Compensated even without working

In contemplation of law, an employee illegally dismissed is deemed to have never left his office. So he should be granted compensation which rightfully belongs to him from the moment he was unduly deprived of it. Up to what period should such compensation or backwages be computed? This is the question answered in this case of Eric.

Eric has been gainfully employed with a food conglomerate for almost 18 years. He rose from the ranks until he was appointed as Field Sales Supervisor with a province wide area of operations. His duties and responsibilities include: (1) the monitoring of account receivables, remittances of salesmen, and stock inventory; and (2) opening of new accounts with customers.

When Eric went on a 14 day sick leave, an audit was conducted by a three member team in his area of operation. The audit revealed that there was failure to account for unremitted collections and stock shortages amounting

to P2,500,000 by one of the salesmen under his supervision. The shortage happened during the time Eric was on leave of absence from his work. But he was nevertheless instructed to report to the office for questioning by the Company lawyer, the auditor and one member of the audit team. Then he was made to execute and sign an affidavit under oath. Two days later, he was placed under preventive suspension for gross violation of company rules and regulations and standard operating procedures. Then after a week, his services were terminated without even giving him a written notice of the charges and the opportunity to be heard and to defend himself. The company dismissed him only on the bases of the sworn statements of the salesman and a certain warehouseman implicating him in the anomaly, and the audit report, which documents were not even shown to him.

When Eric took steps to question the validity of his dismissal and before it could be properly settled, the Company already caused the publication of a paid advertisement notifying the public that he was no longer connected with it thus exposing him to scorn.

Eric’s case was eventually decided in his favor, first by the voluntary arbitrator to which the case was submitted, then by the Court of Appeals. The arbitrator found his dismissal illegal, ordered his reinstatement without loss of seniority rights with full backwages and all benefits he ought to receive from the date of his preventive suspension until he is reinstated. He was also awarded moral damages and attorney’s fees. The CA affirmed this finding but modified the ruling by ordering payment of his separation pay instead of reinstatement equivalent to one month salary for every year of service. The CA also ordered payment of his back wages but only from the time he was placed under suspension up to the time he was illegally dismissed which covers a period of only eight (8) days.

Was the CA correct?

No.

Article 279 of the Labor Code of the Philippines provides that a worker terminated without just cause shall be entitled among others to full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent which rightfully belong to him from the moment he was unduly deprived of them up to the time they are restored to him.

In conformity with Art. 279,and in the light of the CA’s conclusion that reinstatement is no longer possible, Eric should be given full backwages and all the benefits accruing to him from the first day of his preventive suspension, May 13, 1996 up to the date of the finality of this judgment. The backwages to be awarded Eric should not be diminished or reduced by earnings derived by him elsewhere during the term of his illegal dismissal. The company should pay him backwages because the factual circumstances of the manner by which Eric was dismissed reveals that it can hardly be credited with good faith. In the first place, there exists no just cause in dismissing him. The company was not able to prove that Eric should be blamed for the missing accounts. The shortage happened during the time he was on leave. Likewise, Eric was not afforded due process. He was not given a written notice of the charges, nor the opportunity to be heard and defend himself. The documents which were the bases for penalizing him with dismissal were not even shown to him. To compound the matter, even before the validity of the dismissal can properly be settled in the appropriate forum, the company immediately caused the publication of the notice to the public which exposed him to the finger of scorn (Buhain vs. Court of Appeals and Swift Food Inc. G.R.14379, July 2, 2002).

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