MARINERS POLYTECHNIC SCHOOL AND JAIME C. JIMENEZ, PETITIONERS, VS. HON. VICENTE LEOGARDO, JR., DEPUTY MINISTER OF LABOR AND EMPLOYMENT, AND MARCIAL H. TRACENA, RESPONDENTS.

Raised in this special civil action of certiorari is the
issue of the Regional Director’s power to limit, in the process of enforcement
of a final and executory judgment, the payment of back wages to three (3) years
without deduction or qualification when no such limitation is imposed in the
judgment itself.

In a case filed by respondent Marcial H. Tracena, a classroom
teacher, against his employer, petitioner Mariners Polytechnic School,
involving money claims arising under various labor laws, and another filed by
the School for authority to terminate Tracena’s services, which were
consolidated^[1]
and jointly heard, judgment was rendered by the Labor District Officer on April
27, 1978^[2]
ordering the School –

” **to reinstate complainant (Tracena)
to his former position without loss of seniority rights and payment of his
backwages from the time of his dismissal up to the end of the school year
1977-1978 * * (and additionally) to pay complainant the amount of P874.04
representing 13th month pay, emergency cost of living allowance in the amount
of P63.90, holiday pay in the amount of P33.00, or a total of P971.94. “

Clarification was later made of the
decision by Order dated May 30,1978^[3]
to the effect that

” ** 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 backwages up to and until he is finally reinstated
to his former position.

A subsequent Order, promulgated on June
22, 1978, declared the Order of April 27, 1978 final and executory, and
directed the School to forthwith reinstate Tracena to his former position and
to pay him back wages, subject to the modifications contained in the Order
dated May 30, 1978.1

The School appealed to the Office of the Labor Minister, without
success. That Office, in an Order
rendered on July 8, 1981, affirmed the dispositions made by the Labor District
Officer, “except for the reduction of P16.50 from the award issued,”
and commanded that “the Orders of April 27, May 30 and June 22, 1978 be
enforced without further delay.”2 The School next betook itself to
this Court,3
but was also unsuccessful; its petition for certiorari was dismissed for
lack of merit.4

In due time, Tracena moved for execution. After the aggregate of the back wages and
other benefits due to Tracena had been computed and ascertained, the Regional
Director issued the writ of execution prayed for commanding the School to
reinstate Tracena and pay him the total sum of P50,000.18 — representing his
back wages from school year 1977 to 1985 — as well as his 13th month pay,
emergency cost of living allowance and holiday pay. At the School’s instance, however, the Regional Director modified
the Order by reducing the award of back wages from P50,000.18 to P19,552.74,
the latter sum being the sum of his wages for three (3) years without deduction
or qualification. The Director gave the
following justification for the reduction, viz:5

“ ** (W)e must, however, bear in mind that said decision (being
executed) is open-ended in the sense that the period to be reckoned with in
computing the backwages had no cut-off date hence dependent on the date of
actual reinstatement. **

“On this score, this Office appreciates counsel for respondent
for calling our attention to the error committed in computing the backwages
with the period reckoned with far exceeding three (3) years. The Office is therefore constrained to recompute
the backwages and limiting the same to three (3) years. This is so because the decision of the then
Labor District Officer Reyes which became final and executory, being an
open-ended one, falls squarely within the ambit of a long line of decisions of
the Supreme Court consistently limiting backwages to only three (3) years,
without qualification or deduction. **.”

This time it was Tracena who moved for reconsideration. He argued that the order was contrary to
existing jurisprudence prohibiting parties from attempting to frustrate
execution of a final and executory judgment by raising new issues of fact and
law. The Regional Director however
refused to modify his order; so, Tracena appealed to the Office of the Labor
Minister. The Deputy Minister adjudged
his appeal to be “impressed with merit,” it appearing that the
Regional Director had “made a substantial alteration of the final decision
** (although this was) no longer possible.” In his Order dated December
20, 1985, the Deputy Minister set aside the Regional Director’s order of
September 27, 1985 and enjoined him “to implement/enforce the final
judgment dated June 22, 1978 as modified by this Office in its Order dated July
8, 1981 and affirmed by the Supreme Court in its Resolution, dated July 19, 1982.”6

The School thereupon instituted the instant special civil action
of certiorari assailing the Deputy Minister’s Order just described —
which, it was claimed, “allow(ed) backwages for more than 7 years,”
and was “in gross violation of the doctrine laid down by the Supreme Court
limiting backwages to only 3 years” in no less than 34 specified cases1 —
as “an act of grave abuse of discretion.” Acting on the School’s
application therefor, this Court issued a temporary restraining order”2
enjoining the respondents from executing the Order dated December 20, 1985
**.”

