WILFREDO P.
ASAYAS, Petitioner
vs.
SEA POWER SHIPPING ENTERPRISES, INC., and/or AVIN INTERNATIONAL S.A., and/or
ANTONIETTE GUERRERO, Respondents
January 24, 2018 ; G.R. No. 201792
BERSAMIN, J.:
FACTS:
Respondent Sea Power Shipping Enterprises, Inc. employed the petitioner as Third Officer on board
the M/T Samaria, a vessel owned by Avin International SA. On October 25, 2009, prior to the expiration
of his employment contract, the shipowner sold the M/T Samaria to the Swiss Singapore Overseas
Enterprise, Pte. Ltd. As a consequence of the sale, he was discharged from the vessel and repatriated to
the Philippines under the promise to transfer him to the M/T Platinum, another vessel of the respondents.
After he was not ultimately deployed on the M/T Platinum, he was engaged to work as a Second Mate on
board the M/T Kriti Akti. Before his deployment on board the M/T Kriti Akti, however, the shipowner
also sold the vessel to the Mideast Shipping and Trading Limited on April 8, 2010. Thereafter, he was no
longer deployed to another vessel to complete his contract.
The Petitioner filed a complaint against the respondents.
LABOR ARBITER: Illegal dismissal
Rationale: Settled is the rule that in termination cases, the burden of proving that the dismissal of the
employee was for a valid and authorized cause roots on the employer. It is incumbent upon the employer
to show by substantial evidence that the termination of the employment of the employees was validly
made and failure to discharge that duty would mean that the dismissal is not justified and therefore illegal
(Fernando P De Guzman versus NLRC, December 12, 2007).
There is illegal termination because there is no showing that he was transferred or re-engaged to another
vessel named PLATINUM as promised by the respondents as they are governed by employment contract
for nine (9) months plus three (3) months with the consent of both parties. Notwithstanding this is in
violation to Section 23 on the Standard Terms and Conditions Governing the Employment of Filipino
Seafarers on Board Ocean Going Vessels
NLRC: Affirmed Labor Arbiter’s Decision
CA: Not Illegal dismissal (granted the respondents' petition for certiorari)
RATIONALE: The instant case is sanctioned by the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels. We quote the provisions thereof
pertinent to the case, specifically Sections 23 and 26.
It is worthy to note that private respondent's non-inclusion of employment contract in the case at bar was
due to the sale of M/T SAMARIA to Swiss Singapore Overseas Enterprise, Pte. Ltd. We find that the
requirements under the Standard Terms and Conditions Governing the employment of Filipino Seafarers
on Board Ocean Going Vessels were met, to wit: (a) Seafarer's entitlement to earned wages; (b) Seafarer's
repatriation at employer's cost; and (c) one ( 1) month basic wage as termination pay.
Indubitably, the foregoing were availed of by private respondent.
It must also be stressed that upon the signing of the employment contract, private respondent was duly
informed of the impending sale of the vessel. The same was admitted by private respondent in his
position paper and he does not deny the fact that he had knowledge of the same when he signed his
employment contract. More importantly, private respondent later on executed a "Compromise Agreement
with Quitclaim" before conciliator Judy A. Santillan. In this case, We hold and so rule that private
respondent voluntarily executed the "Compromise Agreement with Quitclaim" discharging and releasing
petitioners for any and all claims and liabilities attendant to or arising out of private respondent's
application for overseas employment. Thus, there is no more legal controversy to speak of.
ISSUE
Does CA erred in granting respondents’ petition for certiorari and it is in violation of doctrine of
final and immutable judgement of LA’s decision?
HELD
YES.
LA’s decision has attained its finality. The LA's decision that was served on the respondents by registered
mail was returned with the notation "Moved Out."
The rule on service by registered mail contemplates two situations: (1) actual service, the completeness of
which is determined upon receipt by the addressee of the registered mail; and (2) constructive service, the
completeness of which is determined upon expiration of five days from the date the addressee received
the first notice of the postmaster. A party who relies on constructive service or who contends that his
adversary has received a copy of a final order or judgment upon the expiration of five days from the date
the addressee received the first notice sent by the postmaster must prove that the first notice was actually
received by the addressee. Such proof requires a certified or sworn copy of the notice given by the
postmaster to the addressee.
