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orders of his employer or representative in connection with his work.

Infractions
PANUNCILLO vs. CAP PHILIPPINES Case Digest of company rules and regulations have been declared to belong to this category
MILAGROS PANUNCILLO v. CAP PHILIPPINES, INC. and thus are valid causes for termination of employment by the employer.
515 SCRA 323 (2007)
The employer cannot be compelled to continue the employment of a person who
FACTS: Milagros Panuncillo was hired as Office Senior Clerk by CAP was found guilty of maliciously committing acts which are detrimental to his
Philippines Inc. In order to secure the education of her son, Panuncillo procured interests. It will be highly prejudicial to the interests of the employer to impose on
an educational plan which she had fully paid but which she later sold to Josefina him the charges that warranted his dismissal from employment. Indeed, it will
Pernes for P37,000. Before the actual transfer of the plan could be effected, demoralize the rank and file if the undeserving, if not undesirable, remain in the
however, Panuncillo pledged it for P50,000 to John Chua who, however, sold it to service. It may encourage him to do even worse and will render a mockery of the
Benito Bonghanoy. Bonghanoy in turn sold the plan to Gaudioso R. Uy for rules of discipline that employees are required to observe. This Court was more
P60,000. emphatic in holding that in protecting the rights of the laborer, it cannot authorize
the oppression or self-destruction of the employer.
Having gotten wind of the transactions subsequent to her purchase of the plan,
Josefina informed CAP Philippines Inc. that Panuncillo had "swindled" her but There can thus be no doubt that Panuncillo was given ample opportunity to
that she was willing to settle the case amicably as long as Panuncillo will pay the explain her side. Parenthetically, when an employee admits the acts complained
amount involved and the interest. of, as in Panuncillos case, no formal hearing is even necessary.

CAP Philippines Inc. terminated the services of Panuncillo. Panuncillo sought


reconsideration of her dismissal. Acting on Panuncillos motion for TERMINATION OF EMPLOYMENT RELIEFS FOR ILLEGAL
reconsideration, CAP Philippines Inc. denied the same. Panuncillo thus filed a DISMISSAL-REINSTATEMENT PENDING APPEAL
complaint for illegal dismissal, 13th month pay, service incentive leave pay,
damages and attorneys fees against CAP Philippines Inc. 1. MT. CARMEL COLLEGE VS. JOCELYN RESUENA, EDDIE
VILLALON,SYLVIA SEDAYON and ZONSAYDA EMNACE
The Labor Arbiter, while finding that the dismissal was for a valid cause, found
the same too harsh. He thus ordered the reinstatement of Panuncillo to a position DOCTRINES/PRINCIPLES:
one rank lower than her previous position. On appeal, the National Labor 1. Art. 223 of the Labor Code provides that reinstatement is immediately
Relations Commission (NLRC) reversed the decision of the Labor Arbiter. It held executory even pending appeal only when the Labor Arbiter himself ordered
that Panuncillos dismissal was illegal and accordingly ordered her reinstatement the reinstatement.
to her former position. 2. Art. 224 of the Labor Code applies when the order of reinstatement was first
decided upon appeal to the NLRC. In other words, the Labor Arbiter himself
CAP Philippines Inc. challenged the NLRC Decision before the appellate court via did not order reinstatement.
Petition for Certiorari. The appellate court reversed the NLRC Decision and held 3. Art. 279 of the Labor Code provides thatbackwages are to be computed from
that the dismissal was valid and that CAP Philippines Inc. complied with the the time of illegal dismissal until reinstatement or upon petitioners payment
procedural requirements of due process. Hence, the present petition. of separation pay to respondents if reinstatement is not longer feasible.

