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LABOR RELATIONS

CASE DIGEST

PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION
and LOURDES A. DE JESUS, respondents.
[G.R. No. 118651. October 16, 1997]
FACTS:
De Jesus is petitioners reviser/trimmer who based her assigned work on a paper note posted by
petitioners. The posted paper is identified by its P.O. Number. De Jesus worked on P.O. No. 3853 by
trimming the cloths ribs and thereafter submitted tickets corresponding to the work done to her
supervisor. Three days later, de Jesus received a memorandum requiring her to explain why no
disciplinary action should be taken against her for dishonesty and tampering of official records and
documents with the intention of cheating as P.O. No. 3853 allegedly required no trimming. The
memorandum also placed her under preventive suspension for thirty days. In her explanation, de Jesus
maintained that she merely committed a mistake in trimming P.O. No. 3853 and admitted that she may
have been negligent, but not for dishonesty or tampering. Nonetheless, she was terminated from
employment.
De Jesus filed a complaint for illegal dismissal against petitioners. The Labor Arbiter held
petitioners guilty of illegal dismissal and were ordered to reinstate de Jesus to her previous position
without loss of seniority rights and with full backwages from the time of her suspension. On appeal, the
National Labor Relations Commission (NLRC) declared that the status quo between them should be
maintained and affirmed the Labor Arbiters order of reinstatement, but without backwages. The NLRC
further directed petitioner to pay de Jesus her back salaries from the date she filed her motion for
execution up to the date of the promulgation of the decision. Petitioners filed their partial motion for
reconsideration which the NLRC denied, hence this petition.
ISSUE:
Whether or not an order for reinstatement needs a writ of execution?
HELD:
No. The provision of Article 223 is clear that an award for reinstatement shall be immediately
executory even pending appeal and the posting of a bond by the employer shall not stay the execution for
reinstatement. To require the application for and issuance of a writ of execution as prerequisites for the
execution of a reinstatement award would certainly betray and run counter to the very object and intent of
Article 223, i. e., the immediate execution of a reinstatement order. The reason is simple. An application
for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or
postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the
NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble
purpose envisioned by Article 223. On appeal, however, the appellate tribunal concerned may enjoin or
suspend the reinstatement order in the exercise of its sound discretion.
Furthermore, the rule is that all doubts in the interpretation and implementation of labor laws
should be resolved in favor of labor. In ruling that an order or award for reinstatement does not require a
writ of execution the Court is simply adhering and giving meaning to this rule. Henceforth, we rule that an
award or order for reinstatement is self-executory. After receipt of the decision or resolution ordering the
employee's reinstatement, the employer has the right to choose whether to 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.

---ABBH---

ALEJANDRO ROQUERO, petitioner, vs. PHILIPPINE AIRLINES, INC. (PAL), respondent.


[G.R. No. 152329. April 22, 2003]
FACTS:
Roquero, along with Rene Pabayo, were ground equipment mechanics of PAL. From the evidence
on record, it appears that they were caught red-handed possessing and using shabu in a raid conducted by
PAL security officers and NARCOM personnel. They received a notice of administrative charge for
violating the PAL Code of Discipline. They were required to answer the charges and were placed under
preventive suspension. In their reply to notice of administrative charge, they assailed their arrest and
asserted that they were instigated by PAL to take the drugs. In a Memorandum, Roquero and Pabayo were
dismissed by PAL. Thus, they filed a case for illegal dismissal.
In the Labor Arbiters decision, the dismissal of Roquero and Pabayo was upheld. Nonetheless,
the Labor Arbiter awarded separation pay and attorneys fees to the complainants. On appeal, the NLRC
ruled in favor of petitioners as it likewise found PAL guilty of instigation and ordered reinstatement to
their former positions but without backwages. Petitioners did not appeal from the decision but filed a
motion for a writ of execution of the order of reinstatement. The Labor Arbiter granted the motion but
PAL refused to execute the said order on the ground that they have filed a Petition for Review.
The Court of Appeals later reversed the decision of the NLRC and reinstated the decision of the
Labor Arbiter. However, it denied the award of separation pay and attorneys fees to Roquero on the
ground that one who has been validly dismissed is not entitled to those benefits. Hence, this petition for
review under Rule 45.
ISSUE:
Whether or not an employer who refused to reinstate an employee despite a writ duly issued is
liable to pay the salary of the subject employee?
HELD:
Yes. Article 223 (3) of the Labor Code provide that an order of reinstatement by the Labor Arbiter
is immediately executory even pending appeal. 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 of reinstatement.
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.
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.

