BACKWAGES OF ILLEGALLY DISMISSED PROBATIONARY EMPLOYEE SHOULD BE COMPUTED UP TO THE ACTUAL REINSTATEMENT

In the case of C.P. Reyes Hospital (G.R. No. 228357, April 16, 2024), it is argued that backwages for illegally dismissed probationary employees must be computed only until the end of the probationary period, as laid down in Robinsons Galleria. The contention is that since the security of tenure enjoyed by probationary employees is limited, such that they cannot earn wages beyond the probationary period without actually qualifying for regularization, there is no reason to extend backwages beyond such period.

Further, that backwages should correspond to the life of the employment relationship. Probationary employees, akin to project and fixed-term employees, should be entitled to backwages only for the unexpired portion of their employment.

They also enjoy a limited tenure, one that is not on the same plane as regular employees’; hence, they are not entitled to backwages beyond the probationary period. Further, while probationary employment is not automatically severed upon the lapse of the probationary period, it does not mean that employment is automatically continued; acquiescence of the employer is needed to continue the employment. Without the employer’s acquiescence, to award backwages beyond the probationary period would mean deeming the employment regular without the employee actually qualifying for regularization.

As a rule, all illegally dismissed employees are entitled to backwages from the time compensation was unlawfully withheld until their actual reinstatement. However, it is opined that in case reinstatement of probationary employment is infeasible, backwages of the probationary employee must be limited to the unexpired portion of the probationary period because the lapse of the period without the employee qualifying for regular employment necessarily severed the employment.

However, the Supreme Court did not find such view accurate.

The SC points out two things:

First, the mere lapse of the probationary employment without regularization does not, and should not, by itself, sever the employment relationship. In fact, Art. 296 of the Labor Code specifically stated that a probationary employee who is “allowed to work after” the probationary period—that they were not validly dismissed prior to the expiration of the probationary period—shall be considered a regular employee. The change in the status, from probationary to regular, happens ipso facto, or by force and operation of law, without any further act or deed on the part of the employer and the employee.

The lapse of the period, to truly sever the employer-employee relationship, must be coupled with a showing that the employee is either validly dismissed for just or authorized causes or has failed to qualify for regularization.

Specifically, where there are no valid grounds to terminate a probationary employment. In Philippine Manpower Services, Inc. vs. NLRC (296 Phil. 596 (1993)) it was held that there is no reason to sever the employment and that the probationary employee in that case is entitled to work even beyond the probationary period.

Second, the lapse of the probationary period was caused by C.P. Reyes Hospital, who decided to dismiss Barbosa well before the period lapsed on specious and unlawful grounds. This fact makes it more crucial for the Court to rule that when the employer illegally dismissed the probationary employee, the mere lapse of probationary employment will not automatically sever the employment relationship as to allow the employer to limit the backwages to which a probationary employee is entitled. The Court will not permit an employer to prematurely unshackle itself from the employment relationship and its monetary consequences by the mere expedient of illegally terminating a probationary employee.

Therefore, Barbosa should be entitled to backwages from the time compensation was withheld up to her actual reinstatement. In this case, however, both the LA118 and the CA119 recognized that reinstatement was no longer feasible due to the strained relations between the parties, which this Court respects. Hence, backwages must be awarded up to the finality of the Court’s Decision.