Wenphil Corporation vs. Abing, April 7, 2014

Facts:
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
 
Issue:
Whether the employees should be reinstated.

Held:
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.