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Reinstatement

(Local 7, Press & Printing Free Workers v. Tabigne, G.R. No. L-16093,
[November 29, 1960], 110 PHIL 276-284)

WHEN ORDER FOR REINSTATEMENT BECOMES FINAL. — An order


of reinstatement, unlike an award, becomes final upon the expiration of
the time to appeal, as it finally disposes of the pending action, so that
nothing more can be done with it in the trial court (Mejia vs. Alimurong, 4
Phil., 573; Olsen & Olsen Co. vs. Olsen, 48 Phil., 238; I Moran, Comments on
the Rules of Court [1952 Ed.] 894-895).|||

G.R. No. L-13778 April 29, 1960

PHILIPPINE EDUCATION CO., INC., petitioner,


vs.
UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF
INDUSTRIAL RELATIONS,respondents.

Ernesto Carpio and other employees of the company, members of the


Union of Philippine Education Employees (NLU) joined a strike staged on
January 16, 1953. After the labor dispute was settled, the Industrial Court
ordered the reinstatement of the strikers, including Carpio. The company,
however, opposed the reinstatement of Carpio for the reason that a
criminal complaint had been filed against him in the Municipal Court of
Manila for theft of magazines allegedly belonging to the company. He
was convicted and sentenced to two months and one day of arresto
mayor. On appeal to the Court of First Instance, Carpio was acquitted on
the ground of reasonable doubt.

In the case of National Labor Organization of Employees and Laborers vs.


Court of Industrial Relations, 95 Phil., 727; Off. Gaz. (9) 4219, we said:

. . . the acquittal of a employee in a criminal case is no bar to the


Court of Industrial Relations, after proper hearing, finding the same
employee guilty of facts inimical to the interests of his employer and
justifying loss of confidence in him by said employer, thereby
warranting his dismissal or the refusal of the Company to reinstate
him. The reason for this is not difficult to see. The evidence required
by law to establish guilt and to warrant conviction in a criminal case
substantially differs from the evidence necessary to establish
responsibility or liability in a civil or non-criminal case. The difference
is in the amount and weight of evidence and also in degree. In a
criminal case, the evidence or proof must be beyond reasonable
doubt while in a civil or non criminal case it is merely
preponderance of evidence. In further support of this principle we
may refer to Art. 29 of the New Civil Code (Rep. Act 386) which
provides that when the accused in a criminal case is acquitted on
the ground of reasonable doubt a civil action for damages for the
same act or omission may be instituted where only a
preponderance of evidence is necessary to establish liability. From
all this it is clear that the Court of Industrial Relations was justified in
denying the petition of Rivas and Tolentino for reinstatement in the
cement company, because of their illegal possession of hand
grenades intended by them for purposes of sabotage in
connection with the strike on March 16, 1952.

In the case of National Labor Union vs. Standard Vacuum Oil Company,
73 Phil., 279, the City Fiscal refused to prosecute two employees charged
with theft for lack of evidence and yet this Tribunal upheld their dismissal
from the employer company on the ground that their employer had
ample reason to distrust them.

In the present case, Carpio was refused reinstatement not because of any
union affiliation or activity or because the company has been guilty of
any unfair labor practice. As already stated, Carpio was convicted in the
Municipal Court and although he was acquitted on reasonable doubt in
the Court of First Instance, the company had ample reason to distrust him.
Under the circumstances, we cannot in conscience require the company
to reemploy or reinstate him.

||| (Hind Sugar Co., Inc. v. Court of Industrial Relations, G.R. No. L-13364,
[July 26, 1960], 108 PHIL 1026-1037)

1. COURT OF INDUSTRIAL RELATIONS; JURISDICTION; POWER OF


ARBITRATION AND REINSTATEMENT UNDER INDUSTRIAL PEACE ACT. —
Under section 10 of the Industrial Peace Act the Court of Industrial
Relations is empowered when a strike has been referred to it by the
President of the Philippines, to issue an order "fixing the terms and
conditions of employment." This clause is broad enough to authorize
the Court to order the return to work not only of the actual workers
who were so at the time of the strike but all other regular workers of the
company, even though not actually at work or working during the day
of the strike because they are seasonal workers. In other words, the
Court of Industrial Relations under Section 10 of the Industrial Peace
Act may, as a solution to a strike, order the reinstatement of workers
whether on strike or not, and whether permanent or seasonal, as a
condition for the settlement of the strike. This power
of reinstatement being clearly implied in the express authority granted
in the aforesaid section of the law.
2. ID.; ID.; ID.; WHEN AGREED BY THE PARTIES TO SUBMIT QUESTION
OF REINSTATEMENT; ESTOPPEL. — When the parties in a case before the
Court of Industrial Relations expressly agreed that the matter of
the reinstatement of workers be submitted for resolution of the Court,
they are estopped from denying the power and jurisdiction of said
court to make the corresponding decision or resolution on the matter
submitted to it.
|||

(National Rice and Corn Corp. v. Henson, G.R. No. L-15093, [July 30, 1960],
109 PHIL 81-93)

1. EMPLOYER AND EMPLOYEE; DISMISSAL AND REINSTATEMENT;


ENFORCEMENT OF AGREEMENT FOR REINSTATEMENTOF LAID-OFF
EMPLOYEES. — When petitioner laid of respondent employees in the
instant case, it did so under its obligation to comply with the conditions
laid down in the decision of the Court of Industrial Relations, approving
the agreement on the lay- off, namely, to reemploy them before
taking in new employees, upon the recall of the 19th BCT soldiers. Its
obligation arose when the latter were recalled. It failed to comply with
said obligation when it employed new ones upon the recall of said
soldiers, which obligation is enforceable by the court itself (Section
14, Commonwealth Act No. 103, as amended).
2. ID.; ID.; ID.; ORDER FOR REINSTATEMENT BASED ON TESTIMONY
OF SOME OF THE EMPLOYEES LAID OFF. — The order of the Court of
Industrial Relations for the reinstatement of the forty-one security
guards and the payment of their back salaries, can not be assailed on
the ground that only two of respondents' witnesses testified. The
present case is different from that of Dimayuga, et al., vs. Court of
Industrial Relations, et al., 101 Phil., 290, because here respondents'
claim for reinstatementis based on a court mandate as stated in the
decision of the Court of Industrial Relations, finding the dismissal of the
security guards merely temporary and directing their reemployment as
soon as possible. The respondents, therefore, did not have to prove
their claim, and the testimony of two witnesses was sufficient.
3. ID.; ID.; ID.; TIME WITHIN WHICH TO FILE PETITION
FOR REINSTATEMENT. — As respondents' right to reinstatementarose on
September 27, 1955, when the BCT soldiers were recalled, and their
petitions for reinstatement were filed on February 12 and 18, 1958, the
said petitions were not filed out of time, pursuant to Section 17
of Commonwealth Act No. 103, as amended.

||| (Sampaguita Pictures, Inc. v. Court of Industrial Relations, G.R. No. L-


16404, [October 25, 1960], 109 PHIL 816-819)

COURT OF INDUSTRIAL RELATIONS; JURISDICTION; OVERTIME PAY;


EMPLOYER- EMPLOYEE RELATIONSHIP OFREINSTATEMENT. — When the
complaint involves the recovery of wages for overtime services
rendered by an employee or laborer the Court of Industrial Relations
has exclusive jurisdiction to act thereon if it appears that there exists
between the claimant and respondent an employer-employee
relationship, or if such no longer exists, if the complaint includes
a prayer forreinstatement to the service.

G.R. No. L-15363 July 31, 1961

NATIONAL LABOR UNION, petitioner,


vs.
INSULAR-YEBANA TOBACCO CORPORATION, respondent.

In a proceeding for the trial of charges of unfair labor practice,


prosecuted in accordance with Section 5 of Republic Act No. 875,
pertinent portions of which are as quoted above, can the court grant a
remedy such as reinstatement and back pay, even if the complaint is to
be dismissed because the unfair labor practice alleged to have been
committed has not been proved or found to exist?

In conformity with the principles above expressed, we hold that the


cases at bar having been instituted expressly as unfair labor practice
cases, pursuant to Section 5 of the Industrial Peace Act, and no unfair
labor practice having been proved to have committed, the Court of
Industrial Relations has no power to grant remedy under its general
powers of mediation and conciliation, such as reinstatement or back
wages, but must limit itself to dismissing the charges of unfair labor
practice. Conformably thereto, we hold that the majority of the court
below correctly dismissed the charges, without considering the merits of
the claim of the two employees, Juan Torres and Dominador Gonzales, for
reinstatement.

(Southwestern Sugar & Molasses, Inc. v. Court of Industrial Relations, G.R.


No. L-17219, [August 29, 1961], 112 PHIL 956-959)

COURTS; COURT OF INDUSTRIAL RELATIONS; JURISDICTION; MONEY CLAIMS


OF LABORERS WHEN REINSTATEMENT IS NOT SOUGHT. — Where the
employer- employee relationship is still existing or is sought to be
reestablished because of its wrongful severance, as where the employee
seeks reinstatement, the Court of Industrial Relations has jurisdiction over
all claims arising out of, or in connection with employment, such as those
related to the Minimum Wage Law and the Eight-Hour Labor Law. After
the termination of the relationship and no reinstatement is sought, such
claims become mere money claims and come within the jurisdiction of
the regular courts (Price Stabilization Corporation vs. Court of Industrial
Relations, et al., 108 Phil., 134).|||

(GSIS v. Court of Industrial Relations, G.R. No. L-17186, [October 31, 1961],
113 PHIL 426-431)

PETITION FOR REINSTATEMENT COGNIZABLE BY COURT OF INDUSTRIAL


RELATIONS. — Although the dismissed employee of the GSIS could not file
his petition for reinstatement as an incidental motion in the pending case,
his petition for reinstatement is still cognizable by the Court of Industrial
Relations as he is seeking reinstatement.

|| (Philippine American Drug Co. v. Court of Industrial Relations, G.R. No.


L-15162, [April 18, 1962], 114 PHIL 862-865)

EMPLOYER AND EMPLOYEE; REINSTATEMENT TO POSITION NOT PREVIOUSLY


HELD BY DISMISSED EMPLOYEE. — The Court of Industrial Relations cannot
order reinstatement of a dismissed employee to a position which he had
not previously occupied. The dismissed employee should be restored to
his former position or to substantially equivalent employment.
PREFERENTIAL RIGHT TO EMPLOYMENT. — The preferential right to
employment, a lesser right than reinstatement, cannot include
appointment to a position higher than that formerly occupied by the laid-
off employee.

The issue is: Does a dismissed employee's preferential right to


reemployment include appointment to a position higher than that which
he had lost?
The position of Legaspi branch manager was higher than that of sales
supervisor. 1
Unquestionably, petitioner had suffered a business recession which
rendered unjustified Cuadra's reinstatement on March 1957 — a remedy
to which he would ordinarily have been entitled. So he was merely
given a priority right to be employed should petitioner subsequently
employ additional personnel. A preferential right to employment is a lesser
privilege than reinstatement; it is reinstatement contingent upon
availability of work.

It is a settled rule that the Industrial Court cannot order reinstatement of a


dismissed employee to a position which he had not previously
occupied. 2 All that is required is that the dismissed employee be restored

1
While there is no admission that the office of branch manager is higher than that of sales supervisor, there
is no claim that they are equal. Respondent court avers that it had not impliedly ruled that a Manila sales
supervisor is of the same category as a provincial branch manager (page 4, respondent court's answer),
somehow, leaving the impression that they are not exactly of the same class. On the other hand, Cuadra
claims "that the position of sales supervisor is almost equivalent to the position of branch manager (page 2,
respondent Cuadra's answer). "Almost" means nearly; in large part; well-nigh; little short of (Webster's
International Dictionary, 2nd ed., unabridged). So sales supervisor is not quite equal to a provincial branch
manager even with reference to petitioner's organizational set-up. Note that Cuadra, when he was Davao
general manager, received P650 a month, but only P600 a month when was sales supervisor. (Cuadra was
formerly Davao general manager, but he resigned on January 20, 1951, because he was being demoted to
salesman. Petitioner reemployed him as sales supervisor on July 9, 1951).|||

2
San Miguel Brewery, Inc. vs. Santos, G.R. No. L-12682, August 31, 1961. — The Court (citing 36
Words & Phrases, Perm. ed., 730) definedreinstatement as reforestation to state from which one
has been removed or separated, and consequently declared that one who had been dismissed
from the position of temporary guard may be reinstated to the same, but not to the position of
permanent guard (which, though not stated, appears to be of higher category, considering the
tenure).
to his former position or to substantially equivalent employment.
If reinstatement, as defined, does not cover appointment to a higher
position (otherwise it would be a misnomer), then the preferential right to
employment, a lesser right, certainly cannot include appointment to a
position higher than that formerly occupied by the laid-off employee.

[G.R. No. L-17905. May 25, 1962.]


IGNACIO CAMPOS, ET AL., Petitioners, v. MANILA RAILROAD COMPANY, ET
AL., Respondents.
Jose C. Espinas, for Petitioners.

COURT OF INDUSTRIAL RELATIONS; JURISDICTION; CLAIMS FOR


REINSTATEMENT WITH BACK WAGES; JURISDICTION RESTATED. — In order
that the Court of Industrial Relations may acquire jurisdiction over a
controversy in the light of Republic Act No. 875, the following
circumstances must be present: (a) There must exist between the parties
an employer-employee relationship, or the claimant must seek his
reinstatement; and (b) the controversy must relate to a case certified by
the President to the CIR as one involving national interest or must have a
bearing on an unfair labor practice charge, or must arise either under the
Eight-Hour Labor Law, or under the Minimum Wage Law. In default of any
of these circumstances, the claim becomes a mere money claim that
comes under the jurisdiction of the regular courts.

||| (Malaya Workers Union v. Court of Industrial Relations, G.R. Nos. L-


17880 and L-17881, [April 23, 1963], 117 PHIL 708-711)

1. COURT OF INDUSTRIAL RELATIONS; AUTHORITY TO


ORDER REINSTATEMENT IN AN UNFAIR LABOR PRACTICE CASE. — In an
unfair labor practice case where the Court of Industrial Relations makes
no finding that the employee had been discriminatorily dismissed, the
court has no power to order reinstatement. The court should simply dismiss
the case.
2. ID.; ID.; EXERCISE OF POWERS OF ARBITRATION AND CONCILIATION IN
AN UNFAIR LABOR PRACTICE CASE. — The authority of the Court of
Industrial Relations to order reinstatement under Commonwealth Act
103 is confined to instances covered thereby, i.e., when the court is
exercising its power of arbitration and conciliation. In unfair labor practice
cases, which are distinctive proceedings prosecuted like criminal offenses,
the Industrial Court is inhibited from exercising its powers of arbitration and
conciliation.

(Vda. de Gallardo v. Corominas, Richards Navigation Co., Inc., G.R. No. L-


17453, [December 26, 1963], 119 PHIL 67-69)

COURT OF INDUSTRIAL RELATIONS; JURISDICTION; EMPLOYEE'S CLAIM


FOR REINSTATEMENT AND ALL CLAIMS CONNECTED THEREWITH. — Where
an employee seeks reinstatement to the office from which he claims to
have been wrongfully discharged, the Court of Industrial Relations is the
one vested with jurisdiction over all claims arising out of, or in connection
with the employment.

(GSIS Employees' Association v. Government Service Insurance System,


G.R. No. L-18561, [December 26, 1963])

COURT OF INDUSTRIAL RELATIONS; APPEAL FROM ORDER STAYING


EXECUTION OF JUDGMENT DIRECTING REINSTATEMENT; DISMISSAL OF
APPEAL UPON REINSTATEMENT OF EMPLOYEE. — Where a judgment of the
Court of Industrial Relations (CIR), among other things,
directed reinstatement of an employee, who, upon reporting for work
and refusal by his employer to accept him, filed motion for execution of
said judgment citing Sec. 14, C.A. 103, as amended, and upon opposition
by the employer, the CIR stayed execution of judgment, but subsequently
said employer reinstated said employee, and from an order of the CIR
directing payment of back wages due said employee from the date he
should have been reinstated up to the date of his actual reinstatement,
the employer has appealed, it is held that, without passing upon the
legality of the award of said back wages pending appeal, the petition for
a writ of certiorari to review the order denying the motion for execution
should be dismissed.|||
(Cromwell Commercial Employees and Laborers Union v. Court of
Industrial Relations, G.R. No. L-19778, [September 30, 1964], 120 PHIL 918-
937)

1. COURT OF INDUSTRIAL RELATIONS; UNFAIR LABOR PRACTICE CASES;


POWER TO ORDER REINSTATEMENT OF STRIKERS WITH OR WITHOUT
BACKPAY; TWO TYPES OF EMPLOYEES INVOLVED. — Two types of
employees involved in unfair labor practice cases should be distinguished,
namely, those who were discriminatorily dismissed for union activities and
those who voluntarily went on strike even if it is in protest of an
unfair labor practice. Both types of employees are entitled
to reinstatement.
2. ID.; ID.; ID.; EXCEPTION TO RULE; EMPLOYEES GUILTY OF UNLAWFUL
CONDUCT OF VIOLENCE. — From the rule that employees who strike
because of unfair labor practice are entitled to reinstatement, however,
must be excepted those who, although discriminatorily discharged, must
nevertheless be denied reinstatement because of (1) unlawful conduct or
(2) because of violence.
3. ID.; ID.; ID.; ID.; C.I.R. TO DETERMINE EFFECT OF MISCONDUCT OF
STRIKERS. — It is not for the Supreme Court to judge the effect of
misconduct by the striking employees. That is primarily for the Court of
Industrial Relations to determine.
4. ID.; ID.; ID.; ID.; C.I.R. TO DETERMINE WHETHER STRIKERS WHO FOUND
OTHER EMPLOYMENT SHOULD BE REINSTATED. — It is for the Court of
Industrial Relations to determine primarily whether to
deny reinstatement to those of the strikers who might have found
substantial employment elsewhere.
5. ID.; ID.; ID.; DISCRIMINATORILY DISMISSED EMPLOYEES TO RECEIVE
BACKPAY. — Discriminatorily dismissed employees receive back pay from
the date of the act of discrimination, that is from the day of their
discharge.
6. ID.; ID.; ID.; VOLUNTARY STRIKERS NOT ENTITLED TO BACKPAY. — Those
employees who voluntarily went on strike even if in protest against what
they considered unfair labor practices of the company are not entitled to
backpay. The stoppage of their work was not the direct consequence of
the company's unfair labor practice. Hence, their economic loss should
not be shifted to the employer. (See Dinglasan vs. National Labor Union,
106 Phil., 671).
7. ID.; ID.; ID.; OFFER TO RETURN TO WORK MUST BE UNCONDITIONAL TO
ENTITLE STRIKERS TO BACKPAY UPON REFUSAL OF EMPLOYER TO READMIT
THEM. — To be effective so as to entitle the strikers to backpay, the offer
must have been unconditional. The strikers must have offered to return to
work under the same conditions under which they worked just before their
strike so that the company's refusal would have placed on the latter the
blame for their economic loss.
8. LABOR RELATIONS; HALF BACK WAGES TO REINSTATED EMPLOYEES HELD
PROPER WHILE THEIR ACTS ARE NOT FULLY JUSTIFIED. — Half backwages
instead of full backwages to some of the reinstated employees is proper
where said employees who were salesmen were not exactly justified in
refusing to turn over their collections to the company.
9. ID.; NO BACKPAY IN VOLUNTARY STRIKE EVEN IF IN PROTEST AGAINST
UNFAIR LABOR PRACTICE; EXCEPTION WHERE STRIKERS ABANDON STRIKE
BUT ARE REFUSED REINSTATEMENT. — Those who strike voluntarily, even if in
protest of unfair labor practice, are entitled to backpay only, when the
strikers abandon the strike and apply for reinstatement despite the
unfair labor practice and the employer either refuses to reinstate them or
imposes upon their reinstatement new conditions that constitutes
unfair labor practice.

||| (Diwa ng Pagkakaisa-PAFLU v. Filtex International Corp., G.R. Nos. L-


23960 & L-23961 (Resolution), [February 26, 1968], 130 PHIL 783-786)
|||
1. CONTEMPT OF COURT; REFUSAL TO OBEY COURT'S ORDER DUE TO
GROUNDLESS FEARS OF VIOLATING LABOR LAWS. — Filtex's admitted
failure and refusal to obey this Court's order for it to
reinstate, pending appeal, the strikers-members of petitioner union not
found by the Court of Industrial Relations in its decision as responsible for
the strike, due to its groundless fears of violating labor laws, constitutes
contempt of court.
2. EMPLOYER-EMPLOYEE: DISMISSAL OF STRIKERS' REPLACEMENT DUE
TO REINSTATEMENT OF STRIKERS, ALLOWABLE. — Dismissal of strikers'
replacements, due to court's reinstatement order of strikers, is legal, as
their hiring was subject to the outcome of the present suit or subject to the
herein order. Said workers must be deemed to have accepted their
employment as replacements with the knowledge that the same is
subject to the consequences of the labor dispute between the strikers
and the company.

