PARAMOUNT VINYL PRODUCTS CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND PARAMOUNT INDEPENDENT WORKERS UNION, RESPONDENTS.

The controversy centers around the
execution proceedings of an action for unfair
labor practice filed by private respondent Paramount Independent Workers Union
(hereinafter referred to as UNION) against petitioner
Paramount Vinyl Products Corporation, docketed as NLRC-NCR Case No. 5-2328-83.

The antecedent facts of the case are as follows:

On September 23, 1983,
the Labor Arbiter in NLRC-NCR Case No. 5-2328-83 declared petitioner guilty of
unfair labor practices for illegally shutting-down operations at its Valenzuela
plant and locking out its workers on January 3, 1983, in violation of the existing collective
bargaining agreement and Batas Pambansa Blg. 130.  The dispositive portion of the decision reads as follows:

WHEREFORE, pursuant to all of the foregoing, judgment is hereby
rendered declaring the defaulting respondent COMPANY guilty of unfair labor
practices as charged and ordering it to cease and desist from further
committing the same; and to reinstate the more than 200 members of the
complainant UNION to their former positions without loss of seniority rights
and to pay them backwages from January 3, 1983 until
actually reinstated less whatever separation benefits were received by those
who were forced to resign from the COMPANY.

SO ORDERED [Decision of the Labor Arbiter, p. 6, Rollo, p. 29.]

Petitioner interposed an appeal to the NLRC, but the Labor
Arbiter’s decision was affirmed on August
13, 1984. 
Petitioner then filed a petition for a writ of certiorari with
this Court which was dismissed on December 10, 1984 for lack of merit.

On April
29, 1985, the UNION filed with the Labor Arbiter an “Urgent
Motion and Manifestation”, seeking to expedite the issuance of a writ of
execution.  The motion contained a
computation of backwages and other employment benefits
due to about two hundred (200) union members.

Petitioner then filed its
comment to the UNION’s motion on June 18, 1985,
claiming that fifty (50) of the members found in the UNION’s
list have resigned and executed releases, waivers and quitclaims in favor of
the company.  Petitioner also sought the
exclusion of fifteen (15) listed union members who were no longer in its
employ prior to January 3, 1983.

Subsequently, the Acting
Chief of the Research and Information Unit [RIU] of the Ministry (now Department)
of Labor and Employment submitted on October 22, 1985 a computation
of the backwages due to one hundred thirty seven (137) union members, in the total
amount of P1,977,371.50.  The list
of union members entitled to backwages included
twenty two (22) members who were not yet reinstated as of September 20, 1985
and one hundred fifteen (115) who were
reinstated by petitioner prior to the rendition of the Labor Arbiter’s decision
of September 23, 1983.

A conference then was
held between the parties on November 11, 1985, wherein it appears that the UNION did not pose any objections
to the RIU report, save for its allegation that three (3) union members had
been inadvertently left out of the report, and its request for the recomputation of the backwages awarded
to two (2) other listed members. 
On the other hand, petitioner on November 21, 1985 filed its formal comment to the RIU
report, opposing certain aspects of the socio-analyst’s mode and method of
computation.  Petitioner argued
that:  (1) the salary base for the
computation of backwages refers to the basic salary
only, excluding the ECOLA and 13th month pay; (2) the period for computation of backwages
should be reckoned with from July 1,
1983 up to November 30, 1984 only, the day its plant burned down resulting
in the temporary lay-off of several employees; (3) the computation of backwages be based on actual working days instead of
calendar-working days, and on the basic daily wages then prevailing at the
time; (4) fifty-five (55) of the union members listed in the RIU report who
were reinstated voluntarily by petitioner within the first six months after the
shut-down were not entitled to the award of backwages;
(5) seventeen (17) union members should be excluded from the RIU report because
they were no longer connected with the company, or were transferred, or were
under indefinite suspension long before the January 3, 1983 shut-down; and, (6)
the computed backwages of six (6) other union members should be reduced.

