JUANITO A.

GARCIA and
ALBERTO J. DUMAGO,
Petitioners,

- versus -

PHILIPPINE AIRLINES, INC.,

Respondent.

G.R. No. 164856

Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
AZCUNA,
TINGA,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO, and
BRION, JJ.
Promulgated:

January 20, 2009

x-----------------------------------------------------------------------------------------x
DECISION
CARPIO MORALES, J.:
Petitioners Juanito A. Garcia and Alberto J. Dumago assail the December 5, 2003 Decision and April
16, 2004 Resolution of the Court of Appeals [1] in CA-G.R. SP No. 69540 which granted the petition for
certiorari of respondent, Philippine Airlines, Inc. (PAL), and denied petitioners Motion for
Reconsideration, respectively. The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered and in view of the foregoing, the instant petition is
hereby GIVEN DUE COURSE. The assailed November 26, 2001 Resolution as well as
the January 28, 2002 Resolution of public respondent National Labor Relations
Commission [NLRC] is hereby ANNULLED and SET ASIDE for having been issued with
grave abuse of discretion amounting to lack or excess of jurisdiction. Consequently, the
Writ of Execution and the Notice of Garnishment issued by the Labor Arbiter are hereby
likewise ANNULLED and SET ASIDE.
SO ORDERED.[2]

The case stemmed from the administrative charge filed by PAL against its employees-herein
petitioners[3] after they were allegedly caught in the act of sniffing shabu when a team of company
security personnel and law enforcers raided the PAL Technical Centers Toolroom Section on July 24,
1995.

After due notice, PAL dismissed petitioners on October 9, 1995 for transgressing the PAL Code of
Discipline,[4] prompting them to file a complaint for illegal dismissal and damages which was, by
Decision of January 11, 1999,[5] resolved by the Labor Arbiter in their favor, thus ordering PAL to, inter
alia, immediately comply with the reinstatement aspect of the decision.
Prior to the promulgation of the Labor Arbiters decision, the Securities and Exchange Commission
(SEC) placed PAL (hereafter referred to as respondent), which was suffering from severe financial
losses, under an Interim Rehabilitation Receiver, who was subsequently replaced by a Permanent
Rehabilitation Receiver on June 7, 1999.
From the Labor Arbiters decision, respondent appealed to the NLRC which, by Resolution of January
31, 2000, reversed said decision and dismissed petitioners complaint for lack of merit.[6]
Petitioners Motion for Reconsideration was denied by Resolution of April 28, 2000 and Entry of
Judgment was issued on July 13, 2000.[7]
Subsequently or on October 5, 2000, the Labor Arbiter issued a Writ of Execution (Writ) respecting
the reinstatement aspect of his January 11, 1999 Decision, and on October 25, 2000, he issued a
Notice of Garnishment (Notice). Respondent thereupon moved to quash the Writ and to lift the Notice
while petitioners moved to release the garnished amount.
In a related move, respondent filed an Urgent Petition for Injunction with the NLRC which, by
Resolutions of November 26, 2001 and January 28, 2002, affirmed the validity of the Writ and the
Notice issued by the Labor Arbiter but suspended and referred the action to the Rehabilitation
Receiver for appropriate action.
Respondent elevated the matter to the appellate court which issued the herein challenged Decision
and Resolution nullifying the NLRC Resolutions on two grounds, essentially espousing that: (1) a
subsequent finding of a valid dismissal removes the basis for implementing the reinstatement aspect
of a labor arbiters decision (the first ground), and (2) the impossibility to comply with the
reinstatement order due to corporate rehabilitation provides a reasonable justification for the failure to
exercise the options under Article 223 of the Labor Code (the second ground).
By Decision of August 29, 2007, this Court PARTIALLY GRANTED the present petition and effectively
reinstated the NLRC Resolutions insofar as it suspended the proceedings, viz:
Since petitioners claim against PAL is a money claim for their wages during the
pendency of PALs appeal to the NLRC, the same should have been suspended pending
the rehabilitation proceedings. The Labor Arbiter, the NLRC, as well as the Court of
Appeals should have abstained from resolving petitioners case for illegal dismissal and
should instead have directed them to lodge their claim before PALs receiver.

However, to still require petitioners at this time to re-file their labor claim against PAL
under peculiar circumstances of the case that their dismissal was eventually held valid
with only the matter of reinstatement pending appeal being the issue this Court deems it
legally expedient to suspend the proceedings in this case.
WHEREFORE, the instant petition is PARTIALLY GRANTED in that the instant
proceedings herein are SUSPENDED until further notice from this Court. Accordingly,
respondent Philippine Airlines, Inc. is hereby DIRECTED to quarterly update the Court
as to the status of its ongoing rehabilitation. No costs.
SO ORDERED.[8] (Italics in the original; underscoring supplied)
By Manifestation and Compliance of October 30, 2007, respondent informed the Court that the SEC,
by Order of September 28, 2007, granted its request to exit from rehabilitation proceedings. [9]
In view of the termination of the rehabilitation proceedings, the Court now proceeds to resolve
the remaining issue for consideration, which is whether petitioners may collect their wages during
the period between the Labor Arbiters order of reinstatement pending appeal and the NLRC
decision overturning that of the Labor Arbiter, now that respondent has exited from
rehabilitation proceedings.

Amplification of the First Ground

The appellate court counted on as its first ground the view that a subsequent finding of a valid
dismissal removes the basis for implementing the reinstatement aspect of a labor arbiters decision.
On this score, the Courts attention is drawn to seemingly divergent decisions concerning
reinstatement pending appeal or, particularly, the option of payroll reinstatement. On the one hand
is the jurisprudential trend as expounded in a line of cases including Air Philippines Corp. v. Zamora,
[10]
while on the other is the recent case of Genuino v. National Labor Relations Commission.[11] At the
core of the seeming divergence is the application of paragraph 3 of Article 223 of the Labor Code
which reads:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, pending appeal. The employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein. (Emphasis and
underscoring supplied)

The view as maintained in a number of cases is that:

x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal,
it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court.

On the other hand, if the employee has been reinstated during the appeal period and
such reinstatement order is reversed with finality, the employee is not required to
reimburse whatever salary he received for he is entitled to such, more so if he actually
rendered services during the period.[12] (Emphasis in the original; italics and underscoring
supplied)

In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is
entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless
there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of
reinstatement and it is mandatory on the employer to comply therewith. [13]

The opposite view is articulated in Genuino which states:

If the decision of the labor arbiter is later reversed on appeal upon the finding that the
ground for dismissal is valid, then the employer has the right to require the
dismissed employee on payroll reinstatement to refund the salaries s/he
received while the case was pending appeal, or it can be deducted from the accrued
benefits that the dismissed employee was entitled to receive from his/her employer
under existing laws, collective bargaining agreement provisions, and company
practices. However, if the employee was reinstated to work during the pendency of the
appeal, then the employee is entitled to the compensation received for actual services
rendered without need of refund.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement,
and her dismissal is based on a just cause, then she is not entitled to be paid the
salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC Decision.
[14]
(Emphasis, italics and underscoring supplied)

It has thus been advanced that there is no point in releasing the wages to petitioners since their
dismissal was found to be valid, and to do so would constitute unjust enrichment.
Prior to Genuino, there had been no known similar case containing a dispositive portion where the
employee was required to refund the salaries received on payroll reinstatement.In fact, in a catena of
cases,[15] the Court did not order the refund of salaries garnished or received by payroll-reinstated
employees despite a subsequent reversal of the reinstatement order.
The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render
inutile the rationale of reinstatement pending appeal.
x x x [T]he law itself has laid down a compassionate policy which, once more, vivifies
and enhances the provisions of the 1987 Constitution on labor and the working man.
xxxx
These duties and responsibilities of the State are imposed not so much to express
sympathy for the workingman as to forcefully and meaningfully underscore labor as a

primary social and economic force, which the Constitution also expressly affirms with
equal intensity. Labor is an indispensable partner for the nation's progress and stability.
xxxx
x x x In short, with respect to decisions reinstating employees, the law itself has
determined a sufficiently overwhelming reason for its execution pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may authorize
an immediate implementation, pending appeal, of a decision reinstating a dismissed or
separated employee since that saving act is designed to stop, although temporarily since
the appeal may be decided in favor of the appellant, a continuing threat or danger to the
survival or even the life of the dismissed or separated employee and his family.[16]

The social justice principles of labor law outweigh or render inapplicable the civil law doctrine
of unjust enrichment espoused by Justice Presbitero Velasco, Jr. in his Separate Opinion. The
constitutional and statutory precepts portray the otherwise unjust situation as a condition affording full
protection to labor.
Even outside the theoretical trappings of the discussion and into the mundane realities of human
experience, the refund doctrine easily demonstrates how a favorable decision by the Labor Arbiter
could harm, more than help, a dismissed employee. The employee, to make both ends meet, would
necessarily have to use up the salaries received during the pendency of the appeal, only to end up
having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap leading the
employee to a risky cliff of insolvency.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to
refuse payroll reinstatement and simply find work elsewhere in the interim, if any is available. Notably,
the option of payroll reinstatement belongs to the employer, even if the employee is able and raring to
return to work. Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In the face of
the grim possibilities, the rise of concerned employees declining payroll reinstatement is on the
horizon.
Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also
institutes a scheme unduly favorable to management. Under such scheme, the salaries
dispensed pendente lite merely serve as a bond posted in installment by the employer. For in the
event of a reversal of the Labor Arbiters decision ordering reinstatement, the employer gets back the
same amount without having to spend ordinarily for bond premiums. This circumvents, if not directly
contradicts, the proscription that the posting of a bond [even a cash bond] by the employer shall not
stay the execution for reinstatement.[17]

In playing down the stray posture in Genuino requiring the dismissed employee on payroll
reinstatement to refund the salaries in case a final decision upholds the validity of the dismissal, the
Court realigns the proper course of the prevailing doctrine on reinstatement pending appeal vis--vis
the effect of a reversal on appeal.
Respondent insists that with the reversal of the Labor Arbiters Decision, there is no more basis
to enforce the reinstatement aspect of the said decision. In his Separate Opinion, Justice Presbitero
Velasco, Jr. supports this argument and finds the prevailing doctrine in Air Philippines and allied
cases inapplicable because, unlike the present case, the writ of execution therein was secured prior
to the reversal of the Labor Arbiters decision.
The proposition is tenuous. First, the matter is treated as a mere race against time. The discussion
stopped there without considering the cause of the delay. Second, it requires the issuance of a writ of
execution despite the immediately executory nature of the reinstatement aspect of the
decision. In Pioneer Texturing Corp. v. NLRC,[18] which was cited in Panuncillo v. CAP Philippines,
Inc.,[19] the Court observed:
x x x The provision of Article 223 is clear that an award [by the Labor Arbiter] for
reinstatement shall be immediately executory even pending appeal and the posting of a
bond by the employer shall not stay the execution for reinstatement. The legislative
intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable,
even pending appeal. To require the application for and issuance of a writ of
execution as prerequisites for the execution of a reinstatement award would certainly
betray and run counter to the very object and intent of Article 223, i.e., the
immediate execution of a reinstatement order. The reason is simple. An application for a
writ of execution and its issuance could be delayed for numerous reasons. A mere
continuance or postponement of a scheduled hearing, for instance, or an inaction on the
part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby
setting at naught the strict mandate and noble purpose envisioned by Article 223. In
other words, if the requirements of Article 224 [including the issuance of a writ of
execution] were to govern, as we so declared in Maranaw, then the executory nature of
a reinstatement order or award contemplated by Article 223 will be unduly circumscribed
and rendered ineffectual. In enacting the law, the legislature is presumed to have
ordained a valid and sensible law, one which operates no further than may be necessary
to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the
purpose to be achieved and the evil sought to be remedied. x x x In introducing a new
rule on the reinstatement aspect of a labor decision under Republic Act No. 6715,
Congress should not be considered to be indulging in mere semantic exercise. x x
x[20] (Italics in the original; emphasis and underscoring supplied)

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of
the dismissed employee during the period of appeal until reversal by the higher court. [21] It settles the
view that the Labor Arbiter's order of reinstatement is immediately executory and the employer has to

either re-admit them to work under the same terms and conditions prevailing prior to their dismissal,
or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer
must pay the employees salaries.[22]

Amplification of the Second Ground

The remaining issue, nonetheless, is resolved in the negative on the strength of the second ground
relied upon by the appellate court in the assailed issuances. The Court sustains the appellate courts
finding that the peculiar predicament of a corporate rehabilitation rendered it impossible for
respondent to exercise its option under the circumstances.
The spirit of the rule on reinstatement pending appeal animates the proceedings once the Labor
Arbiter issues the decision containing an order of reinstatement. The immediacy of its execution
needs no further elaboration. Reinstatement pending appeal necessitates its immediate execution
during the pendency of the appeal, if the law is to serve its noble purpose. At the same time, any
attempt on the part of the employer to evade or delay its execution, as observed in Panuncillo and as
what actually transpired in Kimberly,[23]Composite,[24] Air Philippines,[25] and Roquero,[26] should not be
countenanced.
After the labor arbiters decision is reversed by a higher tribunal, the employee may be barred
from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement
pending appeal was without fault on the part of the employer.
The test is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending
appeal was not executed prior to its reversal; and (2) the delay must not be due to the employers
unjustified act or omission. If the delay is due to the employers unjustified refusal, the employer may
still be required to pay the salaries notwithstanding the reversal of the Labor Arbiters decision.
In Genuino, there was no showing that the employer refused to reinstate the employee, who was the
Treasury Sales Division Head, during the short span of four months or from the promulgation on May
2, 1994 of the Labor Arbiters Decision up to the promulgation on September 3, 1994 of the NLRC
Decision. Notably, the former NLRC Rules of Procedure did not lay down a mechanism to promptly
effectuate the self-executory order of reinstatement, making it difficult to establish that the employer
actually refused to comply.
In a situation like that in International Container Terminal Services, Inc. v. NLRC [27] where it was
alleged that the employer was willing to comply with the order and that the employee opted not to
pursue the execution of the order, the Court upheld the self-executory nature of the reinstatement

order and ruled that the salary automatically accrued from notice of the Labor Arbiter's order of
reinstatement until its ultimate reversal by the NLRC. It was later discovered that the employee
indeed moved for the issuance of a writ but was not acted upon by the Labor Arbiter. In that scenario
where the delay was caused by the Labor Arbiter, it was ruled that the inaction of the Labor Arbiter
who failed to act upon the employees motion for the issuance of a writ of execution may no longer
adversely affect the cause of the dismissed employee in view of the self-executory nature of the order
of reinstatement.[28]
The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer
to submit a report of compliance within 10 calendar days from receipt of the Labor Arbiters decision,
[29]
disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion
for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the
writ. With the new rules in place, there is hardly any difficulty in determining the employers
intransigence in immediately complying with the order.
In the case at bar, petitioners exerted efforts [30] to execute the Labor Arbiters order of reinstatement
until they were able to secure a writ of execution, albeit issued on October 5, 2000 after the reversal
by the NLRC of the Labor Arbiters decision. Technically, there was still actual delay which brings to
the question of whether the delay was due to respondents unjustified act or omission.
It is apparent that there was inaction on the part of respondent to reinstate them, but whether
such omission was justified depends on the onset of the exigency of corporate rehabilitation.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before
any court, tribunal or board against the corporation shall ipso jure be suspended.[31] As stated early
on, during the pendency of petitioners complaint before the Labor Arbiter, the SEC placed respondent
under an Interim Rehabilitation Receiver.After the Labor Arbiter rendered his decision, the SEC
replaced the Interim Rehabilitation Receiver with a Permanent Rehabilitation Receiver.
Case law recognizes that unless there is a restraining order, the implementation of the order of
reinstatement is ministerial and mandatory.[32] This injunction or suspension of claims by legislative
fiat[33] partakes of the nature of a restraining order that constitutes a legal justification for respondents
non-compliance with the reinstatement order.Respondents failure to exercise the alternative options
of actual reinstatement and payroll reinstatement was thus justified. Such being the case,
respondents obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of
the options, did not attach.
While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or
even the life of the dismissed employee and his family, it does not contemplate the period when the
employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to
survive.

