Grolier International, Inc. v. Amansec
REITERATIONFacts
The Antecedents: Private respondent Manuel L. Fernandez was employed by petitioner Grolier International, Inc. (Grolier) from July 1, 1964. On July 27, 1974, he went to Sydney, Australia, for seven months, working for Grolier Society, Ltd. of Australia with an annual salary of AUS$ 8,000.00. Upon returning to Manila on February 3, 1975, to follow up his Australian immigration application, which was disapproved on February 19, 1975, he sought reinstatement to his former position with Grolier. Grolier refused reinstatement, leading Fernandez to file a case for illegal dismissal. Procedural History: The Labor Arbiter initially dismissed Fernandez's complaint. This Court upheld the dismissal in a Decision dated December 15, 1986. However, upon Fernandez's Motion for Reconsideration, this Court, in a Resolution dated December 29, 1987 (G.R. No. 55312), set aside its earlier decision, ordered Grolier to reinstate Fernandez with full backwages from February 3, 1975, for three years, or pay separation pay if reinstatement was impossible. The case was remanded to the Executive Labor Arbiter. The Petition: The NLRC Research and Information Unit computed the award based on Fernandez's Australian salary (AUS$ 8,000.00 per annum) and his service from July 1, 1964, to February 2, 1978, totaling AUS$ 35,333.38 plus P 6,646.65 for airfare. The Labor Arbiter approved this computation in an Order dated May 19, 1988, and denied Grolier's Motion for Reconsideration on May 31, 1988. Grolier filed a Petition for Certiorari, assailing these orders as grave abuse of discretion, arguing the award should be based on his Philippine salary (P 4,000.00/month) and that separation pay should not include the period of imputed service.
Issue(s)
Whether the award of backwages and separation pay should be based on the private respondent's salary in the Philippines or in Australia. Whether the period for computing separation pay should include the three-year period for which backwages were awarded.
Ruling
The Supreme Court modified and set aside the Labor Arbiter's order regarding the computation basis. It directed that backwages and separation pay be computed on the basis of P 4,000.00 per month, affirming the computation of separation pay based on the entire service from July 1, 1964, to February 2, 1978.
Ratio Decidendi
On the computation basis for backwages and separation pay: The Court found substantive merit in Grolier's argument that the award should be based on Fernandez's Philippine salary of P 4,000.00 per month, not the AUS$ 8,000.00 per annum received in Australia. Reinstatement means returning to the former position and salary in the Philippines. Fernandez could not have reasonably expected to receive the Philippine peso equivalent of his Australian salary upon returning to his former position in Manila. Salary scales are reflective of the prevailing cost of living and purchasing power of the domestic currency; the P 4,000.00 monthly salary was presumably reasonable for work in the Philippines. The higher salary in Australia was likely an adjustment for the higher cost of living there and did not represent a promotion or a qualitatively different job. The Court cited Union of Supervisors (RB) NATU v. The Secretary of Labor and Republic Bank to define reinstatement as restoration to a former state, entitling the employee only to their last salary in that position. On the period for separation pay: The Court rejected Grolier's interpretation that the phrase "effective as of the end of the above three (3) year period" limited the separation pay computation to a period after the three-year backwages period. Instead, the Court clarified that this phrase meant the three-year period for which backwages were awarded should be included in the computation of separation pay. This aligns with jurisprudence where separation pay is computed from the start of employment up to the termination, including periods of imputed service for which backwages are granted. The period considered was from July 1, 1964, to February 2, 1978, encompassing both actual service and the imputed service for backwages.
Main Doctrine
Backwages and separation pay should be computed based on the employee's salary in the Philippines, not on a higher salary received while temporarily working abroad, as reinstatement implies returning to the former position and salary in the Philippines. The period for separation pay includes imputed service for which backwages are awarded.