Based on the RIU report,
and the parties’ comments thereto, the Labor Arbiter issued an order dated November 27, 1985, directing the
petitioner to pay backwages to one hundred twenty
three (123) union members in the
total amount of P589,021.00.  The list
included five (5) union members*
who had not yet been recalled and reinstated by petitioner, three (3) union
members** who had been recalled but had not yet reported for
work, and one hundred (115) union members who had been reinstated.  The Labor Arbiter found merit in the UNION’S
request for the inclusion of three (3) union members who were left out of the RIU report and for the recomputation of backwages
awarded to two (2) listed members.  With
respect to the claims made by petitioner in its comment, the Labor Arbiter ruled inter alia
that: (1) the base for computation of backwages
should consist of the basic salary and 13th month pay, exclusive of the ECOLA;
(2) the period for computation of backwages should
commence from January 3, 1983 the date of the illegal shut-down; and, (3) the
computation of the basic salary should be computed on a daily basis and on
actual working days in accordance with the rate prevailing at such time.  On this last point, the Labor Arbiter
reasoned that for the period of time the affected union members were deprived
of work due to the illegal shut-down, they should not be awarded more than what
the unaffected employees earned during the same period.  Furthermore, the Labor Arbiter rejected
petitioner’s contention for the exclusion of fifty-five (55) union members from
the list, but granted its request for the exclusion of seventeen (17) other
members, finding merit thereto.  The
Labor Arbiter also found basis in petitioner’s claim that its plant burned down
in November 30, 1984, and accordingly ruled that for the five (5) union members
who had not yet been recalled by petitioner [See Footnote *], the period
for computation of their backwages should
be limited from January 3, 1983 up to November 30, 1984.

No timely appeal having been taken from the above order by either party, the Labor Arbiter
issued on December 23, 1985 a writ of execution for the enforcement of
its Order.

However, on January 2,
1986, the UNION, through its president Felix Emen,
filed an “Urgent Motion and Manifestation for Clarification and Recomputation of Backwages“,
praying that petitioner be ordered to pay its union members the full amount of backwages computed in the RIU report.  The UNION
contended that the higher computation of backwages in
the RIU report was the official amount due to its members.

Petitioner filed an
opposition and motion to strike out the UNION’s
motion asserting inter alia, that, in view of the failure of the UNION to appeal from the
order dated November 27, 1985 within ten (10) days from receipt thereof, that
order has become final and executory. 
Petitioner further alleged that the same had been fully satisfied.

On January
28, 1986, the UNION filed its reply to petitioner’s opposition
and motion.

Thereafter, the Labor
Arbiter issued an order dated April 16, 1986, noting therein that the UNION’s motion was filed long after the November 27, 1985
order attained finality and was fully satisfied by petitioner (as evidenced by
a Sheriff’s report dated January 22, 1986). 
The Labor Arbiter reiterated as well the basis for the reduction of the
computed award of backwages contained in the RIU report, explaining that the report
was not ipso facto final and binding on him.  But, apparently acknowledging an oversight,
the Labor Arbiter ordered the petitioner to immediately reinstate the eight
union members identified in his earlier order as those who had not yet been
reinstated [See Footnotes * and **].

On May 15,
1986, the UNION, through its new counsel of record,
interposed a partial appeal from the Labor Arbiter’s orders dated November
27, 1985 and April
16, 1986 to the NLRC. 
This time, the UNION claimed that fifty (50)
individuals who were forced to resign by petitioner were not included in the
list of union members entitled to backwages.  The UNION contended
that the Labor Arbiter’s order of November
27, 1985 was not a faithful implementation of the judgment rendered
on September 23, 1983
wherein provision was made for the immediate reinstatement of those employees
who were forced to resign and the payment of backwages
less whatever separation benefits were received by them.  The UNION also argued
that the inexplicable failure of its original counsel of record to make a
timely appeal from the November 27,
1985 order should not prejudice the interests of its members.  The petitioner then filed its “Answer Ex Abundante Ad Cautelam and/or Motion to Dismiss” on May 29, 1986.

On August
12, 1987, the NLRC
promulgated a decision, the pertinent portion of which reads:

Indeed, the points invoked by the complainant in its appeal deserve
a careful and serious
scrutiny.  Firstly, there is a gross and marked disparity between
the awards of P1,977,371.50 as computed by the Acting
Chief, Research and Information Unit of the National Capital Region, and the amount
of P589,021.00 as eventually arrived at by the Labor Arbiter.  This computation must necessarily be looked
into and carefully determined in the light of the final decision in this case
considering that any order or writ should not vary the terms of the decision
being executed.  Accordingly, all parties
concerned or involved in the execution of the final decision should be duly
informed or amply notified of all proceedings pertaining to the execution of
aforesaid judgment so that the end of justice may thus be subserved
as in this case.  Secondly, the charge
that the Labor Arbiter omitted the fifty (50) complainants who were forced to
resign after 3 January 1983
from his final computation of P589,201.00 merits sound
reexamination in the light of the disquisition embodied in the final decision
of the Labor Arbiter.  And thirdly, the
manner of the execution of the final decision of the Labor Arbiter, as
implemented in the impugned orders and writ of execution, which may be a
deviation from the terms and conditions of the decision can be subject of a
proper appeal or relief [NLRC Decision, pp. 2-3; Rollo,
pp. 181-182.]

