Session Delights Ice Cream and Fast Foods vs.

Court of Appeals 612 SCRA 11 (2010)

Labor Law; Illegal Dismissals; Termination of Employment; Separation Pay;
Separation pay may be awarded to an illegally dismissed employee in lieu of
reinstatement.By jurisprudence derived from this provision, separation pay may
be awarded to an illegally dismissed employee in lieu of reinstatement. Recourse to
the payment of separation pay is made when continued employment is no longer
possible, in cases where the dismissed employees position is no longer available, or
the continued relationship between the employer and the employee is no longer
viable due to the strained relations between them, or when the dismissed employee
opted not to be reinstated, or payment of separation benefits will be for the best
interest of the parties involved.

Same; Same; Same; The re-computation of the consequences of illegal dismissal

upon execution of the decision does not constitute an alteration or amendments of
the final decision being implemented.A re-computation (or an original
computation, if no previous computation has been made) is a part of the law
specifically, Article 279 of the Labor Code and the established jurisprudence on this
provisionthat is read into the decision. By the nature of an illegal dismissal case,
the reliefs continue to add on until full satisfaction, as expressed under Article 279
of the Labor Code. 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.

Same; Same; Same; In allowing separation pay, the final decision effectively
declares that the employment relationship ended so that separation pay and
backwages are to be computed up to that point.Article 279 provides for the
consequences of illegal dismissal in no uncertain terms, qualified only by
jurisprudence in its interpretation of when separation pay in lieu of reinstatement is
allowed. When that happens, the finality of the illegal dismissal decision becomes
the reckoning point instead of the reinstatement that the law decrees. In allowing
separation pay, the final decision effectively declares that the employment
relationship ended so that separation pay and backwages are to be computed up to
that point. The decision also becomes a judgment for money from which another
consequence flowsthe payment of interest in case of delay. This was what the CA
correctly decreed when it provided for the payment of the legal interest of 12% from
the finality of the judgment, in accordance with our ruling in Eastern Shipping Lines,
Inc. v. Court of Appeals.

Escario vs. National Labor Relations Commission 631 SCRA 263 (2010)
Same; Same; Social Justice; Separation Pay; To safeguard the spirit of social justice
that the Court has advocated in favor of the working man, the right to
reinstatement is to be considered renounced or waived only when the employee
unjustifiably or unreasonably refuses to return to work upon being so ordered or
after the employer has offered to reinstate him.The absence from an order of
reinstatement of an alternative relief should the employer or a supervening event
not within the control of the employee prevent reinstatement negates the very
purpose of the order. The judgment favorable to the employee is thereby reduced to
a mere paper victory, for it is all too easy for the employer to simply refuse to have
the employee back. To safeguard the spirit of social justice that the Court has
advocated in favor of the working man, therefore, the right to reinstatement is to be
considered renounced or waived only when the employee unjustifiably or
unreasonably refuses to return to work upon being so ordered or after the employer
has offered to reinstate him. However, separation pay is made an alternative relief
in lieu of reinstatement in certain circumstances, like: (a) when reinstatement can
no longer be effected in view of the passage of a long period of time or because of
the realities of the situation; (b) reinstatement is inimical to the employers interest;
(c) reinstatement is no longer feasible; (d) reinstatement does not serve the best
interests of the parties involved; (e) the employer is prejudiced by the workers
continued employment; (f) facts that make execution unjust or inequitable have
supervened; or (g) strained relations between the employer and employee.

Same; Same; Same; Same; It is not disputable that the grant of separation pay or
some other financial assistance to an employee is based on equity, which has been
defined as justice outside law, or as being ethical rather than jural and as belonging
to the sphere of morals than of law.Under the circumstances, the grant of
separation pay in lieu of reinstatement of the petitioners was proper. It is not
disputable that the grant of separation pay or some other financial assistance to an
employee is based on equity, which has been defined as justice outside law, or as
being ethical rather than jural and as belonging to the sphere of morals than of law.
This Court has granted separation pay as a measure of social justice even when an
employee has been validly dismissed, as long as the dismissal has not been due to
serious misconduct or reflective of personal integrity or morality.