---ABBH---

TRIAD SECURITY & ALLIED SERVICES, INC. and ANTHONY U. QUE, petitioners, vs.
SILVESTRE ORTEGA, JR., ARIEL ALVARO, RICHARD SEVILLANO,
MARTIN CALLUENG, and ISAGANI CAPILA, respondents.
[G.R. No. 160871 . February 06, 2006]
FACTS:
Respondents were formerly employed by petitioner as security guards. Accordingly, during the
time that they were in the employ of petitioners, they were receiving compensation which was below the
minimum wage fixed by law. They were also made to render services everyday for 12 hours but were not
paid the requisite overtime pay, nightshift differential, and holiday pay. Respondents likewise lamented
the fact that petitioners failed to provide them with weekly rest period, service incentive leave pay, and
13th month pay. As a result of these perceived unfairness, respondents filed a complaint before the
Department of Labor. Upon learning of the complaint, respondents services were terminated without the
benefit of notice and hearing.
The Labor Arbiter rendered judgment ordering the petitioners to reinstate the respondents to
their former jobs as security guards, and to pay respondents backwages and to such further backwages as
they accrue until reinstatement order is complied with by the petitioners. Further, petitioners are ordered
to pay separation pay in the event reinstatement is no longer feasible.
As petitioners failed to seasonably file an appeal with the NLRC, the decision of the labor arbiter
became final and executory prompting respondents to file a motion for the issuance of writ of execution
which was thereafter issued. Pursuant to such writ, petitioners funds were garnished and were eventually
ordered released to respondents pursuant to the labor arbiters order.
Subsequently, the Computation and Examination Unit of the NLRC came up with a computation
of monetary award where it appears that petitioners were liable to respondents for the amount of
P2,097,152.26 representing the latters backwages and separation pay. A 2nd alias writ of execution was
issued by the labor arbiter for the satisfaction of the amount representing the unpaid accrued backwages
including attorneys fees, plus execution fee.
Petitioners filed before the Court of Appeals a petition for certiorari with prayer for the issuance
of a temporary restraining order and/or writ of preliminary injunction. The Court of Appeals ruled that
backwages payable to respondents should be computed from the date of their termination from their jobs
until actual reinstatement as provided in Article 223 of the Labor Code. As petitioners failed to observe
said pertinent provision of the law, the labor arbiter could not be charged with having committed a grave
abuse of discretion when he issued the assailed order. Petitioners motion for reconsideration was denied.
Hence, this petition.
ISSUE:
Whether or not the employer is liable for the accrued backwages despite payment of separation
pay to the dismissed employees?
HELD:
Yes. An illegally dismissed employee is entitled to two reliefs, namely: backwages and
reinstatement. These are separate and distinct from each other. However, separation pay is granted
where reinstatement is no longer feasible because of strained relations between the employee and the
employer. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable and backwages. Backwages and separation pay are,
therefore, distinct reliefs granted to one who was illegally dismissed from employment. The award of one
does not preclude that of the other.
In this case, the labor arbiter ordered the reinstatement of respondents and the payment of their
backwages until their actual reinstatement and in case reinstatement is no longer viable, the payment of
separation pay. It bears emphasizing that the law mandates the prompt reinstatement of the dismissed or
separated employee. This, the petitioners failed to heed.
It should be pointed out that an order of reinstatement by the labor arbiter is not the same as
actual reinstatement of a dismissed or separated employee. Thus, until the employer continuously fails to
actually implement the reinstatement aspect of the decision of the labor arbiter, their obligation to

---ABBH---

respondents, insofar as accrued backwages and other benefits are concerned, continues to accumulate. It
is only when the illegally dismissed employee receives the separation pay that it could be claimed with
certainty that the employer-employee relationship has formally ceased thereby precluding the possibility
of reinstatement. In the meantime, the illegally dismissed employees entitlement to backwages, 13 th
month pay, and other benefits subsists. Until the payment of separation pay is carried out, the employer
should not be allowed to remain unpunished for the delay, if not outright refusal, to immediately execute
the reinstatement aspect of the labor arbiters decision.
The records of this case are bereft of any indication that respondents were actually reinstated to
their previous jobs or to the company payroll. As the law clearly requires petitioners to pay respondents
backwages until actual reinstatement, petitioners are still liable to respondents for accrued backwages and
other benefits.

---ABBH---

AIR PHILIPPINES CORPORATION, petitioner, vs. ENRICO E. ZAMORA, respondent.


