The Law on Reinstatement & Backwages

Republic Act No. 6715, which took effect on March 21, 1989, amended Article 279 of the Labor Code, provides that an illegally dismissed employee is entitled to 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. We have ruled, however, that this amendment has no retroactive effect. In such case, the award of backwages to an employee whose illegal dismissal occurred before March 21, 1989, is limited to a period of three (3) years without deduction or qualification. (G.R. No. 111934, April 29, 1998)

Under the law, 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. It must be emphasized, though, that recent judicial pronouncements distinguish between employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed after that date are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. The legislative policy behind Republic Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. Considering that petitioners were terminated from work on August 1, 1991, they are entitled to full backwages on the basis of their last daily earnings. (G.R. No. 119268, February 23, 2000)

Under Article 279 of the Labor Code, 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. (G.R. No. 152531, July 27, 2007; G.R. No. 176627, August 24, 2007)

Thus, having been illegally dismissed, private respondents should be reinstated to their former positions without loss of seniority rights and other privileges. They should also be paid their full backwages, inclusive of allowances, and the monetary equivalent of other benefits, computed from the time their compensation was withheld from them up to the time of their actual reinstatement. (G.R. No. 162089, July 9, 2008)
Under Article 279 of the Labor Code, as amended, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges; to his full backwages, inclusive of allowances; and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Thus, Lactao is entitled to reinstatement and backwages as a necessary consequence. (G.R. No. 160940, July 21, 2008)

Illegally dismissed employees are entitled to backwages that should not be diminished or reduced by the amount they have earned from another employment during the period of their illegal dismissal. On the other hand, the computation of the separation pay and the circumstances showing the existence of an employer-employee relationship are questions of fact that are generally not proper in a petition for review on certiorari.

As provided by Article 279 of the Labor Code, an illegally dismissed employee is entitled to the twin reliefs of 1) either reinstatement or separation pay, if reinstatement is no longer feasible; and 2) back wages. These are distinct and separate reliefs given to alleviate the economic setback brought about by the employee's dismissal. The award of one does not bar the other. Back wages may be awarded without reinstatement, and reinstatement may be ordered without awarding back wages.

However, the computation of the correct amount of separation pay is a factual issue. Its resolution entails a review of the factual conclusions of the appellate court and the evidentiary basis thereof. This kind of assessment is not, as a rule, proper in appeals from the CA. Such appeals should be confined to a determination only of legal issues, because the appellate court's findings of fact are generally conclusive. In a petition for review on, certiorari, this Court's jurisdiction is limited to reviewing errors of law in the absence of any showing that the factual findings complained of are devoid of support in the records or are glaringly erroneous. (G.R. No. 148848, August 5, 2003)

[T]he award of separation pay is inconsistent with a finding that there was no illegal dismissal, for under Article 279 of the Labor Code and as held in a catena of cases, an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof:

Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents' illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages. (G.R. No. 187200, May 5, 2010; G.R. No. 178524, January 30, 2009)

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