The NLRC reversed the
assailed orders and ordered the remand of the case to the Labor Arbiter for
further proceedings.

On August 27, 1987,
petitioner moved for a reconsideration
of this decision.  The NLRC denied
petitioner’s motion in a Resolution dated November 11, 1987.

Hence, petitioner
interposed the instant petition with application for a temporary restraining
order and/or preliminary injunction.  On January
20, 1988, the Court
issued a temporary restraining order enjoining the NLRC from enforcing and
carrying out its decision dated August 12, 1987.

Public respondent,
through the Solicitor General, and the UNION filed separate comments to the
petition.  Petitioner submitted its reply
to the Solicitor General’s comment. 
Thereafter, considering the allegations contained, issues raised and
arguments adduced in the pleadings, the Court resolved to give due
course to the petition and required the parties to submit their respective memoranda.  In compliance therewith, the petitioner and UNION filed their memoranda.  The Solicitor General, on the other hand,
filed a manifestation adopting his comment as memorandum.

The issue presented for
adjudication in this petition is whether or not there was grave abuse of
discretion on the part of the NLRC in setting aside the orders of the Labor
Arbiter dated November 27, 1985 and April 16, 1986, and in ordering a review of
the list of union members entitled to reinstatement and backwages,
and a recomputation of the amount of backwages awarded.

An appeal from a
decision, award or order of the labor arbiter must be brought to the NLRC within ten (10) calendar days from receipt of such decision, award, or order,
otherwise, the same becomes final and executory [Article 223 of the Labor Code.] And for purposes of determining its
timeliness, a motion for reconsideration may be properly treated as an appeal
and therefore must likewise be filed within the ten-day reglementary
period [The Insular Life Assurance Company, Ltd. v. NLRC, G.R. No. 74191,
December 21, 1987, 156 SCRA 740; See also
Camacho v. CA, G.R. No. L-21850, April 29, 1977, 76 SCRA 531.]

In the case at bar, the Labor Arbiter’s order dated November 27, 1985 was duly received
by the UNION through its counsel of record on November 29, 1985. However, the UNION’s “Urgent Motion and Manifestation for
Clarification and Recomputation of Backwages“, which in effect was a motion for
reconsideration, was filed more than 30 days thereafter, or on January 2,
1986.  By then, the order of the Labor
Arbiter long became final and executory on account of the failure of the UNION
and petitioner to appeal therefrom within the reglementary period provided under the law.

Well-settled is the rule that the perfection of an appeal within
the statutory or reglementary period is not only
mandatory, but also jurisdictional. 
Failure to interpose a timely appeal (or a motion for reconsideration)
renders the assailed decision, order or award final and executory that deprives
the appellate body of any jurisdiction to alter the final judgment [Cruz v.
WCC, G.R. No. L-42739, January 31, 1978, 81 SCRA 445; Volkshel Labor Union v.
NLRC, G.R. No. L-39686, June 28, 1980, 98 SCRA 314; Acda
v. Minister of Labor, G.R. No. 51607, December 15, 1982, 119 SCRA 306; Rizal Empire Insurance Group v. NLRC, G.R. No. 73140, May
29, 1987, 150 SCRA 565; MAI Philippines Inc. v. NLRC, G.R. No. 73662, June 18,
1987, 151 SCRA 196; Narag v. NLRC, G.R. No. 69628,
October 28, 1987, 155 SCRA 199; John Clement Consultants, Inc. v. NLRC, G.R. No. 72096, January 29,
1988, 157 SCRA 635; Bongay v. Martinez, G.R. No.
77188, March 14, 1988, 158 SCRA 552; Manuel L. Quezon
University v. Manuel L. Quezon Educational
Institution, G.R. No. 82312, April 19, 1989, 172 SCRA 597.] This rule “is
applicable indiscriminately to one and all since the rule is grounded on
fundamental consideration of public policy and sound practice that at the risk
of occasional error, the judgment of courts and award of quasi-judicial
agencies must become final at some definite date fixed by law” [Volkschel Labor Union v. NLRC, supra, at p. 322.]
Although, in a few instances, the Court has disregarded
procedural lapses so as to give due course to appeals filed beyond the reglementary period [See Flexo Manufacturing Corporation v. NLRC, G.R. No. 55971, February 28, 1985,
135 SCRA 145; Firestone Tire & Rubber Co. v. Lariosa,
G.R. No. 70479, February 27, 1989, 148 SCRA 187; Chong
Guan Trading v. NLRC, G.R. No. 81471, April 26, 1989, 172 SCRA 831,] the Court
did so on the basis of strong and compelling reasons, such as
serving the ends of justice and preventing
a grave miscarriage thereof.