In the instant case, there is no postmaster's certification to the effect that the registered mail containing the
NLRC decision was unclaimed by the addressee and thus returned to sender, after first notice was sent to
and received by the addressee on a specified date. All that appears from the records are the envelopes
containing the NLRC decision with the stamped markings and notation on the face and dorsal sides
thereof showing "RTS" (meaning, "Return To Sender") and "MOVED." Still, we must rule that service
upon PAL and the other petitioners was complete.
With the service by registered mail being complete, the respondents only had 10 calendar days from the
return of the mail within which to appeal in accordance with the Labor Code. When they did not so
appeal, the LA's decision became final and executory. With the LA's decision attaining finality, it was no
longer legally feasible or permissible to modify the ruling through the expediency of a petition claiming
that the termination of the petitioner's employment had been legal.
HAYDEN KHO, SR., PETITIONER, v. DOLORES G. MAGBANUA, MARILYN S.
MERCADO,* ARCHIMEDES** B. CALUB, MARIA E. ONGOTAN, FRANCISCO J. DUQUE,
MERLE*** G. RIVERA, DOLORES A. PULIDO, PAULINO R. BALANGATAN, JR., ANAFEL L.
ESCROPOLO, PERCIVAL A. DEINLA,**** JERRY C. ZABALA, ROGELIO C. ONGONION,
JR., HELEN B. DELA CRUZ, CENON JARDIN, AND ROVILLA L.
CATALAN, ***** RESPONDENTS.
G.R. No. 237246, July 29, 2019
PERLAS-BERNABE, J.:
FACTS
A complaint for illegal dismissal was filed by respondents before the LA against Holy Face Cell
Corporation (Corporation), Tres Pares Fast Food (Tres Pares), and the Corporation's stockholders,
including Spouses Kho Respondents claimed that they were employed by the Corporation in the Tres
Pares as cooks, cashiers, or dishwashers. Spouses Kho's daughter, Sheryl Kho, posted a notice in the
company premises that the restaurant would close down on January 19, 2011. Fearing the loss of their
jobs, they tried to seek an audience with Kho about the closure, but to no avail. The restaurant closed as
scheduled; thus respondents filed the complaint for illegal dismissal with payment of separation pay,
salary differentials, nominal damages, differentials on overtime pay, service incentive leave pay, and
holiday pay, including damages, as well as attorney's fees.
For their part, Spouses Kho argued that they had no employer-employee relationship with respondents, as
the latter's employer was the Corporation, and that they cannot be held liable for the acts of the
Corporation, the same having been imbued with a personality separate and distinct from its stockholders,
directors, and officers.
LABOR ARBITER: Illegal Dismissal
The LA found that not only did the Corporation fail to prove that it closed down its business due to
financial distress as it did not offer financial documents to corroborate its claim, it also failed to comply
with the notice requirement prior to such closure as laid down under Article 298 Further, the LA ruled
that Kho – whom respondents alleged to be the President of the Corporation at the time of the closure and
which allegation was not denied by Kho18 – should be held solidarity liable for respondents' claims.
NLRC: Reversed LA Decision (Kho NOT Solidarily liable with the corporation)
Absent any allegation and proof from respondents that he committed any act that would justify piercing
the veil of corporate fiction. It stressed that mere failure to comply with the procedural due process does
not constitute an unlawful act that would render Kho personally liable.
CA: Reveresed NLRC Decision ( Held Kho Solidarily liable)
Kho acted in bad faith when he assented to the sudden and abrupt closure of the restaurant despite the
absence of a board resolution authorizing the closure.
ISSUE
Are Spouses Kho solidarily liable with the Corporation?
HELD:
NO.