||| (Lina v. Purisima, G.R. No. L-39380, [April 14, 1978], 172 PHIL 328-344)
|||Petitioner was summarily removed from office by respondent bank for
being notoriously undesirable. The Office of the President denied
her Appeal. Her subsequent complaint for mandamus filed with the Court
of First Instance was dismissed for lack of jurisdiction, the trial court alleging
that since removal of petitioner was pursuant to a Letter of Instruction
issued under Proclamation 1081, the validity or legality of said act was
beyond the power of the courts to review, much less modify or reverse, as
expressly provided in General Order No. 3. Instant petition was thus filed
and after the case was submitted in decision, respondent issued an
administrative order for petitioner's reinstatement with back salaries,
allowances, and reimbursement of all incidental expenses without
prejudice to the outcome of the case. This notwithstanding, petitioner
failed to report back to work and insisted on the final adjudication of her
claim for moral and exemplary damages.
The Supreme Court ruled that General Order No. 3 and its amendments
have always been deemed as practically inoperative because it is for the
Courts rather than the Executive to determine whether or not the Courts
may take cognizance of any given case involving the validity of acts of
the Executive Department purportedly done under authority of the martial
law proclamation. The Supreme Court rendered judgment on the merits
holding that the petitioner was not entitled to more than what
respondents were willing to concede, and her obstinate refusal to report
for duty after respondents insistently reiterated their conformity to her
other demands, has deprived her of legal and equitable basis for
additional relief of moral and exemplary damages.
MAKASIAR, J., dissenting:
1. LABOR LAW; DISMISSAL; VOLUNTARY ORDER
FOR REINSTATEMENT PENDING HEARING; FAILURE TO REPORT BACK TO
WORK TANTAMOUNT TO ABANDONMENT OF OFFICE. — A dismissed
employee who fails to report back to work for over one year from the
issuance by his employer of his order for reinstatement and payment of
back salaries and expenses for litigation without prejudice to the outcome
of the pending case between them, is deemed to have abandoned his
position or office and should not be reinstated; or if reinstated, he should
not be allowed back salaries, much less moral and exemplary damages, if
there is no proof of bad faith on the part of the employer.

||

(Razon v. Inciong, G.R. No. 51809, [December 19, 1980], 189 PHIL 561-564)
Private respondent filed with the Department of Labor an application to
terminate the services of the petitioner while petitioner in turn filed a
complaint for illegal dismissal which proceeded to compulsory arbitration.
The Labor Arbiter ruled that petitioner was not guilty of the charges
against him but did not order reinstatement; instead, he ordered that
petitioner be paid separation pay equivalent to his salary from the date of
his dismissal to the decision. On appeal by respondent company to the
National LaborRelations (NLRC), the latter modified the decision by
requiring payment of a separation pay equivalent to one-half month pay
for every year of service. Because of the reduction of separation pay,
petitioner appealed to the Secretary of Labor praying inter alia that the
NLRC decision "be reviewed, reconsidered and reversed specifically on
the denial of reinstatement and backwages." Said appeal was dismissed.
On review by certiorari, the Supreme Court ordered the reinstatement of
the petitioner with backwages from the time of his dismissal to the time
of reinstatement and ruled that while petitioner did not appeal the ruling
of the Labor Arbiter, the principle ofres judicata may not be invoked
in labor relations proceedings.
Appealed orders reversed.
1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS;
NATIONAL LABOR RELATIONS COMMISSION; PETITIONER FOUND NOT
GUILTY OF CHARGES, ORDERED REINSTATED WITH BACKWAGES; CASE AT
BAR. — Where respondent company which employed the petitioner as
Supervisor of the Cathode Ray Tube (CRT) Department filed with the
Department of Labor an application to terminate his services because of
alleged animosities between petitioner on the one hand and his
colleagues, supervisors and subordinates on the other hand, while
petitioner in turn filed with the Department of Labor a complaint for illegal
dismissal, and the decision of theLabor Arbiter states the petitioner is not
guilty of the charges levelled against him and this was implicitly confirmed
by the NationalLabor Relations Commission in its resolution, the Supreme
Court ordered private respondent to reinstate the petitioner with
backwages from the time of his dismissal to the time of his reinstatement.
2. ID.; ID.; NATIONAL LABOR RELATIONS COMMISSION PROCEDURES;
NATURE OF PROCEEDINGS; PRINCIPLE OF RES JUDICATANOT APPLICABLE.
— While it is true that the petitioner did not appeal the ruling of
the Labor Arbiter that he was not entitled toreinstatement, hence he did
raise the question in his appeal to the Secretary of Labor, the principle
of res judicata may not be invoked considering that labor relations
proceedings are "non-litigation and summary in nature, without regard to
legal technicalities obtaining in courts of law." (Rule XIII, Sec. 5,
Implementing Regulations of the Labor Code).
\

(Philippines Daily Express Publishing Corp. v. Ople, G.R. No. L-56339,


[January 31, 1984], 212 PHIL 343-345)

1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;


PERFORMANCE OF UNATHORIZED JOB; REINSTATEMENTWITHOUT
BACKWAGES PROPER IN VIEW OF THE RELEVANT FACTS IN THE CASE AT
BAR. — Considering the relevant facts, particularly the immediate return
of the P200, the ends of justice would be served by reinstating the two
employees without backwages (See San Miguel Corporation vs.
National Labor Relations Commission, G.R. No. 56554, July 20, 1982, 115
SCRA 329 and San Miguel Corporation vs. Secretary of Labor, SCRA 56, 62)
This case is about the dismissal of employees for their alleged fraudulent
use of company property in performing outside work for
compensation. cdrep
Edgardo Martin, 46, was a color separator of the Philippines Daily Express
Corporation, having worked for the company for more than six years.
Ramon Reyes, Jr., 31, was a circulation field representative, having been
employed by the company for nearly five years.
On April 9, 1979, Reyes, without the requisite job order, handed to Martin a
"transparency" to be color-separated for the Panday Magazine. Three
days later, Martin turned over the finished color-separated negatives to
Reyes. On April 28, Reyes gave Martin two hundred pesos as partial
payment for the negatives.
On May 4, 1979, Santos Diaz, Jr., the acting production director of the
company, was informed by a disinterested party of the unauthorized color
separation made by Martin in connivance with Reyes. Four days later, or
on May 8, Martin returned the P200 to Moises Diaz, Jr., the commercial
press account manager of the company.
The matter was investigated by the personnel office. Martin and Reyes
submitted their statements. They were found guilty of violating Item B(7) of
the company's code of offenses which states:
"Obtaining company owned materials/properties on
fraudulent orders. This will include collusion with persons who
are in charge of such materials/properties. 1st offense —
Dismissal".
On June 21, Martin and Reyes were placed under preventive
suspension on the ground that their continued presence inside the
company's premises would disrupt its business and pose an imminent
danger to its property.
On July 9, the company filed with the Regional Office No. IV of the Ministry
of Labor and Employment an application for clearance to terminate the
services of Martin and Reyes. The latter and the union opposed the
clearance application. Although they admit their participation in the
unauthorized job, they submit that they do not deserve to be dismissed.
The Regional Director in his decision dated November 15, 1979 held that
the two employees should be reinstated with backwages because they
only performed an unauthorized job and are simply guilty of Item B(3) of
the company's code of offenses which states:
"Using company materials, company property or company
time to perform unauthorized work. 1st offense — One week
suspension".
On appeal, the Minister of Labor and Employment Blas F. Ople, in
his resolution of January 15, 1981, affirmed the Regional Director's decision
with the modification that one week's pay should be deducted from the
backwages awarded to Martin and Reyes as the penalty.
The company brought the case to this Court by means of certiorari. It
contends that Martin and Reyes, JR. should be dismissed because they
committed fraud when they accepted work from a third party, a
company client, failed to report the same to the company, did the work
on company time, using company equipment and materials,
and received compensation therefor.
We hold that, considering the relevant facts, particularly the immediate
return of the P200, the ends of justice would be served by reinstating the
two employees without backwages.

||| (City Service Corp. Workers Union v. City Service Corp., G.R. No.
59407, [March 29, 1985], 220 PHIL 239-243)

1. LABOR AND SOCIAL LEGISLATIONS; LABOR CODE; TERMINATION OF


EMPLOYMENT; ILLEGAL DISMISSAL; EMPLOYEE ENTITLED TO REINSTATEMENT:
CASE AT BAR. — Petitioners assail the NLRC decision for failing to order
the reinstatement of individual petitioners after finding them to have been
illegally dismissed. The issue thus raised is whether individual petitioners are
entitled toreinstatement with backwages. It appears that CSC is still in
business and continues to provide janitorial services to numerous clients.
Considering the nature of the position (janitor) of individual petitioners, it
would not be difficult for CSC to re-employ them. Under Section 280 of
the Labor Code, an employee who has been unjustly dismissed shall be
entitled to reinstatement without loss of seniority rights and backwages
from the time his compensation was withheld up to the time of
his reinstatement.
2. ID.; ID.; ID.; ID.; ID.; ID.; EMPLOYEE ENTITLED TO BACKWAGES. — However,
in the compelling interest of Justice and kindred considerations, this Court
in a number of illegal dismissal cases has adopted the policy of granting
backwages for a limited period without deduction on account of interim
earnings realized elsewhere by the dismissed employee. (See, e.g.,
Mercury Drug Co., Inc. vs. Court of Industrial Relations, 56 SCRA 694;
Philippine Airlines, Inc. vs. NLRC, 126 SCRA 223.)
3. ID.; ID.; ID.; SECURITY OF TENURE, RIGHT OF PARAMOUNT VALUE. —
Security of tenure is a right of paramount value. Precisely, it is given
specific recognition and guarantee by the Constitution no less. The State
shall afford protection to labor and "shall assure the rights of workers to . . .
security of tenure", so runs the Constitutional mandate. (Art. II, Sec. 9.) It
stands to reason that a right so highly ranked as security of tenure should
not lightly be denied on so nebulous a basis as mere speculation.

||| (Flores v. Nuestro, G.R. No. 66890, [April 15, 1988], 243 PHIL 712-716)

NEGATED WHERE EMPLOYEE WAS COMPELLED TO LEAVE THE PREMISES


AND IMMEDIATELY FILED COMPLAINT FORREINSTATEMENT. — The record
shows that petitioners were only compelled to leave the premises, which
they regarded as their home, when the respondent inflicted physical
injuries upon petitioner Herminio Flores. Apparently, what they had given
up was only their place of residence but not their jobs. The immediate
filing of a complaint for illegal dismissal against respondent with a prayer
for reinstatement shows that petitioners were not abandoning their work.
REINSTATEMENT NOT FEASIBLE WHERE THERE IS POSSIBLE CONFRONTATION;
AWARD OF DAMAGES PROPER. — Where there is a finding of illegal
dismissal, the general principle is that an employee is entitled
to reinstatement and to receive backwages from the date of his dismissal
up to the time of his reinstatement. However, the circumstances in this
case make thereinstatement of petitioners no longer feasible; any possible
confrontation between the parties in view of their already strained
relationship should be avoided. An award of six (6) months backwages
based on their latest salary is a reasonable alternative
toreinstatement under the circumstances.
||| (Century Textile Mills, Inc. v. National Labor Relations Commission,
G.R. No. 77859, [May 25, 1988], 244 PHIL 543-554)

4. LABOR AND SOCIAL LEGISLATION; LABOR CODE;


EMPLOYMENT; REINSTATEMENT AND PAYMENT OF BACKWAGES, NORMAL
CONSEQUENCES OF ILLEGAL TERMINATION. — We have held in the past
that both reinstatement, without loss of seniority rights, and
payment of backwages are the normal consequences of a finding that
an employee has been illegally dismissed, and which remedies together
make the dismissed employee whole. A finding of illegal dismissal having
been correctly made in this case by public respondent Commission,
private respondent is, as a matter of right, entitled to receive both
types of relief made available inArticle 280 of the Labor Code, as
amended. It matters not that private respondent Calangi had
omitted in his complaint filed in Case No. NLRC-NCR-10-4518-83 a claim
for reinstatement without loss of seniority rights for he is entitled to such
relief as the facts alleged and proved warrant.
5. ID.; ID.; ID.; ID.;
PAYMENT OF SEPARATION PAY MANDATED IN LIEU OF REINSTATEMENT. —
Petitioner Corporation should not be compelled to take back in its fold an
employee who, at least in the minds of his employers, poses a significant
threat to the lives and safety of company workers. Consequently, we hold
that private respondent should be given
his separation pay in lieu of suchreinstatement. The
amount of separation pay shall be equal to private respondent's one-half
(1/2) month's salary for every year ofservice, to be computed from 13
December 1974 (date of first employment) until 10 June 1986 (three years
after date of illegal dismissal).
||| (Manila Midtown Commercial Corp. v. Nuwrain, G.R. No. 57268,
[March 25, 1988], 242 PHIL 681-688)

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE;


TERMINATION OF EMPLOYMENT; LOSS OF TRUST AND CONFIDENCE, VALID
GROUND. — The dual grounds of breach of trust and loss of confidence —
upon which the dismissal of private respondent Masangkay was based —
constitute valid and ample bases to warrant termination of an errant
employee.
2. ID.; ID.; ID.; EMPLOYERS ALLOWED WIDER
LATITUDE OF DISCRETION IN TERMINATING MANAGERIAL EMPLOYEES. — As
a general rule, however, employers are allowed a wider
latitude of discretion in terminating the employment of managerial
personnel or those of similar rank performing functions which by their
nature require the employer's full trust and confidence, than in the
caseof ordinary rank-and-file employees, whose termination on the
basis of these same grounds requires proof of involvement in the
events in question; mere uncorroborated assertions and accusations by
the employer will not suffice.
3. ID.; ID.; ID.; ID.; DISMISSAL OF ROOMBOY FOR ALLEGED
INVOLVEMENT IN THEFTS, ILLEGAL. — The job of a roomboy or
chambermaid in a hotel is clearly of such a nature as to require a
substantial amount of trust and confidence on the part of the employer.
Hotel guests are particularly vulnerable to a dishonest or thieving roomboy
or chambermaid and hotel guests who are so victimized can very quickly
prejudicially affect the reputation and business of a hotel. Private
respondent Masangkay, a roomboy at the Manila Midtown Ramada
Hotel, was thus holding a sensitive job; but he was also of the hotel rank
and file. He was charged, though only administratively, with theft and
subsequently investigated by petitioner Corporation to determine his
participation inthe mentioned hotel room burglaries. As things turned out,
private respondent Masangkay's criminal involvement in the thefts
reported was never established; apart from petitioner Corporation's own
suspicions on the matter, no proof whatsoever was presented to implicate
private respondent Masangkay in said burglaries. Consequently, the
dismissal of private respondent Masangkay on the ground of loss of trust
and confidence cannot be sustained.
4. ID.; ID.; ID.; ILLEGALLY DISMISSED EMPLOYEE ENTITLED TO BACKWAGES. —
We conclude that, in view of our finding of illegal dismissal in this case,
private respondent Masangkay is entitled to receive, and petitioner
Corporation is obligated to pay backwages for three (3) years, without
qualification and deduction.
5. ID.; ID.; ID.; ILLEGAL DISMISSAL; SEPARATION PAY MUST BE
GRANTED IN LIEU OF REINSTATEMENT. — Turning to the
matter ofreinstatement, considering the sensitive character of the job of a
roomboy, the Court believes that substantial justice to both parties would
best be served by requiring petitioner to reinstate private respondent
Masangkay to a reasonably equivalent but non-sensitive position in the
hotel for which the latter would be qualified. Should such a position be
non-available or non-existent at this time, or should private respondent
Masangkay not find such a position acceptable, then petitioner
shall pay him his separation payin lieu of such reinstatement. The
amount of such separation pay — one-half (½) month's salary for every
year of service — is to be computed based on the period from 22 August
1977 (date of first employment) to 13 February 1983 (three years after
date of illegal dismissal).

1989
||| (Hernandez v. National Labor Relations Commission, G.R. No. 84302,
[August 10, 1989], 257 PHIL 275-283)

LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT;


TERMINATION; LOSS OF CONFIDENCE; VALID GROUND. —
"Loss of confidence" constitutes a "just cause" for terminating an employer-
employee relationship.
2. ID.; ID.; ID.; ID.; DISMISSAL WITHOUT VALID CAUSE, ILLEGAL. — The
burden of proof rests upon the employer that the dismissal is for cause,
and the failure of the employer to do so would mean that the dismissal is
not justified.
3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — The record is bare of any showing
positively linking petitioner to the alleged theft committed. The affidavits
executed by private respondents' employees failed to establish a
reasonable basis to attribute the loss directly upon petitioner. The affiants
attested only to the fact of the unauthorized replacement of a tire
attached to the track assigned to petitioner. This is an accepted and
established fact, but to positively link petitioner to the unauthorized
replacement on this fact alone is highly speculative. Surely, this would be
negating the special emphasis laid down by the Constitution on the
protection of working men.
4. CONSTITUTIONAL LAW; BILL OF RIGHTS;
SECURITY OF TENURE, OF PARAMOUNT IMPORTANCE. — "[T]he
constitutional guaranty of 'security of tenure' is of paramount importance.
It is a right so highly ranked that it should not lightly be denied on
conjectures, surmises or speculations.
5. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT;
TERMINATION; LOSS OF CONFIDENCE, AS A GROUND, SHOULD BE
SUPPORTED BY SUFFICIENT PROOF. — For dismissal for loss of confidence to
be warranted, there should naturally be some basis therefor. Stated
elsewise, unsupported by sufficient proof, loss of confidence" is without
basis and may not be successfully invoked as a ground for dismissal.
6. ID.; ID.; ID.; ID.; ID.; NOT INTENDED FOR ABUSE BY THE EMPLOYER. —
"Loss of confidence" as a ground for dismissal has never been intended to
afford an occasion for abuse by the employer of its prerogative, as it can
easily be subject to abuse because of its subjective nature.
7. ID.; ID.; ID.; ID.;
PAYMENT OF SEPARATION PAY MANDATED IN LIEU OF REINSTATEMENT WHE
RE RELATION BETWEEN EMPLOYER AND EMPLOYEE HAS BEEN SEVERELY
STRAINED. — The dismissal is unwarranted and, illegal. Considering,
however, that the relationship between petitioner and private respondent
has been severely strained by reason of their respective
imputations ofbad faith against each other, this Court believes that to
order reinstatement at this juncture will no longer serve any prudent
purpose. The petitioner should be paid backwages not exceeding three
(3) years without any deduction and that petitioner be paid
his separation pay in the amount of one (1) month for every
year of service.

(Asian Transmission Corp. v. National Labor Relations Commission, G.R.


No. 88725, [November 22, 1989], 259 PHIL 191-196)

LABOR AND SOCIAL LEGISLATION; STRIKE; RETURN TO WORK ORDER; MUST


BE COMPLIED, OTHERWISE THE EMPLOYEE LOSES THE BENEFITS
OF REINSTATEMENT AND PAYMENT OF WAGES. — Employees who staged a
strike despite the return-to-work order are not entitled
to reinstatement and payment of wages for work not done.|||

Accordingly, the Court holds that the return-to-work order should benefit
only those workers who complied therewith and, regardless of the
outcome of the compulsory arbitration proceedings, are entitled to be
paid for work they have actually performed. Conversely, those workers
who refused to obey the said order and instead waged the restrained
strike are not entitled to be paid for work not done or to reinstatement to
the positions they have abandoned by their refusal to return thereto as
ordered."||

||| (Supercars, Inc. v. Minister of Labor and Employment, G.R. Nos. 74151-
54, [April 10, 1989], 253 PHIL 652-659)
1. LABOR LAW; NATIONAL LABOR RELATIONS COMMISSION; JUDGMENTS;
MAY NO LONGER BE AMENDED OR CORRECTED ONCE IT HAS BECOME
FINAL AND EXECUTORY. — Inasmuch as the August 1, 1983 order merely
directed the reinstatement of private respondents to their former
positions without backwages, the Regional Director acted without or in
excess of jurisdiction when he awarded backwages, upon motion of the
private respondents, computed from September 2, 1983 to August 19,
1984, representing the span of time after the lapse of the ten (10) day
period within which Supercars should effect reinstatement until the date
prior to the actual reinstatement of the private respondents on August 20,
1984. Thus, in affirming the aforestated order, the Minister ofLabor and
Employment likewise acted without or in excess of jurisdiction. It bears
emphasis that the award constituted a modification of a final order. In this
regard, We quote with approval what was said in Maramba vs. Lozano, et
al., G.R. No. L-21533, June 29, 1967, 20 SCRA 474 and Nieva vs. Manila
Banking Corporation, et al., G.R. No. L-30811, September 2, 1983, 124
SCRA 453, to wit: "It is hornbook doctrine that 'a decision which has
become final and executory can no longer be amended or corrected by
the court except for clerical errors or mistakes and however erroneous it
may be, cannot be disobeyed, otherwise litigations would be endless and
no questions could be considered settled.'"
2. ID.; ID.; ID.; IMMEDIATELY EXECUTORY EVEN PENDING APPEAL; MOTION
FOR THE ISSUANCE OF A WRIT OF EXECUTION; FILING THEREOF NECESSARY
TO PREVENT DELAY IN THE IMPLEMENTATION OF THE SUBJECT DECISION. —
In National Steel Corporation vs. National Labor Relations Commission, et
al., G.R. No. 74711, September 19, 1988, We held: Under Article 223 of
the Labor Code, as amended, the decision of the
National Labor Relations Commission is immediately executory
even pending appeal. Remolado could have moved for the issuance of
a writ of execution of the decision during the pendency of
the appeal and insisted on his right to be reinstated or the Respondent
commission could have issued a writ of execution on its own initiative,
conformably with Article 224 (a) of the same Code. Thus, the delay in the
implementation of the decision cannot be wholly attributed to petitioner."
The order dated August 1, 1983 being immediately executory, private
respondents should have moved for the issuance of a writ of execution of
said order even while the motion for reconsideration is still pending. It is
significant to note that no mention was made of a motion for execution
having been filed and it was only on August 29, 1985 when the Regional
Director ordered the issuance of the writ of execution, motu proprio. It is
fitting to mention again our observation in National Steel Corporation vs.
National Labor Relations Commission, et al., supra to wit: "What obviously
caused the delay was the sheer inaction of private respondent who was
entitled to enforce it. Under the circumstances, it would definitely be
offensive to justice and fair play to hold petitioner liable for the
consequence of such inaction."
(Philippine National Construction Corporation Tollways Division v. National
Labor Relations Commission, G.R. No. 86595, [April 17, 1989], 254 PHIL 362-
367)

