accrued wages could have been properly
computed until the date of the CAs decision
FROILAN M. BERGONIO, et al. v. SOUTH
EAST ASIAN AIRLINES and IRENE DORNIER
G.R. No. 195227 April 21, 2014
BRION, J.:
ART. 223 JURISDICTION OF THE LABOR
ARBITERS AND THE COMMISSION
DOCTRINE:
Under paragraph 3, Article 223 of the Labor
Code, the LAs order for the reinstatement of
an employee found illegally dismissed is
immediately executory even during pendency
of the employers appeal from the decision.
Under this provision, the employer must
reinstate the employee either by physically
admitting him under the conditions prevailing
prior to his dismissal, and paying his wages; or,
at the employers option, merely reinstating
the employee in the payroll until the decision is
reversed by the higher court. Failure of the
employer to comply with the reinstatement
order, by exercising the options in the
alternative, renders him liable to pay the
employees salaries.
FACTS:
Petitioners filed before the LA a complaint for
illegal dismissal and illegal suspension with
prayer for reinstatement against respondents
South East Asian Airlines (SEAIR) and Irene
Dornier as SEAIRs President.
LA RULING: LA found the petitioners illegally
dismissed and ordered the respondents, among
others, to immediately reinstate the petitioners
with full backwages.
NLRC RULING: NLRC dismissed the
respondents appeal for non-perfection. The
NLRC likewise denied the respondents MR,
prompting the respondents to file before the
CA a petition for certiorari.
CA RULING: CA rendered its decision (on the
illegal dismissal ruling of the LA) partly
granting the respondents petition, declaring
the dismissal valid and awarded the petitioners
P30,000.00 as nominal damages for the
respondents failure to observe due process.
The CA agreed that the reinstatement aspect of
the LAs decision is immediately executory
even pending appeal, such that the employer is
obliged to reinstate and pay the wages of the
dismissed employee during the period of
appeal until the decision (finding the employee
illegally dismissed including the reinstatement
order) is reversed by a higher court. Applying
this principle, the CA noted that the petitioners
finding the petitioners validly dismissed.
Thus, the CA declared that, given this peculiar
circumstance (of the petitioners failure to
report for work), the petitioners accrued
wages should only be computed until when
they were supposed to report for work per the
return-to-work Memorandum.
ISSUES:
(1) Is the LAs order for reinstatement of an
illegally dismissed employee immediately
executory even during pendency of the
employers appeal from the decision?
(2) Should the accrued wages be computed
until December 17, 2008, when the CA
reversed the illegal dismissal findings of the LA
or only until February 24, 2006, when the
petitioners were supposed to report for work?
SC RULING:
(1) YES. Under paragraph 3, Article 223 of the
Labor Code, the LAs order for the
reinstatement of an employee found illegally
dismissed is immediately executory even
during pendency of the employers appeal from
the decision. Under this provision, the
employer must reinstate the employee either
by physically admitting him under the
conditions prevailing prior to his dismissal, and
paying his wages; or, at the employers option,
merely reinstating the employee in the payroll
until the decision is reversed by the higher
court. Failure of the employer to comply with
the reinstatement order, by exercising the
options in the alternative, renders him liable to
pay the employees salaries.
Otherwise stated, a dismissed employee whose
case was favorably decided by the LA is
entitled to receive wages pending appeal upon
reinstatement, which reinstatement is
immediately executory. Unless the appellate
tribunal issues a restraining order, the LA is
duty bound to implement the order of
reinstatement and the employer has no option
but to comply with it.
Moreover, and equally worth emphasizing, is
that an order of reinstatement issued by the LA
is self-executory, i.e., the dismissed employee
need not even apply for and the LA need not
even issue a writ of execution to trigger the
employers duty to reinstate the dismissed
employee.
After the LAs decision is reversed by a higher
tribunal, the employers duty to reinstate the
dismissed employee is effectively terminated.
