Computation of back wages

Dear Atty. Kathy,

Our company just received a labor complaint from a former employee dismissed for theft of company funds in 2020. During the conferences, the employee is claiming that he is entitled to back wages worth three years, since he claims he was illegally dismissed three years ago.
However, at the time that the employee was dismissed in 2020, he was already 64 years old, seven months short of the 65 years old compulsory retirement age under the law.
Should the time after the former employee reached 65 years old be included in the computation of his alleged back wages?

Khadijah

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Dear Khadijah,

On the computation of back wages, the Supreme Court has ruled that an employee who is unjustly dismissed from work shall be entitled to full back wages only up to the time he/she reached 65 years old, the compulsory retirement age under the law. This has been the Court's consistent ruling, that back wages should only be computed for the period prior to compulsory retirement.
Since back wages are granted on grounds of equity for earnings lost by an employee due to his/her illegal dismissal, your former employee, if indeed he was illegally dismissed, shall be entitled to back wages only for the period he could have worked had he not been illegally dismissed, which is seven months only, the period after his dismissal up to the age for compulsory retirement.
(The New Philippine Skylanders, Inc., et al. versus Francisco N. Dakila, G.R. 199547, 24 September 2012; Alpha C. Jaculbe versus Silliman University, G.R. No. 156934, 16 March 2007; Intercontinental Broadcasting Corporation versus Reynaldo Benedicto, G.R. 152843, 20 July 2006; Continental Micronesia, Inc. versus Joseph Basso, G.R. 178382-83, 23 September 2015.)

Atty. Kathy Larios