GR 95937; (August, 1991) (Digest)
G.R. No. 95937 ; August 16, 1991
FORTUNE TOBACCO CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION & EDGARDO DE LA CRUZ, ET AL., respondents.
FACTS
Private respondents, employees of Fortune Tobacco Corporation, filed a complaint for illegal dismissal. The Labor Arbiter ordered their reinstatement with full backwages from October 5, 1985, or payment of separation pay. The NLRC modified this decision on appeal, ordering the petitioner to pay backwages from October 5, 1985, only up to the date the plant was “actually sold,” and to pay separation pay to those not rehired by the new owner. This NLRC decision became final.
During execution, the NLRC Research Unit computed backwages from October 1985 up to August 1990, amounting to P3,863,464.89, reasoning that the date of actual sale was unascertained. Petitioner Fortune Tobacco presented a “Deed of Conditional Sale” dated October 17, 1985, arguing the sale date was fixed and the backwages period should be minimal. Private respondents opposed, presenting evidence that the properties remained registered in the petitioner’s name and alleging the sale was not actual. The Labor Arbiter upheld the NLRC computation, finding no actual sale had occurred, and issued a writ of execution.
ISSUE
Whether the NLRC committed grave abuse of discretion in its computation of backwages.
RULING
The Supreme Court dismissed the petition but modified the computation period. The Court found no grave abuse of discretion in the NLRC’s and Labor Arbiter’s factual determination that no actual sale of the plant occurred. The “Deed of Conditional Sale” was merely a conditional contract where ownership would transfer only upon full payment, as evidenced by a clause stating a “final and absolute deed of sale” would be executed thereafter. The tax records showing the property still registered in the petitioner’s name corroborated the absence of a consummated sale. Therefore, the computation of backwages was correctly not limited by the 1985 deed.
However, the Court sustained the petitioner’s legal argument that, pursuant to prevailing jurisprudence, an award of backwages in illegal dismissal cases cannot exceed three years. Consequently, while the finding of no actual sale was upheld, the monetary award must be recalculated, with backwages limited to a period of three years from October 5, 1985.