be
resolved against the private respondents.

It is true that the
decision of the NLRC dated November 26, 1982, ordered the payment of back wages to the
private respondents from the time of
their dismissal in 1979 until
the date of their reinstatement, covering a period of more than three
years.  It is not true,
however, that this period can no longer be reduced because the decision has
already become final and executory.

The open-ended duration
of the period prescribed in the said decision renders it subject to the
limitation suggested by the Solicitor General, who pleads the special
circumstances of this case in justification.

At the time of their
dismissal in 1979, Avera and Simangan
were already 71 and 73 years old,
respectively, and could not be expected to continue much longer, or
indefinitely, in the petitioner’s employ. 
It is only fair, therefore, that they be allowed back pay only for the
period of three years as in the case of other illegally dismissed
employees.  Indeed, such a concession
would be generous in their case as it could not be expected that they could
obtain employment elsewhere at their age, especially with tenure.

Independently of this
consideration, and more importantly, there is the case of Mariners Polytechnic School v. Leogardo,^[15] which we decided only five months ago.

Here, an Order of a Labor
District Officer directing that –

x x x if the
complainant is not reinstated at the opening of classes in June, 1978, he shall
continue to be entitled to and shall be paid back wages up to and until he is finally reinstated to his former position.

was subsequently
modified by the Regional Director, who limited the award to three years
“consistently with a long line of decisions of the Supreme Court.” He
was in turn reversed by the Deputy Minister of Labor on the ground that
substantial alteration of the decision was no longer possible because it had
already become final.

In granting certiorari, this Court, after tracing the history of the three-year doctrine,
concluded through Justice Andres R. Narvasa:

The Court perceives no cogent cause to revise or ignore this
doctrine which, as petitioner stresses, has been consistently applied in a long
line of decisions.  It is no argument to say that the original judgment
omitted to impose the three-year restriction and it is too late to do so
now.  Indeed, the doctrine is of peculiar
application to executory judgments the enforcement of
which invariably entails a computation of monetary benefits and, as
above pointed out, is designed precisely to assure their unimpeded and speedy
execution.  If the three-year limitation
were to be held as not applicable in this case, because not imposed in the
judgment sought to be executed, it would follow, as a matter of logic and
justice, that Mariners, the employer herein, should be allowed to prove the
amounts earned or which could have been earned by its employee, Tracena, during the period of the latter’s separation from
employment; and until this is done, execution must be abated. 
As much is suggested by the Solicitor General.  That need not be done.  The three-year limit doctrine has been
consistently and uniformly applied by this Court and by the Ministry of Labor
and Employment over many years.  That it
was unaccountably disregarded in the judgment in question is of no moment.  Its disregard must be considered a clerical
omission.  The Deputy Minister was bound
to the observance of the doctrine; it certainly was not within his power or discretion to decline to apply it; and his subsequent refusal, during the
process of execution, to avail of the opportunity to uphold his subordinate’s
application of the doctrine constituted in the premises grave abuse of
discretion.  To correct the error, and to
avoid the mischief against which the doctrine is aimed, the three-year
limitation should be considered as written into the judgment.

Finally, there is the
question of the reinstatement of the private respondents as also ordered by the
decision of the NLRC.  As this is
obviously no longer feasible in view of their advanced age, we hold that they
should instead receive separation pay, computed at the rate of one month salary
for every year of service, conformably to existing doctrine.  As we said in the case of Sy Chie Junk Shop
v. Federacion Obrero de la Industria y Otros Trabajadores De Filipinas (FOITAF):^[16]

The public respondent’s order for the private respondents’
reinstatement to their former positions is no longer possible under the
circumstances.  An award equivalent to
three years back wages plus separation pay to compensate for their illegal
separation is thus proper.

WHEREFORE, the challenged decision is MODIFIED in the
sense that the award of back wages shall be limited to three years only and the
private respondents shall be entitled to separation pay as above computed in lieu of their reinstatement.  No
costs.

SO ORDERED.

Narvasa, (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Original Records, p. 14.

^[2]
Ibid., p. 23.

^[3]
Id., p. 26.

^[4]
id., p. 1.

^[5]
id., p. 37.

^[6]
id., p. 67.

^[7]
id., p. 87.

^[8]
id., p. 114.

^[9]
Rollo, p. 46.

^[10]
Ibid., p. 7.

^[11]
East Asiatic Co., Ltd. v. Court of Industrial Relations, L-29068, August 31, 1971.

^[12]
Santos v. NLRC, 154 SCRA
166.

^[13]
Soriano v. NLRC, 155 SCRA 124.

^[14]
Insular Life Assurance Co., Ltd. v. NLRC, 156 SCRA 740.

^[15]
G.R. No. 74271, March 31, 1989.

^[16]
161 SCRA 143.