169.

ISLRIZ TRADING vs CAPADA

GR NO. 168501 JAN 31, 2011

ISSUE:
Won 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 or tribunal?

RULING:
In view of this, the Court held this stance in Genuino as a stray posture and
realigned the proper course of the prevailing doctrine on reinstatement pending
appeal vis-à-vis the effect of a reversal on appeal, that is, 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 or tribunal. It
likewise settled the view that the Labor Arbiter’s order of reinstatement is
immediately executory and the employer has to either re-admit them to work
under the same terms and conditions prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing to exercise the options in the
alternative, employer must pay the employee’s salaries.

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170. GARCIA vs PAL
GR NO. 164856 JAN 20, 2009

ISSUE:
(1) Whether or not a subsequent finding of a valid dismissal removes the basis for
implementing the reinstatement aspect of a labor arbiter’s decision? and (2)
whether or not 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?

RULING:
Since petitioners’ claim against PAL is a money claim for their wages during the
pendency of PAL’s appeal to the NLRC, this should have been suspended pending
the rehabilitation proceedings. It was then suspended while ongoing
rehabilitation. In view of the termination of the rehabilitation proceedings, the
Court now proceeds to resolve the remaining issue for consideration. As to the
first issue, the court held that a subsequent finding of a valid dismissal removes
the basis for implementing the reinstatement aspect of a labor arbiter’s decision.
Based on jurisprudential trend applying par 3 of Article 223 of the Labor Code
which provides that “In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall immediately be executory, 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.” The view as maintained in a
number of cases is 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.” 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. 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. The legislative intent
is quite obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and issuance of a
writ of execution as prerequisites for the execution of a reinstatement award

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would certainly betray and run counter to the very object and intent of Article
223. The reason is simple. As to the second issue, the Court held that the peculiar
predicament of a corporate rehabilitation rendered it impossible for respondent
to exercise its option under the circumstances. The spirit of the rule on
reinstatement pending appeal animates the proceedings once the Labor Arbiter
issues the decision containing an order of reinstatement. Reinstatement pending
appeal necessitates its immediate execution during the pendency of the appeal, if
the law is to serve its noble purpose. At the same time, any attempt on the part of
the employer to evade or delay its execution, should not be countenanced. After
the labor arbiter’s 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 new NLRC Rules of Procedure, now require the employer to submit a report
of compliance within 10 calendar days from receipt of the Labor Arbiter’s
decision, disobedience to which clearly denotes a refusal to reinstate. 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. 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 respondent’s noncompliance with the
reinstatement order. Respondent’s failure to exercise the alternative options of
actual reinstatement and payroll reinstatement was thus justified. Such being the
case, respondent’s obligation to pay the salaries pending appeal, as the normal
effect of the non-exercise of the options, did not attach.

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171. ST JOSEPH ACADEMY OF VALENZUELA FACULTY ASSOCIATION vs ST JOSEPH
ACADEMY OF VALENZUELA
GR NO. 182957 JUNE 13, 2013

ISSUE:
Whether or not the CA committed an error in deleting the award of backwages
and reinstatement?

RULING:
The Court of Appeals decision are modified. As both stressed by the SOLE and the
CA, R.A. no. 7836 provides that no person shall engage in teaching and/or act as
professional teacher unless he is a duly registered professional teacher, and a
holder of a valid certificate of registration and a valid professional license or a
holder of valid temporary/special permit. Aside from the finding that there was
no illegal dismissal, the non-licensees cannot be reinstated since they do not
possess the necessary qualification.

The Court finds that CA did not commit an error in deleting the award of
backwages, as payment of backwages and other benefits is justified only if the
employee was illegally dismissed.

Nevertheless, the Court, in exceptional cases, has granted financial assistance to

legally dismissed emploees as an act of social justice or based on a equity so long
as the dismissal was not serious misconduct, does not reflect on the employees
moral character, or would involve moral turpitude. In Nissan Motor Philippines,
Inc. v. Angelo, the Court ruled that, inspired by compassionate and social justice,
it has in the past awarded financial assistance to dismissed employees when
circumstances warranted such an award. Meanwhile, inPharmacia and Upjohn,
Inc. v. Albayda, Jr., the Court held that an award to the employee of separation
pay by way of financial assistance, equivalent to one-half (1/2) months pay for
every year of service, is equitable. The Court, in Pharmacia, noted, among others,
that although the employees actions constituted a valid ground to terminate his
services, the same is not so reprehensible as to warrant complete disregard of his
long years of service.