This means that an employer is no longer non-execution of the reinstatement order in
obliged to keep the employee in the actual fact moved the LA to issue an alias writ of
service or in the payroll. The employee, in turn, execution on February 16, 2006 and another
is not required to return the wages that he had writ of execution on April 24, 2007.
received prior to the reversal of the LAs From these facts and without doubt, there was
decision. actual delay in the execution of the
The reversal by a higher tribunal of the LAs reinstatement aspect of the LAs May 31, 2005
finding (of illegal dismissal), notwithstanding, decision before it was reversed in the CAs
an employer, who, despite the LAs order of decision.
reinstatement, did not reinstate the employee
during the pendency of the appeal up to the
reversal by a higher tribunal may still be held
liable for the accrued wages of the employee,
i.e., the unpaid salary accruing up to the time
the higher tribunal reverses the decision.32
The rule, therefore, is that an employee may
still recover the accrued wages up to and
despite the reversal by the higher tribunal. This
entitlement of the employee to the accrued
wages proceeds from the immediate and self-
executory nature of the reinstatement aspect
of the LAs decision.
By way of exception to the above rule, an
employee may be barred from collecting the
accrued wages if shown that the delay in
enforcing the reinstatement pending appeal
was without fault on the part of the employer.

(2) To determine whether an employee is thus

barred, two tests must be satisfied: (1) 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. Note that under the second
test, the delay must be without the employers
fault. 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 LAs decision.
First, the existence of delay - whether there
was actual delay or whether the order of
reinstatement pending appeal was not
executed prior to its reversal? We answer this
test in the affirmative.
To recall, on May 31, 2005, the LA rendered the
decision finding the petitioners illegally
dismissed and ordering their immediate
reinstatement. Per the records, the
respondents received copy of this decision on
July 8, 2005. On August 20, 2005, the
petitioners filed before the LA a Motion for
Issuance of Writ of Execution for their
immediate reinstatement. The LA issued the
Writ of Execution on October 7, 2005. From the
time the respondents received copy of the LAs
decision, and the issuance of the writ of
execution, until the CA reversed this decision
on December 17, 2008, the respondents had
not reinstated the petitioners, either by actual
reinstatement or in the payroll. This continued
Second, the cause of the delay whether the
delay was not due to the employers unjustified
act or omission. We answer this test in the
negative; we find that the delay in the
execution of the reinstatement pending appeal
was due to the respondents unjustified acts.
For one, the respondents filed several
pleadings to suspend the execution of the LAs
reinstatement order. These pleadings, to our
mind, show a determined effort on the
respondents part to prevent or suspend the
execution of the reinstatement pending appeal.
The respondents did not sufficiently notify the
petitioners of their intent to actually reinstate
them; neither did the respondents give them
ample opportunity to comply with the return-
to-work directive.
Lastly, the petitioners continuously and
actively pursued the execution of the
reinstatement aspect of the LAs decision, i.e.,
by filing several motions for execution of the
reinstatement order, and motion to cite the
respondents in contempt and re-computation
of the accrued wages for the respondents
continued failure to reinstate them.
These facts altogether show that the
respondents were not at all sincere in
reinstating the petitioners. These facts when
taken together with the fact of delay reveal
the respondents obstinate resolve and willful
disregard of the immediate and self-executory
nature of the reinstatement aspect of the LAs
decision.
EUGENE S. ARABIT, EDGARDO C. SADSAD,
LOWELL C. FUNTANOZ, GERARDO F.PUNZALAN,
FREDDIE M. MENDOZA, EMILIO B. BELEN,
VIOLETA C. DIUMANO andMB FINANCE
EMPLOYEES ASSOCIATION FFW CHAPTER
(FEDERATION OF FREEWORKERS),
Petitioners,vs.JARDINE PACIFIC FINANCE, INC.
(FORMERLY MB FINANCE), Respondent.[G.R. No.
181719, April 21, 2014
FACTS:
Petitioners were former regular employees
of respondent Jardine Pacific Finance, Inc.
(formerly MB Finance). Who were also officers
and members of MB Finance Employees
Association-FFW Chapter (the Union) ---- a
legitimate labor union and the sole exclusive
bargaining agent of the employees of Jardine.
Due to financial losses, Jardine decided to
reorganize and implement a redundancy
program among its employees. The
petitioners were among those affected
by the redundancy program. Jardine
thereafter hired contractual employees to
undertake the functions these employees used
to perform.
The Union filed a notice of strike with the
National Conciliation and Mediation
Board(NCMB), questioning the termination of
employment of the petitioners who were also
union officers. The Union alleged unfair labor
practice on the part of Jardine, as well as
discrimination in the dismissal of its officers
and members.