It is settled that a corporation is a juridical entity with legal personality separate and distinct from those
acting for and in its behalf and, in general, from the people comprising it. As a juridical entity, a
corporation may act only through its directors, officers, and employees. As such, obligations incurred by
the corporation, acting through its directors, officers, and employees, are its sole liabilities, and these
persons should not be held jointly and solidarity liable with the corporation. However, being a mere
fiction of law, this corporate veil can be pierced when such corporate fiction is used: (a) to defeat public
convenience or as a vehicle for the evasion of an existing obligation; (b) to justify wrong, protect or
perpetuate fraud, defend crime, or as a shield to confuse legitimate issues; or (c) as a mere alter ego or
business conduit of a person, or is so organized and controlled and its affairs are so conducted as to make
it merely an instrumentality, agency, conduit, or adjunct of another corporation.
The respondents failed to prove of any finding that Kho was a corporate officer of the Corporation who
willfully and knowingly assented to patently unlawful acts of the latter, or who is guilty of bad faith or
gross negligence in directing its affairs, or is guilty of conflict of interest resulting in damages thereto, he
cannot be held personally liable for the corporate liabilities arising from the case.
Noteworthy, case law instructs that "[n]either does bad faith arise automatically just because a corporation
fails to comply with the notice requirement of labor laws on company closure or dismissal of employees.
The failure to give notice is not an unlawful act because the law does not define such failure as unlawful.
Such failure to give notice is a violation of procedural due process but does not amount to an unlawful or
criminal act. Such procedural defect is called illegal dismissal because it fails to comply with mandatory
procedural requirements, but it is not illegal in the sense that it constitutes an unlawful or criminal act."
NOTES: For readings
The rulings of this Court in A.C. Ransom, Naguiat, and Reynoso, however, have since been tempered, at
least in the aspects of the lifting of the corporate veil and the assignment of personal liability to directors,
trustees[,] and officers in labor cases. The subsequent cases of McLeod v. NLRC, Spouses Santos v.
NLRC and Carag v. NLRC, have all established, save for certain exceptions, the primacy of Section 31 of
the Corporation Code in the matter of assigning such liability for a corporation's debts, including
judgment obligations in labor cases. According to these cases, a corporation is still an artificial being
invested by law with a personality separate and distinct from that of its stockholders and from that
of other corporations to which it may be connected. It is not in every instance of inability to collect
from a corporation that the veil of corporate fiction is pierced, and the responsible officials are
made liable. Personal liability attaches only when, as enumerated by the said Section 31 of the
Corporation Code, there is a fwillfull and knowing assent to patently unlawful acts of the
corporation, there is gross negligence or bad faith in directing the affairs of the corporation, or
there, is a conflict of interest resulting in damages to the corporation. x x x.
It also bears emphasis that in cases where personal liability attaches, not even all officers are made
accountable. Rather, only the "responsible officer," i.e., the person directly responsible for and who
"acted in bad faith" in committing the illegal dismissal or any act violative of the Labor Code, is held
solidarily liable, in cases wherein the corporate veil is pierced. In other instances, such as cases of so-
called corporate tort of a close corporation, it is the person "actively engaged" in the management of the
corporation who is held liable. In the absence of a clearly identifiable officer(s) directly responsible for
the legal infraction, the Court considers the president of the corporation as such officer.
The common thread running among the aforementioned cases, however, is that the veil of corporate
fiction can be pierced, and responsible corporate directors and officers or even a separate but related
corporation, may be impleaded and held answerable solidarily in a labor case, even after final judgment
and on execution, so long as it is established that such persons have deliberately used the corporate
vehicle to unjustly evade the judgment obligation, or have resorted to fraud, bad faith or malice in
doing so. When the shield of a separate corporate identity is used to commit wrongdoing and
opprobriously elude responsibility, the courts and the legal authorities in a labor case have not hesitated to
step in and shatter the said shield and deny the usual protections to the offending party, even after final
judgment. The key element is the presence of fraud, malice or bad faith. Bad faith, in this instance,
does not connote bad judgment or negligence but imports a dishonest purpose or some moral obliquity
and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill
will; it partakes of the nature of fraud.53 (Emphases and underscoring supplied)
STANFILCO - A DIVISION OF DOLE PHILIPPINES, INC. AND REYNALDO CASINO,
PETITIONERS, v. JOSE TEQUILLO AND/OR NATIONAL LABOR RELATIONS
COMMISSION - EIGHTH DIVISION, RESPONDENTS.
