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Stradcom vs. Orpilla, July 2, 2018
Joyce Anabelle L. Orpilla (respondent) was employed by Stradcom as Human Resources Administration Department (HRAD) Head and her duties include administrative and personnel, and training matters.
Respondent was given instructions to organize Stradcom's 2002 Christmas party. She was further instructed to include the employees of Lares, an affiliate of Stradcom. However, respondent refused to include them.
Respondent was then replaced as the organizer of the Christmas Party when it was discovered that the price of the food was actually P200 per head and not P250 per head as represented by respondent. Suspicious about the correct pricing, Stradcom began its investigation and interviewed some employees regarding the conduct of respondent.
After the investigation, Stradcom also discovered that respondent required her staff to prepare presentation/training materials/manuals using company resources for purposes not related to the affairs of the company, on overtime and on Sundays.
Subsequently, Pagdanganan called for a conference with respondent, and discussed respondent's non-inclusion of Lares in Stradcom's Christmas party, the overpricing of the food, and her moonlighting. Respondent made a bare denial.
On January 3, 2003, Chua notified his employees about the reorganization of the HRAD and the Business Operations Department.27 On the same date and as part of routine procedure, respondent turned-over the necessary documents and equipment.
Respondent was advised that considering her position is one that requires the trust and confidence of the management, it would be difficult to force herself on the management. Thus, respondent conveyed her willingness to resign. In view of this, Stradcom's officers agreed that any formal investigation on respondent was unnecessary in view of her willingness to resign.
Whether or not respondent was validly dismissed from employment on the ground of loss of trust and confidence.
Yes. Among the just causes for termination is the employer's loss of trust and confidence in its employee. Article 297 (c) of the Labor Code provides that an employer may terminate the services of an employee for fraud or willful breach of the trust reposed in him/her.
In order for the said cause to be properly invoked, however, certain requirements must be complied with, namely: (1) the employee concerned must be holding a position of trust and confidence; and (2) there must be an act that would justify the loss of trust and confidence.
It is undisputed that at the time of respondent's dismissal, she was holding a managerial position, which was HRAD Head of Stradcom and directly reported to the President, herein Chua and other high ranking officials of Stradcom. Likewise, respondent performed key and sensitive functions, as her duties and responsibilities included the administration, personnel and training matters of the company. Respondent held a trust and critical position which required the conscientious observance of the company rules and procedures. Thus, the first requisite is present in this case.
Regarding the second requisite, the acts alleged to have caused the loss of trust and confidence of the petitioners in the respondent was her mishandling of Stradcom's 2002 Christmas party, dishonesty in preparing the budget thereof, misrepresentation in her application for employment, and using company personnel and resources for purposes not beneficial to the interest of Stradcom. The evidence on record support Stradcom's claims.
Furthermore, respondent was proven to have engaged in moonlighting activities and used company personnel and resources for purposes not in line with the business interest of Stradcom. In fact, respondent admitted that she actually took home some of the training materials owned by the company without the latter's prior clearance and without disclosed purpose.
Such dishonesty on the part of the respondent in carrying out her duties is prejudicial to the interest of Stradcom and constitutes just cause to terminate her employment.
Based on the foregoing, the Court held that there was a just cause for respondent’s dismissal.
Respondent offered telecom lines which were non-existent in the client’s area, for which he received payment and issued receipts. Due to such acts and failure to remit, he was dismissed for breach of trust and confidence. He filed complaint for illegal dismissal. LA dismissed. NLRC reversed, merely finding him guilty of imprudence and not bad faith and malice. CA affirmed. SC affirmed and awarded separation pay.
1. Is the respondent guilty of breach of trust and confidence reposed in him by the petitioner which made the dismissal valid.
2. Is the respondent entitled to separation pay despite there is a valid dismissal.
Yes. Respondent held a position of trust and confidence and committed an act that justified petitioner's loss of trust and confidence.
The willful breach by the employee of the trust reposed in him by his employer or the latter's duly authorized representative is a just cause for dismissal. However, the validity of a dismissal based on this ground is premised upon the concurrence of these conditions: (1) the employee concerned must be holding a position of trust and confidence; and (2) there must be a willful act that would justify the loss of trust and confidence. The first requisite is certainly present. In a number of cases, this Court has held that rank-and-file employees who are routinely charged with the care and custody of the employer's money or property are classified as occupying positions of trust and confidence. It is not disputed that respondent was tasked to solicit subscribers for petitioner's FEX line and, in the course thereof, collect money for subscriptions and issue official receipts therefor, as was the case in the transaction subject of this controversy. Being involved in the handling of the company's funds, respondent undeniably occupies a position of trust and confidence. The records likewise reveal that the second requisite is present. It must be emphasized that a finding that an employer's trust and confidence has been breached by the employee must be supported by substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. It must not be based on the employer's whims or caprices or suspicions; otherwise, the employee would eternally remain at the mercy of the employer. The totality of the circumstances in the case at bar supports a conclusion that respondent's dismissal was based on substantial evidence that he had willfully breached the trust reposed upon him by petitioner, and that petitioner was not actuated by mere whim or capriciousness.
2. YES. Even with a finding that respondent was validly dismissed, separation pay may be granted as a measure of social justice. Generally, an employee dismissed for any of the just causes under Article 297 is not entitled to separation pay. By way of exception, the Court has allowed the grant of separation pay based on equity and as a measure of social justice, as long as the dismissal was for causes other than serious conduct or those manifesting moral depravity. Here, while it is clear that respondent's act constitutes a willful breach of trust and confidence that justified his dismissal, it also appears that he was primarily actuated by zealousness in acquiring and retaining subscribers rather than any intent to misappropriate company funds; as he admitted in his response to the notice to explain that offering an alternative FEX line to Lim was part of his strategy to ensure her subscription.
Respondent’s zealousness was manifested through acts that showed an inordinate lapse of judgment warranting his dismissal in accordance with management prerogative, but this Court considers in his favor the above circumstances in granting him separation pay in the amount of one (1) month pay for every year of service.
This controversy is an offshoot of an illegal dismissal case filed by Ma. Veronica Perez against the CICM et.al. In its June 16, 2008 Decision, the Labor Arbiter recognized Perez right to receive from CICM backwages and separation pay in lieu of reinstatement. Thus, it ordered the petitioners to pay respondent the aggregate amount of P286, 670.58. The LA decision was affirmed by the NLRC, by the CA and by the SC in G.R. No. 200490.
The Decision became final and executory on October 4, 2012, as evidenced by the Entry of Judgment. Consequently, Perez moved for the issuance of a writ of execution. CICM et.al. opposed and moved for the issuance of a certificate of satisfaction of judgment, alleging that their obligation had been satisfied by the release of the cash bond in the amount of P272, 337.05 to respondent.
In its July 10, 2014 Order, the LA ruled that the cash bond posted by the petitioners was insufficient to satisfy their obligation. LA ordered them to award respondent a total amount of P1, 847, 088.89, from this amount should be deducted the amount received at P272, 337.05. Thus, the additional backwages and separation pay due is P1, 575, 751.84. The petitioners elevated an appeal before NLRC, but the LA ruling was affirmed. A petition for certiorari was filed with the CA, but the said petition was dismissed.
What should be the legal basis for the computation of the backwages and separation pay of an illegally dismissed employee in a case where reinstatement was not ordered despite appeals made by said employee which [delayed] the final resolution of the issue on reinstatement.
