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APPEAL CASES

DIAMOND TAXI v LLAMAS, JR.


FACTS:
Llamas worked as a taxi driver for
petitioner Diamond Taxi, owned and
operated by petitioner Bryan Ong. On July
18, 2005, Llamas filed before the Labor
Arbiter (LA) a complaint for illegal
dismissal against the petitioners.
In their position paper, the petitioners
denied dismissing Llamas. They claimed
that Llamas had been absent without
official leave for several days, beginning
July 14, 2005 until August 1, 2005. The
petitioners submitted a copy of the
attendance logbook to prove that Llamas
had been absent on these cited dates.
They also pointed out that Llamas
committed several traffic violations in the
years 2000-2005 and that they had issued
him several memoranda for acts of
insubordination and refusal to heed
management instructions. They argued
that these acts traffic violations,
insubordination and refusal to heed
management instructions constitute
grounds for the termination of Llamas
employment.
Llamas failed
position paper.

to

seasonably

file

his

LA: dismissed Llamas complaint. Llamas


left his job and had been absent for
several days w/o leave.
Llamas received a copy of this LA decision
on January 5, 2006. Meanwhile, he filed his
position paper6 on December 20, 2005.
In his position paper, Llamas claimed that
he failed to seasonably file his position
paper because his previous counsel,
despite
his
repeated
pleas,
had
continuously deferred compliance with the
LAs orders for its submission. Hence, he
was forced to secure the services of
another counsel on December 19, 2005 in
order to comply with the LAs directive.

On the merits of his complaint, Llamas


alleged that he had a misunderstanding
with Aljuver Ong, Bryans brother and
operations manager of Diamond Taxi, on
July 13, 2005 (July 13, 2005 incident).
When he reported for work on July 14,
2005, Bryan refused to give him the key to
his assigned taxi cab unless he would sign
a prepared resignation letter. He did not
sign the resignation letter. He reported for
work again on July 15 and 16, 2005, but
Bryan insisted that he sign the resignation
letter prior to the release of the key to his
assigned taxi cab. Thus, he filed the illegal
dismissal complaint.
On January 16, 2006, Llamas filed before
the LA a motion for reconsideration of its
November 29, 2005 decision. The LA
treated Llamas motion as an appeal per
Section 15, Rule V of the 2005 Revised
Rules of Procedure of the NLRC (2005
NLRC Rules) (the governing NLRC Rules of
Procedure at the time Llamas filed his
complaint before the LA).
NLRC: dismissed the complaint for failure
to attach required cert. of non-forum
shopping per Sec. 4, Rule VI.
MR: He now filed and attached the reqd
Cert. denied
CA: reversed; while non compliance with
the mandatory reqt of Cert.of non-forum
shopping, may nonetheless be excused
upon showing
of manifest equitable
grounds proving substantial compliance.
To the CA, the NLRC should have
considered as substantially compliant with
this rule Llamas subsequent submission
of the required certificate with his motion
for reconsideration (of the NLRCs May 30,
2006 resolution).
ISSUE:
HELD:
Petition not meritorious.

Preliminary considerations: factual-issuebar-rule


In this Rule 45 petition for review on
certiorari, we review the legal errors that
the CA may have committed in the
assailed decision, in contrast with the
review for jurisdictional error undertaken
in an original certiorari action. In reviewing
the legal correctness of the CA decision in
a labor case made under Rule 65 of the
Rules of Court, we examine the CA
decision in the context that it determined
the presence or the absence of grave
abuse of discretion in the NLRC decision
before it and not on the basis of whether
the NLRC decision, on the merits of the
case, was correct. In other words, we have
to be keenly aware that the CA undertook
a Rule 65 review, not a review on appeal,
of the challenged NLRC decision. In
question form, the question that we ask is:
Did the CA correctly determine whether
the NLRC committed grave abuse of
discretion in ruling on the case?15
In the context of this case, however, this
legal issue is inextricably linked with and
cannot be resolved without the definitive
resolution of the core factual issue
whether Llamas abandoned his work or
had been constructively dismissed. As a
proscribed question of fact, we generally
cannot address this issue, except to the
extent necessary to determine whether
the CA correctly found that the NLRC
acted with grave abuse of discretion in
dismissing Llamas appeal on purely
technical grounds.
The NLRC committed grave abuse of
discretion in dismissing Llamas
appeal
on
mere technicality
Article 223 (now Article 229)19 of the Labor
Code states that decisions (or awards or
orders) of the LA shall become final and
executory unless appealed to the NLRC
within ten (10) calendar days from receipt
of the decision. Consistent with Article
223, Section 1, Rule VI of the 2005 NLRC
Rules also provides for a ten (10)-day

period for appealing the LAs decision.


Under Section 4(a), Rule VI 20 of the 2005
NLRC Rules, the appeal shall be in the
form of a verified memorandum of appeal
and accompanied by proof of payment of
the appeal fee, posting of cash or surety
bond (when necessary), certificate of nonforum shopping, and proof of service upon
the other parties. Failure of the appealing
party to comply with any or all of these
requisites within the reglementary period
will render the LAs decision final and
executory.
IN THE CASE AT BAR: Indisputably, Llamas
did not file a memorandum of appeal from
the LAs decision. Instead, he filed,
within the ten (10)-day appeal period,
a motion for reconsideration. Under
Section 15, Rule V of the 2005 NLRC
Rules, motions for reconsideration
from the LAs decision are not
allowed; they may, however, be treated
as an appeal provided they comply with
the requirements for perfecting an appeal.
CERT. OF NON-FORUM SHOPPING. The
NLRC dismissed Llamas motion for
reconsideration treated as an appeal for
failure to attach the required certificate of
non-forum shopping per Section 4(a), Rule
VI of the 2005 NLRC Rules.
The requirement for a sworn certification
of non-forum shopping was prescribed by
the Court under Revised Circular 2891,21 as
amended
by
Administrative
Circular No. 04-94,22 to prohibit and
penalize the evils of forum shopping.
Revised Circular 28-91, as amended by
Administrative Circular No. 04-94, requires
a sworn certificate of non-forum shopping
to be filed with every petition, complaint,
application or other initiatory pleading
filed before the Court, the CA, or the
different divisions thereof, or any other
court, tribunal or agency.
Ordinarily, the infirmity in Llamas appeal
would have been fatal and would have
justified an end to the case. A careful
consideration of the circumstances of the
case, however, convinces us that the NLRC