There was negotiation between Union and
Jardine under NCMB, and parties reached an
amicable settlement. In the settlement, the
petitioners accepted their redundancy pay
without prejudice to their right to question the
legality of their dismissal with the NLRC.
Jardine paid the petitioners a separation
package composed of their severance pay, plus
their grossed up transportation allowance.
On June 1, 1999, the petitioners and the
Union filed a complaint against Jardine with the
NLRC for illegal dismissal and unfair labor
practice.**Labor Arbiter - LA ruled in Unions
favor. In its decision, they held that the hiring
of contractual employees to replace the
petitioners directly contradicts the concept of
redundancy which involves the trimming down
of the workforce because a task is being
carried out by too many people. LA explained
that the companys action was a circumvention
of the right of the petitioners to security of
tenure.- it was error for Jardine to simply lump
together the seven petitioners as employees
whose positions have become redundant
without explaining why their respective
positions became superfluous in relation to the
other positions and employees of the
company.**NLRC - dismissed the appeals and
affirmed the LAs decision in its entirety**CA -
CA reversed the LAs and the NLRCs rulings,
and granted Jardines petition for certiorari.-
CA found that Jardines act of hiring contractual
employees in replacement of the petitioners
does not run counter to the argument that their
positions are already superfluous. According to
the CA, the hiring of contractual employees is a
management prerogative that Jardine has the
right to exercise. In the absence of any
showing of malice or arbitrariness on the part
of Jardine in implementing its redundancy
program, the courts must not interfere with the
companys exercise of a bona fide
management decision. - CA further held that
Jardine successfully established that for the
years 1996 to 1998, the company incurred
serious losses. The appellate court also
observed that the reduction in the number of
workers, made necessary by the introduction of
the services of an independent contractor, is
justified when undertaken to implement more
economic and efficient methods of production.
ISSUE: WON CA correctly rule that the NLRC
committed grave abuse of discretion when it
found that Jardine validly terminated the
petitioners employment because of
redundancy
RULING: SC Granted the petition. it stated that:
We cannot accept Jardines shallow
understanding of the concepts of redundancy
and retrenchment in determining the validity of
the severance of an employer-employee
relationship. The fact that they are found
together in just one provision does not
necessarily give rise to the conclusion that the
difference between them is immaterial.
Redundancy exists where the services of an
employee are in excess of what is reasonably
demanded by the actual requirements of the
enterprise. A position is redundant where it is
superfluous, and superfluity of a position or
positions may be the outcome of a number of
factors, such as over hiring of workers,
decreased volume of business, or dropping of a
particular product line or service activity
previously manufactured or undertaken by the
enterprise. Retrenchment, on the other hand, is
used interchangeably with the term "lay-off." It
is the termination of employment initiated by
the employer through no fault of the
employees and without prejudice to the latter,
resorted to by management during periods of
business recession, industrial depression, or
seasonal fluctuations, or during lulls
occasioned by lack of orders, shortage of
materials, conversion of the plant for a new
production program or the introduction of new
methods or more efficient machinery, or of
automation. Simply put, it is an act of the
employer of dismissing employees because of
losses in the operation of a business, lack of
work, and considerable reduction on the
volume of his business, a right consistently
recognized and affirmed by this Court. In the
case at bench, respondents did not dispute
that after laying-off complainants herein, they
engaged the services of an agency to perform
the tasks use (sic) to be done by complainants.
This is [in direct] contradiction to the concept
of redundancy which precisely requires the
trimming down of the [workforce] because a
task is being carried out by just too many
people. The subsequent contracting out to an
agency the functions or duties that used to be
the domain of individual complainants herein is
a circumvention of their constitutional rights to
security of tenure, and therefore illegal.**
Aside from the guidelines for the selection of
employees who will be terminated, the Court,
in Asian Alcohol Corp. v. NLRC, the Guidelines
in implementing redundancy are as follows: For
the implementation of a redundancy program
to be valid, the employer must comply with the
following requisites: (1) written notice served
on both the employees and the Department of
Labor and Employment at least one month
prior to the intended date of retrenchment; (2)
payment of separation pay equivalent to at
least one month pay or at least one month pay
for every year of service, whichever is higher;
(3) good faith in abolishing the redundant
positions; and (4) fair and reasonable criteria in
ascertaining what positions are to be declared
redundant and accordingly abolished.