SEPARATION PAY IN LIEU OF REINSTATEMENT WHERE THE LATTER NOT


FEASIBLE PROPER. — Mindful, of the strained relations between the parties,
the NLRC granted Macasaet separation pay of one month for every
year of service in lieu of reinstatement, plus backwages from the
time of his dismissal on June 25, 1987 up to the date of its decision,
November 10, 1988. Its decision is not tainted with grave
abuse of discretion for it finds support in the decision of this
Court in Asiaworld Publishing House, Inc. vs. Ople, G.R. No. 56398, July 23,
1987, 152 SCRA 219, where severance pay was awarded to the illegally
dismissed employee in lieu of reinstatement.|||

(Quezon Electric Cooperative v. National Labor Relations Commission,


G.R. No. 79718-22, [April 12, 1989], 254 PHIL 84-92)

SEPARATION PAY PROPER IN LIEU OF REINSTATEMENT. — Where the


employer failed to establish sufficient basis for the dismissal ofthe
employee on the ground of lack of confidence, the Court
awarded separation pay equivalent to one (1) month pay for every
year of service instead of ordering reinstatement "so that he (the
employee) can be spared the agony of having to work anew with
petitioner (the employer) under an atmosphere of antipathy and
antagonism and the petitioner does not have to endure the continued
services of private respondent in whom it has lost confidence.|||

(Galindez v. Rural Bank of Llanera, Inc., G.R. No. 84975, 85211, [July 5,
1989], 256 PHIL 585-594)

ID.; ID.; ID.; CASE AT BAR. — In the case at bar, the modification of the
judgment, rendered by the Labor Arbiter on 4 May 1983, is warranted by
the fact that the Bank had been placed under liquidation thereby
permanently foreclosing any possibility for the Bank to resume its
business. Reinstatement of Galindez, as Cashier, therefore, was rendered
inappropriate considering the Bank's eventual closure and that the
position of Cashier has been abolished as a result of liquidation.
3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; SEPARATION PAY;
GRANT THEREOF PROPER WHERE REINSTATEMENT IS NO LONGER FEASIBLE.
— The grant of separation pay, which was
awarded in lieu of reinstatement, was likewise proper were the
establishment has closed or ceased operations or where his former
position no longer exists at the time of reinstatement not attributable to
the fruit of the employer. (Section 4(b), Rule 1, Book VI of the Omnibus
Rules Implementing the Labor Code)
4. ID., ID.; BACKWAGES; NOT IN COMPATIBLE WITH REINSTATEMENT. —
Backwages and reinstatement are two different forms ofrelief. In Santos vs.
NLRC (No. L-76721, September 21, 1987, 154 SCRA 166), it was squarely
held: "The two forms of relief are distinct and separate, one from the other.
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 non-availability of the
other."
|||

1991

||| (Torillo v. Leogardo, Jr., G.R. No. 77205, [May 27, 1991], 274 PHIL 758-
769)

1. LABOR LAWS; REINSTATEMENT AND BACKWAGES; PROPER IN CASE


EMPLOYEE IS ILLEGALLY DISMISSED; REASON THEREFOR.— Article 280 (now
Article 279) of the Labor Code provides that "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 . . ."
Backwages in general are granted on grounds of equity for earnings
which a worker or employee has lost due to his illegal
dismissal. Reinstatement, on the other hand, means restoration to a
state of condition from which one had been removed or separated.
2. ID.; SEPARATION PAY; PROPER IF REINSTATEMENT IS NO LONGER
VIABLE. — Backwages and reinstatement are two reliefs given to an
illegally dismissed employee. They are separate and distinct from each
other. However, in the event that reinstatement is no longer
possible, separation pay is awarded to the employee. Thus, the
award of separation pay is in lieu of reinstatement and
notof backwages. In other words, an illegally dismissed employee is
entitled to (1) either reinstatement, if viable,
or separation pay ifreinstatement is no longer viable,
or separation pay if reinstatement is no longer viable and (2) backwages.
3. ID.; ID.; DISTINGUISHED FROM BACKWAGES. — The distinction
between separation pay and backwages has been exhaustively
discussed by this Court in Santos vs. NLRC, et al. wherein we held: "The
normal consequences of a finding that an employee has been illegally
dismissed are firstly, that the employee becomes entitled
to reinstatement to his former position without loss ofseniority rights and,
secondly, the payment of backwages corresponding to the period from
his illegal dismissal up to actualreinstatement. The statutory intent on this
matter is clearly discernible. Reinstatement restores the employee who
was unjustly dismissed to the position from which he was removed, that is,
to his status quo ante dismissal, while the grant of backwages allows the
same to recover from the employer that which he had lost by
way of wages as a result of his dismissal. These twin remedies —
reinstatement and payment of backwages — make the dismissed
employee whole can then look forward to continued employment. Thus
do these two remedies give meaning and substance to the constitutional
right of labor to security of tenure. The two forms ofrelief are distinct and
separate, one from the other. Though the
grant of reinstatement commonly carries with it an award ofbackwages,
the inappropriateness or non-availability of one does not carry with it the
inappropriateness or non-availability 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 paywas 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 ofbackwages is 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.
4. ID.; BACKWAGES; LIMITED TO THREE YEARS WITHOUT QUALIFICATION
AND DEDUCTION. — Petitioner, by reason of his illegal dismissal is entitled
to both separation pay and backwages. However, the
amount of backwages shall be based on the Mercury Drug Rule which
limits backwages of illegally dismissed employees to an amount
equivalent to their wages for three (3) years, without qualification and
deduction. The Court has adopted the practice of fixing the
amount of backwages at a reasonable level without qualification and
deduction so as to relieve the employees from proving their earnings
during their layoffs and the employer from submitting counter proofs and
thus obviate the twin evils of idleness on the part of the employees and
attrition and undue delay insatisfying the award on the part of the
employer. This practice has been hailed as a realistic, reasonable and
mutually beneficial solution. An award of backwages equivalent to three
years (where the case is not terminated sooner) serves as the base figure
for such awards without deduction.
5. ID.; ID.; INCLUDED IN THE COMPUTATION OF SEPARATION PAY. — With
regards to petitioner's separation pay which was awarded to
him in lieu of reinstatement, he shall receive the amount equivalent to
one month wage/salary for every year of service, including the three-year
period in which backwages are awarded. This finds support in the
case of Grolier International, Inc. vs. Amansec, wherein we held: "Thus
when the Court stated that private respondent was entitled to
'separation pay based on the application law or company practice,
whichever is higher, effective as of the end of the above three (3) year
period,' it meant onlythat in the computation of separation pay, the three
(3) year period in respect of which backwages are awarded, must be
included (although private respondent had not actually served during the
last three (3) years . . ."

||| (Tan v. Court of Appeals, G.R. No. 97238, [July 15, 1991], 276 PHIL 227-
248)

CONSTITUTIONAL LAW; EDUCATION; SCHOOL ADMINISTRATOR MAY


REQUIRE STUDENTS TO ENROLL IN ANOTHER SCHOOL WHEN THERE IS PRE-
EXISTING AND SUPERVENING STRAINED RELATIONS BETWEEN THEM. —
Where relations between parents and students on the one hand, and
teachers and administrators upon the other hand, have deteriorated to
the level here exhibited, a private school may, in the interest of the rest of
the student body and of the faculty and the management as a whole,
and of the children of the parents affected, require the affected children
to be enrolled elsewhere. The maintenance of a morally conducive and
orderly educational environment will be seriously imperilled if, under the
circumstances of this case, Grace Christian is forced to admit petitioners'
children and to reintegrate them to the student body. It may even be
argued that petitioners' children have been innocent victims in a
deplorable confrontation between some parents and respondent School,
but the situation here finds some analogy in labor cases where, because
of pre-existing and supervening strained relations, reinstatement is not
always a feasible solution.

(Torillo v. Leogardo, Jr., G.R. No. 77205, [May 27, 1991], 274 PHIL 758-769)

LABOR LAWS; REINSTATEMENT AND BACKWAGES; PROPER IN CASE


EMPLOYEE IS ILLEGALLY DISMISSED; REASON THEREFOR. —Article 280 (now
Article 279) of the Labor Code provides that "an employee who is unjustly
dismissed from work shall be entitled toreinstatement without
loss of seniority rights and other privileges and to his full backwages . . ."
Backwages in general are granted on grounds of equity for earnings
which a worker or employee has lost due to his illegal
dismissal. Reinstatement, on the other hand, means restoration to a
state of condition from which one had been removed or separated.|||

SEPARATION PAY; PROPER IF REINSTATEMENT IS NO LONGER VIABLE. —


Backwages and reinstatement are two reliefs given to an illegally
dismissed employee. They are separate and distinct from each other.
However, in the event that reinstatement is no longer
possible, separation pay is awarded to the employee. Thus, the
award of separation pay is in lieu of reinstatement and not of
backwages. In other words, an illegally dismissed employee is entitled to
(1) either reinstatement, if viable, or separation pay ifreinstatement is no
longer viable, or separation pay if reinstatement is no longer
viable and (2) backwages.|||

||| (Talaga Barangay Water Service Cooperative v. National Labor


Relations Commission, G.R. No. 94803, [March 16, 1992], 283 PHIL 1105-
1113)

ID.; EMPLOYER-EMPLOYEE RELATIONSHIP; AS A GENERAL RULE, EMPLOYER


HAS THE PREROGATIVE TO ORDER PAYMENT OFBACKWAGES
PLUS SEPARATION PAY IN LIEU OF REINSTATEMENT; EXCEPTION. — As a rule,
the Court recognizes the prerogative ofthe employer to order merely
payment of backwages plus separation pay in lieu of reinstatement even
when the employee was eventually cleared of the charges, where
relations between employer and the employee are so strained or where
an employee would no longer be useful because his employer has lost
trust and confidence in him. However, this rule is not without
exception. Inthe case of Sibal v. Notre Dame of Greater Manila, 182 SCRA
538, the Court held: ". . . Clearly, therefore, when the assailed NLRC
decision was rendered on April 11, 1986, the alleged `strained
relations' of `irritant factors' which the Labor Arbiter capitalized on had
been totally eliminated. Respondent NLRC obviously failed to consider this
and thus perpetrated the error committed by theLabor Arbiter in her prior
decision. The eventual replacement of Fr. Garcia all the more confirmed
the discretionary and oppressive treatment which he gave petitioner. The
dissenting NLRC Commissioner aptly observed thus: Moreover, it should be
emphasized that no strained relations should arise from a valid and legal
act of asserting one's right, such as in the instant case, for otherwise, an
employee who still asserts his/her separation pay on the pretext that
his/her relationship with his/her employer and already become strained
relations in order that it may justify the
award of separation pay in lieu of reinstatement with backwages should
be such that they are so compelling, and so serious. . . .."
3. ID.; TERMINATION OF EMPLOYMENT; DISMISSAL; FOUND ILLEGAL IN CASE
AT BAR. — Private respondent was illegally terminated because (a) the
Board of Directors had no authority to terminate her and (b) the charges
or offenses imputed against her were not substantiated and that private
respondent was not guilty thereof. But she was not reinstated
because of animosity giving rise to a strained relationship between
Rolando Romero (the Board President) and the former. However, during
the pendency of the motion for reconsideration before the NLRC,
Rolando Romero died. Hence, the NLRC realizing that the obstacle to
reinstate private respondent to her former position is already removed,
modified its decision and ordered her reinstatement. This ruling is
conformable to the aforecited case of Sibal v. Notre Dame of Greater
Manila (182 SCRA 538). We therefore sustain the same. Besides, we rule
that private respondent's termination can only be made by the General
Assembly and not by the Board of Directors.
To pay her separation pay instead of reinstatement would in effect
validate her termination which was not authorized and illegal. If petitioner
believes that private respondent's continued stay would be most
detrimental to the cooperative, let them present the matter to the
General Assembly, in accordance with petitioner's constitution and by-
laws.
1993
||| (Medina v. Consolidated Broadcasting System, G.R. No. 99054-56,
[May 28, 1993])

1. LABOR LAWS AND SOCIAL LEGISLATION; LABOR CODE;


NATIONAL LABOR RELATIONS COMMISSION; REINSTATEMENT ORDER;
OPTIONS AVAILABLE FOR EMPLOYER IN COMPLIANCE THEREOF;
REMEDY OF EMPLOYEE IN CASE OF FAILURE TO REINSTATE. — 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 dues process of law. Therefore, he should be protected
against any arbitrary and unjust deprivation ofhis job (Bondoc vs. People's
Bank and Trust Co., Inc., 103 SCRA 599 [1981]). The employee should not
be left without any remedy incase the employer unreasonably
delays reinstatement. Therefore, we hold that the unjustified refusal of the
employer to reinstate an illegally dismissed employee entitled the
employee to payment of his salaries, effective from the date the
employer failed to reinstate despite an executory writ of execution served
upon him. Such ruling is in accord with the mandate of the new law
awarding full backwages until actual reinstatement (Article
279 of the Labor Code as amended).
2. ID.; ID.; ID.; ID.; BAD FAITH OF EMPLOYER WARRANTS ADDITIONAL
GRANT OF THREE YEARS BACKWAGES; CASE AT BAR. — In view of the
manifest bad faith and obstinacy on the part of private respondents to
reinstate petitioners despite a final and executory order of reinstatement,
equity demands that we award additional backwages equivalent to
three (3) years' without qualification and deduction.
The Solicitor General, citing Mariners Polytechnic School vs. Leogardo,
Jr. (171 SCRA 597 [1989]) and Tan Jr. vs. NLRC (183 SCRA 651 [1990]),
comments that the ruling of the Labor Arbiter, as affirmed by the NLRC,
limiting backwages recoverable to three (3) years only is supported by
jurisprudence. Apparently, there is no point of conflict with the three-year
limitation on backwages, otherwise known as the Mercury Drug Rule, a
doctrine laid down in Mercury Drug v. Court of Industrial Relations (56
SCRA 694 [1974]).
The three years' backwages, awarded by the Labor Arbiter and affirmed
by the NLRC, and already received by herein petitioners, covers the
interim period or during the pendency of the labor case. It is intended to
restore to some extent income of the employee that was lost by
reason of the illegal dismissal. On the other hand, the three years'
backwages that this Court now grants is intended to indemnify the
dismissed employee for income which could have been earned had he
been immediately reinstated as mandated by law. In other words, the
backwages that the Labor Arbiter decreed refer to backwages, in its
ordinary sense for illegal dismissal; whereas the backwages that we are
granting are backwages as a result of the unjustified failure to reinstate.
This differentiation springs from the principle that reinstatement and
backwages for illegal dismissal are two forms ofrelief distinct and separate
from one another as laid down in the case of Santos v. NLRC (154 SCRA
166 [1987]).
3. ID.; ID.; ID.; ID.; ID.; MERCURY DRUG RULE, EXCEPTION; CASE AT BAR. — It
is worth noting that the Mercury Drug Rule is not a hard and fast rule. It
admits of certain exceptions. Where there have been serious
unfair labor practices committed by the employer in laying off the
workers, obstinacy or deceit in trying to defeat the judgment
for reinstatement and consequently prolonged non-satisfaction of the
judgment for reinstatement and backwages, this Court imposed as an
element of punitive damages against respondent by way of example and
for the public good, the equivalent of five years' backwages without
deduction or qualification or even more (Davao Free Workers Front vs.
Court of Industrial Relations, 60 SCRA 408 [1974]). Also in New Manila
Candy Workers Union (Naconwa-Paflu) vs. Court of Industrial Relations, 86
SCRA 37 [1978]), we awarded backwages for five years on account of the
employer's unfair labor practices and the long number of years during
which the workers have been deprived of their work and their
wages. In Panday vs. NLRC, (208 SCRA 122 [1992]), we fixed the
backwages award at five (5) years as an exception to the standard net
award of three years' backwages, with the aim of punishing the employer
for his bad faith.
4. ID.; ID.; ID.; ID.; QUITCLAIMS, NOT BINDING. — The fact that the
petitioners entered into an agreement for the payment of
separation pay in lieu of reinstatement does not preclude them from
demanding the benefits which they are entitled to under the law. Such
agreement is not binding since it was not made with the
assistance of the Labor Arbiter; neither was it approved by him. This, aside
from the fact that in the instant petition, herein petitioners are reiterating
their demand for immediate reinstatement. As may be deduced from the
above agreement, the purpose of private respondents in offering
to pay separation pay was clearly for petitioners to withdraw their
complaints for unfair labor practice against private respondents lodged
with the Office of the City Prosecutor of Baguio City. In Lopez Sugar Corp.
v. FFW (189 SCRA 179 [1990]), we ruled that quitclaims executed by
laborers are commonly frowned upon as contrary to public policy and
ineffective to bar claims for the full measure of the worker's legal rights.

(Philtread Tire and Rubber Corp. v. National Labor Relations Commission,


G.R. No. 102185, [February 15, 1993])

SEPARATION PAY IN LIEU OF REINSTATEMENT, A PROPER RECOURSE. —


Since the return-to-work order was obtained by the workers, the right to
return-to-work could be waived by them, as they did in this case when
they opted to defer their reinstatement while negotiating with the
company for financial benefits in lieu of reinstatement in view of the "bad
blood" and "severely strained relations" between them and management
(p. 49, Rollo). The award of separation pay in lieu of reinstatement is an
equitable recourse that has been sanctioned by this Court in a
number of cases. (Commercial Motors Corporation vs. Commissioners,
Second Division, National Labor Relations Commission and Pedro Umlas,
92 SCRA 191, citing Citytrust Finance Corporation vs. NLRC, 157 SCRA 87
[1988], cited in Quezon Electric Cooperative vs. NLRC, 172 SCRA 88, 97-98
[1989]).|||

(Philtread Tire and Rubber Corp. v. National Labor Relations Commission,


G.R. No. 102185, [February 15, 1993])

SEPARATION PAY IN LIEU OF REINSTATEMENT, A PROPER RECOURSE. —


Since the return-to-work order was obtained by the workers, the right to
return-to-work could be waived by them, as they did in this case when
they opted to defer their reinstatement while negotiating with the
company for financial benefits in lieu of reinstatement in view of the "bad
blood" and "severely strained relations" between them and management
(p. 49, Rollo). The award of separation pay in lieu of reinstatement is an
equitable recourse that has been sanctioned by this Court in a
number of cases. (Commercial Motors Corporation vs. Commissioners,
Second Division, National Labor Relations Commission and Pedro Umlas,
92 SCRA 191, citing Citytrust Finance Corporation vs. NLRC, 157 SCRA 87
[1988], cited in Quezon Electric Cooperative vs. NLRC, 172 SCRA 88, 97-98
[1989]).|||

(Callanta v. National Labor Relations Commission, G.R. No. 105083,


[August 20, 1993])

LABOR AND SOCIAL LEGISLATION; LABOR CODE;


IMMEDIATE REINSTATEMENT UNDER REPUBLIC ACT NO. 6715 NOT
APPLICABLE TO CASE AT BAR. — As borne by the records, the Labor Arbiter
rendered his decision in favor of petitioner on February 16, 1989. Private
respondent, on the other hand, filed its appeal on March 20, 1989.
Ironically, Republic Act No. 6715, which granted the right to
immediate reinstatement under Section 12 thereof amending Article 223
of the Labor Code, became effective on March 21, 1989, or the day after
the appeal was filed by private respondent company. Meanwhile, the
NLRC Interim Rules on Appeal under Republic Act No. 6715 became
effective on September 5, 1989. Given this factual background, it is
apparent that when the Labor Arbiter rendered his decision and even up
to the time when private respondent company filed
an appeal therefrom, Republic Act No. 6715was not yet in effect. Thus,
the most logical and necessary consequence was that the execution of
the Labor Arbiter's decision as well as the requirements for the perfection
of the appeal would have to be governed by the rules prevailing prior to
the amendment of the Labor Code by R.A. No. 6715. Prior to the
amendment of Article 223 of the Labor Code by R.A. 6715, "decisions,
awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission within ten (10) days from receipt of such
awards, orders, or decisions." There was then no provision providing for an
execution pending appeal. Hence, under the facts of the present
petition, petitioner had no right to ask for the immediate enforcement of
the reinstatement aspect of the Labor Arbiter's decision, no such right
having been granted to him under the old rules.|||

REPUBLIC ACT NO. 6715, WITH NO RETROACTIVE EFFECT. — R.A. No.


6715 cannot be deemed to have retroactive effect, prospective
application of the law being the rule rather than the exception (Article
4, New Civil Code). More so in the present case where the law (R.A. No.
6715) itself did not provide for retroactive application (Inciong vs.
National Labor Relations Commission, 185 SCRA 651 [1990]).
LABOR RULES, LITERALLY CONSTRUED TO GIVE WAY TO SUBSTANTIAL
JUSTICE; CASE AT BAR. — It cannot be denied, however, that upon the
effectivity of R.A. No. 6715, public respondent NLRC ordered private
respondent company to post the additional requirement of cash bond
and immediate reinstatement of the petitioner. By this time, the appeal of
private respondent company has already been perfected in accordance
with the old rules. Consequently, the latter's failure to timely comply with
the bond requirement cannot be deemed in any way to affect the
perfection of the appeal. Besides, considering the factual peculiarities of
the present petition as above-described, compliance with the bond
requirement, although a jurisdictional requirement, should be liberally
construed to give way to substantial justice. The same sentiment was
expressed by this Court in the 1990 case of YBL (Your Bus Line) vs. NLRC
(190 SCRA 160), where the factual background of the case likewise
played a vital role in upholding a liberal interpretation of the rules.

