When a civil service employee is illegally retired, is he entitled to back salaries and other benefits from date of illegal retirement up to date of reinstatement? This is the issue raised in this case of Benito.
Benito was the manager of the General Services Division of a City Water District (BCW) and had been employed therein for 13 years. BCW had a Collective Bargaining Agreement (CBA) with its employees dated October 1, 1991 up to September 30, 1996. Under the CBA, the compulsory retirement age of employees was 60 years.
On March 12, 1992 however the Supreme Court declared that a water district is a quasi-government corporation and that its officers and employees are covered by the Civil Service Law which provides for a compulsory retirement age of 65 years. To resolve the conflict on whether or not to apply said jurisprudence or the CBA, a tripartite committee composed of the Budget Secretary, the Civil Service Commission (CSC) Chairman and the Administrator of the Local Water Utilities (LUWA) agreed that all benefits provided under duly existing CBAs entered prior to March 12, 1992 shall continue up to the respective expiry dates of the benefits or the CBA whichever comes earlier.
On May 16, 1994 Benito reached the age of 60 years which is the compulsory retirement age under the CBA. By virtue of a BCW Board Resolution, Benito’s term was however conditionally extended until December 31, 1995. On August 15, 1995 four months before the expiry of his extended term, Benito asked the CSC to determine the compulsory retirement age of BCW employees because he believed that he can also avail of the provision of the CSC on compulsory retirement age of 65.
In the meantime, On November 29, 1995 the BCW Board amended Benito’s retirement date from December 31, 1995 to November 30, 1995. Thus he was given retirement pay and separated from the service on said date.
On January 16, 1996, the CSC replied to Benito’s query and said that his compulsory retirement should be at age 65 pursuant to P.D. 1146 which shall prevail over the terms and conditions of the CBA. Then on March 4, 1996, he wrote another letter to CSC asking for an official ruling on whether he could be reinstated since BCW had not responded to his request for reinstatement and allowed to retire on a later date to enable him to complete and comply with the minimum 15 years of service. Thus on August 5, 1996, the CSC officially issued a resolution declaring that the CBA cannot shorten the employee’s term fixed by law which is 65 years. This pronouncement was affirmed by the Court of Appeals (CA) on March 29, 1999 but it made no mention of Benito’s reinstatement so he still was not reinstated.
Thus on May 6, 1999, Benito again went to CSC requesting for an order that he be officially reinstated and paid his back salaries. On May 26, 2000 the CSC ruled in favor of Benito declaring that his compulsory retirement age was on May 16, 1999 when he turned 65 years old thus he should be paid his back salaries and other benefits from December 1, 1995 to May 16, 1999. This resolution was again affirmed by the CA. BCW questioned this CA ruling insisting that the order requiring them to pay Benito back salaries and other benefits was not proper because it was in good faith when it terminated Benito upon reaching 60 years under the CBA considering that the Tripartite Committee (that included the CSC) agreed to continue the existence of the CBA up to its expiry date. Was BCW correct?
No. With PD 1146 fixing the retirement age at 65 years, the CBA violated this law by lowering the compulsory retirement age at 60 years. The tripartite committee merely agreed to continue the implementation of benefits. It did not provide that the CBA provisions that violate laws should remain in force.
Substantial justice cannot be served if BCW will be allowed to treat Benito as retired at age 60 even after the annulment of its CBA provisions mandating retirement at age 60. When the CA stated that “P.D. 1146 gives Benito a right to be compulsorily retired at age 65 and he cannot waive that right because such waiver is contrary to public policy”, it definitely did not bar Benito’s reinstatement and payment of back salaries and other benefits. The CA is correct in saying that as a necessary consequence of his reinstatement to the service, Benito must be compensated for lost income arising from his illegal removal by forced retirement (Bacolod City Water District vs. Bayona, G.R. 168780, November 23, 2007).
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