East Asiatic Co. LTD. vs. CIR

3/6/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 040
VOL. 40, AUGUST 31, 1971 521

East Asiatic Company, Ltd. vs. Court of Industrial
Relations
No. L-29068. August 31, 1971.
EAST ASIATIC COMPANY, LTD., E. JAKOBSEN, P.

SORENSEN and K. R. NIELSEN, petitioners, vs. THE
COURT OF INDUSTRIAL RELATIONS, THE EAST
ASIATIC CO. EMPLOYEES UNION (PTUC) and
SOLEDAD A. DIZON, respondents.
Industrial Peace Act; Unfair labor practice; Determination of

amount of backwages; Procedure to be observed.—The
determination of how much should be paid as backwages when
payment thereof is ordered in an unfair labor practice case
constitutes either an inevitable sequel or a part and parcel of the
whole proceeding. Consequently, there is no reason why the same
simple, liberal and non-technical procedure indicated in Section
5(b) should not be observed in such determination, particularly if
it is considered that under Section 5(c), the discretion granted to
the court in the imposition of the appropriate sanction against
any party guilty of unfair labor practice is so broad that it is not
confined merely to the issuance of an “order requiring such person
to cease and desist from such unfair labor practice” but includes
also the authority to “take such affirmative action as will
effectuate the policies of the Act, including but not limited to
reinstatement of employees with or without backpay and
including rights of the employees prior to dismissal including
seniority,” and having in view, further, the limited time of thirty
(30) days within which the matters “relative to such disputes” is
mandatorily required to be decided by the Court, which
considerations unmistakably indicate the policy of the law to
make all unfair labor practice proceedings and the incidents
thereof as simple, speedy and expeditious as possible, to the end
that they may be undertaken without regard to procedural
technicalities save as may be indispensable for due process and
decided strictly according to the substantial merits of the
respective claims of the parties.
http://www.central.com.ph/sfsreader/session/000001695041050e2484e05b003600fb002c009e/t/?o=False 1/31
Same; Immediate implementation of ordered reinstatement;

Advantages.—The point is that in such a situation, it is implicit in
the law that what the court should have done as the initial step
was to order immediate implementation of the ordered
reinstatement, without prejudice to resolving the question of
backwages afterwards. With the immediate reinstatement upon
the court’s finding of just and legal ground therefor no injury is
caused to either employer or employee, for the former gets the
benefit of the latter’s work and the latter received due
compensation therefor. The obvious advantages of this
arrangement in terms of industrial peace and economic and social
progress, and to the larger interests of the nation as a whole, are
incalculable.
522
522 SUPREME COURT REPORTS ANNOTATED
East Asiatic Company, Ltd. vs. Court of Industrial Relations
Same; Deductions of earnings from backwages to be paid;

Reason for rule.—It is well settled that an employer is entitled to
deduct from what the court orders to be paid as backwages.
privileges, etc., whatever an employee has earned elsewhere
during the period for which backwages are supposed to be paid,
hence such qualifications must be considered implied in all
judgments ordering reinstatement, unless otherwise expressly
ordered for reasons the court may deem justified. In a rather long
line of decisions involving payment of backwages in consequence
of unfair labor practices on the part of their employers, the court
has uniformly held that whatever the dismissed laborer had
actually earned during the period of his illegal dismissal should
be deducted from his computed backwages for the same period, on
the principle that no one should be allowed to enrich himself at
the expense of another.
Same; Same; Guidelines in the ascertainment of the total
backwages payable.—The guidelines to be observed in the
ascertainment of the total backwages payable are: First, To be
deducted from the backwages accruing to each of the laborers to
be reinstated is the total amount of earnings obtained by him
from other employment(s) from the date of dismissal to the date of
reinstatement. Should the laborer decide that it is preferable not
to return to work, the deduction should be made up to the time
judgment becomes final. And these, for the reason that employees
should not be permitted to enrich themselves at the expense of
their employer. Besides, there is the “law’s abhorrence for double
compensation.” Second, likewise, in mitigation of the damages
that the dismissed respondents are entitled to, account should be

taken of whether in the exercise of due diligence respondents
might have obtained income from suitable remunerative
employment. We are prompted to give out this last reminder
because it is really unjust that a discharged employee should,
with folded arms, remain inactive in the expectation that a
windfall would come to him. A contrary view would breed
idleness; it is conducive to lack of initiative on the part of a
laborer. Both bear the stamp of undesirability.
Same; Duty of both employer and employee to disclose facts
within their peculiar knowledge.—It must be emphasized that it is
inconsistent with the intent of the law to permit the parties to
play hide-and-seek in connection with the determination of the
bases and the amounts of the deductions to be made. In the same
manner that the employer must disclose the material facts within
his peculiar knowledge affecting the rights and privileges of the
discharged employee or worker during the period of lay-off so that
the corresponding amounts to be added to the basic backwages
may be speedily and justly determined, so also, it is the
corresponding duty of the em-
523
VOL. 40, AUGUST 31, 1971 523
ployee or worker to be honest and fully comprehensive in

informing the court, with the least possible delay, the
circumstances of any gainful employment or work he or she has
had during the lay-off period, particularly the true income derived
therefrom, thereby to enable the court to make the corresponding
deductions to which the employer is entitled pursuant to the
jurisprudence cited. Indeed, this duty of the employee or worker
to assist the court by frank and candid disclosure of his earnings
elsewhere during the period of lay-off is but a corollary of his
obligation to minimize his own damages consequent to the action,
if unwarranted and illegal, of the employer.
Same; Employee may seek employment anywhere.—As long as
the reinstatement of an illegally dismissed worker or employee
has not been carried out he can seek employment or work
anywhere, including in a foreign country.
Same; Waiver of reinstatement.—By failing to report for work
with petitioners when she had an opportunity to do so and leaving
instead for the United States with intent to resume her teaching
job, she must be deemed to have effectively waived reinstatement

by petitioners from said date.
Same; Court of Industrial Relations; Admissibility of
affidavit.—An affidavit is admissible as evidence before the Court
of Industrial Relations for the reason that the same is an
administrative body.
Same; Modes of discovery applicable to proceedings before the
Court of Industrial Relations.—The discovery procedures
authorized by the Rules of Court are by their very nature
precisely suitable to proceedings of the kind now before Us, since
the main objective of discovery is to enable one party to acquire
knowledge of relevant facts which otherwise would be in the
peculiar knowledge of the adverse party alone and for that party
to afterwards make use of such acquired knowledge either as
evidence itself or as a means of preparing evidence in its favor,
and it is in proceedings for the determination of backwages in
cases of reinstatement of illegally discharged employees that the
parties usually indulge in the practice of unnecessarily trying to
conceal evidentiary facts from each other. As a matter of fact,
under the broad control that the Industrial Court has over
procedural matters and in order to expedite proceedings and go
directly to the substantial merits of the claims of the parties, it
can even adjust and modify the application of the modes of
discovery in cases before it accordingly as the demands of the
particular situation before it may require.
Same; Same; Discovery in aid of execution of judgment.—
While it is true that as a rule, discovery is best used before or
524
during the trial and before judgment, there can be no valid

objection to allow recourse thereto in proceedings in aid of
execution of a judgment when the need therefor arises because of
the material issues of fact more or less numerous or complicated,
and specially in cases before the Court of Industrial Relations
wherein the court is free to adopt the procedure it deems most
conducive to attain its objective under the law.
Same; Dollar earnings should not be computed on any
exchange rate basis at all.—The Court considers it necessary to
advert to the attempt of the Court Examiner assigned to compute
the income of respondent from her employment in the United
States to determine the peso value of said income by multiplying
her dollar earnings by the rate of exchange of the American dollar

