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349 Phil. 986
SECOND DIVISION
[ G.R. No. 122440, February 12, 1998 ]
PHILIPPINE NATIONAL
CONSTRUCTION CORPORATION (PNCC), PETITIONER, VS. NATIONAL LABOR
RELATIONS COMMISSION (NLRC) AND FEDERICO DAGASDAS, RESPONDENTS.
D E C I S I O N
PUNO, J.:
The core issue
relates to the salary rate that should be applied in computing the backwages of
private respondent Federico Dagasdas, who worked for a project of petitioner in
the Middle East.
The facts show
that private respondent, a carpenter, is a regular work pool employee of the
petitioner. He was employed in 1971
and, from then on, worked in various
construction projects of the petitioner within the Philippines.
In 1979, private
respondent worked in petitioner's project in the Middle East, with a salary of
$2.20 per hour. The project was
completed in 1984 and he returned to the Philippines. Petitioner then failed to give him work in its local projects. Consequently, on May 15, 1989, private
respondent sued petitioner for illegal dismissal.[1] The labor arbiter dismissed the
complaint on the ground of prescription.[2] On appeal, however, the National
Labor Relations Commission (NLRC) reversed the labor arbiter.[3] It ordered the reinstatement of
private respondent to his former position and the payment of his backwages for
three (3) years. Petitioner appealed to
this Court but in G.R. No. 101468, we denied the petition and remanded the case to the labor arbiter for
the computation of the backwages.
In computing the
backwages, the Research and Information Unit of public respondent used private
respondent's salary rate in the Middle East. Thus, private respondent's total backwages amounted to four hundred
sixty eight thousand and seven hundred pesos (P468,700.00), viz:
"RE: COMPUTATION OF THREE (3) YEARS
BACKWAGES AS PER NLRC RESOLUTION
DATED APRIL 30, 1991
Backwages 3-years
Dollar: 2.20/hour = Dollar 17.60/day
Dollar: 17.60 x 26/days x 36/months = $16,473.60
13th Month Pay:
1/12 of Dollar 16,473.60 = 1,372.80
$17,846.40
Dollar conversion:
April 27, 1993 = $1.00 =P26.263
In Pesos:
$17,846.40 xP26,263 =P468,700.00
=========
Manila, Philippines, May 6, 1993."
Petitioner questioned the correctness of the above computation. It claimed that private respondent's
backwages should not be based on his salary abroad since his overseas
employment contract was for a definite
term and that the project covered by the said contract had been completed in
1984. Petitioner then submitted its own computation of private respondent's
backwages[4] based on his local wage rate at the
time of his transfer to the overseas project, thus:
"Re: Computation of Three (3) years
Backwages as per NLRC Resolution Dated
April 30, 1991
Backwages 3-year
Hourly Rate: 3.50/hr. = 28.00/day
28.00 x 26 days x 36 months =P26,208.00
13th Month Pay
1/12 of 26,208.00 = 2,184.00
P28,392.00
========
"Note: Rate was based on local rate at the time of his transfer to overseas project."
The labor
arbiter ruled in favor of petitioner.[5]
Private
respondent appealed to the NLRC. On
September 29, 1994, the NLRC set aside
the labor arbiter's order,[6] thus:
"WHEREFORE, the Order of Labor Arbiter Ricardo C. Nora dated May 26, 1994, to the extent that it reduced complainant's (private respondent) backwages, is hereby set aside. As prayed for by complainant, "the computation of the Research and Information Unit of the NLRC National Capital Region in the amount ofP468,700.00" is hereby reinstated, to serve as basis for the issuance/enforcement of the pertinent writ of execution.
"SO ORDERED."
Petitioner's motion for reconsideration was denied in an Order[7] dated August 22, 1995.
Hence, the
petition.
The sole issue
is whether the public respondent gravely abused its discretion in using the
overseas salary rate of private respondent in computing his backwages.
