On 17 December 1997, Lailani started working for CML as an Assembly Production Operator. On 6 February 2012, she was dismissed by way of redundancy. She then signed a quitclaim indicating her position as QA Inspector Lead and received a certain amount as severance package. At the time of her dismissal, she was receiving a monthly salary of Php17,047.88.
On 21 September 2012, Lailani accepted a job with the same employer, CML, for the position of QA Inspector Senior — a position under the QA Inspector Lead. The position had a basic monthly salary of Php10,835.86.
On 20 April 2015, a first Absence Without Official Leave (AWOL) Notice was given to Lailani due to the latter’s absence from 16 to 18 April 2015. Lailani was directed to report for work on 21 April 2015. Due to Lailani’s continued absence, a second AWOL Notice and a third AWOL Notice were sent to her. As a result of her prolonged unexplained absence, Lailani’s employment was terminated on 11 May 2015. A Termination Letter dated 11 May 2015 was sent to Lailani informing her of the decision to sever her employment.
Lailani filed a complaint for illegal dismissal against CML.
In the Court of Appeals (CA), the dismissal of Lailani from employment on 6 February 2012 was affirmed to be illegal. With regard to the awards of separation pay and backwages, although the CA computed the said reliefs using Lailani’s original monthly salary of P17,047.88 for the period of 6 February 2012 to September 2012, the amount of Php10,835.86 was used in computing separation pay and backwages from September 2012 until 11 May 2015. The CA explained that Lailani’s employment in September 2012 constituted a new job because her first employment was effectively terminated on 6 February 2012. The CA added that Lailani’s execution of the employment contract in September 2012 was an acceptance of the lower salary.
Was Lailani entitled to differentials in the awards of separation pay and backwages?
The Supreme Court ruled that Lailani was entitled to salary differentials from the time she was re-hired in September 2012 up to the time she was validly dismissed on 11 May 2015.
In pointing out the error of the CA, the Supreme Court cited Article 294 of the Labor Code of the Philippines, which states:
Art. 294. Security of Tenure. — 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 of their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
The Court explained that since the termination of Lailani’s employment on 6 February 2012 was illegal, Article 294 requires that she be given whatever she was previously entitled to. The Court stated that this did not only include Lailani’s reinstatement to her old position but also the amount of compensation previously received. According to the Court, when Lailani was “re-hired” in September 2012, she was actually reinstated. Thus, she should have been paid her basic monthly salary of Php17,047.88 instead of Php10,835.86. Accordingly, the Supreme Court awarded differential in the amount of Php6,212.02 from September 2012 until 11 May 2015
Further reading:
- Hapita v. Cypress Manufacturing Limited, G.R. No. 240512, January 27, 2020.
