Twin remedies

Can back wages be awarded together with separation pay in case of unjust dismissals? This is one of the issues raised in this case of Lito and Ed.

Lito and Ed were hired by a Japanese car distributor (NNE) as drivers in its Parts Department on August 2, 1995 and July 1, 1996 respectively. Lito was assigned to drive a pick-up vehicle with a daily load of between P200,000 to P400,000. He twice received merit increases for satisfactory performance in 1996. Ed on the other hand was assigned to drive a motorcycle with a daily load of P20,000. He also twice received merit increases in 1997.

But in 1998, the company found Lito and Ed responsible for the loss of two rolls of tint. In his written explanation Ed insisted that the two rolls of tint were picked up on July 21, 1998, unloaded them on July 22, 1998 and notified the Parts and Accessories Department particularly Tess. Lito on the other hand stated that he and Ed picked up the two rolls but he had no knowledge of the actual delivery as he had already left the office by then. But the company claimed that according to Tess the two rolls were picked up not on July 21 but on July 9, 1998 and that she never received the delivery. So Ed and Lito were dismissed from the service for loss of trust and confidence.

As a consequence both Ed and Lito filed a joint complaint for illegal dismissal and separation pay plus back wages, non-payment of salaries service incentive leave pay, 13th month pay, overtime pay, damages and attorney’s fees before the Labor Arbiter (LA)

On June 6, 2000 the Labor Arbiter found that Ed and Lito were indeed illegally dismissed because the company failed to establish by substantial evidence the charge of asportation upon which it based Lito and Ed’s dismissals. It turned out from the records that it was only made to appear that Ed and Lito failed to deliver the rolls to the company because Tess antedated the date of delivery receipt of the two rolls from July 28, 1998 to July 9, 1998 when there was really no pick up of the said rolls on said date. So the LA awarded Lito and Ed back-wages in addition to separation pay totaling P94,875.84 and P98,601.84 respectively aside from their other monetary claims.

The NLRC affirmed the said findings but ruled that the LA erred in awarding back-wages. According to the NLRC, Ed and Lito did not asked for reinstatement. So it is error on the part of LA to award back wages aside from separation pay. Was the NLRC correct?

No. The normal consequences of illegal dismissal are, firstly, the employee becomes entitled to reinstatement to his former position without loss of seniority rights, and secondly, the payment of back-wages corresponding to the period from his illegal dismissal up to actual reinstatement. These twin remedies make the dismissed employee whole as he can look forward to continued employment. They give meaning and substance to the constitutional right of labor to security of tenure. Though the grant of reinstatement commonly carries with it an award for back-wages, the in-appropriateness or non-availability of one does not carry with it the in-appropriateness or non-availability of the other.

In this case the grant of separation pay was a substitute for immediate and continued re-employment. It did not redress the injury that is intended to be relieved by the second remedy of back wages, that is, the loss of earnings that would have accrued to the dismissed employees during the period between dismissal and reinstatement. Payment of back-wages is a form of relief that restores the income lost by reason of unlawful dismissal; separation pay, in contrast, is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. The grant of separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement and back-wages. The LA decision should be upheld (Nissan North Edsa vs. Serano, Jr. and Tagulao, G.R. 162538, June 4, 2009). –Jose C. Sison, Philippine Star

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call Tel. 7249445.

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E-mail at:jcson@pldtdsl.net