Saturday, April 9, 2016

Computation of backwages, separation pay in labor cases; when moral & exemplary damages and attorney's fees awarded.


“x x x.

Given the foregoing, Cadiz, therefore, is entitled to 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 should be awarded as an alternative and as a form of financial assistance. 55 

In the computation of separation pay, the Court stresses that it should not go beyond the date an employee was deemed to have been actually separated from employment, or beyond the date when reinstatement was rendered impossible.56 

In this case, the records do not show whether Cadiz already severed her employment with Brent or whether she is gainfully employed elsewhere; thus, the computation of separation pay shall be pegged based on the findings that she was employed on August 16, 2002, on her own admission in her complaint that she was dismissed on November 17, 2006, and that she was earning a salary of P9,108.70 per month,57 which shall then be computed at a rate of one (1) month salary for every year of service,58 as follows: x x x.

The Court also finds that Cadiz is only entitled to limited backwages.

Generally, the computation of backwages is reckoned from the date of illegal dismissal until actual reinstatement. 59 

In case separation pay is ordered in lieu of reinstatement or reinstatement is waived by the employee, backwages is computed from the time of dismissal until the finality of the decision ordering separation pay. 60 

Jurisprudence further clarified that the period for computing the backwages during the period of appeal should end on the date that a higher court reversed the labor arbitration ruling of illegal dismissal. 61 

If applied in Cadiz's case, then the computation of backwages should be from November 17, 2006, which was the time of her illegal dismissal, until the date of promulgation of this decision. 

Nevertheless, the Court has also recognized that the constitutional policy of providing full protection to labor is not intended to oppress or destroy management. 62 

The Court notes that at the time of Cadiz's indefinite suspension from employment, Leus was yet to be decided by the Comi. 

Moreover, Brent was acting in good faith and on its honest belief that Cadiz's pregnancy out of wedlock constituted immorality. 

Thus, fairness and equity dictate that the award of backwages shall only be equivalent to one (1) year or P109,304.40, computed as follows: x x x.

X x x.”

Finally, with regard to Cadiz's prayer for moral and exemplary damages, the Court finds the same without merit. 

A finding of illegal dismissal, by itself, does not establish bad faith to entitle an employee to moral damages. 63 

Absent clear and convincing evidence showing that Cadiz's dismissal from Brent's employ had been carried out in an arbitrary, capricious and malicious manner, moral and exemplary damages cannot be awarded. 

The Court nevertheless grants the award of attorney's fees in the amount of ten percent ( 10%) of the total monetary award, Cadiz having been forced to litigate in order to seek redress of her grievances.64

X x x.”