should, indeed, have given due course


to Llamas appeal despite the initial
absence of the required certificate.
We note that in his motion for
reconsideration of the NLRCs May
30, 2006 resolution, Llamas attached
the required certificate of non-forum
shopping.
RELAXATION OF THE RULE. Moreover,
Llamas adequately explained, in his
motion
for
reconsideration,
the
inadvertence and presented a clear
justifiable ground to warrant the relaxation
of the rules. To recall, Llamas was able to
file his position paper, through his new
counsel, only on December 20, 2005. He
hired the new counsel on December 19,
2005 after several repeated, albeit failed,
pleas to his former counsel to submit, on
or before October 25, 2005 per the LAs
order, the required position paper. On
November 29, 2005, however, the LA
rendered a decision that Llamas and his
new counsel learned and received a copy
of only on January 5, 2006. Evidently, the
LAs findings and conclusions were
premised solely on the petitioners
pleadings and evidence. And, while not
the fault of the LA, Llamas, nevertheless,
did not have a meaningful opportunity to
present his case, refute the contents and
allegations in the petitioners position
paper and submit controverting evidence.
Faced with these circumstances, i.e.,
Llamas subsequent compliance with the
certification-against-forum-shopping
requirement; the utter negligence and
inattention of Llamas former counsel
to his pleas and cause, and his
vigilance in immediately securing the
services of a new counsel; Llamas
filing of his position paper before he
learned and received a copy of the
LAs decision; the absence of a
meaningful opportunity for Llamas to
present his case before the LA; and
the clear merits of his case (that our
subsequent discussion will show), the
NLRC
should
have
relaxed
the
application of procedural rules in the

broader
justice.

interests

of

substantial

Indeed, while the requirement as to the


certificate of non-forum shopping is
mandatory, this requirement should not,
however, be interpreted too literally and
thus defeat the objective of preventing the
undesirable practice of forum-shopping.
W/O REGARD TO MERE TECHNICALITIES.
Under Article 221 (now Article 227) 24 of
the Labor Code, "the Commission and its
members and the Labor Arbiters shall use
every and all reasonable means to
ascertain the facts in each case speedily
and objectively and without regard to
technicalities of law or procedure, all in
the
interest
of
due
25
process." Consistently,
we
have
emphasized that "rules of procedure are
mere tools designed to facilitate the
attainment of justice. A strict and rigid
application
which
would
result
in
technicalities that tend to frustrate rather
than promote substantial justice should
not be allowed x x x. No procedural rule is
sacrosanct if such shall result in
subverting
justice."26 Ultimately,
what
should guide judicial action is that a party
is given the fullest opportunity to establish
the merits of his action or defense rather
than for him to lose life, honor, or
property, on mere technicalities.
CONSTI MANDATE. "the dismissal of an
employees appeal on purely technical
ground
is
inconsistent
with
the
constitutional mandate on protection to
labor."28 Under the Constitution29 and the
Labor Code,30 the State is bound to protect
labor and assure the rights of workers to
security of tenure tenurial security being
a preferred constitutional right that, under
these fundamental guidelines, technical
infirmities in labor pleadings cannot
defeat.31
Llamas did not abandon his work; he
was
constructively dismissed

"Abandonment is the deliberate and


unjustified refusal of an employee to
resume his employment."34 It is a form of
neglect of duty that constitutes just cause
for the employer to dismiss the
employee.35
To constitute abandonment of work, two
elements must concur: "(1) x x x the
employee must have failed to report for
work or must have been absent without
valid or justifiable reason; and (2) x x x
there must have been a clear intention [on
the part of the employee] to sever the
employer-employee
relationship
manifested by some overt act." mere
absence NOT enough
IN THE CASE AT BAR: Guided by these
parameters, we agree that the petitioners
unerringly failed to prove the alleged
abandonment. They did not present proof
of some overt act of Llamas that clearly
and unequivocally shows his intention to
abandon his job. We note that, aside from
their bare allegation, the only evidence
that the petitioners submitted to prove
abandonment were the photocopy of their
attendance logbook and the July 15, 2005
memorandum40 that
they
served
on
Llamas regarding the July 13, 2005
incident. These pieces of evidence, even
when considered collectively, indeed failed
to prove the clear and unequivocal
intention, on Llamas part, that the law
requires to deem as abandonment Llamas
absence from work. Quite the contrary,
the
petitioners
July
15,
2005
memorandum, in fact, supports, if not
strengthens, Llamas' version of the events
that led to his filing of the complaint, i.e.,
that as a result of the July 13, 2005
incident, the petitioners refused to give
him the key to his assigned taxi cab unless
he would sign the resignation letter.
RULING: CA DECISION AFFIRMED

ANDO v CAMPO

FACTS:
Petitioner was the president of Premier
Allied and Contracting Services, Inc.
(PACSI), an independent labor contractor.
Respondents were hired by PACSI as pilers
or haulers tasked to manually carry bags
of sugar from the warehouse of Victorias
Milling Company and load them on trucks.
[4]
In June 1998, respondents were
dismissed from employment.
COMPLAINT. They filed a case for illegal
dismissal and some money claims with the
National Labor Relations Commission
(NLRC), Regional Arbitration Branch No.
VI,Bacolod City
LA: ruled in favor of the respondent;
ordered to pay separation pay, etc.
NLRC: the NLRC ruled that petitioner failed
to perfect his appeal because he did not
pay the supersedeas bond. It also affirmed
the
Labor
Arbiters
decision
with
modification of the award for separation
pay to four other employees who were
similarly situated. Upon finality of the
decision, respondents moved for its
execution.[9]
To answer for the monetary award, NLRC
Acting Sheriff Romeo Pasustento issued a
Notice of Sale on Execution of Personal
Property[10] over the property in the name
of of Paquito V. Ando x x x married to
Erlinda S. Ando.
ACTION FOR PROHIBITION AND DAMAGES
+ TRO. Petitioner claimed that the
property belonged to him and his wife, not
to the corporation, and, hence, could not
be subject of the execution sale. Since it is
the corporation that was the judgment
debtor, execution should be made on the
latters properties.[11]
RTC: denied the prayer for TRO holding
that the trial court had no jurisdiction to
try and decide the case. Still, it went on to
decide the merits of the case.

PETITION FOR CERTIORARI. Petitioner did


not file a motion for reconsideration of the
RTC Order. Instead, he filed a petition
for certiorari under Rule 65[13] before the
CA. He contended that the RTC acted
without or in excess of jurisdiction or with
grave abuse of discretion amounting to
lack or excess of jurisdiction in issuing the
Order. Petitioner argued that the writ of
execution was issued improvidently or
without authority since the property to be
levied belonged to him in his personal
capacity and his wife. The RTC, respondent
contended, could stay the execution of a
judgment if the same was unjust. [14] He
also contended that, pursuant to a ruling
of this Court, a third party who is not a
judgment creditor may choose between
filing a third-party claim with the NLRC
sheriff or filing a separate action with the
courts.[15]

where a person, not a party to the case,


asserts title to or right to the possession of
the property levied upon.