The decision of the CA is based on long standing jurisprudence that in the event the aspect of reinstatement is disputed, backwages, including separation pay, shall be computed from the time of dismissal until the finality of the decision ordering the separation pay. In this case, respondent remained an employee of the petitioners pending her partial appeal.
When there is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently ordered in light of a supervening event making the award of reinstatement no longer possible), the employment relationship is terminated only upon the finality of the decision ordering the separation pay. The finality of the decision cuts off the employment relationship and represents the final settlement of the rights and obligations of the parties against each other. Hence, back wages no longer accumulate upon the finality of the decision ordering the payment of separation pay because the employee is no longer entitled to any compensation from the employer by reason of the severance of his employment.
Sometime in March 1977, the Philippine National Construction Corporation (PNCC) was awarded by the Toll Regulatory Board (TRB) with the franchise of constructing, operating and maintaining the north and south expressways, including the South Metro Manila Skyway (Skyway).
On December 15, 1998, it created petitioner PNCC Skyway Corporation (PSC) for the purpose of taking charge of its traffic safety, maintaining its facilities and collecting toll.Eight years later, or on July 18, 2007, the Citra Metro Manila Tollway Corporation (Citra), a private investor under a build-and-transfer scheme, entered into an agreement with the TRB and the PNCC to transfer the operation of the Skyway from petitioner PSC to the Skyway O & M Corporation (SOMCO). The said transfer provided for a five-month transition period from July 2007 until the full torn-over of the Skyway at 10:00 p.m. of December 31, 2007 upon which petitioner PSC will close its operation.On December 28, 2007, or three (3) days before the flail transfer of the operation of the Skyway to SOMCO, petitioner PSC served termination letters to its employees, many of whom were members of private respondent PNCC Skyway Traffic Management and Security Division Worker's Organization (Union). According to the letter, PSC has no choice but to close its operations resulting in the termination of its employees effective January 31, 2008.
However, the employees are entitled to receive separation pay amounting to 250% of the basic monthly pay for every year of service, among others things. Petitioner PSC, likewise, served a notice of termination to the Department of Labor and Employment (DOLE).On that same day of December 28, 2007, private respondent Union, immediately upon receipt of the termination letters, filed a Notice of Strike before the DOLE alleging that the closure of the operation of PSC is tantamount to union-busting because it is a means of terminating employees who are members thereof. Furthermore, the notices of termination were served on its employees three (3) days before petitioner PSC ceases its operations, thereby violating the employees' right to due process. As a matter of fact, the employees were no longer allowed to work as of January 1, 2008. Private respondent Union, thus, prayed that petitioner PSC be held guilty of unfair labor practice and illegal dismissal. It, likewise, prayed for the reinstatement of all dismissed employees, along with the award of backwages, moral and exemplary damages, and attorney's fees.
Is PSC failed to comply with the procedural requirements of article 283 of the labor code on notice.
Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or under taking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
In sum, under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business operations: (a) service of a written notice to the employees and to the DOLE at least one month before the intended date thereof; (b) the cessation of business must be bona fide in character; and (c) payment to the employees of termination pay amounting to one month pay or at least one-half month pay for every year of service, whichever is higher.
The required written notice under Article 283 of the Labor Code is to inform the employees of the specific date of termination or closure of business operations, and must be served upon them at least one (1) month before the date of effectivity to give them sufficient time to make the necessary arrangements. The purpose of this requirement is to give employees time to prepare for the eventual loss of their jobs, as well as to give DOLE the opportunity to ascertain the veracity of the alleged cause of termination. Thus, considering that the notices of termination were given merely three (3) days before the cessation of the PSC's operation, it defeats the very purpose of the required notice and the mandate of Article 283 of the Labor Code. Neither the payment of employees' salaries for the said one-month period nor the employees' alleged actual knowledge of the ASTOA is sufficient to replace the formal and written notice required by the law.
On December 8, 2000, LA Geobel A. Bartolabac ruled that the respondents had been illegally dismissed by Wenphil. According to the LA, the allegation of serious misconduct against the respondents had no factual and legal basis.Consequently, LA Bartolabac ordered Wenphil to immediately reinstate the respondents to their respective positions or to equivalent ones, whether actual or in the payroll. Also, the LA ordered Wenphil to pay the respondents their backwages from February 3, 2000 until the date of their actual reinstatement. Because of the unfavorable LA decision, Wenphil appealed to the NLRC on April 16, 2001. In the meantime, the respondents moved for the immediate execution of the LA’s December 8, 2000 decision. On October 29, 2001, Wenphil and the respondents entered into a compromise agreement before LA Bartolabac. They agreed to the respondents’ payroll reinstatement while Wenphil’s appeal with the NLRC was ongoing. Wenphil also agreed to pay the accumulated salaries of the respondents for the payroll period from April 5, 2001 until October 15, 2001.
As for the remaining payroll period starting October 16, 2001, Wenphil committed itself to credit the respective salaries of the respondents to their ATM payroll accounts until such time that the questioned decision of LA Bartolabac is either modified, amended or reversed by the Honorable National Labor Relations Commission. On January 30, 2002, the NLRC issued a resolution affirming LA Bartolabac’s decision with modifications. Instead of ordering the respondents’ reinstatement, the NLRC directed Wenphil to pay the respondents their respective separation pay at the rate of one (1) month salary for every year of service. Also, the NLRC found that while the respondents had been illegally dismissed, they had not been illegally suspended. Thus, the period from February 3 to February 28, 2000 during which the respondents were on preventive suspension was excluded by the NLRC in the computation of the respondents’ backwages
Whether the employees should be reinstated.
The petition was DENIED
LABOR LAW: order of reinstatement. An order of reinstatement is immediately executory even pending appeal. The employer has the obligation to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.
Under Article 223 of the Labor Code, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation, or at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement. The reinstatement salaries due to the respondents were, by their nature, payment of unworked backwages. These were salaries due to the respondents because they had been prevented from working despite the LA and the NLRC findings that they had been illegally dismissed.
We point out that reinstatement and backwages are two separate reliefs available to an illegally dismissed employee. The normal consequences of a finding that an employee has been illegally dismissed are: first, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights; and second, the payment of backwages covers the period running from his illegal dismissal up to his actual reinstatement. These two reliefs are not inconsistent with one another and the labor arbiter can award both simultaneously.
Moreover, the relief of separation pay may be granted in lieu of reinstatement but it cannot be a substitute for the payment of backwages. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay should be granted. In effect, an illegally dismissed employee should be entitled to either reinstatement if viable, or separation pay if reinstatement is no longer be viable, plus backwages in either instance.
This case arose from a complaint for illegal dismissal filed by Florentino and Nilda on May 18, 2000 against UPI, its President Cesar Duque, Executive Vice-President Juan Llamas Amor and Director for Student Affairs Dominador Reyes.
In a Decision dated November 6, 2000, Labor Arbiter Rolando D. Gambito ruled that Florentino and Nilda were illegally dismissed by UPI ordering [UPI] to pay backwages, allowances and other benefits computed from the date of their dismissal on May 9, 2000 up to November 6, 2000, date of promulgation of decision and instead of reinstatement of [Florentino and Nilda] to their former positions, [the petitioners] should pay them separation pay equivalent to one (1) month salary for every year of service, a fraction of at least six (6) months shall be considered as one (1) whole year.
