G.R. No. L-24592 May 29, 1970
NORTHWEST AIRLINES EMPLOYEES ASSOCIATION and LOUISE MATEU, petitioners, vs. NORTHWEST AIRLINES, INC., and COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

Petitioner Louise Mateu was employed as a flight stewardess by respondent Northwest Airlines, Inc. since 1947 until her dismissal on September 23, 1960. Together with the Northwest Airlines Employees Association, she charged the company with unfair labor practice, alleging her dismissal was due to union activities. During the pendency of the case before the Court of Industrial Relations (CIR), she was reemployed by the company on June 28, 1962, as a passenger sales agent at the same monthly salary of P445.07. She later received salary increases in this new position. On September 30, 1963, the CIR found the company guilty of unfair labor practice and ordered Mateu’s reinstatement as flight stewardess with full back wages and without loss of seniority and other rights. On the company’s motion for reconsideration, the CIR en banc resolved on July 21, 1964, that Mateu was entitled to back wages only for the period of her wrongful dismissal (September 24, 1960, to June 1962) and that any excess salary she received as a passenger sales agent over P445.07 should be deducted from her back pay, unless she could claim she would have been entitled to the same increases as a flight stewardess. Subsequently, upon reinstatement as a flight stewardess on August 9, 1965, Mateu was paid back salaries for her lay-off period at the rate of P445.07 per month, minus all amounts she had received in excess of that rate during her employment as a passenger sales agent from June 28, 1962, to August 8, 1965, resulting in a deduction of P2,480.95.

ISSUE

1. Whether the deduction from Mateu’s back salaries corresponding to the period of her illegal dismissal, of the excess amounts she earned as a passenger sales agent after her reemployment (from June 28, 1962, onward), is valid.
2. Whether the company was justified in reinstating Mateu to her former position as flight stewardess at her old salary rate of P445.07, considering she was receiving a higher salary as a passenger sales agent at the time of reinstatement.

RULING

1. No, the deduction is not valid. The Supreme Court reversed the CIR’s resolution authorizing the deduction. The Court held that: (a) Mateu’s earnings as a passenger sales agent were for services rendered to the company, and she did not unduly enrich herself at its expense; (b) The period of her wrongful dismissal was only from September 23, 1960, to June 1962, and her entitlement to back salaries was limited to that period. Therefore, it is neither logical nor equitable to deduct earnings received after this period (from June 28, 1962, onward). The Court distinguished prior cases where deductions were upheld, noting they only involved earnings during the period of suspension or dismissal; (c) The deduction contravened Article III, paragraph 5, of the collective bargaining agreement, which entitled an employee temporarily assigned to a higher classification to be paid the rate of that higher classification. The Court ordered the respondent company to restore the deducted amount to Mateu.
2. The Supreme Court did not make a definitive ruling on this issue, as it involved questions of fact raised by the parties. The Court noted that the CIR’s September 30, 1963, decision ordering reinstatement “without loss to her seniority and other acquired rights” was final and unappealed. However, the implementation of this aspect of the judgment, including the determination of Mateu’s proper salary rate upon reinstatement, was remanded to the lower court for hearing and reception of evidence if necessary. The Court found the company’s reliance on Article III, paragraph 7, of the bargaining agreement (regarding permanent assignment to a lower classification) misplaced, as Mateu’s reemployment as a passenger sales agent was temporary in nature, pending the outcome of her case.