CA: affirmed

IN THE CASE AT BAR: The TCT[28] of the


property bears out that, indeed, it belongs
to petitioner and his wife. Thus, even if we
consider petitioner as an agent of the
corporation and, therefore, not a stranger
to the case such that the provision on
third-party claims will not apply to him,
the property was registered not only in the
name of petitioner but also of his wife. She
stands to lose the property subject of
execution without ever being a party to
the case. This will be tantamount to
deprivation of property without due
process.

HELD:
Petition is meritorious.
The Court has long recognized that regular
courts have no jurisdiction to hear and
decide questions which arise from and are
incidental to the enforcement of decisions,
orders, or awards rendered in labor cases
by appropriate officers and tribunals of the
Department of Labor and Employment. To
hold otherwise is to sanction splitting of
jurisdiction which is obnoxious to the
orderly administration of justice.
Thus,
it
is,
first
and
foremost,
the NLRC Manual on the Execution of
Judgment that governs any question on
the execution of a judgment of that body.
Petitioner need not look further than that.
The Rules of Court apply only by analogy
or in a suppletory character .
THIRD-PARTY CLAIM. On the other hand,
the NLRC Manual on the Execution of
Judgment deals specifically with
thirdparty claims in cases brought before that
body. It defines a third-party claim as one

NOT THE CORPORATIONS PPTY. There is


no doubt in our mind that petitioners
complaint is a third- party claim within the
cognizance of the NLRC. Petitioner may
indeed be considered a third party in
relation to the property subject of the
execution vis--vis the Labor Arbiters
decision. There is no question that the
property belongs to petitioner and
his wife, and not to the corporation. It
can be said that the property belongs to
the conjugal partnership, not to petitioner
alone. Thus, the property belongs to a
third party, i.e., the conjugal partnership.
At the very least, the Court can consider
that petitioners wife is a third party within
contemplation of the law.

Moreover, the power of the NLRC, or the


courts, to execute its judgment extends
only
to
properties
unquestionably
belonging to the judgment debtor alone.
[29]
A sheriff, therefore, has no authority to
attach the property of any person except
that of the judgment debtor.[30] Likewise,
there is no showing that the sheriff ever
tried to execute on the properties of the
corporation.
RULING: PETITION GRANTED.

BERGONIO, ET AL
ASIAN AIRLINES
FACTS:

SOUTH

EAST

On April 30, 2004, the 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 (collectively, the respondents).

respondents
depositary
bank

Metrobank-San Lorenzo Village Branch,


Makati
City

in
the
amount
of P1,900,000.00

LA: illegally dismissed and ordered the


respondents to immediately reinstate the
petitioners w/ full backwages.

On January 31, 2008, the petitioners filed


with the LA an Urgent Ex-Parte Motion for
the Immediate Release of the Garnished
Amount.

Petitioners filed before the LA a Motion for


Issuance of writ of execution for their
immediate reinstatement.
PREEXECUTION. During the scheduled preexecution conference held on September
14, 2005, the respondents manifested
their option to reinstate the petitioners in
the payroll. The payroll reinstatement,
however, did not materialize. Thus, on
September 22, 2005, the petitioners filed
before the LA a manifestation for their
immediate reinstatement.
LA granted the petitioners motion and
issued a writ of execution.
MTQ. The respondents moved to quash
the writ of execution with a prayer to hold
in abeyance the implementation of the
reinstatement order.9 They maintained
that the relationship between them and
the petitioners had been so strained that
reinstatement was no longer possible.
On February 21, 2006, the respondents
issued a Memorandum11 directing the
petitioners to report for work on February
24, 2006. The petitioners failed to report
for work on the appointed date. On
February 28, 2006, the respondents
moved before the LA to suspend the order
for the petitioners reinstatement.12
NLRC: dismissed the respondents appeal
for non-perfection. It also denied the
respondents MR. The NLRC issued an
Entry of Judgment on February 6, 2007
declaring
its
November
29,
2006
resolution final and executory. The
petitioners forthwith filed with the LA
another motion for the issuance of a writ
of execution, which the LA granted on
April 24, 2007. The LA also issued another
writ
of
execution.14 A
Notice
of
Garnishment was thereafter issued to the

CA:partly granted respondents petition


declaring the dismissal valid

In its March 13, 2008 order,15 the LA


granted the petitioners motion; it directed
Metrobank-San
Lorenzo
to
release
the P1,900,000.00 garnished amount. The
LA found valid and meritorious the
respondents claim for accrued wages in
view of the respondents refusal to
reinstate the petitioners despite the final
and executory nature of the reinstatement
aspect of its (LAs) May 31, 2005 decision.
PETITION
FOR
CERTIORARI.
The
respondents filed the same before the CA.
CA:
remanded
the
case
to
the
Computation and Examination Unit of the
NLRC; it reversed the decision re the
garnishing of the amount.
CONTENTION
OF
PETITIONERS:
The
petitioners argue that the CA gravely
erred when it ruled, contrary to Article
223, paragraph 3 of the Labor Code, that
the computation of their accrued wages
stopped when they failed to report for
work on February 24, 2006. Had the
respondents really intended them to
report back to work, they should have
issued a memo immediately after the LA
issued the first execution.
ISSUE: W/N the petitioners may recover
the accrued wages until the CAs reversal
of the LAs decision.
HELD:
Nature of the reinstatement aspect of
the
LAs decision on a finding of illegal
dismissal
Article 223. APPEAL

xxxx
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. [Emphasis
and underscoring supplied]