Whether the reckoning period is not interrupted by the NLRC's reversal of LA Gambito's finding of
NO. In Gonzales, the Court stated that the increase in the amount that the corporation had to pay "is a consequence that it cannot avoid as it is the risk that it ran when it continued to seek recourses against the [LA's] decision." Further, in Reyes v. NLRC, et al., the Court declared that:
One of the natural consequences of a finding that an employee has been illegally dismissed is the payment of backwages corresponding to the period from his dismissal up to actual reinstatement. The statutory intent of this matter is clearly discernible. The payment of backwages allows the employee to recover from the employer that which he has lost by way of wages as a result of his dismissal. Logically, it must be computed from the date of petitioner's illegal dismissal up to the time of actual reinstatement. There can be no gap or interruption, lest we defeat the very reason of the law in granting the same.
Although in Reyes, the issue relates to the delay in filing of the complaint for illegal dismissal from the time of termination, there is no preclusion to apply the doctrine that there should be no gap or interruption in the reckoning period during which the dismissed employee is entitled to backwages and benefits. The statutory intent in the award of backwages and benefits is clear. Further, as declared in Gonzales, an employer takes a risk in assailing the LA's finding of illegal dismissal, but there is no insulation from the consequences therefrom.
Santos is a full-time Spanish language teacher since she was hired by the International School in 1978. After coming back from a leave of absence, she agreed to teach one Spanish class and four Filipino class.
Santos was observed by the School’s high school administrators in her conduction of classes. The result of the Classroom Standards Evaluation Form was poor wherein it indicated that Santos needed improvement in conducting classes.
After a series of classroom observations, Santos continued to receive poor feedbacks from the school’s administrators. Eventually, Principal Peter Loy required Santos to undergo the remediation phase of the evaluation process through a Professional Growth Plan.
In a letter dated May 29, 1997, McCauley informed Santos that he was adopting the recommendation of the investigation committee that Santos’s employment from the School cannot be continued. According to McCauley, the committee found that the numerous consultations of Santos with her supervisors for the last three school years did not result in any appreciable improvement on her part. Given that Santos was duly licensed to teach Filipino, McCauley stated that the committee could not accept her claim that she was ill-equipped to teach the language. McCauley then told Santos that her employment with the School would cease effective June 7, 1997.
Whether Evangeline Santos was illegally dismissed.
No. The International School had sufficiently proved the charge of gross inefficiency, which warranted the dismissal of Santos from the School. She appeared to lack the necessary skills, in-depth knowledge, and expertise to teach the Filipino language at the standards required by the School.
Since Santos was validly dismissed from her employment, she would not ordinarily be entitled to separation pay. However, applying the principle of social justice according to the equities of the case (PLDT v. NLRC), the Court finds equitable and proper the award of separation pay in favor of Santos in view of the length of her service with the School.
United Tourist Promotions employed Kemplin to be its President for a period of five years, to commence on March 1, 2002 and to end on March 1, 2007, “renewable for the same period, subject to new terms and conditions”. Kemplin continued to render his services to UTP even after his fixed term contract of employment expired. Records show that on May 12, 2009, Kemplin, signing as President of UTP, entered into advertisement agreements with Pizza Hut and M. Lhuillier. Kemplin then filed for illegal dismissal against petitioner.
Whether or not Kemplin was illegally dismissed.
Yes. Considering that he continued working as President for UTP for about one (1) year and five (5) months and since [his] employment is not covered by another fixed term employment ontract, [Kemplin’s] employment after the expiration of his fixed term employment is already regular. Therefore, he is guaranteed security of tenure and can only be removed from service for cause and after compliance with due process. This is notwithstanding [UTP and Jersey’s] insistence that they merely tolerated [Kemplin’s] "consultancy" for humanitarian reasons. In this case, [UTP and Jersey] failed to prove the existence of just cause for his termination.
The pendency of a criminal suit against an employee, does not, by itself, sufficiently establish a ground for an employer to terminate the former. It also bears stressing that the letter failed to categorically indicate which of the policies of UTP did Kemplin violate to warrant his dismissal from service. Further, Kemplin was never given the chance to refute the charges against him as no hearing and investigation were conducted. The absence of a hearing and investigation, the existence of just cause to terminate Kemplin could not have been sufficiently established. The Court is well aware that reinstatement is the rule and, for the exception of "strained relations" to apply, it should be proved that it is likely that, if reinstated, an atmosphere of antipathy and antagonism would be generated as to adversely affect the efficiency and productivity of the employee concerned. Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable.
Integrated Microelectronics Inc employed Adonis Pionilla as one of its production workers. Pionilla was later on dismissed in violation of the company rules and regulations which prohibits lending one's ID since the same is considered a breach of its security rules. It was reported that Pionilla was seen escorting a lady to board the company shuttle bus at a terminal, and that the lady was wearing a company ID – which serves as a free pass for shuttle bus passengers – even if she was just a job applicant at Integrated Microelectronics, Inc.
Pionilla admitted that he lent his ID to the lady who turned out to be his relative and at the time of the incident, he had two IDs in his name as he lost his original ID but was later on able to secure a temporary ID. As Pionilla and his relative were about to board the shuttle bus, they were both holding separate Ids, both in his name. The day after the incident, Pionilla received a notice requiring him to explain the incident and a committee was subsequently formed to investigate the matter. Thereafter, Pionilla was found guilty and was dismissed from service.
Whether or not Pionilla was illegally dismissed and hence entitled to reinstatement and full back wages.
An illegally dismissed employee is entitled to either reinstatement, if viable or separation pay if reinstatement is no longer viable and backwages. In certain cases, however, the Court has ordered reinstatement of the employee without backwages considering the fact that (1) the dismissal of the employee would be too harsh a penalty and, (2) the employer was in good faith in terminating the employee.
The Court observed that: (a) the penalty of dismissal was too harsh of a penalty to be imposed against Pionilla for his infractions; and (b) IMI was in good faith when it dismissed Pionilla as his dereliction of its policy on ID usage was honestly perceived to be a threat to the company's security. In this respect, since these circumstances trigger the application of the exception to the rule on backwages, the Court finds it proper to accord the same disposition and consequently directs the deletion of the award of back wages in favor of Pionilla, notwithstanding the illegality of the dismissal.
On January 24, 1997, Dario Nacar got dismissed by his employer, Gallery Frames. He filed a complaint; the Labor Arbiter ruled that the petitioner was dismissed without just cause. Computation for the separation pay and back wages were made and it amounted to Php 158,919.92. The respondent sought an appeal to the NLRC, CA, and Supreme Court, but they were all dismissed, thus the judgment became final on April 17, 2002. During the execution of the final judgment, the petitioner filed a motion for the re-computation of the damages.
The amount previously computed includes the separation pay and back wages up to the time of his dismissal. The petitioner argued that the damages should cover the period until the date of final judgment. A re-computation was made and the damages were increased to 471,320.31. Respondent prayed for the quashal of such motion on the ground that the judgment made by the SC is already final and the amount should not be further altered. Petitioner also filed another motion asking the court to order the respondent to pay the appropriate legal fees.
Whether or not a subsequent correction of the damages awarded during the final judgment of the Supreme Court violates the rule on immutability of judgments.
