Computation of Backwages of Illegally Dismissed Probationary Employee
The Supreme Court’s 2024 En Banc Resolution in C.P. Reyes Hospital and Angeline M. Reyes, vs. Geraldine M. Barbosa (G.R. No. 228357, April 16, 2024) [“CP Reyes Hospital Case”] addressed and resolved a long-standing jurisdictional conflict regarding the proper computation of backwages for illegally dismissed probationary employees. By a vote of 9-5, the Court abandoned the limiting doctrine previously established in Robinsons Galleria/Robinsons Supermarket Corporation v. Ranchez (G.R. No. 177937, January 19, 2011) and affirmed the equal treatment of probationary and regular employees in the computation of monetary awards.
Probationary Employee Unjustly Dismissed is Entitled to Backwages.
Under the law, an employee who is unjustly dismissed is entitled to reinstatement and full backwages, inclusive of allowances and other benefits, computed from the time compensation was withheld up to the time of actual reinstatement (Labor Code, Art. 294) However, the application of this provision to probationary employees has been inconsistent.
Prior to the doctrinal split, the Court consistently ruled that probationary employees unjustly dismissed were entitled to full backwages until actual reinstatement. This precedent was notably set in Lopez v. Javier (G.R. No. 102874, January 22, 1996), where the Court upheld the finding of illegal dismissal against the probationary employee and ruled that such employee was entitled to backwages up to the finality of the decision, reasoning that the Labor Code used the term “employee” without distinction regarding status. This view was later affirmed in cases such as Cebu Marine Beach Resort v. NLRC (G.R. No. 143252, October 23, 2003) and SHS Perforated Materials v. Diaz (G.R. No. 185814, October 13, 2010).
The Old Robinsons Galleria Doctrine
A deviation occurred with the Robinsons Galleria doctrine (Robinsons Galleria/Robinsons Supermarket Corporation v. Ranchez, G.R. No. 177937, January 19, 2011), which held that backwages for illegally dismissed probationary employees should only be computed up to the end date of the probationary period. This ruling was based on the premise that the expiration of the fixed probationary contract effectively severed the employment relationship, even if the dismissal was illegal.
The CP Reyes Hospital Case that overturned the Robinsons Galleria Doctrine
The Robinsons Galleria doctrine was overturned in the CP Reyes Hospital Case. In said case, the Supreme Court aligned the treatment of probationary employees with that of regular employees. Crucially, the Court explicitly held that “Illegally dismissed probationary employees, like regular employees, are entitled to backwages up to their actual reinstatement”.
This landmark ruling reinforces the fundamental principles of labor protection in the Philippines. The Supreme Court reasoned that neither the Constitution nor the Labor Code distinguishes between regular and probationary employees in guaranteeing labor rights, and therefore, the judiciary should not create such distinctions.
The constitutional guarantee of security of tenure applies equally to probationary and regular employees. Hence, the uniform rule for illegally dismissed employees requires backwages to be computed from the time compensation was withheld until the time of actual reinstatement. However, if reinstatement is not feasible due to strained relations or analogous causes, backwages are computed from the time compensation was withheld until the finality of the decision. Strained relations may justify separation pay in lieu of reinstatement, but not a reduced backwage computation.
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