G.R. No. 209735, July 17, 2019
A. REYES, JR., J.:
DOCTRINE
Physical violence inflicted by one employee on another constitutes serious misconduct, which justifies the
former's dismissal. Nevertheless, the employer bears the onus of proving that the attack was work-related
and has rendered the erring employee unfit to continue working. This burden is not overcome by the mere
fact that the act occurred within company premises and during work hours. Verily, the employer must
establish a reasonable connection between the purported offense and the employee's duties.
FACTS
Stanfilco (petitioner) is a duly organized domestic corporation that operates a banana plantation in
Lantapan, Bukidnon. Petitioner hel “Kaibigan Fellowship which all its employees are required to attend.
However, Tequillo did not attend rather go on a drinking spree at the farm shed area with fellow workers.
Gayon, who was sent to assist Tequillo at an assigned area of the farm, forced to join them. At the time,
Tequillo was expressing resentment towards petitioner's refusal to provide him with a performance
incentive. Since Gayon was not yet a regular employee of petitioner, Tequillo advised him not to work at
the plantation, warning the former that he, too, might meet the same fate, and not receive any incentive
for his efforts. Instead of heeding to the advice, Gayon told Tequillo to air his grievances to petitioner's
higher-ranking employees. Irked by the suggestion, Tequillo proceeded to maul Gayon.
Petitioner served Tequillo a memorandum. In response, Tequillo admitted mauling Gayon but it was done
in self-defense. However, petitioner found his explanations unsatisfactory, and eventually terminated him
on May 24, 2010 on the ground of serious misconduct.
Tequillo filed before the Labor Arbiter (LA) a complaint for illegal dismissal.
LABOR ARBITER: Legal Dismissal
Tequillo's acts constituted serious misconduct and willful disobedience to company rules, thus justifying
petitioner's decision to dismiss him.
NLRC: Reversed LA’s Decision (Illegal Dismissal)
Tequillo was not performing official work at the time he mauled Gayon. It followed, then, that Tequillo's
act could not be work-related.
CA: Affirmed NLRC’s Decision (Illegal Dismissal)
The act of mauling Gayon was not work-related, and at most amounted only to simple misconduct.
ISSUE
Was Tequillo illegally dismissed?
HELD
No.
In labor cases, misconduct, as a ground for dismissal, must be serious—that is, it must be of such grave
and aggravated character and not merely trivial or unimportant. In addition, the act constituting
misconduct must be connected with the duties of the employee and performed with wrongful intent.
Hence, for an employee's termination to be justified on the ground of serious misconduct, the following
requisites must concur: (a) the misconduct must be serious; (b) it must relate to the performance of the
employee's duties, showing that the employee has become unfit to continue working for the employer;
and (c) it must have been performed with wrongful intent.
Tequillo's violent act amounted to serious misconduct. The incident disturbed the peace in the farm and
breached the discipline expected by petitioner from its employees. That Tequillo is ill-suited to continue
working is shown by his perverse attitude and by the possibility that the attack may be repeated. On the
other hand, his wrongful intent is shown by the arbitrary and unfounded manner in which he attacked
Gayon. Hence, all the requisites of serious misconduct are present in this case.
NOTES: For Readings
From the Court's perspective, the work-relatedness of and wrongful intent behind Tequillo's violent
conduct cannot be questioned. Tequillo himself admitted that he mauled Gayon out of emotional
disturbance, which was ultimately caused by petitioner's refusal to provide the former employee with a
productivity incentive.45 The attack was clearly unfounded, as it remains undisputed that petitioner's
refusal to furnish said incentive was due to Tequillo's failure to meet his work quotas. Worse, Gayon had
said or done nothing to sufficiently provoke the attack. Therefore, while it may be remains undisputed
that petitioner's refusal to furnish said incentive was due to Tequillo's failure to meet his work quotas.
