G.R. No. L-53627 September 30, 1982
CAPITAL GARMENT CORPORATION, petitioner, vs. HON. BLAS OPLE, HON. FRANCISCO ESTRELLA, FLORITA SANTOS, ET AL., respondents.

FACTS

Petitioner Capital Garment Corporation applied for clearance to dismiss 41 employees, including the 28 private respondents, for alleged inefficiency and tardiness. The Ministry of Labor denied the application and ordered the reinstatement of all 41 employees with full backwages. Petitioner complied only partially on November 2, 1978, reinstating 32 employees. After two days of work, 28 of the reinstated employees stopped reporting. Petitioner then filed a new clearance application to terminate these 28 for abandonment of work and violation of company rules.
On November 15, 1978, the employees, through counsel, sent a letter to petitioner protesting their unbearable working conditions and harassment by supervisors, which they claimed forced their absence, and stated they were preparing an unfair labor practice complaint. They subsequently filed said complaint for illegal dismissal. The Labor Arbiter denied petitioner’s clearance application, a decision affirmed by the Minister of Labor.

ISSUE

Whether the Minister of Labor committed grave abuse of discretion in ordering the reinstatement of private respondents with full backwages.

RULING

The Supreme Court found no grave abuse of discretion. The legal logic centered on the definition of abandonment and the policy for awarding backwages. For abandonment to exist, there must be a clear and deliberate intent to sever the employment relationship. The Court upheld the Labor Arbiter’s finding that such intent was absent. The employees’ cessation of work was a direct protest against the petitioner’s harassment and unbearable working conditions, meticulously documented in their November 15, 1978 letter, which negated any intention to abandon. The Court deferred to these factual findings, which were supported by substantial evidence.
Regarding backwages, the Court modified the award. Rejecting petitioner’s argument for deducting interim earnings based on older precedents, the Court applied the prevailing “Mercury Drug Rule.” This policy fixes backwages at a reasonable amount without requiring proof of interim earnings or allowing deductions, thereby avoiding protracted hearings and ensuring expeditious justice. Considering the case had been pending for four years, the Court deemed a two-year backwages award, computed based on rates at the time of reinstatement and without qualification, as fair and reasonable. The petition was dismissed with this modification.