to the Philippine peso. Such a method of computation is uncalled
for. While viewed in terms of the rate of exchange of our peso to
the U.S. dollar, one’s income in the United States may appear to
be lucrative compared to one’s income in the Philippines, not to be
overlooked is the fact that, in more or less similar proportion, the
living expenses and the standard of living in said country are also
relatively high. As a result, dollar earnings should not be
computed on any exchange rate basis at all.
Same; Backwages; Computation and deductions.—It is the
obligation of the employer to pay an illegally dismissed employee
or worker the whole amount of the salaries or wages, plus all
other benefits and bonuses and general increases, to which he
would have been normally entitled had he not been dismissed and
had not stopped working, but it is the right, on the other hand, of
the employer to deduct from the total of these, the amount
equivalent to the salaries or wages the employee or worker should
have earned in his old employment on the corresponding days
that he was actually gainfully employed elsewhere with an equal
or higher salary or wage, such that if his salary or wage in his
other employment was less, the employer may deduct only what
has been actually earned. For instance, if the lay-off period is one
year and the monthly salary of the employee or worker is P300.00,
which is equivalent to P10.00 a day, he would be entitled to
backwages of P3,600.00, plus benefits, bonuses and general
increases, but, if during the year of lay-off, he was employed off
and on, and at one time earned P12.00 a day but at another time
only P8.00 a day, what should be deducted be P10.00 for everyday
that he was earning P12.00 and only P8.00 for everyday that he
was earning such amount. Otherwise stated, all earnings of the
dismissed employee or worker elsewhere over and above what he
would have earned with his old employer during the
corresponding period belong to the employee or worker to the
exclusion of any right on the part of the employer to use the same
to minimize the damages he had to pay.
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VOL. 40, AUGUST 31, 1971 525

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PETITION for review by certiorari of the order and

resolution of the Court of Industrial Relations.
The facts are stated in the opinion of the Court.

Alfonso Felix, Jr. for petitioner.
Alejandro C. Villaviza for respondents.
BARREDO, J.:
Appeal by way of a petition for certiorari, from the May 12,

1967 order of Associate Judge Emiliano C. Tabigne and the
en banc resolution on the motion for reconsideration if the
said order, issued by the respondent Court of Industrial
Relations in connection with the proceeding on execution
had therein relative to the reinstatement of and payment of
back wages to respondent Soledad A. Dizon, as ordained in
the final and executory judgment rendered by it against
petitioners in its Case No. 1796-ULP, dated February 10,
1960, which was affirmed on appeal
1
by this Court on April
30, 1966 in G. R. No. L-17037.
Respondent Soledad A. Dizon was, from February 8,
1951 to August 31, 1958, continuously employed by the
petitioner East Asiatic Co., Ltd., a corporation licensed to
engage in the import, export and shipping business in the
Philippines. Having been dismissed on September 1, 1958
from the service of the said company, through its managers
E. Jakobsen and K. R. Nielsen and its assistant-manager
P. H. Sorensen, respondent Dizon filed with the respondent
Court of Industrial Relations the aforementioned Case No.
1796-ULP—a charge of unfair labor practice against said
petitioner company and its above-named officials; and the
court a quo, after appropriate proceedings, rendered
judgment against petitioners (respondents below) with the
following dispositive portion:
“WHEREFORE, the Court, finding the respondents guilty of the

unfair labor practices complained of, hereby orders them
________________
1 The East Asiatic Co., Ltd., E. Jakobsen, P.H. Sorensen and K.R. Nielsen vs.
Court of Industrial Relations, The East Asiatic Co. Employees’ Union (PTUC) and
Soledad A. Dizon, decided April 30, 1966 (16 SCRA 820).
526

to cease and desist from further committing the same and to

reinstate Soledad A. Dizon immediately to her former position
with back wages from September 1, 1958 until actually
reinstated, with all the rights and privileges acquired and due
her, including seniority and such other terms and conditions of
employment existing at the time of her lay-off.”
This decision was affirmed by Us in G.R. No. L-17037,

supra, on April 30, 1966 in the following terms:
“WHEREFORE, her reinstatement with back pay was correctly

ordered. Judgment affirmed, with costs.”
It appears further that before this Court could return the

records of the case to the lower court for execution, the
petitioner company filed a manifestation dated June 14,
1966, making known its willingness to reinstate
respondent Soledad A. Dizon to her former position with
the same salary she was receiving at the time of her
dismissal from its service. To that manifestation
respondent Dizon filed a counter-manifestation wherein
she averred that she was willing to be reinstated to her
former position, but her monthly salary should be the
amount she was receiving on the date of her dismissal plus
the yearly general wage increases petitioners have given to
their employees from 1958 to 1965. Petitioners made a
reply to the said counter-manifestation, reiterating their
previous offer to reinstate respondent Dizon to her former
position as stated in their previous manifestation, and
pointing out that by the terms of the decision ordering her
reinstatement the same is to be made on the basis of what
said respondent was receiving at the time of her layoff.
Acting thereon, on June 30, 1966 this Court issued a
resolution worded as follows:
“In G.R. No. L-17037 (The East Asiatic Co., Ltd., et al. vs. Court of
Industrial Relations, et al.;) the Court resolved: Petitioners’ reply
to respondents’ counter-manifestation of June 16, 1966 is hereby
noted, with the observation that the matter treated of therein, as
well as in the previous manifestations of the parties, may be
taken up on the lower court in connection with the
implementation of its decision, which has been affirmed by this
Court.”
Meanwhile, a motion to compute the backwages due her

under the decision in her favor appears to have been filed
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VOL. 40, AUGUST 31, 1971 527

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by respondent Dizon on June 8, 1966, which motion became

the subject of an opposition submitted by the petitioners
before the Court of Industrial Relations, and whereupon,

the trial court issued the following order:
“Acting on the motion to compute filed by the complainants,

through counsel, alleging among others that the decision of this
Court in the above-entitled case dated February 10, 1960,
affirmed by the Supreme Court in a final entry of judgment dated
April 30, 1966, is now final and executory and, therefore, the
computation of her backwages is now in order and finding the
motion well-taken.
“WHEREFORE, as prayed for, the Chief of the Examining
Division of this Court or his authorized representative, is hereby
directed to proceed to the offices of the respondent East Asiatic
Co., Ltd. at Hongkong & Shanghai Building, Juan Luna, Manila,
which is requested to make its record pertinent in this case
available to said Examiner—and verify and compute from such
records the backwages of the individual complainant in
accordance with the final decision of this Court dated February
10, 1960 and immediately upon termination to submit a report
thereof for further disposition of this Court.”
Pursuant to the order above-quoted, the Chief Examiner of

the examining division of the court a quo made the
required computation and, thereafter, submitted the
corresponding report thereon, dated March 2, 1967
informing the trial court that the backwages to which
respondent Dizon should be entitled for the period from
September 28, 1958 (date of her dismissal) to February 28,
1967 (apparently, this was the date the examination was
concluded, up to which, respondent was still not reinstated)
would amount to P30,090.00, while her earnings from other
employers during the same period that she was separated
from the service of petitioners amount to P42,881.44
(P6,-691.44—earned in the Philippines; and P36,190.00—
the peso value of respondent’s alleged dollar earnings in
the United States, computed at the exchange rate of P3.90
to $1.00). And on the basis of these figures, the said
examiner concluded in his report that “If the total amount
of P42,881.44 representing the earnings elsewhere of Mrs.
Soledad Dizon were allowed by the Honorable Court as
proper deductions from her computed total backwages of
P30.090.00, she will no longer receive any back wages.”
528

