Philippine National Construction Corporation v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Private respondent Federico Dagasdas, a regular work pool employee of petitioner Philippine National Construction Corporation (PNCC) since 1971, worked on a project in the Middle East from 1979 to 1984 with a salary of $2.20 per hour. Upon completion of the project and his return to the Philippines, PNCC failed to provide him with local project work. Procedural History: On May 15, 1989, Dagasdas filed a complaint for illegal dismissal, which was initially dismissed by the labor arbiter for prescription. The National Labor Relations Commission (NLRC) reversed this, ordering reinstatement and payment of backwages. This Court denied PNCC's appeal and remanded the case for computation of backwages. The NLRC's Research and Information Unit computed backwages based on the overseas salary rate ($2.20/hour), totaling P468,700.00. PNCC contested this, arguing that backwages should be based on the local wage rate at the time of his transfer to the overseas project, submitting a computation of P28,392.00. The labor arbiter ruled in favor of PNCC. The NLRC, however, reinstated the P468,700.00 computation, which was affirmed upon PNCC's motion for reconsideration. The Petition: PNCC filed a petition for certiorari, arguing that the NLRC gravely abused its discretion in using the overseas salary rate for computing backwages, contending that it would result in unjust enrichment and that the overseas contract had expired.
Issue(s)
Whether the National Labor Relations Commission gravely abused its discretion in using the overseas salary rate of private respondent in computing his backwages when the dismissal occurred after the completion of an overseas project and the employee's return to the local work pool. Whether the backwages of an illegally dismissed employee should be based on the overseas salary rate or the local wage rate when the employee was awaiting deployment in local projects after completing an overseas assignment.
Ruling
The petition is meritorious. The decision of the 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.
Ratio Decidendi
On the issue of computing backwages based on overseas salary rate when the dismissal occurred after the completion of an overseas project and the employee's return to the local work pool: The Court held that the NLRC gravely abused its discretion in computing private respondent's backwages based on his salary abroad. An illegally dismissed employee is typically reinstated without loss of seniority rights and paid backwages from the time of separation until actual reinstatement, aiming to restore lost income. However, in this case, private respondent was not illegally dismissed while working on the Middle East project, which was for a definite period and had been completed. Upon his return, he received all benefits due under the overseas contract and voluntarily awaited deployment in local projects. Therefore, the "loss" backwages aim to restore is the income he would have earned from local assignments, not the higher overseas rate. On the issue of whether backwages should be based on overseas or local wage rate when the employee was awaiting deployment in local projects: The Court emphasized that salary scales reflect the prevailing standard of living and purchasing power of domestic currency, and the higher overseas rate was due to the different cost of living abroad. Reinstatement means returning the employee to the state from which they were removed, which in this context is their position as a regular member of the local work pool, entitled to local wages.
Main Doctrine
The backwages of an illegally dismissed employee should be computed based on the local wage rate if the illegal dismissal occurred after the completion of an overseas project and the employee's return to the local work pool, as the overseas salary was specific to the foreign project's conditions and duration.