(Philippine Airlines, Inc. v. National Labor Relations Commission, G.R. No.


106374, [June 17, 1993])

LABOR LAWS; TERMINATION OF EMPLOYMENT; ILLEGAL DISMISSAL BY


EMPLOYER; WARRANTS NOT ONLY REINSTATEMENT BUT ALSO BACKWAGES.
— The infractions of private respondents were not related to the positions
they held. Rather, they arose as a result of a misunderstanding of PAL's
security measures. The unfelicitous remarks uttered by respondent Tinio
against his supervisors were made in the heat of anger. He was already
punished for it; as was Zabayle for his offense. It must be stressed that both
private respondents were placed under preventive suspension from the
moment they were administratively charged up to the time they were
ordered dismissed. There being a finding of illegal dismissal, respondents
are entitled to reinstatement. Such finding of illegal dismissal warrants not
only reinstatement but also the payment of backwages computed for
three (3) years only, and not from 2 February 1989 when they were
unlawfully dismissed. This is because the dismissal of private respondents
transpired before the effectivity of R.A. 6715 on 21 March 1989.|||

||| (Medina v. Consolidated Broadcasting System, G.R. No. 99054-56,


[May 28, 1993])

1. LABOR LAWS AND SOCIAL LEGISLATION; LABOR CODE;


NATIONAL LABOR RELATIONS COMMISSION; REINSTATEMENT ORDER;
OPTIONS AVAILABLE FOR EMPLOYER IN COMPLIANCE THEREOF; REMEDY
OF EMPLOYEE IN CASE OF FAILURE TO REINSTATE. — Under Article 223 of
the Labor Code, as amended, an employer has two options in order for
him to comply with an order ofreinstatement, 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]; andPedroso
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 dues process of law. Therefore, he should be
protected against any arbitrary and unjust deprivation of his job (Bondoc
vs. People's 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 entitled the
employee to payment of his salaries, effective from the date the
employer failed to reinstate despite an executory writ of execution served
upon him. Such ruling is in accord with the mandate of the new law
awarding full backwages until actual reinstatement (Article 279 of
the Labor Code as amended).
2. ID.; ID.; ID.; ID.; BAD FAITH OF EMPLOYER WARRANTS ADDITIONAL GRANT
OF THREE YEARS BACKWAGES; CASE AT BAR. — In view of the manifest
bad faith and obstinacy on the part of private respondents to reinstate
petitioners despite a final and executory order of reinstatement, equity
demands that we award additional backwages equivalent to three (3)
years' without qualification and deduction. The Solicitor General,
citing Mariners Polytechnic School vs. Leogardo, Jr. (171 SCRA 597 [1989])
and Tan Jr. vs. NLRC (183 SCRA 651 [1990]), comments that the ruling of
the Labor Arbiter, as affirmed by the NLRC, limiting backwages
recoverable to three (3) years only is supported by jurisprudence.
Apparently, there is no point of conflict with the three-year limitation on
backwages, otherwise known as the Mercury Drug Rule, a doctrine laid
down in Mercury Drug v. Court of Industrial Relations (56 SCRA 694 [1974]).
The three years' backwages, awarded by the Labor Arbiter and affirmed
by the NLRC, and already received by herein petitioners, covers the
interim period or during the pendency of the labor case. It is intended to
restore to some extent income of the employee that was lost by reason of
the illegal dismissal. On the other hand, the three years' backwages that
this Court now grants is intended to indemnify the dismissed employee for
income which could have been earned had he been immediately
reinstated as mandated by law. In other words, the backwages that
the Labor Arbiter decreed refer to backwages, in its ordinary sense for
illegal dismissal; whereas the backwages that we are granting are
backwages as a result of the unjustified failure to reinstate. This
differentiation springs from the principle that reinstatement and
backwages for illegal dismissal are two forms of relief distinct and
separate from one another as laid down in the case of Santos v.
NLRC (154 SCRA 166 [1987]).
3. ID.; ID.; ID.; ID.; ID.; MERCURY DRUG RULE, EXCEPTION; CASE AT BAR. — It
is worth noting that the Mercury Drug Rule is not a hard and fast rule. It
admits of certain exceptions. Where there have been serious
unfair labor practices committed by the employer in laying off the
workers, obstinacy or deceit in trying to defeat the judgment
for reinstatement and consequently prolonged non-satisfaction of the
judgment for reinstatement and backwages, this Court imposed as an
element of punitive damages against respondent by way of example and
for the public good, the equivalent of five years' backwages without
deduction or qualification or even more (Davao Free Workers Front vs.
Court of Industrial Relations, 60 SCRA 408 [1974]). Also in New Manila
Candy Workers Union (Naconwa-Paflu) vs. Court of Industrial Relations, 86
SCRA 37 [1978]), we awarded backwages for five years on account of the
employer's unfair labor practices and the long number of years during
which the workers have been deprived of their work and their wages.
In Panday vs. NLRC, (208 SCRA 122 [1992]), we fixed the backwages
award at five (5) years as an exception to the standard net award of
three years' backwages, with the aim of punishing the employer for his
bad faith.
4. ID.; ID.; ID.; ID.; QUITCLAIMS, NOT BINDING. — The fact that the
petitioners entered into an agreement for the payment of separation pay
in lieu of reinstatement does not preclude them from demanding the
benefits which they are entitled to under the law. Such agreement is not
binding since it was not made with the assistance of the Labor Arbiter;
neither was it approved by him. This, aside from the fact that in the instant
petition, herein petitioners are reiterating their demand for
immediate reinstatement. As may be deduced from the above
agreement, the purpose of private respondents in offering to pay
separation pay was clearly for petitioners to withdraw their complaints for
unfair labor practice against private respondents lodged with the Office
of the City Prosecutor of Baguio City. In Lopez Sugar Corp. v. FFW (189
SCRA 179 [1990]), we ruled that quitclaims executed by laborers are
commonly frowned upon as contrary to public policy and ineffective to
bar claims for the full measure of the worker's legal rights.
(Jardine Davies, Inc. v. National Labor Relations Commission, G.R. No.
106915, [August 31, 1993])

ILLEGAL DISMISSAL; REINSTATEMENT PENDING APPEAL, MERE ANCILLARY


RELIEF; FAILURE TO COMPLY THEREOF, NOT DECISIVE IN FINAL RESOLUTION.
— 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 on 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."|||

1994

||| (Alhambra Industries, Inc. v. National Labor Relations Commission,


G.R. No. 106771, [November 18, 1994], 308 PHIL 249-257)

1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;


DISMISSAL WITHOUT JUST CAUSE; REINSTATEMENTPROPER REGARDLESS
WHETHER WORKER WAS ACCORDED DUE PROCESS OR NOT. — A
termination without just cause entitles a worker
to reinstatement regardless of whether he was accorded due process.
2. ID.; ID.; DISMISSAL FOR CAUSE BUT WITHOUT PROCEDURAL DUE PROCESS;
WORKER ENTITLED TO DAMAGES BUT NOTREINSTATEMENT. — Termination of
a worker for cause, even without procedural due process, does not
warrant reinstatement, but the employer incurs liability for damages. . . .
To order reinstatement and compel the parties to start the procedure
from step one would be circuitous because almost invariably that same
issue of validity of the ground of dismissal would be brought back to
theLabor Arbiter for adjudication. To avoid this runabout process, we laid
down in Wenphil Corporation v. NLRC, (G.R. No. 80587, 8 February 1989,
170 SCRA 69, 74-76) that an otherwise justly grounded termination without
procedural due process would only sanction payment of damages. . . .
3. ID.; ID.; ID.; ID.; CASE AT BAR. — In the case at bench, the decision to
dismiss Rupisan did not state the reason for his termination, in disregard of
Sec. 6, Rule XIV, Book V, of the Omnibus Rules. But, having been found
guilty of serious misconduct, private respondent cannot
demand reinstatement nor separation pay. However, he is entitled to
damages for petitioner's non-observance of procedural due process
which is not only required by statute but enshrined in the Constitution. For
this purpose, the amount of P10,000.00 is considered fair, reasonable and
realistic.
4. ID.; ID.; VALIDITY OF DISMISSAL; FINDING OF LABOR ARBITER THEREON
GIVEN MORE WEIGHT ON APPEAL; CASE AT BAR. — Since the Labor Arbiter
found a valid ground for dismissal, taking into consideration the
controverting evidence of the parties, which finding was not set aside by
NLRC, the latter was in grave error when it directed reinstatement. Where,
on the basis of the evidence of the opposing parties the validity of the
dismissal is determinable at the level of the Labor Arbiter, the latter should
resolve that issue. And if the Labor Arbiter finds just cause in the
termination, reinstatement would no longer serve any purpose. After all, a
finding by the Labor Arbiter as to the validity of the ground for dismissal is
much more impartial and trustworthy than a determination by the
employer who assumes the role of accuser and judge at the same time.
(Zamboanga City Water District v. Buat, G.R. No. 104389, [May 27, 1994],
302 PHIL 622-628)

REINSTATEMENT; WHEN EFFECTIVE; RULE ON EFFECTIVITY


THEREOF PENDING APPEAL. — Under the provision of Art. 223 of
the Labor Code as amended by RA 6715, 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. The issuance of the temporary restraining order in
G.R. Nos. 95219-20 did not nullify the rights of private respondents to
their reinstatement and to collect their wages during the period of the
effectivity of the order but merely suspended the implementation
thereof pending the determination of the validity of the NLRC resolutions
subject of the petition. Naturally, a finding of this Court that private
respondents were not entitled to reinstatement would mean that they
had no right to collect any back wages. On the other hand, where the
Court affirmed the decision of the NLRC and recognized the right of
private respondents to reinstatement, as in G.R. Nos. 95219-20, private
respondents are entitled to the wages accruing during the effectivity of
the temporary restraining order.

(C. Alcantara & Sons, Inc. v National Labor Relations Commission, G.R. No.
73521, [January 5, 1994], 299 PHIL 116-124)

RIGHT OF EMPLOYEE ILLEGALLY DISMISSED. — Private respondent having


been illegally dismissed, he should be reinstated to his former position with
payment of back wages for a period of three (3) years without
qualification and deduction, not full back wages from 14 July 1983 to
actual reinstatement as his illegal dismissal took place on 14 July 1983, well
before 21 March 1989, the date of effectivity of R.A. No. 6715. However,
if reinstatement is no longer feasible, as petitioner claims it has since 30
June 1991 closed its logging operations upon expiration of its Timber
License Agreement with the Department of Environment and Natural
Resources, private respondent must be paid, in addition to the 3-year
back wages herein stated, separation pay computed on the basis of one
(1) month salary for every year of service.|||

|||

(Maranaw Hotel Resort Corp. v. National Labor Relations Commission, G.R.


No. 110027, [November 16, 1994], 308 PHIL 203-215)

1. LABOR AND SOCIAL


LEGISLATION; LABOR CODE; LABOR DISPUTES; REINSTATEMENT PENDING AP
PEAL; OPTIONS OF EMPLOYER. — It is clear from Article 223 that if
execution pending appeal is granted, the employee concerned shall be
admitted back to work under the terms and conditions prevailing prior to
his dismissal or separation. However, instead of doing so, the employer is
granted the option to merely reinstate the employee in the payroll. This
would simply mean that although not admitted back to work, the
employee would nevertheless be included in the payroll and entitled to
receive her salary and other benefits as if she were in fact working.
2. ID.; ID.; ID.; ID.; WRIT OF EXECUTION, INDISPENSABLE. — 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 proprio
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. . . ." 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 proprio or upon motion of any interested party,
issue a writ of execution on a judgment only 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."
3. ID.; ID.; ID.; ID.; MOTION FOR EXECUTION IN CASE AT BAR DEEMED
ABANDONED. — In the instant case, the Labor Arbiter neither issued motu
proprio a writ of execution to enforce the reinstatement aspect of his
decision nor acted on the private respondent's motion for execution filed
on 13 March 1992. The NLRC did not also resolve it prior to the
promulgation of its decision more than a year later or on 23 March 1993.
The pleadings before us do not show that the private respondent had
filed a motion to resolve the motion for execution or that she had, by any
other means, called the attention of the NLRC to such motion for
execution. The private respondent may therefore be deemed to have
abandoned her motion for execution pending appeal.
4. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN ORDERING PAYROLLREINSTATEMENT OF
EMPLOYEE IN THE ABSENCE OF ORDER FOR THE ISSUANCE OF WRIT OF
EXECUTION; CASE AT BAR. — In the absence then 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 petitioner's 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. Since in the instant case no occasion arose for
the petitioner to exercise its option under Article 223 of the Labor Code
with respect to the reinstatement aspect of the decision of
the Labor Arbiter, the NLRC acted with grave abuse of discretion when it
ordered that the private respondent should be considered reinstated in
the payroll from the filing of her motion for execution until the
promulgation of its resolution on 25 March 1993. As correctly contended
by the Office of the Solicitor General, the NLRC arrogated unto itself the
right to choose whether to admit the dismissed employee back to work or
to reinstate her in the payroll, which right properly pertains to the
employer." Worse, the NLRC resolution granted the unresolved motion for
execution which had been effectively abandoned through the private
respondent's inaction and which, for obvious reasons, could no longer be
properly resolved in a resolution finally disposing the appeal. And since
the resolution reversed the decision of the Labor Arbiter and dismissed for
lack of merit the private respondent's complaint for illegal dismissal, the
rationale for the order of payrollreinstatement is beyond us. WHEREFORE,
the petition is hereby GRANTED. The challenged resolution of the
National Labor Relations Commission of 25 March 1993 in NLRC-NCR Case
No. 00-11-06059-90 is modified by deleting the portion thereof ordering the
petitioner to pay the private respondent her salaries corresponding to the
period from 13 March 1992 up to the date of the promulgation of the
resolution. The rest shall stand.
5. LABOR AND SOCIAL
LEGISLATION; LABOR CODE; LABOR DISPUTE; REINSTATEMENT PENDING APP
EAL; OPTIONS OF EMPLOYER; BASIS. — This option is based on practical
considerations. The employer may insist that the dismissal of the employee
was for a just and valid cause and the latter's presence within its premises
is intolerable by any standard; or such presence would be inimical to its
interest or would demoralize the co-employees. Thus, while
payroll reinstatement would in fact be unacceptable because it
sanctions the payment of salaries to one not rendering service, it may still
be the lesser evil compared to the intolerable presence in the workplace
of an unwanted employee.
||| (Gaco v. National Labor Relations Commission, G.R. No. 104690,
[February 23, 1994], 300 PHIL 261-270)

RIGHTS OF EMPLOYEES IN CASE THEREOF; APPLICATION IN CASE AT BAR. —


On the basis of the foregoing jurisprudence defining the term constructive
dismissal, we sustain the ruling of the Labor Arbiter and his rationalization
thereon. Consequently, petitioner is entitled to her full backwages,
inclusive of allowances, and other benefits or their monetary equivalent
computed from the time her compensation was withheld from her up to
the time of her actual reinstatement. In ascertaining the total
amount of backwages payable to her, we enunciated in the
case of Pines City Educational Center, et al. v. NLRC, et al. (G.R. No.
96779, November 10, 1993) the doctrine that: ". . . we go back to the rule
prior to the Mercury Drug rule that the total amount derived from
employment elsewhere by the employee from the date of dismissal up to
the date of reinstatement, if any, should be deducted therefrom. . . ."
However, we shall not follow Article 279 of the Labor Code to the letter
regarding the period of backwages in view of the peculiar
circumstances of the present case, namely, "there is now a strained
relationship between (petitioner) and (private respondent) and
(petitioner) prays for payment of separation pay in lieu of reinstatement."
Instead, the period thereof shall be reckoned from the time her
compensation was withheld from her, or in April, 1990 up to the
finality of our decision.
3. ID.; SEPARATION PAY; RULE IN AWARDING
THEREOF IN CASE OF ILLEGALLY DISMISSED
EMPLOYEE IN LIEU OFREINSTATEMENT. — We sustain the
ruling of the Labor Arbiter granting separation pay in the amount of one
(1) month pay for every year of service. This has been our consistent
ruling in numerous decisions awarding separation pay to an illegally
dismissed employee in lieu of reinstatement. It should be emphasized
that separation pay is being awarded in this case for this reason, a fact
which the Office of the Solicitor General overlooked.

1995

||| (Coca-Cola Salesforce Union v. National Labor Relations Commission,


G.R. No. 116637, [April 21, 1995], 313 PHIL 612-619)

REINSTATEMENT; SHALL IMMEDIATELY BE EXECUTORY


EVEN PENDING APPEAL. — In the case at bench, both parties agreed to
submit NLRC Case No. RAB-III-05-5044-93 to Labor Arbiter Saludares on the
basis of their position papers and replies, as well as the documentary
evidence annexed thereto. They are likewise of the view that public
respondent erred in ordering the case remanded for hearings and further
reception of evidence. They submit that there is ample evidence on
record for public respondent to have decided on the appeal, even with
respect to the issue of illegal dismissal. Even the Solicitor General finds
public respondent's order for remand as constitutive of grave abuse of
discretion. Anent the issue of the stoppage of Calibot's and Duval's
payrollreinstatement, there is no need to look further than Article 223 of
the Labor Code, as amended, which provides, in part: " . . . 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. . .
." Since the May 16, 1994 Resolution of public respondent ordering the
remand of the illegal dismissal case to the labor arbiter was issued in
grave abuse of discretion and must be set aside, it inescapably follows
that the payroll reinstatement of the two employees should not be
stopped. p

||| (Balladares, Jr. v. National Labor Relations Commission, G.R. No.


111342, [June 19, 1995], 315 PHIL 203-210)

1. LABOR AND SOCIAL LEGISLATION; BACKWAGES; FULL PAYMENT THEREOF


UP TO THE TIME OF ACTUAL REINSTATEMENTPROVIDED UNDER R.A. No. 6715;
NO RETROACTIVE EFFECT. — We agree that no full backwages from the
time their pay was withheld up to the time of actual reinstatement can be
ordered paid to petitioners. R.A. No. 6715, which amended Art. 279 of
the Labor Code by requiring that an employee who is illegally dismissed
shall be paid "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
actualreinstatement," has no retroactive effect and does not apply to
cases of illegal dismissal taking place before its effectivity on March
21,1989. Since petitioners were dismissed in 1987, they cannot demand
payment of full backwages until they were actually reinstated.
2. ID.; ID.; PAYMENT THEREOF WHERE CASE OF REINSTATEMENT IS NOT
TERMINATED SOONER; RULE PRIOR TO THE EFFECTIVITY OF R.A. No. 6715. —
The NLRC should have awarded additional backwages instead of merely
affirming the Labor Arbiter's award of backwages for 15 months
corresponding to the time petitioners were illegally dismissed in April 1987
up to the time the LaborArbiter rendered his decision on August 5, 1988.
Prior to the effectivity of R.A. No. 6715, the rule was that an employee,
who was illegally dismissed, was entitled to an award of backwages
equivalent to three years (where his case is not terminated sooner). This
rule is understood to be written into the dispositive portion of every
decision awarding backwages, in view of the obvious difficulty in some
cases of determining when actual reinstatement would be made. In the
case at bar it was not quite possible for the LaborArbiter to determine
when petitioners would actually be reinstated since it had only been 15
months since their illegal dismissal. But in 1992, when even after three years
they had not been reinstated the NLRC should have modified the award
of backwages and given them the equivalent of three years full
backwages.
3. ID.; NATIONAL LABOR RELATIONS COMMISSION; APPEAL; RULE PRIOR TO
THE EFFECTIVITY OF R.A. No. 6715. — We also agree that petitioners did not
have a right to be reinstated pending resolution of the appeal of the
Bank. Their contention that the Bank'sappeal was not perfected on
account of the Bank's failure to post a supersedeas bond and that in any
event they had a right to be reinstated pending appeal, pursuant to Art.
223, is premised on the assumption that the requirement of posting a
bond as condition for perfecting an appeal as well as the provision
for reinstatement pending appeal applied to their case. The fact,
however, is that these are features introduced by way of amendment to
Art. 223 by R.A. No. 6715. At the time the appeal in this case was taken to
the NLRC on August 25, 1988, the provision for the posting of a
supersedeas bond and for execution pending appeal was not yet
effective. At that time, the rule was simply that to perfect an appeal, the
payment of the appeal fee and the filing of the memorandum
of appeal setting forth, among other things, the grounds relied upon and
the arguments in support thereof, were all that were required in order to
perfect an appeal. On the other hand, upon the perfection of
the appeal the decision appealed from was stayed.

(Archilles Manufacturing Corp. v. National Labor Relations Commission,


G.R. No. 107225 (Resolution), [June 2, 1995], 314 PHIL 770-780)

LABOR AND SOCIAL LEGISLATION; REINSTATEMENT; REQUIRES WRIT OF


EXECUTION FOR ENFORCEMENT THEREOF PENDINGAPPEAL. — Whether a
writ of execution is still necessary to enforce the Labor Arbiter's order of
immediate reinstatement even whenpending appeal, we agree with
petitioners that it is necessary. The third paragraph of Art. 223 of
the Labor Code provides — In any event, 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 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 the bond by the employer shall not stay the
execution for reinstatement provided herein. We have fully explained the
legal basis for this conclusion in Maranaw Hotel Resort Corporation
(Century Park Sheraton Manila) v. NLRC and Gina G. Castro (G. R. No.
110027, 16 November 1994) thus — 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). The second paragraph of
Section 1, Rule XVIII 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 proprio or upon
motion of any interested party, issue a writ of execution on a judgment
only 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. In the absence . . . 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 petitioner's 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 the 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.|||

||| (F.R.F. Enterprises, Inc. v. National Labor Relations Commission, G.R.