The parallelism between a judicial order of corporation rehabilitation as a justification for the nonexercise of its options, on the one hand, and a claim of actual and imminent substantial losses as
ground for retrenchment, on the other hand, stops at the red line on the financial statements. Beyond
the analogous condition of financial gloom, as discussed by Justice Leonardo Quisumbing in his
Separate Opinion, are more salient distinctions. Unlike the ground of substantial losses contemplated
in a retrenchment case, the state of corporate rehabilitation was judicially pre-determined by a
competent court and not formulated for the first time in this case by respondent.
More importantly, there are legal effects arising from a judicial order placing a corporation under
rehabilitation. Respondent was, during the period material to the case, effectively deprived of the
alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction
but also in view of the interim relinquishment of management control to give way to the full exercise of
the powers of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may
have opted for actual physical reinstatement pending appeal to optimize the utilization of
resources. Then again, though the management may think this wise, the rehabilitation receiver may
decide otherwise, not to mention the subsistence of the injunction on claims.
In sum, the obligation to pay the employees salaries upon the employers failure to exercise the
alternative options under Article 223 of the Labor Code is not a hard and fast rule, considering the
inherent constraints of corporate rehabilitation.
WHEREFORE, the petition is PARTIALLY DENIED. Insofar as the Court of Appeals Decision
of December 5, 2003 and Resolution of April 16, 2004 annulling the NLRC Resolutions affirming the
validity of the Writ of Execution and the Notice of Garnishment are concerned, the Court finds no
reversible error.

SO ORDERED.

FIRST DIVISION
G.R. No. 161006, October 14, 2015

ROGELIO BARONDA, Petitioner, v. HON. COURT OF APPEALS, AND HIDECO SUGAR MILLING
CO., INC., Respondents.
DECISION
BERSAMIN, J.:
The reinstatement aspect of the Voluntary Arbitrator's award or decision is immediately executory
from its receipt by the parties.chanRoblesvirtualLawlibrary
The Case
The petitioner assails the decision1 promulgated on August 21, 2003 in CA-G.R. SP No. 67059,
whereby the Court of Appeals (CA) annulled and set aside the order issued by the Voluntary
Arbitrator2 granting his motion for the issuance of the writ of execution. 3chanRoblesvirtualLawlibrary
Antecedents
Respondent Hideco Sugar Milling Co., Inc. (HIDECO) employed the petitioner as a mud press truck
driver with a daily salary of P281.00. On May 1, 1998, he hit HIDECO's transmission lines while
operating a dump truck, causing a total factory blackout from 9:00 pm until 2:00 am of the next day.
Power was eventually restored but the restoration cost HIDECO damages totaling P26,481.11.
Following the incident, HIDECO served a notice of offense requiring him to explain the incident within
three days from notice. He complied. Thereafter, the management conducted its investigation, and,
finding him guilty of negligence, recommended his dismissal. 4 On June 15, 1998, the resident
manager served a termination letter and informed him of the decision to terminate his employment
effective at the close of office hours of that day. Hence, HIDECO no longer allowed him to report to
work on the next day.5chanroblesvirtuallawlibrary
In August 1998, the petitioner, along with another employee also dismissed by HIDECO, filed in the
Office of the Voluntary Arbitrator of the National Conciliation and Mediation Board in Tacloban City a
complaint for illegal dismissal against HIDECO.
Voluntary Arbitrator Antonio C. Lopez, Jr. handled the case and eventually rendered his decision on
January 13, 1999 by finding the petitioner's dismissal illegal, and ordering his reinstatement.
Voluntary Arbitrator Lopez, Jr. deemed the petitioner's separation from the service from June 16,
1998 to January 15, 1999 as a suspension from work without pay, and commanded him to pay on
installment basis the damages sustained by HIDECO from the May 1, 1998 incident he had
caused,6 to wit:7chanroblesvirtuallawlibrary
Wherefore, in so far as the case of ROGELIO BARONDA is concerned, this Office finds his dismissal
illegal and reinstatement is therefore ordered. His separation on June 16, 1998 up to January 15,
1999 is deemed suspension without pay for his negligent acts, and is further ordered to pay
respondent employer the sum of P26,484.41 for actual damages at P1,500.00 every month
deductible from his salary until complete payment is made.
HIDECO filed a motion for reconsideration,8 but the Voluntary Arbitrator denied the motion on August
11, 2000.9 Accepting the outcome, HIDECO reinstated the petitioner on September 29,
2000.10chanroblesvirtuallawlibrary
Thereafter, on October 9, 2000, the petitioner filed his manifestation with motion for the issuance of
the writ of execution in the Office of the Voluntary Arbitrator,11 praying for the execution of the

decision, and insisting on being entitled to backwages and other benefits corresponding to the period
from January 16, 1999 up to September 28, 2000 totaling P192,268.66 based on Article 279 of the
Labor Code ("An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement'').
HIDECO opposed the petitioner's motion for execution, 12 and simultaneously presented its own
motion for execution to enforce the decision of the Voluntary Arbitrator directing the petitioner to pay
the actual damages totaling P26,484.41 at the rate of P1,500.00/month deductible from his salary
starting in January 2001 until complete payment was made. 13chanroblesvirtuallawlibrary
In his order dated March 20, 2001,14 the Voluntary Arbitrator denied the petitioner's motion for
execution on the ground that the decision did not award any backwages; and granted HIDECO's
motion for execution by directing the petitioner to pay HIDECO P26,484.41 at the rate of
P1,500.00/month.
On May 17, 2001, the petitioner filed another motion for execution praying that a writ of execution
requiring HIDECO to pay to him unpaid wages, 13 th month pay and bonuses from January 16, 2001,
the date when his reinstatement was effected, until his actual reinstatement. 15 HIDECO opposed the
petitioner's second motion for execution because "the items prayed for by the complainant in his
Motion for Issuance of Writ of Execution are not included in the dispository portion of the decision of
the voluntary arbitrator, neither are the said items mentioned in any part of the same
decision."16chanroblesvirtuallawlibrary
On July 25, 2001, however, the Voluntary Arbitrator granted the petitioner's second motion for
execution,17 to wit:
Wherefore, for failure of complainant to re-admit complainant nor reinstate him in the payroll for the
period from January 21, [1999] up to September 28, 2000, let an order or execution issue for the
satisfaction of his reinstatement wages in the amount of P155,647.00 (554 days at P281.00 per day),
13 month pay in the amount of P7,200.00, bonus in the amount of P8,000.00 for 1999, and P8,000.00
for his signing bonus.
The sheriff of the National Labor Relations Commission, Regional Arbitration Branch No. VIII is
directed to implement the writ.
So ordered.
The Voluntary Arbitrator cited as basis Article 223 of the Labor Code, which pertinently provides:
Art. 223. Appeal xxxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar
as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms and conditions prevailing prior
to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The
posting of a bond by the employer shall not stay the execution for reinstatement provided herein.

Having received a copy of the order of July 25, 2001 on August 7, 2001, 18 HIDECO instituted a
special civil action for certiorari in the Court of Appeals (CA) on October 2,
2001.19chanRoblesvirtualLawlibrary
Decision of the CA
HIDECO's petition for certiorari averred that the Voluntary Arbitrator had acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in issuing the July 25, 2001 order. It listed the
following issues, namely:
I. The voluntary arbitrator, in rendering the assailed order actually granted an award without giving
due process to the herein petitioner.20chanroblesvirtuallawlibrary
II. The voluntary arbitrator resolved the (second) motion by applying Art. 223 of the Labor Code. Was
this the correct law to apply under the circumstances? Did he have jurisdiction to apply this law?
21
chanroblesvirtuallawlibrary
III. The decision dated January 13, 1999 clearly stated the relief that had been granted to the
complainant Baronda, which was reinstatement. Baronda was reinstated on September 29, 2000,
thus [HIDECO] had complied with the decision. The questions therefore: Could a relief that is not
written in the decision be executed? Since the voluntary arbitrator clearly did this in this case, is it not
correct to say that he committed grave abuse of discretion? 22chanroblesvirtuallawlibrary
IV. In the assailed Order dated July 25, 2001 the Voluntary Arbitrator said, among others, that it
treated a second motion for the issuance of a writ of execution, and that a first motion had already
been denied on the ground that no backwages had been awarded to the complainant Baronda. Did
he have any legal basis then to issue two different and contradictory orders for what are essentially
similar motions?23chanrobleslaw
In his comment,24 the petitioner countered that the petition for certiorari should be dismissed
considering that HIDECO should have appealed the decision of the Voluntary Arbitrator under Rule
43 of the Rules of Court because certiorari was not a substitute for a lost appeal; that HIDECO did not
file a motion for reconsideration of the questioned order, which would have been an adequate remedy
at law; that the petition for certiorari did not raise any jurisdictional error on the part of the Voluntary
Arbitrator but only factual and legal issues not proper in certiorari; and that the Voluntary Arbitrator did
not commit any error, much less grave abuse of discretion amounting to lack or excess of jurisdiction
in rendering the questioned order.
In the decision promulgated on August 21, 2003, 25 the CA treated HIDECO's petition for certiorari as a
petition for review brought under Rule 43, and brushed aside the matters raised by the petitioner. It
observed that the petition for certiorari included the contents required by Section 6, Rule 43 for the
petition for review; that the writ of execution was proper only when the decision to be executed
carried an award in favor of the movant; that the Voluntary Arbitrator had issued the writ of execution
for backwages despite his decision lacking such award for backwages; and that the reliance by the
Voluntary Arbitrator on Article 223 of the Labor Code was misplaced because said provision referred
to decisions, awards or orders of the Labor Arbiter, not the Voluntary Arbitrator. It disposed as follows:
WHEREFORE, the instant petition is hereby GRANTED and the questioned Order dated July 25,
2001 of the public respondent ANNULLED and SET ASIDE.
SO ORDERED.26chanroblesvirtuallawlibrary

Issues
In this appeal, the petitioner submits the following issues, 27 namely
I.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT
CONSIDERED THE PETITION FOR CERTIORARI FILED BY PRIVATE RESPONDENT AS ONE
FILED UNDER RULE 43 OF THE RULES OF COURT WHEN SAID PETITION EXPRESSLY
DECLARED THAT IT WAS FILED UNDER RULE 65 OF THE RULES OF COURT. EVEN GRANTING
FOR THE SAKE OF ARGUMENT THAT SAID PETITION COULD BE CONSIDERED AS FILED
UNDER RULE 43 OF THE RULES OF COURT, THE HONORABLE COURT OF APPEALS
COMMITTED AN ERROR OF LAW IN NOT CONSIDERING THAT IT WAS FILED OUT OF
TIME.chanRoblesvirtualLawlibrary
II.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT DID NOT
DISMISS THE PETITION FILED BY THE PRIVATE RESPONDENT FOR NOT HAVING
PREVIOUSLY FILED A MOTION FOR RECONSIDERATION BEFORE RESORTING TO THE
PETITION FOR CERTIORARI.chanRoblesvirtualLawlibrary
III.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT
CONSIDERED THE WRIT OF EXECUTION AS ISSUED FOR THE SATISFACTION OF
BACKWAGES INSTEAD OF FOR REINSTATEMENT WAGES.chanRoblesvirtualLawlibrary
IV.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW AND SANCTIONED A
VIOLATION OF THE EQUAL PROTECTION OF THE LAWS WHEN IT RULED THAT THE
REINSTATEMENT ASPECT OF THE DECISION OF THE VOLUNTARY ARBITRATOR IS NOT
IMMEDIATELY EXECUTORY.chanRoblesvirtualLawlibrary
V.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT DECLARED
THAT PRIVATE RESPONDENT WAS DENIED DUE PROCESS OF LAW.
In other words, the decisive issues for consideration and resolution are: (a) whether or not the CA
erred in granting HIDECO's petition for certiorari despite its procedural flaws; and (b) whether or not
the reinstatement aspect of the Voluntary Arbitrator's decision was executory pending
appeal.chanRoblesvirtualLawlibrary
Ruling
The appeal is meritorious.chanRoblesvirtualLawlibrary