IMMEDIATELY
EXECUTORY.
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. 22 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.24 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.
ORDER
OF
REINSTATEMENT
SELFEXECUTORY. Moreover, and equally worth
emphasizing, is that an order of
reinstatement issued by the LA is selfexecutory, 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.
The employer is obliged to pay the
dismissed employees salary if he
refuses to reinstate until actual
reinstatement or reversal by a higher
tribunal; circumstances that may bar
an
employee from receiving the accrued
wages.
GR: As we amply discussed above, an
employer is obliged to immediately
reinstate the employee upon the LAs
finding of illegal dismissal; if the employer
fails, it is liable to pay the salary of the
dismissed employee. Of course, it is not
always the case that the LAs finding of
illegal dismissal is, on appeal by the
employer, upheld by the appellate court.
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 obliged to keep the
employee in the actual service or in the
payroll. The employee, in turn, is not
required to return the wages that he had
received prior to the reversal of the LAs
decision.31
The reversal by a higher tribunal of the
LAs
finding
(of
illegal
dismissal),
notwithstanding,
an employer,
who,
despite the LAs order of 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.
EXCEPTION: 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. 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.
APPLICATION OF 2-FOLD TEST:
As we earlier pointed out, the core issue to
be resolved is whether the petitioners may
recover the accrued wages until the CAs
reversal of the LAs decision. An
affirmative answer to this question will
lead us to reverse the assailed CA decision
for legal errors and reinstate the NLRCs
decision affirming the release of the
garnished amount. Otherwise, we uphold
the CAs decision to be legally correct. To
resolve this question, we apply the twofold test.
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 nonexecution of the reinstatement order in
fact moved the LA to issue an alias writ of
execution on February 16, 2006 and
another writ of execution on April 24,
2007.
From these facts and without doubt, there
was actual delay in the execution of the
reinstatement aspect of the LAs May 31,
2005 decision before it was reversed in
the CAs decision.
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.
In reversing, for grave abuse of discretion,
the NLRCs order affirming the release of
the garnished amount, the CA relied on
the fact of the issuance of the February
21, 2006 Memorandum and of the
petitioners failure to comply with its
return-to-work directive. In other words,
with the issuance of this Memorandum,
the CA considered the respondents as
having sufficiently complied with their
obligation to reinstate the petitioners.
And, the subsequent delay in or the nonexecution of the reinstatement order was
no longer the respondents fault, but
rather of the petitioners who refused to
report back to work despite the directive.
Respondent was at fault.
RE DELAY. Per the NLRC Rules of
Procedure, employers are reqd to submit a
report of compliance w/on 10 calendar
days from receipt of LAs decision; noncompliance is a clear refusal to reinstate.
RULING: PETITION IS GRANTED

BUENVIAJE, ET AL. v CA

FACTS:
Petitioners were former employees of
Cottonway Marketing Corp. (Cottonway),
hired as promo girls for their garment
products. In October, 1994, after their
services were terminated as the company
was allegedly suffering business losses,
petitioners filed with the National Labor
Relations Commission (NLRC) a complaint
for illegal dismissal, underpayment of
salary, and non-payment of premium pay
for rest day, service incentive leave pay
and thirteenth month pay against
Cottonway Marketing Corp. and Network
Fashion Inc./JCT International Trading.[1]
LA: retrenchment valid and ordered LA to
pay the separation pay and 13th month
pay
NLRC: reinstated + backwages
MR: denied
On August 30, 1996, Cottonway filed with
the NLRC a manifestation stating that they
have complied with the order of
reinstatement by sending notices dated
June 5, 1996 requiring the petitioners to
return to work, but to no avail; and
consequently, they sent letters to
petitioners
dated
August
1,
1996
informing them that they have lost their
employment for failure to comply with the
return to work order.[5] Cottonway also
filed a petition for certiorari with the
Supreme Court which was dismissed on
October 14, 1996.
SUPPLEMENTAL MANIFESTATION. Praying
that the NLRC allow the reception of evid.
w/ r.t their claims that petitioners have
found new employment
Labor Arbiter Romulus S. Protasio issued
an Order declaring that the award of
backwages and proportionate thirteenth
month pay to petitioners should be limited
from the time of their illegal dismissal up
to the time they received the notice of
termination sent by the company upon
their refusal to report for work despite the
order of reinstatement. He cited the fact
that petitioners failed to report to their
posts without justifiable reason despite
respondent's order requiring them to
return to work immediately. The Labor
Arbiter
ordered
the
Research
and

Investigation Unit to recompute the


monetary award in accordance with its
ruling.[14]
NLRC set aside; it ruled that its decision
has become final and executor and it is
the ministerial duty of the LA to issue the
corresponding writ of execution.
CA: reinstatement of petitioners are no
longer possible bec. of their deliberate
refusal to return to work despite the notice
given to ER.
ISSUE: whether it should be limited from
the time they were illegally dismissed until
they received the notice of termination
sent by Cottonway on August 1, 1996 as
argued by respondent company, or
whether it should be computed from the
time of their illegal dismissal until their
actual reinstatement as argued by the
petitioners.
HELD:
The Court agreed w/ petitioners.
The issue of the legality of the termination
of petitioners services has been settled in
the NLRC decision dated March 26,
1996. Thus, Cottonway was ordered to
reinstate petitioners to their former
position without loss of seniority rights
and other privileges and to pay them full
backwages.
These are the reliefs afforded to
employees
whose
employment
is
unlawfully
severed. Reinstatement
restores the employee to the position from
which he was removed, i.e., to his status
quo ante dismissal, while the grant of
backwages allows the same employee to
recover from the employer that which he
lost by way of wages because of his
dismissal.
Under R.A. 6715, employees who are
illegally dismissed are entitled to full
backwages, inclusive of allowances and
other
benefits
or
their
monetary
equivalent, computed from the time
their
actual
compensation
was
withheld from them up to the time of
their
actual
reinstatement. If
reinstatement is no longer possible, the
backwages shall be computed from the
time of their illegal termination up to the
finality of the decision.[21] The Court

explained the meaning of full backwages


in the case of Bustamante vs. NLRC:[22]
DECISION WAS FINAL AND EXECUTORY.
The Court does not see any reason to
depart from this rule in the case of herein
petitioners. The decision of the NLRC
dated March 26, 1996 has become final
and executory upon the dismissal by this
Court of Cottonways petition for certiorari
assailing said decision and the denial of its
motion for reconsideration. Said judgment
may no longer be disturbed or modified by
any court or tribunal. It is a fundamental
rule that when a judgment becomes final
and executory, it becomes immutable and
unalterable, and any amendment or
alteration which substantially affects a
final and executory judgment is void,
including the entire proceedings held for
that purpose. Once a judgment becomes
final and executory, the prevailing party
can have it executed as a matter of right,
and the issuance of a writ of execution
becomes a ministerial duty of the court.
CONTENTION: EEs refused to work
SC: We cannot concur with said
ruling. Petitioners' alleged failure to return
to work cannot be made the basis for their
termination. Such failure does not amount
to abandonment which would justify the
severance of their employment. To
warrant a valid dismissal on the ground of
abandonment, the employer must prove
the concurrence of two elements: (1) the
failure to report for work or absence
without valid or justifiable reason, and (2)
a clear intention to sever the employeremployee relationship.
IN THE CASE AT BAR: We note that
Cottonway, before finally deciding to
dispense with their services, did not give
the petitioners the opportunity to explain
why they were not able to report to work.
The records also do not bear any proof
that all the petitioners received a copy of
the letters. Cottonway merely claimed that
some of them have left the country and
some have found other employment.
But they really could not report back to
work because the case was pending NLRC.
CONTENTION:
It
appears
that
the
supposed notice sent by Cottonway to the
petitioners demanding that they report

