G.R. No. L-10327; September 30, 1958
United Employees Welfare Association, petitioner, vs. Isaac Peral Bowling Alleys, respondent.

FACTS

On October 10, 1952, thirty-six pinboys employed by the Isaac Peral Bowling Alleys, owned by the Philippine Advertising Corporation, declared a strike. Their union, the United Employees Welfare Association, filed a petition with the Department of Labor. The case was certified to the Court of Industrial Relations (CIR) and docketed as Case No. 751-V. On October 22, 1952, the parties entered into a temporary agreement, and the CIR issued an order enjoining the union from striking and restraining the respondent from hiring new pinboys without court authority, while also requiring the respondent to allow the 36 pinboys to continue working under the same terms and conditions existing before the strike. The pinboys returned to work. However, on November 11, 1952, while Case No. 751-V was still pending, the management dismissed four pinboys (Ramon Arevalo, Claro Bordones, Petronio Beriña, and Carlos Menodiado) on grounds of grave and willful insubordination, grave misconduct, and drunkenness (for the latter two). The union filed a motion to declare the manager and directors in contempt for violating the CIR’s order and later amended it to seek the reinstatement of the dismissed pinboys with backpay. After a hearing, the CIR issued an order on December 9, 1955, denying the contempt motion but ordering the reinstatement of the four pinboys with back wages from November 11, 1952, up to December 22, 1954 (when the case was submitted for decision), based on their average earnings one month prior to their dismissal. Both parties sought relief from the Supreme Court. The respondent’s petition for certiorari (G.R. No. L-10331) was dismissed for lack of merit. The union’s appeal by certiorari is now before the Court, contending that the CIR order was erroneous for limiting back wages only up to the submission date and for basing the computation on the average earnings from the month prior to dismissal, which included a strike period.

ISSUE

1. Whether the Court of Industrial Relations erred in limiting the award of back wages to the dismissed pinboys only up to the date the case was submitted for decision, instead of until actual reinstatement.
2. Whether the Court of Industrial Relations erred in directing that the back wages be based on the dismissed pinboys’ average earnings for the month prior to their dismissal, without excluding the period during which they were on strike.

RULING

1. On the first issue, the Supreme Court ruled that the CIR did not err. The right to backpay is not absolute but subject to the discretion of the Industrial Court, as provided under Section 5(c) of Republic Act No. 875 , which empowers the court to order reinstatement “with or without backpay.” The CIR has the lesser power to mitigate the backpay award. In this case, mitigating circumstances existed: there was a long delay in the disposal of the case (decision came one year after submission), and the CIR was aware that the financial condition of the bowling alleys was “not very sound due to losses reported during the years 1952-1953.” Therefore, the Supreme Court found no reason to disturb the CIR’s order limiting back wages to the date of submission for decision.
2. On the second issue, the Supreme Court ruled in favor of the petitioner union. The order must be clarified to account for the fact that the pinboys were on strike for 12 days during the month preceding their dismissal. The computation of “average earnings one month prior to their dismissal” should refer to a full working month, excluding the strike period. Thus, the backpay awarded should be based on the dismissed pinboys’ earnings for such a full working month.
DISPOSITIVE PORTION:
With the clarification that the month for computing average earnings means a full working month (excluding the strike period), the order appealed from is affirmed, without pronouncement as to costs.