No acceptable reason has
been advanced and none appears on record to excuse the tardiness exhibited by
the UNION.  The UNION‘s claim that its right to seek a review of the
November 27, 1985 order was lost through the inadvertence or refusal of its counsel of
record is, at best, self-serving.  The
legal consequences arising out of the failure of the UNION‘s attorney to timely file a motion for
reconsideration or appeal from the November
27, 1985 order of the Labor Arbiter are binding upon
petitioner.  A client is generally bound by the action of his counsel in the
management of a litigation, as by the attorney’s mistake or negligence in
procedural technique [US v. Umali, 15 Phil. 33
(1910); Montes v. Court of First Instance of Tayabas,
48 Phil. 640 (1926); Inocando v. Inocando,
110 Phil. 266 (1960); Rizal Commercial Banking
Corporation v. Dayrit, G.R. No. 63372, June 28, 1983,
123 SCRA 203; Ayllon v. Sevilla,
G.R. No. 79244, December 10, 1987, 156 SCRA 257.] Absent a clear showing of
fraud or excusable negligence on the part of the UNION‘s counsel, the Court finds no cogent reason to depart from
the foregoing rule.

Respondents, however, take the position that the case at bar is
an exception to the general rule on the finality of decisions, awards and
orders.  They contend that the Labor
Arbiter’s orders dated November 27, 1985 and April 16, 1986, respectively,
varied the tenor of, and failed to substantially conform to that decreed in,
the judgment rendered against petitioner on September 23, 1983.  Respondents conclude that the NLRC had
appellate jurisdiction to set aside these void orders and to require a
comprehensive review of the union members entitled to reinstatement and backwages, and a recomputation of
the amount of backwages due them.

In support of their position, respondents challenge three
principal features of the Labor Arbiter’s order.  First of all, respondents charge that the
order failed to direct petitioner to reinstate and pay backwages
to fifty (50) union members claimed by petitioner to have resigned and executed quitclaims or releases in favor of
the company.  They argue that the order thereby contravened
the final judgment against the company which ordered the reinstatement of those
union members who were forced to resign. 
(This charge, incidentally, was the sole basis of the UNION‘s appeal before the NLRC.) The Solicitor
General further argues that the Labor Arbiter failed to rule on the matter of whether these individuals were
forced, or voluntarily, resigned from their employment.  Secondly, the respondents assail the ruling
of the Labor Arbiter which limited the period for the computation of backwages until
November 30, 1984 for five (5) union members
[See Footnote*.] They dispute the veracity of petitioner’s claim that
its plant burned down on said date and resulted in the temporary lay-off of
employees.  Thirdly, respondents claim
error in the salary base used by the Labor Arbiter in his computation of backwages.

The first and second
points raised by respondents are addressed to the factual findings of the Labor
Arbiter in the proceedings below.  Based
on a review of the records of the execution proceedings before the Labor Arbiter,
the Court finds substantial basis for these findings.

After the submission of
the UNION’s “Urgent Motion and
Manifestation” dated April 28, 1985 containing the list of over two hundred
(200) union members claimed to be entitled to reinstatement and/or backwages, and the petitioner’s comment thereto claiming,
on the other hand, that fifty (50) of the individuals listed in the UNION’s list had resigned and executed quitclaims or
waivers, the Research and Information Unit of the DOLE submitted its own list
of affected union members.  The RIU
list did not contain the names of
the fifty (50) members.  It is noteworthy that the UNION
raised no objection to the RIU report except for its request that three (3)
other union members be included in the list. 
Working initially from the official RIU list of union members, the Labor
Arbiter rendered his order of November
27, 1985, incorporating the points raised by both parties in their
respective comments to the RIU report which he found to be meritorious.  Again, no timely opposition was raised by the
UNION before the Labor Arbiter regarding the exclusion
of the fifty (50) union members from the Labor Arbiter’s order.  In fact, in the UNION’s
“Urgent Motion and Manifestation for Clarification and Recomputation
of Backwages” belatedly filed by the UNION’s president, Felix Emen, on
January 2, 1986, the UNION did not dispute the non-inclusion of the fifty (50) union members, but, instead, insisted that
the Labor Arbiter adopt the RIU list.