The Supreme Court ruled that a correction in the computation of the damages does not violate the rule on immutability of judgments. The final decision made by the Supreme Court to award the petitioner with damages with regards to the dismissal without justifiable cause can be divided into two important parts. One is the finding that an illegal dismissal was indeed made. And the other is the computation of damages.
According to a previous case of Session Delights Ice Cream and Fast Foods v. Court of Appeals, the Supreme Court held that the second part of the decision - being merely a computation of what the first part of the decision established and declared - can, by its nature, be recomputed. The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected, and this is not a violation of the principle of immutability of final judgments. Interest of the damages from the date of final judgment until full payment.
Villaruel filed with the NLRC NCR-Quezon City a Complaint for payment of separation pay against Yuhans Enterprises.
Petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise engaged in the business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan.
Petitioner further alleged that in October 1998, he got sick and was confined in a hospital; In December 1998, he reported for work but was no longer permitted to go back because of his illness; he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he was offered a sum of P15,000.00 as his separation pay; however, the said amount corresponds only to the period between 1993 and 1999; petitioner prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent refused.
On the other hand, respondent averred that petitioner was hired as machine operator from March 1993 until he stopped working sometime in February 1999 on the ground that he was suffering from illness; after his recovery, petitioner was directed to report for work, but he never showed up. Respondent was later caught by surprise when petitioner filed the instant case for recovery of separation pay. Respondent claimed that he never terminated the services of petitioner and that during their mandatory conference, he even told the latter that he could go back to work anytime but petitioner clearly manifested that he was no longer interested in returning to work and instead asked for separation pay.
Whether or not Villaruel is entitled to separation pay.
YES, but only financial assistance as a measure of social justice.
Article 284 of the Labor Code reads:
An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees:
Provided, That he is paid separation pay equivalent to at least 1 month salary or to ½ month salary for every year of service whichever is greater, a fraction of at least six months being considered as 1 whole year.
A plain reading of the above quoted provision clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties.
The Court agrees with the CA in its observation of the following circumstances as proof that respondent did not terminate Villaruel’s employment: first, the only cause of action in petitioner’s original complaint is that he was “offered a very low separation pay”; second, there was no allegation of illegal dismissal, both in petitioner’s original and amended complaints and position paper; and, third, there was no prayer for reinstatement. This is tantamount to resignation.
Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment
However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established employer practice or policy.
Since petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, he is not entitled to separation pay under the provisions of the Labor Code.
Rodolfo Luna (Luna) filed a complaint before the Executive Labor Arbiter alleging that he was an employee of Allado Construction Co., having been a part of Allado Construction Co. construction pool of personnel. He had continuously rendered services as a warehouseman and a timekeeper in every construction project undertaken by Allado Construction Co. on November 26, 2001, he was told by one Marilou Matilano, personnel manager of Allado Construction Co., to sign several sets of "Contract of Project Employment". He refused to sign the said contracts. Because of his refusal, he was not given a reassignment or any other work. These incidents prompted him to file the complaint.
Allado Construction Co., on the other hand, alleged that on November 29, 2001, Luna applied for a leave of absence until December 6, 2001, which was granted. Upon expiration of his leave, Luna was advised to report to the company’s project in Kablacan, Sarangani Province. However, he refused to report to his new assignment and claimed instead that he had been dismissed illegally.
Finding that Luna should be deemed to have resigned, the Labor Arbiter dismissed Luna’s complaint for illegal dismissal against Allado Construction Co., but ordered the latter to pay the former the amount of ₱18,000.00 by way of financial assistance. On appeal with the National Labor Relations Commission (NLRC), Allado Construction Co., purely for the purpose of questioning the validity of the grant of financial assistance made by the Labor Arbiter.
Relying on jurisprudence, the Court of Appeals held that it was grave abuse of discretion for the NLRC to rule on the issue of illegal dismissal when the only issue raised to it on appeal was the propriety of the award of financial assistance. The Court of Appeals further ruled that financial assistance may not be awarded in cases of voluntary resignation.
Whether or not the awarding of financial assistance is proper.
Yes. Assuming without admitting that there was no illegal dismissal, the award of financial assistance was in accordance with existing jurisprudence pursuant to the principle of social justice. Eastern Shipping Lines, Inc v. Sedan bears certain parallelisms with the present controversy. In Eastern, the employer likewise questioned the grant of financial assistance on the ground that the employee’s refusal to report back to work, despite being duly notified of the need for his service, is tantamount to voluntary resignation. In that case, however, we ruled:
We are not unmindful of the rule that financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Neither are we unmindful of this Court's pronouncements in Arc-Men Food Industries Corporation v. NLRC, and Lemery Savings and Loan Bank v. NLRC, where the Court ruled that when there is no dismissal to speak of, an award of financial assistance is not in order.
But we must stress that this Court did allow, in several instances, the grant of financial assistance. In the words of Justice Sabino de Leon, Jr., now deceased, financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. The instant case equally calls for balancing the interests of the employer with those of the worker, if only to approximate what Justice Laurel calls justice in its secular sense.
There appears to be no reason why Luna, who has served Allado Construction Co. for more than eight years without committing any infraction, cannot be extended the reasonable financial assistance of ₱18,000.00 as awarded by the Labor Arbiter on equity considerations.
In some cases where there is neither a dismissal nor abandonment, we have previously held that separation pay may be awarded under appropriate circumstances.
Pfizer vs. Velasco, March 9, 2011
Geraldine L. Velasco was employed with petitioner PFIZER, INC. as Professional Health Care Representative since 1 August 1992. Sometime in April 2003, Velasco had a medical work up for her high-risk pregnancy and was subsequently advised bed rest which resulted in her extending her leave of absence. Velasco filed her sick leave for the period from 26 March to 18 June 2003, her vacation leave from 19 June to 20 June 2003, and leave without pay from 23 June to 14 July 2003.
While Velasco was still on leave, PFIZER through its Area Sales Manager, Ferdinand Cortez, personally served Velasco a "Show-cause Notice" dated 25 June 2003. Aside from mentioning about an investigation on her possible violations of company work rules regarding "unauthorized deals and/or discounts in money or samples and unauthorized withdrawal and/or pull-out of stocks" and instructing her to submit her explanation on the matter within 48 hours from receipt of the same, the notice also advised her that she was being placed under "preventive suspension" for 30 days or from that day to 6 August 2003 and consequently ordered to surrender some of the accountabilities from her employer.
Velasco sent a letter denying the charges claiming that the transaction with Mercury Drug, Magsaysay Branch. Velasco received a "Second Show-cause Notice" informing her of additional developments in their investigation. According to the notice, a certain Carlito Jomen executed an affidavit pointing to Velasco as the one who transacted with a printing shop to print PFIZER discount coupons. Again, Velasco was given 48 hours to submit her written explanation on the matter. On 16 July 2003, Velasco sent a letter to PFIZER via Aboitiz courier service asking for additional time to answer the second Show-cause Notice.
Velasco filed a complaint for illegal suspension with money claims before the Regional Arbitration Branch. PFIZER sent her a letter inviting her to a disciplinary hearing to be held on 22 July 2003. Velasco received it under protest and informed PFIZER via the receiving copy of the said letter that she had lodged a complaint against the latter and that the issues that may be raised in the July 22 hearing "can be tackled during the hearing of her case" or at the preliminary conference set for 5 and 8 of August 2003.She likewise opted to withhold answering the Second Show-cause Notice. On 25 July 2003, Velasco received a "Third Show-cause Notice," together with copies of the affidavits of two Branch Managers of Mercury Drug, asking her for her comment within 48 hours. Finally, on 29 July 2003, PFIZER informed Velasco of its "Management Decision" terminating her employment.
