PAGCOR v.
SALAS Pending resolution of his motion by the CSC, PAGCOR effected Salas
August 1, 2002 | Austria-Martinez, J. | Dismissal, back wages
Digester: Santos, Ihna
SUMMARY: Salas was employed as PAGCORs Internal Security Staff member and
assigned to the casino at the Manila Pavilion Hotel. PAGCORs BOD terminated him
from from employment for loss of confidence because he engaged in proxy betting. His
appeal to the BOD and MSPB was denied. CSC affirmed the MSPB resolution.
However, CA set aside the CSC resolution and ruled that Salas could be removed only
for cause and after due process. This was affirmed by the SC in the 1995 case of CSC
and PAGCOR v. Salas. Consequently, PAGCOR was ordered to reinstate Salas with full
back wages, but without prejudice to the filing of administrative charges against him if
warranted. An administrative complaint was later on filed by PAGCOR against Salas.
PAGCOR rendered a resolution in the administrative case ordering Salas dismissal
from service. Meanwhile, CA resolved the SCs referral of Salas motion for clarification
and held that Salas is entitled to back wages before the effectivity of his dismissaleven
granting that the same might be upheld with finality. PAGCOR filed an MR but this
was denied by the CA. SC likewise denied PAGCORs petition. Having been illegally
dismissed, Salas is entitled to back wages from the time he was illegally dismissed from
service on December 3, 1991 until his reinstatement on November 3, 1997, but not to
exceed five years.
DOCTRINE: Back wages may be granted to those who have been illegally dismissed
and consequently ordered reinstated, or to those acquitted of the charge against them.
FACTS:
Rafael Salas was employed as PAGCORs Internal Security Staff member and
assigned to the casino at the Manila Pavilion Hotel. On December 3, 1991,
PAGCORs BOD terminated him from employment for loss of confidence
because he engaged in proxy betting.
Salas appealed to the Chairman and the BOD, requesting reinvestigation of the
case, but was denied.
Salas appealed to the Merit and System Protection Board (MSPB), but it was denied
on the ground that being a confidential employee, he was not dismissed from
service but his term of office merely expired.
On appeal to the CSC, the MSPBs decision was affirmed per Resolution No. 92-
1283.
On appeal, CA set aside the CSC resolution and ruled that Salas could be removed
only for cause and after due process.
In CSC and PAGCOR v. Salas (1995), SC affirmed the CA decision which ruled
that Salas, not being a confidential employee, cannot be dismissed on ground of
loss of confidence. Consequently, PAGCOR was ordered to reinstate Salas with
full back wages, but without prejudice to the filing of administrative charges against
him if warranted.
Salas filed a motion for execution with the CSC requesting his reinstatement with
full back wages.
reinstatement, but imposed on him a 90-day preventive suspension pending
investigation of the administrative complaint for grave misconduct, dishonesty,
violation of company rules and regulations, and conduct grossly prejudicial to the
best interests of the service, PAGCOR filed against him.
In the meantime, the CSC ruled that the proper authority to issue the writ of
execution is the SC. Accordingly, Salas filed a Motion for Clarification with the SC,
praying that a resolution be issued clarifying whether or not he is entitled to
payment of full back wages from the time of his separation up to his reinstatement.
A Resolution was then issued by the SC ordering the remand of the records of the
case to the CSC, through the CA, for it to conduct such hearing as may be
necessary for the issuance of the writ.
Salas then filed another motion for execution with the CSC. However, before his
motion can be resolved, PAGCOR rendered a resolution in the administrative case
ordering Salas dismissal from service. This recommendation was approved by the
BOD. Salas filed an MR but the same was denied. On the same day, Salas received
a copy of the CSCs resolution of his motion for execution which ruled that the
administrative case filed by PAGCOR against him is not an obstacle to the
implementation of the decision of CA, as affirmed by the SC, unless said case has
already been decided by PAGCOR and the decision is not in Salas favor.
Salas then appealed to the CSC but the same was also dismissed. Salas filed a
petition for review with the CA, but this was denied for being insufficient in form
and substance. The CA likewise denied PAGCORs MR.
Meanwhile, CA resolved the SCs referral of Salas motion for clarification and held
that Salas is entitled to back wages before the effectivity of his dismissaleven
granting that the same might be upheld with finality.
PAGCOR filed an MR but this was denied by the CA for having been filed out of
time. Hence, this petition filed by the OSG, in behalf of PAGCOR, seeking to
annul the following issuances of the CA:
o Resolution upholding Salas entitlement to back wages regardless of
the outcome of the administrative case against him
o Resolution denying PAGCORs MR (1998 and 1999)
RULING: Petition denied. CA resolutions affirmed.
Whether Salas is entitled to the payment of back wages before the effectivity of
his dismissal regardless of the final outcome of the administrative case against
him YES.
PAGCOR insists that the CA decision ordering Salas reinstatement with back
wages but without prejudice to the filing of administrative charges against him if
warranted, connotes that Salas is not entitled anymore to his back wages because
he was subsequently found to be guilty of the administrative charges against him;
and that the CAs resolution holding that Salas should be given his back wages
regardless of the outcome of the administrative case against him contravenes the
 principle that back wages are allowed if an employee is found innocent of the
charges.
SC: It is already a settled rule that back wages may be granted to those who have
been illegally dismissed and consequently ordered reinstated, or to those acquitted
of the charge against them.
Salas was found to have been illegally dismissed by PAGCOR in the case of CSC
and PAGCOR v. Salas wherein SC ruled that Salas, not being a confidential
employee of petitioner, can only be removed for cause and after due process.
Hence, for all legal intents and purposes, the first dismissal effected by PAGCOR
had no legal force and effect, and Salas tenure of office was never interrupted
o Del Castillo v. CSC: When an official or employee was illegally
dismissed and his reinstatement has later been ordered, for all legal
purposes he is considered as not having left his office. Therefore, he
is entitled to all the rights and privileges that accrue to him by virtue
of the office he held. Back salaries may be ordered paid to said officer
or employee.
PAGCORs subsequent finding of guilt in the administrative case bears no
consequence as said case is distinct and separate from the first charge.
o It must be noted that the first charge was founded on proxy betting,
an entirely different ground as those involved in the administrative
case, although both cases were based on the same set of facts.
o The proceedings in the administrative case is not a continuation or a
part of the proceedings in the first charge. In fact, after Salas was held
to have been illegally dismissed in CSC and PAGCOR v. Salas, it was
as if he was not dismissed from service at all. Prior thereto, he is
considered to have been in PAGCORs continuous service, and
entitled to all the rights and privileges his position enjoys. This is but
the natural consequence of the SCs finding of illegal dismissal.
As correctly held by the CA, the subsequent dismissal cannot retroact to a date
prior to the filing of an administrative case against Salas.
o CA: The filing of an administrative case against Salas is the requisite
due process which must precede his removal if warranted. The
phrase after due process is an indication that any removal or
dismissal may be made only prospectively and not retrospectively.
Hence, if sufficient cause is found against Salas for his dismissal or
removal from the service, the same cannot retroact to a date before
the filing of an administrative case against him.
Having been illegally dismissed, Salas, therefore, is entitled to back wages from the
time he was illegally dismissed from service on December 3, 1991 until his
reinstatement on November 3, 1997, but not to exceed five years pursuant to the
pronouncement of SC in a long line of cases.