Lopez vs. National Labor Relations Commission 297 SCRA 509 (1998)
Same; Same; Benefits; Illegally dismissed employees are entitled to reinstatement
and full backwages; If reinstatement is not possible, the employees are entitled to
the grant of separation pay and full backwages; Separation pay shall be granted as
an option to reinstatement if reinstatement can no longer be enforced due to the

strained relations between the parties brought about by the litigation in this case.
Article 279 of the Labor Code, as amended, provides that an employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual
reinstatement. Pursuant to the said rule, illegally dismissed employees are entitled
to reinstatement and full backwages. The phraseology of the law means that both
reliefs are available to the illegally dismissed employee as a matter of course.
However, if reinstatement is not possible, the employees are entitled to the grant of
separation pay and full backwages. At this instance, it must be stressed that the
reliefs of separation pay and backwages are cumulative, not alternative remedies.
Not infrequently had this Court ruled that separation pay shall be granted as an
option to reinstatement if reinstatement can no longer be enforced due to the
strained relations between the parties brought about by the litigation in this case.
Personal animosities have been generated due to the attendant circumstances of
the case. Petitioner held much rancor in her heart against private respondents.
Since reinstatement would not be to the best interest of the parties, in lieu thereof,
the NLRC correctly awarded separation pay equivalent to one (1) months salary for
every year of service, a fraction of at least six (6) months being considered as one
(1) whole year.

Sarona vs. National Labor Relations Commission 663 SCRA 395 (2012)

Labor Law; Separation Pay; Separation pay is computed from the commencement
of employment up to the time of termination, including the imputed service for
which the employee is entitled to backwages, with the salary rate prevailing at the
end of the period of putative service being the basis for computation.Effectively,
the petitioner cannot be deemed to have changed employers as Royale and
Sceptre are one and the same. His separation pay should, thus, be computed from
the date he was hired by Sceptre in April 1976 until the finality of this decision.
Based on this Courts ruling in Masagana Concrete Products, et al. v. NLRC, et al.,
the intervening period between the day an employee was illegally dismissed and
the day the decision finding him illegally dismissed becomes final and executory
shall be considered in the computation of his separation pay as a period of
imputed or putative service: Separation pay, equivalent to one months salary
for every year of service, is awarded as an alternative to reinstatement when the
latter is no longer an option. Separation pay is computed from the commencement
of employment up to the time of termination, including the imputed service for
which the employee is entitled to backwages, with the salary rate prevailing at the
end of the period of putative service being the basis for computation.

Same; Backwages; Backwages is a remedy affording the employee a way to recover

what he has lost by reason of the unlawful dismissal.Backwages is a remedy
affording the employee a way to recover what he has lost by reason of the unlawful
dismissal. In awarding backwages, the primordial consideration is the income that
should have accrued to the employee from the time that he was dismissed up to his
reinstatement and the length of service prior to his dismissal is definitely
inconsequential. As early as 1996, this Court, in Bustamante, et al. v. NLRC, et al.,
clarified in no uncertain terms that if reinstatement is no longer possible,
backwages should be computed from the time the employee was terminated until
the finality of the decision, finding the dismissal unlawful.

Same; Separation Pay; In case separation pay is awarded and reinstatement is no

longer feasible, backwages shall be computed from the time of illegal dismissal up
to the finality of the decision should separation pay not be paid in the meantime.
In case separation pay is awarded and reinstatement is no longer feasible,
backwages shall be computed from the time of illegal dismissal up to the finality of
the decision should separation pay not be paid in the meantime. It is the
employees actual receipt of the full amount of his separation pay that will
effectively terminate the employment of an illegally dismissed employee.
Otherwise, the employer-employee relationship subsists and the illegally dismissed
employee is entitled to backwages, taking into account the increases and other
benefits, including the 13th month pay, that were received by his co-employees
who are not dismissed. It is the obligation of the employer to pay an illegally
dismissed employee or worker the whole amount of the salaries or wages, plus all
other benefits and bonuses and general increases, to which he would have been
normally entitled had he not been dismissed and had not stopped working.