[G.R. No. 148247 . August 07, 2006]
FACTS:
Zamora was employed with Air Philippines Corporation as a B-737 Flight Deck Crew. He applied
for promotion to the position of airplane captain and underwent the requisite training program. After
completing training, he inquired about his promotion but APC did not act on it; instead, it continued to
give him assignments as flight deck crew. Thus, Zamora filed a Complaint with the Labor Arbiter arguing
that the act of withholding his promotion rendered his continued employment with it oppressive and
unjust. He therefore asked that APC be held liable for constructive dismissal.
APC denied that it dismissed complainant. It pointed out that, when the complaint was filed,
complainant was still employed with it. It was complainant who stopped reporting for work, not because
he was forced to resign, but because he had joined a rival airline, Grand Air.
In its decision, the Labor Arbiter ruled in favor of Zamora and rendered APC liable for
constructive dismissal and ordered respondent to reinstate complainant to his position as B-737 Captain
without loss of seniority right immediately upon receipt thereof and pay complainant his full backwages.
Zamora immediately filed a Motion for Execution of the order of reinstatement. The Labor
Arbiter granted the motion and issued a writ of execution directing APC to reinstate complainant to his
former position.
On appeal, the NLRC held that no dismissal, constructive or otherwise, took place for it was
Zamora himself who voluntarily terminated his employment by not reporting for work and by joining a
competitor Grand Air. However, upon Motion for Reconsideration filed by Zamora, the NLRC modified
its earlier Resolution by ordering APC to pay Zamora his unpaid salaries and allowances. Hence, this
petition.
ISSUE:
Whether or not the NLRC committed grave abuse of discretion in granting Zamora unpaid
salaries while declaring him guilty of abandonment of employment?
HELD:
No. The premise of the award of unpaid salary to respondent is that prior to the reversal by the
NLRC of the decision of the Labor Arbiter, the order of reinstatement embodied therein was already the
subject of an alias writ of execution even pending appeal. Although petitioner did not comply with this
writ of execution, its intransigence made it liable nonetheless to the salaries of respondent pending
appeal. In Roquero v. Philippine Airlines, Inc., the Court ruled 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.
Pursuant to the 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.

---ABBH---

MILAGROS PANUNCILLO, petitioner, vs. CAP PHILIPPINES, INC., respondent.


[G.R. No. 161305 . February 09, 2007]
FACTS:
Petitioner was hired as Office Senior Clerk by CAP Philippines. In order to secure the education of
her son, petitioner procured an educational plan from respondent which she had fully paid but which she
later sold to Josefina Pernes. Before the actual transfer of the plan could be effected, however, petitioner
pledged it to John Chua who, however, sold it to Benito Bonghanoy. Bonghanoy in turn sold the plan to
Gaudioso R. Uy.
Having gotten wind of the transactions subsequent to her purchase of the plan, Josefina informed
respondent that petitioner had swindled her but that she was willing to settle the case amicably as long
as petitioner pays the amount involved and the interest. The Integrated Internal Audit Operations (IIAO)
of respondent thus conducted an investigation on the matter. The IIAO recommended that administrative
action should be taken against petitioner for violating Section 8.4 of respondents Code of Discipline
reading. A show-cause memorandum was sent to petitioner giving her 48 hours to explain why she should
not be disciplinarily dealt with. Complying with the directive, petitioner admitted having defrauded
Josefina. Respondent thereupon terminated the services of petitioner. Petitioner thus filed a complaint
for illegal dismissal, 13th month pay, service incentive leave pay, damages and attorneys fees against
respondent.
The Labor Arbiter, while finding that the dismissal was for a valid cause, found the same too
harsh. He thus ordered the reinstatement of petitioner to a position one rank lower than her previous
position, and directed the respondent to pay complainants 13th Month pay and Service Incentive Leave
Pay. On appeal, the National Labor Relations Commission (NLRC) reversed that of the Labor Arbiter, it
finding that petitioners dismissal was illegal and accordingly ordering her reinstatement to her former
position. The Court of Appeals reversed the NLRC Decision and held that the dismissal was valid and that
respondent complied with the procedural requirements of due process before petitioners services were
terminated. Hence, the present petition.
ISSUE:
Whether or not petitioner is entitled to her full backwages from the time the NLRC decision
became final and executory up to the time the Court of Appeals reversed said decision?
HELD:
No. Since the NLRC found petitioners dismissal illegal and ordered her reinstatement, following
the provision of the sixth paragraph of Article 223, the NLRC decision became final and executory after
ten calendar days from receipt of the decision by the parties for reinstatement. In view, however, of
Article 224 of the Labor Code, there was still a need for the issuance of a writ of execution of the NLRC
decision. Unlike the order for reinstatement of a Labor Arbiter which is self-executory, that of the NLRC is
not. There is still a need for the issuance of a writ of execution.
Since this Court is now affirming the challenged decision of the Court of Appeals finding that
petitioner was validly dismissed and accordingly reversing the NLRC Decision that petitioner was illegally
dismissed and should be reinstated, petitioner is not entitled to collect any backwages from the time the
NLRC decision became final and executory up to the time the Court of Appeals reversed said decision.
It does not appear that a writ of execution was issued for the implementation of the NLRC order
for reinstatement. Had one been issued, respondent would have been obliged to reinstate petitioner and
pay her salary until the said order of the NLRC for her reinstatement was reversed by the Court of
Appeals, and following Roquero, petitioner would not have been obliged to reimburse respondent for
whatever salary she received in the interim.

