GARCIA AND DUMAGO V. PHILIPPINE AIRLINES (G.R. NO.

164856)

Facts:

Petitioners-employees filed a complaint for illegal dismissal against respondent

PAL who dismissed them after they were allegedly caught in the act of sniffing
shabu within its premises. The Labor Arbiter ruled for the petitioners and ordered
immediately for their reinstatement. Prior to this decision, SEC had placed PAL
under an Interim Rehabilitation Receiver, and subsequently under a Permanent
Rehabilitation Receiver. PAL appealed and the Labor Tribunal ruled in their favor.
Subsequently, the Labor Arbiter issued a writ of execution for the reinstatement
and issued a notice of garnishment. The Labor Tribunal affirmed the writ and notice
but suspended and referred the action to the Rehabilitation Receiver of PAL. On
appeal, CA found for respondent PAL.

Issue:

Whether or not PAL being under corporate rehabilitation suspends any monetary
claims to it.

Ruling: YES.

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.

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.