I
HIDECO's proper recourse was to appeal
by petition for review; hence, the CA erred
in granting HIDECO's petition for certiorari
The order issued on July 25, 2001 by the Voluntary Arbitrator, albeit directing the execution of the
award or decision of January 13, 1999, was a final order, as contrasted from a merely interlocutory
order, because its issuance left nothing more to be done or taken by the Voluntary Arbitrator in the
case.28 It thus completely disposed of what the reinstatement of the petitioner as ordered by the
Voluntary Arbitrator in the award or decision of January 13, 1999 signified.
The proper remedy from such order was to appeal to the CA by petition for review under Rule 43 of
the Rules of Court, whose Section 1 specifically provides:
Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax
Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial
agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service
Commission, Central Boards of Assessment Appeals, Securities and Exchange Commission, Office
of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board,
Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration,
Energy Regulation Board, National Telecommunications Commission, Department of Agrarian Reform
under Republic Act No. 6657, Government Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy
Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary
arbitrators authorized by law.
The period of appeal was 10 days from receipt of the copy of the order of July 25, 2001 by the
parties. It is true that Section 4 of Rule 43 stipulates that the appeal shall be taken within 15 days
from notice of the award, judgment, final order or resolution, or from the date of its last publication, if
publication is required by law for its effectivity, or of the denial of the petitioner's motion for new trial or
reconsideration duly filed in accordance with the governing law of the court or agency a quo.
However, Article 262-A of the Labor Code, the relevant portion of which follows, expressly states that
the award or decision of the Voluntary Arbitrator shall be final and executory after 10 calendar days
from receipt of the copy of the award or decision by the parties, viz.:
Art. 262-A. Procedures. xxxx
The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the
facts and the law on which it is based. It shall be final and executory after ten (10) calendar days
from receipt of the copy of the award or decision by the parties.
Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the
Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the
Voluntary Arbitrator or panel of Voluntary Arbitrators for any reason, may issue a writ of execution
requiring either the sheriff of the Commission or regular courts or any public official whom the parties
may designate in the submission agreement to execute the final decision, order or award. (Emphasis
supplied)

On account of Article 262-A of the Labor Code, the period to appeal was necessarily 10 days from
receipt of the copy of the award or decision of the Voluntary Arbitrator or panel of Voluntary
Arbitrators; otherwise, the order of July 25, 2001 would become final and immutable, because only a
timely appeal or motion for reconsideration could prevent the award or decision from attaining finality
and immutability.
Yet, HIDECO filed the petition for certiorari, not a petition for review under Rule 43, and the CA
liberally treated the petition for certiorari as a petition for review under Rule 43.
We hold that such treatment by the CA was procedurally unwarranted.
To begin with, even if the error sought to be reviewed concerned grave abuse of discretion on the part
of the Voluntary Arbitrator,29 the remedy was an appeal in due course by filing the petition for review
within 10 days from notice of the award or decision. This was because certiorari, as an extraordinary
remedy, was available only when there was no appeal, or any plain, speedy and adequate remedy in
the ordinary course of law.30 In other words, the justification for HIDECO's resort to the extraordinary
equitable remedy of certiorari did not exist due to the availability of appeal, or other ordinary remedies
in law to which HIDECO as the aggrieved party could resort.
Although it is true that certiorari cannot be a substitute for a lost appeal, and that either remedy was
not an alternative of the other, we have at times permitted the resort to certiorari despite the
availability of appeal, or of any plain speedy and adequate remedy in the ordinary course of law in
exceptional situations, such as: (1) when the remedy of certiorari is necessary to prevent irreparable
damages and injury to a party; (2) where the trial judge capriciously and whimsically exercised his
judgment; (3) where there may be danger of a failure of justice; (4) where appeal would be slow,
inadequate and insufficient; (5) where the issue raised is one purely of law; (6) where public interest
is involved; and (7) in case of urgency.31Verily, as pointed out in Jaca v. Davao Lumber
Company,32 the availability of the ordinary course of appeal does not constitute sufficient ground to
prevent a party from making use of certiorari where the appeal is not an adequate remedy or equally
beneficial, speedy and sufficient; for it is inadequacy, not the mere absence of all other legal remedies
and the danger of failure of justice without the writ that must usually determine the propriety
of certiorari. It is nonetheless necessary in such exceptional situations for the petitioner to make a
strong showing in such situations that the respondent judicial or quasi-judicial official or tribunal
lacked or exceeded its jurisdiction, or gravely abused its discretion amounting to lack or excess of
jurisdiction.
HIDECO did not establish that its case came within any of the aforestated exceptional situations.
And, secondly, HIDECO filed the petition for certiorari on October 2, 2001. Even assuming, as the CA
held, that the petition for certiorari contained the matters required by Rule 43, such filing was not
timely because 56 days had already lapsed from HIDECO's receipt of the denial by the Voluntary
Arbitrator of the motion for reconsideration. In short, HIDECO had thereby forfeited its right to appeal.
We have always emphasized the nature of appeal as a merely statutory right for the aggrieved
litigant, and such nature requires the strict observance of all the rules and regulations as to the
manner of its perfection and as to the time of its taking. Whenever appeal is belatedly resorted to,
therefore, the litigant forfeits the right to appeal, and the higher court ipso facto loses the authority to
review, reverse, modify or otherwise alter the judgment. The loss of such authority is jurisdictional,
and renders the adverse judgment both final and immutable.chanRoblesvirtualLawlibrary

II
Voluntary Arbitrator's order of reinstatement of
the petitioner was immediately executory
The next query is whether the order of reinstatement of the petitioner by the Voluntary Arbitrator was
immediately executory or not.
We answer the query in the affirmative. Although the timely filing of a motion for reconsideration or of
an appeal forestalls the finality of the decision or award of the Voluntary Arbitrator,33 the reinstatement
aspect of the Voluntary Arbitrator's decision or award remains executory regardless of the filing of
such motion for reconsideration or appeal.
The immediate reinstatement of the employee pending the appeal has been introduced by Section 12
of Republic Act No. 6715, which amended Article 223 of the Labor Code, to wit:
SEC. 12. Article 223 of the same code is amended to read as follows:
Art. 223. Appeal. xxxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
in so far as the reinstatement aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein, (bold underscoring supplied for emphasis)
The normal consequences of a finding that an employee was illegally dismissed are, firstly, that the
employee becomes entitled to reinstatement to his former position without loss of seniority rights;
and, secondly, the payment of wages corresponding to the period from his illegal dismissal up to the
time of actual reinstatement. These two consequences give meaning and substance to the
constitutional right of labor to security of tenure. 34 Reinstatement pending appeal thus affirms the
constitutional mandate to protect labor and to enhance social justice, for, as the Court has said in Aris
(Phil.) Inc. v. National Labor Relations Commission:35chanroblesvirtuallawlibrary
In authorizing execution pending appeal of the reinstatement aspect of a decision of a Labor Arbiter
reinstating a dismissed or separated employee, the law itself has laid down a compassionate policy
which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the
working-man.
xxxx
These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic
force, which the Constitution also expressly affirms with equal intensity. Labor is an indispensable
partner for the nation's progress and stability.
If in ordinary civil actions execution of judgment pending appeal is authorized for reasons the
determination of which is merely left to the discretion of the judge, We find no plausible reason to
withhold it in cases of decisions reinstating dismissed or separated employees. In such cases, the
poor employees had been deprived of their only source of livelihood, their only means of support for

their family their lifeblood. To Us, this special circumstance is far better than any other which a judge,
in his sound discretion, may determine. In short, with respect to decisions reinstating employees, the
law itself has determined sufficiently overwhelming reason for its execution pending appeal.
x x x Then, by and pursuant to the same power (police power), the State may authorize an immediate
implementation, pending appeal, of a decision reinstating a dismissed or separated employee since
that saving act is designed to stop, although temporarily since the appeal may be decided in favor of
the appellant, a continuing threat or danger to the survival or even the life of the dismissed or
separated employee and its family.36chanroblesvirtuallawlibrary
We also see no reason to obstruct the reinstatement decreed by the Voluntary Arbitrator, or to treat it
any less than the reinstatement that is ordered by the Labor Arbiter. Voluntary arbitration really takes
precedence over other dispute settlement devices. Such primacy of voluntary arbitration is mandated
by no less than the Philippine Constitution,37 and is ingrained as a policy objective of our labor
relations law.38The reinstatement order by the Voluntary Arbitrator should have the same authority,
force and effect as that of the reinstatement order by the Labor Arbiter not only to encourage parties
to settle their disputes through this mode, but also, and more importantly, to enforce the constitutional
mandate to protect labor, to provide security of tenure, and to enhance social justice.
The 2001 Procedural Guidelines in the Execution of Voluntary Arbitration
Awards/Decisions (Guidelines), albeit not explicitly discussing the executory nature of the
reinstatement order, seems to align with the Court's stance by punishing the noncompliance by a
party of the decision or order for reinstatement. Section 2, Rule III of the Guidelines states:
Sec. 2. Issuance, Form and Contents of a Writ of Execution. xxxx
b) If the execution be for the reinstatement of any person to any position, office or employment, such
writ shall be served by the sheriff upon the losing party or in case of death of the losing party upon his
successor-in-interest, executor or administrator and such party or person may be punished for
contempt if he disobeys such decision or order for reinstatement. (bold underscoring supplied
for emphasis)
The 2005 NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings also supports this Court's position, for Section 6 of its Rule VIII reads:
Sec. 6. Effect of Filing of Petition for Ceriiorari on Execution. The filing of a petition for certiorari with
the Court of Appeals or the Supreme Court shall not stay the execution of the assailed
decision unless a temporary restraining order or injunction is issued by the Court of Appeals or the
Supreme Court pending resolution of such petition.(Emphasis Ours)
We declare, therefore, that the reinstatement decreed by the Voluntary Arbitrator was immediately
executory upon the receipt of the award or decision by the parties.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REINSTATES the order dated
July 25, 2001 of the Voluntary Arbitrator; and ORDERS respondent Hideco Sugar Milling Co., Inc. to
pay the costs of suit.
SO ORDERED.cralawlawlibrary

Republic of the Philippines

SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 207983

April 7, 2014

WENPHIL CORPORATION, Petitioner,

vs.
ALMER R. ABING and ANABELLE M. TUAZON, Respondents.
DECISION
BRION, J.:
We resolve this petition for review on certiorari 1 under Rule 45 of the Rules of Court, challenging the
August 31, 2012 decision2 and the June 20, 2013 resolution3 (assailed CA rulings) of the Court of
Appeals (CA) in CA-G.R. SP No. 117366.
These assailed CA rulings annulled and set aside the March 26, 2010 Decision 4 and September 15,
20105resolution (NLRC rulings) of the National Labor Relations Commission (NLRC) in NLRC CA No.
02-8233-01 (Rl-08).
The NLRC rulings, in turn, fully affirmed the November 16, 2007 Order 6 of the Labor Arbiter (LA) in
NLRC-NCR Case Nos. 30-03-00993-00 and 30-03-01020-00. The LAs order found that an illegal
dismissal took place. Thus, the LA directed petitioner Wenphil Corporation (Wenphil) to pay
respondents Almer Abing and Anabelle Tuazon (respondents) their backwages for the period from
February 15, 2002 to November 8, 2002, pursuant to the rule that an order of reinstatement is
immediately executory even pending appeal. 7
Factual Antecedents
This case stemmed from a complaint for illegal dismissal filed by the respondents against Wenphil,
docketed as NLRC NCR Case No. 30-03-00993-00.
On December 8, 2000, LA Geobel A. Bartolabac ruled 8 that the respondents had been illegally
dismissed by Wenphil. According to the LA, the allegation of serious misconduct against the
respondents had no factual and legal basis. 9 Consequently, LA Bartolabac ordered Wenphil to
immediately reinstate the respondents to their respective positions or to equivalent ones, whether
actuall or in the payroll. Also, the LA ordered Wenphil to pay the respondents their backwages from
February 3, 2000 until the date of their actual reinstatement. 10
Because of the unfavorable LA decision, Wenphil appealed to the NLRC on April 16, 2001 11. In the
meantime, the respondents moved for the immediate execution of the LAs December 8, 2000
decision.12
On October 29, 2001, Wenphil and the respondents entered into a compromise agreement 13 before
LA Bartolabac. They agreed to the respondents payroll reinstatement while Wenphils appeal with the

NLRC was ongoing. Wenphil also agreed to pay the accumulated salaries of the respondents for the
payroll period from April 5, 2001 until October 15, 2001. 14 As for the remaining payroll period starting
October 16, 2001, Wenphil committed itself to credit the respective salaries of the respondents to
their ATM payroll accounts until such time that the questioned decision of LA Bartolabac is either
modified, amended or reversed by the Honorable National Labor Relations Commission. 15
On January 30, 2002, the NLRC issued a resolution 16 affirming LA Bartolabacs decision with
modifications. Instead of ordering the respondents reinstatement, the NLRC directed Wenphil to pay
the respondents their respective separation pay at the rate of one (1) month salary for every year of
service. Also, the NLRC found that while the respondents had been illegally dismissed, they had not
been illegally suspended. Thus, the period from February 3 to February 28, 2000 during which the
respondents were on preventive suspension was excluded by the NLRC in the computation of the
respondents backwages.17
Subsequently, Wenphil moved for the reconsideration 18 of the NLRCs January 30, 2002 resolution,
but the NLRC denied the motion in another resolution dated September 24, 2002. 19
Wenphil thereafter went up to the CA via a petition for certiorari to question the NLRCs January 30,
2002 and September 24, 2002 resolutions.20 On August 27, 2003, the CA rendered its
decision21 reversing the NLRCs finding that the respondents had been illegally dismissed. According
to the CA, there was enough evidence to show that the respondents had been guilty of serious
misconduct; thus, their dismissal was for a valid cause.22The respondents moved for the
reconsideration of the CAs decision.23 In a resolution24 dated February 23, 2004, the CA denied the
respondents motion.
On appeal to the Supreme Court (SC) via Rule 45 (docketed as G.R. No. 162447 25 and dated
December 27, 2006), the SC denied the respondents petition for review on certiorari 26 and affirmed
the CAs August 27, 2003 decision and February 23, 2004 resolution. The respondents did not file any
motion for reconsideration to question the SCs decision; thus, the decision became final and
executory on February 15, 2007.27
The Labor Arbitration Rulings
Sometime after the SCs decision in G.R. No. 162447 became final and executory, the respondents
filed with LA Bartolabac a motion for computation and issuance of writ of execution. 28 The
respondents asserted in this motion that although the CAs ruling on the absence of illegal dismissal
(as affirmed by the SC) was adverse to them, under the law and settled jurisprudence, they were still
entitled to backwages from the time of their dismissal until the NLRCs decision finding them to be
illegally dismissed was reversed with finality.29
LA Bartolabac granted the respondents motion and, in an order dated November 16, 2007, 30 directed
Wenphil to pay each complainant their salaries on reinstatement covering the period from February
15, 2002 (the date Wenphil last paid the respondents respective salaries) to November 8, 2002
(since the NLRCs decision finding the respondents illegally dismissed became final and executory on
February 28, 2002).
Both parties appealed to the NLRC to question LA Bartolabacs November 16, 2007 order. 31 Wenphil
argued that the respondents were no longer entitled to payment of backwages in view of the