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After a hearing was had on the said report, and after

considering the various pleadings commenting thereon
(Annexes P, Q, R and S, Petition) filed by the parties,
Judge Emiliano C. Tabigne of the respondent Court issued
an order, dated May 12, 1967, approving the P30,090.00—
backwages computed by the examiner, but disallowing the
P42,881.44 alleged outside earnings of respondent Soledad
A. Dizon mentioned in his report. His Honor reasoned thus:
“The matter now before this Court is whether to approve or

disapprove the report of the Examiner dated March 2, 1967,
especially that portion thereof which computed alleged outside
earnings of complainant Dizon using as basis thereof alleged
affidavits of persons living in the United States of America, copies
of which are attached to the various manifestations filed by the
respondents in this case.
“On this question and from the records of this case, the Court
finds that the report of the Examiner in so far as it computed the
backwages of complainant Dizon in the amount of P30,090.00 is
correct. On the point, however, of whether or not to deduct the
amount of P42,881.44 from the backwages due complainant
Dizon, the Court is of the considered opinion that the same may
not be deducted therefrom. This is so because respondents failed
to adduce any evidence in support of their claim that complainant
Dizon earned that much from other employers. The Examining
Division of this Court, in arriving at such figure, made use of
alleged affidavits of persons in the United States copies of which
are attached to the manifestation filed by respondent in this case.
The Examiner of the Court in so doing, exceed his authority, as
stated in the Court order dated December 13, 1966. Said
Examiner was not directed to compute any other wages against
said claim. Furthermore, when the respondents were given the
opportunity to present competent evidence in support of their
allegation that complainant Dizon earned that amount during the
time of her dismissal, they failed to do so. The alleged affidavits
attached to the various manifestations filed with this Court were
not even identified by witnesses. So that such alleged affidavits
are merely pieces of paper and do not have any value as evidence.
In passing the Court also is of the considered opinion that claims
for wages earned outside the jurisdiction of this country and
necessarily this Court, are not those wages that may properly be
considered to offset any computed claims for backwages. The law
envisions that these claims should be within the jurisdiction of
this Court and not otherwise. The claims of respondents for
Dizon’s earnings elsewhere find no merit.
529
VOL. 40, AUGUST 31, 1971 529


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“WHEREFORE, this Court finds that the computed back-wages of

Soledad A. Dizon in the amount of P30,090.00 is hereby approved;
and respondents are ordered to pay said sum to com-plainant
Dizon’s backwages. Further, the alleged outside earnings of
complainant Dizon are hereby denied for lack of merit. The
Examining Division of this Court is further directed to compute
the backwages due complainant Dizon from March 1, 1967 up to
the date she is actually reinstated.
“In view of the fact, however, that complainant Dizon did not
present any evidence in support of her claim that she is entitled to
fringe benefits, etc., cited in her motion to compute dated June 8,
1966, the same is hereby denied.”
Petitioners filed a motion for reconsideration of this order

with the Court of Industrial Relations en banc which
resolved the said motion with a divided vote of three to two.
In a resolution dated June 27, 1967, Associate Judge
Emiliano C. Tabigne, with the concurrence of Presiding
Judge Arsenio I. Martinez, voted to deny the motion; while
Associate Judge Amando C. Bugayong, in a separate
concurring and dissenting opinion which was concurred in
(in the result) by Associate Judges Ansberto P. Paredes and
Joaquin M. Salvador, voted to modify the order sought to
be reconsidered in the sense that respondent Dizon was
held to be no longer entitled to reinstatement, nor to
backwages from the time she left the Philippines for the
United States. Pertinent portions of this majority opinion,
read as follows:
“In a ‘Summary of Arguments’ filed with this Court dated July 10,
1967, it is submitted and not denied that certain undisputable
developments took place in that Dizon went to the United States.
In a pleading filed with the Supreme Court while this case was on
appeal therein, a copy of which was furnished counsel for Dizon
then in the United States, she was formally asked to report for
work the next day, June 15, 1966. She came back to the country.
One day, counsel for respondents met her at the office of her
lawyers and there she was told to report to respondents for work,
which she never did. Again, she went to the United States.
“Forthwith, the issue is whether Soledad A. Dizon is still
entitled to reinstatement with backwages and how much. Her
refusal to report for work and her continued stay in the United
States, it is believed, is a waiver of her right to be reinstated.
Respondent employer, or for that matter any employer, could
530

not be made to wait for her to report at her pleasure. She could
not dilly-dally with her presentation to management to work in
order to make her backwages run until she chooses to report for
work.
“On the matter of backwages, regardless of whether she
worked in the United States or not and regardless of whether this
Court has jurisdiction over her earnings abroad, it is undisputable
that while she was in the United States, she could not have
worked in the Philippines. Consequently, although Soledad A.
Dizon is entitled to backwages, the same should commence from
the time she was dismissed until she left the country for the first
time. Hence, this modification of the Order sought to be
reconsidered because of the above-mentioned developments that
took place in the premises.”
In brief, in the lower court’s resolution en banc, while the

trial judge, with the concurrence of the presiding judge,
ruled that respondent Dizon is entitled to full payment of
her backwages without any deduction of any kind, but at
the same time without any right to fringe benefits and
general increases which the petitioners might have given to
their employees, from the date of her dismissal to the date
of her actual reinstatement, on the other hand, the three
other judges, constituting the majority, were in agreement
that respondent’s backwages should be limited only to the
period from her dismissal to the date she first left for the
United States, regardless of whether or not she secured
gainful employment there. Premise of the minority’s
conclusion is that no competent evidence was presented by
petitioners to prove respondent’s other alleged
employments whether here or in the United States, while
the majority considered the fact of respondent’s having left
for America as undisputed and the proof of her earnings
there as irrelevant and immaterial, for “while she was in
the United States, she could not have worked in the
Philippines.”
After a review of the record, the Court holds that neither
of these two views is entirely correct.
The specific basis of the minority in ruling against
petitioners’ claim for deduction of alleged earnings
elsewhere of respondent after her lay-off is that the
affidavits submitted by them were nothing but mere copies
of originals,
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VOL. 40, AUGUST 31, 1971 531

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the existence of which has not been shown, and, in any

event, the said affidavits and even the testimony of the lone
witness a certain G. Francisco, from Standard Vacuum Oil
Company, are either hearsay or inconclusive or vague. It is
obvious that such ruling is overtechnical and does not
conform with the provisions of the law, much less the spirit
informing them. Not only does Section 20 of
Commonwealth Act. 108 creating the Court of Industrial
Relations precisely endow the said court with such
plenitude of authority “(T)hat in the hearing, investigation
and determination of any question or controversy and in
exercising any duties and power under this Act, the Court
shall act according to justice and equity and substantial
merits of the case, without regard to technicalities or legal
forms and shall not be bound by any technical rules of legal
evidence but may inform its mind in such manner as it may
deem just and equitable”, but Section 5(b) of the Industrial
Peace Act pointedly provides that in unfair labor
proceedings,
“x x x the rules of evidence prevailing in courts of law or equity

shall not be controlling and it is the spirit and intention of this
Act that the Court and its members and Hearing Examiners shall
use every and all reasonable means to ascertain the facts in each
case speedily and objectively and without regard to technicalities
of law or procedure. In rendering its decision, the Court shall not
be bound solely by the evidence presented during the hearing but
may avail itself of all other means such as (but not limited to)
ocular inspections and questioning of well-informed persons
which results must be made a part of the record. In the
proceeding before the Court or a Hearing Examiner thereof, the
parties shall not be required to be represented by legal counsel
and it shall be the duty and obligation of the Court or Hearing
Examiner to examine and cross-examine witnesses on behalf of
the parties and to assist in the orderly presentation of evidence.”
The determination of how much should be paid as back-