G.R. No. 181490 : April 23, 2014
MIRANT (PHILIPPINES) CORPORATION, ET.
AL., Petitioners, v. JOSELITO A. CARO,
Respondent.
VILLARAMA, JR., J.:
FACTS:
Petitioner corporation is organized and
operating under and by virtue of the laws of
the Republic of the Philippines. It is a holding
company that owns shares in project
companies such as Mirant Sual Corporation and
Mirant Pagbilao Corporation (Mirant Pagbilao)
which operate and maintain power stations
located in Sual, Pangasinan and Pagbilao,
Quezon, respectively. Petitioner corporation
and its related companies maintain around
2,000 employees detailed in its main office and
other sites. Petitioner corporation had changed
its name to CEPA Operations in 1996 and to
Southern Company in 2001. In 2002, Southern
Company was sold to petitioner Mirant whose
corporate parent is an Atlanta-based power
producer in the United States of America.
Petitioner corporation is now known as Team
Energy Corporation.
Petitioner Edgardo A. Bautista (Bautista) was
the President of petitioner corporation when
respondent was terminated from employment.
Respondent was hired by Mirant Pagbilao on
January 3, 1994 as its Logistics Officer. In 2002,
when Southern Company was sold to Mirant,
respondent was already a Supervisor of the
Logistics and Purchasing Department of
petitioner. At the time of the severance of his
employment, respondent was the Procurement
Supervisor of Mirant Pagbilao assigned at
petitioner corporations corporate office. As
Procurement Supervisor, his main task was to
serve as the link between the Materials
Management Department of petitioner
corporation and its staff, and the suppliers and
service contractors in order to ensure that
procurement is carried out in conformity with
set policies, procedures and practices. In
addition, respondent was put in charge of
ensuring the timely, economical, safe and
expeditious delivery of materials at the right
quality and quantity to petitioner corporations
plant. Respondent was also responsible for
guiding and overseeing the welfare and
training needs of the staff of the Materials
Management Department. Due to the nature of
respondents functions, petitioner corporation
considers his position as confidential.
Respondent filed a complaint for illegal
dismissal and money claims for 13th and 14th
month pay, bonuses and other benefits, as well
as the payment of moral and exemplary
damages and attorneys fees. It is the
contention of respondent that he was illegally
dismissed by petitioner corporation due to the
latters non-compliance with the twin
requirements of notice and hearing. He asserts
that while there was a notice charging him of
unjustified refusal to submit to random drug
testing, there was no notice of hearing and
petitioner corporations investigation was not
the equivalent of the hearing required under
the law which should have accorded
respondent the opportunity to be heard.
In a decision dated August 31, 2005, Labor
Arbiter Aliman D. Mangandog found respondent
to have been illegally dismissed. The Labor
Arbiter also found that the quitclaim
purportedly executed by respondent was not a
bona fide quitclaim which effectively
discharged petitioners of all the claims of
respondent in the case at bar. If at all, the
Labor Arbiter considered the execution of the
quitclaim as a clear attempt on the part of
petitioners to mislead its office into thinking
that respondent no longer had any cause of
action against petitioner corporation.
On appeal to the NLRC, petitioners alleged that
the decision of the Labor Arbiter was rendered
with grave abuse of discretion for being
contrary to law, rules and established
jurisprudence, and contained serious errors in
the findings of facts which, if not corrected,
would cause grave and irreparable damage or
injury to petitioners. The NLRC, giving weight
and emphasis to the inconsistencies in
respondents explanations, considered his
omission as unjustified refusal in violation of
petitioner corporations drug policy. Respondent
filed a motion for reconsideration, while
petitioners filed a motion for partial
reconsideration of the NLRC decision. In a
Resolution dated June 30, 2006, the NLRC
denied both motions.
ISSUES:
1) Whether the petition for certiorari filed by
respondent with the CA should have been
summarily dismissed as it lacked the requisite
verification and certification against forum
shopping under Sections 4 and 5, Rule 7 of the
Rules;
2) Whether respondent was illegally dismissed
HELD:
LABOR LAW
We agree with the disposition of the appellate
court that there was illegal dismissal in the
case at bar.
