On September 1, 2002, the employer hospital hired Antonina as a staff midwife. During her employment, the employer hospital also allowed her to study nursing simultaneously.
Antonina alleged that on June 23, 2007, she requested permission to go on leave without pay from June 29, 2007 to September 15, 2007 as she needed to work as an affiliate, in compliance with a school requirement. The employer hospital approved the request on the same day and she was also included in the Schedule of Duty for the period September 16 to 30, 2007.
Antonina stated that on September 19, 2007, the president of the employer hospital berated her for having been away from work for a long time. The next day, a supervisor relayed to Antonina the president’s instructions for her not to report for work anymore.
Antonina thus filed a complaint against the employer hospital for illegal dismissal, with a prayer for payment of backwages and separation pay.
The employer hospital denied dismissing Antonina. It claimed that the latter simply failed to report for work after June 28, 2007 for unspecified reasons.
The Office of the Labor Arbiter ruled that Antonina was illegally dismissed from her job based on the following findings:
- Antonina’s leave of absence was supported by a leave form and approval by the employer hospital.
- Antonina was also found to have reported for work after September 15, 2007 and was included in the Schedule of Duty from September 16 to 30, 2007.
- Antonina’s assertion that she was ordered not to report for work was credible.
- Antonina filed her complaint for illegal dismissal within a reasonable period inconsistent with the employer hospital’s claim of abandonment.
- Finally, Antonina was not accorded procedural due process in her dismissal from employment.
The Office of the Labor Arbiter awarded Antonina full backwages, as well as separation pay, in lieu of reinstatement, because of strained relations between Antonina and the employer hospital.
The National Labor Relations Commission affirmed the ruling of the Office of the Labor Arbiter.
However, the Commission considered Antonina’s rejection of an alleged offer of reinstatement by the employer hospital during a hearing held on January 16, 2008. Thus, the Commission modified the computation of her backwages and separation pay by limiting it to the period of September 19, 2007 until January 16, 2008.
The Court of Appeals reinstated the Decision of the Office of the Labor Arbiter. It found that the employer hospital’s offer of reinstatement was not supported by evidence and thus should not have been automatically factored in by the National Labor Relations Commission as a basis for modifying the reckoning point of the awards of backwages and separation pay.
The Court of Appeals clarified that even if the alleged offer was made, the award of backwages and separation pay should be computed from the time Antonina’s compensation was withheld from her until the time of her actual reinstatement, and not only up to the time the offer of reinstatement was made, in accordance with Article 294 of the Labor Code of the Philippines. According to the Court of Appeals, a mere order for reinstatement issued by the Office of the Labor Arbiter is different from the actual restoration of an employee to his or her previous position.
The Court of Appeals stated that in case of reinstatement, backwages and other monetary awards shall continue beyond the issuance of the Office of the Labor Arbiter’s ruling until such time the said reinstatement is actually complied with.
The Court of Appeals further stated that if reinstatement is no longer feasible, backwages and separation pay must be computed up to the finality of the decision. Until actual receipt by the employee of the award of separation pay, the employer-employee relationship subsists and entitles the illegally dismissed employee to an award of backwages, and other benefits from the time of his or her actual dismissal until finality of the decision of the Office of the Labor Arbiter.
The employer hospital elevated its case to the Supreme Court.
How should the awards of Antonina be computed?
The Supreme Court reiterated the settled rule that “[t]he twin reliefs that should be given to an illegally dismissed employee are full backwages and reinstatement. Backwages restore the lost income of an employee and is computed from the time compensation was withheld up to actual reinstatement. Anent reinstatement, only when it is not viable is separation pay given.”1Peak Ventures Corp. v. Heirs of Villareal, G.R. No. 184618, November 19, 2014.
The Supreme Court then mentioned Session Delights Ice Cream and Fast Foods v. Court of Appeals,2G.R. No. 172149, February 8, 2010. where it held that a decision in a case involving illegal dismissal consists essentially of two components:
The first is that part of the decision that cannot now be disputed because it has been confirmed with finality. This is the finding of the illegality of the dismissal, as well as the awards of separation pay, in lieu of reinstatement, and backwages.
The second part is the computation of the awards made.
In the present case, the Supreme Court recognized that the illegality of Antonina’s dismissal from employment had already been settled in a ruling of the Court of Appeals in a separate case. Antonina was declared entitled to the reliefs of backwages and separation pay.
Thus, the Supreme Court focused on the issue on the computation of Antonina’s backwages and separation pay.
In this regard, the Court referred to Bani Rural Bank, Inc. v. De Guzman3Bani Rural Bank, Inc. v. De Guzman, G.R. No. 170904, November 13, 2013. in explaining the basis for the computation of backwages and separation pay. Said the Court:
The computation of backwages depends on the final awards adjudged as a consequence of illegal dismissal, in that:
First, when reinstatement is ordered, the general concept under Article [294] of the Labor Code, as amended, computes the backwages from the time of dismissal until the employee’s reinstatement. The computation of backwages (and similar benefits considered part of the backwages) can even continue beyond the decision of the [Office of the Labor Arbiter] or [National Labor Relations Commission] and ends only when the employee is actually reinstated.
Second, when separation pay is ordered in lieu of reinstatement (in the event that this aspect of the case is disputed) or reinstatement is waived by the employee (in the event that the payment of separation pay, in lieu, is not disputed), backwages is computed from the time of dismissal until the finality of the decision ordering separation pay.
Third, when separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a supervening event that makes the award of reinstatement no longer possible, backwages is computed from the time of dismissal until the finality of the decision ordering separation pay.
The Court said that the above computation of backwages, when separation pay is ordered, has been its consistent ruling.
According to the Court, the finality of the decision becomes the reckoning point because in allowing separation pay, the final decision effectively declares that the employment relationship ended so that backwages and separation pay are to be computed up to that point.
The Court determined that the second scenario squarely applies in the present case since the order of separation pay was decreed in lieu of reinstatement.
Hence, the Court said, the employer-employee relationship of the employer hospital and Antonina would only be completely terminated upon the finality of the decision which ordered the payment of backwages and separation pay. It follows that the computation of Antonina’s backwages must be from the time of her illegal dismissal from employment on September 19, 2007 until the finality of the decision ordering the payment thereof. As for her separation pay, it should be computed at one month pay for every year of service reckoned from September 2, 2002 until the finality of the decision in her favor.
The Court affirmed the ruling of the Court of Appeals which reinstated the Decision of the Office of the Labor Arbiter.
Further reading:
- Angono Medics Hospital, Inc. v. Agabin, G.R. No. 202542, December 9, 2020.
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