No. 105998, [April 21, 1995], 313 PHIL 493-502)

3. ID.; ID.; ID.; TERMINATION WITHOUT CAUSE AND WITHOUT NOTICE AND
HEARING, ILLEGAL; EMPLOYEE ENTITLED TOREINSTATEMENT AND
BACKWAGES. — Not only was private respondent's dismissal without
cause. It was, in addition, made without notice and
hearing in violation of Rule XIV, Section 2 of the Rules Implementing the
Labor Code which provides that — An employer who seeks to dismiss a
worker shall furnish him a written notice stating the particular acts or
omission constituting the grounds for
dismissal. In cases of abandonment of work, the notice shall be served at
the worker's last known address.
Art. 279 of the Labor Code provides that an employee who is
unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to full backwages. As
explained in the case of Torillo v. Leogardo: Backwages
and reinstatement are two reliefs given to an illegally dismissed employee.
They are separate and distinct from each other. However, in the event
thatreinstatement is no longer possible, separation pay is awarded to the
employee. Thus, the
award of separation pay is in lieu ofreinstatement and
not of backwages. In other words, an illegally dismissed employee is
entitled to (1) either reinstatement, if viable,
or separation pay if reinstatement is no longer viable and (2) backwages.

4. ID.; ID.; ID.; ID.; ID.; BACKWAGES


AWARDED IN LIEU OF REINSTATEMENT WHERE RELATIONSHIP BETWEEN THE
EMPLOYER AND THE EMPLOYEE HAD BECOME STRAINED. — In this case, the
NLRC cited the strained relationship between petitioner, particularly its
Operations Manager Victor Eugenio, and private respondent as basis for
increasing the rate of separation pay awarded to private
respondent in lieu of reinstatement, from ½ month for every year of service
to 1 month pay for every year of service. Forreinstatement would indeed
only aggravate the strain in the relation of the parties. The
award of backwages by the NLRC is likewise fully justified. This is a
form of relief intended to restore income lost by reason of unlawful
dismissal.
(Bombase v. National Labor Relations Commission, G.R. No. 110889, [June
30, 1995], 315 PHIL 551-556)
SEPARATION PAY; PAYMENT THEREOF IN LIEU OF REINSTATEMENT, MOST
EQUITABLE REMEDY IN CASE AT BAR. — The payment ofseparation pay to
petitioner cannot be faulted. Her reinstatement became a legal
impossibility after private respondent was dissolved by former President
Corazon C. Aquino in a Memorandum, dated May 7, 1988. Aside from this
supervening legal obstacle, the relationship between the petitioner and
the officials of private respondent has been strained by too much
antagonism. Officials of private respondent have expressed
lack of confidence on petitioner while petitioner has moved to cite the
general manager ofprivate respondent for contempt as indeed he was
fined for contempt. Given this strained relationship,
the reinstatement ofpetitioner will be neither beneficial for her nor her
employer. Under these circumstances, public respondent took the most
equitable step by ordering the payment of separation pay in favor of the
petitioner. With the grant of separation pay, it is incongruous for petitioner
to insist on any kind of reinstatement. Separation pay is precisely the
alternative remedy to reinstatement.|||

(Gold City Integrated Port Service, Inc. v. National Labor Relations


Commission, G.R. No. 103560, 103599, [July 6, 1995], 315 PHIL 698-716)

SEPARATION PAY, WHEN PROPER. — Where reinstatement is not possible or


when dismissal is due to valid causes, separation paymay be
granted. Separation pay is awarded when reinstatement is not possible,
due, for instance, to strained relations between employer and employee.
It is also given as a form of financial assistance when a worker is
dismissed in cases such as the installation of labor saving devices,
redundancy, retrenchment to prevent losses, closing or
cessation of operation of the establishment, or incase the employee was
found to have been suffering from a disease such that his continued
employment is prohibited by law. Separation pay is a statutory right
defined as the amount that an employee receives at the time of his
severance from the service and is designed to provide the employee with
the wherewithal during the period that he is looking for another
employment. It is oriented towards the immediate future, the transitional
period the dismissed employee must undergo before locating a
replacement job. Hence, an employee dismissed for causes other than
those cited above is not entitled to separation pay. Well-settled is it
that separation pay shall be allowed only in those instances where the
employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character.|||

||| (Vallacar Transit, Inc. v. National Labor Relations Commission, G.R. No.
109809, [July 17, 1995], 316 PHIL 556-562)

1. LABOR LAW; EMPLOYMENT; ILLEGAL DISMISSAL;


ORDER OF REINSTATEMENT AND AWARD OF BACK WAGES, PROPER. — We
find no abuse of discretion, much less grave, committed by
NLRC in ordering the reinstatement of private respondent and awarding
him back wages and attorney's fees. Article 279 of the Labor Code of the
Philippines, as amended, provides: "Security of Tenure. —
In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by
this Title. 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 back wages, 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." There having
been a finding of illegal dismissal, the Labor Arbiter should have applied
this provision of the Labor Code and ordered private
respondent'sreinstatement and payment of his back wages. Instead, he
only awarded private respondent separation pay.
2. ID.; ID.; ID.; AWARD OF SEPARATION PAY IN LIEU OF REINSTATEMENT, NOT
PROPER IN CASE AT BAR. — Under the law,separation pay can be
awarded in lieu of reinstatement only if reinstatement can no longer be
made, as when the position previously held by the employee no longer
exists or when there is strained relations as a result of loss of trust and
confidence. InGlobe-Mackay Cable and Radio Corporation
v. National Labor Relations Commission, 206 SCRA 701 (1992), we ruled:
"Over time, the following reasons have been advanced by the Court for
denying reinstatement under the facts of the case and the law
applicable thereto; that reinstatement can no longer be
effected in view of the long passage of time (22 years of litigation) or
because of the realities of the situation; or that it would be 'inimical to the
employer's interest;' or that reinstatement may no longer be feasible; or,
that it will not serve the best interests of the parties involved; or that the
company would be prejudiced by the workers' continued employment; or
that it will not serve the prudent purpose as when supervening facts have
transpired which make execution on that score unjust or inequitable or, to
an increasing extent, due to the resultant atmosphere of 'antipathy and
antagonism' or 'strained relations' or 'irretrievable estrangement' between
the employer and the employee."
Furthermore, we held: "In such cases, it should be proved that the
employee concerned occupies a position where he enjoys the trust and
confidence of his employer; and that it is likely that if reinstated, an
atmosphere of antipathy and antagonism may be generated as to
adversely affect the efficiency and productivity of the employee
concerned. "In Maranaw Hotels and Resorts Corp. v. Court of Appeals,
215 SCRA 501 (1992), we explained: ". . . '[s]trained relations' may be
invoked only against employees whose positions demand trust and
confidence, or whose differences with their employer are of such nature
or degree as to preclude reinstatement. In the instant case, however, the
relationship between private respondent a roomboy, and management
was clearly on an impersonal level. . . ." The case at bench does not fall
within any of the exceptions as to warrant the
grant of separation pay in lieu of reinstatement. Private respondent, as a
bus driver, did not hold a position of trust and confidence. That he
figured in several accidents prejudicial to petitioner cannot serve as basis
for the loss of trust and confidence. While the accidents may justify an
inquiry of the conduct of private respondent, the procedure required by
law for said purpose should be followed.
Moreover, there are no conclusive findings that the accidents were
caused by private respondent. In fact even the Labor Arbiter, in his
decision, found that the accident on April 8, 1988 was caused by the
driver of the tractor. Clearly, the NLRC did not commit grave
abuse of discretion in its findings.

1996
(Michael, Inc. v. National Labor Relations Commission, G.R. No. 97204,
[April 25, 1996], 326 PHIL 472-477)

LABOR LAW AND SOCIAL LEGISLATION; EMPLOYMENT; DISMISSAL; TOO


HARSH A PENALTY FOR ABSENCES INCURRED BY A MARINE ENGINEER ON
FOUR DIFFERENT OCCASIONS OVER A PERIOD OF FOUR
YEARS; SEPARATION PAY IN LIEU OFREINSTATEMENT, PROPER. — Private
respondent, as a marine engineer, was an important member of the
crew of a vessel. On no other employer is a greater duty
imposed of minimizing absences among crew members than on common
carriers. The law requires them to exercise extraordinary diligence in the
transportation of passengers and vigilance over goods.

The question in this case is whether, considering the fact that the
absences of private respondent occurred on four different occasions over
a period of four years from 1980 to 1984 and that he had been with the
company for eight years, dismissal would not be too drastic a penalty to
impose. We think the NLRC rightly invoked the words of Justice
Fernando in Almira v. B.F. Goodrich Phils. Inc. that "where a penalty less
punitive would suffice, whatever missteps may be committed
by labor ought not to be visited with a consequence so severe.

It is not only the law's concern for the workingman. There


is, in addition, his family to consider. Unemployment brings untold
hardships and sorrows on those dependent on the wage-earner. Our
cases after Goodrich have been faithful to the spirit of that decision, by
paying tribute to the right of employees to security of tenure while
recognizing the right of employers to impose discipline.
||| (Caliguia v. National Labor Relations Commission, G.R. No. 117945,
[November 13, 1996], 332 PHIL 128-143)

AWARD OF BACKWAGES; SINCE THE ILLEGAL DISMISSAL IN QUESTION WAS


EFFECTED PRIOR TO THE EFFECTIVITY OF R.A. NO. 6715, PETITIONER IS
ENTITLED TO AN AWARD OF BACKWAGES FOR ONLY THREE YEARS;
PETITIONER MAY BE AWARDED SEPARATION PAYIN LIEU OF REINSTATEMENT;
REASON. — The award of back wages for three years is due to the fact
that the illegal dismissal inquestion was effected prior to the
effectivity of R.A. No. 6715 on 21 March 1989. As the said statute had no
retroactive effect, the controlling doctrine then was the Mercury
Drug rule. After the effectivity of R.A. No. 6715, an illegally dismissed
employee is entitled to payment of back wages from the time he was
illegally dismissed from his employment until he is reinstated subject,
however, as decreed by this Court, to deduction of the income the
employee may have derived from employment elsewhere during the
period ofhis illegal termination. We do not discount the
impossibility of reinstatement of the petitioner considering that his position
or any equivalent position may no longer be available and that this
protracted litigation may have seriously antagonized the relationship of
the parties so as to render reinstatement impractical.

Accordingly, the petitioner may be awarded separation pay in lieu of


reinstatement, as in Pepsi-Cola Distributors of the Philippines, Inc. vs.
National Labor Relations Commission on the basis of service from the time
the petitioner was employed by PCD (July 1981) until the actual
payment of separation pay in accordance with this decision. ED

||| (Pantranco North Express, Inc. v. National Labor Relations


Commission, G.R. No. 114333, [January 24, 1996], 322 PHIL 256-267)

IN CASE OF ILLEGAL DISMISSAL, EMPLOYEE ENTITLED


TO REINSTATEMENT AND BACKWAGES. — We now come to the
consequences that should visit the petitioner for illegally dismissing Rueda.
Under the Labor Code, an illegally dismissed employee is entitled
toreinstatement and to backwages.
5. ID.; ID.; ID.; SEPARATION PAY; PAYMENT THEREOF
PROPER IN LIEU OF REINSTATEMENT WHERE EMPLOYER IS IN SEVERE
FINANCIAL STRAIT; CASE AT BAR. — In this case, however, public
respondent deemed it proper to order the payment of Rueda's
backwages and separation pay, in lieu of reinstatement. Public
respondent noted that petitioner is "in severe financial strait, nay, on the
verge of collapse," thus, making Rueda's reinstatement impractical or
impossible. We find no cogent reason to set aside public respondent's
findings on this matter.
(Radio Communications of the Philippines, Inc. v. National Labor Relations
Commission, G.R. No. 113178, 114777, [July 5, 1996], 327 PHIL 838-851)

PAYMENT OF SEPARATION PAY IN LIEU OF REINSTATEMENT; CASE AT BAR. —


The company's failure to take seasonable steps for its "self-preservation,"
the company may not now claim all previous infractions allegedly
committed by Villaflores as contributory reasons for dismissing him. After
all, the immediate cause of his dismissal was the incident with Mattus,
obviously a Braga protege. As such, in the interest of both the company
and Villaflores, in lieu of reinstatement, he shall
receive separation pay of one month for every year of service or as
provided for in the then prevailing collective bargaining agreement,
whichever would result in a higher award.|||

||| (Rasonable v. National Labor Relations Commission, G.R. No. 117195,


[February 20, 1996], 324 PHIL 191-201)

LABOR CODE; TERMINATION OF EMPLOYMENT BY EMPLOYER; ILLEGAL


DISMISSAL; ENTITLES AN EMPLOYEE TO SEPARATION PAY AND BACKWAGES.
— An employee who has been illegally dismissed after the effectivity
of R.A. 6715 shall be entitled to reinstatement, full backwages and other
benefits for the entire period that he was out of work and until
actual reinstatement. However, in lieu of reinstatement, petitioner may
instead be awarded separation pay. Separation pay is the amount that
an employee receives at the time of his severance from the service and is
designed to provide the employee with the wherewithal during the period
that he is looking for another employment. The grant of separation pay
does not preclude an award for backwages for the latter represents the
amount of earnings lost by reason of the unjustified dismissal. Additionally,
a dismissed employee is entitled to 13th month pay.
ORDER OF REINSTATEMENT DIFFERENTIATED FROM ACTUAL REINSTATEMENT.
— A mere order for reinstatement issued by the labor arbiter is totally
different from actual restoration of an employee to his previous position. It
is for this reason that Article 279, as amended by R.A. 6715, provides for
payment of full backwages and other benefits from the time of dismissal
up to the time of actual reinstatement. Thus, in case reinstatement is
adjudged, the award of backwages and other benefits continues
beyond the date of the labor arbiter's decision
ordering reinstatement and extends up to the time said order
ofreinstatement is actually carried out. Correlatively, an award of
separation pay, in lieu of reinstatement, and other benefits due to the
employee, without actual payment thereof, does not have the effect of
terminating the employment of an illegally dismissed employee. The
award of the labor arbiter could still be overturned or modified and, in
most cases, its execution could be unreasonably delayed. Thus, until
actual receipt of the award of separation pay, the employer-employee
relationship subsists, entitling the illegally dismissed employee to an award
of backwages, 13th month pay and other benefits from the time of his
dismissal until finality of the decision of the labor arbiter.

(Philippine Airlines, Inc. v. National Labor Relations Commission, G.R. No.


113827, [July 5, 1996], 327 PHIL 876-882)

LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF


EMPLOYMENT; INTENT OF THE LAW IN MAKING REINSTATEMENTORDER
IMMEDIATELY EXECUTORY. — The intent of the law in making
a reinstatement order immediately executory is much like a return-to-work
order, i.e., to, restore the status quo in the workplace in the meantime that
the issues raised and the proofs presented by the contending parties have
not yet been finally resolved. It is a legal provision which is fair to
both labor and management because while execution of the order
cannot be stayed by the posting of a bond by the employer, the workers
also cannot demand their physical reinstatement if the employer opts to
reinstate them only in the payroll.|||

(Belaunzaran v. National Labor Relations Commission, G.R. No. 120038,


[December 23, 1996], 333 PHIL 670-679)

LABOR AND SOCIAL LEGISLATION;


TERMINATION OF EMPLOYMENT; SEPARATION PAY MAY BE
AWARDED IN LIEU OFREINSTATEMENT. — There being no dismissal nor
abandonment to speak of, the status quo between petitioner and private
respondents should be maintained as a matter of course. But as found by
the Labor Arbiter, the reinstatement of petitioner is no longer feasible due
to a deep antagonism between her and private respondents.
Thus, in lieu of reinstatement, petitioner was correctly
awarded separation pay equivalent to one (1) month pay for every
year of service plus thirteenth (13th) month pay which is based on the
original offer of private respondents.|||

1997
||| (First City Interlink Transportation Co., Inc. v. Roldan-Confesor, G.R. No.
106316, [May 5, 1997], 338 PHIL 635-651)

RETURN TO WORK ORDER; SUBSTANTIAL COMPLIANCE THEREOF IN CASE AT


BAR. — Petitioner substantially complied with the Return to Work Order.
The medical examination, NBI, Police and Barangay Clearances as well as
the driver's and conductor's/conductress' licenses and photographs
required as conditions for reinstatement were reasonable management
prerogatives. However, the other requirements imposed as condition
for reinstatement were unreasonable considering that the employees
were not being hired for the first time, although the imposition of such
requirements did not amount to refusal on the part of the employer to
comply with the Return to Work Order or constitute illegal lockout so as to
warrant payment of backwages to the strikers. If at all, it is the employees'
refusal to return to work that may be deemed a refusal to comply with the
Return to Work Order resulting in loss of their employment status. As both
the employer and the employees were, in a sense, at fault or in pari
delicto, the nonreturning employees, provided they did not
participate in illegal acts, should be considered entitled to reinstatement.
But since reinstatement is no longer feasible, they should be
given separation pay computed up to March 8, 1988 (the date set for the
return of the employees) in lieu of reinstatement.

||| (Yap v. National Labor Relations Commission, G.R. No. 123492,


[August 21, 1997], 343 PHIL 803-815)

Petitioner, an employee of China Banking Corporation, availed of a


housing loan under the bank's Financing Plan for Officers and Employees
for the construction of his house in Tandang Sora, Quezon City. Petitioner
received the full proceeds of the loan. EaISTD
Respondent bank discovered that the loan proceeds were not used for
the bank's financing plan.
Required to explain, petitioner declared that he used a substantial
portion of the proceeds of the loan to repay the installments advanced
by his brother on the lot where he intended to build his house, and that
the pre-construction expenses he incurred left him an amount which was
no longer enough for the construction of a house.
Unsatisfied with his explanation, respondent bank terminated petitioner's
employment.
Petitioner filed a complaint for illegal dismissal against respondent bank
with the arbitration branch of the NLRC, National Capital Region. He
prayed for reinstatement and payment of backwages plus damages.
The labor arbiter dismissed petitioner's complaint. On appeal to the NLRC,
the NLRC affirmed the labor arbiter's decision, which also denied
petitioner's motion for reconsideration.
We find merit in this petition. Granting that petitioner violated the bank's
financing plan, the penalty of dismissal from the service is too severe and
grossly disproportionate to the act imputed to him. This being his first
offense against the bank the penalty ofdisqualification from borrowing
under the financing plan for five years or suspension, but not dismissal,
should have been imposed.
This court, in a long line of cases, has held that notwithstanding the
existence of a valid cause for dismissal such as breach of trust by an
employee, nevertheless, dismissal should not be imposed, as it is too
severe a penalty if the employee has worked for a considerable
length of time in the service of his employer, and such employment is
untainted by any kind of dishonesty or irregularity.
||

PAYMENT OF SEPARATION PAY IN LIEU OF REINSTATEMENT WHERE


RELATIONSHIP OF EMPLOYER TO EMPLOYEE HAS BECOME STRAINED. —
In this case, the reinstatement of petitioner would, in our view, no longer
be beneficial to either party, considering petitioner's allegations against
his immediate superior, as well as some co-employees. There is no doubt
that the relationship ofemployer to employee is so strained and ruptured
as to preclude a harmonious working relationship should reinstatement be
decreed. Instead, petitioner should be afforded the right
to separation pay so that he can be spared the agony of having to
work inan atmosphere of antipathy and antagonism, and the private
respondent does not have to endure the continued
services ofpetitioner in whom it has lost confidence. Private respondent,
China Banking Corporation is hereby ordered to pay petitioner Danilo A.
Yap, separation pay equivalent to one month's pay for every
year of service, in lieu of reinstatement, and full backwages based on his
last monthly salary, to be computed from the date of his dismissal from the
service up to the date of finality of this decision, without any qualifications
or deductions.

||| (Capili v. National Labor Relations Commission, G.R. No. 117378,


[March 26, 1997], 337 PHIL 210-217)

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF


EMPLOYMENT; ILLEGAL DISMISSAL; SEPARATION PAY AS A REMEDY;
WHEN AVAILABLE. — The legal basis for the award of separation pay
is clearly provided by Art. 279 of the Labor Code which states that
the remedy for illegal dismissal is reinstatement without loss of
seniority rights plus back wages computed from the time
compensation was withheld up to reinstatement. However, there
may be instances where reinstatement is not a viable remedy as
where the relations between employer and employee have been
so severely strained that it is no longer advisable to
order reinstatement or where the employee decides not to be
reinstated. In such events, the employer will instead be ordered to
pay separation pay. A reading of Art. 279 in relation to Art. 282 of
the Labor Code reveals that an employee who is dismissed for
cause after appropriate proceedings in compliance with the due
process requirements is not entitled to an award of separation pay.