ISSUE: Whether or not Milagros has been illegally dismissed FACTS:


PetitionerMt. Carmel College is a private educational institution and respondents
HELD: Panuncillos repeated violation of Section 8.4 of CAP Philippines Incs were its employees. Respondents were dismissed for joining the protest action
Code of Discipline, she violated the trust and confidence of CAP Philippines Inc. against the school administration. The Labor Arbiter (LA) found that they were
and its customers. To allow her to continue with her employment puts CAP not illegally dismissed but ordered that they be awarded 13th month pay,
Philippines Inc. under the risk of being embroiled in unnecessary lawsuits from separation pay and attorneys fees. The NLRC reversed the findings of the LA
customers similarly situated as Josefina, et al. Clearly, CAP Philippines Inc. finding the termination of the respondents as illegal and ordering the payment of
exercised its management prerogative when it dismissed Panuncillo. backwages of respondents.It further directed the reinstatement of respondents by
way of payment of separation pay, with backwages. This was affirmed by the
Under the Labor Code, the employer may terminate an employment on the ground Court of Appeals.
of serious misconduct or willful disobedience by the employee of the lawful
Petitioner is appealing not the judgment of the NLRC but the manner of
execution of the same. Petitioner argues that the CA erred in upholding the LA
and the NLRC that the award for backwages goes beyond the period May 15,
1998 to May 25, 1999 on the supposition that reinstatement is self-executory and
does not need a writ of execution for its enforcement.Petitioner avers that the LA
went beyond the terms of the NLRC Decision, as affirmed by the CA, and
erroneously used as bases inapplicable law and jurisprudence in the execution of
the same.Petitioner contends that the award of backwages subject to execution is
limited to the period prior to the appeal and does not include the period during the
pendency of the appeal, on the contention that reinstatement during appeal is
warranted only when the Labor Arbiter rules that the dismissed employee should
be reinstated.

ISSUES:
1.Whetherreinstatement in the case is self-executory and does not need a writ of
execution for its enforcement.
2. Whether the continuing award of backwages is proper.

RULING:
1.No(though the court sees no cogent reason as to the relevance of a discussion
of this issue only that petitioner raised it as an issue).The court states that the
above findings will not affect the award of backwages for the period beyond May
25, 1999.
Article 224 applies in the given case since the order of reinstatement was first
decided upon appeal to the NLRC and affirmed with finality by the CA.
2. Yes. The court found out that there is a conflict between the
dispositive portion of the falloand the body of the decision. The fallo stated that
respondents were illegally dismissed and must therefore be ordered reinstated
with payment of backwages from the time were illegally dismissed up to the time
of their actual reinstatement. In view thereof, the court declared that the
fallocontrols.
Applying Article 279 of the Labor Code, the court emphasized that backwages
are to be computed from the time of illegal dismissal until reinstatement or upon
petitioners payment of separation pay to respondents if reinstatement is not
longer feasible.
JUANITO GARCIA ET AL V PAL Whether petitioners may collect their wages during the period between the
Labor Arbiters order of reinstatement pending appeal and the NLRC
TOPIC: Payroll Reinstatement decision overturning that of the Labor Arbiter, now that PAL has exited
FACTS: from rehabilitation proceedings.

HELD:

