Entitlement to backwages due to illegal dismissal

Persida Acosta

Persida Acosta

Dear PAO,
If a permanent employee is illegally dismissed, what is his remedy and how much is he entitled to because of this?

Dear Alaine,
According to the Labor Code of the Philippines, an employee who was illegally terminated from work is entitled to full backwages and reinstatement without loss of seniority rights and other benefits. This is particularly provided under Article 279 of the said law, to wit:

“ARTICLE 279. Security of tenure.-xxx 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 from him up to the time of his actual reinstatement.”

Although, there is no mention in the said law of an award of separation pay in cases where reinstatement is no longer possible due to the strained relationship or the tension created between the employer and the employee because of the illegal dismissal, jurisprudence is replete with cases involving the award of separation pay instead of reinstatement. In the case of Golden Ace Builders vs. Jose A. Talde (G.R. No. 187200, May 5, 2010), the Supreme Court enunciated the following:

“[T]he award of separation pay is inconsistent with a finding that there was no illegal dismissal, for under Article 279 of the Labor Code and as held in a catena of cases, an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof:

Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents’ illegal dismissal, then, are 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 equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages. (Emphasis, italics and underscoring supplied).”

To assert his/her rights, an employee who was illegally terminated from employment may file a labor complaint before the National Labor Relations Commission, a quasi-judicial agency tasked to adjudicate labor cases.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.


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