Similarly in this case, the dismissal of the 13 non-licensees was due to their failure
to possess teaching licenses. It was not due to any serious misconduct or
infraction reflecting their moral character. Records also bear that they have been
in the employ of SJAV from five (5) to nine (9) years, and as observed by the SOLE,
SJAV has not shown any dissatisfaction with their teaching services, otherwise, x x

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x, it would not have kept them under its employ for such quite a period of time.
This being the case, the Court, in keeping with equity and social justice, grants the
award of financial assistance to the 13 non-licensees equivalent to one-half (1/2)
months’ pay for every year of service rendered with SJAV.

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172. ABELLA vs BARRIOS
GR NO. 7332 JUNE 18, 2013

ISSUE:
Won, backwages are separate and distinct from separation pay in lieu of
reinstatement and are awarded conjunctively to an employee who has been
illegally dismissed?

RULING:
Fundamental in the realm of labor law is the rule that backwages are separate
and distinct from separation pay in lieu of reinstatement and are awarded
conjunctively to an employee who has been illegally dismissed. There is nothing in
the records that could confound the finding that complainant was illegally
dismissed as LA Carreon, the NLRC, and the CA were all unanimous in decreeing
the same. Being a labor arbiter, it is hardly believable that respondent could
overlook the fact that complainant was entitled to backwages in view of the
standing pronouncement of illegal dismissal. In this regard, respondent's defense
deserves scant consideration.

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173. UNILIVER PHILS. INC vs RIVERA
GR NO. 201701 JUNE 3, 2013

ISSUE:
Won Rivera, as a validly dismissed employee, is entitled to an award of separation
pay?
RULING:
No, Rivera is not entitled. As a general rule, an employee who has been dismissed
for any of the just causes enumerated under Article 28215 of the Labor Code is
not entitled to a separation pay.16 Section 7, Rule I, Book VI of the Omnibus Rules
Implementing the Labor Code provides:
Sec. 7. Termination of employment by employer.—the just causes for terminating
the services of an employee shall be those provided in Article 282 of the Code.
The separation from work of an employee for a just cause does not entitle him to
the termination pay provided in the Code, without prejudice, however, to
whatever rights, benefits and privileges he may have under the applicable
individual or collective agreement with the employer or voluntary employer
policy or practice.
In exceptional cases the Supreme Court has granted separation pay to a legally
dismissed employee as an act of “social justice” or on “equitable grounds.” In
both instances, it is required that the dismissal (1) was not for serious misconduct;
and (2) did not reflect on the moral character of the employee.
Separation pay is only warranted when the cause for termination is not
attributable to the employee’s fault, such as those provided in Articles 283 and
284 of the Labor Code, as well as in cases of illegal dismissal in which
reinstatement is no longer feasible

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174. BANARES vs TABACO WOMEN’S TRANSPORT SERVICE COOPERATIVE
GR NO. 197353 APRIL 1, 2013

ISSUE:
Whether or not a transfer of assignment given to an employee can be deemed a
reinstatement when his previous facilities were not provided?
RULING:
No. Under Article 223 of the Labor Code, an employee entitled to reinstatement
"shall either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation" Verily, an illegally dismissed
employee is entitled to reinstatement without loss of seniority rights and to other
established employment privileges, and to his full backwages. The boarding house
privilege being an established perk accorded to petitioner ought to have been
granted him if a real and authentic reinstatement to his former position as
general manager is to be posited. It cannot be stressed enough that TAWTRASCO
withheld petitioner’s salaries for and after his purported refusal to report for
work at the Virac terminal. The reality, however, is that TAWTRASCO veritably
directed petitioner to work under terms and conditions prejudicial to him, the
most hurtful cut being that he was required to work without a decent office partly
performing a checker’s job. And this embarrassing work arrangement is what
doubtless triggered the refusal to work, which under the premises appears very
much justified. The reinstatement order has not been faithfully complied with.
And varied but justifiable reasons obtain which made petitioner’s work at the
Virac terminal untenable. To reiterate, there was a lack of a viable office: no
proper office space, no office furniture and equipment, no office supplies.
Petitioner’s request for immediate remediation of the above unfortunate
employment conditions fell on deaf ears. This is not to mention petitioner’s board
and lodging privilege which he was deprived of without so much as an
explanation. Thus, it could not be said that petitioner’s absence is without valid or
justifiable cause.