back to work immediately was only a


scheme to remove the petitioners for
good. Petitioners failure to instantaneously
abide by the directive gave them a
convenient reason to dispense with their
services. This
the
Court
cannot
allow. Cottonway cited Article 223 of the
Labor Code providing that the decision
ordering the reinstatement of an illegally
dismissed
employee
is
immediately
executory even pending appeal as basis
for its decision to terminate the
employment of petitioners. We are not
convinced.
NOTE: The foregoing provision is intended
for the benefit of the employee and
cannot be used to defeat their own
interest. The law mandates the employer
to either admit the dismissed employee
back to work under the same terms and
conditions prevailing prior to his dismissal
or to reinstate him in the payroll to abate
further loss of income on the part of the
employee during the pendency of the
appeal. But we cannot stretch the
language of the law as to give the
employer the right to remove an
employee who fails to immediately comply
with the reinstatement order, especially
when there is reasonable explanation for
the failure. If Cottonway were really
sincere in its offer to immediately
reinstate petitioners to their former
positions, it should have given them
reasonable time to wind up their current
preoccupation or at least to explain why
they could not return to work at
Cottonway at once. Cottonway did not do
either. Instead, it gave them only five days
to report to their posts and when the
petitioners failed to do so, it lost no time in
serving them their individual notices of
termination.
RULING: PETITION GRANTED.

COLLEGE
OF
CONCEPTION v NLRC

IMMACULATE

FACTS:
Petitioner College of
the
Immaculate
Conception, through its former President
Rev. Fr. Antonio A.Mangahas, Jr., appointed
respondent Atty. Marius F. Carlos on June
1, 1995 as Acting Dean of the Department

of
Business
Administration
and
Accountancy. Thereafter,
in
a
letter
dated May 23, 1996, petitioner informed
respondent of his appointment as Dean of
the Department of Business, Economics
and
Accountancy
effective June
1,
1996 until May
31,
2000. Respondent
served as Dean of said department for the
designated term.
LETTER. Petitioner reminded respondent
that upon the expiration of his term as
Dean, he will be appointed as full-time
professor of Law and Accounting without
diminution of his teaching salary as
Dean. As promised, on June 1, 2000,
respondent was given eight (8) teaching
loads as full-time professor.
Respondent then requested for the
payment of overload pay, arguing that the
regular full time load of a faculty member
is only six. Petitioner, in a letter dated July
3, 2000, denied respondent's claim for
overload pay and explained that pursuant
to the Faculty Manual, a full time faculty
member, such as the respondent, is one
who teaches at least twenty-four units or
eight (8) teaching loads per semester in
the College Department.
REPLY. In the same letter, petitioner
requested the respondent to vacate the
Dean's office. Petitioner also directed
respondent to explain why no disciplinary
action should be taken against him for
engaging in the practice of law and
teaching law in another law school without
prior permission from the petitioner.
In his written reply, respondent admitted
that
he
was
teaching
at Araullo University without
written
permission because it was unnecessary. As
to his law practice, he explained that the
only case he was handling was a petition
for Declaration of Nullity of Marriage,
which was referred to him by petitioner's
Vice-President
for
Academic
Affairs. Respondent said that his demotion
from Dean of the Department to a Faculty
member was without legal basis and that
the non-renewal of his appointment as
Dean was arbitrary, capricious, unlawful,
tainted with abuse of discretion, and
injurious to his integrity and reputation.
Further, the subsequent appointment

of other personnel as
was violative of the law.

acting

Dean

CONTENTION: no demotion bec. the


appointment of him as a dean was only for
a fixed period of 4 yrs.
He was given 2 options but he failed to
reply. Thus he was informed that he will
NOT be assigned any teaching load for the
succeeding sem pursuant to a CHED
memo.
COMPLAINT. He filed a complaint before
the Regional Arbitration branch for
ULP,illegal dismissal and backwages.
LA: illegally dismissed; the LA then issued
a Writ of Execution,[9] directing the Sheriff
of the NLRC to implement his Decision
dated February 14, 2001. The Petitioner
opted to reinstate respondent in its payroll
only.[10]
NLRC:
set
aside
and
dismissed.
Respondents are ordered to reinstate
complainant as full time prof of Law and
Accountancy w/o back wages. It was clear
that the respondents contract was only 4
yrs.
CA: affirmed
ISSUE:
Does the subsequent reversal of the LA's
findings mean that respondent should
reimburse petitioner all the salaries and
benefits he received pursuant to the
immediate execution of the LA's erroneous
decision ordering his reinstatement as
Department Dean?
HELD:
NO. In Air Phil Corp. v Zamora, the SC
ruled:
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.
It is not disputed at this point that the LA
erred
in
ordering
respondent's

reinstatement as Dean. The NLRC ruled


that respondent should have been merely
reinstated as a full-time law professor,
because the term of his appointment as
Dean had long expired. However, such
mistake on the part of the LA cannot, in
any way, alter the fact that during the
pendency of the appeal of his decision, his
order for respondent's reinstatement as
Dean
was
immediately executory.
Article 223 of the Labor Code explicitly
provides that:
Art. 223. - Appeal. x x x
xxxx
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, even
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 therein. (Emphasis
supplied)