Worse, Gayon had said or done nothing to sufficiently provoke the attack. Therefore, while it may be true
that Tequillo acted out of resentment towards petitioner, the same resentment was essentially attributable
to his own work-related neglect. It follows, then, that the attack was connected to the sub-standard
performance of Tequillo's duties, and that it was fundamentally rooted in his confounded notion of
workplace dynamics.
RAYMOND A. SON, RAYMOND S. ANTIOLA, and WILFREDO E. POLLARCO, Petitioners
vs
UNIVERSITY OF SANTO TOMAS, FR. ROLANDO DELA ROSA, DR. CLARITA CARILLO,
DR. CYTHIA LOZA, FR. EDGARDO ALAURIN, and the COLLEGE OF FINE ARTS AND
DESIGN FACULTY COUNCIL, Respondents
APRIL 18, 2018; G.R. No. 211273
DEL CASTILLO, J.:
FACTS
Petitioners Raymond A. Son (Son), Raymond S. Antiola (Antiola), and Wilfredo E. Pollarco (Pollarco)
are full time professors of the UST Colleges of Fine Arts and Design and Philosophy, and are members of
the UST Faculty Union, with which UST at the time had a Collective Bargaining Agreement (CBA).
Son and Antiola were hired in June, 2005, while Pollarco was employed earlier, or in June, 2004. Under
their respective appointment papers, petitioners were designated as "faculty member[s] on
PROBATIONARY status," whose "accession to tenure status is conditioned by [sic] your meeting all the
requirements provided under existing University rules and regulations and other applicable laws
including, among others, possession of the (prerequisite] graduate degree before the expiration of the
probationary period and by your satisfactory performance of the duties and responsibilities set forth in the
job description hereto attached." Petitioners did not possess the required Master's degree, but were
nonetheless hired by UST on the condition that they fulfill the requirement within the prescribed period.
Petitioners enrolled in the Master's program, but were unable to finish the same.
On March 3, 2010, then CHED Chairman Emmanuel Angeles issued a Memorandum directing the strict
implementation of the minimum qualification for faculty members of undergraduate programs,
particularly the Master's degree and licensure requirements.
Acting on the Memorandum, UST wrote petitioners and informing them to cease re-appointment of those
who failed to complete their Master’s degrees but allow a written appeal from the concerned faculty
members who are due for thesis defense/completion of their Master's degrees.
Petitioners did not make a written appeal, operating under the belief that they have been vested tenure
under the CBA for their continued employment despite failure to obtain the required Master's degree.
Later, petitioners received termination/thank you letters.
LABOR ARBITER: Illegal dismissal
PETITIONER”S CLAIM:
They acquired tenure by default pursuant to the tenure provision in the CBA, they could not be
dismissed for failure to complete their respective Master's degrees
that in terminating their employment, respondents did not comply with the required "twin-notice
rule"
that respondents are guilty of bad faith and unfair labor practice on account of their violation of
the CBA
that respondents are guilty of bad faith when they re-hired the other professors even when they
did not possess the required Master's degree, while they (petitioners) were discriminated against
and terminated from work just because they did not file the prescribed appeal letter
RESPONDENTS:
no unfair labor practice committed, because the CBA provision adverted to is not an economic
provision
that the implementation of Memorandum Order No. 40-08 takes legal precedence over the parties'
CBA
that Memorandum Order No. 40-08 is a police power measure for the protection and promotion
of quality education, and as such, the CBA should yield to the same and to the broader interests
of the State
NLRC: Affirmed LA’s Decision
It held that the UST-UST Faculty Union CBA took precedence over CHED Memorandum Order
No. 40-08
that by said CBA provision, petitioners acquired tenure by default
that UST continued to hire faculty members without the required Master's degree in their field of
instruction even after petitioners were dismissed from work
that the only cause for petitioners' dismissal was their refusal to submit a written appeal, which is
not a valid ground for dismissal or non-renewal of their appointment.