compromise agreement they executed on October 29, 2001. According to Wenphil, the compromise
agreement provided that Wenphils obligation to pay the respondents backwages should cease as
soon as LA Bartolabacs decision was "modified, amended or reversed" by the NLRC. Since the
NLRC modified the LAs ruling by ordering the payment of separation pay in lieu of reinstatement,
then the respondents, under the terms of the compromise agreement, were entitled to backwages
only up to the finality of the NLRC decision.32
The respondents questioned in their appeal the determined period for the computation of their
backwages; they posited that the period for payment should end, not on November 8, 2002, but on
February 14, 2007, since the SCs decision which upheld the CAs ruling became final and executory
on February 15, 2007.33
The NLRC denied the parties respective appeals in its decision dated March 26, 2010 34 and affirmed
in toto the LAs order. Both parties moved for the reconsideration of the NLRCs decision but the
NLRC denied their respective motions in the resolution of September 15, 2010. 35
The CAs Ruling
In its decision dated August 31, 2012,36 the CA reversed the NLRC rulings and prescribed a different
computation period.
The CA ruled that the NLRC committed grave abuse of discretion when it affirmed the LAs computed
period which was from February 15, 2002 to November 8, 2002. In arriving at this conclusion, the CA
cited the case of Pfizer v. Velasco37 where this Court ruled that even if the order of reinstatement of
the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and
pay the dismissed employees wages during the period of appeal until reversal by the higher
court.38 The CA construed this "higher court" to be the CA, not the SC.
The CA reasoned out that it was a "higher court" than the NLRC when it reversed the NLRCs rulings;
thus, the period for computation should end when it promulgated its decision reversing that of the
NLRC, and not on the date when the SC affirmed its decision.
The CA likewise held that the compromise agreement did not contain any waiver of rights for any
award the respondents might have received when the NLRC changed or modified the LAs award. 39
The Petition
In its petition for review with this Court, Wenphil maintained that the respondents were no longer
entitled to payment of backwages in view of the modification of the LAs ruling by the NLRC pursuant
with their October 29, 2001 compromise agreement.
Wenphil argued that the CA utterly disregarded the terms of the parties compromise agreement
whose terms were very clear; the agreement reads:
3. That for the payroll period from October 16-31 and thereafter, their [respondents] salaries (net of
withholding tax, SSS, Philhealth and Pag-ibig) shall be credited every 10th and 25th of the
succeeding months through their respective ATM employees account until such time that the
questioned decision of the Honorable Labor Arbiter Geobel Bartolabac is modified, amended or
reversed by the Honorable Labor Relations Commission. 40 [emphasis ours]

It was Wenphils assertion that since the NLRCs decision partly changed the decision of LA
Bartolabac by ordering payment of separation pay in lieu of reinstatement, the NLRC decision was a
"modification" that should operate to remove Wenphils obligation to pay the respondents backwages
for the period of the CAs reversal of the NLRCs illegal dismissal ruling. 41 According to Wenphil, the
words of the compromise agreement left no room for interpretation as to the parties intentions; 42 as a
valid agreement between the parties, it must be given effect and respected by the court.
Wenphil also contended that the CAs cited Pfizer case cannot apply to the present case since there
was no compromise agreement in Pfizer where the dismissed employee waived her entitlement to
backwages.43
Finally, Wenphil claimed that the reliefs of reinstatement and backwages are only available to illegally
dismissed employees. A ruling that the respondents were still entitled to reinstatement pay
notwithstanding the validity of their dismissal, would amount to the courts tolerance of an unjust and
equitable situation.44
The Courts Ruling
We resolve to DENY the petition. An order of reinstatement is immediately executory even pending
appeal. The employer has the obligation to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court.
Under Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation, or at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution
for reinstatement."
The Court discussed reason behind this legal policy in Aris v. NLRC, 45 where it explained:
In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter
reinstating a dismissed or separated employee, the law itself has laid down a compassionate policy
which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the
working-man. These provisions are the quintessence of the aspirations of the workingman for
recognition of his role in the social and economic life of the nation, for the protection of his rights, and
the promotion of his welfare These duties and responsibilities of the State are imposed not so much
to express sympathy for the workingman as to forcefully and meaningfully underscore labor as a
primary social and economic force, which the Constitution also expressly affirms with equal intensity.
Labor is an indispensable partner for the nation's progress and stability. [emphasis ours]
Since the decision is immediately executory, it is the duty of the employer to comply with the order of
reinstatement, which can be done either actually or through payroll reinstatement. As provided under
Article 223 of the Labor Code, this immediately executory nature of an order of reinstatement is not
affected by the existence of an ongoing appeal. The employer has the duty to reinstate the employee
in the interim period until a reversal is decreed by a higher court or tribunal.

In the case of payroll reinstatement, even if the employers appeal turns the tide in its favor, the
reinstated employee has no duty to return or reimburse the salary he received during the period that
the lower court or tribunals governing decision was for the employees illegal dismissal.
Otherwise, the situation would run counter to the immediately executory nature of an order of
reinstatement. The case of Garcia v. Philippine Airlines 46 is enlightening on this point:
Even outside the theoretical trappings of the discussion and into the mundane realities of human
experience, the "refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter
could harm, more than help, a dismissed employee. The employee, to make both ends meet, would
necessarily have to use up the salaries received during the pendency of the appeal, only to end up
having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap leading the
employee to a risky cliff of insolvency.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to
refuse payroll reinstatement and simply find work elsewhere in the interim, if any is
available.1wphi1 Notably, the option of payroll reinstatement belongs to the employer, even if the
employee is able and raring to return to work.
We see the situation discussed above to be present in the case before us as Wenphil observed the
mandate of Article 223 to immediately comply with the order of reinstatement by the LA. On October
29, 2001, while Wenphils appeal with the NLRC was pending, it entered into a compromise
agreement with the respondents. In this agreement, Wenphil committed to reinstate the respondents
in its payroll. However, the commitment came with a condition: Wenphil stipulated that its obligation to
pay the wages due to the respondents would cease if the decision of the LA would be "modified,
amended or reversed" by the NLRC.47
Thus, when the NLRC rendered its decision on the appeal affirming the LAs finding that the
respondents were illegally dismissed, but modifying the award of reinstatement to payment of
separation pay, Wenphil stopped paying the respondents wages.
The reinstatement salaries due to the respondents were, by their nature, payment of unworked
backwages. These were salaries due to the respondents because they had been prevented from
working despite the LA and the NLRC findings that they had been illegally dismissed.
We point out that reinstatement and backwages are two separate reliefs available to an illegally
dismissed employee. The normal consequences of a finding that an employee has been illegally
dismissed are: first, that the employee becomes entitled to reinstatement to his former position
without loss of seniority rights; and second, the payment of backwages covers the period running
from his illegal dismissal up to his actual reinstatement. 48 These two reliefs are not inconsistent with
one another and the labor arbiter can award both simultaneously.
Moreover, the relief of separation pay may be granted in lieu of reinstatement but it cannot be a
substitute for the payment of backwages. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay should be
granted. In effect, an illegally dismissed employee should be entitled to either reinstatement if
viable, or separation pay if reinstatement is no longer be viable, plus backwages in either

instance.49 The rationale for such policy of distinction was vividly explained in Santos v. NLRC under
these terms:50
Though the grant of reinstatement commonly carries with it an award of backwages, the
inappropriateness or non-availability of one does not carry with it the inappropriateness or nonavailability of the other. Separation pay was awarded in favor of petitioner Lydia Santos because the
NLRC found that her reinstatement was no longer feasible or appropriate. As the term suggests,
separation pay is the amount that an employee receives at the time of his severance from the service
and, as correctly noted by the Solicitor General in his Comment, is designed to provide the employee
with "the wherewithal during the period that he is looking for another employment." In the instant
case, the grant of separation pay was a substitute for immediate and continued re-employment with
the private respondent Bank. The grant of separation pay did not redress the injury that is intended to
be relieved by the second remedy of backwages, that is, the loss of earnings that would have accrued
to the dismissed employee during the period between dismissal and reinstatement. Put a little
differently, payment of backwages is a form of relief that restores the income that was lost by reason
of unlawful dismissal; separation pay, in contrast, is oriented towards the immediate future, the
transitional period the dismissed employee must undergo before locating a replacement job. It was
grievous error amounting to grave abuse of discretion on the part of the NLRC to have considered an
award of separation pay as equivalent to the aggregate relief constituted by reinstatement plus
payment of backwages under Article 280 of the Labor Code. The grant of separation pay was a
proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement
and for backwages. In effect, the NLRC in its assailed decision failed to give to petitioner the full relief
to which she was entitled under the statute. [emphasis ours]
Apparently, when the NLRC changed the LAs decision (specifically, the order to award separation
pay in lieu of reinstatement), Wenphil read this to mean to be the "modification" envisioned in the
compromise agreement, Wenphil likewise effectively concluded that separation pay and backwages
are the same or are interchangeable reliefs. This conclusion can be deduced from Wenphils
insistence not to pay the respondents remaining backwages under its erroneous reasoning that this
was the effect of the NLRCs order to Wenphil to pay separation pay in lieu of reinstatement.
We emphasize that the basis for the payment of backwages is different from that of the award of
separation pay. Separation pay is granted where reinstatement is no longer advisable because of
strained relations between the employee and the employer. Backwages represent compensation that
should have been earned but were not collected because of the unjust dismissal. The basis for
computing separation pay is usually the length of the employees past service, while that for
backwages is the actual period when the employee was unlawfully prevented from working. 51
Had Wenphil really wanted to put a stop to the running of the period for the payment of the
respondents backwages, then it should have immediately complied with the NLRCs order to award
the employees their separation pay in lieu of reinstatement. This action would have immediately
severed the employer-employee relationship. However, the records are bereft of any evidence that
Wenphil actually paid the respondents separation pay. Thus, the employer-employee relationship
between Wenphil and the respondents never ceased and the employment status remained pending
and uncertain until the CA actually rendered its decision that the respondents had not been illegally
dismissed. In the context of the parties agreement, it was only at this point that the payment of
backwages should have stopped.

A compromise agreement should not be contrary to law, morals, good customs and public policy.
While it is true that a compromise agreement is binding between the parties and becomes the law
between them,52 it is also a rule that to be valid, a compromise agreement must not be contrary to
law, morals, good customs and public policy.53
In the present case, the parties compromise agreement simply provided that Wenphils obligation to
pay the respondents backwages shall end the moment the NLRC modifies, amends or reverses the
illegal dismissal decision of LA Bartolabac. On its face, there is nothing invalid with such stipulation.
Indeed, had the NLRC reversed the LA, the obligation to pay backwages would have stopped. The
NLRC, however, did not decree a reversal of the finding of illegal dismissal. In fact, it affirmed the
illegal dismissal conclusion, confining itself merely to a modification of the consequences of the illegal
dismissal from reinstatement to the payment of separation pay.
This "modification" of course we cannot accept; the option under the legal policy is solely limited to a
ruling that the respondents had not been illegally dismissed. Otherwise, we would be violating the
Labor Codes policy entitling illegally dismissed employees to their right to backwages even during
the period of appeal. As we held in the case of Garcia v. Philippine Airlines: 54
The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of
the dismissed employee during the period of appeal until reversal by the higher court. It settles the
view that the Labor Arbiter's order of reinstatement is immediately executory and the employer has to
either re-admit them to work under the same terms and conditions prevailing prior to their dismissal,
or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer
must pay the employees salaries. [emphasis ours]
This ruling embodies a principle and policy of the law that cannot be watered down by any lesser
agreement except perhaps when backwages are already earned entitlements that the employee
chooses to surrender for a valuable consideration (and even then, the consideration must at least be
equitable). This legal policy emphasizes, too, the rule that separation pay cannot be a substitute for
backwages but only for reinstatement. The award of separation pay is not inconsistent with the
payment of backwages. Thus, until a higher courts or tribunals reversal of the finding that an
employee had been illegally dismissed, the employee would be entitled to receive his reinstatement
salary or backwages during the period of appeal until such reversal. This is in line with the Labor
Codes policy that an order of reinstatement, which can either be actual or through the payroll, is
immediately executory and is not affected by the period of appeal.
Period for Computation of Backwages
The records show that the inconsistency between the labor arbitration rulings and the CAs ruling was
on the period for the computation of such backwages and not on whether the respondents were still
entitled to such backwages during the period of appeal until the reversal of the finding of illegal
dismissal.
According to the LA, whose ruling the NLRC affirmed, the period for computation should be from
February 15, 2002 until November 8, 2002 since the NLRCs decision which affirmed the LAs finding
of illegal dismissal became final and executory on November 8, 2002. The LA started the counting of

the period on February 15, 2002 since that was the day when Wenphil last paid the respondents
backwages.
On the other hand, the CA, in setting aside the NLRCs rulings, relied on the case of Pfizer v. Velasco
where we ruled that the backwages of the dismissed employee should be granted during the period of
appeal until reversal by a higher court. Since the first CA decision which found that the respondents
had not been illegally dismissed was promulgated on August 27, 2003, then the reversal by the higher
court was effectively made on August 27, 2003.
As against this view, the respondents argued that the period for payment of their backwages should
end on February 14, 2007 since the SC decision in G.R. No. 162447 which affirmed the CAs findings
that the respondents had not been legally dismissed became final and executory on February 15,
2007.
Among these views, the commanding one is the rule in Pfizer, which merely echoes the rulings we
made in the cases of Roquero v. Philippine Airlines 55 and Garcia v. Philippine Airlines56 that the period
for computing the backwages due to the respondents during the period of appeal should end on the
date that a higher court reversed the labor arbitration ruling of illegal dismissal. In this case, the
higher court which first reversed the NLRCs ruling was not the SC but rather the CA. In this light, the
CA was correct when it found that that the period of computation should end on August 27, 2003. The
date when the SCs decision became final and executory need not matter as the rule in Roquero,
Garcia and Pfizer merely referred to the date of reversal, not the date of the ultimate finality of such
reversal.
As a last minor detail, we do not agree with the CA that the date of computation should start on
February 15, 2002. Rather, it should be on February 16, 2002. The respondents themselves admitted
in their motion for computation and issuance of writ of execution that the last date when they were
paid their backwages was on February 15, 2002. To start the computation on the same date would
result to a duplication of wages for this day; thus, computation should start on the following date February 16, 2002.
WHEREFORE, in light of these considerations, we hereby DENY the petition. The Court of Appeals'
decision dated August 31, 2012 and resolution dated June 20, 2013, which annulled and set aside the
March 26, 2010 decision and September 15, 2010 resolution of the NLRC, are hereby AFFIRMED
with MODIFICATION. The period for the computation of backwages of respondents Almer R. Abing
and Anabelle M. Tuazon should be from February 16, 2002 until August 27, 2003, when the Court of
Appeals promulgated its decision reversing the NLRC' s finding of illegal dismissal. No costs.
SO ORDERED.
SECOND DIVISION
[G.R. No. 110419. March 3, 1997]
UERM-MEMORIAL MEDICAL CENTER and DR. ISIDRO CARINO, petitioners, vs. National Labor
Relations Commission and UERM Employees ASSOCIATION, Priscillo Dalogdog and
516 Members-Employees of UERM Hospital, respondents.
DECISION