- July 24, 1995, an administrative charge was filed by PAL against its employees- NO. (an exception to the general rule)
herein petitioners after they were allegedly caught in the act of sniffing shabu
RATIONALE:
when a team of company security personnel and law enforcers raided the
PAL Technical Centers Toolroom Section.
- October 9, 1995, after due notice, PAL dismissed petitioners for transgressing the
PAL Code of Discipline. - Paragraph 3 of Article 223 of the Labor Code reads:
- Petitioners filed a complaint for illegal dismissal and damages.
- Prior to the promulgation of the Labor Arbiters decision, the Securities and In any event, the decision of the Labor Arbiter reinstating a
Exchange Commission (SEC) placed PAL, which was suffering from severe dismissed or separated employee, insofar as the reinstatement aspect is
financial losses, under an Interim Rehabilitation Receiver. concerned, shall immediately be executory, pending appeal. The
- LA- there was illegal dismissal, ordering PAL to, inter alia, immediately comply employee shall either be admitted back to work under the same terms and
with the reinstatement aspect of the decision. conditions prevailing prior to his dismissal or separation or, at the option
- January 1999-The Interim Rehabilitation Receiver was subsequently replaced by a of the employer, merely reinstated in the payroll. The posting of a bond
Permanent Rehabilitation Receiver. by the employer shall not stay the execution for reinstatement provided
- NLRC which, by Resolution of January 31, 2000, reversed said decision and herein.
dismissed petitioners complaint for lack of merit.
- Petitioners Motion for Reconsideration was denied
- On October 5, 2000 (note: after NLRC reversed LAs decision), the Labor - It was held in a number of cases that when the order of reinstatement of the
Arbiter issued a Writ of Execution (Writ) respecting the reinstatement aspect Labor Arbiter is reversed on appeal, it is obligatory on the part of the
of his January 11, 1999 Decision, and on October 25, 2000, he issued a Notice employer to reinstate and pay the wages of the dismissed employee during the
of Garnishment (Notice). period of appeal until reversal by the higher court. If the employee has been
- PAL thereupon moved to quash the Writ and to lift the Notice while petitioners reinstated during the appeal period and such reinstatement order is reversed with
moved to release the garnished amount. finality, the employee is not required to reimburse whatever salary he
- PAL also filed an urgent petition for injunction with the NLRC. received for he is entitled to such, more so if he actually rendered services
- NLRC- affirmed the validity of the Writ and the Notice issued by the Labor during the period. Hence, it immaterial whether an employee is actually
Arbiter but suspended and referred the action to the Rehabilitation Receiver for reinstated or on payroll reinstatement, he/she would still be entitled for wages
appropriate action. during the pendency period.
- CA- nullified the NLRC Resolutions on two grounds: (1) a subsequent finding of
a valid dismissal removes the basis for implementing the reinstatement aspect of a
labor arbiters decision (the first ground), and (2) the impossibility to comply with - However in the case of Genuino the opposite view was articulated. In this case, it
the reinstatement order due to corporate rehabilitation provides a reasonable was held that when LAs decision is later reversed on appeal upon finding that the
justification for the failure to exercise the options under Article 223 of the Labor ground for dismissal is valid, then the employer has the right to require the
Code (the second ground). 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
ISSUE: during the pendency of the appeal, then the employee is entitled to the
compensation received for actual services rendered without need of refund.
- SC does not agree with the ruling in the Genuino case on the ff reasons:
o refund doctrine easily demonstrates how a favorable decision by the Labor rehabilitation receiver. Had there been no need to rehabilitate, respondent may
Arbiter could harm, more than help, a dismissed employee. The employee, to have opted for actual physical reinstatement pending appeal to optimize the
make both ends meet, would necessarily have to use up the salaries received utilization of resources. Then again, though the management may think this wise,
during the pendency of the appeal, only to end up having to refund the sum in the rehabilitation receiver may decide otherwise, not to mention the subsistence of
case of a final unfavorable decision. It is mirage of a stop-gap leading the the injunction on claims.
employee to a risky cliff of insolvency. -In sum, the obligation to pay the employees salaries upon the employers failure
o Not only does it disregard the social justice principles behind the rule, but also to exercise the alternative options under Article 223 of the Labor Code is not a
institutes a scheme unduly favorable to management. Under such scheme, the hard and fast rule, considering the inherent constraints of corporate rehabilitation.
salaries dispensed pendente lite merely serve as a bond posted in installment by
the employer. For in the event of a reversal of the Labor Arbiters decision
ordering reinstatement, the employer gets back the same amount without having
to spend ordinarily for bond premiums.

o The Court reaffirms the prevailing principle that 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.
However this rule is not without exception, the employee may be barred from
collecting the accrued wages when:
o there is actual delay or the fact that the order of reinstatement pending appeal was
not executed prior to its reversal; and
o delay must not be due to the employers unjustified act or omission.

- In the case at bar, petitioners exerted efforts to execute the Labor Arbiters order
of reinstatement until they were able to secure a writ of execution, albeit issued on
October 5, 2000 after the reversal by the NLRC of the Labor Arbiters
decision. Technically, there was still actual delay which brings to the question
of whether the delay was due to respondent.

-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.

