G.R. No. L-15544; July 26, 1960
PHILIPPINE AIR LINES, INC., petitioner, vs. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION, respondent.

FACTS

The Court of Industrial Relations (CIR), in a resolution dated July 22, 1954, ordered petitioner Philippine Air Lines, Inc. (PAL) to reinstate four dismissed employees (Fortunato Biangco, Hernando Guevarra, Bernardino Abarrientos, and Onofre Griño) with back pay from their dismissal date (May 5, 1950) to their reinstatement date. This resolution was affirmed by the Supreme Court in G.R. No. L-8197, and the decision became final. The employees were actually reinstated on January 14, 1959. Respondent Philippine Air Lines Employees Association filed a motion for partial execution, claiming back wages for the period from May 5, 1950, to January 13, 1959, totaling P158,485.33 for the four employees. PAL opposed the motion, contending that all salaries or wages the employees earned elsewhere during their dismissal period should be deducted from the back wages. The CIR, through Judge Martinez, issued an order on February 12, 1959, for the issuance of a writ of execution for back wages “without any deduction of salaries and/or income earned elsewhere.” The CIR en banc denied PAL’s motion for reconsideration on May 22, 1959.

ISSUE

Whether the Court of Industrial Relations erred in ordering the execution of back wages without deducting the wages or pay the dismissed employees actually earned from other employment during the period of their illegal dismissal.

RULING

Yes. The Supreme Court modified the CIR’s order and resolution. Applying the principle that no one should be allowed to enrich himself at the expense of another, the Court held that the amount of wages and pay the four dismissed employees actually earned elsewhere during the period of their lay-off must be deducted from their respective back pay. The Court cited previous rulings (Macleod & Co. vs. Progressive Federation of Labor, Western Mindanao Lumber Co. vs. Mindanao Federation of Labor, Durable Shoe Factory vs. Court of Industrial Relations, and Felix Potenciano vs. Andres Estafani) which consistently applied this doctrine of deduction to mitigate liability and prevent double recovery. The Court noted that the question of deduction was not the subject of the prior appeal (G.R. No. L-8197), which dealt only with the legality of the dismissal, and that raising the issue of deduction prematurely could have been misconstrued as an acknowledgment of the illegality of the dismissal. The CIR was directed to hold a hearing to allow the parties to prove the actual earnings of the employees during their dismissal for the purpose of deducting such amounts from the back pay. Costs were imposed on the respondent.