THEREFORE, petitioner could not validly


insist that it is entitled to reimbursement
for the payment of the salaries of
respondent pursuant to the execution of
the LA's decision by simply arguing that
the LA's order for reinstatement is
incorrect. The pertinent law on the matter
is not concerned with the wisdom or
propriety
of
the
LA's
order
of
reinstatement, for if it was, then it should
have provided that the pendency of an
appeal should stay its execution. After all,
a decision cannot be deemed irrefragable
unless it attains finality.
OPTION OF PAYROLL REINSTATEMENT.
x x x [E]ven 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. (Emphasis in the original; italics
and underscoring supplied). refund
doctrine in Genuino case has illogical and
unjust effects. Even outside the theoretical
trappings of the discussion and into the
mundane realities of human experience,
the refund doctrine easily demonstrates
how a favorable decision by the Labor
Arbiter could harm, more than help, a
dismissed employee.
IN THE CASE AT BAR: there is even more
reason to hold the employee entitled to
the salaries he received pending appeal,
because the NLRC did not reverse the LA's
order of reinstatement, but merely
declared the correct position to which
respondent is to be reinstated, i.e., that of
full-time professor, and not as Dean.
NOTE: Moreover, it bears stressing that
the manner of immediate reinstatement,
pending appeal, or the promptness thereof
is immaterial, as illustrated in the
following two scenarios:
Situation No. 1. (As in the cases of Air
Philippines
Corporation and International
Container Terminal Services, Inc.) The LA
ruled in favor of the dismissed employee
and ordered his reinstatement. However,
the employer did not immediately comply
with the LA's directive. On appeal, the
NLRC reversed the LA and found that there
was
no
illegal
dismissal.
In
this
scenario, We ruled that the employee is
entitled to payment of his salaries and
allowances pending appeal.
Situation No. 2. (As in the present case)
The LA ruled in favor of the dismissed
employee and ordered the latter's
reinstatement. This time, the employer
complied by reinstating the employee in
the payroll. On appeal, the LA's ruling was
reversed, finding that there was no case of
illegal dismissal but merely a temporary
sanction, akin to a suspension. Here, We
also must rule that the employee cannot
be required to reimburse the salaries he
received because if he was not reinstated
in the payroll in the first place, the ruling
in situation no. 1 will apply, i.e., the

employee is entitled to payment of his


salaries and allowances pending appeal.
Thus, either way we look at it, at the end
of the day, the employee gets his salaries
and allowances pending appeal. The only
difference lies as to the time when the
employee gets it.
RULING: PETITION DENIED.

GARCIA, ET AL. v KJ COMML


FACTS:
Respondent KJ Commercial is a sole
proprietorship. It owns trucks and engages
in the business of distributing cement
products.
On
different
dates,
KJ
Commercial employed as truck drivers and
truck helpers petitioners Cesar V. Garcia,
Carlos Razon, Alberto De Guzman, Tomas
Razon, Omer E. Palo, Rizalde Valencia,
Allan Basa, Jessie Garcia, Juanito Paras,
Alejandro Orag, Rommel Pangan, Ruel
Soliman,
and
Cenen
Canlapan
(petitioners).
On 2 January 2006, petitioners demanded
for a P40 daily salary increase. To pressure
KJ Commercial to grant their demand, they
stopped working and abandoned their
trucks at the Northern Cement Plant
Station in Sison, Pangasinan. They also
blocked other workers from reporting to
work.
COMPLAINT. Petitioners filed a complaint
re illegal dismissal, underpayment of
salary and non-paymt of SIL.
LA: petitioners were illegally dismissed
NLRC: dismissed the appeal; Filed with
respondents-appellants
Appeal
Memorandum is a Motion to Reduce
Appeal
Bond
and
a
cash
bond
ofP50,000.00 only. x x x
We find no merit on [sic] the respondentsappellants Motion. It must be stressed
that under Section 6, Rule VI of the 2005
Revised Rules of this Commission, a

motion to reduce bond shall only be


entertained when the following requisites
concur:
1. The motion is founded on meritorious
ground; and
2. A bond of reasonable amount in relation
to the monetary award is posted.
Respondents-appellants insinuation that
no surety company can finish the
processing of a surety bond in ten days
time is not worthy of belief as it is contrary
to ordinary business experience. What is
obvious is that respondents-appellants are
not willing to accept the usual conditions
of a surety agreement that is why no
surety bond could be processed. The
reduction of the required bond is not a
matter of right o[n] the part of the movant
but lies within the sound discretion of the
NLRC upon showing of meritorious
grounds .
MR. KJ Commercial filed a motion 10 for
reconsideration and posted a P2,562,930
surety bond. In its 8 February 2010
Resolution, the NLRC granted the motion
and set aside the Labor Arbiters 30
October 2008 Decision.
CA: affirmed
CONTENTION:
finality

LAs

decision

reached

ISSUE: the Labor Arbiters 30 October


2008
Decision
became
final
and
executory; thus, the NLRCs 8 February
and 25 June 2010 Resolutions and the
Court of Appeals 29 April 2011 Decision
are void for lack of jurisdiction. Petitioners
claim that KJ Commercial failed to perfect
an appeal since the motion to reduce bond
did not stop the running of the period to
appeal.
HELD:
The petition is unmeritorious.
NOTE: This argument (which refers to
the above contention) cannot be
passed upon in this appeal, because
it was not raised in the tribunals a
quo. Well-settled is the rule that
issues not raised below cannot be

raised for the first time on appeal.


Thus, points of law, theories, and
arguments
not
brought
to
the
attention of the Court of Appeals
need not and ordinarily will not
be
considered
by
this
Court.
Petitioners allegation cannot be
accepted by this Court on its face; to
do so would be tantamount to a
denial of respondents right to due
process.
Furthermore, whether respondents were
able to appeal on time is a question of fact
that cannot be entertained in a petition for
review under Rule 45 of the Rules of Court.
In general, the jurisdiction of this Court in
cases brought before it from the Court of
Appeals is limited to a review of errors of
law allegedly committed by the court a
quo.18(Emphasis supplied)
LATE POSTING OF APPEAL BOND. KJ
Commercials filing of a motion to reduce
bond
and
delayed
posting
of
the P2,562,930 surety bond did not render
the Labor Arbiters 30 October 2008
Decision final and executory. The Rules of
Procedure of the NLRC allows the filing of
a motion to reduce bond subject to two
conditions: (1) there is meritorious ground,
and (2) a bond in a reasonable amount is
posted.
The NLRC has full discretion to grant or
deny the motion to reduce bond, 21 and it
may rule on the motion beyond the 10-day
period within which to perfect an appeal.
Obviously, at the time of the filing of the
motion to reduce bond and posting of a
bond in a reasonable amount, there is no
assurance whether the appellants motion
is indeed based on "meritorious ground"
and whether the bond he or she posted is
of a "reasonable amount." Thus, the
appellant always runs the risk of failing to
perfect an appeal.
IN THE CASE AT BAR: KJ Commercial filed a
motion to reduce bond and posted
a P50,000 cash bond. When the NLRC
denied its motion, KJ Commercial filed a
motion for reconsideration and posted the
full P2,562,930 surety bond. The NLRC
then
granted
the
motion
for
reconsideration. In any case, the rule that
the filing of a motion to reduce bond shall
not stop the running of the period to