PUNO, J.:
The question presented in this petition for certiorari under Rule 65 is whether or not in perfecting
an appeal to the National Labor Relations Commission (NLRC) a property bond is excluded by the
two forms of appeal bond cash or surety as enumerated in Article 223 of the Labor Code.
The facts show that on 14 December 1987 Republic Act No. 6640 took effect which mandated a
ten (P10.00) peso increase on the prevailing daily minimum wage of P54.00. In applying said law, the
petitioners granted salary increases to their employees based on the following computation, to wit:
"1.To members of the faculty who are non-union members, P304.17 per month; and
2.To rank-and-file employees (individual complainants who are union members), P209.17 per month."
There was a difference of P95.00 in the salaries of the two classes of employees. Private
respondents who are rank and file employees demanded payment of the difference. Before the
parties could settle their dispute, Republic Act No. 6727 took effect on 1 July 1989 which again
increased the daily minimum wage in the private sector (whether agricultural or non-agricultural)
by P25.00. In compliance, petitioners paid their employees using the following computation, to wit:
"1.To members of the faculty who are non-union members, P760.42 a month; and
2.To rank-and-file employees (individual complainants who are union members), P523.00 a month."
Again, there was a difference of P237.42 per month between the salaries of union members and nonunion members. In September 1987, petitioners increased the hiring rate of the new employees
to P188.00 per month. Private respondents once more demanded from the petitioners payment of the
salary differential mandated by RA No. 6727 and correction of the wage distortion brought about by
the increase in the hiring rate of new employees.
On 12 April 1988, Policy Instruction No. 54 was issued by the then Secretary of Labor Franklin
Drilon, the pertinent provision of which reads:
"x x x the personnel in subject hospitals and clinics are entitled to a full weekly wage of seven days if
they have completed the 40-hour/5-day workweek in any given workweek.
All enforcement and adjudicatory agencies of this Department shall be guided by this issuance in the
disposition of cases involving the personnel of covered hospitals and clinics.
Done in the City of Manila, this 12th day of April, 1988.
(Sgd) FRANKLIN M. DRILON
Secretary"
Petitioners challenged the validity of said Policy Instruction and refused to pay the salaries of the
private respondents for Saturdays and Sundays.

Consequently, a complaint was filed by the private respondents, represented by the Federation of
Free Workers (FFW), claiming salary differentials under Republic Act Nos. 6640 and 6727, correction
of the wage distortion and the payment of salaries for Saturdays and Sundays under Policy
Instruction No. 54.
Labor Arbiter Nieves de Castro sustained the private respondents except for their claim of wage
distortion. The dispositive portion of the decision reads:
"PREMISES CONSIDERED, respondents are hereby directed to pay the 517 individual complainants:
(1)Their Salary Differentials, to wit:
1.1 Under RA 6640 - P1,743,582.50
1.2 Under RA 6727 - P3,559,613.06
1.3 Policy Instruction 54 - P11,779,328.00
Total P17,082,448.56
(2) Exemplary Damages of P2,000.00 each.
SO ORDERED."[1]
Within the reglementary period for appeal, the petitioners filed their Notice and Memorandum of
Appeal with a Real Estate Bond consisting of land and various improvements therein
worth P102,345,650.[2] The private respondents moved to dismiss the appeal on the ground that
Article 223 of the Labor Code, as amended, requires the posting of a cash or surety bond. The NLRC
directed petitioners to post a cash or surety bond of P17,082,448.56 with a warning that failure to do
so would cause the dismissal of the appeal. The petitioners filed a Motion for Reconsideration
alleging it is not in a viable financial condition to post a cash bond nor to pay the annual premium
of P700,000.00 for a surety bond. On 6 October 1992, the NLRC dismissed petitioners' appeal.
Petitioners' Motion for Reconsideration was also denied by the NLRC in a resolution [3] dated 7 June
1993.
Hence, this petition assailing the two resolutions as having been issued with grave abuse of
discretion. On 28 June 1993, we temporarily enjoined the NLRC from implementing the questioned
resolutions and from executing the decision of the Labor Arbiter.
The applicable law is Article 223 of the Labor Code, as amended by Republic Act No. 6715, which
provides:
"In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed from."
We have given a liberal interpretation to this provision. In YBL (Your Bus Line) v. NLRC[4] we ruled:

"x x x that while Article 223 of the Labor Code, as amended by Republic Act No. 6715,
requiring a cash or surety bond in the amount equivalent to the monetary award in the
judgment appealed from for the appeal to be perfected, may be considered a jurisdictional
requirement, nevertheless, adhering to the principle that substantial justice is better served by
allowing the appeal on the merits threshed out by the NLRC, the Court finds and so holds that
the foregoing requirement of the law should be given a liberal interpretation."
Then too, in Oriental Mindoro Electric Cooperative, Inc. v. National Labor Relations
Commission[5] we held:
"The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an
appeal by the employer is underscored by the provision that an appeal by the employer may be
perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly clear,
that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive
means by which an employer's appeal may be perfected. The requirement is intended to discourage
employers from using an appeal to delay, or even evade, their obligation to satisfy their employees'
just and lawful claims.
Considering, however, that the current policy is not to strictly follow technical rules but rather to take
into account the spirit and intention of the Labor Code, it would be prudent for us to look into the
merits of the case, especially since petitioner disputes the allegation that private respondent was
illegally dismissed."
We reiterate this policy which stresses the importance of deciding cases on the basis of their
substantive merit and not on strict technical rules. In the case at bar, the judgment involved is more
than P17 million and its precipitate execution can adversely affect the existence of petitioner medical
center. Likewise, the issues involved are not insignificant and they deserve a full discourse by our
quasi-judicial and judicial authorities. We are also confident that the real property bond posted by the
petitioners sufficiently protects the interests of private respondents should they finally prevail. It is not
disputed that the real property offered by petitioners is worth P102,345,650. The judgment in favor of
private respondent is only a little more than P17 million.
IN VIEW WHEREOF, the resolutions dated October 6, 1992 and June 7, 1993 of the public
respondent are set aside. The case is remanded to the NLRC for continuation of proceedings. No
costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 106915 August 31, 1993

JARDINE DAVIES, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION, CEBU CITY, and
SALVADOR SALUTIN, respondents.
Hilado, Hagad, & Hilado Law Office for petitioner.
Romeo B. Esuerte for private respondent.

VITUG, J.:
The instant petition for certiorari seeks the reversal of the resolution of respondent National Labor
Relations Commission, dated 22 July 1992, which declared private respondent Salvador Salutin as
not having abandoned his work by his alleged failure to report for work during the pendency of the
petitioner's appeal before the respondent Commission.
Respondent Salvador Salutin ("Salutin") was employed by petitioner Jardine Davies, Inc. ("JDI"), on
15 July 1985, as a demonstrator/agronomist to provide services relating to, and to give advice on, the
promotion and use of JDI's pesticides and other products.
The controversy that spawned two (2) special Civil actions for certiorari (this instance included) with
this Court, began when respondent Salutin filed a complaint against petitioner JDI for illegal
dismissal, with prayer for reinstatement and backwages or, in the alternative, separation pay plus
wage differential, service incentive leave pay, thirteenth (13th) month pay, holiday pay, moral and
exemplary damages, and attorney's fees. The complaint was decided by the Labor Arbiter in favor of
respondent Salutin in a decision, dated 08 August 1991, the decretal portion of which reads:
WHEREFORE, PREMISES CONSIDERED, respondent Jardine Davies, Inc./Jardine
Agchem is hereby ordered to reinstate complaint to his former position, without loss of
seniority and other rights, and with backwages, in amount of FIFTY SIX THOUSAND
SEVEN HUNDRED PESOS (P56,700.00), without deduction and qualification.
Respondent is further ordered to pay complaint the following:
a.) 13th month pay P 8,100.00
b.) Holiday pay 13,115.84
c.) Service Incentive pay 1,557.60
d.) Moral Damages 20,000.00
e.) Exemplary Damages 10,000.00
f.) Attorney's fees, which is ten percent (10%) of the total awarded amount.
SO ORDERED.
JDI appealed the case to the National Labor Relations Commission (NLRC), and it posted a
supersedeas bond to answer for the monetary awards. It also reinstated Salutin, "on payroll only",
beginning 26 August 1991, 1 in compliance with the writ of execution issued by the Labor Arbiter
pursuant to Article 223, paragraph 3, of the Labor Code. In a decision, dated 17 October 1991, NLRC

dismissed JDI's appeal for lack of merit but modified the decision by eliminating the awards given for
holiday pay, service incentive leave pay, moral and exemplary damages. 2 A motion for
reconsideration was filed which was denied in NLRC's resolution of 13 January 1992. 3
On 14 February 1992, JDI filed its first petition for certiorari with this Court, docketed as G.R. No.
103720, assailing the 17 October 1991 decision and the resolution of 13 January 1992 of respondent
Commission. In our resolution, dated 26 February 1992, the petition was dismissed for failure to
comply with this Court's Circular No. 28-91 on forum-shopping. Its subsequent motion for
reconsideration was itself denied on 20 May 1992. The resolution of 26 February 1992 became final
and executory on 19 June 1992, and an entry of judgment was accordingly made on 20 August 1992.
At the time when the above narrated events were still unfolding, some material facts occured
beginning with JDI's appeal to the NLRC on the 08 August 1991 decision of the Labor Arbiter. Shortly
after the reinstatement of Salutin "on payroll only", JDI sent a letter, dated 21 September 1991, to
Salutin directing him to report for work to their Bacolod Branch Manager. Salutin, as directed reported
on the 24th of September 1991 at around 9:20 a.m. He did not stay long, however, since after fifteen
minutes or so, he left and was reported not to have thereafter returned for work. JDI forthwith stopped
further payment of salary to Salutin.
On 17 October 1991, JDI filed a "Manisfestation and Motion" with the respondent Commission
stating, inter alia, that:
Salutin be considered as having abandoned his work considering his continuous
absence of more than three (3) weeks since he was required to report for work . . . and
that any award for reinstatement to his former position, without loss of seniority and
other rights, in the Arbiter's decision subject of this appeal be considered and held as
waived or lost. 4
Salutin opposed the motion, claiming that he was forced to leave in haste because he was then
suffering from a serious ailment. He submitted a medical certificate to support his claim. 5
On 13 January 1992, respondent Commission denied JDI's "Manifestation & Motion" stating, among
other things, that:
As to the issue of whether the complaint-appellee Salvador Salutin is guilty of work
abandonment, this is a new and factual matter which has to be determined and resolved
in appropriate proceedings before the Arbitration Branch, more especially in the present
case, where the charge of abandonment is seriously controverted.
Prescinding from its receipt of an information that Salutin was employed elsewhere, JDI filed an ex
parte motion, dated 16 June 1992, to set for hearing the aforestated "Manifestation and
Motion." 6 Salutin, on his part, also filed a motion praying that JDI be ordered to release his withheld
salary, 7 claiming that he had reported for work when he recovered from his ailment on 11 December
1991. 8
On 22 July 1992, respondent Commission issued its assailed resolution stating, viz:

WHEREFORE, Premises considered, the respondent's prayer to declare or consider the

complainant to have abandoned his job for his alleged failure to report back to work
during the pendency of the appeal in this case is hereby denied for lack of merit.
The complainant's motion for release of his salary since 24 September 1991, until he
formally seeks for the enforcement of the decision is likewise denied.
SO ORDERED.
When the motion for reconsideration was likewise denied, JDI instituted on 18 September 1992 the
present petition for certiorari.
During the pendency of this petition, JDI filed an "urgent motion for the issuance of writ of preliminary
injunction and/or restraining order" to prevent the respondent Commission from enforcing its
resolution of 22 July 1992 and 25 August 1992 insofar as it ordered the reinstatement of Salutin. In its
resolution, dated 3 March 1993, this Court resolved to issue a temporary restraining order.
Petitioner raises this sole assignment of error, to wit:
THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION
IN DENYING PETITIONER'S CONTENTION/SUBMISSION THAT PRIVATE
RESPONDENT SALUTIN SHOULD BE CONSIDERED AS HAVING ABANDONED HIS
WORK WHEN HE FAILED TO REPORT FOR WORK PENDING THE PETITIONEREMPLOYER'S APPEAL FROM THE ARBITER'S DECISION GRANTING
REINSTATEMENT, ALTHOUGH AT THAT TIME HE WAS ON REINSTATEMENT ON
PAYROLL THIS NOTWITHSTANDING PETITIONER'S SHOWING THAT SUCH
FAILURE TO REPORT WAS BECAUSE RESPONDENT-EMPLOYEE WAS THEN
WORKING ALSO WITH ANOTHER COMPANY, HENCE HE WAS RECEIVING
SALARIES FROM BOTH.
In the subsequent pages of its petition, JDI paraphrased the assigned issue in this wise: Is Salutin,
who was then on payroll reinstatement since 26 August 1991, not guilty of abandonment when his
failure to report for work was because he was also working for another entity from 01 September
1991 to 31 December 1991? Correlatively, did respondent Commission not gravely abuse its
discretion when it did not take into consideration such other employment?
Our answer is in the negative.
The records show that at the time JDI filed its Manifestation and Motion, dated 17 October 1991, the
sole basis of its prayer for a declaration that Salutin abandoned his work was his alleged
unauthorized absences from the date he was notified to report for work. 11 A shift to a new focus took
place when, on 30 January 1992, JDI, at its request, received a letter-certification issued by the
Officer-in-Charge of King's Enterprises of Iloilo City that Salutin was employed by Monsato
Philippines, Inc., from 01 September to 31 December 1991, as Aggressive Crop Technician, for which
he was paid P5,146.00 per month. 12 Thus, this was the reason given by JDI in its ex parte motion,
dated 16 June 1992, to set for hearing the Manifestation and Motion of 17 October 1991. NLRC
denied the said ex parte motion in the now assailed resolution of 22 July 1992.