Same; Damages; Moral Damages; Exemplary Damages; Moral damages may be

recovered where the dismissal of the employee was tainted by bad faith or fraud, or
where it constituted an act oppressive to labor, and done in a manner contrary to
morals, good customs or public policy while exemplary damages are recoverable
only if the dismissal was done in a wanton, oppressive, or malevolent manner.
Moral damages and exemplary damages at P25,000.00 each as indemnity for the
petitioners dismissal, which was tainted by bad faith and fraud, are in order. Moral
damages may be recovered where the dismissal of the employee was tainted by
bad faith or fraud, or where it constituted an act oppressive to labor, and done in a
manner contrary to morals, good customs or public policy while exemplary damages
are recoverable only if the dismissal was done in a wanton, oppressive, or
malevolent manner.

Golden Ace Builders vs. Talde 620 SCRA 284 (2010)

abor Law; Separation Pay; Separation pay is awarded when reinstatement no longer
advisable; Backwages is that earned but not collected due to unjust dismissal.The
basis for the payment of backwages is different from that for the award of
separation pay. Separation pay is granted where reinstatement is no longer
advisable because of strained relations between the employee and the employer.
Backwages represent compensation that should have been earned but were not
collected because of the unjust dismissal. The basis for computing backwages is
usually the length of the employees service while that for separation pay is the
actual period when the employee was unlawfully prevented from working.

Same; Same.The normal consequences of respondents illegal dismissal, then, are

reinstatement without loss of seniority rights, and payment of backwages computed
from the time compensation was withheld up to the date of actual reinstatement.
Where reinstatement is no longer viable as an option, separation pay equivalent to
one (1) month salary for every year of service should be awarded as an alternative.
The payment of separation pay is in addition to payment of backwages.

Same; Same; Separation pay is an acceptable alternative to reinstatement.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. On one hand, such payment liberates the employee from what could be a
highly oppressive work environment. On the other hand, it releases the employer
from the grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust. Strained relations must be demonstrated as a fact, however,
to be adequately supported by evidencesubstantial evidence to show that the
relationship between the employer and the employee is indeed strained as a
necessary consequence of the judicial controversy.

Same; Employee deemed in service not only when he was unjustly dismissed but
when he actually separated when reinstatement become impossible.The Court,
however, does not find the appellate courts computation of separation pay in order.
The appellate court considered respondent to have served petitioner company for
only eight years. Petitioner was hired in 1990, however, and he must be considered
to have been in the service not only until 1999, when he was unjustly dismissed, but
until June 30, 2005, the day he is deemed to have been actually separated (his

reinstatement having been rendered impossible) from petitioner company or for a

total of 15 years.

Baares vs. Tabaco Women's Transport Service Cooperative (TAWTRASCO) 694 SCRA
313 (2013)

Same; Same; Reinstatement; Doctrine of Strained Relations; Separation Pay; Under

the doctrine of strained relations, payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer
desirable or viable.Reinstatement is no longer viable where, among other things,
the relations between the employer and employee have been so severely strained,
that it is not in the best interest of the parties, nor is it advisable or practical to
order reinstatement. Under the doctrine of strained relations, payment of separation
pay is considered an acceptable alternative to reinstatement when the latter option
is no longer desirable or viable. Indeed, separation pay is made an alternative relief
in lieu of reinstatement in certain circumstances, such as: (1) when reinstatement
can no longer be effected in view of the passage of a long period of time or because
of the realities of the situation; (2) reinstatement is inimical to the employers
interest; (3) reinstatement is no longer feasible; (4) reinstatement does not serve
the best interests of the parties involved; (5) the employer is prejudiced by the
workers continued employment; (6) facts that make execution unjust or inequitable
have supervened; or (7) strained relations between the employer and the
employee.

Same; Same; Same; Where reinstatement is no longer viable as an option,

separation pay equivalent to one (1) month salary for every year of service should
be awarded as an alternative.Where reinstatement is no longer viable as an
option, separation pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. In lieu of reinstatement, petitioner is entitled
to separation pay equivalent to one (1) month salary for every year of service
reckoned from the time he commenced his employment with TAWTRASCO until
finality of this Decision.