Whether Pfizer shall pay Velasco wages from the date of the Labor Arbiter’s decision ordering her reinstatement when the Court of Appeals rendered its decision declaring Velasco’s dismissal valid.
Yes, PFIZER’s previous payment to respondent representing her wages that was successfully garnished under the Labor Arbiter’s Writ of Execution cannot be considered in its favor. Not only was this sum legally due to respondent under prevailing jurisprudence but also this circumstance highlighted PFIZER’s unreasonable delay in complying with the reinstatement order of the Labor Arbiter.
An award or order of reinstatement is immediately self-executory without the need for the issuance of a writ of execution in accordance with the third paragraph of Article 223 of the Labor Code. The provision of Article 223 is clear that an award shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. If the requirements of Article 224 including the issuance of a writ of execution 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 the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution. Thus, respondent was entitled to the wages paid to her under the aforementioned writ of execution.
It is well-settled that when a person is illegally dismissed, he is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. In the event, however, that reinstatement is no longer feasible, or if the employee decides not to be reinstated, the employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewise observed in the case of a strained employer-employee relationship or when the work or position formerly held by the dismissed employee no longer exists. In sum, an illegally dismissed employee is entitled to: (1) either reinstatement if viable or separation pay if reinstatement is no longer viable, and (2) backwages.
Respondent Ranchez a probationary employee for 5 months was hired as cashier. Two weeks after she was hired, she reported a loss of cash placed in company’s locker. She offered to pay the lost but Operation Manager Robinson reported her to police even though they found nothing on her. She was charged for qualified theft and detained for 2 weeks due to failure to pay the bail. Weeks later, Respondent filed complaint for illegal dismissal and damages. Year later, Robinsons sent to respondent by mail a notice of termination and/or expiration of probationary employment.
Labor Arbiter dismissed the complaint for illegal dismissal since when respondent filed the complain she’s not yet terminated. NLRC reversed the ruling, and state that respondent was illegally dismissed and should be reinstated. It held that Ranchez was deprived of due process when she was strip-searched and sent to jail for two weeks because such amounted to constructive dismissal, making it impossible for the respondent to continue under the employment. Lapse of probationary contract did not amount to a valid dismissal even if she was merely probationary employee since there was already an unwarranted constructive dismissal beforehand.
NLRC denied Robinson’s motion for reconsideration. CA affirmed NLRC’s decision.
Whether or not respondent was illegally terminated from employment by petitioners.
The petition is unmeritorious. There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.
A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code,i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following:
(1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.
Article 277(b) of the Labor Code mandates that the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment.
In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process. The haphazard manner in the investigation of the missing cash, which was left to the determination of the police authorities and the Prosecutor's Office, left respondent with no choice but to cry foul.
Administrative investigation was not conducted by petitioner Supermarket. On the same day that the missing money was reported by respondent to her immediate superior, the company already pre-judged her guilt without proper investigation, and instantly reported her to the police as the suspected thief, which resulted in her languishing in jail for two weeks.
The due process requirements under the Labor Code are mandatory and may not be replaced with police investigation or court proceedings. An illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively.
Respondents were hired as drivers, conductors, mechanics or inspectors by Prince Transport, Inc. (PTI), a company engaged in the business of transporting passengers by land. Respondents received in their regular monthly income and commissions equivalent to 8 to 10% of their wages but was later reduced to 7 to 9%. PTI suspected that respondents plan to form a union which it objected.
Respondents formed a union but PTI blocked it and caused the transfer of all union members to one of its sub-companies, Lubas Transport. Later, Lubas operations deteriorated because of PTI refusal to repair the units of Lubas which caused the latter to cease operations and rendered the respondents jobless. Respondents filed a complaint with illegal dismissal,unfair labor practice and illegal deductions .
The Labor Arbiter rendered a Decision dismissing the complaints for Unfair Labor Practice against PTI for lack of evidence to show that PTI violated respondents’ right to self-organization; non-payment of holiday pay and holiday premium, service incentive leave pay and 13th month pay; and ordered Lubas Transport to pay backwages and separation pay in lieu of reinstatement to respondents. The LA also held that Lubas is a separate entity from PTI and is guilty of illegal dismissal of respondents.
Respondents filed a Partial Appeal with the NLRC praying, among others, that PTI should also be held equally liable as Lubas. The CA partially granted the petition by adding the claims of two (2) more complainants and upholding the refund of boundary-hulog of one complainant. The rest of the Labor Arbiter’s decision was sustained.
In a special civil action for certiorari with the CA , the CA granted the respondent’s petition and reversed the assailed Decision and Resolution of the NLRC. The CA ruled that petitioners are guilty of unfair labor practice; that Lubas is a mere instrumentality, agent conduit or adjunct of PTI; and that petitioners’ act of transferring respondents to Lubas is indicative of their intent to frustrate the efforts of respondents to organize themselves into a union and ordered reinstatement of the petiitoners to their former positions with full backwages. Petitioners filed the instant petition for review on certiorari with the Supreme Court.
1) Whether PTI is guilty of Unfair Labor Practice;
2) Whether or not petitioners Prince Transport, Inc. and Lubas Transport are one and the same corporation and thus, liable in solidum to respondents.
1) Yes, the PTI is guilty of unfair labor practice, by means of transfer of respondent’s transfer of work assignments to Lubas was designed by petitioners as a subterfuge to foil the former’s right to organize themselves into a union.
Under Article 248 (a) and (e) of the Labor Code, an employer is guilty of unfair labor practice if it interferes with, restrains or coerces its employees in the exercise of their right to self-organization or if it discriminates in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.
Evidence of petitioners' unfair labor practice is shown by the established fact that, after respondents' transfer to Lubas, petitioners abandoned the operations of Lubas by withholding the necessary financial and logistic support such as spare parts and repair and maintenance of the Lubas buses until only two units remained in running condition which left respondents without work.
2) Yes, by applying the doctrine of piercing the corporate veil, the Court agreed with the CA that Lubas is a mere agent, conduit or adjunct of PTI. And since PTI and Lubas are one and the same entity; they are solidarily liable for the payment of backwages and other money claims awarded to the complainants therein.30
WHEREFORE, the instant petition is denied. The assailed Decision and Resolution of the Court of Appeals, dated December 20, 2004 and February 24, 2005, respectively, are AFFIRMED.
Aboc, the Regional Operations Coordinator of Metrobank in Cebu City alleged that on August 29, 1988, he started working as a loans clerk. For nine years, he maintained an unblemished employment record until he received an inter-office letter, requiring him to explain in writing the charges that he had actively participated in the lending activities of his immediate supervisor, Wynster Y. Chua (Chua), the Branch Manager of Metrobank where he was assigned. Aboc wrote a letter to Metrobank explaining that he had no interest whatsoever in the lending business of Chua because it was solely owned by the latter. He admitted, however, that he did some acts for Chua in connection with his lending activity. He did so because he could not say "no" to Chua because of the latters influence and ascendancy over him and because of his "utang na loob." His participation in the lending activity was limited to ministerial acts such as the preparation of deposit and withdrawal slips and the typing of statement of accounts for some clients of Chua. In fact, Chua wrote a letter to Metrobank absolving him of any responsibility and participation in his lending activities.