CA: Reversed NLRC’S Decision (Grants petition for certiorari; Legal Dismissal)
Rationale: There is no doubt that private respondents failed to meet the standards for regular employment
provided under Memorandum Order No. 040-08 issued by CHED. The termination of their contract was
based on their failure to obtain (a) master's degree and cannot, therefore, be regarded as illegal. In fact,
the services of an employee hired on probationary basis may be terminated when he fails to qualify as a
regular employee in accordance with reasonable standards made known by the employer to the employee
at the time of his engagement. There is nothing that would hinder the employer from extending a regular
or permanent appointment to an employee once the employer finds that the employee is qualified for a
regular employment even before the expiration of the probationary period.
ISSUE
Were respondents illegally dismissed?
HELD
No.
When CHED Memorandum Order No. 40-08 came out, it merely carried over the requirement of a
masteral degree for faculty members of undergraduate programs contained in the 1992 Revised Manual of
Regulations for Private Schools. It cannot therefore be said that the requirement of a master's degree was
retroactively applied in petitioners' case, because it was already the prevailing rule with the issuance of
the 1992 Revised Manual of Regulations for Private Schools.
Thus, going by the requirements of law, it is plain to see that petitioners are not qualified to teach in the
undergraduate programs of UST. And while they were given ample time and opportunity to satisfy the
requirements by obtaining their respective master's degrees, they failed in the endeavor. Petitioners knew
this - that they cannot continue to teach for failure to secure their master's degrees - and needed no
reminding of this fact; "those who are seeking to be educators are presumed to know these mandated
qualifications."
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner
vs.
ANTONIO P. MAGNO, JR. and MELCHOR L. OCAMPO, JR., Respondents
July 3, 2019; G.R. No. 212520
CARPIO, J.:
FACTS
Ocampo alleged that he was hired by petitioner Coca-Cola on 1988. During his employment he was
rewarded with promotions and incentives and he reached position of District Sales Supervisor. On the
other hand, Magno was employed on 1988 and had his last position as Territory Sales Manager.
RESPONDENTS:
Ocampo and Magno meted a suspension for one monthe because of the charge that two hauler trucks
belong to Tablang, dealer of Petitioner’s products whose operation is under Ocampo’s district and
Magno’s territory, were distributing soon to expire products in Manila which is outside dealership area.
They claimed that the said incident happened at a time when respondent company's products were not
doing well in the market and this decrease in the sales would result to the expiration of the products stored
in the warehouses. The expiration of the products on [sic] storage would in turn translate to financial
losses to respondent company.
On 29 April 2008, Ocampo was terminated. Antonio Magno was likewise terminated from work on 29
May 2008 when he was not allowed to enter company premises for no reason at all.
PETITIONER:
The company has a ”no encroachment policy”. The local sales market of the company is geographically
divided into areas, district, and territories to protect each other dealer’s area and prevent unfair dealings.
This policy is for strict compliance by sales personnel, the violation of which is a ground for the
termination of dealership agreement and/or the services of employees involved.
Magno and Ocampo were charged violating the policy and placed under preventive suspension and
dismissed from service base on loss of trust and confidence.
Some products purportedly hauled from Cabanatuan, Tablang’s authority, and not actually delivered to
Casiguran or Dipaculao but diverted to outlets in Metro Manila. The products were hauled using
Tablang's delivery trucks/haulers. The company conducted a surveillance of Tablang's trucks and on 28
December 2006 they were able to track down REH 597. Nine hundred cases of soft drinks were pulled
out from Cabanatuan Sales Office, but instead of proceeding to Casiguran or Dipaculao, Aurora, the
driver proceeded to Manila. Tablang stated that Magno and Ocampo used his facilities to buy company
products at discount rates.
Magno and Ocampo filed against petitioner Coca-Cola Bottlers Philippines Inc., a complaint for illegal
suspension and money claims which was later amended to include a prayer for reinstatement, backwages,
damages, attorney’s fees and payment of their salaries corresponding to their suspension.
