Islriz vs. Capada, January 31, 2011

Facts:
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.
 
 Issue:
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.