G.R. No. 122440 - Philippine National Construction Corp. vs. National Labor Relations Commission

Private respondent Federico Dagasdas, a carpenter, was a regular work pool employee of the petitioner, Philippine National Construction Corporation (PNCC), having been employed since 1971.
Throughout his tenure, he was assigned to various construction projects within the Philippines.

In 1979, private respondent was deployed to work on an overseas construction project in the Middle East where he received a salary of US $2.20 per hour.
His assignment was for a definite period, and the project was completed in 1984; upon completion, he returned to the Philippines.

After his return from the Middle East, PNCC failed to assign him to local projects, prompting his filing of an illegal dismissal case on May 15, 1989.
The initial labor arbiter dismissed the complaint on the ground of prescription; however, the NLRC subsequently reversed the decision.

The NLRC, through its Research and Information Unit, computed the backwages based on the overseas salary rate, arriving at a total of P468,700.00 for three (3) years.
PNCC contested this computation, arguing that the backwages should be calculated based on his local wage rate at the time he was transferred to the overseas project. PNCC provided an alternative computation based on a local hourly rate of P3.50, resulting in lower backwages (P28,392.00).

The labor arbiter initially ruled in favor of PNCC, but this was set aside when the NLRC reinstated the NLRC computation on September 29, 1994.
PNCC’s subsequent motion for reconsideration was denied, leading to the petition before the Court.

The core issue centers on whether it was proper for the NLRC to base the computation of private respondent’s backwages on his overseas salary rate.
PNCC contended that such computation would result in unjust enrichment and that the appropriate basis should be the local wage rate, given that his overseas employment contract was for a definite period and had already been settled.

Whether the NLRC gravely abused its discretion by computing the backwages on the basis of the overseas salary rate (US $2.20 per hour) rather than the local wage rate applicable to private respondent after his return.

Whether the use of the overseas salary rate in the computation of backwages leads to unjust enrichment of the employee, taking into account that the overseas employment contract had expired and all due benefits had been received during that period.

Whether the principle that salary scales should mirror the domestic standard of living and the purchasing power of the local currency necessitates the use of the local wage rate in computing backwages for an illegally dismissed employee.