When JDI filed its first petition for certiorari (in G.R. No. 103720) with this Court on 14 February 1992,
assailing the 17 October 1991 decision of NLRC, it also raised, as an added argument on the alleged
abandonment of work by Salutin, the fact that he was gainfully employed elsewhere. 13 Considering
that this matter was thus already taken up by the petitioner in its first petition for certiorari, which this
Court dismissed with finality, the petitioner should really now be barred from invoking anew that issue
in this present (second) petition.
Be that as it may, the same fate of dismissal is still inevitable. Although this Court is not a trier of
facts, it may still wade through the records of a case if only to prevent any possible misgiving in its
ultimate disposition. 14 The petitioner's evidence to establish Salutin's supposed abandonment of work
is the certification of employment issued by King's Enterprises at the request of herein petitioner to
the effect that Salutin had indeed been employed by Monsato Philippines, Inc., during the period from
01 September to 31 December 1991. Is this enough? What we have heretofore said is this
For abandonment to constitute a valid cause for termination of employment, there must
be a deliberate unjustified refusal of the employee to resume his employment. This
refusal must be clearly shown. Mere absence is not sufficient; it must be accompanied
by overt acts pointing to the fact that the employee simply does not want to work
anymore. 15
Abandonment of position is a matter of intention expressed in clearly certain and unequivocal acts. In
this instance, however, certain uncontroverted facts show just exactly the opposite. Hence, Salutin did
report, as directed, on 24 September 1991, but that he could not stay long because he was ailing at
that time; he, although perhaps belatedly made, did seek medical consultation on 7 November 1991,
at the Corazon Locsin Montelibano Memorial Regional Hospital, for "peptic ulcer"; and on 11
December 1991, he did, in fact, manifest his desire to assume his work with the petitioner.
This Court's resolution of 26 February 1992, denying the petition in G.R. No. 103720, became final
and executory on 19 June 1992. Respondent Salutin's interim employment, stressed by the petitioner,
did not stain the picture at all. Here, we second the well-considered view of NLRC, thus
The order of immediate reinstatement pending appeal, in cases of illegal dismissal is an
ancillary relief under R.A. 6715 granted to a dismissed employee to cushion him and his
family against the impact of economic dislocation or abrupt loss of earnings. If the
employee chooses not to report for work pending resolution of the case appeal, he
foregoes such a temporary relief and is not paid of his salary. The final determination of
the rights and obligations respectively of the parties is the ultimate and final resolution of
this Commission.
WHEREFORE, the petition is hereby DISMISSED. The questioned resolutions of the National Labor
Relations Commission are AFFIRMED, and the temporary restraining order issued by this Court is
hereby LIFTED.
SO ORDERED.

G.R. NO. 202791, June 10, 2013

PHILIPPINE TRANSMARINE CARRIERS, INC., Petitioner, v. LEANDRO LEGASPI, Respondent.

DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the January 5,
2012 Resolution1 and July 20, 2012 Resolution2 of the Court of Appeals (CA), in CA-G.R. SP No.
116686, which denied the petitioner's motion to amend the dispositive portion of the June 29, 2011
CA Decision.
The Factual and Procedural Antecedents
Respondent Leandro Legaspi (respondent) was employed as Utility Pastry on board the vessel
"Azamara Journey" under the employment of petitioner Philippine Transmarine Carriers,
Inc. (petitioner). Respondent's employment was covered by a Collective Bargaining
Agreement (CBA) wherein it was agreed that the company shall pay a maximum disability
compensation of up to US$60,000.00 only.
While on board the vessel, respondent suffered "Cardiac Arrest S/P ICD Insertation." He was checked
by the ship's doctor and was prescribed medications. On November 14, 2008, respondent was
repatriated to receive further medical treatment and examination. On May 23, 2009, the companydesignated physician assessed his condition to be Disability Grade 2.
Not satisfied, respondent filed a complaint for full and permanent disability compensation against
petitioner before the Labor Arbiter (LA).
The Labor Arbiter's Ruling
In its January 25, 2010 Decision,3 the LA ruled in favor of respondent, the dispositive portion of which
reads:chanroblesvirtualawlibrary
WHEREFORE, respondents (now petitioner) are hereby ordered to pay complainant jointly and
severally, the following:chanroblesvirtualawlibrary
1. US$80,000.00 or its peso equivalent at the time of payment as permanent disability
compensation;nadcralavvonlinelawlibrary
2. US$1,320.00 or its peso equivalent as sick wages;nadcralavvonlinelawlibrary
3. Attorney's fees equivalent to 10% of the total award.
SO ORDERED.
Notably, the LA awarded US$80,000.00 based on the ITF Cruise Ship Model Agreement for Catering
Personnel, not on the CBA.
Not satisfied, petitioner appealed the LA decision before the National Labor Relations
Commission (NLRC).
The NLRC's Ruling

In its May 28, 2010 Decision, the NLRC affirmed the decision of the LA. Petitioner timely filed its
motion for reconsideration but it was denied by the NLRC in its July 30, 2010 Resolution. On
September 5, 2010, the NLRC issued the Entry of Judgment stating that its resolution affirming the LA
decision had become final and executory.
On October 22, 2010, during the hearing on the motion for execution before the NLRC, petitioner
agreed to pay respondent US$81,320.00. The terms and conditions of said payment were embodied
in the Receipt of Judgment Award with Undertaking, 4 wherein respondent acknowledged receipt of
the said amount and undertook to return it to petitioner in the event the latter's petition
for certiorari would be granted, without prejudice to respondent's right to appeal. It was also agreed
upon that the remaining balance would be given on the next scheduled conference. Pertinent portions
of the said undertaking provide:chanroblesvirtualawlibrary
xxxx
3. That counsel (of the petitioner) manifested their willingness to tender the judgment award without
prejudice to the respondent's (now petitioner) right to file a Petition for Certiorari and provided,
complainant (now respondent) undertakes to return the full amount without need of demand or
a separate action in the event that the Petition for Certiorari is
granted;nadcralavvonlinelawlibrary
4. That complainant's counsel was amenable to the arrangement and accepted the offer. NOW
THEREFORE complainant and his counsel hereby acknowledge RECEIPT of the sum of EIGHTYONE THOUSAND THREE HUNDRED TWENTY AND 0/100 (US$81,320.00) covered by CITIBANK
CHECK with No. 1000001161 dated October 21, 2010 payable to the order of LEANDRO V.
LEGASPI and UNDERTAKES to RETURN the entire amount to respondent PHILIPPINE
TRANSMARINE CARRIERS, INC. in the event that the Petition for Certiorari is granted without
prejudice to complainant's right to appeal. Such undertaking shall be ENFORCEABLE by mere
motion before this Honorable office without need of separate action. 5 [Emphases and underscoring
supplied]
On November 8, 2010, petitioner timely filed a petition for certiorari with the
CA.6chanroblesvirtuallawlibrary
In the meantime, on March 2, 2011, the LA issued a writ of execution which noted petitioner's
payment of the amount of US$81,320.00. On March 16, 2011, in compliance with the said writ,
petitioner tendered to the NLRC Cashier the additional amounts of US$8,132.00 as attorney's fees
and P3,042.95 as execution fee. In its Order, dated March 31, 2011, the LA ordered the release of the
aforementioned amounts to respondent.
The CA's Ruling
Unaware of a) the September 5, 2010 entry of judgment of the NLRC, b) the October 22, 2010
payment of US$81,320.00, and c) the writ of execution issued by the LA, the CA rendered its
Decision, dated June 29, 2011. The CA partially granted the petition for certiorari and modified the
assailed resolutions of the NLRC, awarding only US$60,000.00 pursuant to the CBA between
Celebrity Cruise Lines and Federazione Italianaa Transporti CISL.
Petitioner then filed its Manifestation with Motion to Amend the Dispositive Portion, submitting to the
CA the writ of execution issued by the LA in support of its motion. Petitioner contended that since it

had already paid the total amount of US$89,452.00, it was entitled to the return of the excess
payment in the amount of US$29,452.00.
In its assailed January 5, 2012 Resolution, the CA denied the motion and ruled that the petition
should have been dismissed for being moot and academic not only because the assailed decision of
the NLRC had become final and executory on September 5, 2010, but also because the said
judgment had been satisfied on October 22, 2010, even before the filing of the petition
for certiorari on November 8, 2010. In so ruling, the CA cited the pronouncement in Career
Philippines Ship Management v. Geronimo Madjus 7where it was stated that the satisfaction of the
monetary award rendered the petition for certiorari moot.
Petitioner filed a motion for reconsideration but it was denied by the CA in its assailed July 20, 2012
Resolution.
Hence, this petition.
ISSUES
I.

WHETHER THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE

ERROR OF LAW IN RULING THAT PETITIONER IS ESTOPPED IN COLLECTING
THE EXCESS PAYMENT IT MADE TO THE RESPONDENT NOTWITHSTANDING
THE RECEIPT OF JUDGMENT AWARD SIGNED BY THE RESPONDENT

II.

WHETHER THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE

ERROR IN INVOKING THE RULING OF CAREER V. MADJUS

Petitioner argues that it clearly filed its petition for certiorari within the 60-day reglementary period
and, thus, the NLRC resolutions could not have attained finality. Citing Delima v. Gois,8 petitioner
avers that the NLRC cannot declare that a decision has become final and executory because the
period to file the petition has not yet expired. Petitioner, thus, contends that the finality of the NLRC
judgment did not render the petition moot and academic because such is null and void ab initio.
Petitioner also argues that the Receipt of the Judgment Award with Undertaking, which was never
refuted by respondent, clearly stated that the payment of the judgment award was without prejudice
to its right to file a petition for certiorari with the CA. Petitioner asserts that the case relied upon by the
CA, Career Philippines, is not applicable as it is not on all fours with this case. Instead, it asserts that
the applicable case should be Leonis Navigation Co., Inc. v. Villamater,9 where it was held that the
satisfaction of the monetary award by the employer does not render the petition for certiorari moot
before the CA.
On the other hand, respondent reiterates the CA ruling, asserting that the voluntary satisfaction by
petitioner of the full judgment award rendered the case moot, and insists that it was a clear indication
that it had already been persuaded by the judiciousness and merits of the award for disability
compensation. He also avers that this petition is merely pro-forma as it is a reiteration of petitioner's
previous issues and arguments already resolved by the CA.cralaw lawlibrary
The Court's Ruling
Petition for Certiorari, Not Moot

Section 14, Rule VII of the 2011 NLRC Rules of Procedure provides that decisions, resolutions or
orders of the NLRC shall become final and executory after ten (10) calendar days from receipt thereof
by the parties, and entry of judgment shall be made upon the expiration of the said period. 10 In St.
Martin Funeral Home v. NLRC,11 however, it was ruled that judicial review of decisions of the NLRC
may be sought via a petition for certiorari before the CA under Rule 65 of the Rules of Court; and
under Section 4 thereof, petitioners are allowed sixty (60) days from notice of the assailed order or
resolution within which to file the petition. Hence, in cases where a petition for certiorari is filed after
the expiration of the 10-day period under the 2011 NLRC Rules of Procedure but within the 60-day
period under Rule 65 of the Rules of Court, the CA can grant the petition and modify, nullify and
reverse a decision or resolution of the NLRC.
Accordingly, in this case, although the petition for certiorari was not filed within the 10-day period,
petitioner timely filed it before the CA within the 60-day reglementary period under Rule 65. It has,
thus, been held that the CA's review of the decisions or resolutions of the NLRC under Rule 65,
particularly those which have already been executed, does not affect their statutory finality,
considering that Section 4,12 Rule XI of the 2011 NLRC Rules of Procedure, provides that a petition
for certiorari filed with the CA shall not stay the execution of the assailed decision unless a restraining
order is issued. In Leonis Navigation, it was further written:chanroblesvirtualawlibrary
The CA, therefore, could grant the petition for certiorari if it finds that the NLRC, in its assailed
decision or resolution, committed grave abuse of discretion by capriciously, whimsically, or arbitrarily
disregarding evidence that is material to or decisive of the controversy; and it cannot make this
determination without looking into the evidence of the parties. Necessarily, the appellate court can
only evaluate the materiality or significance of the evidence, which is alleged to have been
capriciously, whimsically, or arbitrarily disregarded by the NLRC, in relation to all other evidence on
record.13 Notably, if the CA grants the petition and nullifies the decision or resolution of the NLRC on
the ground of grave abuse of discretion amounting to excess or lack of jurisdiction, the decision or
resolution of the NLRC is, in contemplation of law, null and void ab initio; hence, the decision or
resolution never became final and executory.14
Career Philippines not applicable
In Career Philippines, believing that the execution of the LA Decision was imminent after its petition
for injunctive relief was denied, the employer filed before the LA a pleading embodying a conditional
satisfaction of judgment before the CA and, accordingly, paid the employee the monetary award in the
LA decision. In the said pleading, the employer stated that the conditional satisfaction of the judgment
award was without prejudice to its pending appeal before the CA and that it was being made only to
prevent the imminent execution.15chanroblesvirtuallawlibrary
The CA later dismissed the employer's petition for being moot and academic, noting that the decision
of the LA had attained finality with the satisfaction of the judgment award. This Court affirmed the
ruling of the CA, interpreting the "conditional settlement" to be tantamount to an amicable settlement
of the case resulting in the mootness of the petition for certiorari, considering (i) that the employee
could no longer pursue other claims,16 and (ii) that the employer could not have been compelled to
immediately pay because it had filed an appeal bond to ensure payment to the employee.
Stated differently, the Court ruled against the employer because the conditional satisfaction of
judgment signed by the parties was highly prejudicial to the employee. The agreement stated that the
payment of the monetary award was without prejudice to the right of the employer to file a petition
for certiorari and appeal, while the employee agreed that she would no longer file any complaint or
prosecute any suit of action against the employer after receiving the payment.