Did the Court of Appeals err in ruling that Antonio A. Aboc was validly dismissed by the
Metropolitan Bank and Trust Company.
In termination cases, the burden of proof rests on the employer to show that the dismissal was for a just cause or authorized cause. An employee's dismissal due to serious misconduct and loss of trust and confidence must be supported by substantial evidence. Substantial evidence is that amount of relevant evidence a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.
C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the manufacture and processing of plywood. Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is the exclusive bargaining agent of the Company’s rank and file employees. The other parties to these cases are the Union officers and their striking members.
The Company and the Union entered into a CBA that bound them to hold no strike and no lockout in the course of its life. At some point, the parties began negotiating the economic provisions of their CBA but this ended in a deadlock, prompting the Union to file a notice of strike. After efforts at conciliation by the DOLE failed, the Union conducted a strike vote that resulted in an overwhelming majority of its members favoring it. The Union reported the strike vote to the DOLE and, after the observance of the mandatory cooling-off period, went on strike.
During the strike, the Company filed a petition for the issuance of a writ of preliminary injunction with prayer for the issuance of a temporary restraining order (TRO) Ex Parte with the NLRC to enjoin the strikers from intimidating, threatening, molesting, and impeding by barricade the entry of non-striking employees at the Company’s premises. The NLRC first issued a 20-day TRO and, after hearing, a writ of preliminary injunction, enjoining the Union and its officers and members from performing the acts complained of. Meantime, the Union filed a petition with the CA, questioning the preliminary injunction order. The latter court dismissed the petition. The Union did not appeal from such dismissal. The Company, on the other hand, filed a petition with the Regional Arbitration Board to declare the Union’s strike illegal, citing its violation of the no strike, no lockout, provision of their CBA.
The Labor Arbiter rendered a decision, declaring the Union’s strike illegal for violating the CBA’s no strike, no lockout, provision. As a consequence, the Labor Arbiter held that the Union officers should be deemed to have forfeited their employment with the Company and that they should pay actual damages plus 10% interest and attorney’s fees. With respect to the striking Union members, finding no proof that they actually committed illegal acts during the strike, the Labor Arbiter ordered their reinstatement without backwages.
At any rate, the Company did not reinstate them. Both parties appealed the Labor Arbiter’s decision to the NLRC. The NLRC rendered a decision, affirming that of the Labor Arbiter insofar as the latter declared the strike illegal, ordered the Union officers terminated, and directed them to pay damages to the Company. The NLRC ruled, however, that the Union members involved, who were identified in the proceedings held in the case, should also be terminated for having committed prohibited and illegal acts.
The CA rendered a decision dismissing the petition. The CA ruled that the reinstatement pending appeal provided under Article 223 of the Labor Code contemplated illegal dismissal or termination cases and not cases under Article 263. Thus, the CA ruled that the resolution ordering the reinstatement of the terminated Union members and the payment of their wages and other benefits had no basis.
Whether the terminated Union members are entitled to the payment of backwages on account of the Company’s refusal to reinstate them pending appeal.
Yes. The Company’s failure to reinstate the employees pursuant to the decision of the Labor Arbiter makes it liable for accrued backwages until the eventual reversal of the order of reinstatement by the National Labor Relations Commission (NLRC).
Although the Labor Arbiter failed to act on the terminated Union members’ motion for reinstatement pending appeal, the Company had the duty under Article 223 to immediately reinstate the affected employees even if it intended to appeal from the decision ordaining such reinstatement. The Company’s failure to do so makes it liable for accrued backwages until the eventual reversal of the order of reinstatement by the NLRC on November 8, 1999, a period of four months and nine days.
Elizabeth D. Palteng was the Senior Assistant Manager/Branch Operations Officer of respondent United Coconut Planters Bank .On April 15, 1996, Area Head and Vice-President Eulallo S. Rodriguez reported to the bank’s Internal Audit and Credit Review Division that bank client Clariza L. Mercado-The Red Shop has incurred Past Due Domestic Bills Purchased (BP) of P34,260,000. After conducting a diligence audit, the division reported to the Audit and Examination Committee that Palteng committed several offenses under the Employee Discipline Code in connection with Mercado’s Past Due Domestic BP. It also recommended that the matter be referred to the Committee on Employee Discipline for proper disposition. Palteng was required to explain why no disciplinary action should be taken against her.
In response, Palteng explained that while she admitted committing a major offense that may cause her dismissal, she claimed that it was an honest mistake. After hearing and investigation, the committee recommended Palteng’s dismissal. Palteng filed a complaint for illegal dismissal seeking reinstatement to her former position without loss of seniority rights with full backwages, or in the alternative, payment of separation pay with full backwages, and recovery of her monetary claims with damages.
Whether the award of backwages is proper.
No. Settled is the rule that an employee who is illegally dismissed from work is entitled to reinstatement without loss of seniority rights, and other privileges as well as to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
However, in the event that reinstatement is no longer possible, the employee may be given separation pay instead. In the case at bar, petitioner admitted that she granted the BP accommodation against Mercado’s personal checks beyond and outside her authority. The Labor Arbiter, the NLRC and the Court of Appeals all found her to have committed an “error of judgment,” “honest mistake,” “honest mistake” vis-à-vis a “major offense.”Since petitioner was not faultless in regard to the offenses imputed against her, we hold that the award of separation pay only, without backwages, is proper.
An email was sent to Amkor Technology Philippines (Amkor) through their General Manager alleging that the Lunesa Lansangan (Lansangan) and Rocita Cendana (Cendana) stole company time. Lansangan and Cendana admitted to the wrongdoing and were terminated for ―extremely serious offenses‖. The two then filed a case of illegal dismissal against Amkor. The Labor Arbiter (LA) ordered for their reinstatement to their former positions without backwages, but dismissed the complaint on basis of Lansangan and Cendana’s guilt. The two did not appeal the finding that they were guilty, and moved for the writ of execution. Amkor appealed the decision to the National Labor Relations Commissions (NLRC) and was subsequently granted. The NLRC deleted the grant for reinstatement of the LA.
The Court of Appeals affirmed the decision of the NLRC that Lansangan and Cendana are guilty and should not be reinstated but modified in so far as backwages are concerned that it must be paid in full.
Whether or not Lansangan and Cendana are entitled to backwages and reinstatement.
The Arbiter found Lansangan and Cendana’s dismissal to be valid. Such finding had, as stated earlier, become final, they not having appealed it. Lansangan and Cendana’s are not entitled to full backwages as their dismissal was not found to be illegal. Agabon v. NLRC so states –– payment of backwages and other benefits is justified only if the employee was unjustly dismissed.
Respondents Efren Capada, Lauro Licup, Norberto Nigos and Godofredo Magnaye were drivers while respondents Ronnie Abel, Arnel Siberre, Edmundo Capada, Nomerlito Magnaye and Alberto Dela Vega were helpers of Islriz Trading, a gravel and sand business owned and operated by petitioner Victor Hugo Lu. Respondents claimed that they were illegally dismissed and were not paid for overtime pay, holiday pay, rest day pay, allowances and separation pay against petitioner on August 9, 2000 before the Labor Arbiter. On his part, petitioner imputed abandonment of work against respondents.
