GR 81200; (October, 1990) (Digest)
G.R. No. 81200 October 17, 1990
PARAMOUNT VINYL PRODUCTS CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND PARAMOUNT INDEPENDENT WORKERS UNION, respondents.
FACTS
The case originated from an unfair labor practice complaint filed by Paramount Independent Workers Union against Paramount Vinyl Products Corporation. The Labor Arbiter found the company guilty of illegally shutting down its plant and locking out workers, ordering the reinstatement of over 200 union members with full backwages from January 3, 1983. This decision was affirmed by the NLRC and subsequently by the Supreme Court. During execution proceedings, the Research and Information Unit computed backwages for 137 members. The Labor Arbiter, in an Order dated November 27, 1985, directed payment to 123 members, setting the computation parameters. He ruled that the salary base for backwages included basic salary and 13th month pay, but excluded Emergency Cost of Living Allowance (ECOLA). The period was set from January 3, 1983, until actual reinstatement, with an adjustment for members not recalled due to a plant fire on November 30, 1984. The Union filed a belated appeal with the NLRC, challenging this computation.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in entertaining the Union’s belated appeal and in affirming the Labor Arbiter’s order which excluded ECOLA from the salary base for backwages computation.
RULING
The Supreme Court granted the petition, finding grave abuse of discretion by the NLRC. On procedural grounds, the Court held that the NLRC should not have entertained the Union’s appeal. The Labor Arbiter’s Order of November 27, 1985, became final and executory after neither party appealed within the ten-day reglementary period. The Union’s subsequent motion for clarification, filed over a month later, did not toll the period for appeal as it was a mere reiteration of previously resolved issues and not a motion for reconsideration. The NLRC’s assumption of jurisdiction over the belated appeal was therefore a violation of procedural rules and constituted grave abuse of discretion. On the substantive issue, the Court held that the Labor Arbiter committed a legal error in excluding ECOLA from the salary base for computing backwages. Judicial precedent establishes that an unqualified award of backwages includes not only basic salary but all regular allowances the employee was receiving, which encompasses ECOLA and 13th month pay. Despite the procedural finality of the Arbiter’s order, the Supreme Court modified it on this point, citing its duty to correct a patently erroneous application of the law by a quasi-judicial body. The case was remanded to the Labor Arbiter solely for the recomputation of backwages to include ECOLA in the base figure.