perfect an appeal is not absolute. The


Court may relax the rule.
In Intertranz Container Lines, Inc. v.
Bautista,22 the Court held:
Jurisprudence tells us that in labor cases,
an appeal from a decision involving a
monetary award may be perfected only
upon the posting of a cash or surety bond.
The Court, however, has relaxed this
requirement under certain exceptional
circumstances
in
order
to
resolve
controversies on their merits. These
circumstances include: (1) fundamental
consideration of substantial justice; (2)
prevention of miscarriage of justice or of
unjust enrichment; and (3) special
circumstances of the case combined with
its legal merits, and the amount and the
issue involved.
GR: Appeal of the decision involving a
monetary award in labor cases may be
PERFECTED only upon posting of a cash or
surety bond.
EXCEPTIONS: "(a) counsels reliance on the
footnote of the notice of the decision of
the labor arbiter that the aggrieved party
may appeal within ten (10) working days;
(b)
fundamental
consideration
of
substantial justice; (c) prevention of
miscarriage of justice or of unjust
enrichment, as where the tardy appeal is
from a decision granting separation pay
which was already granted in an earlier
final
decision;
and
(d)
special
circumstances of the case combined with
its legal merits or the amount and the
issue involved."
IN THE CASE AT BAR: Here, petitioner
claims to have received the labor arbiters
Decision on April 6, 1993. On April 16,
1993,
it
filed,
together
with
its
memorandum on appeal and notice of
appeal, a motion to reduce the appeal
bond accompanied by a surety bond for
fifty thousand pesos issued by Prudential
Guarantee and Assurance, Inc. Ignoring
petitioners motion (to reduce bond),

Respondent Commission rendered its


assailed Resolution dismissing the appeal
due to the late filing of the appeal bond.
In Ong v CA, the Court held that the
bond requirement on appeals may be
relaxed
when
there
is
substantial
compliance with the Rules of Procedure of
the NLRC or when the appellant shows
willingness to post a partial bond.
In the present case, KJ Commercial
showed willingness to post a partial
bond.1wphi1 In fact, it posted a P50,000
cash bond. In Ong, the Court held that,
"Petitioner in the said case substantially
complied with the rules by posting a
partial surety bond of fifty thousand pesos
issued by Prudential Guarantee and
Assurance, Inc. while his motion to reduce
appeal bond was pending before the
NLRC."28Aside from posting a partial bond,
KJ Commercial immediately posted the full
amount of the bond when it filed its
motion for reconsideration of the NLRCs 9
March 2009 Decision.
RULING: CA DECISION AFFIRMED.
PFIZER, INC. v VELASCO
FACTS:
Private respondent Geraldine L. Velasco
was employed with petitioner PFIZER, INC.
as Professional Health Care Representative
since 1 August 1992. Sometime in April
2003, Velasco had a medical work up for
her
high-risk
pregnancy
and
was
subsequently advised bed rest which
resulted in her extending her leave of
absence. Velasco filed her sick leave for
the period from 26 March to 18 June 2003,
her vacation leave from 19 June to 20 June
2003, and leave without pay from 23 June
to 14 July 2003.
FIRST
SHOW-CAUSE
NOTICE.
While
Velasco was still on leave, PFIZER through
its Area Sales Manager, herein petitioner
Ferdinand
Cortez,
personally served
Velasco a "Show-cause Notice" dated 25

June 2003. Aside from mentioning about


an investigation on her possible violations
of
company
work
rules
regarding
"unauthorized deals and/or discounts in
money or samples and unauthorized
withdrawal and/or pull-out of stocks" and
instructing her to submit her explanation
on the matter within 48 hours from receipt
of the same, the notice also advised her
that she was being placed under
"preventive suspension" for 30 days or
from that day to 6 August 2003 and
consequently ordered to surrender the
following "accountabilities;" 1) Company
Car, 2) Samples and Promats, 3)
CRF/ER/VEHICLE/SOA/POSAP/MPOA
and
other related Company Forms, 4) Cash
Card, 5) Caltex Card, and 6) MPOA/TPOA
Revolving Travel Fund. The following day,
petitioner Cortez together with one Efren
Dariano retrieved the above-mentioned
"accountabilities"
from
Velascos
residence.
LETTER. She denied the charges alleging
that the transaction w/ the
Mercury Drug covered by a check in the
amount of P23,980 was merely to
accommodate 2 undisclosed patients of a
certain Dr. Renato Manalo. In support
thereto, Velasco attached the Doctors
letter and the affidavit of the latters
secretary.
SECOND SHOW-CAUSE NOTICE. On 12 July
2003, Velasco received a "Second Showcause Notice" informing her of additional
developments in their investigation.
According to the notice, a certain Carlito
Jomen executed an affidavit pointing to
Velasco as the one who transacted with a
printing shop to print PFIZER discount
coupons. Jomen also presented text
messages originating from Velascos
company issued cellphone referring to the
printing of the said coupons. Again,
Velasco was given 48 hours to submit her
written explanation on the matter. On 16
July 2003, Velasco sent a letter to PFIZER
via Aboitiz courier service asking for
additional time to answer the second
Show-cause Notice.

COMPLAINT. Velasco filed a complaint for


illegal suspension w/ MCs
LA: illegally dismissed ordering her
reinstatement w/ backwages and award of
damages.
NLRC: affirmed but the deleted the award
of damages
CA: granted
MR. Modified by ordering Pfizer to pay
respondent her wages from the date of
the LAs decision up to CA decision.
CONTENTION: In PFIZERs view, it should
no longer be required to pay wages
considering that (1) it had already
previously paid an enormous sum to
respondent under the writ of execution
issued by the Labor Arbiter; (2) it was
allegedly ready to reinstate respondent as
of July 1, 2005 but it was respondent who
unjustifiably refused to report for work; (3)
it would purportedly be tantamount to
allowing respondent to choose "payroll
reinstatement" when by law it was the
employer which had the right to choose
between actual and payroll reinstatement;
(4) respondent should be deemed to have
"resigned" and therefore not entitled to
additional backwages or separation pay;
and (5) this Court should not mechanically
apply Roquero but rather should follow the
doctrine in Genuino v. National Labor
Relations
Commission18 which
was
supposedly "more in accord with the
dictates of fairness and justice."19
ISSUE: Whether or not the Court of
Appeals
committed
a
serious
but
reversible error when it ordered Pfizer to
pay Velasco wages from the date of the
Labor Arbiters decision ordering her
reinstatement until November 23, 2005,
when the Court of Appeals rendered its
decision declaring Velascos dismissal
valid.13
HELD:

The petition is without merit.