Labor Arbiter Waldo Emerson R. Gan (Gan) rendered a Decision that Islriz is guilty of illegal dismissal. He also ordered to reinstate respondents to their former positions without loss of seniority rights and the payment of full backwages from date of dismissal to actual reinstatement.
NLRC reversed the decision finding that respondents' failure to continue working for petitioner was neither caused by termination nor abandonment of work, hence, NLRC ordered respondents' reinstatement but without backwages.
In a Decision 27 dated March 18, 2005, the CA quoted the June 3, 2004 Order of Labor Arbiter Castillon and agreed with her ratiocination that pursuant to Article 223 of the Labor Code, what is sought to be enforced by the subject Writ of Execution is the accrued salaries owing to respondents by reason of the reinstatement order of Labor Arbiter Gan.
1. Whether respondents collect their accrued salaries for the period between the Labor Arbiter's order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter
2. Whether the computation of respondents’ accrued salaries from January 1, 2002 to January 31, 2022 correct.
1. Yes, the petition was denied. The Court applied the two- fold test used in Garcia.
• Was there an actual delay or was the order of reinstatement pending appeal executed prior to its reversal? Yes. until the issuance of the September 5, 2002 NLRC Resolution overturning Labor Arbiter Gan's Decision, petitioner still failed to reinstate respondents or effect payroll reinstatement in accordance with Article 223 of the Labor Code
• Was the delay not due to the employer's unjustified act or omission?
Yes. Unlike in Garcia where PAL, as the employer, was then under corporate rehabilitation, Islriz Trading here did not undergo rehabilitation or was under any analogous situation which would justify petitioner's non-exercise of the options provided under Article 223 of the Labor Code. Petitioner, however, without any satisfactory reason, failed to fulfill this promise and respondents remained to be not reinstated until the NLRC resolved petitioner's appeal. Evidently, the delay in the execution of respondents' reinstatement was due to petitioner's unjustified refusal to effect the same.
2. No. It should commence from petitioner's date of receipt of the Labor Arbiter's Decision ordering reinstatement up to the date of the NLRC Resolution reversing the same. In this case, it starts from the date of petitioner's receipt of the December 21, 2001 Decision of the Labor Arbiter up to the issuance of the NLRC Resolution on September 5, 2002.
This is because it is only during said period that respondents are deemed to have been illegally dismissed and are entitled to reinstatement pursuant to Labor Arbiter Gan's Decision which was the one in effect at that time. Beyond that period, the NLRC Resolution declaring that there was no illegal dismissal is already the one prevailing. From such point, respondents' salaries did not accrue not only because there is no more illegal dismissal to speak of but also because respondents have not yet been actually reinstated and have not rendered services to petitioner.
PAL vs. Paz, November 26, 2014
Reynaldo V. Paz (respondent) was a former commercial pilot of PAL and a member of the Airlines Pilots Association of the Philippines (ALPAP), the sole and exclusive bargaining representative of all the pilots in PAL.
On December 9, 1997, ALPAP filed a notice of strike with the National Conciliation and Mediation Board of the Department of Labor and Employment (DOLE). Pursuant to Article 263(g) of the Labor Code, the DOLE Secretary assumed jurisdiction over the labor dispute and enjoined the parties from committing acts which will further exacerbate the situation.
Notwithstanding the directive of the DOLE Secretary, the ALPAP officers and members staged a strike and picketed at the PAL’s premises. To control the situation, the DOLE Secretary issued a return-to-work order on June 7, 1998, directing all the striking officers and members of ALPAP to return to work within 24 hours from notice of the order. The said order was served upon the officers of ALPAP on June 8, 1998 by the DOLE Secretary himself. Even then, the striking members of ALPAP did not report for work.
On June 25, 1998, Atty. Joji Antonio, the counsel for ALPAP, informed the members of the union that she has just received a copy of the return-to-work order and that they have until the following day within which to comply. When the striking members of the ALPAP reported for work on the following day, the security guards of PAL denied them entry.
PAL filed a petition for approval of rehabilitation plan and for appointment of a rehabilitation receiver with the Securities and Exchange Commission (SEC), claiming serious financial distress brought about by the strike. Subsequently, the SEC appointed a rehabilitation receiver for PAL and declared the suspension of all claims against it.
The DOLE Secretary resolved the motions for reconsideration filed by both parties and declared the strike staged by ALPAP illegal and that the participants thereof are deemed to have lost their employment.
The Labor Arbiter (LA) rendered a Decision holding that the respondent Reynaldo V. Paz was illegally dismissed and ordered that he be reinstated to his former position without loss of seniority rights and other privileges and paid his full backwages inclusive of allowances and other benefits. PAL appealed the foregoing decision to the National Labor Relations Commission (NLRC). Pending appeal, the respondent Reynaldo Paz filed a motion for partial execution of the reinstatement aspect of the decision. The LA granted the said motion and issued a partial writ of execution.
The NLRC rendered a Resolution reversing the LA decision.
Notwithstanding the reversal of the LA decision, the respondent pursued his move for the issuance of a writ of execution, claiming that he was entitled to reinstatement salaries which he supposedly earned during the pendency of the appeal to the NLRC.
PAL appealed the LA order arguing that the writ of execution lacked factual and legal basis considering that the NLRC reversed and set aside the LA decision and categorically declared the order of reinstatement as totally devoid of merit. It contended that entitlement to salaries pending appeal presupposes a finding that the employee is entitled to reinstatement.
PAL filed a petition for certiorari with the CA. Subsequently, in a Decision the CA affirmed with modification the NLRC Resolution, ruling that, in lieu of reinstatement salaries, petitioner Philippine Airlines, Inc. is ordered to pay respondent Paz separation pay equivalent to one month salary for every year of service, to be computed from the time respondent commenced employment with petitioner PAL until the time the Labor Arbiter issued the writ ordering respondent’s reinstatement.
Whether or not the respondent Reynaldo Paz was entitled to reinstatement salaries and full backwages which he is supposed to have received from the time PAL received the LA decision, ordering his reinstatement, until the same was overturned by the NLRC.
No. The delay in reinstating the respondent was not due to the unjustified refusal of PAL to abide by the order but because of the constraints of corporate rehabilitation. It bears noting that a year before the respondent filed his complaint for illegal dismissal, PAL filed a petition for approval of rehabilitation plan and for appointment of a rehabilitation receiver with the SEC. Thereafter, the SEC issued an Order suspending all claims for payment against PAL. The inopportune event of PAL’s entering rehabilitation receivership justifies the delay or failure to comply with the reinstatement order of the LA. PAL’s failure to exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified.
In light of the fact that PAL’s failure to comply with the reinstatement order was justified by the exigencies of corporation rehabilitation, the respondent Reynaldo Paz may no longer claim salaries which he should have received during the period that the LA decision ordering his reinstatement is still pending appeal until it was overturned by the NLRC.
