Facts:

This case involves petitioners Porfirio Balladares, Jr. and Florante S. de la Pena, who were employed by the Rural Bank of Pagadian, represented by its manager, Ms. Arlene A. Fucoy. The events date back to 1986 when the Bank’s rank-and-file employees formed a union known as the Philippine Integrated Industries Labor Union, with Balladares and de la Pena elected as president and vice-president, respectively. On April 8, 1987, the Union filed a notice of strike due to a deadlock in collective bargaining negotiations. In retaliation, the Bank terminated the employment of the petitioners, citing retrenchment in letters dated March 27, 1987, which they received on April 13, 1987. Subsequently, on April 28, 1987, Balladares and de la Pena filed separate complaints against the Bank for illegal dismissal, unfair labor practices, and claims for wage differentials, overtime pay, and other benefits. The Bank countered by filing a complaint for illegal strike against the petitioners and oth

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Facts:

Employment and Union Formation

• Petitioners Porfirio Balladares, Jr. and Florante de Ia Pena were employed by Rural Bank of Pagadian, Inc. as a driver/messenger and a bank technician, respectively.
• In 1986, the bank’s rank-and-file workers formed the Philippine Integrated Industries Labor Union and elected Balladares, Jr. as president and De Ia Pena as vice-president, leading to their active participation in union activities.

Collective Bargaining and Strike Notice

• The union, under the leadership of the petitioners, entered into collective bargaining negotiations with the bank.
• Due to a deadlock in negotiations, the union filed a notice of strike with the Department of Labor and Employment on April 8, 1987 (actual strike held on April 23, 1987).

Termination and Filing of Complaints

• As a countermove to the strike, the bank allegedly terminated petitioners’ employment on the ground of retrenchment through letters dated March 27, 1987, which were received on April 13, 1987, with effectivity stated to be within ten (10) days from receipt.
• On April 28, 1987, petitioners filed separate complaints for illegal dismissal, unfair labor practice, wage differential, overtime pay, 13th month pay, holiday pay, and separation pay against the bank.
• Conversely, the bank filed a complaint for illegal strike against petitioners and other employees.
• The cases were later consolidated by order of the Regional Arbitration Branch No. IX in Zamboanga City dated November 10, 1987.

Decisions and Procedural History

• On August 5, 1988, Acting Executive Labor Arbiter Rhett Julius J. Plagata rendered a decision which:
• Dismissed the complaint for illegal strike for lack of merit.
• Declared the dismissals of petitioners illegal and ordered their reinstatement without loss of seniority, together with backwages of P17,457.55 each.
• Granted specific monetary awards for wage differentials and 13th month pay while dismissing claims for overtime pay, holiday pay, and other labor benefit violations.
• Dismissed the issue of the deadlock in collective bargaining as moot and academic.
• The bank appealed the decision on August 25, 1988.
• Pending appeal, petitioners filed a motion for execution of the Labor Arbiter’s decision. No action was taken initially on this motion, owing to a transmission of the case records to the National Labor Relations Commission (NLRC).

NLRC Resolution and Petition for Reconsideration

• On June 29, 1992, the NLRC (Fifth Division) affirmed the Labor Arbiter’s decision.
• Petitioners subsequently moved for reconsideration, seeking that the NLRC order the bank to pay backwages and other labor benefits computed from the time the Labor Arbiter’s decision was appealed to the time of actual reinstatement—in effect, a demand for full backwages beyond the 15 months initially awarded.
• The NLRC in its resolution dated June 30, 1993, denied petitioners’ motion, holding that the provisions of R.A. No. 6715 requiring the posting of a supersedeas bond and immediate reinstatement pending appeal had not yet taken effect at the time the bank filed its appeal.

Supreme Court Intervention

• Petitioners contended that the NLRC committed grave abuse of discretion in denying full backwages and in not executing the arbiter’s decision pending appeal.
• The Supreme Court granted the petition, modifying previous resolutions by ordering the bank to pay petitioners backwages for a period of three years from the date of their illegal dismissal in April 1987.
• The Court clarified that full backwages from the time compensation was withheld up to actual reinstatement could not be ordered because R.A. No. 6715, with its provision on immediate reinstatement and requirement of a supersedeas bond, was not yet effective at the time of dismissal.

Issue:

Whether the NLRC abused its discretion in denying petitioners’ motion for full backwages computed from the time the Labor Arbiter’s decision was appealed until actual reinstatement.

• The contention rested on the bank’s failure to perfect its appeal by posting a supersedeas bond, as required by R.A. No. 6715.
• Whether the provision of immediate reinstatement pending appeal should have been applied despite the bank’s apparent non-compliance with the bonding requirement.

• Whether R.A. No. 6715, which amended Article 279 of the Labor Code to provide for full backwages and reinstatement pending appeal, was applicable retroactively to cases of illegal dismissal that occurred before its effectivity on March 21, 1989.

• Whether the proper measure of backwages in cases of illegal dismissal, particularly when actual reinstatement is uncertain, should default to an award equivalent to three years’ pay.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)