Title
BPI Employees Union-Metro Manila vs. Bank of the Philippine Islands
Case
G.R. No. 178699
Decision Date
Sep 21, 2011
Bank teller Zenaida Uy was illegally dismissed; Supreme Court ordered reinstatement with back wages based on pre-dismissal salary, excluding post-dismissal benefits, and imposed 12% interest.
illegal dismissal
reinstatement
back wages
A

Case Summary (G.R. No. L-30279)

Factual Background and Initial Disposition by the Voluntary Arbitrator

Uy and the Union filed a case for illegal dismissal. On December 31, 1997, the Voluntary Arbitrator ruled that the dismissal was illegal. It ordered BPI to reinstate Uy to her former position as bank teller without loss of seniority rights and other benefits, and to pay full back wages computed from the time Uy was dismissed on December 14, 1995 until her actual reinstatement. The Voluntary Arbitrator also ordered the payment of the benefits under the Collective Bargaining Agreement (CBA) and attorney’s fees of 10% of the recoverable award.

Appellate Modification by the Court of Appeals

On October 28, 1998, the Court of Appeals (CA) affirmed the Voluntary Arbitrator’s ruling with modification. Instead of ordering full back wages, the CA limited back wages to three years and, instead of reinstatement, ordered BPI to pay separation pay of one month for every year of service. Uy’s and the Union’s subsequent petition to this Court pursued review of that modification.

Supreme Court Decision in G.R. No. 137863 and Its Effect

After the parties separately sought review, BPI’s petition docketed as G.R. No. 137856 was dismissed for failure to comply with the requirements for a valid certification of non-forum shopping. Uy’s petition, docketed as G.R. No. 137863, was given due course. On March 31, 2005, the Court modified the CA rulings. The dispositive portion directed BPI to: (a) pay Uy backwages from the time of her illegal dismissal until her actual reinstatement; and (b) reinstate Uy to her former position (or a substantially equivalent one) without loss of seniority rights and other benefits attendant to the position.

Execution Proceedings and the Dispute on the Computation of Back Wages

After the March 31, 2005 Decision became final and executory, Uy and the Union moved for the issuance of a writ of execution with the Voluntary Arbitrator. Uy computed back wages using the current wage level, and she included wage and benefit increases and new CBA-granted items awarded during the entire period of illegal dismissal. The computation included COLA, Financial Assistance, Quarterly Bonus, CBA Signing Bonus, Uniform Allowance, Medicine Allowance, Dental Care, Medical and Doctor’s Allowance, Teller’s Functional Allowance, Vacation Leave, Sick Leave, Holiday Pay, Anniversary Bonus, Burial Assistance, and an Omega watch.

BPI opposed the computation, contending that some items were not within back wages, and that no proof showed Uy received the listed benefits at the time of dismissal. It asserted that the back wage computation should be based on Uy’s wage rate at the time of dismissal.

Voluntary Arbitrator’s Order of December 6, 2005 and the Awarded Amount

In an Order dated December 6, 2005, the Voluntary Arbitrator agreed with Uy and the Union that full back wages should include wage and benefit increases granted during the period of illegal dismissal. It reasoned that the March 31, 2005 Decision effectively reinstated its December 31, 1997 ruling ordering full back wages computed from dismissal until actual reinstatement, inclusive of CBA benefits. However, it excluded claims for uniform allowance, anniversary bonus, and the Omega watch for lack of basis. The Voluntary Arbitrator then computed back wages totaling P3,897,197.89, including items described as basic monthly salary, COLA, financial assistance, quarterly bonuses, CBA signing bonus, various allowances, leave and cash equivalent amounts, and attorney’s fees.

Following this, a writ of execution and a notice of garnishment were issued.

CA Proceedings on Certiorari and the Amended CA Decision of July 4, 2007

BPI filed a petition for certiorari with urgent application for a TRO and/or writ of preliminary injunction, alleging that the Voluntary Arbitrator’s computation modified the final and executory March 31, 2005 Decision. BPI asserted that the Voluntary Arbitrator improperly computed back wages based on the current rate, and improperly included wage increases and benefits granted in the interim, along with attorney’s fees and other items allegedly unsupported by proof.

The CA initially issued a TRO restraining the implementation of the December 6, 2005 Order and the corresponding writ of execution. Uy and the Union sought clarification on whether the TRO covered the reinstatement component of the Court’s final decision. The CA rendered a decision on May 24, 2006, holding that BPI’s certiorari petition was proper and that the award of CBA benefits and attorney’s fees had legal basis. Nonetheless, it found error in the computation of back wages based on current rates and deleted dental allowance granted more than six years after dismissal.