---ABBH---

MARILOU S. GENUINO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,


CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA, respondents.
[G.R. No. 142732-33 . December 04, 2007]
FACTS:
Genuino was employed by Citibank as Treasury Sales Division Head with the rank of Assistant
Vice-President. On August 23, 1993, Citibank sent Genuino a letter charging her with knowledge and/or
involvement in transactions which were irregular or even fraudulent. In the same letter, Genuino was
informed she was under preventive suspension. Subsequently, Citibank informed Genuino of the result of
their investigation where it found that Genuino used facilities of Genuinos family corporation, namely,
Global Pacific, personally and actively participated in the diversion of bank clients funds to products of
other companies that yielded interests higher than what Citibank products offered, and that Genuino
realized substantial financial gains, all in violation of existing company policy and the Corporation Code,
which carries a penal sanction. Genuinos employment was terminated by Citibank on grounds of (1)
serious misconduct, (2) willful breach of the trust reposed upon her by the bank, and (3) commission of a
crime against the bank.
Genuino filed before the Labor Arbiter a Complaint against Citibank for illegal suspension and
illegal dismissal. The Labor Arbiter rendered a Decision finding the dismissal of Genuino to be without
just cause and in violation of her right to due process, and ordered Citibank to reinstate Genuino
immediately with backwages. On appeal, the NLRC reversed the Labor Arbiters decision and declared the
dismissal of Genuino to be valid and legal on the ground of serious misconduct and breach of trust and
confidence and consequently dismissed the complaint a quo; but ordered the respondent bank to pay the
salaries due to the complainant from the date it reinstated complainant in the payroll up to and until the
date of its decision. The CA promulgated its decision, denying due course to and dismissing both
petitions. Both parties filed motions for reconsideration and the appellate court modified its decision
ordering Citibank to pay Genuino five thousand pesos (P5,000.00) as indemnity for non-observance of
due process.
ISSUE:
Whether or not Citibank is liable to pay the salaries due to Genuino pursuant to the decisions of
the Labor Arbiter and the NLRC?
HELD:
No. Anent the directive of the NLRC in its Decision ordering Citibank to pay the salaries due to
the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a
month, as found by the Labor Arbiter) up to and until the date of this decision, the Court hereby cancels
said award in view of its finding that the dismissal of Genuino is for a legal and valid ground.
Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal
pursuant to Art. 223, paragraph 3 of the Labor Code, which states that 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.
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be
deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her
employer under existing laws, collective bargaining agreement provisions, and company practices.
However, if the employee was reinstated to work during the pendency of the appeal, then the employee is
entitled to the compensation received for actual services rendered without need of refund.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her
dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in the NLRC
Decision.

---ABBH---

EDMUNDO Y. TORRES, JR. and MANUEL C. CASTELLANO, petitioners, vs. NATIONAL


LABOR RELATIONS COMMISSION, FOURTH DIVISION, and
SAN MIGUEL CORPORATION, respondents.
[G.R. No. 172584 . November 28, 2008]
FACTS:
Petitioners were among the many employees of private respondent SMC who retired from
employment pursuant to private respondents Retirement Plan. Believing that they were constructively
forced to retire from employment and that their separation from employment was illegal petitioners filed
a complaint for illegal dismissal against SMC. The Labor Arbiter rendered a Decision dismissing all the
claims of the petitioners against the respondent SMC for lack of merit. On appeal, the NLRC, on August
21, 1992, handed down a Decision reversing in part that of the Labor Arbiter and ordered SMC to
immediately reinstate petitioners and to pay their back salaries. Private respondent SMC appealed
through a petition for certiorari to the Supreme Court which rendered a Decision affirming in toto that of
the NLRC. The Decision of the Supreme Court became final and executory and as a consequence, private
respondent SMC partially complied with the Decision by paying the monetary awards in favor of the
petitioners representing their back salaries for three (3) years after deducting the sums that they received,
respectively, from SMC as Retirement Pay
Petitioners, in an effort to cause the amendment of the NLRC Decision, filed a Motion for
Computation and Satisfaction of Back Salaries, praying for the issuance of an Order directing the private
respondent SMC to pay them the sums of P9,218,205.00 and P5,268,455.50 respectively, representing
purportedly their back salaries and other benefits from September 9, 1992 up to November 1999 invoking
the Supreme Court ruling in Pioner Texturizing Corporation v. NLRC, granting full back wages to
illegally dismissed employees. Surprisingly, the Executive Labor issued an Order granting the petitioners
Motion for Computation of Back Salaries.
Petitioners filed another Motion to direct private respondent SMC to comply strictly with the
NLRC Decision relative to their reinstatement which the Executive Labor Arbiter granted. Private
respondent SMC timely appealed from both Orders to the NLRC which promulgated a Decision declaring
that complainants are not entitled to backwages. The Court of Appeals upheld the decision of the NLRC.
Hence, this instant petition.
ISSUE:
Whether or not petitioners are entitled to back salaries from September 9, 1992 until they are
effectively reinstated to their previous employment?
HELD:
No. In its assailed decision, the Court of Appeals ruled that at the time petitioners were dismissed
in 1984, R.A. No. 6715, which amended Art. 223 of the Labor Code, had not yet been enacted. Further, the
Courts ruling in Maranaw Hotel Resort Corp. v. NLRC, holding that in the absence of an order for the
issuance of a writ of execution on the reinstatement aspect, the employer is under no legal obligation to
admit its illegally dismissed employee back to work, was declared by the appellate court as still
controlling.
In Inciong v. NLRC, the Court declared that in the absence of a provision giving it retroactive
effect, the amendment introduced in the aforequoted provision cannot be applied to the decision of the
labor arbiter rendered three (3) months before R.A. No. 6715 had become a law. It was under this
jurisprudential setting that the August 21, 1992 decision of the NLRC ordering the reinstatement of
petitioners was promulgated.
In the line of cases following Inciong, the Court consistently held that immediate reinstatement is
mandated and is not stayed by the fact that the employer has appealed or posted a cash or surety bond
pending appeal. However, in the Maranaw case, the Court declared that although the reinstatement
aspect of the labor arbiters 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.
It is clear from the foregoing that at the time the August 21, 1992 NLRC decision was
promulgated, the rule commonly adhered to was for a writ of execution to be issued, either motu proprio