-Respondents failure to exercise the alternative options of actual


reinstatement and payroll reinstatement was JUSTIFIED.
-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.
-PAL, during the period material to the case, was effectively deprived of the
alternative 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
Held: Yes, the updated computation was proper. The issue in the case at bar is not
Session Delights Ice Cream & Fastfoods vs. CA, G.R. No. 172149 , February
the correctness of the awards, the finality of the CAs judgment, nor the
8, 2010
Post under case digests, labor law at Saturday, February 04, 2012 Posted petitioners failure to appeal. Rather, it is the propriety of the computation of the
by Schizophrenic Mind
awards made, whether this violated the principle of immutability of final
Facts: A complaint for illegal dismissal was filed against petitioner Session judgments.
Delights Ice Cream & Fast Foods by private respondent Adonis Armenio M.
Flora, docketed as NLRC Case No. RAB-CAR 09-0507-00. The labor arbiter In concrete terms, the question is whether a re-computation in the course of
decided against petitioner, finding that it had illegally dismissed the private execution, of the labor arbiters original computation of the awards made pegged
respondent. Based on such finding, it awarded private respondent backwages, as of the time the decision was rendered and confirmed with modification by a
separation pay in lieu of reinstatement, indemnity, and attorneys fees. final CA decision, is legally proper.

The CA affirmed with modification the NLRC decision by deleting the awards for The Court held that under the terms of the decision under execution, no essential
a proportionate 13th month pay and for indemnity. The CA decision became final change is made by a re-computation as this step is a necessary consequence that
per Entry of Judgment dated July 29, 2003. flows from the nature of the illegality of dismissal declared in that decision. A re-
computation (or an original computation, if no previous computation has been
In January 2004, and in the course of the execution of the above final judgment, a made) is a part of the law specifically, Article 279 of the Labor Code and the
pre-execution conference was held, with the contending parties in attendance. In established jurisprudence on this provision that is read into the decision. By the
said conference an updated computation of the monetary awards in the total nature of an illegal dismissal case, the reliefs continue to add on until full
amount of P235,986.00, which included additional backwages and separation pay satisfaction, as expressed under Article 279 of the Labor Code. The re-
and a proportionate amount of the 13th month pay due to private respondent Flora, computation of the consequences of illegal dismissal upon execution of the
was made and was approved by the Labor Arbiter about three (3) months after. decision does not constitute an alteration or amendment of the final decision being
implemented. The illegal dismissal ruling stands; only the computation of the
The petitioner objected to the re-computation and appealed the labor arbiters monetary consequences of this dismissal is affected and this is not a violation of
order to the NLRC but the same was denied. The CA, however, partially granted the principle of immutability of final judgments.
the petition by deleting the awarded proportionate 13th month pay.

Issue: Whether or not the updated computation was proper


effectively terminate the employment of an illegaly dismissed employee.
Timoteo Sarona vs. National Labor Relations Commission, Royale Security Otherwise, the employer-employee relationship subsists and the illegally
Agency, et.al. [GR No. 185280, January 18, 2012]
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-
FACTS: The petitioner, who was hired by Sceptre as a security guard, was asked employees who are not dismissed. It is the obligation of the employer to pay an
by Karen Therese Tan, Sceptre's Operations Manager, to submit a resignation illegally dismissed employee or worker the whole amount of the salaries or wages,
letter as the same was supposedly required for applying for a position at Royale. 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.

Martin informed him that he would no longer be given any assignment per the
instructions of Aida Sabalones-Tan, general manager of Sceptre. This prompted
him to file a complaint for illegal dismissal. While complainant is entitled to
backwages, we are aware that his stint with respondent Royale lasted only for one
(1) month and three (3) days such that it is our considered view that his backwages
should be limited to only three (3) months. The petitioner does not deny that he
has received the full amount of his backwages and separation pay as provided
under the NLRC's November 2005 Decision. However, he claims that this does
not preclude this Court from modifying a decision that is tainted with grave abuse
of discretion or issued without jurisdiction.

ISSUE: Whether the petitioner's backwages should be limited to his salary for
three (3) months

RULING: No. 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
employee's actual receipt of the full amount of his separation pay that will

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