Almirante: Diminution in pay

Dominador Almirante

ON OCT. 29, 1996, petitioner Isabela-I Electric Cooperative Inc. hired respondent Vicente B. Del Rosario Jr. as financial assistant. On Oct. 26, 1996, he was promoted to management internal auditor at petitioner’s main office.

In January 2011, petitioner approved a reorganization plan declaring all positions in the company vacant. Under the new setup, respondent was given the new position of area operations manager.

In a complaint for illegal dismissal and damages, respondent alleged among others, that he suffered a diminution in pay in his new position. Petitioner denied this allegation.

The Court of Appeals (CA) affirmed the decision of the National Labor Relations Commission (NLRC) finding the transfer of respondent illegal but deleted the award of salary differential.

Did the CA err?

Ruling: Yes.

We disagree with the Court of Appeals’ finding that respondent did not suffer diminution in salary.

Records show that management internal auditor carries salary rank 20, while the position of an area operations head is salary rank 19.

On this score, petitioner asserts that respondent is basically receiving the same amount of salary at P30,963.95, and therefore, there is no diminution in salary to speak of.

The evidence, however, would suggest that after the reorganization, there was restructuring of the salary ranks. Salary rank 20 is paid P33,038.53,44 while the compensation for salary rank 19 is fixed at P30,963.95.

Hence, had petitioner been retained as management internal auditor, he would already have received P33,038.53, and not just P30,963.95.

In any case, even if there was no diminution in salary, there has still been a demotion in terms of respondent’s rank, responsibilities and status. There is demotion when an employee is appointed to a position resulting to a diminution in duties, responsibilities, status or rank which may or may not involve a reduction in salary.

As for respondent’s monetary awards, we deem it proper to grant salary differential. As correctly held by the NLRC, Article 279 of the Labor Code provides that an employee who is unjustly dismissed from employment shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to his actual reinstatement.

Considering that respondent ought to be reinstated to his former position, he must also enjoy the salary that comes with it. (Isabela-I Electric Coop. Inc., et al. vs. Vicente B. Del Rosario Jr., G.R. 226369, July 17, 2019).