Under Arts. 283 and 284 of the same Code, separation pay is
authorized only in cases of dismissals due to any of these reasons:
(a) installation of labor saving devices; (b) redundancy; (c)
retrenchment; (d) cessation of the employer's business, and, (e)
when the employee is suffering from a disease and his continued
employment is prohibited by law or is prejudicial to his health and to
the health of his co-employees. However, separation pay shall be
allowed as a measure of social justice in these cases where the
employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character, but only
when he was illegally dismissed. The common denominator of these
instances where payment of separation pay is warranted is that the
employee was dismissed by the employer.
2. ID.; ID.; ID.; ID.; ID.; AWARD THEREOF CANNOT BE JUSTIFIED SOLELY
BECAUSE OF THE EXISTENCE OF "STRAINED RELATIONS" BETWEEN THE
EMPLOYER AND THE EMPLOYEE. — The award of separation pay cannot
be justified solely because of the existence of "strained relations" between
the employer and the employee. It must be given to the employee only
as an alternative to reinstatement emanating from illegal dismissal. When
there is no illegal dismissal, even if the relations are strained, separation
pay has no legal basis. Besides, the doctrine on "strained relations" cannot
be applied indiscriminately since every labor dispute almost invariably
results in "strained relations"; otherwise, reinstatement can never be
possible simply because some hostility is engendered between the parties
as a result of their disagreement.
3. ID.; ID.; ID.; ID.; REINSTATEMENT, AS A RELIEF; WHEN MAY BE WAIVED;
CASE AT BAR. — When respondents filed their complaint, and taking
account of the allegations therein, they foreclosed reinstatement as a
relief, since they prayed only for an award of separation pay. This is
confirmed in their appeal to the NLRC where they prayed for a
modification of the decision of theLabor Arbiter,
from reinstatement without back wages to payment of three (3) years
back wages and separation pay equivalent to one (1) month salary for
every year of service. If private respondents voluntarily chose not to return
to work any more they must be considered as having resigned from their
employment. This is without prejudice however to the willingness of both
parties to continue with their former contra of employment or enter into a
new one whenever they so desire.
4. CONSTITUTIONAL LAW; SOCIAL JUSTICE AND HUMAN RIGHTS; LABOR; THE
CONSTITUTIONAL POLICY OF PROVIDING FULL PROTECTION TO LABOR IS
NOT INTENDED TO OPPRESS OR DESTROY MANAGEMENT. — The
constitutional policy of providing full protection to labor is not intended to
oppress or destroy management. The commitment of this Court to the
cause of labor does not prevent us from sustaining the employer when it is
in the right, as in this case.
Herein private respondent Lourdes A. 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 finding 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. Petitioners appealed to the NLRC. The NLRC
affirmed the Labor Arbiter's order of reinstatement, but without
backwages. Petitioners filed their motion for reconsideration, but it was
denied. Hence, this petition. cdasia
Petitioners simply failed, both before the Labor Arbiter and the NLRC, to
discharge the burden of proof and to validly justify De Jesus' dismissal from
service. Lack of a just cause in the dismissal from service of an employee,
as in this case, renders the dismissal illegal, despite the employer's
observance of procedural due process. The Court also found the
imposition of the extreme penalty of dismissal against de Jesus as harsh
and grossly disproportionate to the negligence committed. Furthermore,
the rule that all doubts in the interpretation and implementation
of labor laws should be resolved in favor of labor found its application in
this case. The Court ruled that the award or order for reinstatement of de
Jesus is self-executory. The petition herein was denied and the decision of
the Labor Arbiter was reinstated.

||| (Pioneer Texturizing Corp. v. National Labor Relations Commission,


G.R. No. 118651, [October 16, 1997], 345 PHIL 1057-1077)

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF


EMPLOYMENT BY EMPLOYER; LACK OF JUST CAUSE RENDERS THE DISMISSAL
ILLEGAL; CASE AT BAR. — The law 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 (Art. 279, Labor Code, as
amended). Lack of a just cause in the dismissal from service of an
employee, as in this case, renders the dismissal illegal, despite the
employer's observance of procedural due process. 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. This Court finds 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. The employer
should bear in mind that, in the exercise of such right, what is at stake is
not only the employee's position but her livelihood as well.
2. ID.; ID.; ID.; LOSS OF CONFIDENCE AS A CAUSE; REQUIREMENT TO BE A
VALID GROUND; CASE AT BAR. — 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 be 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. In this case, 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
employers. The breach of trust must be relaxed to the performance of the
employee's functions.
3. ID.; ID.; ID.; ILLEGAL DISMISSAL; ORDER OR AWARD FOR REINSTATEMENT;
WHEN SELF-EXECUTORY; RATIONALE. — Prior to the enactment of R.A. No.
6715, Article 223 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 thereby the legislature's 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 and that the presumption is that the word
"shall," when used in a statute, is mandatory. Anappeal or posting of
bond, by plain mandate of the law, could not even forestall nor stay the
executory nature of an order ofreinstatement. The law, moreover, is
unambiguous and clear. Thus, it must be applied according to its plain
and obvious meaning, according to its express terms. 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 award becomes final and executory. It
can not 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 reinstatementshall be immediately
executory even pending appeal and the posting of a bond by the
employer shall not stay the execution forreinstatement. The legislative
intent is quite obvious, i.e., to make an award
of reinstatement immediately enforceable, even pendingappeal. 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 reinstatementorder. 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 then the executory nature of a reinstatement order or
award contemplated by Article 223 will be unduly circumscribed and
rendered ineffectual. In introducing a new rule on
the reinstatementaspect of a labor decision under R.A. No. 6715 Congress
should not be considered to be indulging in mere semantic exercise.
Onappeal, 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, the rule is 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 re-admit 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. DCcHIS
4. STATUTORY CONSTRUCTION; STATUTE; SHOULD BE CONSTRUED IN THE
LIGHT OF THE PURPOSE TO BE ACHIEVED OR EVIL SOUGHT TO BE REMEDIED.
— 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. And where the statute is fairly susceptible of two or more
constructions, that construction should be adopted which will most tend
to give effect to the manifest intent of the lawmaker 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. caCED

||| (Taberrah v. National Labor Relations Commission, G.R. No. 117742,


[July 29, 1997], 342 PHIL 394-408)

Petitioner worked for Caltex for 19 years. In 1993, while occupying the
position of Senior Manager of the Supply and Distribution Department of
Caltex an anonymous letter was circulated against petitioner on
contracting certain anomalous transactions and other irregularities. Due
to the gravity of the accusation, petitioner was placed under preventive
suspension and informed of a scheduled formal investigation which
petitioner did not attend and instead filed a complaint for illegal
suspension and illegal dismissal. Ex-parte ruling of the formal investigation
dismissed him on ground of breach of trust and loss of confidence.
In the complaint for illegal suspension and dismissal filed by Petitioner
against Caltex, the Labor Arbiter denied the motion of Caltex for a trial on
the merits and rendered judgment based on the pleadings and other
documentary evidence. The Labor Arbiter found the dismissal of petitioner
illegal, and ordered Caltex to reinstate petitioner with full backwages and
to pay moral and exemplary damages.
On appeal to the NLRC, Caltex instead of posting an appeal bond,
attached to its Memorandum of Appeal a Motion to Fix Appeal
Bond alleging that the Labor Arbiter did not contain a computation of the
award. Subsequently, the NLRC issued an order fixing the appeal bond
and gave Caltex an additional period to post the required bond.
Meanwhile, petitioner filed several motions for execution with the NLRC
which refused to act thereon. Finally, the NLRC reversed the decision of
the Labor Arbiter and dismissed the complaint. Hence, this recourse.
The Supreme Court held that it is the Labor Arbiter, not the NLRC, who has
authority to issue writ of execution of the reinstatement aspect of the
decision; that Labor Arbiter enjoys wide discretion in determining whether
there is need for formal hearing in a given case; that the requirement of
posting an appeal bond within the reglementary period has been relaxed
in line with the principle that substantial justice is better served by
allowing appeal to be resolved on the merits rather than dismissing it
based on technicality; continued recognition of the right of the employer
to dismiss an employee on ground of breach of trust and loss of
confidence which must not be exercised arbitrarily and without just cause;
and finally while award of moral and exemplary damages is discretionary
upon Labor Arbiter, the amount thereof must be reasonable and justified.

LABOR AND SOCIAL LEGISLATION; LABOR CODE; APPEAL; LABOR ARBITER


— NOT THE NLRC — HAS THE AUTHORITY TO ISSUE THE WRIT OF EXECUTION
OF THE REINSTATEMENT ASPECT OF THE DECISION EVEN IF THE CASE IS
ALREADY PENDING APPEAL. — It is clear that it is the Labor Arbiter — not
the NLRC — that has the authority to issue the writ of execution of
the reinstatement aspect of the decision even if the case is
already pending appeal. Since it was the Labor Arbiter who issued the
decision sought to be executed, the motion for execution should also be
filed with the Labor Arbiter. Furthermore, as correctly ruled by respondent
NLRC, appellate courts cannot by themselves issue a writ of execution but
that the same may only be issued by the hearing officer of the court of
origin. In this regard, however, to obviate delay, the NLRC should have
forthwith directed the Labor Arbiter to issue the corresponding writ prayed
for.

1998
(Kathy-O Enterprises v. National Labor Relations Commission, G.R. No.
117610, [March 2, 1998], 350 PHIL 380-393)

Petitioner Kathy-O Enterprises is a sole proprietorship owned and


operated by Arlene Estrella. Ernesto C. Aruta was employed by Kathy-O
as a pattern maker and operations manager. Aruta absented himself
from work without the approval of Estrella. When he returned, he was
directed to work on the night shift. Perceiving that the hiring of another
pattern maker in his stead and his transfer to the night shift as a dismissal,
he filed an illegal dismissal case against Kathy-O. The Labor Arbiter
rendered a decision dismissing the charge of illegal dismissal; nevertheless,
Kathy-O was ordered to reinstate Aruta to his former position. Neither
party appealed from the decision. After more than six months, Aruta and
his counsel informed Kathy-O of his desire to be reinstated or be paid
separation pay and back wages. However, Kathy-O rejected both
options. Aruta moved for the execution of the decision as regards
his reinstatement. The Labor Arbiter granted the motion on the ground
that the decision had become final and executory. Kathy-O appealed,
but the NLRC denied it for having been filed out of time. The NLRC also
denied Kathy-O's motion for reconsideration. Unsatisfied, Kathy-O
instituted this petition. The issue is whether the Labor Arbiter committed
error in granting execution pending appeal.
The Supreme Court answered the issue in the negative ruling that
the delay in the appeal of Kathy-O proved to be an inadvertence
amounting to excusable negligence, hence, NLRC should have decided
the case on the merits. However, to remand the case to the NLRC would
only further delay its termination. The Court, therefore, granted the instant
petition in part. According to the Court, Aruta had five years within which
to secure execution of judgment pursuant to Section 1 of Rule VIII of the
New Rules of Procedure of the NLRC. Clearly, the Labor Arbiter acted
correctly in granting the motion for execution filed six months after Aruta
was to be reinstated. However, under the circumstances of the
case, reinstatement would be impractical. Hence, the Court ordered
Kathy-O to pay separation pay to Aruta.
EMPLOYER-EMPLOYEE RELATIONS; TERMINATION OF EMPLOYMENT BY
EMPLOYER; WHEN SEPARATION PAY CAN BE
AWARDED INLIEU OF REINSTATEMENT. — The resentment and enmity
between ARUTA and KATHY-O which culminated in and was
compounded by the illegal dismissal suit (NCR Case No. 00-12-06646-91),
necessarily strained the relationship between them or even provoked
antipathy and antagonism. The Court has ruled that separation pay can
be awarded in lieu of reinstatement if reinstatement can no longer be
had, as when the position previously held by the employee no longer
exists or when there is strained relations as a result of loss of trust and
confidence. (Globe-Mackay Cable and Radio Corp. v. NLRC, 206 SCRA
701 [1992]) Accordingly, the rule is that in lieu of reinstatement, ARUTA
should instead be given separation pay at the rate of one month pay for
every year of service, with a fraction of at least six months of service
considered as one year of service, computed from the time he was first
employed until he shall be paid the separation pay due him. TcIHD|||

||| (Pascua v. National Labor Relations Commission, G.R. No. 123518,


[March 13, 1998], 351 PHIL 48-75)

Petitioners filed at the Regional Arbitration Branch separate complaints


against Henry Lao, doing business under the name "Tiongson Super
Bazaar, for illegal dismissal and claims for violation of labor standards
pertaining to payment of wages. The LaborArbiter ruled that the dismissals
were illegal and awarded backwages and separation pay to
petitioners. AEHTIC
Both petitioners and respondents appealed to the NLRC, which modified
the appealed decision. It found the termination ofpetitioners' employment
to be due either to voluntary resignation or dismissals with just cause.
Petitioners' motion for reconsideration was denied. Hence, this petition.
The issue is whether the NLRC committed grave abuse of discretion
amounting to lack of jurisdiction.
The petition is meritorious. Petitioners were not served a formal
notice of dismissal. Their right to procedural due process was violated.
Petitioners' employment was not terminated in accordance with law.
Petitioners did not voluntarily quit their jobs. They were forced to resign or
were summarily dismissed without just cause.
SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; INSTANCES WHEN THE SUPREME


COURT MAY REVIEW FACTUAL MATTERS. — This Court refrains from
reviewing the factual assessments of lower courts and agencies exercising
adjudicative functions, such as the NLRC. Occasionally, however, this
Court is constrained to wade into factual matters when there is insufficient
or insubstantial evidence on record to support those factual findings; or
when too much is concluded, inferred or deduced from the bare or
incomplete facts appearing on record.
2. LABOR LAW; LABOR RELATIONS; DISMISSAL; THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE DISMISSAL WAS FOR A JUST CAUSE. — The
employer has the burden of proving that the dismissal was for a just cause;
failure to show this, as in the instant case, would necessarily mean that the
dismissal was unjustified and, therefore, illegal. To allow an employer to
dismiss an employee based on mere allegations and generalities would
place the employee at the mercy of his employer; and the right to
security oftenure, which this Court is bound to protect, would be unduly
emasculated. AHCaES
3. ID.; TWO-FOLD REQUIREMENT IN THE DISMISSAL OF AN EMPLOYEE. —
Under the Labor Code, as amended, the dismissal of an employee which
the employer must validate has a two-fold requirement: one is
substantive, the other procedural. Not only must the dismissal be for a just
and authorized cause as provided by law (Articles 282, 283 and
284 of the Labor Code, as amended); the rudimentary
requirements of due process — the opportunity to be heard and to
defend oneself — must be observed as well.
4. ID.; WILLFUL DISOBEDIENCE AS A CAUSE FOR DISMISSAL; REQUIREMENTS.
— To be a just cause for an employee's dismissal, wilful disobedience must
show the following: the employee's assailed conduct must have been
wilful or intentional, the wilfulness being characterized by a "wrongful and
perverse attitude"; and the other violated must have been reasonable,
lawful, made known to the employee and pertinent to the duties which
he or she had been engaged to discharge.
5. ID.; SEPARATION PAY; AWARD OF SEPARATION PAY PRESUPPOSES
ILLEGAL DISMISSAL. — The grant of separation pay, however, is
inconsistent with existing employment or voluntary resignation, for it
presupposes illegal dismissal. The solicitor general rationalizes the
award of separation pay as one that is based on "equitable
consideration"; that is, it was for the purpose ofproviding petitioner the
"wherewithal during the period that she is looking for another
employment." This explanation is unacceptable. If petitioner was legally
dismissed, as the solicitor general held, then the NLRC erred in finding her
"entitled toseparation pay, in lieu of reinstatement." Indeed, if she was
dismissed for cause, jurisprudence demands that she should not be
granted any award for the wrongdoing she was alleged to have
committed; nor is she entitled to reinstatement and back wages.

||| (Food Traders House, Inc. v. National Labor Relations Commission,


G.R. No. 120677, [December 21, 1998], 360 PHIL 551-559)

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT;


ILLEGALLY DISMISSED EMPLOYEE ENTITLED TO FULL BACK WAGES. — As the
law now stands, an illegally dismissed employee is entitled to his full back
wages, without deduction of earnings earned elsewhere from the time his
compensation was withheld until his actual reinstatement. As such,
earnings earned elsewhere during the pendency of the case should not
be deducted from the computation of his back wages. Article 279 of
the Labor Code, as amended by R.A. 6715 which took effect 21 March
1989. cdasia
2. ID.; ID.; ID.; ID.; CASE AT BAR. — In the instant case, Espino was illegally
dismissed on 31 January 1992 and was only actually reinstated on 4 July
1994. Conformably with Art. 279 of the Labor Code, which provides that
an illegally dismissed employee is entitled to full backwages from the time
his compensation was withheld from him up to the time of his
actual reinstatement, Espino's back wages should be computed from 31
January 1992 until 4 July 1994, plus the corresponding increases and other
benefits, including 13th month pay. Thus, in case reinstatement is
adjudged, the award of back wages and other benefits continues
beyond the date of the labor arbiter's decision
ordering reinstatement and extends up to the time said order
of reinstatement is actually carried out.
3. ID.; ID.; LABOR ARBITER; JURISDICTION. — Article 217 of the Labor Code
limits the jurisdiction of labor arbiters to (a) unfair labor practice cases; (b)
termination disputes; (c) if accompanied with a claim for reinstatement,
those cases that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment; (d) claims for
actual, moral, exemplary and other forms of damages arising from the
employer-employee relations; (e) cases arising from any violation of Art.
264 of this Code, including questions involving the legality of strikes and
lockouts; and, (f) except for claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding P5,000,00 regardless of
whether accompanied with a claim for reinstatement.

(Filflex Industrial & Manufacturing Corp. v. National Labor Relations


Commission, G.R. No. 115395, [February 12, 1998], 349 PHIL 913-925)
Private respondent herein was dismissed for abandonment of work.
She claimed, however, that her dismissal on the said ground is not in
consonance with the law considering that her absences were due to
sickness wherein her employer was duly notified. TSaEcH
The petitioner herein contended otherwise. It alleged that
complainant has been committing various violations of company rules
and regulations ever since. And despite several warnings, private
respondent persisted in her tardiness and frequent absences. Finally, due
to her absences from November 30, 1990 to December 11, 1990, she was
required to explain why she should not be dismissed for having
abandoned her job considering that she had been earlier warned against
similar violations. Thereafter, petitioner dismissed private respondent for
failure to report for work and explain her absences without permission.
The Labor Arbiter declared the dismissal of private respondent
improper and unjust. She was awarded limited backwages and other
benefits plus separation pay. The Labor Arbiter did not order
her reinstatement. On appeal, Respondent NLRC ruled that the dismissal
of private respondent was justified. It held however, that Article 223 of
the Labor Code required the reinstatement of private respondent during
the pendency of her appeal. Hence, the NLRC awarded private
respondent her salaries from the date of the filing of the appeal up to the
date of the promulgation of its Resolution.
Reinstatement during appeal is warranted only when
the Labor Arbiter himself rules that the dismissed employee should be
reinstated. Here, the Labor Arbiter's decision never ordered
the reinstatement of private respondent. Further, the backwages granted
in the said decision were specifically limited to the period prior to the filing
of the appeal with respondent NLRC. In fact, the decision ordered her
separation from service. Hence, it is an error for the NLRC to hold that the
award of limited backwages, by implication, included an order for private
respondent's reinstatement.
||
LABOR AND SOCIAL LEGISLATION; EMPLOYMENT;
DISMISSAL; REINSTATEMENT AND BACKWAGES; NOT WARRANTED IN CASE
AT BAR. — Reinstatement during appeal is warranted only when
the labor arbiter himself rules that the dismissed employee should be
reinstated. In the present case, neither the dispositive portion nor the text
of the labor arbiter's decision ordered the reinstatementof private
respondent. Further, the back wages granted to private respondent were
specifically limited to the period prior to the filing of the appeal with
Respondent NLRC. In fact, the LA's decision ordered her separation from
service for the parties' "mutual advantage and most importantly to the
physical and health welfare of complainant." Hence, it is an error and an
abuse of discretion for the NLRC to hold that the award of limited back
wages, by implication, included an order for private
respondent's reinstatement. An order for reinstatement must be
specifically declared and cannot be presumed; like back wages, it is a
separate and distinct relief given to an illegally dismissed employee. There
being no specific order for reinstatement and the order being for
complainant's separation, there can be no basis for the award of
salaries/back wages during the pendency of appeal. In addition to the
foregoing, before reinstatement or back wages may be granted, there
must be unjust or illegal dismissal from work. The labor arbiter ruled that
private respondent's "absences and tardiness by itself are sufficient
ground for the complainant's dismissal were it not for reason of sickness
which we believe is excusable." On appeal, the NLRC categorically
declared that private respondent's dismissal was wholly justified because
her performance was characterized by inefficiency, infractions and
absenteeism. Since the dismissal of private respondent was deemed valid,
she cannot be entitled to reinstatement and back wages. An award of
back wages by the NLRC during the period of appeal is totally
inconsistent with its finding of a valid dismissal.|||

(International Container Terminal Services, Inc. v. National Labor Relations


Commission, G.R. No. 115452, [December 21, 1998], 360 PHIL 527-536)