In contrast, in Leonis Navigation, after the NLRC resolution awarding disability benefits became final
and executory, the employer paid the monetary award to the employee. The CA dismissed the
employer's petition for certiorari, ruling that the final and executory decisions or resolutions of the
NLRC rendered appeals to superior courts moot and academic. This Court disagreed with the CA and
held that final and executed decisions of the NLRC did not prevent the CA from reviewing the same
under Rule 65 of the Rules of Court. It was further ruled that the employee was estopped from
claiming that the case was closed and terminated, considering that the employee's Acknowledgment
Receipt stated that such was without prejudice to the final outcome of the petition
for certiorari pending before the CA.
In the present case, the Receipt of the Judgment Award with Undertaking was fair to both the
employer and the employee. As in Leonis Navigation, the said agreement stipulated that respondent
should return the amount to petitioner if the petition for certiorari would be granted but without
prejudice to respondent's right to appeal. The agreement, thus, provided available remedies to both
parties.
It is clear that petitioner paid respondent subject to the terms and conditions stated in the Receipt of
the Judgment Award with Undertaking. 17chanroblesvirtuallawlibrary
Both parties signed the agreement. Respondent neither refuted the agreement nor claimed that he
was forced to sign it against his will.
Therefore, the petition for certiorari was not rendered moot despite petitioner's satisfaction of the
judgment award, as the respondent had obliged himself to return the payment if the petition would be
granted.
Return of Excess Payment
As the agreement was voluntarily entered into and represented a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of mind. 18 Respondent
agreed to the stipulation that he would return the amount paid to him in the event that the petition
for certiorari would be granted. Since the petition was indeed granted by the CA, albeit partially,
respondent must comply with the condition to return the excess amount.
The Court finds that the Receipt of the Judgment Award with Undertaking was a fair and binding
agreement. It was executed by the parties subject to outcome of the petition. To allow now
respondent to retain the excess money judgment would amount to his unjust enrichment to the
prejudice of petitioner.
Unjust enrichment is a term used to depict result or effect of failure to make remuneration of or for
property or benefits received under circumstances that give rise to legal or equitable obligation to
account for them. To be entitled to remuneration, one must confer benefit by mistake, fraud, coercion,
or request. Unjust enrichment is not itself a theory of reconveyance. Rather, it is a prerequisite for the
enforcement of the doctrine of restitution.19 There is unjust enrichment
when:chanroblesvirtualawlibrary
1. A person is unjustly benefited; and
2. Such benefit is derived at the expense of or with damages to another.20
In the case at bench, petitioner paid respondent US$81,320.00 in the pre-execution conference plus

attorney's fees of US$8,132.00 pursuant to the writ of execution. The June 29, 2011 CA Decision,
however, modified the final resolution of the NLRC and awarded only US$60,000.00 to respondent. If
allowed to return the excess, the respondent would have been unjustly benefited to the prejudice and
expense of petitioner.
Petitioner's claim of excess payment is further buttressed by, and in.' line with, Section 14, Rule XI of
the 2011 NLRC Rules of Procedure which provides:chanroblesvirtualawlibrary
EFFECT OF REVERSAL OF EXECUTED .JUDGMENT. Where the executed judgment is totally
or partially reversed or annulled by the Court of Appeals or the Supreme Court, the Labor
Arbiter shall, on motion, issue such orders of restitution of the executed award, except wages paid
during reinstatement pending appeal. [Emphases supplied]
Although the Court has, more often than not, been inclined towards the plight of the workers and has
upheld their cause in their conflicts with the employers, such inclination has not blinded it to the rule
that justice is in every case for the deserving, to be dispensed in the light of the established facts and
applicable law and doctrine.21chanroblesvirtuallawlibrary
WHEREFORE, the petition is GRANTED. The Court of Appeals Resolutions, dated January 5, 2012
and July 20, 2012, are hereby REVERSED and SET ASIDE. Respondent Leandro Legaspi
is ORDERED to return the excess amount of payment in the sum of US$29,452.00 to petitioner
Philippine Transmarine Carriers, Inc. The amount shall earn interest at the rate of 12% per annum
from the finality of this judgment.
SO ORDERED.
PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A.
DE JESUS, respondents.
DECISION
FRANCISCO, J.:
The facts are as follows:
Private respondent Lourdes A. de Jesus is petitioners reviser/trimmer since 1980. As
reviser/trimmer, de Jesus based her assigned work on a paper note posted by petitioners. The posted
paper which contains the corresponding price for the work to be accomplished by a worker is
identified by its P.O. Number. On August 15, 1992, de Jesus worked on P.O. No. 3853 by trimming the
cloths ribs. She thereafter submitted tickets corresponding to the work done to her supervisor. Three
days later, de Jesus received from petitioners personnel manager a memorandum requiring her to
explain why no disciplinary action should be taken against her for dishonesty and tampering of official
records and documents with the intention of cheating as P.O. No. 3853 allegedly required no
trimming. The memorandum also placed her under preventive suspension for thirty days starting from
August 19, 1992. In her handwritten explanation, de Jesus maintained that she merely committed a
mistake in trimming P.O. No. 3853 as it has the same style and design as P.O. No. 3824 which has an
attached price list for trimming the ribs and admitted that she may have been negligent in presuming
that the same work was to be done with P.O. No. 3853, but not for dishonesty or tampering
Petitioners personnel department, nonetheless, terminated her from employment and sent her a
notice of termination dated September 18, 1992.

On September 22, 1992, de Jesus filed a complaint for illegal dismissal against petitioners. The
Labor Arbiter who heard the case noted that de Jesus was amply accorded procedural due process in
her termination from service. Nevertheless, after observing that de Jesus made some further trimming
on P.O. No. 3853 and that her dismissal was not justified, the Labor Arbiter held petitioners guilty of
illegal dismissal. Petitioners were accordingly ordered to reinstate de Jesus to her previous position
without loss of seniority rights and with full backwages from the time of her suspension on August 19,
1992. Dissatisfied with the Labor Arbiters decision, petitioners appealed to the public respondent
National Labor Relations Commission (NLRC). In its July 21, 1994 decision, the NLRC [1] ruled that de
Jesus was negligent in presuming that the ribs of P.O. No. 3853 should likewise be trimmed for
having the same style and design as P.O. No. 3824, thus petitioners cannot be entirely faulted for
dismissing de Jesus. The NLRC declared that the status quo between them should be maintained
and affirmed the Labor Arbiters order of reinstatement, but without backwages. The NLRC further
directed petitioner to pay de Jesus her back salaries from the date she filed her motion for execution
on September 21, 1993 up to the date of the promulgation of [the] decision. [2] Petitioners filed their
partial motion for reconsideration which the NLRC denied, hence this petition anchored substantially
on the alleged NLRCs error in holding that de Jesus is entitled to reinstatement and back salaries. On
March 6, 1996, petitioners filed its supplement to the petition amplifying further their arguments. In a
resolution dated February 20, 1995, the Court required respondents to comment thereon. Private
respondent de Jesus and the Office of the Solicitor General, in behalf of public respondent NLRC,
subsequently filed their comments. Thereafter, petitioners filed two rejoinders [should be replies] to
respondents respective comments. Respondents in due time filed their rejoinders.
These are two interrelated and crucial issues, namely: (1) whether or not de Jesus was illegally
dismissed, and (2) whether or not an order for reinstatement needs a writ of execution.
Petitioners insist that the NLRC gravely abused its discretion in holding that de Jesus is entitled to
reinstatement to her previous position for she was not illegally dismissed in the first place. In support
thereof, petitioners quote portions of the NLRC decision which stated that respondent [petitioners
herein] cannot be entirely faulted for dismissing the complaint [3] and that there was no illegal dismissal
to speak of in the case at bar.[4] Petitioners further add that de Jesus breached the trust reposed in
her, hence her dismissal from service is proper on the basis of loss of confidence, citing as authority
the cases of Ocean Terminal Services, Inc. v. NLRC, 197 SCRA 491; Coca-Cola Bottlers Phil., Inc. v.
NLRC, 172 SCRA 751, and Piedad v. Lanao del Norte Electric Cooperative,[5] 154 SCRA 500.
The arguments lack merit.
The entire paragraph which comprises the gist of the NLRCs decision from where petitioners
derived and isolated the aforequoted portions of the NLRCs observation reads in full as follows:
We cannot fully subscribe to the complainants claim that she trimmed the ribs of PO3853 in
the light of the sworn statement of her supervisor Rebecca Madarcos (Rollo, p. 64) that no
trimming was necessary because the ribs were already of the proper length. The complainant
herself admitted in her sinumpaang salaysay (Rollo, p. 45) that Aking napansin na hindi
pantay-pantay ang lapad ng mga ribs PO3853 - mas maigsi ang nagupit ko sa mga ribs ng
PO3853 kaysa sa mga ribs ng mga nakaraang POs. The complaint being an experienced
reviser/trimmer for almost twelve (12) years should have called the attention of her supervisor
regarding her observation of PO3853. It should be noted that complainant was trying to claim
as production output 447 pieces of trimmed ribs of PO3853 which respondents insists that
complainant did not do any. She was therefore negligent in presuming that the ribs of PO3853
should likewise be trimmed for having the same style and design as PO3824. Complainant
cannot pass on the blame to her supervisor whom she claimed checked the said tickets prior
to the submission to the Accounting Department. As explained by respondent, what the
supervisor does is merely not the submission of tickets and do some checking before

forwarding the same to the Accounting Department. It was never disputed that it is the
Accounting Department who does the detailed checking and computation of the tickets as has
been the company policy and practice. Based on the foregoing and considering that
respondent cannot be entirely faulted for dismissing complainant as the complainant herself
was also negligent in the performance of her job, We hereby rule that status quo between
them should be maintained as a matter of course. We thus affirm the decision of Labor Arbiter
reinstating the complainant but without backwages. The award of backwages in general are
granted on grounds of equity for earnings which a worker or employee has lost due to his
illegal dismissal. (Indophil Acrylic Mfg. Corporation vs. NLRC, G.R. No. 96488 September 27,
1993) There being no illegal dismissal to speak in the case at bar, the award for backwages
should necessarily be deleted.[6]
We note that the NLRCs decision is quite categorical in finding that de Jesus was merely
negligent in the performance of her duty. Such negligence, the Labor Arbiter delineated, was brought
about by the petitioners plain improvidence. Thus:
After careful assessment of the allegations and documents available on record, we are
convinced that the penalty of dismissal was not justified.
At the outset, it is remarkable that respondents did not deny nor dispute that P.O. 3853 has
the same style and design as P.O. 3824; that P.O. 3824 was made as guide for the work done
on P.O. 3853; and, most importantly, that the notation correction on P.O. 3824 was made only
after the error was discovered by respondents Accounting Department.
Be sure that as it may, the factual issue in this case is whether or not complaint trimmed the
ribs of P.O. 3853?
Respondents maintained that she did not because the record in Accounting Department
allegedly indicates that no trimming is to be done on P.O. 3853. Basically, this allegation is
unsubstantiated.
It must be emphasized that in termination cases the burdent of proof rests upon the employer.
In the instant case, respondents mere allegation that P.O. 3853 need not be trimmed does not
satisfy the proof required to warrant complainants dismissal.
Now, granting that the Accounting record is correct, we still believe that complainant did some
further trimming on P.O. 3853 based on the following grounds:
First, Supervisor Rebecca Madarcos who ought to know the work to be performed because
she was in-charged of assigning jobs, reported no anomally when the tickets were submitted
to her.
Incidentally, supervisor Madarcos testimony is suspect because if she could recall what she
ordered the complainant to do seven (7) months ago (to revise the collars and plackets of
shirts) there was no reason for her not to detect the alleged tampering at the time complainant
submitted her tickets, after all, that was part of her job, if not her main job.
Secondly, she did not exceed her quota, otherwise she could have simply asked for more.
That her output was remarkably big granting misinterpreted it is true, is well explained in that
the parts she had trimmed were lesser compared to those which she had cut before.
In this connection, respondents misinterpreted the handwritten explanation of the complainant
dated 20 August 1992, because the letter never admits that she never trimmed P.O. 3853, on
the contrary the following sentence,

Sa katunayan nakapagbawas naman talaga ako na di ko inaasahang inalis na pala ang

presyo ng Sec. 9 P.O. 3853 na ito.
is crystal clear that she did trim the ribs on P.O. 3853.

