CASE DIGESTS_DECEMBER 7

BACKWAGES DEFINED

GENERAL BAPTIST BIBLE COLLEGE and GENERAL BAPTIST

CHURCH OF THE PHILIPPINES vs. NATIONAL LABOR RELATIONS
COMMISSION and GAUDENCIO O. BASA

FACTS: Basa was hired by the College as Academic Dean was subsequently appointed as
President of the College by its Board of Trustees at the regular meeting of the Board of
Directors of the General Baptist Bible College. When his employment was terminated, hence,
Basa personally, without the assistance of counsel, filed a complaint for illegal dismissal, money
claims and damages, not only for the position of President but for the position of Academic
Dean as well. The reinstatement of appellee as Academic Dean and the payment of unpaid
salaries are in order. The backwages, however, is limited to the basic salary (excluding
allowance) of the position of Academic Dean considering that the pay as President already
included allowances which appellee received.

ISSUE: Whether or not the award with respect to backwages was valid.

HELD: The NLRC erroneously referred to unpaid salaries as "backwages" when it excluded
allowances therefrom. When the term "backwages" was used in the NLRC decision, what was
actually meant was unpaid salaries, which pertain to compensation due the employee for
services actually rendered before termination. Backwages, on the other hand, refer to his
supposed earnings had he not been illegally dismissed. Unpaid salaries refer to those earned
prior to dismissal whereas backwages refer to those earnings lost after illegal dismissal. Thus,
reinstatement would always bring with it payment of backwages but not necessarily payment
of unpaid salaries. Payment of unpaid salaries is only ordered if there are still salaries collectible
from his employer by reason of services already rendered.
We also want to clarify that when there is an award of backwages this actually refers to
backwages without qualifications and deductions. Thus, We held that: "The term "backwages
without qualification and deduction" means that the workers are to be paid their backwages
fixed as of the time of the dismissal or strike without deduction for their earnings elsewhere
during their layoff and without qualification of their wages as thus fixed; i.e., unqualified by any
wage increases or other benefits that may have been received by their co-workers who are not
dismissed or did not go on strike. Awards including salary differentials are not allowed. The
salary base properly used should, however, include not only the basic salary but also the
emergency cost of living allowances and also transportation allowances if the workers are
entitled thereto."

COMPUTATION OF BACKWAGES PERIOD COMPUTATION

TORRES vs. NLRC

FACTS: During a routinary meeting of the security guards of the agency assigned to the
Philippine Aerospace Development Corporation, the issue of granting a P25.00 pay increase
pursuant to Republic Act No. 6727 was taken up and questions were raised as to the date of
implementation of the increase. Petitioner Chona P. Torres stood up and uttered aloud at the
presiding officer: "BAKIT ANG SASABIHIN NINYO SA OPISINA AT DITO AY MAGKAIBA!" to which
remark the presiding officer replied: "WALA NAMAN PAGKAKAIBA, DI BA?". The presiding
officer also asked: "BAKIT AYAW MO DOON SA OPISINA?" Then petitioner shouted: "WALA NA
AKONG TIWALA SA INYO AT SA AGENCY KASI SINUNGALING KAYO. EH, KUNG LALAKI LANG AKO,
BAKA KUNG ANO PA ANG NAGAWA KO SA INYO NGAYON!" Torres filed with the Labor Arbiter
an amended complaint charging respondent with underpayment of wages under R.A. No. 6640
and harassment. NLRC declared that the dismissal of the complainant was not in accordance
with law; and ordered to immediately reinstate Torres with full backwages.

ISSUE: Whether or not the award was valid.

HELD: The respondent agency contended that there has been a change in the situation of the
parties making execution inequitable because petitioner accepted employment from another
agency without resigning from it is patently without merit. However, the rule is that back wages
awarded to an illegally dismissed employee shall not be diminished or reduced by the earnings
derived by him elsewhere during the period of his illegal dismissal. WHEREFORE, the Court
DIRECTS the Labor Arbiter to order the immediate release of the balance of the judgment
award to petitioner.

FINANCIAL ASSISTANCE NOT ALLOWED

EASTERN PAPER MILLS INC., vs. NLRC

FACTS: Petitioner, after due notice, investigation, and hearing, dismissed the private
respondent Eduardo Malabanan, an accounts payable clerk, for having physically assaulted and
verbally abused, within full view and hearing of the other employees, a superior officer,
Mariano Lopingco, who was then the personnel and administrative manager of the company.
The reason for the assault was private respondent's resentment at being suspected of having
stolen an ash tray from Lopingco's office and being questioned about the matter by the security
office. Hence, Private respondent filed a complaint for illegal dismissal. But the Court dismissed
Malabanan's complaint finding that his dismissal from employment was for just and valid cause.
However, the Labor Arbiter awarded him P 10,000 as "financial assistance". On appeal, it
awarded Malabanan separation or termination pay amounting to P 10,780, in lieu of financial
assistance.

ISSUE: Whether or not the award with financial assistance is valid.

HELD: Separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for cause other than serious misconduct or those
reflecting on his moral character. Where the reason for the valid dismissal is, for example
habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations
with a fellow worker, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on the ground of
social justice.

The only cases when separation pay shall be paid, although the employee was lawfully
dismissed, are when the cause of termination was not attributable to the employee's fault but
due to: (1) the installation of labor-saving devices, (2) redundancy (3) retrenchment, (4)
cessation of the employer's business, or (5) when the employee is suffering from a disease and
his continued employment is prohibited by law or is prejudicial to his health and to the health
of his co- employees. (Articles 283 and 284, Labor Code.) Other than these cases, an employee
who is dismissed for a just and lawful cause is not entitled to separation pay even if the award
were to be called by another name Dismissing the private respondent's complaint for illegal
dismissal is affirmed, but the award of separation pay or financial assistance to him is hereby
set aside for lack of legal basis.