G.R. No. L-77437 June 23, 1988
LEPANTO CONSOLIDATED MINING COMPANY, petitioner, vs. THE HONORABLE EXECUTIVE LABOR ARBITER NORMA C. OLEGARIO, TOMAS SIMONGO, THE SHERIFF OF THE CITY OF BAGUIO AND BENGUET, respondents.

FACTS

Private respondent Tomas Simongo filed a complaint for illegal dismissal against petitioner Lepanto Consolidated Mining Company. On January 16, 1986, Labor Arbiter Saturnino Orate rendered a decision ordering Simongo’s reinstatement with full back wages from the time his salary was withheld until actual reinstatement. Petitioner complied by reinstating Simongo and paying him back wages equivalent to three years, consistent with the prevailing jurisprudence established in Lepanto Consolidated Mining Company vs. Encarnacion. However, Simongo filed a motion for execution, claiming entitlement to back wages beyond the three-year period as stated in the unqualified text of the Labor Arbiter’s decision. The Executive Labor Arbiter granted the motion, issuing a writ of execution for the full amount. Petitioner’s motion to quash the writ was denied, prompting this petition.

ISSUE

Whether a final and executory Labor Arbiter decision awarding reinstatement and full back wages without qualification can be enforced to grant back wages exceeding three years, contrary to established Supreme Court doctrine limiting such awards to a maximum of three years.

RULING

No. The Supreme Court granted the petition and set aside the orders of the Executive Labor Arbiter. The Court held that the three-year limit on back wage awards for illegally dismissed employees is a settled doctrine of long standing, adhered to in the interest of justice and expediency. This rule, originating from Mercury Drug Co., Inc. vs. Court of Industrial Relations, was designed as a realistic and mutually beneficial solution to prevent idleness on the part of the employee and protracted delays by the employer. It establishes a reasonable base figure without requiring deductions for interim earnings, thereby facilitating immediate execution. A labor arbiter’s decision that becomes final and executory is indeed enforceable, but its execution must conform to law and prevailing jurisprudence. The award of “full back wages” in the decision must be construed and executed within the bounds of this controlling legal principle. To allow execution beyond the three-year cap would violate established law and undermine the doctrine’s purpose of providing a definitive and equitable measure of damages. The Court emphasized that while finality of judgments is imperative, it cannot be invoked to sanction an execution that is contrary to law. Therefore, petitioner’s compliance in paying three years’ back wages was correct and complete.