While the adoption and enforcement by
petitioner corporation of its Anti-Drugs Policy is
recognized as a valid exercise of its
management prerogative as an employer, such
exercise is not absolute and unbridled.
Managerial prerogatives are subject to
limitations provided by law, collective
bargaining agreements, and the general
principles of fair play and justice. In the
exercise of its management prerogative, an
employer must therefore ensure that the
policies, rules and regulations on work-related
activities of the employees must always be fair
and reasonable and the corresponding
penalties, when prescribed, commensurate to
the offense involved and to the degree of the
infraction. The Anti-Drugs Policy of Mirant fell
short of these requirements.
Petitioner corporations subject Anti-Drugs
Policy fell short of being fair and reasonable.
First. The policy was not clear on what
constitutes unjustified refusal when the subject
drug policy prescribed that an employees
unjustified refusal to submit to a random drug
test shall be punishable by the penalty of
termination for the first offense. To be sure, the
term unjustified refusal could not possibly
cover all forms of refusal as the employees
resistance, to be punishable by termination,
must be unjustified. To the mind of the Court, it
is on this area where petitioner corporation had
fallen short of making it clear to its employees
as well as to management as to what types of
acts would fall under the purview of unjustified
refusal. Even petitioner corporations own
Investigating Panel recognized this ambiguity.
Crisanto F. Castro, Jr. vs Ateneo De Naga
University, et al., G.R. No. 175293, 23
July 2014
Facts: started his employment with
respondent Ateneo de Naga University
(University) in the first semester of school
year 1960-1961. At the time of his dismissal,
he was a regular and full-time faculty member
of the University's Accountancy Department
in the College of Commerce with a monthly
salary of P29,846.20.3 Allegedly, he received
on February 22, 2000 a letter from respondent
Fr. Joel Tabora, SJ., the University President,
informing him that his contract (which was set
to expire on May 31, 2000) would no longer
be renewed.4 After several attempts to
discuss the matter with Fr. Tabora in person,
and not having been given any teaching load
or other assignments effective June 2000, he
brought his complaint for illegal dismissal.
The University denied the allegation of illegal
dismissal, and maintained that the petitioner
was a participant and regular contributor to
the Ateneo de Naga Employees Retirement
Plan (Plan); that upon reaching the age of 60
years on June 26, 1999, he was deemed
automatically retired under the Plan; and that
he had been allowed to teach after his
retirement only on contractual basis.
LA Quinones, explaining that Article 223 of
the Labor Code granted to the employer the
option to implement either a physical or a
payroll reinstatement, and that, therefore, the
respondents must first exercise the option
regardless of the petitioner's employment
with the Government, denied the petitioner's
motion, but ordered the respondents to
exercise the option of either actual or payroll
reinstatement of the petitioner. NLRC affirmed
with modification. But on MR, it reversed its
decision and held that his execution of the
receipt and quitclaim respecting his benefits
under the Plan estopped the petitioner from
pursuing other claims arising from his
employer-employee relationship with the
University.
CA dismissed the petitioner's petition for
certiorari on the ground of its having been
rendered moot and academic by the
aforecited August 31, 2005 decision of the
NLRC.
Issue: whether or not the petitioner's claim for
the payment of accrued salaries and benefits
for the period that he was not reinstated was
rendered moot and academic by: (a) his
receipt of the retirement benefits and
execution of the corresponding receipt and
quitclaim in favor of the respondents; and (b)
the dismissal of his complaint for illegal
dismissal by the NLRC.
Held: The Court holds that the order of
reinstatement of the petitioner was not
rendered moot and academic. He remained
entitled to accrued salaries from notice of the
LAs order of reinstatement until reversal
thereof. In Islriz Trading v. Capada, we even
clarified that the employee could be barred
from claiming accrued salaries only when the
failure to reinstate him was without the fault
of the employer.
Considering that the respondents reinstated
the petitioner only in November 2002, and
that their inability to reinstate him was
without valid ground, they were liable to pay
his salaries accruing from the time of the
decision of the LA (i.e., September 3, 2001)
until his reinstatement in November 2002. It
did not matter that the respondents had yet
to exercise their option to choose between
actual or payroll reinstatement at that point
because the order of reinstatement was
immediately executory.