On July 4, 2007, the CA issued an Amended Decision. It upheld the propriety of certiorari and, crucially, ruled that the March 31, 2005 Decision did not reinstate the Voluntary Arbitrator’s December 31, 1997 ruling insofar as it awarded CBA benefits as components of back wages. The CA held that the computation of back wages under Republic Act No. 6715 should be based on the basic salary at the time of dismissal, plus only the regular allowances the employee was receiving at that time. It ruled that salary increases occurring after dismissal and benefits given only after dismissal should not be awarded, consistent with settled jurisprudence.

Accordingly, the CA used P10,895.00 as the base figure corresponding to Uy’s basic salary at dismissal, retained COLA, quarterly bonus, and financial assistance but limited their computation to the rate prevailing at dismissal, deleted CBA signing bonus, medicine allowance, medical and doctor’s allowance, and dental care allowance for insufficient proof, and retained teller’s functional allowance, holiday pay, and the monetary equivalents of vacation and sick leave benefits. It also sustained attorney’s fees. Finally, the CA ruled that the TRO effectively restrained Uy’s reinstatement, interpreting that the restraint covered implementation or enforcement of the Voluntary Arbitrator’s order and writ, which were for reinstatement.

The CA then directed the Voluntary Arbitrator to recompute back wages consistent with the amended ruling.

The Parties’ Issues Before the Supreme Court

Uy and the Union argued that the CA amended the final Supreme Court Decision by revisiting matters already settled in G.R. No. 137863, contending that issues there had been confined to the period-limitation of back wages to three years and separation pay in lieu of reinstatement. They also challenged the CA’s restraining order as improper despite the finality of the Court’s reinstatement directive. They further asserted that BPI’s CA petition should have been dismissed for improper mode, and they sought twelve percent (12%) per annum interest on the total amount due from the finality of the March 31, 2005 Decision until full compliance.

BPI, for its part, alleged that Uy and the Union failed to prove service of their petition on the lower court. It challenged the CA’s inclusion of teller’s functional allowance and the monetary conversion of vacation and sick leaves, and questioned the attorney’s fees award.

Supreme Court’s Determination on the Scope of G.R. No. 137863

The Court held that the March 31, 2005 Decision in G.R. No. 137863 did not reinstate the Voluntary Arbitrator’s December 31, 1997 Decision as to the award of CBA benefits included within full back wages. The Court explained that the March 31, 2005 ruling modified only the CA’s October 28, 1998 Decision by awarding full back wages instead of limiting back wages to three years, and by directing reinstatement. It rejected the premise that the dispositive portion had broadly reinstated all components of the Voluntary Arbitrator’s earlier award, including CBA benefits, as part of back wages.

Governing Rule on Full Back Wages Under Republic Act No. 6715

The Court anchored the computation of full back wages on Republic Act No. 6715, which amended Article 279 of the Labor Code. Under Art. 279, an unjustly dismissed employee is entitled to reinstatement without loss of seniority rights and to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time compensation was withheld until actual reinstatement. Jurisprudence, as cited in the decision, provides that such award is without qualifications or deductions, meaning it is unqualified by wage increases or benefits received by co-workers who were not dismissed. The Court reaffirmed that the base figure for computing back wages is the wage rate at the time of dismissal, unqualified by deductions, increases, and modifications.

The Court thus agreed with the CA that the back wages described in the March 31, 2005 Decision did not include salary increases and CBA benefits treated as additional benefits over and above those within RA 6715. It approved the CA’s deletion of signing bonus, medicine allowance, medical and doctor’s allowance, and dental care allowance, given the lack of proof that these benefits were being received at the time of Uy’s dismissal. The Court also approved the CA’s ruling regarding attorney’s fees as having attained finality because the issue was not timely contested after the award of attorney’s fees in Uy’s favor.

Mootness of the Reinstatement-Restraint Issue

The Court held that the CA’s temporary restraining order issue was moot because Uy had been subsequently reinstated in BPI’s payroll on August 1, 2006. The Court stated that it agreed with Uy and the Union that the CA should not have restrained reinstatement in view of BPI’s appeal focusing on the back wages computation. However, it deemed the issue moot based on the undisputed reinstatement.

Propriety of BPI’s Certiorari Petition Under Rule 65

The Court upheld the CA’s treatment of BPI’s certiorari petition as proper. It relied on Rule 41, Sec. 1, which provides that no appeal may be taken from an order of executio

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms