The workers of the Continuous Galvanizing Line department of the Philippine Steel Coating Corp. asserted that the awards of backwages and separation pay should not have been limited to the closure of the said department, but should have included the closure of Philippine Steel Coating Corporation’s entire business.
The Supreme Court disagreed based on the principle that “an illegally dismissed employee’s entitlement to backwages and separation pay should be computed only up to the time that the said employee would have been expected to work with his/her employer had he/she not been illegally dismissed.” The Court said:
In any event, petitioner’s claim that the judgment award should include the period after the closure of the Continuous Galvanizing Line (CGL) department until the closure of respondent Philippine Steel Coating Corporation’s (PhilSteel) entire business, lacks merit.
It should be noted that petitioner never questioned the validity of the closure of PhilSteel’s CGL department. It only insists that the closure of the CGL department does not affect the computation of the period for the purpose of determining the retrenched employees’ monetary award because PhilSteel continued to operate until May 8, 2013.
Petitioner should be reminded that an illegally dismissed employee’s entitlement to backwages and separation pay should be computed only up to the time that the said employee would have been expected to work with his/her employer had he/she not been illegally dismissed. Given that the validity of the CGL department’s closure is not disputed, the ten (10) retrenched employees assigned to the CGL department could not have been presumed to continue working for PhilSteel despite the valid closure of PhilSteel’s CGL department. There is nothing in the petition to show that the retrenched employees’ employments were not dependent on the operation of the CGL department in order to justify their claim of entitlement to backwages and separation pay until PhilSteel’s total closure on May 8, 2013. On the contrary, the retrenched employees were specifically referred to as “workers of the CGL line,” thereby showing that their employment was contingent on the existence of the CGL department. As such, the backwages and separation pay were properly computed only until the closure of the CGL department, or until August 2, 2012.
Further Reading:
- PhilSteel Workers Union-Olalia-KMU v. Philippine Steel Coating Corp., G.R. No. 241897, January 7, 2019.
