G.R. No. 88636 , October 3, 1991
Lina B. Octaviano, petitioner, vs. National Labor Relations Commission and General Diesel Power Corporation, respondents.

FACTS

The petitioner, Lina Octaviano, was hired by General Diesel Power Corporation as a component mechanic under a temporary employment contract from November 21, 1984, to May 21, 1985, but was made to work as a secretary and parts clerk. Her employment was extended under a new contract with a six-month probationary period starting May 22, 1985. She was terminated on November 21, 1985, but was rehired as a parts clerk on January 20, 1986, under another six-month probationary contract. She was dismissed again on June 5, 1986. She filed a complaint for illegal dismissal.
The Labor Arbiter ruled in her favor, ordering reinstatement with full backwages. The NLRC affirmed the illegal dismissal finding but modified the award, limiting backwages to only one year. The NLRC justified this reduction by citing Octaviano’s chemical engineering background, reasoning she could not have remained idle. Octaviano assailed this modification, invoking her right to full backwages under Article 279 of the Labor Code.

ISSUE

Whether the NLRC committed grave abuse of discretion in reducing the award of backwages to one year despite a finding of illegal dismissal.

RULING

Yes. The Supreme Court granted the petition, ruling the NLRC gravely abused its discretion. The legal logic is anchored on Octaviano’s attainment of regular employee status and the consequent entitlement to full reinstatement rights. First, her successive six-month probationary contracts, performing necessary and desirable activities as a parts clerk, converted her into a regular employee by operation of law under Article 280 of the Labor Code. The repeated rehiring negated any claim she failed to meet probationary standards.
Second, the reduction of backwages based on her educational attainment was arbitrary and contrary to settled doctrine. An illegally dismissed employee is entitled to reinstatement with full backwages until actual reinstatement. To avoid protracted computations, the Court consistently applied the policy of awarding backwages for three years without qualification or deduction. The NLRC’s rationale improperly imposed a duty to mitigate losses on the employee in a manner not sanctioned by law, as the right to full backwages is a statutory relief distinct from a civil claim for damages. The employer’s unlawful termination mandated the full relief of reinstatement with three years’ backwages.