G.R. No. L-76746; July 27, 1987
DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL MANAGER, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO, HON. ARBITER AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and REYNALDO BODEGAS, respondents.

FACTS

Petitioner Durabuilt illegally dismissed respondent Reynaldo Bodegas. The Labor Arbiter ordered his reinstatement with full backwages from termination until actual reinstatement. The decision became final. The Ministry of Labor computed the backwages at P24,316.38, based on a straight 26-day monthly computation. Durabuilt opposed, arguing the computation should only cover days the business was actually operational. It contended that during the backwages period, operations were frequently interrupted due to government-mandated brownouts under a Voluntary Load Curtailment Plan, machine trouble, and lack of raw materials. Durabuilt asserted Bodegas was only entitled to backwages for days work was available, proposing a significantly lower amount.
The Labor Arbiter denied the opposition, and the NLRC affirmed, prompting this petition. Durabuilt concedes the illegal dismissal and willingness to pay backwages but insists the computation must reflect actual lost earnings, not hypothetical wages for days no work could be performed by anyone due to legitimate business stoppages.

ISSUE

Whether the computation of backwages for an illegally dismissed employee should be based on a straight monthly salary without deduction for days the employer’s business was not in operation due to external causes like power interruptions.

RULING

The Supreme Court granted the petition. The policy of awarding backwages “without qualification or deduction” does not establish an inflexible rule mandating payment for days when no work was performed through no fault of the employer. This policy, developed in cases like Insular Life, was meant to obviate the need to prove interim earnings or losses and to prevent undue delay, not to grant windfalls. The fundamental principle remains “a fair day’s wage for a fair day’s labor.”
An employee cannot recover wages for work not performed and which could not have been performed because the enterprise was not operational. Here, the business shutdowns were due to legitimate external factors: government-scheduled brownouts under an energy crisis program, machine repairs, and lack of materials. Awarding backwages for these non-working days would unjustly enrich the employee and penalize the employer beyond its actual liability. The Court emphasized the employer’s good faith, evidenced by reinstating Bodegas during the pendency of the case. Consequently, backwages must be computed based on the daily pay rate and limited to the number of days the business was in actual operation during the period of illegal dismissal, not to exceed three years. The orders of the Labor Arbiter and NLRC were set aside.