TERMNATION OF EMPLOYMENT

Backwages (2002)
A. An employee was ordered reinstated with backwages. Is he entitled to the benefits and increases granted during the period of his layoff? Explain briefly. (3%) B. Aside from the just causes enumerated in Article 282 of the Labor Code for the termination of employment, state three {3} lawful or authorized causes for the dismissal of an employee. (2%) SUGGESTED ANSWER: A. Yes. An employee who is ordered reinstated with backwages is entitled to the benefits and increases granted during the period of his layoff. The Supreme Court has ruled: "Backwages are granted for earnings a worker lost due to his illegal dismissal and an employer is obliged to pay an illegally dismissed employee the whole amount of salaries plus all other benefits and bonuses and general increases to which the latter should have been normally entitled had he not been dismissed." [Sigma Personnel Services v. NLRC, 224 SCRA 181 (1993)]

ALTERNATIVE ANSWER: An award of BACKWAGES is given to an employee who is unjustly dismissed. The cause of action here is the unjust dismissal. On the other hand, an award of UNPAID WAGES is given to an employee who has not been paid his salaries or wages for services actually rendered. The cause of action here is nonpayment of wages or salaries. (General Baptist Bible College vs. NLRC 219 SCRA 549).

Backwages; Basis (2001)

What economic components constitute backwages for a rank and file employee? Are these components equally applicable to a managerial employee? (5%) SUGGESTED ANSWER: The Labor Code (Art. 279) provides that an employee who is unjustly dismissed from work is entitled to reinstatement and also 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 his actual reinstatement. An employee is entitled to all the above benefit regardless of whether he is a rank-and-file employee or a managerial employee. However, backwages may also include the 13th month pay which are paid to rank-and-file employees, as well as benefits arising from a CBA given only to employees in the bargaining unit. Managerial employees cannot be given the same since they are ineligible to join a labor organization.

Backwages vs. Unpaid Wages (1994)

Distinguish between an award for back wages and an award for unpaid wages. SUGGESTED ANSWER: An award for BACKWAGES is to compensate an employee who has been illegally dismissed, for the wages, allowances and other benefits or their monetary equivalent, which said employee did not receive from the time he was illegally dismissed up to the time of his actual reinstatement. On the other hand, an award for UNPAID WAGES is for an employee who has actually worked but has not been paid the wages he is entitled to receive for such work done. (Arts. 279 and 97(1), Labor Code)

Backwages; Basis (2001) "A" was hired by company "B" in January 1980 until A was illegally dismissed on April 30, 1990 as found by a Labor Arbiter who ordered reinstatement and full backwages from April 30, 1990 until As reinstatement. The Arbiter's decision was promulgated on April 29, 1995. B appealed claiming, among others, that the award for

backwages was excessive in that it went beyond three-year rule set forth in Mercury Drug v. CIR (56 SCRA 696). Is B's contention tenable? Why? (S5U%G)G ESTED ANSWER:
No, the contention of "B" is not tenable. Rep. Act No. 6715, which was enacted in 1989, in effect set aside the three-year rule set forth in Mercury Drug vs. CIR (56 SCRA 696) when it provided that the full backwages that an unjustly dismissed employee shall receive shall be computed from the time his compensation was withheld from him up to the time of his actual reinstatement. The word "actual" was inserted in the law by Rep. Act No. 6715. Thus, in accordance with the aforesaid law, an unjustly dismissed employee shall receive his full backwages computed from the time his compensation was withheld from him up to the time of his actual reinstatement even if this period is more than three years. ANOTHER SUGGESTED ANSWER: No, the contention of "B" is not tenable. The Supreme Court (In Ferrer vs. NLRC, July 5, 1993) abandoned the Mercury Drug Rule and in 1996 Bustamante vs. NLRC, 265 SCRA 61 the Supreme Court said: [Quoting Article 279 of the Labor Code] Under the above quoted provision, it became mandatory to award backwages to illegally dismissed regular employees. The law specifically declared that the award of backwages was to be computed from the time compensation was withheld from the employee up to the time of his reinstatement. xxx The clear legislative intent of the amendment in RA No. 6715 is to give more benefits to the workers than was previously given them under the Mercury Drug rule. In other words, the provision calling for "full backwages" to illegally

dismissed employees is clear, plain and free from ambiguity, and, therefore, must be applied without attempted or strained interpretation.

Backwages; Basis (2001)

(a) "A", an employee of Company "B", was found to have been illegally dismissed and was ordered to be reinstated and paid backwages from the time of dismissal until actual reinstatement. The case was elevated all the way to the Supreme Court. By the time the Supreme Court's decision became final and executory, B had closed down and was in the process of winding up. Nonetheless, B paid A his backwages and separation pay. A complained that Bs computation was erroneous in that A's allowances was not included. Is A correct in his claim? For what reason(s)? (2%). SUGGESTED ANSWER: A is correct. After its amendment by Rep. Act No. 6715, the backwages that an employee who has