[7]

Gleaned either from the Labor Arbiters observations or from the NLRCs assessment, it distinctly
appears that petitioners accusation of dishonesty and tampering of official records and documents
with intention of cheating against de Jesus was not substantiated by clear and convincing evidence.
Petitioners simply failed, both before the Labor Arbiter and the NLRC, to discharge the burdent of
proof and to validly justify de Jesus dismissal from service. The law, in this light, directs the
employers, such as herein petitioners, not to terminate the services of an employee except for a just
or authorized cause under the Labor Code. [8] Lack of a just cause in the dismissal from service of an
employee, as in this case, renders the dismissal illegal, despite the employers observance of
procedural due process.[9] And while the NLRC stated that there was no illegal dismissal to speak of
in the case at bar and that petitioners cannot be entirely faulted therefor, said statements are
inordinate pronouncements which did not remove the assailed dismissal from the realm of
illegality. Neither can these pronouncements preclude us from holding otherwise.
We also find the imposition of the extreme penalty of dismissal against de Jesus as certainly
harsh and grossly disproportionate to the negligence committed, especially where said employee
holds a faithful and an untarnished twelve-year service record. While an employer has the inherent
right to discipline its employees, we have always held that this right must always be exercised
humanely, and the penalty it must impose should be commensurate to the offense involved and to the
degree of its infraction.[10] The employer should bear in mind that, in the exercise of such right, what is
at stake is not only the employees position but her livelihood as well.
Equally unmeritorious is petitioners assertion that the dismissal is justified on the basis of loss of
confidence. While loss of confidence, as correctly argued by petitioners, is one of the valid grounds
for termination of employment, the same, however, cannot be used as a pretext to vindicate each and
every instance of unwarranted dismissal. To be a valid ground, it must shown that the employee
concerned is responsible for the misconduct or infraction and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confidence demanded by his position. [11] In
this cae, petitioners were unsuccessful in establishing their accusations of dishonesty and tampering
of records with intention of cheating.Indeed, even if petitioners allegations against de Jesus were
true, they just the same failed to prove that her position needs the continued and unceasing trust of
her employees functions.[12]Surely, de Jesus who occupies the position of a reviser/trimmer does not
require the petitioners perpetual and full confidence. In this regard, petitioners reliance on the cases
of Ocean Terminal Services, Inc. v. NLRC; Coca-Cola Bottlers Phil., Inc. v. NLRC; and Piedad v.
Lanao del Norte Electric Cooperative, which when perused involve positions that require the
employers full trust and confidence, is wholly misplaced. In Ocean Terminal Services, for instance,
the dismissed employee was designated as expediter and canvasser whose responsibility is mainly to
make emergency procurements of tools and equipments and was entrusted with the necessary cash
for buying them. The case of Coca-Cola Bottlers, on the other hand, involves a sales agent whose
job exposes him to the everyday financial transactions involving the employers goods and funds,
while that of Piedad concerns a bill collector who essentially handles the employers cash
collections. Undoubtedly, the position of a reviser/trimmer could not be equated with that of a
canvasser, sales agent, or a bill collector. Besides, the involved employees in the three
aforementioned cases were clearly proven guilty of infractions unlike private respondent in the case
at bar. Thus, petitioners dependence on these cited cases is inaccurate, to say the least. More,
whether or not de Jesus meets the days quota of work she, just the same, is paid the daily minimum
wage.[13]

Corollary to our determination that de Jesus was illegally dismissed is her imperative entitlement
to reinstatement and backwages as mandated by law. [14] Whence, we move to the second issue, i.e.,
whether or not an order for reinstatement needs a writ of execution.
Petitioners theory is that an order for reinstatement is not self-executory. They stress that there
must be a writ of execution which may be issued by the NLRC or by the Labor Arbiter motu proprio or
on motion of an interested party. They further maintain that even if a writ of execution was issued, a
timely appeal coupled by the posting of appropriate supersedeas bond, which they did in this case,
effectively forestalled and stayed execution of the reinstatement order of the Labor Arbiter. As
supporting authority, petitioners emphatically cite and bank on the case of Maranaw Hotel Resort
Corporation (Century Park Sheraton Manila) v. NLRC, 238 SCRA 190.
Private respondent de Jesus, for her part, maintains that petitioners should have reinstated her
immediately after the decision of the Labor Arbiter ordering her reinstatement was promulgated since
the law mandates that an order for reinstatement is immediately executory. An appeal, she says,
could not stay the execution of a reinstatement order for she could either be admitted back to work or
merely reinstated in the payroll without need of a writ of execution. De Jesus argues that a writ of
execution is necessary only for the enforcement of decisions, orders, or awards which have acquired
finality. In effect, de Jesus is urging the Court to re-examine the ruling laid down in Maranaw.
Article 223 of the Labor Code, as amended by R.A. No. 6715 which took effect on March 21,
1989, pertinently provides:
ART. 223. Appeal. --Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. Such appeal maybe entertained only on any of
the following grounds:
xxx xxx xxx
In an event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the option of the employer,
merely reistated in the payroll. The posting of a bond by the employer shall not stay the
execution for reinstatement provided herein.
xxx xxx xxx
We initially interpreted the aforequoted provision in Inciong v. NLRC.[15] The Court[16] made this
brief comment:
The decision of the Labor Arbiter in this case was rendered on December 18, 1988, or three
(3) months before Article 223 of the Labor Code was amended by Republic Act 6715 (which
became law on March 21, 1989), providing that a decision of the Labor Arbiter ordering the
reinstatement of a dismissed or separated employee shall be immediately executory insofar as
the reinstatement aspect is concerned, and the posting of an appeal bond by the employer
shall not stay such execution. Since this new law contains no provision giving it retroactive
effect (Art. 4, Civil Code), the amendment may not be applied to this case.
which the Court adopted and applied in Callanta v. NLRC.[17] In Zamboanga City Water District v.
Buat,[18] the Court construed Article 223 to mean exactly what it says. We said:
Under the said provision of law, the decision of the Labor Arbiter reinstating a dismissed or
separated employee insofar as the reinstatement aspect is concerned, shall be immediately
executory, even pending appeal. The employer shall reinstate the employee concerned either
by: (a) actually admitting him back to work under the same terms and conditions prevailing

prior to his dismissal or separation; or (b) at the option of the employer, merely reinstating him
in the payroll. Immediate reinstatement is mandated and is not stayed by the fact that the
employer has appealed, or has posted a cash or surety bond pending appeal. [19]
We expressed a similar view a year earlier in Medina v. Consolidated Broadcasting System (CBS)
DZWX[20] and laid down the rule that an employer who fails to comply with an order of reinstatement
makes him liable for the employees salaries. Thus:
Petitioners construe the above paragraph to mean that the refusal of the employer to reinstate an
employee as directed in an executory order of reinstatement would make it liable to pay the latters
salaries.This interpretation is correct. Under Article 223 of the Labor Code, as amended, an employer
has two options in order for him to comply with an order of reinstatement, which is immediately
executory, even pending appeal. Firstly, he can admit the dismissed employee back to work under the
same terms and conditions prevailing prior to his dismissal or separation or to a substantially
equivalent position if the former position is already filled up as we have ruled in Union of Supervisors
(RB) NATU vs. Sec. of Labor, 128 SCRA 442 [1984]; and Pedroso vs. Castro, 141 SCRA 252
[1986]. Secondly, he can reinstate the employee merely in the payroll. Failing to exercise any of the
above options, the employer can be compelled under pain of contempt, to pay instead the salary of
the employee. This interpretation is more in consonance with the constitutional protection to labor
(Section 3, Art. XIII, 1987 Constitution). The right of a person to his labor is deemed to be property
within the meaning of the constitutional guaranty that no one shall be deprived of life, liberty, and
property without due process of law. Therefore, he should be protected against any arbitrary and
unjust deprivation of his job (Bondoc vs. Peoples Bank and Trust Co., Inc., 103 SCRA 599
[1981]). The employee should not be left without any remedy in case the employer unreasonably
delays reinstatement. Therefore, we hold that the unjustified refusal of the employer to reinstate an
illegally dismissed employee entitles the employee to payment of his salaries x x x. [21]
The Court, however, deviated from this construction in the case of Maranaw. Reinterpreting the
import of Article 223 in Maranaw, the Court[22] declared that the reinstatement aspect of the Labor
Arbiters decision needs a writ of execution as it is not self-executory, a declaration the Court recently
reiterated and adopted in Archilles Manufacturing Corp. v. NLRC.[23]
We note that prior to the enactment of R.A. No. 6715, Article 223 [24] of the Labor Code contains
no provision dealing with the reinstatement of an illegally dismissed employee. The amendment
introduced by R.A. No. 6715 is an innovation and a far departure from the old law indicating therby
the legislatures unequivocal intent to insert a new rule that will govern the reinstatement aspect of a
decision or resolution in any given labor dispute. In fact, the law as now worded employs the phrase
shall immediately be executory without qualification emphasizing the need for prompt compliance. As
a rule, shall in a statute commonly denotes an imperative obligation and is inconsistent with the idea
of discretion[25] and that the presumption is that the word shall, when used in a statute, is mandatory.
[26]
An appeal or posting of bond, by plain mandate of the law, could not even forestall nor stay the
executory nature of an order of reinstatement. The law, moreover, is unambiguous and clear. Thus, it
must be applied according to its plain and obvious meaning, according to its express terms. In GlobeMackay Cable and Radio Corporation v. NLRC,[27] we held that:
Under the principles of statutory construction, if a statute is clear, plain and free from ambiguity, it
must be given its literal meaning and applied without attempted interpretation. This plain-meaning rule
or verba legis derived from the maxim index animi sermo est (speech is the index of intention) rests
on the valid presumption that the words employed by the legislature in a statute correctly express its
intent by the use of such words as are found in the statute. Verba legis non est recedendum, or from
the words of a statute there should be no departure. [28]

And in conformity with the executory nature of the reinstatement order, Rule V, Section 16 (3) of the
New Rules of Procedure of the NLRC strictly requires the Labor Arbiter to direct the employer
to immediately reinstate the dismissed employee. Thus:
In case the decision includes an order of reinstatement, the Labor Arbiter shall direct the employer to
immediately reinstate the dismissed or separated employee even pending appeal. The order of
reinstatement shall indicate that the employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll.
In declaring that reinstatement order is not self-executory and needs a writ of execution, the
Court, in Maranaw, adverted to the rule provided under Article 224. We said:
It must be stressed, however, that although the reinstatement aspect of the decision
is immediately executory, it does not follow that it is self-executory. There must be a writ of
execution which may be issued motu proprio or on motion of an interested party. Article 224
of the Labor Code provides:
ART. 224. Execution of decisions, orders or awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter
or voluntary arbitrator may, motu propio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it becomes final and executory
(emphasis supplied)
The second paragraph of Section 1, Rule VIII of the New Rules of Procedure of the NLRC
also provides:
The Labor Arbiter, POEA Administrator, or the Regional Director, or his duly authorized hearing officer
of origin shall, motu propio or on motion of any interested party, issue a writ of execution on a
judgment within five (5) years from the date it becomes final and executory . No motion for execution
shall be entertained nor a writ be issued unless the Labor Arbiter is in possession of the records of
the case which shall include an entry of judgment. (emphasis supplied)
xxx xxx xxx
In the absence them of an order for the issuance of a writ of execution on the reinstatement
aspect of the decision of the Labor Arbiter, the petitioner was under no legal obligation to
admit back to work the private respondent under the terms and conditions prevailing prior to
her dismissal or, at the petitioners option, to merely reinstate her in the payroll. An option is a
right of election to exercise a privilege, and the option in Article 223 of the Labor Code is
exclusively granted to the employer. The event that gives rise for its exercise is not the
reinstatement decree of a Labor Arbiter, but the writ for its execution commanding the
employer to reinstate the employee, while the final act which compels the employer to
exercise the option is the service upon it of the writ of execution when, instead of admitting
the employee back to his work, the employer chooses to reinstate the employee in the
payroll only. If the employer does not exercise this option, it must forthwith admit the
employee back to work, otherwise it may be punished for contempt. [29]
A closer examination, however, shows that the necessity for a writ of execution under Article 224
applies only to final and executory decisions which are not within the coverage of Article 223. For
comparison, we quote the material portions of the subject articles:
ART. 223. Appeal. x x x

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein.
xxx xxx xxx
ART. 224. Execution of decisions, orders, or awards. --(a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter
or voluntary arbitrator may, motu propio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it becomes final and
executory, requiring a sheriff or a duly deputized officer to execute or enforce final
decicions, orders or awards of the Secretary of Labor and Employment or regional director,
the Commission, the arbiter or med-arbiter, or voluntary arbitrators. In any case, it shall be
the duty of the responsible officer to separately furnish immediately the counsels of record
and the parties with copies of said decisions, orders or awards. Failure to comply with the
duty prescribed herein shall subject such responsible officer to appropriate administrative
sanctions."
Article 224 states that the need for a writ of execution applies only within five (5) years from the
date a decision, an order or awards becomes final and executory. It cannot relate to an award or
order of reinstatement still to be appealed or pending appeal which Article 223 contemplates. The
provision of Article 223 is clear that an award for reinstatement shall be immediately executory
even pending appeal and the posting of a bond by the employer shall not stay the execution
for reinstatement. The legislative content is quite obvious, i.e., to make an award of reinstatement
immediately enforceable, even pending appeal. To require the application for and issuance of a writ of
execution as prerequisites for the execution of a reinstatement award would certainly betray and run
counter to the very object and intent of Article 223, i. e., the immediate execution of a reinstatement
order. The reason is simple. An application for a writ of execution and its issuance could be delayed
for numerous reasons. A mere continuance or postponement of a scheduled hearing, for instance, or
an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ
thereby setting at naught the strict mandate and noble purpose envisioned by Article 223. In other
words, if the requirements of Article 224 were to govern, as we so declared in Maranaw, then the
executory nature of a reinstatement order or award contemplated by Article 223 will be unduly
circumscribed and rendered ineffectual. In enacting the law, the legislature is presumed to have
ordaineda valid and sensible law, one which operates no further than may be necessary to achieve its
specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved
and the evil sought to be remedied. [30] And where statues are fairly susceptible of two or more
construction, that construction should be adopted which will most tend to give effect to the manifest
intent of the law maker and promote the object for which the statute was enacted, and a construction
should be rejected which would tend to render abortive other provisions of the statute and to defeat
the object which the legislator sought to attain by its enactment. [31] In introducing a new rule on the
reinstatement aspect of a labor decision under R.A. No. 6715, Congress should not be considered to
be indulging in mere semantic exercise. On appeal, however, the appellate tribunal concerned may
enjoin or suspend the reinstatement order in the exercise of its sound discretion.
Furthermore, the rule is that all doubts in the interpretation and implementation of labor laws
should be resolved in favor of labor. In ruling that an order or award for reinstatement does not
require a writ of execution the Court is simply adhering and giving meaning to this rule. Henceforth,
we rule that an award or order for reinstatement is self-executory. After receipt of the decision or
resolution ordering the employee's reinstatement, the employer has the right to choose whether to readmit the employee to work under the same terms and conditions prevailing prior to his dismissal or

to reinstate the employee in the payroll. In either instance, the employer has to inform the employee
of his choice. The notification is based on practical considerations for without notice, the employee
has no way of knowing if he has to report for work or not.
WHEREFORE, the petition is DENIED and the decision of the Labor Arbiter is hereby
REINSTATED.
Costs against petitioner.
SO ORDERED.