Atty. Gregorio B. Austral, CPA
How to compute length of service of a rehired/reinstated employee
There are employees who resign from their previous employers to seek a greener pasture in another company. As fate would have it, the previous employer turns out to be better than the new employer. After working shortly with the new employer, the employee later on decides to reapply for a job in his previous employer. When this employee retires, a question is often asked: Should the length of service be reckoned from the very first day he worked at the company or should it be counted only from the time he re-applied at the company up to the date of his retirement?
The Supreme Court has consistently decided that the length of service should be computed from the date of re-application.
In a fairly recent case of Melchor A. Cuadra, et. Al. vs. San Miguel Corporation, G.R. No. 194467, July 13, 2020, the Supreme Court summarized the Court’s consistent rulings on this issue.
Carandang, Sta. Catalina College, and Philippine Village Hotel all illustrate how an employee who returns to work for the same employer is considered a new hire if prior employment was validly terminated, either voluntarily or under any of the just and authorized causes provided in the Labor Code. Therefore, the reckoning point of the length of service, for purposes of security of tenure, begins on the date the employee was re-hired.
However, if an employee returns to work upon an order of reinstatement, he or she is not considered a new hire. Because reinstatement presupposes the illegality of the dismissal, the employee is deemed to have remained under the employ of the employer from the date of illegal dismissal to actual reinstatement. Further, there is no “prior employment” to speak of, and the payment of backwages is compensation for the time the employee was illegally deprived of work. In the latter case, the reckoning point of the length of service must be the date the employee first began working for the employer, not when he or she returned for work.
In Carandang, Sta. Catalina, and Philippine Village Hotel, the prior employment of the employees were all validly terminated. Carandang voluntarily resigned from work before she was re-hired, while Tercero abandoned her prior employment in Sta. Catalina. The closure of the establishment of Philippine Village Hotel was declared valid in a final and executory judgment of the National Labor Relations Commission. In these cases, the reckoning point of the employees’ length of service is the date when they were re-hired.