Backwages, separation pay based on 30-day month


When an award for back- wages and separation pay are granted to an illegally dismissed employee, both should be computed on the basis of a 30-day month.

A man was employed in a company as a conductor since 1967. His salary was computed on a percentage basis and he received a commission of about P40.00 to P50.00 a day. During his eighteenth year of employment, he met an accident and burned a portion of his body. He had to be hospitalized for several days. After his hospitalization, his employer ordered him to immediately return to work, for which he complied. He reported to work everyday for several days yet his operating manager would not give him any route assignments despite the promise that he would.

Eventually, the conductor was informed that he would be accepted back to work but only as a new employee. In effect, his eighteen years of service would no longer be credited. When the conductor refused, the operations manager humiliated the conductor in front of the other employees. Thus, the conductor filed a complaint for illegal dismissal, among other things. The Labor Arbiter (LA) rendered judgment in favor of the conductor and found that he had been constructively dismissed –

[w]e hold that complainant was constructively dismissed. Notified in writing that complainant would lose his job for abandonment if he fails to return, complainant reported for work only to be refused because respondent wanted him to be hired as a new employee. Naturally, complainant had to object considering that his length of service had already run for 18 years.

The re-employment as a new employee was found to be prejudicial against the conductor as it would mean a “demotion in rank and privileges, retirement benefits, for example, as his entire previous eighteen (18) years of service with petitioner, would simply be considered as non-existent.”

Moreover, the LA, affirmed by the National Labor Relations Commission (NLRC), granted six (6) months worth of backwages and separation pay equivalent to one-half (1/2) the average daily commission per every year of service. Separation pay was deemed the proper remedy rather than reinstatement due to strained relations between the conductor and the company after the conductor was humiliated and embarrassed when he tried to report back to work. The amount of separation pay was computed as follows: P45.00 x 30 = P1350.00/2 = P675 x 18 = P12,150.00.

On appeal, the company questioned the computation of the LA, who based the computation of separation pay on a thirty (30) day month instead of the conductor’s actual number of work days, which was a maximum of eleven (11) days per month.

The Supreme Court (SC) refused to entertain the company’s arguments, reiterating that “this Court does not make findings of facts specially on evidence raised for the first time on appeal.” The company should have presented records proving that the conductor only worked 11 days per month, which it did not.

Thus, the SC awarded backwages equivalent to three (3) years without deduction or qualification. Because the illegal dismissal transpired before the effectivity of Republic Act 6715, the SC was limited to granting only 3 years. The SC further ruled that the conductor could not be reinstated, and so separation pay was the proper remedy and it should be equivalent to at least one (1) month for every year of service. Lastly, the SC held that both awards were to be computed on the basis of a 30-day month. The amount of 3 years backwages and separation pay for 18 years amounted to P 48,600.00 and P24,300.00, respectively (JAM Trans Co. v. Flores, G.R. No. 82829, 19 March 1993, J. Nocon).


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