wages when payment thereof is ordered in an unfair labor
practice case constitutes either an inevitable sequel or a
part and parcel of the whole proceeding. Consequently,
there is no reason why the same simple, liberal and non-
technical procedure indicated in Section 5(b) just quoted
should not be observed in such determination, particularly
if it is considered that under Section 5 (c), the discretion
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granted to the court in the imposition of the appropriate

sanction against any party guilty of unfair labor practice is
so broad that it is not confined merely to the issuance of an
“order requiring such person to cease and desist from such
unfair labor practice” but includes also the authority to
“take such affirmative action as will effectuate the policies
of (the) Act, including (but not limited to) reinstatement of
employees with or without backpay and including rights of
the employees prior to dismissal including seniority”, and
having in view, further, the limited time of thirty (30) days
within which the matters “relative to such disputes” is
mandatorily required to be decided by the Court, (Section 5
[d], which considerations unmistakably indicate the policy
of the law to make all unfair labor practice proceedings and
the incidents thereof as simple, speedy and expeditious as
possible, to the end that they may be undertaken without
regard to procedural technicalities save as may be
indispensable for due process and decided strictly according
to the substantial merits of the respective claims of the
parties. (Ang Tibay vs. CIR, G.R. No. 46496, February 27,
1940, 69 Phil. 685; Kapisanan Ng Mga Manggagawa sa
MRR vs. Hernandez, G.R. No. L-19791, August 14, 1968, 24
SCRA 591.)
Thus, much of the delay in the disposition of this case
could have been avoided had the Industrial Court adopted
a more practical and less technical approach to the problem
before it, as envisioned by the law. In principle,
respondent’s right to backwages was not being seriously
denied by petitioners. The only question raised by them
was as to the amount thereof; in other words, how much, on
the one hand, should be added to the basic pay by way of
restoration of “all rights and privileges acquired and due
her, including seniority and such other terms and
conditions of employment existing at the time of her lay-
off” as ordained in the judgment and as contemplated in
the above-quoted provisions of the law and, on the other,
how much should be deducted therefrom by way of
earnings elsewhere pursuant to the guidelines set down in
Itogon-Suyoc, infra, and the long line of decisions, to be
more appropriately cited later, on the same point.
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VOL. 40, AUGUST 31, 1971 533

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In connection with such position of petitioners, it appears

that they had manifested to the court below their
willingness to immediately reinstate respondent “in her
former position with the salary she was receiving at the
date of her separation from its service.” Of course, such
manifestation was hardly of any legal significance, since
the judgment to be implemented was already final and
executory and could not be subjected to conditions
inconsistent therewith, and neither was the subsequent
counter-manifestation of respondent imposing her own
conditions for her return to work of any legal consequence,
as she had no right to ask for more than what the decision
granted her. The point is that in such a situation, it is
implicit in the law that what the court should have done as
the initial step was to order immediate implementation of
the ordered reinstatement, without prejudice to resolving
the question of backwages afterwards. In that manner, all
of these questions vexing the parties and the court could
have been avoided or at least minimized. After all, it is the
long lay-off that creates problems not only for the
employer, with regard to how much has to be paid in
backwages, but also, and this is worse, for the discharged
employee or worker, as to whom naturally the damage is
always bound to be beyond complete repair since during
the uncertain period of lay-off, he and his family have to
undergo the difficulties, hardships and vicissitudes of
unemployment until he can have some kind of earning
elsewhere. On the other hand, with immediate
reinstatement upon the court’s finding of just and legal
ground therefor no injury is caused to either employer or
employee, for the former gets the benefit of the latter’s
work and the latter receives due compensation therefor.
The obvious advantages of this arrangement in terms of
industrial peace and economic and social progress, and the
larger interest of the nation as a whole, are incalculable.
As to the exact amount of her backwages, it is
unquestionable that under the decision being executed,
respondent, as already stated, is entitled to “all the rights
and privileges acquired and due her, including seniority,
and such other terms and conditions of employment
existing at the
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time of her lay-off.” In Philippine Air Lines, Inc. vs.

PALEA, et al., G. R. No. L-21120, Feb. 28, 1967, involving
an almost identically worded judgment as in this case, We
held such judgment to mean “backwages for the lay-off
period, coupled with the ‘seniority or other rights and
privileges’ attached to the status of the employees when
they were dismissed, (or) (T)o put it differently, said
employees (should be treated) as if they had not been
absent from work and had been uninterruptedly working
during the lay-off period.” Having in view the spirit of the
law, the court should not have expected respondent to
assume the whole burden of proving the factual bases of
the relief to which she is entitled. From their very nature,
such matters are more or less within the peculiar
knowledge of her employer, since they are necessarily
found in the books and records of the latter. In any event, it
was incumbent upon both parties to disclose to the court all
the material facts, within their respective particular
knowledge instead of expecting the other to follow the
ordinary procedure of presenting evidence to prove them.
As may be noted in the procedure for unfair labor practice
proceedings outlined in Section 5(b), supra, in cases of this
nature, the court, unlike in ordinary cases, does not act
merely as a referee but is supposed to take active part in
drawing out the true facts from the parties concerned,
exercising thus more of the administrative than the judicial
aspect of its authority. Accordingly, in the face of seeming
inadequacy of respondent’s evidence relative to the “rights
and privileges” which the basic decision recognized she is
entitled to and/or the apparent, if natural, hesitancy of
petitioners to disclose facts connected therewith within
their peculiar knowledge, it was incumbent upon the court
to take the needed steps to compel the petitioners to
cooperate with it by being candid and frank about such
facts and not to hide behind the usual cloak of the
technicality that it is respondent’s exclusive responsibility
to establish her claim. Under the law, such responsibility
for the discovery of the material facts is not of the worker
or employee alone, but of the employer and, in a sense, of
the court as well. Hence, it is the duty of the Examiner
charged by the court to compute backwages, as in this case,
to look into the books
535
VOL. 40, AUGUST 31, 1971 535

Relations
and records of the employer and report to the court the

relevant facts appearing therein connected with the claim
of the discharged employee or worker and it is the
correlative obligation of the employer to allow such
examination.
Now, turning to the deductions claimed by petitioners,
although the basic decision in this case did not say so
expressly, it is well settled that an employer is entitled to
deduct from what the court orders to be paid as back-
wages, privileges, etc., whatever an employee has earned
elsewhere during the period for which backwages are
supposed to be paid, hence such qualification must be
considered implied in all judgments ordering
reinstatement, unless otherwise expressly ordered for
reasons the court may deem justified. In a rather long line
of decisions involving payment of backwages to employees
who have been illegally dismissed in consequence of unfair
labor practices on the part of their employers, We have
uniformly held that whatever the dismissed laborer had
actually earned during the period of his illegal dismissal
should be deducted
2
from his computed backwages for the
same period, on the principle that no one should 3
be
allowed to enrich himself at the expense of another. And in
this connection, We stated in precise terms the guidelines
to be observed in the ascertainment of total backwages
payable in Itogon-Suyoc Mines, Inc., supra, thus
________________
2 MacLeod & Co. vs. Progressive Federation of Labor, 97 Phil. 205. 211;
Durable Shoe Factory vs. CIR and NLU, 99 Phil. 1043; Phil. Air Lines vs.
PALEA, 108 Phil. 1129, 1133, and cases cited therein. See also: Mindanao
Motor Line, Inc. vs. CIR, L-18418, Nov. 29, 1962, 6 SCRA 710, 715-716;
Rizal Labor Union vs. Rizal Cement Co., Inc., L-19779, July 30, 1966, 17
SCRA 858, 863; Republic Savings Bank vs. CIR, L-20303, Oct. 31, 1967,
21 SCRA 661, 665; Itogon-Suyoc Mines, Inc. vs. Sangilo-Itogon Workers’
Union, L-24189, Aug. 30, 1968, 24 SCRA 873; 888; G. Liner vs. National
Labor Union, L-24963, Nov. 29, 1968, 26 SCRA 282; Northwest Airlines
Employees Asso. vs. Northwest Airlines, Inc., L-24592, May 29, 1970, 33
SCRA 143, 146; Dy Pac Pakiao Workers Union vs. Dy Pac & Co., Inc., L-
27377, March 31, 1971; Elegance, Inc. vs. CIR, et al., L-24096, April 30,
1971; Castillo, et al. vs. CIR, et al., L-26124, & L-32725, May 29, 1971.
3 Northwest Airlines Employees Association versus North-west
Airlines, Incorporated, supra,and cases therein cited.
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“Since the dismissal of respondents in 1958, more than ten years