---ABBH---

or on motion of an interested party, before the employer may be compelled to admit the employee back to
work or to reinstate him in the payroll, on pain of being liable for the employees salaries. However, at the
time the Courts Decision in San Miguel Corporation v. NLRC was promulgated on July 23, 1998, the
Pioneer case was already the prevailing rule on the matter and should have been read into the case. Thus,
upon its receipt of our July 23, 1998 Decision affirming the NLRC decision, SMC should have immediately
opted either to re-admit petitioners or merely reinstate them in the payroll.
Be that as it may, the retirement age of 60 years already attained by petitioners as early as 1989
for Edmundo Torres, Jr. and 1990 for Manuel Castellano had set in motion the provisions of SMCs
Retirement Plan which is a valid management prerogative. Ultimately, therefore, the Court of Appeals was
correct in ruling that the reinstatement of petitioners is no longer feasible. SMC should accordingly take
formal steps, in accordance with its Retirement Plan, to effect petitioners retirement.
Even so, petitioners should not be compelled to return the salaries and benefits already received
by them on account of the order for reinstatement adjudged by the NLRC and affirmed by the Court. In
Air Philippines Corporation v. Zamora, we held that if an employee was reinstated during the appeal
period but such reinstatement was reversed with finality, the employee is not required to reimburse
whatever salary he received from the employer. Justice and equity require that we apply the same
doctrine to this case.

---ABBH---

JUANITO A. GARCIA and ALBERTO J. DUMAGO, petitioners, vs.


PHILIPPINE AIRLINES, INC., respondent.
[G.R. No. 164856 . January 20, 2009]
FACTS:
An administrative charge was filed by PAL against its employees (Garcia and Dumago) after they
were caught in the act of sniffing shabu in the PAL Technical Centers Toolroom Section. They were
dismissed, after due notice, for transgressing the PAL Code of Discipline, prompting them to file a
complaint for illegal dismissal which was resolved by the Labor Arbiter in their favor, thus ordering PAL
to immediately comply with the reinstatement aspect of the decision. Prior to the promulgation of the
Labor Arbiters decision, the SEC placed PAL under an Interim Rehabilitation Receiver, who was
subsequently replaced by a Permanent Rehabilitation Receiver on June 7, 1999. On appeal, the NLRC
reversed said decision and dismissed petitioners complaint for lack of merit.
Subsequently, the Labor Arbiter issued a Writ of Execution respecting the reinstatement aspect of
his decision. Respondent filed an Urgent Petition for Injunction with the NLRC which affirmed the
validity of the writ issued by the Labor Arbiter but suspended and referred the action to the Rehabilitation
Receiver for appropriate action. The Court of Appeals nullified the NLRC Resolution on two grounds,
essentially espousing that: (1) a subsequent finding of a valid dismissal removes the basis for
implementing the reinstatement aspect of labor arbiters decision 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. Hence, this petition.
ISSUE:
Whether or not petitioners may collect their wages during the period between the Labor Arbiters
order of reinstatement pending appeal and the NLRC decision overturning that of the Labor Arbiter, now
that respondent has exited from rehabilitation proceedings?
HELD:
No. After the labor arbiters decision is reversed by a higher tribunal, the employee may be barred
from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. The test is two-fold: (1) there must be actual delay or
the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the
delay must not be due to the employers unjustified act or omission. If the delay is due to the employers
unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of
the Labor Arbiters decision.
It is apparent that there was inaction on the part of respondent to reinstate them, but whether
such omission was justified depends on the onset of the exigency of corporate rehabilitation.
It
is
settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before any
court, tribunal or board against the corporation shall ipso jure be suspended. 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 fiat
partakes of the nature of a restraining order that constitutes a legal justification for respondents noncompliance with the reinstatement order. Respondents failure to exercise the alternative options of
actual reinstatement and payroll reinstatement was thus justified. Such being the case, respondents
obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did
not attach.
While reinstatement pending appeal aims to avert the continuing threat or danger to the survival
or even the life of the dismissed employee and his family, it does not contemplate the period when the
employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to
survive.
Respondent was, during the period material to the case, effectively deprived of the alternative

---ABBH---

choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction but also in view
of the interim relinquishment of management control to give way to the full exercise of the powers of the
rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for actual
physical reinstatement pending appeal to optimize the utilization of resources. Then again, though the
management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the
subsistence of the injunction on claims.
In sum, the obligation to pay the employees salaries upon the employers failure to exercise the
alternative options under Article 223 of the Labor Code is not a hard and fast rule, considering the
inherent constraints of corporate rehabilitation.

