BPI Employees Union v. Bank of the Philippine Islands

G.R. No. 178699, 178735 (September 21, 2011)

SC ruled back wages for illegally dismissed employees based on salary at dismissal, excluding future raises.

Facts:

Zenaida Uy was employed as a bank teller at the Bank of the Philippine Islands (BPI) Escolta Branch until her dismissal on December 14, 1995. The grounds for her termination included allegations of gross disrespect, insubordination, and absence without leave. Following her dismissal, Uy, along with the BPI Employees Union, filed a case for illegal dismissal.

On December 31, 1997, a Voluntary Arbitrator ruled that Uy’s dismissal was illegal, ordering BPI to reinstate her and pay full back wages along with other benefits under the Collective Bargaining Agreement (CBA). However, on October 28, 1998, the Court of Appeals (CA) modified this decision, denying reinstatement and instead awarding Uy separation pay and limiting her back wages to three years.

The case escalated to the Supreme Court, where Uy and the Union filed a petition (G.R. No. 137863) that was granted on March 31, 2005. The Supreme Court ordered BPI to pay Uy back wages from the time of her dismissal until actual reinstatement and to reinstate her to her former position or a substantially equivalent one.

After the Supreme Court's decision became final, Uy and the Union sought the issuance of a Writ of Execution from the Voluntary Arbitrator to compute Uy’s back wages. Uy’s computation included her basic salary, various allowances, and benefits that had been granted during her period of illegal dismissal. BPI contested this computation, arguing that back wages should be based solely on her salary at the time of dismissal without including subsequent increases or benefits.

On December 6, 2005, the Voluntary Arbitrator ruled in favor of Uy, including all wage and benefit increases in the computation of back wages, except for certain items lacking proof of prior receipt. BPI then filed a petition for certiorari with the CA, claiming grave abuse of discretion by the Voluntary Arbitrator.

The CA initially ruled that BPI's resort to certiorari was proper but later amended its decision, stating that the computation of back wages should be based on Uy’s salary at the time of her dismissal, excluding any increases or benefits granted thereafter. This led to both parties filing separate petitions with the Supreme Court.

Issues:

  1. Whether the CA erred in modifying the Voluntary Arbitrator's computation of Uy’s back wages by excluding salary increases and benefits granted after her dismissal.
  2. Whether the CA's decision to restrain Uy’s reinstatement was proper.
  3. Whether the award of attorney's fees and other benefits was justified.

Arguments:

Petitioners (Uy and the Union):

  • They argued that the CA effectively amended the Supreme Court's final decision by limiting the computation of back wages to the salary at the time of dismissal, which they claimed was not the intent of the Supreme Court's ruling.
  • They contended that the CA's restraining order on Uy’s reinstatement was improper, as the Supreme Court had already ordered her reinstatement.
  • They sought the imposition of a 12% interest per annum on the total amount due to Uy from the finality of the Supreme Court's decision.

Respondent (BPI):

  • BPI maintained that the Voluntary Arbitrator's computation was erroneous and that back wages should only reflect Uy’s salary at the time of her dismissal, excluding any subsequent increases or benefits.
  • BPI argued that the CA's certiorari petition was a proper remedy and that the award of certain allowances and attorney's fees lacked sufficient basis.

Court's Decision and Legal Reasoning:

The Supreme Court ruled that the CA correctly interpreted the March 31, 2005 decision, clarifying that it did not reinstate the Voluntary Arbitrator's earlier decision regarding the award of CBA benefits. The Court emphasized that back wages should be computed based on the salary rate at the time of dismissal, without including subsequent increases or benefits.

The Court affirmed the CA's decision to delete the award of certain benefits for lack of proof that Uy was receiving them at the time of her dismissal. However, it upheld the award of attorney's fees, noting that this issue had been resolved with finality when it was not contested in previous appeals.

The Court also addressed the CA's temporary restraining order, stating that it had become moot due to Uy’s subsequent reinstatement in BPI's payroll. The Court imposed a legal interest of 12% per annum on the monetary awards due to Uy from the finality of the March 31, 2005 decision until full payment.

Significant Legal Principles Established:

  • The computation of back wages for illegally dismissed employees should be based on the salary at the time of dismissal, excluding any increases or benefits granted thereafter.
  • The right to attorney's fees can attain finality if not contested in subsequent appeals.
  • Temporary restraining orders can become moot if the underlying issue (such as reinstatement) is resolved.