had elapsed. It would not seem but of place to restate the
guidelines to be observed in the ascertainment of the total back
wages payable under the judgment below. These are:
“First. To be deducted from the back wages accruing to each of
the laborers to be reinstated is the total amount of earnings
obtained by him from other employment(s) from the date of
dismissal to the date of reinstatement. Should the laborer decide
that it is preferable not to return to work, the deduction should be
made up to the time judgment becomes final. And these, for the
reason that employees should not be permitted to enrich
themselves at the expense of their employer. (Philippine Air
Lines, Inc. vs. Philippine Air Lines Employees Association, L-
15544, July 26, 1960 and cases cited therein.) Besides, there is the
‘law’s abhorrence for double compensation.’ (Republic Savings
Bank vs. Court of Industrial Relations, 1967D Phild. 198, 202
[Resolution]).
“Second. Likewise, in mitigation of the damages that the
dismissed respondents are entitled to, account should be taken of
whether in the exercise of due diligence respondents might have
obtained income from suitable remunerative employment. (Sotelo
vs. Behn, Meyer & Co., H. Mij., 57 Phil. 775, 778-779, citing
Garcia Palomar vs. Hotel de France Co., 42 Phil. 660. See: Sta.
Cecilia Sawmills, Inc. vs. Court of Industrial Relations, L-19273 &
L-19274. February 29, 1964; Mindanao Motor Line, Inc. vs. Court
of Industrial Relations (L-18418) and Aboitiz and Company, Inc.
vs. Court of Industrial Relations (L-18419), November 29, 1962;
Durable Shoe Factory vs. Court of Industrial Relations, 99 Phil.
1043; Aldaz vs. Gay, 7 Phil. 268, 271.) We are prompted to give
out this last reminder because it is really unjust that a discharged
employee should, with folded arms, remain inactive in the
expectation that a windfall would come to him. A contrary view
would breed idleness; it is conducive to lack of initiative on the
part of a laborer. Both bear the stamp of undesirability.”
Again, it must be emphasized that it is inconsistent with

the intent of the law to permit the parties to play hide-and-
seek in connection with the determination of the bases and
the amounts of the deductions to be made. In the same
manner that the employer must disclose the material facts
within his peculiar knowledge affecting the rights and
privileges of the discharged employee or worker during the
period of lay-off so that the corresponding amounts to be

added to the basic backwages may be speedily and justly
determined, so also, it is the correspond-
537
VOL. 40, AUGUST 31, 1971 537

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ing duty of the employee or worker to be honest and fully

comprehensive in informing the court, with the least
possible delay, the circumstances of any gainful
employment or work he or she has had during the lay-off
period, particularly the true income derived therefrom,
thereby to enable the court to make the corresponding
deductions to which the employer is entitled pursuant to
the jurisprudence abovecited. Indeed, this duty of the
employee or worker to assist the court by frank and candid
disclosure of his earnings elsewhere during the period of
lay-off is but a corollary of his obligation to minimize his
own damages consequent to the action, if unwarranted and
illegal, of the employer. There is no sense in construing the
law in such a way as to permit or oblige the parties to
engage in protracted and complicated proceedings which
can only result in probable flaring up of emotions and the
multiplication of reasons for discord, and more importantly,
the waste of man hours otherwise needed in the productive
enterprise or industry to which the employer is dedicated,
when, after all, what is sought cannot be anything more
than what is fair and equitable.
Accordingly, both views in the court below must be
rectified and the decision appealed from accordingly
modified. We hold that the ruling of the majority in the
court below to the effect that the respondent Dizon is
entitled to backwages only from the time of her dismissal to
the date she left for the United States on July 15, 1964 is
not good law, in the sense that it fails to consider that in
this particular case it is undisputed that respondent’s
departure for the United States was to look for employment
in fulfillment precisely of her obligation to minimize her
damages resulting from her unjustified dismissal. As long
as the reinstatement of an illegally dismissed worker or
employee has not been carried out he can seek employment
or work anywhere, including in a foreign country. Surely,
his departure from the Philippines for such parpose should
not constitute a waiver of his right to reinstatement; it is
only if he unjustifiedly or unreasonably refuses to report for
work with his former employer after his reinstatement has

been ordered or after his employer
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has offered to reinstate him pursuant to the judgment of

the court that he could be considered as having renounced
such right. The bare fact of his being actually employed
elsewhere in any capacity cannot affect his right to
reinstatement, for the option is his to return or not to
return to his former work upon knowing of the order or
offer of reinstatement; if he opts to return, he has to be
reinstated, subject to the conditions as to his backwages
already elucidated above; if he refuses to return or imposes
uncalled for conditions therefore, then and only then would
his right to reinstatement cease, although he would
nonetheless be entitled to the same backwages already
discussed up to the time of such refusal. In the light of
these criteria, the important question is, when should
respondent be considered as having waived her right to
reinstatement, independently of when she left for the
United States and when she secured employment there, or,
in other words, when did she manifest her option to waive
reinstatement either expressly or by conduct unmistakably
implying her option to forego the same?
In this respect, according to the lower court, it is
“x x x not denied that certain undisputable developments took

place in that (respondent) Dizon went to the United States. In a
pleading filed with the Supreme Court while this case was on
appeal therein, a copy of which was furnished counsel for Dizon
then in the United States, she was formally asked to report for
work the next day, June 15, 1966. She came back to the country.
One day, counsel for respondents met her at the office of her
lawyers and there she was told to report to respondents for work,
which she never did. Again, she went to the United States.”
Ordinarily, these findings of fact should bind this Court,

particularly because in unfair labor practice case, the rule
to this effect in regard to cases appealed from the Court of
Industrial Relations which has long been established in the
law and jurisprudence is specifically reiterated in Section 6
of the Industrial Peace Act thus:
“The findings of the (Industrial) Court with respect to questions of

fact if supported by substantial evidence on the record shall be
conclusive. The appeal to the Supreme Court shall be limited to
questions of law only.”
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VOL. 40, AUGUST 31, 1971 539

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In this case, however, the record reveals that it is equally

undisputed that upon receipt of the offer of reinstatement,
which, by the way, was actually made on July 14, 1966 or
already after this Court had rendered its judgment of April
30, 1966, respondent’s counsel lost no time in manifesting:
that she was
“willing to be reinstated to her former position but not with the

monthly salary she was receiving on the date of her dismissal (as
stipulated in the offer). Respondent Dizon should recflive a
monthly salary of P295.00 plus the yearly general wage increases
from 1958 to 1965 given by the petitioners to all its employees. To
serve as gauge of what respondent Dizon should receive as
monthly salary effective on the date of her reinstatement, the
respondents respectfully inform the Honorable Tribunal that the
employee who replaced respondent Dizon in her position is
presently receiving the monthly salary of P425.00, whereas at the
time she assumed said position she was receiving the monthly
salary of P250.00.”
and that, in turn, counsel for petitioners counter-

manifested that pursuant to the decision of this Court
affirming that of the lower court all that was ordered was
that respondent be reinstated “to her former position with
backwages from September 1, 1958 until actually
reinstated, with all the rights and privileges acquired and
due her, including seniority and such other terms and
conditions of employment existing at the time of her lay-off.”
Otherwise stated, it was not exactly true that
respondent disregarded petitioners’ offer for reinstatement,
as the lower court’s finding would seem to imply. On the
contrary, she indicated readiness to accept the same but,
rather over-cautiously, she wanted to be sure first that she
was not going to lose any of the other rights she was
accorded by the standing judgment in her favor. For their
part, petitioners must have been motivated by the same
feeling when they filed their counter-manifestation. While
their respective positions are somehow understandable, it

cannot be said that either of them acted in accordance with
the spirit of the law; and much less the court below. As
already explained above, under the circumstances, what
the court should have immediately done was to forthwith
implement the order of reinstatement, and the parties
should
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have known better than not to trust that the court would
resolve all matters relative to the other parts of the
judgment in accordance with the law and jurisprudence
discussed above. We reiterate that the implementation of
an order of reinstatement should not be delayed, much less
subjected to conditions proposed by the parties but not
consistent with the judgment and manifestly violative of
their substantial rights, since long periods of unjustified
and illegal lay-offs are economically and socially unwise
and prejudicial to everyone concerned, most importantly to
the laboring or working classes.
Thus, in the circumstances of this particular case, We
hold that the court a quo should have seen to it that
respondent returned to the Philippines by the earliest
reasonable means as soon as she was notified of the
judgment of this Court and the offer of petitioners to
reinstate her and reported for work as soon as possible. She
should not have been allowed to quibble about the terms of
her reinstatement, nor the petitioners to qualify the same,
since the judgment and the law and jurisprudence
regarding them had necessarily to be followed. Hence, to
avoid further delay as regards this particular point, all
relevant things extant in the record considered, We hold
that respondent Dizon is entitled to backwages, computed
together with her other rights and privileges as above
indicated, from the date of her dismissal to the date she left
the Philippines to return to the United States to resume
her teaching job thereat, which date she should reveal to
the court a quo with competent proof, subject to verification
by petitioners and the court. By failing to report for work
with petitioners when she had an opportunity to do so and
leaving instead for the United States with intent to resume
her teaching job, she must be deemed to have effectively
waived reinstatement by petitioners from said date.
Anent her earnings here and/or abroad during the

period of her lay-off, the motion to compute the back-wages
due the respondent was filed as early as June 8, 1966 and
it was only after almost a year, or on May 12, 1967, that
the trial judge resolved the matter and only
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VOL. 40, AUGUST 31, 1971 541

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4
shortly before May 23, 1968 that the court en banc
rendered the decision now on appeal. Such delay is, to say
the least, deplorable, if only because the reason therefor is
that in dealing with the issues before it, the court a quo
failed to adhere to the spirit and intent of the legal
provisions aforementioned prescribing the procedure for
the purpose. The record evinces an unexplainable
indifference on the part of the trial judge in the face of the
technical maneuvers of the parties not in keeping with the
nature of the proceedings. Each kept urging the other to
prove facts which each one knew very well was within its
own peculiar knowledge, and the court did nothing to
compel both of them to be more honest and candid to it by
disclosing the real facts within their respective peculiar
knowledge. Thus, instead of requiring petitioners to reveal
on the basis of their records what general increases,
benefits and bonuses were granted to their employees
which respondent would have been entitled to share had
she not been laid-off, the Court merely waited for evidence
to be presented by the respondent, only to later on
disregard them, rightly or wrongly, as incompetent, by
applying the strict rules of evidence for ordinary courts.
Consequently, the ruling of the lower court denying
respondent’s claim for fringe benefits, etc. on the ground
that she “did not present evidence in support” thereof
cannot stand.
Likewise, when it came to the turn of the petitioners to
prove respondent’s earnings during the lay-off period, the
court made no more to compel respondent to disclose the
facts pertinent thereto which were within her peculiar
knowledge. In the situation in which petitioners were
found, it was only natural that they had to depend on
affidavits and certifications from knowledgeable people in
the United States, the taking of depositions thereat or the
bringing here to competent witnesses and records for the
purpose being obviously impractical, but the court below
ruled out said affidavits and certifications, holding in utter

non-chalance, surely unjustified, that
________________
4 The record does not show when the en banc resolution was
promulgated.
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“x x x when the respondents (herein petitioners) were given the

opportunity to present competent evidence in support of their
allegations that complainant Dizon earned (that amount) during
the time of her dismissal, they failed to do so. The alleged
affidavits attached to the various manifestations filed with this
Court were not even identified by witnesses. So that such alleged
affidavits are merely pieces of paper and do not have any value as
evidence, x x x.”
which holding is not even correct, considering that in

Luzon Brokerage Co. v. Luzon Labor Union, G.R. No. L-
17085. July 31, 1963, 8 SCRA 509, 510, a case involving
also backwages, We ruled that: “an affidavit is admissible
as evidence before the Court of Industrial Relations for the
reason that the same is an administrative body.”
Worse, when petitioners availed a request for
admissions, the trial judge failed to observe the procedure
governing this means of discovery existing under the Rules
of Court. It appears that in their effort to prove the
earnings of respondent during the lay-off, petitioners made
a request to respondent for admission of pertinent facts
such as:
“1. On January 8, 1962, you were employed by Warner,

Barnes & Co., at a monthly salary of P215.00.
“2. On June 1, 1962, your above monthly salary in the
said firm was increased to P250.00.
“3. On July 15, 1964, you voluntarily resigned your
said position in Warnes, Barnes & Co.
“4. During the entire period of your employment by
Warner Barnes & Co., you have received during the
periods mentioned hereinabove the salary referred
to hereinabove.
“5. Furthermore, during the period of your employment

by Warner, Barnes & Co., you were granted
Christmas bonuses vacation leave and all other
privileges incidental to your employment by said
company.
“6. After resigning from your position on July 15, 1964
you left for the United States with your children.
“7. As a matter of fact, you are now a permanent
resident of the United States.
“8. While in the United States, you have been
employed by a teaching institution and/or by travel
agency, receiving
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VOL. 40, AUGUST 31, 1971 543

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from these two sources a total income in dollars which

when translated to pesos exceeds the amount that you
would have received during the entire period of your
separation from service of the East Asiatic.
“9. You returned to the Philippines this year during the school
summer vacation of the United States and left again some time
ago for the United States to resume your various employments.”
Instead of complying with said request, respondent filed a

reply excusing herself from compliance by contending that:
“1. That the matters treated in the request are

improper and irrelevant at this stage of the
proceeding in this case;
“2. That request for admission is proper only after
issues have been joined and before any decision is
issued in the case and not after the decision has
been promulgated and has become final and
executory.”
To be sure, there was some deviation by both parties from

the procedure prescribed by Rule 26, since such a request
need not have been filed with the court and should have
been addressed directly to the respondent instead of her
being merely furnished with copy thereof, and, on the other
hand, instead of the “reply” of respondent excusing herself
on the above-quoted grounds, the said grounds should have
been submitted formally for the resolution of the court as

objections to the request, pursuant to Section 2 of said rule,
but such departure was no excuse for the court not to play
the part designed for it by Commonwealth Act 103 and the
Industrial Peace Act. Instead of ignoring the formal
departure by the parties from Rule 26 and considering the
reply of respondent as her objection to the request for
admission and correspondingly ruling thereon so that the
parties may be guided accordingly, the trial judge appears
to have completely disregarded both the request and the
reply and did not even make any mention thereof in his
final order. Raid attitude is clearly erroneous. The
discovery procedures authorized by the Rules of Court are
by their very nature precisely suitable to proceedings of the
kind now before Us, since the main objective of discovery is
to enable one party to acquire knowledge of relevant facts
which otherwise would be in
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the peculiar knowledge of the adverse party alone and for

that party to afterwards make use of such acquired
knowledge either as evidence itself or as a means of
preparing evidence in its favor, and it is in proceedings for
the determination of backwages in cases of reinstatement
illegally discharged employees that the parties usually
indulge in the practice of unnecessarily trying to conceal
evidentiary facts from each other. As a matter of fact,
under the broad control that the Industrial Court has over
procedural matters and in order to expedite proceedings
and go directly to the substantial merits of the claims of the
parties, it can even adjust and modify the application of the
modes of discovery in cases before it accordingly as the
demands of the particular situation before it may require.
Now, respondent’s above-quoted grounds of objection to
petitioners’ request are obviously untenable. While it is
true that as a rule, discovery is best used before or during
the trial and before judgment, there can be no valid
objection to allow, recourse thereto in proceedings in aid of
execution of a judgment when the need therefor arises
because of the material issues of fact more or less
numerous or complicated, as in the case at bar, and
specially in cases before the Court of Industrial Relations
wherein the court is free to adopt the procedure it deems
most conducive to attain its objective under the law.

Accordingly, respondent’s objections should have been
overruled and she should have been promptly ordered to
properly reply to the petitioners’ request for admissions.
Considering all the foregoing, We have no recourse but
to return this case to the court aquo for further
proceedings. This may entail further delay, but We have no
alternative because even the facts which petitioners
requested to be admitted are not as sufficiently detailed as
to accurately and comprehensively include all the
circumstances of respondent’s employment and earnings
during the lay-off period in question; hence, even if We
were to hold, as was prayed for by petitioners in the court
below, that the said facts be deemed admitted pursuant to
Section 2 of Rule 26, in view of respondent’s failure to pro-
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VOL. 40, AUGUST 31, 1971 545

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perly comply with petitioners’ request and considering that

anyway, her objections to the request are completely
untenable, there would still be no basis for a complete
judgment in this case.
Before closing, however, We consider it necessary to
advert to the attempt of the Court Examiner assigned to
compute the income of respondent from her employment in
the United States to determine the peso value of said
income by multiplying her dollar earnings by the rate of
exchange of the American dollar to the Philippine peso.
Such a method of computation is uncalled for. While viewed
in terms of the rate of exchange of our peso to the U. S.
dollar, one’s income in the United States may appear to be
lucrative compared to one’s income in the Philippines, not
to be overlooked is the fact that, in more or less similar
proportion, the living expenses and the standard of living
in said country are also relatively high. As a result, dollar
earnings should not be computed on any exchange rate
basis at all.
Furthermore, as a result of the erroneous basis thus
used by the Court Examiner, he also concluded that what
respondent earned in the United States is equivalent to
P36,-190.00, and since this is more than P30,190.00, the
total, according to his computation, of what respondent
would have earned from petitioners from the date of her
dismissal to the date of computation, respondent is no
longer entitled to any payment from petitioners. Again, this

method of computation is erroneous.
On this point, Northwest Airlines Employees
Association vs. Northwest Airlines, Inc., supra, while not
exactly identical in circumstances with this case, indicates
the governing principle. In that case, petitioner was a
permanent employee—as a flight stewardess with a salary
of P445.07 a month—of therein respondent Northwest
Airlines, Inc. The company dismissed her from its service
on September 23, 1960, in consequence of which, petitioner
filed an unfair labor practice charge with the Court of
Industrial Relations against said respondent. On June 28,
1962, while the case was pending in the CIR, petitioner
applied to and was reemployed by the same company on
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a temporary basis as passenger sales agent with the same

monthly salary of P445.07. This, notwithstanding,
petitioner pursued her case further; and on September 30,
1963, the CIR decided the same, finding the respondent
company guilty of the unfair labor practice charge and
ordering it to reinstate her to her former job as flight
stewardess “with full backwagfes and without loss to (sic)
her seniority and other acquired rights therein.” When the
company moved to reconsider, the CIR en banc resolved
that petitioner should be paid backwages from September
24, 1960, the day after her dismissal, to June, 1962, when
she was reemployed on temporary basis, and, as it was
shown that petitioner received a number of salary
increases as passenger sales agent, ordered that “the
excess over P445.07 that she received from the company
under the new designation should also be deducted” from
said backwages. Thus, on August 9, 1965, when pursuant
to a motion for execution pending appeal, petitioner was
reinstated to her former position, of flight stewardess, she
was paid her back salaries for the period of her lay-off
(from September 23, 1960 to June 27, 1962) at the rate of
P445.07 a month, minus all that she had received in excess
of that rate during the period of her employment as
passenger sales agent from June 28, 1962 to August 8,
1965. The validity of this deduction was put in issue in the
petition with this Court and We held:
“The first issue raised in this petition is the validity of such

deduction as ordered in the respondent Court’s resolution of July
21, 1964. To justify the said order the respondent company cites
several decisions of this Court (Philippine Airlines vs. PALEA, L-
15544, July 26, 1960, 60 O.G. 8269; MacLeod & Co. vs.
Progressive Federation of Labor, L-7881, May 31, 1955; Western
Mindanao Lumber Co., Inc. vs. Western Mindanao Federation of
Labor, L-10170, April 25, 1957), wherein it was held that
whatever the dismissed laborers had actually earned during the
period of their illegal dismissal should be deducted, on the
principle that no one should be allowed to enrich himself at the
expense of another.
“Several reasons militate against the application of those
decisions in the case now before us. First, whatever Louise Mateu
earned during the time she was working as passenger sales agent
was for services rendered to the respondent company; she did not
unduly enrich herself at its expense in being
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VOL. 40, AUGUST 31, 1971 547

paid for them; on the contrary, it is the company that would be

unduly enriched if, after having received the benefit of such
services, it should be allowed to pay less than what they were
worth. Secondly, since the parties are agreed that the period of
the petitioner’s dismissal was only from September 23, 1960 to
June 1962, and since she was adjudged entitled to back salaries
only during such period, there is neither logic nor equity in taking
into account, for purposes of deduction the income she received
thereafter. x x x.”
Similarly, We cannot see any justification for Us to uphold

here the Examiner’s theory and virtually allow petitioners
to escape the sanction intended by the law for the unfair
labor practice they were found guilty of by final judgment
of this Court, specially because to adopt such view would
enable petitioners in effect to enrich themselves from what
the very victim of their unjust and illegal act of dismissing
her without sufficient cause earned thru her on work and
effort. It is indeed the height of inequity and injustice for
any employer to take advantage of a favorable turn of
fortune of his worker, laborer or employee he has dismissed
in violation of law and use such lucky break to elude the
penalty provided by the law for such violation. It would be
a travesty of the Constitutional injunction that “the State
shall afford protection to labor (Section 6, Art. XIV,
Constitution of the Philippines) if the principle that a party