---ABBH---

LUNESA O. LANSANGAN and ROCITA CENDANA, petitioners, vs. AMKOR


TECHNOLOGY PHILIPPINES, INC., respondent.
[G.R. No. 177026 . January 30, 2009]
FACTS:
An anonymous e-mail was sent to Amkor Technology alleging malfeasance on the part of
Lansangan and Cendana for stealing company time. Petitioners admitted their wrongdoing and were
terminated for extremely serious offenses prompting them to file a complaint for illegal dismissal which
the Labor Arbiter dismissed. The Arbiter, however, ordered the reinstatement of petitioners to their
former positions without backwages as a measure of equitable and compassionate relief owing mainly to
petitioners prior unblemished employment records, show of remorse, harshness of the penalty and
defective attendance monitoring system of respondent.
On appeal, the NLRC deleted the reinstatement aspect of the Arbiters decision. Petitioners
motion for reconsideration of the NLRC Resolution having been denied, they filed a petition for certiorari
before the Court of Appeals which, while affirming the finding that petitioners were guilty of misconduct
and the like, ordered respondent to pay petitioners their corresponding backwages without qualification
and deduction for the period covering October 20, 2004 (date of the Arbiters decision) up to June 30,
2005 (date of the NLRC Decision), citing Article 223 of the Labor Code and Roquero v. Philippine
Airlines.
ISSUE:
Whether or not petitioners are entitled to full backwages?
HELD:
No. Roquero, as well as Article 223 of the Labor Code on which the appellate court also relied,
finds no application in the present case. Article 223 concerns itself with an interim relief, granted to a
dismissed or separated employee while the case for illegal dismissal is pending appeal, as what happened
in Roquero. It does not apply where there is no finding of illegal dismissal, as in the present case.
The Arbiter found petitioners dismissal to be valid. Such finding had, as stated earlier, become
final, petitioners not having appealed it. Following Article 279, petitioners 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.
WHEREFORE, the petition is DENIED.

---ABBH---

WENPHIL CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION


and ROBERTO MALLARE, respondents.
[G.R. No. 80587 . February 08, 1989]
FACTS:
Private respondent had an altercation with a co-employee, as a result of which they were
suspended on the following morning and in the afternoon of the same day a memorandum was issued
advising private respondent of his dismissal from the service in accordance with their Personnel Manual.
A notice of dismissal was served to that effect.
Thus private respondent filed a complaint against petitioner for unfair labor practice, illegal
suspension and illegal dismissal which was dismissed by the Labor Arbiter for lack of merit. On appeal,
the NLRC set aside the decision of the Labor Arbiter and ordered the reinstatement of private respondent
to his former position with backwages without qualification and deduction. Hence, this petition.
ISSUE:
Whether or not an employee who was dismissed from work for a just cause but without due
process is entitled to reinstatement and backwages?
HELD:
No. The Court holds that the policy of ordering the reinstatement to the service of an employee
without loss of seniority and the payment of his wages during the period of his separation until his actual
reinstatement but not exceeding three (3) years without qualification or deduction, when it appears he
was not afforded due process, although his dismissal was found to be for just and authorized cause in an
appropriate proceeding in the Ministry of Labor and Employment, should be re-examined. It will be
highly prejudicial to the interests of the employer to impose on him the services of an employee who has
been shown to be guilty of the charges that warranted his dismissal from employment. Indeed, it will
demoralize the rank and file if the undeserving, if not undesirable, remains in the service.
Thus in the present case, where the private respondent, who appears to be of violent temper,
caused trouble during office hours and even defied his superiors as they tried to pacify him, should not be
rewarded with re-employment and back wages. It may encourage him to do even worse and will render a
mockery of the rules of discipline that employees are required to observe. Under the circumstances the
dismissal of the private respondent for just cause should be maintained. He has no right to return to his
former employer.