Neither does it appear
that the UNION was deprived of the opportunity to assert and substantiate
before the Labor Arbiter its claim that the fifty (50) union members had been
forced or coerced to resign and
execute quitclaims in favor of petitioner. 
It simply failed to do so.

The same could be said
with respect to the fixing of the period of the computation of backwages until November 30, 1984 for five (5) union members who had not yet
been recalled by petitioner.  November
30, 1984 was
allegedly the date petitioner’s plant burned down, resulting in the
temporary lay-off of employees.  It
appears that this particular claim was not disputed by the UNION
during the proceedings before the Labor Arbiter or the NLRC.  It is in its comment filed before the Court
that the UNION attacks for the first time the veracity
of petitioner’s claim.

Considering the
foregoing, the Court finds no legal infirmity tainting the Labor Arbiter’s
order of November 27, 1985 which excluded the names of the fifty (50)
union members from the list of employees entitled to backwages
and reinstatement, and which limited the period for computing the backwages due to the five (5) union members.  It bears emphasizing that the execution
proceedings below were undertaken precisely to facilitate the identification of
each union member entitled under the decision, to backwages
and reinstatement, the computation of
the exact amount due to these members, and the consideration of supervening events which affect the manner and extent
of the execution.  And inasmuch as the UNION
failed to interpose a timely opposition to, or appeal from, the Labor Arbiter’s
order, re-examination of the correctness of the Labor Arbiter’s findings of
fact is accordingly foreclosed.

But there is merit in the
third point raised by respondents herein. 
The determination of the salary base for the computation of backwages requires simply an application of judicial
precedents defining the term “backwages“. 
Unfortunately, the Labor Arbiter erred in this regard.  An unqualified award of backwages
means that the employee is paid at the wage rate at the time of his dismissal [Davao Free Worker Front v. Court of Industrial
Relations, G.R. No. L-29356, October 27, 1975, 67 SCRA 418; Capital Garments
Corporation v. Ople, G.R. No. 53627, September 30,
1982, 117 SCRA 473; Durabilt Recapping Plant &
Company v. NLRC, G.R. No. 76746, July 27, 1987, 152 SCRA 328.] And the Court
has declared that the base figure to be used in the computation of backwages due to the employee should include not just the
basic salary, but also the regular allowances that he had been receiving, such
as the emergency living allowances and the 13th month pay mandated under
the law [See Pan-Philippine Life Insurance Corporation v. NLRC, G.R. No.
53721, June 29, 1982, 144 SCRA 866; Santos v. NLRC, G.R. No. 76721, September
21, 1987, 154 SCRA 166; Soriano v. NLRC, G.R. No.
75510, October 27, 1987, 155 SCRA 124; Insular Life Assurance Co. Ltd v. NLRC, supra.]
In his computation of the amount of backwages, the
Labor Arbiter without legal basis excluded the ECOLA.  It is on this score alone that the Labor
Arbiter’s order dated November 27,
1985 should be set aside.  The Court holds that notwithstanding the
belated appeal by the UNION, the assailed order should
be modified with respect to the
incorrect salary base used by the Labor Arbiter in his computation of backwages.  Where
there is a patently improper application and interpretation of the law on the
part of administrative officers who are tasked to perform quasi-judicial
functions, the Court will not hesitate to disregard procedural rules so as to effect faithful adherence to that mandated under the law.

WHEREFORE, in view of the foregoing, the petition is
GRANTED and the NLRC decision dated August 12, 1987 and resolution dated November
11, 1987 are hereby
SET ASIDE, for having been rendered in grave abuse of discretion.  The temporary restraining order issued by
this Court is made PERMANENT.  However,
the case is ordered REMANDED to the Labor Arbiter for the recomputation
of the amount of backwages awarded to the union
members listed in his order dated November 27, 1985, by including in the base
figure, their basic salary, 13th month pay and ECOLA, and for
the issuance of a writ of execution requiring petitioner to pay the
corresponding difference.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., and Bidin, JJ., concur.

Feliciano, J., on leave.

*
Antonia Estrella, Cristina Legaspi, Anacorita Hermoso, Myrna Percel, and Teodora Dimla.

** Nimfa Ancheta,
Larcy Asinas and Perla Paet.