Dismissal settlement

Dear Atty. Kathy,

My father filed an illegal dismissal complaint against his former company for reinstatement and backwages. It has been 10 years and the case is still not finished. The new HR Head of the company talked to my father about settlement of the case, and offered my father separation pay of 1 month salary per year of service. The HR Head told my father that since it has been a long time, the court will rule anyway that separation pay be given instead of reinstatement. Is this correct? How about the backwages? We could also use the money now for my father’s medical bills.

Kate

***

Dear Kate,

The Supreme Court has ruled that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances and to his other benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual reinstatement.

If reinstatement is not possible, however, the award of separation pay is proper. The payment of separation pay has been awarded by the Supreme Court in lieu of reinstatement, where a long time has lapsed since the beginning of the case, similar with your father’s situation. For practical reasons and to serve the best interest of the parties, the Court deems it proper to award separation instead of reinstatement. Thus, your father may be awarded separation pay in lieu of reinstatement.

In addition to the said separation pay, your father may also be entitled to backwages, which are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. They are a reparation for the illegal dismissal of an employee based on earnings which the employee would have obtained, either by virtue of a lawful decree or order, as in the case of a wage increase under a wage order, or by rightful expectation, as in the case of one’s salary or wage. The outstanding feature of backwages is thus the degree of assuredness to an employee that he would have had them as earnings had he not been illegally terminated from his employment. Thus, the backwages, could be included in your father’s talks with the company about settlement.

(Ernesto C. Luces, et al. versus Coca-Cola Bottlers Phils. Inc., et al., G.R. No. 213816, 2 December 2020)

Atty. Kathy Larios