1. LABOR CODE; EMPLOYMENT; ILLEGAL DISMISSAL; AWARD


OF REINSTATEMENT BY THE LABOR ARBITER IS SELF- EXECUTORY; WRIT OF
EXECUTION APPLIED ONLY TO FINAL AND EXECUTORY DECISIONS NOT
WITHIN THE COVERAGE OF ART. 223 OF THE LABORCODE. — The Court in
the 1997 Pioneercase has laid down the doctrine that henceforth an
order or award for reinstatement is self-executory, meaning that it does
not require a writ of execution much less a motion for its issuance, as
maintained by petitioner. It proceeded to explain that Art. 224, adverted
to in Maranaw as the basis for the need for a writ of execution, applies
only to final and executory decisions which are not within the coverage of
Art. 223. It further expounded on the objective of Art. 223 as envisioned by
our lawmakers. Thus: Art. 224 states that the need for a writ of execution
applies only within five (5) years from the date a decision, an order or
award becomes final and executory. It cannot relate to an award or
order of reinstatement still to be appealed orpending appeal which Art.
223 contemplates. The provision of Art. 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. cdasia
2. ID.; ID.; ID.; ID.; DUTIES OF THE EMPLOYER. — Under Art. 223
the reinstatement aspect of the Labor Arbiter's decision, albeit
under appeal, was immediately enforceable as a consequence of which,
petitioner as the employer was duty-bound to choose forthwith whether
to re-admit Tanpiengco or to reinstate him in the payroll and to inform
Tanpiengco of its choice to enable the latter to act accordingly. Falling to
exercise the options in the alternative, petitioner must pay the salary of
Tanpiengco which automatically accrued from notice of
the Labor Arbiter's order of reinstatement until its ultimate reversal by the
NLRC.
3. ADMINISTRATIVE LAW; QUASI-JUDICIAL BODIES;
NATIONAL LABOR RELATIONS COMMISSION (NLRC); REMISSED IN ITS DUTY
TO ACT ON THE MOTION TO EXECUTE
THE LABOR ARBITER'S REINSTATEMENT ORDER. — In the instant case, for
some inexplicable reasons, the NLRC failed to act on Tanpiengco's motion
for the issuance of a writ to execute
the Labor Arbiter's reinstatement order. It did not even mention the fact of
its filing in its assailed Decision. While this may no longer adversely affect
the cause of the dismissed employee under the Pioneer case, the Court
cannot let this pass. The Commission's inaction is a serious oversight for
which it should be admonished. While it is incumbent upon the party to
take an active role in his case and not adopt a wait-and-see attitude, the
adjudicating body has the corresponding obligation to act promptly on
all incidents brought before it. H
||| (Lopez v. National Labor Relations Commission, G.R. No. 124548,
[October 8, 1998], 358 PHIL 141-154)

1.LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;


RIGHTS OF ILLEGALLY DISMISSED EMPLOYEES; THE NLRC CORRECTLY
AWARDED SEPARATION PAY IN LIEU OF REINSTATEMENT DUE TO THE
STRAINED RELATIONS BETWEEN THE PARTIES BROUGHT ABOUT BY THE
LITIGATION IN THIS CASE. — Article 279 of the Labor Code, as amended,
provided that "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." Pursuant to the said rule, illegally dismissed
employees are entitled to reinstatement and full backwages. The
phraseology of the law means that both reliefs are available to the
illegally dismissed employee as matter of course. However,
if reinstatement is not possible, the employees are entitled to the
grantof separation pay and full backwages. At this instance, it must be
stressed that the reliefs of separation pay and backwages are cumulative,
not alternative remedies. Not infrequently had this Court ruled
that separation pay shall be granted as an option
toreinstatement if reinstatement can no longer be enforced due to the
strained relations between the parties brought about by the
litigation in this case. Personal animosities have been generated due to
the attendant circumstances of the case. Petitioner held much
rancor in her heart against private respondents.
Since reinstatement would not be to the best interest of the
parties, in lieuthereof, the NLRC correctly
awarded separation pay equivalent to one (1) month's salary for every
year of service, a fraction of at least six (6) months being considered as
one (1) whole year. cdasia
2.ID.; ID.; ID.; PETITIONER IS ENTITLED TO PAYMENT OF "FULL
BACKWAGES" IN ACCORDANCE WITH THE RULING OF THE COURT INTHE
CASE OF BUSTAMANTE vs. NLRC. — We agree with the
recommendation of the OSG that in addition to separation pay (which
isin lieu of reinstatement), the petitioner should also be entitled to
backwages. However, we want to rectify the erroneous stance ofthe OSG
that in computing backwages, the total amount derived from
employment elsewhere by the employee from the date ofdismissal up to
date of reinstatement, if any, should be deducted therefrom. It further
stated that the computation of full backwages and presentation of proof
as to income earned elsewhere by the illegally dismissed employee after
his termination and before actual reinstatement should be
ventilated in the execution proceeding before the Labor Arbiter
concordant with Section 3, Rule 8 ofthe 1990 New
Rules of Procedure of the National Labor Relations Commission. For clarity
and emphasis at the expense ofredundancy, we reiterate the
jurisprudence laid down in our en banc Resolution in Bustamante vs.
NLRC with regard to illegal dismissals effected after March 21, 1989. We
ruled in recent cases that an illegally dismissed employee is entitled to his
full backwages from the time his compensation was withheld from him
(which, as a rule, is from the time of his illegal dismissal) up to the
time of his actual reinstatement. The legislative policy behind Republic Act
No. 6715 points to "full backwages" as meaning exactly that, i.e., without
deducting from backwages the earnings derived elsewhere by the
concerned employee during the periodof his illegal dismissal. Considering
that petitioner was terminated from service on May 8, 1991, which is after
March 21, 1989, the ruling in Bustamante vs. NLRC should be applied.
AS

1999

(Quebec Sr. v. National Labor Relations Commission, G.R. No. 123184,


[January 22, 1999], 361 PHIL 555-566)

PAYMENT OF SEPARATION PAY IN LIEU OF REINSTATEMENT. —


In lieu of reinstatement, however, separation pay is to be awarded herein
due to the fact that the reinstatement of respondents to their previous
confidential jobs is no longer possible since theCanhagimet Express was
already sold by petitioner. Separation pay is the amount that an
employee receives at the time of his severance from the service and is
designed to provide him with the wherewithal during the period that he is
looking for another employment. The grant of separation pay does not
preclude an award for back wages for the latter represents the
amount ofearnings lost by reason of the unjustified dismissal.|||

(Millares v. National Labor Relations Commission, G.R. No. 122827, [March


29, 1999], 365 PHIL 42-55)

EMPLOYMENT; SEPARATION PAY; SANTOS, SORIANO AND INSULAR CASES


NOT APPLICABLE IN CASE AT BAR. — In Santos the Court decreed
that in the
computation of separation pay awarded in lieu of reinstatement,
account must be taken not only of the basic salary but
also of transportation and emergency living allowances. Later, the
Court in Soriano, citing Santos, was general in its holding that the salary
base properly
used in computing separation pay where reinstatement was no longer
feasible should include not just the basic salary but also the regular
allowances that the employee had been receiving. Insular merely
reiterated the aforementioned rulings. The rationale is not difficult to
discern. It is the obligation of the employer to pay an illegally dismissed
employee the whole amount of his salaries plus all other benefits, bonuses
and general increases to which he would have been normally entitled
had he not been dismissed and had not stopped working. The same holds
true in case of retrenched employees. And thus we
applied Insular and Soriano in Planters in the
computation of separation pay of retrenched
employees. Songco likewise involved retrenchment and was relied
upon in Planters, Soriano and Santos in the proper
amount of separation pay. As culled from the foregoing
jurisprudence, separation pay when awarded to an illegally dismissed
employee in lieu of reinstatement or to a retrenched employee should be
computed based not only on the basic salary but also on
the regular allowances that the employee had been receiving.
But in view of the previous discussion that the disputed allowances
were not regularly received by petitioners herein, there was no reason at
all for petitioners to resort to the above cases.|||

||| (Philippine Rabbit Bus Lines, Inc. v. National Labor Relations


Commission, G.R. No. 122078, [April 21, 1999], 365 PHIL 598-605)

In 1975, Procopio Evangelista sued for illegal dismissal against petitioner


Philippine Rabbit Bus Lines (PRBL). In 1976, the Labor Arbiter declared his
dismissal illegal and ordered his reinstatement with
payment of backwages. Petitioner's appeal was dismissed by the NLRC
for failure to file it within the reglementary period. Acting on petitioner's
appeal, the Office of the President held that there was just cause for
terminating the employment of Evangelista but the dismissal was
nonetheless illegal due to the failure of petitioner to observe the
mandatory procedural requirements for termination of employment under
the rules implementing the Labor Code. It directed petitioner to reinstate
Evangelista and pay him six months backwages of which the Labor
Arbiter issued a writ of execution. Evangelista was paid
backwages in 1979 but was not reinstated, so that in 1985 or seven years
thereafter, he moved for the issuance of a second alias writ of execution
for his reinstatement and additional payment of backwages. Petitioner
opposed the motion asserting that the inaction of private respondent for
seven years to pursue his reinstatement has rendered that portion of the
decision dormant and therefore could no longer be executed by a mere
motion. The Labor Arbiter issued an alias writ of execution, which was
affirmed by the NLRC.
LABOR AND SOCIAL LEGISLATION; LABOR CODE;
EMPLOYMENT; REINSTATEMENT;
AWARD OF SEPARATION PAY IN LIEU THEREOF PROPER IN CASE AT BAR. —
The award of separation pay in lieu of reinstatement is an equitable
recourse that has been sanctioned by this Court in a number of cases.
Moreover, the order of reinstatement is immediately executory. The
unjustified refusal of the employer to reinstate an illegally dismissed
employee entitles him to payment of his salaries effective from the time
the employer failed to reinstate him despite the issuance of a
writ of execution. Therefore, the payment of back wages by petitioner to
respondent Evangelista for the period he was not reinstated despite the
issuance of the alias writ of execution up to the time he opted
for separation pay in lieu of reinstatement is equitable and justified under
the law.

The Supreme Court held that petitioner can not invoke the strict
application of the rule limiting execution of judgment by mere motion
within a period of five years only because it unduly delayed the full
implementation of the final decision of the Office of the President by filing
numerous dilatory appeals and persistently failing and refusing to
immediately reinstate private respondent. It added that technicalities
have no room in labor cases where the Rules of Court are applied
only in a suppletory manner and only to effectuate the objectives of the
Labor Code, and not to defeat them. The law bends over backward,
under the policy of social justice, to accommodate the interest of the
working class on the humane justification that those with less
privileges in life should have more in law.
TI
||| (Villaruel v. Grapilon, A.C. No. 4826 (Resolution), [April 30, 1999], 366
PHIL 162-166)

Respondents filed a motion for partial reconsideration of the Supreme


Court's Resolution of 27 January 1999 averring that the Court had
erred in taking cognizance of the termination dispute between petitioners
and respondents, as well as in ordering the former's reinstatements
and in admonishing the IBP Board of Governors for failing to comply with
the status quo ante order of 03 February 1998. cdasia
The Court ruled that there was partial merit in the motion. It found
no cogent reason to reconsider its opting to exercise jurisdiction over the
termination dispute between petitioners and respondents. The Court
neither saw any justification for recalling its admonition on the IBP
Board of Governors. The status quo ante order in the Resolution of 03
February 1998 has clearly mandated that the IBP Board of Governors
maintain the suspension with pay status of petitioners during the
pendency of the proceedings so long as no contrary order is issued by
the Ad Hoc Committee. The Court nevertheless agreed with respondents
that the proceedings have created an intolerable atmosphere as well as
uneasiness and tension between petitioners, respondents and other
employeesof the IBP National Office.
Hence, it ordered the payment to
petitioners of their separation pay in lieu of reinstatement.

LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS;


TERMINATION OF EMPLOYMENT; SEPARATION PAY; PAYMENT THEREOF
ALLOWED WHEN REINSTATEMENT IS NO LONGER FEASIBLE DUE TO STRAINED
RELATIONS BETWEEN COMPLAINANTS AND RESPONDENTS IN CASE AT BAR.
— The Court, nevertheless, is inclined to agree with respondents that the
proceedings have evidently created an "intolerable atmosphere," as well
as "uneasiness and tension," between and among complainants,
respondents, and the other employees of the IBP National Office.

In a number of cases, the Court has allowed the


payment of separation pay, in lieu of reinstatement of dismissed
employees, when reinstatement is no longer feasible, expedient or
practical due to strained relations, and so here, again, the Court believes
it must so hold.
(Kams International, Inc. v. National Labor Relations Commission, G.R. No.
128806, [September 28, 1999], 373 PHIL 950-961)

Private respondent Mercedita T. Torrejos was employed as a utility worker


in the petitioner's company. Her employment was terminated by
petitioner for allegedly abandoning her job. Private respondent filed a
complaint for illegal dismissal against petitioners with the arbitration
branch of the National Labor Relations Commission (NLRC) in Manila.
According to the petitioners, when private respondent was caught trying
to smuggle out two (2) yards of fabric in August of 1994, the management
decided to restrict her activities. Respondent reportedly resented it.
Thereafter, malicious rumors allegedly spread in the work place
concerning the private affairs of the petitioners. Respondent was singled
out as the source of such rumors and her attention was called by the
Jeswanis (Her employers). Instead of being apologetic, respondent
allegedly offered to resign for a price and when petitioners refused to give
in to her demands, she walked out on them. Since then, she never
reported back for work. Thus, petitioners declared that they could not in
any way be liable for illegal dismissal. The Labor Arbiter rendered a
decision holding that private respondent was illegally dismissed and
ordered her reinstatement or give her separation pay. Petitioners
appealed to the NLRC, but their appealwas dismissed. Petitioners now
alleged in this petition that the NLRC committed grave abuse of discretion
when it affirmed theLabor Arbiter's decision holding that private
respondent was illegally dismissed.
The Supreme Court dismissed the petition. According to the Court,
petitioners failed to adduce evidence on any overt act of private
respondent showing an actual intent to abandon her employment. The
fact that she filed a case for illegal dismissal against petitioners negated
any intention on her part to forsake her work. The Court also emphasized
that the termination of an employee must be effected in accordance
with law, i.e., the employer must comply with the twin requirements of due
process.. In the present case, no written notice was sent by petitioners
informing respondent that she had been terminated due to
abandonment of work. Said failure on the part of the petitioners
underscored the irregularity of private respondent's dismissal.
|||
1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; JUST
CAUSES; ABANDONMENT; NOT ESTABLISHED IN CASE AT BAR; PETITIONERS
FAILED TO ADDUCE EVIDENCE ON OVERT ACT OF EMPLOYEE SHOWING
ACTUAL INTENT TO ABANDON HER EMPLOYMENT. — For abandonment to
exist, it is essential that (a) the employee must have failed to report for
work or must have been absent without valid or justifiable reason; and, (b)
there must have been a clear intention to sever the employer-employee
relationship manifested by some overt acts. In De Paul/King Philip Customs
Tailor, and/or Milagros Chuakay and William Go v. NLRC we held —
Abandonment, as a just and valid ground for dismissal means the
deliberate and unjustified refusal of an employee to resume his
employment. The burden of proof is on the employer to show unequivocal
intent on the part of the employee to discontinue employment. The intent
cannot be lightly inferred or legally presumed from certain ambivalent
acts. For abandonment to be a valid ground for dismissal, two elements
must be proved: the intention of an employee to abandon, coupled with
an overt act from which it may be inferred that the employee has no
more intent to resume his work.

However, in the case before us, petitioners failed to adduce


evidence on any overt act of Torrejos showing an actual intent to
abandon her employment. In fact, the evidence on record belies this
contention. According to petitioners, the intent to abandon work could
be inferred from Torrejos' failure to file a motion
for reinstatement pending appeal of the decision of the Labor Arbiter,
and to assert her right to be reinstated after a writ of execution was issued
by the Labor Arbiter. This contention is quite presumptuous being based
merely on conjecture and speculation.

In fact, the only reason why Torrejos did not file a motion
for reinstatement pending appeal was that she had opted for separation
pay in lieu of reinstatement, and not because she had given up her work.
Besides, petitioners cannot deny the fact that Torrejos filed a complaint for
illegal dismissal against them on 24 November 1994. This alone negates
any intention on the part of the employee to forsake her work. It is a
settled doctrine that the filing of complaint for illegal dismissal is
inconsistent with the charge of abandonment, for an employee who
takes steps to protest his dismissal cannot by logic be said to have
abandoned his work. It cannot be overly emphasized that the dismissal of
an employee should be for any of the just and authorized causes
enumerated in the Labor Code. And since petitioners utterly failed to
justify Torrejos' discharge on the basis of abandonment of work, we do not
hesitate to strike it down as illegal. Furthermore, it. must be stressed that
abandonment of work does not per se sever the employer-employee
relationship. It is merely a form of neglect of duty, which is in turn a just
cause for termination of employment. The operative act that will
ultimately put an end to this relationship is the dismissal of the employee
after complying with the procedure prescribed by law.

||| (Vinoya v. National Labor Relations Commission, G.R. No. 126586


(Resolution), [August 25, 2000], 393 PHIL 441-446)

In an earlier decision, the Supreme Court ruled to affirm the


decision of the labor arbiter ordering Regent Food Corporation (RFC) to
reinstate petitioner to his former position and pay him backwages and
other benefits. Private respondent RFC filed motions for
reconsideration. In its first motion for partial reconsideration, RFC claimed
that petitioner appeared to be the employee of Peninsula Manpower
Company, Inc. (PMCI), since he was merely assigned to RFC by
virtue of PMCI's own declaration as a qualified and legitimate
independent contractor RFC was convinced to enter into a
contract of service with it. In its supplemental motion, RFC prayed that the
Court modify the award of reinstatement of petitioner and instead order
the payment of separation pay in favor ofthe latter. ICcaST
The Supreme Court ruled that despite the existence of the alleged
contracts of service and employment, the status of petitioner as the
employee of RFC was not affected. Based on the standards set by the
Labor Code, PMCI was merely a labor-only contractor and, as such,
cannot be properly considered as the employer of petitioner. However,
the Court found that it would be impractical and notin the best
interest of both parties if it will insist that the petitioner be reinstated to his
former position. Hence, the motion for reconsideration was partially
granted. Private respondent was ordered
to pay petitioner separation pay equivalent to one month's salary for
every year of service in lieu of reinstatement, plus full backwages, without
deduction or qualification, counted from the date of dismissal until the
finality of the resolution including other benefits to which he was entitled
under the law.
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; ILLEGAL DISMISSAL;
AWARDS GIVEN TO EMPLOYEES IN CASE THEREOF. — An illegally dismissed
employee is entitled to: (1) either reinstatement, if viable,
or separation pay if reinstatement is no longer viable, and (2)
backwages. TSAHIa
2. ID.; ID.; ID.; ID.; WHEN
PAYMENT OF SEPARATION PAY IN LIEU OF REINSTATEMENT PROPER; CASE AT
BAR. — As pointed out by the private respondent, the antagonistic
feelings of the parties towards each other stemmed from the filing by the
petitioner of the complaint before the labor arbiter and deepened during
the eight-year pendency of the case. This fact, petitioner has failed to
deny in his comment to the motion for reconsideration. Petitioner merely
opposes private respondent's motion for reconsideration on the ground
that the same does not raise any new issues not resolved in the decision.
However, the issue of strained relations was never squarely dealt
with in the decision being reconsidered. The Court finds that it would be
impractical and not in the best interest of the parties to insist that
petitioner be reinstated to his former position. Considering further that
petitioner's former position as sales representative involves the
handling of accounts and other property of RFC, it would not be
equitable on the part of RFC to be forced to maintain petitioner in its
employ since it may only inspire vindictiveness on the part of petitioner.
Accordingly in lieu of reinstatement,
payment of separation pay equivalent to one month's salary for every
year of service may be awarded.
(Litonjua Group of Companies v. Vigan, G.R. No. 143723, [June 28, 2001], 412
PHIL 627-644)
ILLEGAL DISMISSAL; DISMISSED EMPLOYEE IS ENTITLED
TO REINSTATEMENT, IF VIABLE OR SEPARATION PAY IF REINSTATEMENT IS
NO LONGER VIABLE, AND BACKWAGES. — As correctly disposed by the
respondent Court: "Thus finding that Vigan was illegally dismissed, she is
entitled to the following: 1) Either reinstatement, if viable,
or separation pay if reinstatement is no longer viable; and 2) Backwages,
Backwages and separation pay are distinct reliefs given to alleviate the economic
damage by an illegally dismissed employee. Hence, an
award of separation pay in lieu of reinstatement does not bar an
award of backwages, computed from the time of illegal dismissal. . . up to the
date of the finality of the Decision . . . without qualification or
deduction. Separation pay, equivalent to one month's salary for every
year of service, is awarded as an alternative to reinstatement when the latter is
no longer an option. Separation pay is computed from the
commencement of employment up to the time of termination, including the
imputed service for which the employee is entitled to backwages, with the salary
rate prevailing at the end of the period of putative service being the basis for
computation (Masagana Concrete Products, et al. vs. NLRC, supra).

In case of a fraction of at least six (6) months in the length of service, the
same shall be considered as one year in computing the separation pay. With
regard to backwages, it meant literal "full backwages" that is
inclusive of allowances and other benefits or their monetary equivalent
computed from the time her compensation was withheld from her up to the
time of her actual reinstatement, if it is still viable or up to the time the
Decision in her favor becomes final — without deducting from back wages the
earning derived elsewhere, if there is any, by Vigan during the period of her
illegal dismissal. (Lopez vs. NLRC, 297 SCRA 508).

