Case Digest (G.R. No. 11045)
Facts:
On July 11, 1985, the Supreme Court of the Philippines issued a ruling in the case of Panay Railways, Inc. vs. The National Labor Relations Commission, Hon. Labor Arbiter Ma. Sol M. Manalo, Deputy Sheriff of NLRC-Iloilo City, and Berty Paluay (G.R. No. 69416). The petitioner, Panay Railways, Inc., is the successor in interest of FIVIDEC Railways, Inc., and the respondent, Berty Paluay, was previously ordered to be reinstated to his former position with full back wages. This order stemmed from a resolution rendered by the Labor Arbiter of Iloilo City on November 7, 1963, which mandated Paluay's reinstatement following his dismissal on January 1, 1977. The order was not appealed, and subsequently, the labor arbiter issued a writ of execution based on Paluay's motion. A total of P83,000.00 was garnished by the sheriff from an amount deposited by Panay Railways with the Iloilo City Branch of Traders Royal Bank. After Paluay's motion to compel the bank to deliver the sei
Case Digest (G.R. No. 11045)
Facts:
- Background of the Case
- The petition for certiorari challenges the decision of the National Labor Relations Commission (NLRC), which affirmed the labor arbiter of Iloilo City’s ruling.
- The decision in question denied the application of the three-year back wages rule in implementing a judgment rendered in favor of private respondent Bertie Palu-ay against petitioner Panay Railways, Inc.
- Timeline and Procedural History
- On November 7, 1963, the Labor Arbiter of Iloilo City issued a resolution ordering petitioner Panay Railways, Inc., as successor in interest of FIVIDEC Railways, Inc., to reinstate Palu-ay to his former position.
- The reinstatement included full back wages from January 1, 1977 (the date of Palu-ay’s dismissal) at a rate of P1,000.00 per month until his actual reinstatement.
- No appeal was filed against this resolution, leading to:
- The labor arbiter, acting on a motion by respondent Palu-ay, to issue a writ of execution.
- The subsequent garnishment of P83,000.00 from the amount deposited by petitioner in the Iloilo City Branch of Traders Royal Bank by the NLRC sheriff.
- After the garnishment, Palu-ay filed a motion directing the Traders Royal Bank to deliver the garnished amount to the sheriff.
- Petitioner’s Motion and Subsequent Proceedings
- In response, petitioner Panay Railways, Inc. moved:
- To stop the execution of the judgment.
- To set a hearing for the computation of the exact amount due to Palu-ay, or alternatively, to award back wages equivalent to “three-year salaries without deduction or qualification.”
- On March 8, 1984, the Labor Arbiter denied the petitioner’s motion.
- The NLRC then:
- Affirmed the labor arbiter’s decision on appeal.
- Later denied petitioner’s motion for reconsideration.
- These developments led to the filing of the present petition for certiorari.
- Judicial Policy and Precedents
- The Court referenced earlier decisions, particularly:
- Insular Life Assurance Co., Ltd. Employees Association v. Insular Life Assurance Co., Ltd. which established the policy of fixing back wages to a “just and reasonable level” computed as the net equivalent of three years’ salaries without deductions or qualifications.
- The rationale underlying the three-year back wages rule:
- It alleviates the need for detailed and potentially contentious proofs concerning the actual earnings of the employees during their lay-off.
- It spares employers from the burden of submitting counterproofs.
- It prevents protracted delays caused by extended hearings and the resulting attrition or settlement pressures that might compel employees to accept unconscionable awards.
- The Court found that, based on this consistent policy and established jurisprudence, the three-year back wages rule should apply in the case at bar.
Issues:
- Applicability of the Three-Year Back Wages Rule
- Whether the three-year back wages rule, as established in prior cases, should be applied in computing the amount due to Bertie Palu-ay.
- Whether the petitioner's motion to set the award at a fixed measure of three-year salaries without deductions is supported by existing judicial policies and relevant jurisprudence.
- Validity of the NLRC and Labor Arbiter’s Decisions
- Whether the decision of the Labor Arbiter, which denied petitioner's motion for fixing back wages, was correct in light of the policy to award back wages for a maximum of three years.
- Whether the subsequent affirmation of that decision by the NLRC and its denial of the petitioner’s motion for reconsideration were justified under the law.
- Procedural and Substantive Fairness
- Whether the procedures adopted in computing and awarding back wages adequately protected the rights of both the employee (Palu-ay) and the petitioner (Panay Railways, Inc.).
- Whether the application of the fixed formula serves the interests of justice and efficiency, considering the twin evils of employee idleness and employer delay.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)