Labor Arbiter (LA) declared Coca-Cola guilty of illegally suspending and dismissing respondents. The
National Labor Relations Commission (NLRC) in a decision dated Oct. 30, 2008 ruled that respondents
were legally dismissed but their suspension was illegal. The Court of Appeals (CA) promulgated a
decision dated March 7, 2012 which upheld the legality of respondents’ dismissal and correspondingly
denied for lack of merit their claims for reinstatement, backwages, moral and exemplary damages and
attorney’s fees.
Main point of the case:
Coca-Cola contended that any entitlement of respondents to accrued wages should be limited to their
basic pay only. There is no factual or legal basis of the inclusion in respondents’ accrued wages of
benefits and amounts in increase of their basic pay, including the supposed cash equivalent and their
vacation and sick leave benefits. It prayed for a judgment directing respondents to return to it any and all
amounts that they received as part of their accrued wages in excess of their basic pay.
ISSUE
How should the backwages of Magno and Ocampo be computed?
HELD
Subject to submission of proof of receipt of benefits at the time of their dismissal, Magno’s and
Ocampo’s accrued backwages should include their basic salary as well as the allowances and benefits that
they have been receiving at the time of their dismissal. In accordance with the claims previously put
forward by Magno and Ocampo, accrued backwages may include, but are not limited to, allowances and
benefits such as transportation benefits, cellphone allowance, 13th month pay, sick leave and vacation
leave in the amounts at the time of their dismissal. Magno and Ocampo should also prove that they have
been receiving the amounts that correspond to merit or salary increases, incentive pay and medicine at the
time of their dismissal so that they may validly qualify for receipt of such as part of their accrued
backwages.
Considering that the kind of monetary awards granted to Magno and Ocampo have differed throughout
the course of the present case, the LA should determine the day following the last day when Magno or
Ocampo received the amount for such allowance or benefit. In any event, the last day of the period of
computation of Magno’s and Ocampo’s backwages should be July 27, 2010. This is the date of
promulgation of the NLRC decision which ruled that Magno and Ocampo were legally dismissed. This
Court’s Entry of Judgment in G.R. 202141 on Oct. 31, 2012 should not have any bearing on the
determination of the last day of the period of computation.
NOTES: For readings
The third paragraph of Article 22971 of the Labor Code provides: "In any event, the decision of the Labor
Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned,
shall immediately be executory, even pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not
stay the execution for reinstatement provided herein."
Article 29472 of the Labor Code further provides: "x x x An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement."
Our jurisprudence has been consistent as to what should constitute accrued backwages. In Paramount
Vinyl Products Corp. v. NLRC,73 we ruled that "the base figure to be used in the computation of
backwages due to the employee should include not just the basic salary, but also the regular
allowances that he had been receiving, such as the emergency living allowances and the 13th month
pay mandated under the law." In United Coconut Chemicals, Inc. v. Valmores,74 we ruled that "[t]he
base figure to be used in reckoning full backwages is the salary rate of the employee at the time of his
dismissal. The amount does not include the increases or benefits granted during the period of his
dismissal because time stood still for him at the precise moment of his termination, and move forward
only upon his reinstatement." Entitlement to such benefits must be proved by submission of proof of
having received the same at the time of the illegal dismissal. 75 Increases are thus excluded from
backwages.
In Pfizer Inc. v. Velasco, 660 Phil. 434,455 (2011), we ruled that an order for reinstatement entitles an
employee to receive his accrued backwages from the moment the reinstatement order was issued up to the
date when the same was reversed by a higher court without fear of refunding what he had received.
Wenphil Corp. v. Abing, 731 Phil. 685 (2014), further clarified Pfizer: The start of the computation of the
backwages should be on the day following the last day when the dismissed employee was paid
backwages, and end on the date that a higher court reversed the LA’s ruling of illegal dismissal. The date
of reversal should be the end date, and not the date of the ultimate finality of such reversal.