Applicable jurisprudence is on the petitioner’s side. It is entitled to the writ of certiorari it
prays for, a proposition with which the Solicitor General agrees.

Prior to the adoption of the doctrine set out in the “long
line of decisions” adverted to by the Regional Director, the
monetary benefits awarded to an employee finally adjudged to have been
unlawfully separated from employment, could be reduced by the sum of the
salaries or wages actually earned by him during the period of his separation
from employment until his reinstatement, or those which he could have earned
had he applied himself with sufficient diligence to an effort to obtain gainful
employment. It was therefore the employer’s
right to adduce evidence on these matters, and consequently cause suspension of
execution of a judgment directing reinstatement of a worker and payment to him
of back salaries and/or other pecuniary benefits until such evidence could be
presented and a conclusion finally made on the basis thereof as to whether or
not deductions should be made from the award3 It was in Mercury Drug Co.,
Inc v. CIR4
that the Court first found occasion, in order to preclude recurrence of
this situation and speed up the process of execution, to provide a remedy by
ruling that an employee whose illegal termination had lasted some years was
entitled to back wages for a fixed period5 “without further
qualifications.” i.e., without need of taking account of whatever he might
have earned during such period, and deducting it from the amount of
recovery. The base period of three
years now governing such cases was instituted in the later case of Feati
University Faculty Club (PAFLU v Feati University,6
where it was declared that the policy “of fixing the amount to (such) a
just and reasonable level without qualification or deduction ** (is) to avoid
protracted delay in the execution of the award for backwages due to extended
hearings and unavoidable delays and difficulties encountered in determining the
earnings of the laid-off employees ordered to be reinstated with backwages
during the pendency of the case for purposes of deducting the same from the
gross backwages awarded,” and that:

* * (T)his formula of awarding reasonable net backwages without
deduction or qualification relieves the employees from proving or disproving
their earnings during their lay-off and the employers from submitting
counterproofs, and obviates the twin evils of idleness on the part of the
employee who would ‘with folded arms remain inactive in the expectation that a
windfall would come to him’ and attrition and protracted delayin satisfying
such award on the part of unscrupulous employers who have seized upon the
further proceedings to determine the actual earnings of the wrongfully
dismissed or laid-off employees to hold unduly extended hearings for each and
every employee awarded backwages and thereby render practically nugatory such
award and compel the employees to agree to unconscionable settlements of their
backwages award in order to satisfy their dire need.”

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.

WHEREFORE, the writ is granted; the Order of the
respondent Deputy Minister of December 20, 1985 is ANNULLED AND SET ASIDE, and
that of the Regional Director of September 27, 1985 REINSTATED and
AFFIRMED. No costs.

Cruz, Gancayco, Griño-Aquino, and
Medialdea, JJ., concur.

^[1]
Case No. RO5-D-312-77

^[2]
Rollo, pp. 32-33

^[3]
Id., p. 44

1
Rollo, p.34

2 Id., p. 40

3
G.R. No. 57792

4
Resolution dtd July 19,1982, Rollo, p. 11

5 Rollo, pp. 99-100

6
Id., pp. 10,11

1
Id., pp. 5-6

2 Resolution, May 7, 1986

3 SEE, e.g., East Asiatic Co., Ltd., et al. v.
CIR, et al., 40 SCRA 521, 547-548

4 56 SCRA 694, 709 (April 30, 1974)

5 The period fixed in this particular case was one
year, eleven months and fifteen days. The base figure of three years’ back wages was proposed in the
concurring and dissenting opinion of then Associate Justice (later Chief
Justice) Teehankee.

6 58 SCRA 395, 418 (Aug. 15, 1974; Teehankee, J.,
ponente)