Chronicle Securities vs. NLRC, November 25, 2004

Facts:
Petitioners hired private respondent Neal H. Cruz as the publicist and the editor in chief of the Manila Chronicle. Private respondent went about the task of improving the over-all image of the Manila Chronicle. He made full use of its color capabilities and introduced new columns and sections. In time, these initiatives helped improve the financial condition of the Manila Chronicle, boosting circulation and increasing advertising revenue.
 
However, due to private respondent's role in the publication of a controversial article that was carried by the newspaper, petitioners terminated his services. Consequently, private respondent filed a complaint for illegal dismissal against herein petitioners. The Labor Arbiter rendered a decision holding that private respondent was illegally dismissed awarding Cruz 10M in moral damages and 5M in exemplary damages. Petitioners appealed the decision with the National Labor Relations Commission (NLRC), which affirmed the labor arbiter's decision with modification by reducing the moral damages to P500,000.00 and exemplary damages to P200,000.00.
 
The Motion for Reconsideration of petitioners were denied. Petitioners then filed their Notice of Appeal and Memorandum of Appeal. However, the petition was denied for being filed out of time. Their MR being denied, they elevated the case to the CA on certiorari. The CA finding no grave abuse of discretion on the part of the NLRC, dismissed the petition. Petitioners' Motion for Reconsideration was likewise denied. Hence, this petition for review. Petitioners are questioning the basis of the Labor Arbiter's computation of private respondent's backwages in the total amount of P6,310,000.00

Issue:
Whether or not the LA committed reversible error in the computation of Private Respondent’s backwages.

​Held:
Yes.  Backwages, in general, are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. It represents compensation that should be earned but was not collected because an employer has unjustly dismissed an employee. Thus, the payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal.
Article 279 of the Labor Code of the Philippines, as amended, provides that:
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. (Underscoring supplied)
 
Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, among others, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. If reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision.
 
Respondent National Labor Relations Commission is DIRECTED to reinstate and give due course to petitioners' appeal for a determination of the amount of backwages to be paid to private respondent with further instructions to receive or require such further evidence as may be necessary.