G.R. No. L-64809 - Philippine Airlines, Inc. vs. National Labor Relations Commission

The private respondents (Clemente Basinillo, Jr., Antonio Magno, and Rodolfo Salazar) were administratively charged with serious misconduct for the attempted pilferage of two cases of wine from the bonded warehouse of Philippine Airlines on June 12, 1978.
Following a formal investigation, they were found guilty of the charge and were recommended for dismissal from service.

On July 25, 1978, Philippine Airlines, Inc. (the petitioner) filed an application for clearance with the Ministry of Labor and Employment to terminate the services of the private respondents.
As a result of the clearance, the private respondents were summarily dismissed.
In response, the private respondents filed a case for illegal dismissal against Philippine Airlines, which was assigned for arbitration before Labor Arbiter Francisco Jose, Jr.

The case was submitted for decision following the parties’ presentation of their respective position papers.
On August 14, 1981, Labor Arbiter Jose rendered his decision ordering:

The reinstatement of the private respondents to their former positions;
The payment of full backwages from the date of their respective preventive suspensions up to the date of actual reinstatement, without loss of seniority rights.

The petitioner appealed the Labor Arbiter’s decision to the National Labor Relations Commission (NLRC) on December 16, 1981, where the decision was affirmed in toto on June 16, 1983.

Philippine Airlines petitioned for certiorari with a request for a preliminary injunction to annul part of the Labor Arbiter’s decision, particularly the award of full backwages.
The petition sought to revise the duration for backwages from the date of preventive suspension up to actual reinstatement, arguing that the dismissal was made in good faith and that the petitioner should not shoulder the entire burden of the backwages.
A Temporary Restraining Order (TRO) was issued on August 24, 1983, restraining the NLRC from enforcing the full backwages award but not affecting the reinstatement order.

The petitioner contended that given the long pendency of the case (five years and four months) and its timely good faith dismissal, the award of backwages should be limited rather than covering the entire period from the preventive suspension until reinstatement.
Counsel for the public respondent supported the petitioner’s contentions.
The discussion on the period for backwages was framed within the broader context of previous cases, notably:

Mercury Drug Co., Inc. v. Court of Industrial Relations, which established a policy of limiting the award to a just and reasonable level without exhaustive deductions.
Other cited cases, including decisions where awards have been fixed to a maximum of three years or, in subsequent rulings, to even shorter periods given extensive delays.

Whether the petitioner should be required to pay full backwages from the date of the preventive suspension until the date of actual reinstatement, despite the dismissal being executed in good faith.

Whether the long pendency of the case (exceeding five years) justifies a reduction in the period for which backwages are awarded.
How established policies and precedents, particularly those outlined in Mercury Drug Co., Inc. and Capital Garment Corporation, should influence the determination of the appropriate duration of backwages.

Whether the award of full backwages should be modified to a shorter, more just and equitable period based on the principle of fairness and the delays attributable to the case processing.