G.R. No. 138756 , August 1, 2002
Philippine Amusement and Gaming Corporation, petitioner, vs. Rafael M. Salas, respondent.

FACTS

Respondent Rafael M. Salas, an Internal Security Staff member of PAGCOR, was terminated on December 3, 1991, for loss of confidence due to proxy betting. The Civil Service Commission affirmed his dismissal. On appeal, the Court of Appeals reversed the CSC, ruling Salas was not a confidential employee and could only be removed for cause and after due process. It ordered his reinstatement with full back wages, without prejudice to the filing of administrative charges. This Court affirmed the CA decision in G.R. No. 123708 on June 19, 1997. PAGCOR reinstated Salas on November 3, 1997, but simultaneously placed him under preventive suspension pending a new administrative case (Admin. Case No. 1-1-98) for grave misconduct, dishonesty, etc. PAGCOR later found him guilty in this new case and ordered his dismissal, retroactive to the date of the offense, and declared him not entitled to back wages. Salas sought clarification on his entitlement to back wages. The Court of Appeals, resolving the referral, issued the assailed Resolution dated November 9, 1998, holding that Salas was entitled to back wages before the effectivity of any subsequent dismissal, as dismissal cannot retroact to a date before the filing of the administrative case. PAGCOR’s motions for reconsideration were denied.

ISSUE

Whether respondent Rafael M. Salas is entitled to payment of back wages from the time of his illegal dismissal until his reinstatement, notwithstanding his subsequent dismissal in a separate administrative case.

RULING

Yes. The petition is denied. The Court affirmed the Court of Appeals Resolutions. The Court held that Salas’s first dismissal was illegal, as he was not a confidential employee. Consequently, for all legal purposes, his tenure was uninterrupted, and he is considered as not having left his office. He is therefore entitled to back wages as a natural consequence of the illegal dismissal. The subsequent administrative case (Admin. Case No. 1-1-98) is distinct and separate from the first charge, based on different grounds, and is deemed his first charge after the illegal dismissal was nullified. A dismissal can only be prospective, not retrospective; it cannot retroact to a date before the filing of the administrative case. Thus, Salas is entitled to back wages from December 3, 1991, until his reinstatement on November 3, 1997, but not exceeding five years. The Court also found no merit in PAGCOR’s procedural argument regarding the denial of its motion for reconsideration.