---ABBH---

RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION


and ISETANN DEPARTMENT STORE, respondents.
[G.R. No. 117040 . January 27, 2000]
FACTS:
Serrano was the head of the Security Checkers Section of Isetann Department Store. Isetann, as a
cost-cutting measure, decided to phase out its entire security section and engaged the services of an
independent security agency. For that reason, Serrano filed an illegal dismissal complaint against Isetann
which was decided by the Labor Arbiter in his favor and ordered Isetann to immediately reinstate Serrano
with full backwages. On appeal, the NLRC reversed the decision of the Labor Arbiter and ordered Serrano
to be given separation pay, unpaid salary, and proportionate 13th month pay. Hence, this petition.
ISSUE:
Whether or not Serrano was illegally dismissed?
HELD:
No. The management of a company cannot be denied the faculty of promoting efficiency and
attaining economy by a study of what units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its personnel or contracted to outside agencies.
While there should be mutual consultation, eventually deference is to be paid to what management
decides. Consequently, absent proof that management acted in a malicious or arbitrary manner, the Court
will not interfere with the exercise of judgment by an employer.
In the case at bar, we have only the bare assertion of petitioner that, in abolishing the security
section, private respondents real purpose was to avoid payment to the security checkers of the wage
increases provided in the collective bargaining agreement approved in 1990. Such an assertion is not a
sufficient basis for concluding that the termination of petitioners employment was not a bona fide
decision of management to obtain reasonable return from its investment, which is a right guaranteed to
employers under the Constitution. Indeed, that the phase-out of the security section constituted a
"legitimate business decision" is a factual finding of an administrative agency which must be accorded
respect and even finality by this Court since nothing can be found in the record which fairly detracts from
such finding.
Accordingly, we hold that the termination of petitioners services was for an authorized cause, i.e.,
redundancy. Hence, pursuant to Art. 283 of the Labor Code, petitioner should be given separation pay at
the rate of one month pay for every year of service.

---ABBH---

JENNY M. AGABON and VIRGILIO C. AGABON, petitioners, vs. NATIONAL LABOR


RELATIONS COMMISSION, RIVIERA HOME IMPROVEMENTS, INC.
and VICENTE ANGELES, respondents.
[G.R. No. 158693 . November 17, 2004]
FACTS:
Petitioners were employees of Riviera Home Improvements Inc. as gypsum board and cornice
installers, when they were dismissed for abandonment of work. So they filed a case for illegal dismissal
which was decided by the Labor Arbiter in their favor. On appeal, the NLRC reversed the Labor Arbiter
because it found that the petitioners had abandoned their work, and were not entitled to backwages and
separation pay. The Court of Appeals, in turn, ruled that the dismissal of the petitioners was not illegal
because they had abandoned their employment but ordered the payment of money claims. Hence, this
petition for review.
ISSUE:
Whether or not petitioners were illegally dismissed?
HELD:
No. The dismissal should be upheld because it was established that the petitioners abandoned
their jobs to work for another company. Private respondent, however, did not follow the notice
requirements and instead argued that sending notices to the last known addresses would have been
useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a
valid excuse because the law mandates the twin notice requirements to the employees last known address.
Thus, it should be held liable for non-compliance with the procedural requirements of due process.
It must be stressed that in the present case, the petitioners committed a grave offense, i.e.,
abandonment, which, if the requirements of due process were complied with, would undoubtedly result in
a valid dismissal. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due
process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should
indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor
Relations Commission. The indemnity to be imposed should be stiffer to discourage the abhorrent
practice of dismiss now, pay later, which we sought to deter in the Serrano ruling. The sanction should be
in the nature of indemnification or penalty and should depend on the facts of each case, taking into
special consideration the gravity of the due process violation of the employer.
The violation of the petitioners right to statutory due process by the private respondent warrants
the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to
the sound discretion of the court, taking into account the relevant circumstances. Considering the
prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this
form of damages would serve to deter employers from future violations of the statutory due process rights
of employees. At the very least, it provides a vindication or recognition of this fundamental right granted
to the latter under the Labor Code and its Implementing Rules.