The case stemmed from the administrative charge filed by PAL against its employees-herein petitioners after they were allegedly caught in the act of sniffing shabu. PAL dismissed petitioners, prompting them to file a complaint for illegal dismissal and damages which was resolved by the Labor Arbiter in their favor, thus ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the decision. Prior to the promulgation of the Labor Arbiter’s decision, the Securities and Exchange Commission (SEC) placed PAL (hereafter referred to as respondent), which was suffering from severe financial losses, under an Interim Rehabilitation Receiver, who was subsequently replaced by a Permanent Rehabilitation Receiver. Respondent appealed to the NLRC which reversed said decision and dismissed petitioners’ complaint for lack of merit. Subsequently, the Labor Arbiter issued a Writ of Execution (Writ) respecting the reinstatement aspect and issued a Notice of Garnishment (Notice). Respondent thereupon moved to quash the Writ and to lift the Notice while petitioners moved to release the garnished amount. Respondent filed an Urgent Petition for Injunction with the NLRC which affirmed the validity of the Writ and the Notice issued by the Labor Arbiter but suspended and referred the action to the Rehabilitation Receiver for appropriate action. Respondent elevated the matter to the appellate court which issued the herein challenged Decision and Resolution nullifying the NLRC Resolutions on two grounds, essentially espousing that: (1) a subsequent finding of a valid dismissal removes the basis for implementing the reinstatement aspect of a labor arbiter’s decision (the first ground), and (2) the impossibility to comply with the reinstatement order due to corporate rehabilitation provides a reasonable justification for the failure to exercise the options under Article 223 of the Labor Code (the second ground).
Whether petitioners may collect their wages during the period between the Labor Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that respondent has exited from rehabilitation proceedings.
Yes. The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the Labor Arbiter's order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries.
After the labor arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. The test is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s decision.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before any court, tribunal or board against the corporation shall ipso jure be suspended. As stated early on, during the pendency of petitioners’ complaint before the Labor Arbiter, the SEC placed respondent under an Interim Rehabilitation Receiver. After the Labor Arbiter rendered his decision, the SEC replaced the Interim Rehabilitation Receiver with a Permanent Rehabilitation Receiver.
Case law recognizes that unless there is a restraining order, the implementation of the order of reinstatement is ministerial and mandatory. This injunction or suspension of claims by legislative fiat33 partakes of the nature of a restraining order that constitutes a legal justification for respondent’s non-compliance with the reinstatement order. Respondent’s failure to exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. Such being the case, respondent’s obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did not attach.
Panuncillo was dismissed from her position as Office Senior Clerk under respondent for violating Section 8.4 of respondent’s Code of Discipline, reading: Committing or dealing any act or conniving with co-employees or anybody to defraud the company or customer/sales associates.
Petitioner sought reconsideration of her dismissal, imploring her request to avail of the retirement benefit of respondent company, which was later denied. Petitioner thus filed a complaint for illegal dismissal, 13th month pay, service incentive leave pay, damages and attorney’s fees against respondent.
As a result, the Labor Arbiter ordered the reinstatement of petitioner to a position one rank lower than her previous position and directed the respondent to pay complainant’s 13th Month pay and Service Incentive Leave Pay for 1999. On appeal, however, the NLRC reversed the decision of the Labor Arbiter, finding that petitioner’s dismissal was illegal and accordingly ordering her reinstatement to her former position without loss of seniority rights, with full backwages, and with other benefits and payments for damages. Further, the complainant’s Motion to Declare Respondent in Contempt dated May 3, 2000 is denied and rendered moot while all other claims are dismissed for lack of merit.
CAP challenged the NLRC Decision before the CA via Petition for Certiorari. On May 16, 2003, the CA reversed the NLRC Decision and held that the dismissal was valid and that respondent complied with the procedural requirements of due process before petitioner’s services were terminated. Hence, the present petition, petitioner faulting the appellate court.
Whether or not it is still obligatory on the part of an employer to reinstate and pay the wages of a dismissed employee during the period of appeal.
Yes. The Court reiterates 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 the Labor 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 such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.
Bago vs. NLRC, April 4, 2007
Arlyn Bago (Bago) and five other employees were dismissed by Celia P. Abordo (Abordo), head of the Tuguegarao Branch of Standard Insurance Company Incorporated (SICI) for manipulating the company funds and spreading damaging rumors. Bago, the auditor of the company, and the five other employees apologized for spreading the rumors. Abordo issued a memo to the employees requiring an explanation for the charges. Thinking that Abordo had already forgiven them, the employees did not respond to the memo.
Not receiving any reply, the Human Resource Department of SICI proceeded with their investigation and found all the employees guilty and dismissed them for loss of confidence and serious misconduct. Bago filed a complaint for illegal dismissal. She contended that there was no due process in the investigation and that dismissal is a severe penalty for the offenses charged.
The Labor Arbiter found that Bago was illegally dismissed but the NLRC reversed the Labor Arbiter's decision and declared valid the termination of Bago’s services on the grounds of loss of trust and confidence and dishonesty. Bago further claims that she is an ordinary rank-and-file employee, hence, she cannot be dismissed for loss of trust and confidence. The CA found, however, that her work is of such nature as to require a substantial amount of trust and confidence on the part of her employer.
Whether the penalty of dismissal was valid despite the fact that the actual amount of money allegedly misappropriated was never established.
Yes. Arlyn of course incorrectly assumes that mere rank-and-file employees cannot be dismissed on the ground of loss of confidence. Jurisprudence holds otherwise albeit it requires “a higher proof of involvement” in the questioned acts. a general rule, employers are allowed a wide latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employer’s full trust and confidence. Proof beyond reasonable doubt is not required. It is sufficient that there is some basis for loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position. This must be distinguished from the case of ordinary rank-and-file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice.
Even assuming that Arlyn may be considered a rank-and-file employee, sufficient evidence of her involvement in the dishonest scheme of SICI’s accountant and cashier who were also charged and found guilty exists. Not only was her participation established by the internal audit conducted; the cashier identified her as part of the scheme, and she herself admitted her involvement.
Anastacio Abad was the Senior Assistant Manager of PCIB, Tacloban City, when he was dismissed from work on Aug. 3, 1998. On Mar. 13, 1998, Abad received a memorandum from PCIB concerning the irregular clearing of PNB-Naval Check of Sixtu Chu, a valued client. Abad denied that he instructed his subordinates to validate the out-of-town checks of Chu presented for deposit or encashment as local clearing checks. During the investigation conducted by the PCIB, several transactions violative of the Bank’s Policies and Rules and Regulations were uncovered by the Fact-Finding Committee. Consequently, Lorenzo Cervantes, Fact-Finding officer, issued another memorandum to Abad asking the latter to explain the newly discovered irregularities. Not satisfied with the explanations of Abad, PCIB served another memorandum, terminating his employment effective immediately upon receipt. Abad instituted a Complaint for Illegal dismissal against PCIB. The LA ruled that the dismissal was legal. However, it directed PCIB to pay Abad the amount of P10,000.00 for its failure to comply with the requirements of due process.
In appeal, NLRC issued a decision affirming the decision of LA with modification ordering PCIB to pay Abad the amount of P21,209.31 representing his 13th month pay for 1998. The CA also sustained the validity of the dismissal but modified the award to separation pay equivalent to ½ month pay for every year of service in accordance with social justice policy in favor of the working class.
Is an employee entitled to separation pay even if legally dismissed.
Yes. An employee dismissed for any of just causes enumerated under Art. 282 of the LC is not, as a rule, entitled to separation pay. As an exception, allowing the grant of separation pay or some other financial assistance to an employee dismissed for just causes is based on equity. The Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal was not due to serious misconduct or reflective of personal integrity or morality. The dismissal in the present case was due to loss of trust and confidence, not serious misconduct. As facts indicate, his actions were motivated by a desire to accommodate a valued client of the bank.