Petitioner urges
that the computation of his backwages should be based on the local salary rate
at the time of his separation from employment. It contends that unjust
enrichment would result if the overseas salary rate of private respondent is
used as the basis in computing his backwages. It points out that private
respondent's employment contract for
the Middle East project already expired in 1984. All of private respondent's claims under the overseas employment
contract had been paid, hence, he could no longer make any other claim under
his expired contract.
In its Comment[8] dated March 5, 1996, the Office of
Solicitor General (OSG) agreed with petitioner. The OSG further stressed that
private respondent was illegally dismissed from the work pool after, and not
during his stint abroad. Therefore,
considering that upon his return, he reverted to his former status as an
ordinary work pool employee of petitioner, he should be paid in accordance with
the local wage rate. It also argued
that the computation of his backwages could not be based on the US $2.20 per
hour rate because it was meant only for the duration of the foreign
project.
For its part,
public respondent contends that private respondent's last salary with
petitioner at the time of his dismissal was US $2.20 per hour, hence, his
backwages should be based on the said rate.
The petition is
meritorious.
An illegally
dismissed employee is usually reinstated to his former position without loss of
seniority rights and paid backwages from the time he was separated from work up
to his actual reinstatement.[9] The purpose of reinstatement is to
restore the employee to the state or condition from which he has been removed
or separated. Backwages aim to replenish the income that was lost by
reason of the unlawful dismissal.[10]
In the case at
bar, we hold that the NLRC gravely abused its discretion in computing private respondent's
backwages based on his salary abroad. The records show that private respondent was not illegally dismissed
while working in the Middle East project of the petitioner. His overseas assignment was a specific project and for a definite period. Upon the completion of the project in 1984,
he received all the benefits due him under the overseas contract. He then voluntarily returned to the
Philippines to await his deployment in the local projects of the
petitioner. Clearly, he was not
illegally dismissed while working in the Middle East.
When private
respondent prayed for reinstatement, he meant reinstatement to his position as
a regular member of petitioner's work pool. If private respondent were given local assignments after his stint abroad, he would have received the
local wage. This is the
"loss" which backwages aim to restore.[11]
In making this
ruling, we take into account the principle that salary scales reflect the
standard of living prevailing in the country and the purchasing power of the
domestic currency.[12] Private respondent received a
higher salary rate for his work in the Middle East because the cost of living
and the standard of living in that country are different from those in the
Philippines.
WHEREFORE, the decision of public respondent
National Labor Relations Commission, dated September 29, 1994 is REVERSED and
SET ASIDE and the Order dated May 26, 1994 of the labor arbiter is
REINSTATED. No pronouncement as to
costs.
SO ORDERED.
[1]
The illegal dismissal case (docketed as Case No. NCR-00-05-02281-89) was
later consolidated with the illegal dismissal case (docketed as Case No.
NCR-00-04-01949-89) filed on April 24, 1989 by another PNCC work pool employee,
Margarito Dagasdas.
[2]
Order, dated June 30, 1989.
[3]
Penned by Commissioner Vicente S.E. Veloso and concurred in by Presiding
Commissioner Bartolome S. Carale and Commissioner Romeo Putong; See Annex "F" of Petition, Rollo,
p. 47-54.
[4]
Rollo, p. 35.
[5]
Order, dated May 26, 1994, Rollo, pp. 37-40.
[6]
Penned by Commissioner Vicente S.E. Veloso and concurred in by Presiding
Commissioner Bartolome S. Carale and Commissioner Alberto R. Quimpo; Rollo, pp. 26-31.
[7]
Rollo, p. 23.
[8]
Rollo, pp. 80-88.
[9]
Santos vs. National Labor Relations Commission, No. L-76721, September 21, 1987, 154 SCRA 166.
[10]
Santos vs. National Labor Relations Commission, supra.
[11]
Globe-Mackay Cable and Radio Communications vs. NLRC, G.R. No.
82511, March 3, 1992, 206 SCRA 701.
[12]
Grolier International, Inc., vs. Amansec, G.R. No. 83523,
August 31, 1989, 177 SCRA 196.