damaged by another has the obligation to try to minimize
his damages were to be extended in the sense that what a
laborer or employee, after being oppressed and illegally
treated by his employer, has earned by his own efforts, over
and above the wages or salaries such employer would have
paid him had he not been laid off should be used in
reducing the award of damages to the worker.
In other words, the just and equitable rule regarding the
point under discussion is this: It is the obligation of the
employer to pay an illegally dismissed employee or worker
the whole amount of the salaries or wages, plus all other
benefits and bonuses and general increases, to which he
would have been normally entitled had he not been
dismissed and had not stopped working, but it is the right,
on the other hand, of the employer to deduct from
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the total of these, the amount equivalent to the salaries or

wages the employee or worker would have earned in his old
employment on the corresponding days that he was
actually gainfully employed elsewhere with an equal or
higher salary or wage, such that if his salary or wage in his
other employment was less, the employer may deduct otnly
what has been actually earned. For instance, if the lay-off
period is one year and the monthly salary of the employee
or worker is P300.00, which is equivalent to P10.00 a day,
he would be entitled to backwages of P3,-600.00, plus
benefits, bonuses and general increases, but if during the
year of lay-off, he was employed off and on, and at one time
earned P12.00 a day but at another time only P8.00 a day,
what should be deducted would be P10.00 for everyday that
he was earning P12.00 and only P8.00 for everyday that he
was earning such amount. Otherwise stated, all earnings of
the dismissed employee or worker elsewhere over and
above what he would have earned with his old employer
during the corresponding period belong to the employee or
worker to the exclusion of any right on the part of the
employer to use the same to minimize the damages he has
to pay.
IN VIEW OF ALL THE FOREGOING, the en banc
resolution appealed from is hereby modified and the
judgment of this Court is that:
(a) Respondent Dizon is entitled to backwages only up

to her return to the United States to resume her
teaching job there, the exact date of which she must
forthwith inform the court a quo;
(b) Respondent Dizon is further entitled to all general
increases and bonuses she would have received
during the period of her lay-off specified in the next
preceding paragraph of this judgment, as if she had
never been discharged, the amount of such benefits
to be disclosed forthwith to the court a quo by
petitioners on the basis of what appears in their
books and records which may be examined by the
Court Examiner together with respondent or her
duly authorized representative, if she so desires;
and
549
VOL. 40, AUGUST 31, 1971 549

Relations
(c) Petitioners may deduct from the total amounts of (a)

and (b) of this judgment, all the earnings of respondent
during her lay-off as above-defined, whether here or
abroad, the exact details of which the respondent must
forthwith furnish the court a quo, provided that all her
earnings in dollar in the United States shall be computed
on a 1 to 1 basis, and provided also that the amount to be
deducted shall not exceed what she would have been
entitled to have received from the petitioners during the
corresponding period of her actual gainful employment
elsewhere.
It is further ordered that the records of this case be
remanded to the Court of Industrial Relations for further
proceedings consistent with this judgment and the above
opinion. Both parties shall pay the costs, share and share
alike.
Concepcion, C.J., Reyes, J.B.L., Makalintal,

Zaldivar, Fernando, Villamor and Makasiar, JJ., concur.
CastroandTeehankee, JJ., concur in the result.
Dizon, J., did not take part.
Resolution modified. Records of the case ordered

remanded to the Court of Industrial Relations for further
proceedings.
Notes.—Back pay upon reinstatement; computation;

deduction or exclusion of earnings at other work.—Where
the Court of Industrial Relations orders the reinstatement
of an employer as having been dismissed without just
cause; whether to allow him back-pay rests in the
discretion of the court, and any right to back pay is likewise
a matter which was waived or required to be waived as a
condition to reinstatement (Dimayuga vs. Court of
Industrial Relations, L-10213, May 27, 1957).
A back pay award by the Court of Industrial Relations to
employees unjustifiably discharged should not include
wages beyond a date when the factory in which the
employees worked was totally shut down, as long as the
closure was for legitimate business reasons and not merely
to de-
550

People vs. Leal
feat reinstatement of the employees in question (Durable

Shoe Factory vs. Court of Industrial Relations, L-7783, May
31, 1956).
Earnings of a discharged or suspended employee at
other employment during the time he was laid off have
usually been deducted in computing the amount of back
pay to be allowed him, even when the layoff is found to
have been unjustified, warranting a back pay award; and
this practice has been approved by the Supreme Court.
(See Macleod & Co. vs. Progressive Federation of Labor, L-
7887, May 31, 1955; 51 O.G. 2907; Durable Shoe Factory vs.
Court of Industrial Relations, supra).
—————
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3/6/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 040

VOL. 40, AUGUST 31, 1971 521

No. L-29068. August 31, 1971.

EAST ASIATIC COMPANY, LTD., E. JAKOBSEN, P.

Industrial Peace Act; Unfair labor practice; Determination of

Same; Immediate implementation of ordered reinstatement;

522 SUPREME COURT REPORTS ANNOTATED

East Asiatic Company, Ltd. vs. Court of Industrial Relations

Same; Deductions of earnings from backwages to be paid;

that the dismissed respondents are entitled to, account should be

VOL. 40, AUGUST 31, 1971 523

East Asiatic Company, Ltd. vs. Court of Industrial Relations

ployee or worker to be honest and fully comprehensive in

job, she must be deemed to have effectively waived reinstatement

524 SUPREME COURT REPORTS ANNOTATED

East Asiatic Company, Ltd. vs. Court of Industrial Relations

during the trial and before judgment, there can be no valid

her dollar earnings by the rate of exchange of the American dollar

VOL. 40, AUGUST 31, 1971 525

PETITION for review by certiorari of the order and

The facts are stated in the opinion of the Court.

Appeal by way of a petition for certiorari, from the May 12,

“WHEREFORE, the Court, finding the respondents guilty of the

526 SUPREME COURT REPORTS ANNOTATED

to cease and desist from further committing the same and to

This decision was affirmed by Us in G.R. No. L-17037,

“WHEREFORE, her reinstatement with back pay was correctly

It appears further that before this Court could return the

Meanwhile, a motion to compute the backwages due her

VOL. 40, AUGUST 31, 1971 527

by respondent Dizon on June 8, 1966, which motion became

before the Court of Industrial Relations, and whereupon,

“Acting on the motion to compute filed by the complainants,

Pursuant to the order above-quoted, the Chief Examiner of

528 SUPREME COURT REPORTS ANNOTATED

After a hearing was had on the said report, and after

“The matter now before this Court is whether to approve or

VOL. 40, AUGUST 31, 1971 529

East Asiatic Company, Ltd. vs. Court of Industrial

“WHEREFORE, this Court finds that the computed back-wages of

Petitioners filed a motion for reconsideration of this order

530 SUPREME COURT REPORTS ANNOTATED

In brief, in the lower court’s resolution en banc, while the

VOL. 40, AUGUST 31, 1971 531

the existence of which has not been shown, and, in any

“x x x the rules of evidence prevailing in courts of law or equity

The determination of how much should be paid as back-

532 SUPREME COURT REPORTS ANNOTATED

granted to the court in the imposition of the appropriate

VOL. 40, AUGUST 31, 1971 533

In connection with such position of petitioners, it appears

534 SUPREME COURT REPORTS ANNOTATED

time of her lay-off.” In Philippine Air Lines, Inc. vs.

VOL. 40, AUGUST 31, 1971 535

and records of the employer and report to the court the

536 SUPREME COURT REPORTS ANNOTATED

“Since the dismissal of respondents in 1958, more than ten years

Again, it must be emphasized that it is inconsistent with

period of lay-off so that the corresponding amounts to be

VOL. 40, AUGUST 31, 1971 537