---ABBH---

JAKA FOOD PROCESSING CORPORATION, petitioner, vs. DARWIN PACOT, ROBERT


PAROHINOG, DAVID BISNAR, MARLON, DOMINGO, RHOEL LESCANO and
JONATHAN CAGABCAB, respondents.
[G.R. No. 151378 . March 28, 2005]
FACTS:
Respondents were hired by petitioner JAKA Foods Processing Corporation until the latter
terminated their employment because the corporation was in dire financial straits. It is not disputed,
however, that the termination was effected without JAKA complying with the requirement under Article
283 of the Labor Code regarding the service of a written notice upon the employees and the Department
of Labor and Employment at least one (1) month before the intended date of termination.
Respondents filed complaints for illegal dismissal against JAKA. The Labor Arbiter rendered a
decision declaring the termination illegal and ordering JAKA to reinstate respondents with full
backwages, and separation pay if reinstatement is not possible. On appeal, the NLRC affirmed in toto that
of the Labor Arbiter. Acting on a motion for reconsideration filed by Jaka, the NLRC came out with
another decision, this time modifying its earlier decision by reversing and setting aside the awards of
backwages. The Court of Appeals, applying the doctrine laid down by the Court in Serrano vs. NLRC,
reversed and set aside the NLRCs decision. Hence, this petition.
ISSUE:
Whether or not respondents are entitled to full backwages and separation pay when their
termination was effected without complying with the notice rule?
HELD:
No. A dismissal for just cause under Article 282 implies that the employee concerned has
committed, or is guilty of, some violation against the employer, i.e. the employee has committed some
serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his
duties. Thus, it can be said that the employee himself initiated the dismissal process. On another breath, a
dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability
on the part of the employee. Instead, the dismissal process is initiated by the employers exercise of his
management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to
cease business operations or when, as in this case, he undertakes to implement a retrenchment program.
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282
but the employer failed to comply with the notice requirement, the sanction to be imposed upon him
should be tempered because the dismissal process was, in effect, initiated by an act imputable to the
employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer
failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process
was initiated by the employers exercise of his management prerogative.
It is established that there was ground for respondents dismissal, i.e., retrenchment, which is one
of the authorized causes enumerated under Article 283 of the Labor Code. Likewise, it is established that
JAKA failed to comply with the notice requirement under the same Article. Considering the factual
circumstances in the instant case and the above ratiocination, we, therefore, deem it proper to fix the
indemnity at P50,000.00.
Likewise, the Court of Appeals have been in error when it ordered JAKA to pay respondents
separation pay equivalent to one (1) month salary for every year of service. In Reahs Corporation vs.
NLRC, the rule, therefore, is that in all cases of business closure or cessation of operation or undertaking
of the employer, the affected employee is entitled to separation pay. This is consistent with the state policy
of treating labor as a primary social economic force, affording full protection to its rights as well as its
welfare. The exception is when the closure of business or cessation of operations is due to serious business
losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is
lost for obvious reasons.

---ABBH---

INDUSTRIAL TIMBER CORPORATION, INDUSTRIAL PLYWOOD GROUP CORPORATION,


TOMAS TANGSOC, JR., LORENZO TANGSOC and TOMAS TAN, petitioners, vs.
VIRGILIO ABABON, et.al., respondents.
[G.R. No. 164518 . March 30, 2006]
FACTS:
Industrial Timber Corporation (ITC) ceased its operations due to circumstances beyond its
control with an advice for all the workers to collect the benefits due them under the law and CBA.
Coincidentally, Industrial Plywood Group Corporation (IPGC) took over the plywood plant on the same
day the ITC ceased operation of the plant. This prompted Virgilio Ababon, et al. to file a complaint against
ITC and IPGC for illegal dismissal, unfair labor practice and damages. They alleged that the cessation of
ITCs operation was intended to bust the union and that both corporations are one and the same entity
being controlled by one owner.
The Labor Arbiter rendered a decision which refused to pierce the veil of corporate fiction for lack
of evidence to prove that it was used to perpetuate fraud or illegal act; upheld the validity of the closure;
and ordered ITC to pay separation pay of month for every year of service. On appeal, the NLRC set aside
the decision of the Labor Arbiter and ordered the reinstatement of the employees to their former
positions, and the payment of full back wages. However, the NLRC granted the Petition for Relief filed by
petitioners and set aside all its prior decision and resolutions. The Court of Appeals rendered a decision
setting aside the decision of the NLRC.
The Supreme Court rendered a decision reversing that of the Court of Appeals and affirmed with
modifications the Decision of the NLRC reinstating the decision of the Labor Arbiter, and ordered ITC to
pay separation pay equivalent to one month pay or at least one-half month pay for every year of service,
whichever is higher, and P50,000.00 as nominal damages to each employee. Hence, this motion for
reconsideration.
ISSUE:
Whether or not ITC should be made to pay P50,000 as nominal damages to each employee?
HELD:
No. While the Supreme Court ruled in this case that the sanction should be stiffer in a dismissal
based on authorized cause where the employer failed to comply with the notice requirement than a
dismissal based on just cause with the same procedural infirmity, however, in instances where the
execution of a decision becomes impossible, unjust, or too burdensome, modification of the decision
becomes necessary in order to harmonize the disposition with the prevailing circumstances.
In the determination of the amount of nominal damages which is addressed to the sound
discretion of the court, several factors are taken into account: (1) the authorized cause invoked, whether it
was a retrenchment or a closure or cessation of operation of the establishment due to serious business
losses or financial reverses or otherwise; (2) the number of employees to be awarded; (3) the capacity of
the employers to satisfy the awards, taken into account their prevailing financial status as borne by the
records; (4) the employers grant of other termination benefits in favor of the employees; and (5) whether
there was a bona fide attempt to comply with the notice requirements as opposed to giving no notice at
all.
In the case at bar, there was valid authorized cause considering the closure or cessation of ITCs
business which was done in good faith and due to circumstances beyond ITCs control. Moreover, ITC had
ceased to generate any income since its closure. Several months prior to the closure, ITC experienced
diminished income due to high production costs, erratic supply of raw materials, depressed prices, and
poor market conditions for its wood products. It appears that ITC had given its employees all benefits in
accord with the CBA upon their termination.
Thus, considering the circumstances obtaining in the case at bar, we deem it wise and just to
reduce the amount of nominal damages to be awarded for each employee to P10,000.00 each instead of
P50,000.00 each.

---ABBH---