Dear PAO,
I have a question regarding my case currently pending before the National Labor Relations Commission (NLRC). If it is eventually proven that I was illegally dismissed, will the salary increases mandated under our company’s collective bargaining agreement (CBA) during the period of my unemployment be included in the computation of my backwages?
Teng
Dear Teng,
Under Article 294 of the Labor Code of the Philippines, as amended:
“Art. 294. [279] Security of Tenure. – In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. 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.” (Emphasis ours)
In the case of United Coconut Chemicals, Inc. vs. Valmores (G.R. No. 201018, 12 July 2017, penned by Honorable Chief Justice Lucas P. Bersamin), the Supreme Court held that “[t]he base figure in the determination of full backwages is fixed at the salary rate received by the employee at the time he was illegally dismissed. The award shall include the benefits and allowances regularly received by the employee as of the time of the illegal dismissal, as well as those granted under the Collective Bargaining Agreement (CBA), if any.”
Backwages are awarded as remuneration for the employee’s lost income due to illegal dismissal. The inclusion of increases in backwages has jurisprudential basis. According to the case of Fernandez, Jr. vs. Manila Electric Company (MERALCO) (G.R. No. 226002, June 25, 2018, penned by Honorable Chief Justice Diosdado M. Peralta):
“Backwages shall include the whole amount of salaries, plus all other benefits and bonuses, and general increases, to which Fernandez would have been normally entitled had he not been illegally dismissed. Unless there is/are valid ground/s for the payment of separation pay in lieu of reinstatement, Fernandez’s backwages should be computed from the date when he was illegally dismissed on September 14, 2000, until his retirement in April 2009. It shall be subject to legal interest of 12% per annum from September 14, 2000 until June 30, 2013, and then to legal interest of 6% interest per annum from July 1, 2013 until full satisfaction.” (Emphasis ours)
Regarding your situation, based on the jurisprudence cited above, the salary increases mandated under your company’s CBA during the period of your unemployment may be included in the computation of your backwages.
We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Thank you for your continued trust and support.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net