In other words, Vigan is entitled to reinstatement, which perhaps is no


longer viable due to the strained relations between the parties,
or separation pay of P8,000 for every year of service and backwages of another
P8,000.00 per month reckoned from the time she last received salary from the
Litonjuas up to the date of the finality of this Decision. Mark again that We
allowed the P8,000.00 claim of Vigan as her last salary received for again the
Litonjuas failed to validly refute the same."|||

||| (EDI Staff Builders International, Inc. v. Magsino, G.R. No. 139430, [June
20, 2001], 411 PHIL 730-740)

Petitioner EDI Staff Builders International, Inc. is a duly licensed recruitment


agency. Petitioner Leocadio J. Dominguez was the president while
respondent Fermina D. Magsino was the supervisor of its Processing and
Documentation Group. On April 16, 1993, Dan de Guzman,
Manager of Processing and Documentation Group, sent a memorandum
to the respondent asking her to submit an explanation on the fact that
they collected premium payments for the repatriation bonds of contract
workers for the two-year period; however, she released to the POEA liaison
officer premium payment only for one year. Instead of complying with the
memorandum, respondent tendered her resignation letter effective May
30, 1993. However, action on her resignation letter was held in abeyance
pending the result of the investigation of the charge against her. On May
20, 1993, respondent was given notice of termination. On July 12, 1993,
she filed a complaint for illegal dismissal. She claimed that she had been
dismissed without cause and without notice. As no amicable settlement
had been reached, the Labor Arbiter directed both parties to file their
position papers. Only the respondent complied. The Labor Arbiter
deemed as unrebutted the allegations in respondent's complaint and
position paper, and he rendered the decision in favor of the respondent.
Petitioners appealed to the NLRC which, in its decision, affirmed the
Labor Arbiter's decision. The Court of Appeals also affirmed the NLRC
rulings with modification that in lieu of the order of reinstatement,
a separation pay shall be awarded to private respondent. Hence, this
petition.
It has been settled that no undue sympathy is to be accorded to any
claim of a procedural misstep in labor cases. Such cases must be decided
according to justice and equity and the substantial merits of the
controversy. It should be stressed that in an unlawful dismissal case, the
employer has the burden of proving the lawful cause for the employee's
dismissal. Without sufficient proof of loss of confidence, an employee
cannot be dismissed on this ground. It was, therefore, error for both the
NLRC and the Court of Appeals to disallow evidence on appeal which
petitioners tried to present. However, in this case, there is no proof
either of the amount collected by document analyst Mary Ann Samson
and turned over to respondent or of the amount which respondent turned
over to POEA liaison officer Ferdinand De la Cruz for eventual payment to
the bonding company. As the Court of Appeals aptly stated, "if there are
no records to speak of, it follows that the discovered anomalies have no
basis too." Nor can the Court of Appeals be faulted for ordering
payment of separation pay in lieu of reinstatement. The strain in the
relationship between the parties, not to mention the length of time
respondent has been out of petitioner's employ, make an
award of separation pay appropriate.
The decision of the Court of Appeals was AFFIRMED.
ILLEGAL DISMISSAL;
PAYMENT OF SEPARATION PAY IN LIEU OF REINSTATEMENT IS PROPER; CASE
AT BAR. — Nor can the Court ofAppeals be faulted for ordering
payment of separation pay in lieu of reinstatement. Indeed, if any party
can complain against this feature of the decision of the Court of Appeals,
it should be respondent, as employee, and not petitioners, who are the
employers. The strain in the relationship between the parties, not to
mention the length of time respondent has been out of petitioners'
employ, make an award of separation pay appropriate. The
grant of separation pay is of course to be understood as separate
and in addition to the payment of backwages which, in accordance with
the ruling in Bustamante v NLRC, should be computed from the time of
respondent's dismissal up to the time of finality of this decision and without
any deduction and qualification.|||
|||

(ATCI Overseas Corp. v. Court of Appeals, G.R. No. 143949, [August 9, 2001],
414 PHIL 883-896)

ILLEGAL DISMISSAL; REINSTATEMENT AS REMEDY; RATIONALE. — In order


to give substance to the constitutional right of labor to security of tenure, Article
279 provides that the illegally dismissed employee shall be entitled
to reinstatement without loss ofseniority 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.
4. ID.; ID.; ID.; ID.; ID.; ID.; SEPARATION PAY, AS AN ALTERNATIVE THEREOF.
— As to the second remedy granted by Article 279, nowhere in the records does
it appear that private respondents desire to be reinstated to their former
employment. But more significantly, any order of reinstatement issued by this
Court will be difficult for private respondents to enforce against the Ministry
of Public Health of Kuwait. Therefore, in lieu of reinstatement, private
respondents are entitled to separation pay. The illegally dismissed employee is
granted separation pay in order to provide him with "the wherewithal during the
period that he is looking for another employment." Prevailing jurisprudence
dictates that the employee be given one month pay for every year of service, as
an alternative to reinstatement. Considering that private respondents herein
have only worked for two months, they are entitled to
aseparation pay equivalent to one-sixth of their monthly salary.
(Atlas Farms, Inc. v. National Labor Relations Commission, G.R. No. 142244,
|||

[November 18, 2002], 440 PHIL 620-636)


RIGHTS OF ILLEGALLY DISMISSED EMPLOYEES. — We find that a
modification of the monetary awards is in order. As a consequence of their illegal
dismissal, private respondents are entitled to reinstatement to their former
positions. But since reinstatement is no longer feasible because petitioner had
already closed its shop, separation pay in lieu of reinstatement shall be awarded.
A terminated employee's receipt of his separation pay and other monetary
benefits does not preclude reinstatement or full benefits under the law,
should reinstatement be no longer possible. As held in Cariño vs. ACCFA:
Acceptance of those benefits would not amount to estoppel. The reason is plain.
Employer and employee, obviously, do not stand on the same footing. The
employer drove the employee to the wall. The latter must have to get hold of the
money. Because out of job, he had to face the harsh necessities oflife. He thus
found himself in no position to resist money proffered. His, then, is a
case of adherence, not of choice. One thing sure, however, is that petitioners did
not relent their claim. They pressed it. They are deemed not to have waived their
rights. Renuntiato non praesumitur. Conformably, private respondents are
entitled to separation pay equivalent to one month's salary for every year
of service, in lieu of reinstatement. As regards the award of damages, in order
not to further delay the disposition of this case, we find it necessary to expressly
set forth the extent of the backwages as awarded by the appellate court.
Pursuant to R.A. 6715, as amended, private respondents shall be entitled to full
backwages computed from the time of their illegal dismissal up to the date of
promulgation of this decision without qualification, considering
that reinstatement is no longer practicable under the circumstances. CDAHIT

||| (Abalos v. Philex Mining Corp., G.R. No. 140374, [November 27, 2002],
441 PHIL 386-396)

Philex undertook a retrenchment program that resulted in the termination


of petitioners' employment. The case was submitted for arbitration through
a submission agreement coursed through the National Conciliation and
Mediation Board. The Voluntary Arbitrator ordered Philex to reinstate
petitioners except the two employees who were granted early retirement.
Philex appealed to the Supreme Court and the case was remanded to
the appellate court, which dismissed the petition. Philex elevated the
case to the Supreme Court which denied the same and consequently, an
entry of judgment was made. Philex filed a manifestation and motion for
leave to offer separation pay to petitioners, in lieu of reinstatement before
the Office of the Voluntary Arbitrator, which granted the motion.
Consequently, petitioners filed a petition for certiorari with the Court of
Appeals (CA) on the ground that the Arbitrator acted without or in excess
of jurisdiction. The CA affirmed the Arbitrator's order and denied the
petitioners' motion for reconsideration. Hence, this petition for review.
In denying the petition, the Supreme Court ruled that an award that is
final and executory cannot be amended or modified anymore. Nothing is
more settled in law than that once a judgment attains finality it thereby
becomes immutable and unalterable. It may no longer be modified in
any respect, even if the modification is meant to correct what is
perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering
it or by the highest court of the land. However, this rule is subject to
exceptions. One exception is that where facts and/or events transpire
after a decision has become executory, which facts and/or events
present a supervening cause or reason which renders the final and
executory decision no longer enforceable. In the case at bar,
petitioners' reinstatement had become not only inappropriate but also
impossible because of the abolition of petitioners' positions.
The Court likewise ruled that jurisdiction once acquired is not lost upon the
instance of the parties but continues until the case is terminated. The
power of a voluntary arbitrator to issue a writ of execution carries with it
the power to inquire into the correctness of its execution and to consider
whatever supervening events transpire during execution. Therefore, a
voluntary arbitrator has jurisdiction to amend the mode of executing an
award if and when the case merits such amendment.

ID.; ID.; TERMINATION OF EMPLOYMENT; REINSTATEMENT, A RIGHT OF


ILLEGALLY DISMISSED EMPLOYEES; DOCTRINE OF STRAINED RELATIONS,
INAPPLICABLE TO SITUATION WHERE EMPLOYEE HAS NO SAY IN THE
OPERATION OF EMPLOYER'S BUSINESS. — [W]e find respondent's reliance
on the doctrine of "strained relations" misplaced. In Quijano vs. Mercury
Drug Corporation, we stated that said doctrine is inapplicable to a
situation where the employee has no say in the operation of the
employer's business. Petitioners herein are part of the rank-and-file
workforce; they are cooks, miners, helpers and mechanics of the
respondent. As held also in the Mercury Drug case: "To protect labor's
security of tenure, we emphasize that the doctrine of 'strained relations'
should be strictly applied so as not to deprive an illegally dismissed
employee of his right to reinstatement. Every labor dispute almost always
results in 'strained relations' and the phrase cannot be given an
overarching interpretation, otherwise an unjustly dismissed employee can
never be reinstated."|||

(Solidbank Corp. v. Court of Appeals, G.R. No. 151026, [August 25, 2003],
456 PHIL 879-888)

Respondent Gerardo Garcia was a check verifier of petitioner


Solidbank, Tabora, Manila Branch Office, for fourteen years. On June 1,
1992, he was dismissed from the service for being grossly
negligent in clearing the three forged checks. Thus, he filed a complaint
for illegal dismissal before the National Labor Relations Commission (NLRC)
- Arbitration Branch. Related to the same incident, he was charged with
Estafa through Falsification of Commercial Documents before the
Regional Trial Court of Manila, but he was acquitted. On the illegal
dismissal case, the labor arbiter dismissed the complaint for lack of merit.
On appeal, the NLRC ruled that Garcia was illegally dismissed, but limited
the award of backwages to only one year, as it was found that he was
not entirely faultless. Consequently, petitioner sought relief with the
Court of Appeals by filing a special civil action for certiorari. The appellate
court rendered the assailed Decision modifying the resolution of the NLRC
by granting Garcia full backwages. Hence, this petition.
The Court held that the petitioner failed to justify the
dismissal of respondent Garcia. As a rule, employees who are illegally
dismissed are entitled to full backwages and reinstatement to their former
positions without loss of seniority rights. There are instances, however,
where reinstatement is no longer viable as where the business of the
employer has closed, or where the relations between the employer and
the employee have been so severely strained that it is not advisable to
order reinstatement, or where the employee decides not to be reinstated.
As respondent Garcia explicitly prayed for an
award of separation pay in lieu of reinstatement, he
foreclosed reinstatement as a relief by implication. Consequently, he is
entitled to separation pay equivalent to one month pay for every
year of service, from the time of his illegal dismissal up to the finality of this
judgment, as an alternative to reinstatement. With respect to the
backwages, he shall be entitled to an amount equivalent to only one
year.
|||

LABOR AND SOCIAL LEGISLATION; LABOR CODE;


TERMINATION OF EMPLOYMENT; ILLEGAL DISMISSAL; WHEN AN EMPLOYEE
PRAYED FOR AN AWARD OF SEPARATION PAY IN LIEU OF REINSTATEMENT,
HE FORECLOSES REINSTATEMENT AS A RELIEF. — As a rule, employees who
are illegally dismissed are entitled to full backwages and reinstatement to
their former positions without loss of seniority rights. There are instances,
however, where reinstatement is no longer viable as where the
business of the employer has closed, or where the relations between the
employer and the employee have been so severely strained that it is not
advisable to order reinstatement, or where the employee decides not to
be reinstated. As respondent Garcia explicitly prayed for an award of
separation pay in lieu of reinstatement, he forecloses reinstatement as a
relief by implication. Consequently, he is entitled
to separation pay equivalent to one month pay for every year of service,
from the time of his illegal dismissal up to the finality of this judgment, as an
alternative to reinstatement.

||| (Roquero v. Philippine Airlines Inc., G.R. No. 152329, [April 22, 2003],
449 PHIL 437-446)

Petitioner was ground equipment mechanic of PAL, tasked to repair and


maintain airplanes. He was dismissed from employment when caught red-
handed possessing shabu, in violation of the PAL Code of Discipline. He
alleged, however, that the act was instigated by PAL. The Labor Arbiter
ruled both petitioner and PAL blameworthy and thus, dismissed petitioner,
but awarded him separation pay and attorney's fees. When appealed to
the NLRC, petitioner was ordered reinstated to his former position, but PAL
refused, as it had filed a petition for review before the Court. When
referred to the Court of Appeals, it reiterated the dismissal of petitioner but
without separation pay and attorney's fees.
Petitioner was guilty of serious misconduct. Even if he was instigated to
take drugs, he has no right to be reinstated in his position. At any rate,
when petitioner was ordered reinstated by the NLRC, the same was
immediately executory even pending appeal. The unjustified refusal of
PAL to reinstate him entitles him to payment of salaries effective from the
time he should have been reinstated until finality of the Court's decision
reversing such order.

1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;


DISMISSAL; GROUNDS; SERIOUS MISCONDUCT; VIOLATION OF PHILIPPINE
AIRLINES, INC. (PAL) CODE OF DISCIPLINE. — There is no question that
petitioner Roquero is guilty of serious misconduct for possessing and
using shabu. He violated Chapter 2, Article VII, Section 4 of the PAL Code
of Discipline which states: "Any employee who, while on company
premises or on duty, takes or is under the influence of prohibited or
controlled drugs, or hallucinogenic substances or narcotics shall be
dismissed." Serious misconduct is defined as "the transgression of some
established and definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies wrongful intent and not mere error in
judgment." For serious misconduct to warrant the dismissal of an
employee, it (1) must be serious; (2) must relate to the performance of the
employee's duty; and (3) must show that the employee has become unfit
to continue working for the employer.
2. ID.; ID.; ID.; ID.; ID.; ID.; CANNOT BE JUSTIFIED BY EMPLOYER'S
INSTIGATION. — It is of public knowledge that drugs can damage the
mental faculties of the user. Roquero was tasked with the repair and
maintenance of PAL's airplanes. He cannot discharge that duty if he is a
drug user. His failure to do his job can mean great loss of lives and
properties. Hence, even if he was instigated to take drugs he has no right
to be reinstated to his position. He took the drugs fully knowing that he
was on duty and more so that it is prohibited by company rules. Instigation
is only a defense against criminal liability. It cannot be used as a shield
against dismissal from employment especially when the position involves
the safety of human lives.
3. ID.; ID.; ID.; PROCEDURAL DUE PROCESS; PRESENT WHEN TWIN-NOTICE
REQUIREMENT IS COMPLIED WITH. — Petitioner cannot complain he was
denied procedural due process. PAL complied with the twin-notice
requirement before dismissing the petitioner. The twin-notice rule requires
(1) the notice which apprises the employee of the particular acts or
omissions for which his dismissal is being sought along with the opportunity
for the employee to air his side, and (2) the subsequent notice of the
employer's decision to dismiss him. Both were given by respondent
PAL. cAHIaE
4. ID.; ID.; ID.; ORDER OF REINSTATEMENT, IMMEDIATELY EXECUTORY
EVEN PENDING APPEAL; RATIONALE. — Article 223 (3rd paragraph) of
the Labor Code, as amended by Section 12 of Republic Act No. 6715,
and Section 2 of the NLRC Interim Rules on Appeals under RA No. 6715,
Amending the Labor Code, provide that an order of reinstatement by
the Labor Arbiter is immediately executory even pending appeal. The
rationale of the law has been explained in Aris (Phil.) Inc. vs. NLRC. "In
authorizing executionpending 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 onlabor and the working man. . . . 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. . . . In short, with respect to decisions
reinstating employees, the law itself has determined a sufficiently
overwhelming reason for its executionpending appeal. . . . 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."
5. ID.; ID.; ID.; ID.; REFUSAL TO REINSTATE ENTITLES EMPLOYEE TO PAYMENT
OF SALARIES FROM THEREON UNTIL ORDER IS REVERSED. — The order
of reinstatement is immediately executory. The unjustified refusal of the
employer to reinstate a dismissed employee entitles him to payment of his
salaries effective from the time the employer failed to reinstate him
despite the issuance of a writ of execution. Unless there is a restraining
order issued, it is ministerial upon the Labor Arbiter to implement the order
ofreinstatement. In the case at bar, no restraining order was granted. Thus,
it was mandatory on PAL to actually reinstate Roquero or reinstate him in
the payroll. Having failed to do so, PAL must pay Roquero the salary he is
entitled to, as if he was reinstated, from the time of the decision of the
NLRC until the finality of the decision of this Court. We reiterate the rule
that technicalities have no room in labor cases where the Rules of Court
are applied only in a suppletory manner and only to effectuate the
objectives of theLabor Code and not to defeat them. Hence, 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. On the other hand, if the employee has been reinstated
during the appeal period and suchreinstatement 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.
(Wah Yuen Restaurant v. Jayona, G.R. No. 159448, [December 16, 2005],
514 PHIL 505-516)

SEPARATION PAY; AWARDED TO THE


EMPLOYEE IN LIEU OF REINSTATEMENT WHERE RELATIONSHIP OF EMPLOYER
TO EMPLOYEE IS SO STRAINED AND RUPTURED AS TO PRECLUDE A
HARMONIOUS WORKING RELATIONSHIP. — Although the
loss of confidence on petitioner's part is unfounded, reinstating
respondent to his former position would not be advisable given the
souring of their relationship. . . . Where the relationship of employer to
employee is so strained and ruptured as to preclude a harmonious
working relationship should reinstatement of the employee be decreed,
the latter should be afforded the right to separation pay where the
employer does not have to endure the continued services of the
employee in whom it has lost confidence. This Court now, therefore,
directs petitioner to just afford respondent his right to separation pay,
backwages, and other benefits under the law.

(Casol v. Purefoods Corp., G.R. No. 166550, [November 18, 2005], 512 PHIL
206-209)||

LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;


RIGHTS OF ILLEGALLY DISMISSED EMPLOYEES; DECISION DATED SEPTEMBER
22, 2005 MODIFIED BY ORDERING RESPONDENT COMPANY
TO PAY PETITIONER FULL BACKWAGES, ALLOWANCES AND OTHER BENEFITS
COMPUTED FROM NOVEMBER 9, 1992 UNTIL THE CLOSURE OF HIS
DEPARTMENT ON JULY 2, 1997 AND SEPARATION PAY EQUIVALENT TO ONE
MONTH PAY OR TO AT LEAST ONE-HALF MONTH PAY FOR EVERY
YEAR OF SERVICE, WHICHEVER IS HIGHER. — Under Article
279 of the Labor Code, an employee unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges
and to his full back wages, 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. As held in our decision dated September 22, 2005,
Casol is entitled to separation pay in lieu of reinstatement and full back
wages, inclusive of allowances, and other benefits, computed from the
time his compensation was withheld up to July 2, 1997, the date of the
actual closure of the department to which Casol belonged. However, the
payment of full backwages, allowances and other benefits was not
mentioned in the dispositive portion of the decision, hence, the same
must be accordingly modified. As to the
computation of the separation pay, no evidence was presented other
than Casol's bare allegation, that the respondent
awarded separation pay to its employees at the rate of one and one-half
month for every year of service. As such, we cannot order any other basis
for the computation of the separation pay than what is provided under
the Labor Code. The motion for reconsideration filed by respondent is
denied for lack of merit.
||| (Maxi Security and Detective Agency v. National Labor Relations
Commission, G.R. No. 162850, [December 16, 2005], 514 PHIL 563-574)

4.ID.; ID.; ID.; ILLEGAL DISMISSAL; AN ILLEGALLY DISMISSED EMPLOYEE IS


ENTITLED TO REINSTATEMENT AND FULL BACKWAGES;
COMPUTATION OF BACKWAGES. — The reliefs afforded to employees
whose employment were unlawfully severed arereinstatement and
payment of full backwages. Reinstatement restores the employee to the
position from which he was removed, i.e., to his status quo ante dismissal,
while the grant of backwages allows the same employee to recover from
the employer that which he lost by way of wages because of his dismissal.
The Court of Appeals held that Gusi was entitled to payment of full
backwages from December 6, 1997 up to the time of his
actual reinstatement. However, since Gusi died on April 7,
1999,reinstatement is rendered impossible. As regards the
award of backwages, the same should be computed after the
lapse of his two-months' suspension or December 6, 1997 up to the
time of his death on April 7, 1999.
5.ID.; ID.; ID.; ID.; SEPARATION PAY CANNOT BE
AWARDED IN LIEU OF REINSTATEMENT WHERE THE EMPLOYEE DIED DURING
THE PENDENCY OF THE CASE. — In view of Gusi's death,
however, separation pay cannot be
awarded in lieu of reinstatement. Separationpay is the amount that an
employee receives at the time of his severance from the service and is
designed to provide the employee with the wherewithal during the period
that he is seeking another employment. To grant the same in this case
would result in absurdity.
(Veterans Security Agency Inc. v. Gonzalvo Jr., G.R. No. 159293, [December
16, 2005], 514 PHIL 488-505)

ILLEGAL DISMISSAL; AN ILLEGALLY DISMISSED EMPLOYEE IS ENTITLED


TO REINSTATEMENT AND
BACKWAGES; SEPARATION PAYAWARDED IN LIEU OF REINSTATEMENT WH
ERE REINSTATEMENT IS NO LONGER FEASIBLE DUE TO THE PALPABLE
STRAINED RELATIONS BETWEEN THE EMPLOYEE AND EMPLOYER. — The
only logical conclusion from the foregoing discussion is that the VSAI
constructively dismissed the respondent. This ruling is in rhyme with the
findings of the Court of Appeals and the NLRC. Dismissal is the ultimate penalty
that can be meted to an employee. Inasmuch as petitioners failed to adduce
clear and convincing evidence to support the legality of respondent's dismissal,
the latter is entitled to reinstatement and back wages as a necessary
consequence. However, reinstatement is no longer feasible in this case
because of the palpable strained relations, thus, separation pay is
awarded in lieu of reinstatement.
|||