At the outset, we note that PFIZERs
previous payment to respondent of the
amount of P1,963,855.00 (representing
her wages from December 5, 2003, or the
date of the Labor Arbiter decision, until
May 5, 2005) that was successfully
garnished under the Labor Arbiters Writ of
Execution dated May 26, 2005 cannot be
considered in its favor. Not only was this
sum legally due to respondent under
prevailing jurisprudence but also this
circumstance
highlighted
PFIZERs
unreasonable delay in complying with the
reinstatement order of the Labor Arbiter. A
perusal of the records, including PFIZERs
own submissions, confirmed that it only
required respondent to report for work on
July 1, 2005, as shown by its Letter 20 dated
June 27, 2005, which is almost two years
from the time the order of reinstatement
was handed down in the Labor Arbiters
Decision dated December 5, 2003.
NOTE: The provision of Article 223 is
clear that an award [by the Labor Arbiter]
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.
RATIONALE. The provision of Article 223 is
clear that an award [by the Labor Arbiter]
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 would certainly
betray and run counter to the very object
and intent of Article 223, i.e., the
immediate execution of a reinstatement
order. The reason is simple. An
application for a writ of execution
and its issuance could be delayed for
numerous
reasons.
A
mere

continuance or postponement of a
scheduled hearing, for instance, or an
inaction on the part of the Labor
Arbiter or the NLRC could easily delay
the issuance of the writ thereby
setting at naught the strict mandate
and noble purpose envisioned by
Article 223. In other words, if the
requirements of Article 224 [including
the
issuance
of
a
writ
of
execution] were to govern, as we so
declared
in Maranaw, then
the
executory nature of a reinstatement
order or award contemplated by
Article
223
will
be
unduly
circumscribed
and
rendered
ineffectual.
IN THE CASE AT BAR: PFIZER did not
immediately admit respondent back to
work which, according to the law, should
have been done as soon as an order or
award of reinstatement is handed down by
the Labor Arbiter without need for the
issuance of a writ of execution.
It would also seem that PFIZER waited for
the resolution of its appeal to the NLRC
and, only after it was ordered by the Labor
Arbiter
to
pay
the
amount
of P1,963,855.00
representing
respondents
full
backwages
from
December 5, 2003 up to May 5, 2005, did
PFIZER decide to require respondent to
report back to work via the Letter in June
2005.
REINSTATEMENT;
SAME
TERMS
AND
CONDITIONS. To reiterate, 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 or, at the
option of the employer, merely reinstated
in the payroll."
IN THE CASE AT BAR: Applying the
foregoing principle to the case before us, it
cannot be said that with PFIZERs June 27,
2005 Letter, in belated fulfillment of the
Labor Arbiters reinstatement order, it had
shown a clear intent to reinstate

respondent to her former position under


the same terms and conditions nor to a
substantially equivalent position. To begin
with, the return-to-work order PFIZER sent
respondent is silent with regard to the
position
or
the
exact
nature
of
employment that it wanted respondent to
take up as of July 1, 2005. Even if we
assume that the job awaiting respondent
in the new location is of the same
designation and pay category as what she
had before, it is plain from the text of
PFIZERs June 27, 2005 letter that such
reinstatement was not "under the same
terms and conditions" as her previous
employment, considering that PFIZER
ordered respondent to report to its main
office in Makati City while knowing fully
well that respondents previous job had
her stationed in Baguio City (respondents
place of residence) and it was still
necessary for respondent to be briefed
regarding her work assignments and
responsibilities, including her relocation
benefits.

NO
REASON
OR
JUSTIFICATION
RE
CHANGE
OF
POSITION
NOTE: Moreover, while the Court has
upheld the employers right to choose
between actually reinstating an employee
or merely reinstating him in the payroll,
we have also in the past recognized that
reinstatement might no longer be possible
under certain circumstances. In F.F. Marine
Corporation v. National Labor Relations
Commission,29 we had the occasion to
state:
It is well-settled that when a person is
illegally dismissed, he is entitled to
reinstatement without loss of seniority
rights and other privileges and to his full
backwages. In the event, however, that
reinstatement is no longer feasible, or if
the
employee
decides
not
be
reinstated, the employer shall pay him
separation pay in lieu of reinstatement.
Such a rule is likewise observed in the
case of a strained employer-employee
relationship or when the work or position
formerly held by the dismissed employee
no longer exists. In sum, an illegally

dismissed employee is entitled to: (1)


either reinstatement if viable or separation
pay if reinstatement is no longer viable,
and (2) backwages.30 (Emphasis supplied.)
In the case at bar, respondents
decision to claim separation pay over
reinstatement had no legal effect, not
only because there was no genuine
compliance by the employer to the
reinstatement order but also because
the employer chose not to act on said
claim.
If
it
was
PFIZERs
position
that
respondents
act
amounted
to
a
"resignation" it should have informed
respondent that it was accepting her
resignation and that in view thereof she
was not entitled to separation pay. PFIZER
did not respond to respondents demand
at all. As it was, PFIZERs failure to effect
reinstatement and accept respondents
offer to terminate her employment
relationship with the company meant that,
prior to the Court of Appeals reversal in
the November 23, 2005 Decision, PFIZERs
liability for backwages continued to accrue
for the period not covered by the writ of
execution dated May 24, 2005 until
November 23, 2005.
Ordinarily, the employer is required to
reinstate the employee during the
pendency of the appeal pursuant to Art.
223, paragraph 3 of the Labor Code
Again, NO refund pursuant Garcia v
PAL. Even if the decision of the LA
was reversed on appeal, the ER is
obliged to reinstate EE and pay
wages during the period of appeal up
to the reversal of the higher court.
RULING: CA RESOLUTION AFFIRMED

This is the 2015 Resolution.


In the Decision dated 4 June 2014, this
Court directed SLPI, Aris, SLC, Cesar Cruz,
and FAPI, collectively known as the
Corporations, to post P725 Million, in cash
or surety bond, within 10 days from the
receipt of the Decision. The Court further
nullified the Resolution of the National
Labor Relations Commission (NLRC) dated
19 December 2006 for being premature.
Aris permanently ceased operations on 9
October 1995 displacing 5,984 rank-andfile employees. On 26 October 1995, FAPI
was incorporated prompting former Aris
employees to file a case for illegal
dismissal on the allegations that FAPI was
a continuing business of Aris. SLC, SLP and
Cesar Cruz were impleaded as defendants
being major stockholders of FAPI and
officers of Aris, respectively.
LA: the dismissal of the 5,984 Aris EEs
illegal and awarded them monetary
benefits.
The Corporations filed a Notice of Appeal
with Motion to Reduce Appeal Bond. They
posted a P4.5 Million bond.
NLRC:
granted
and
ordered
the
Corporations to post additional P4.5M
bond
APPEAL. The 5,984 former Aris employees,
represented
by
Emilinda
Macatlang
(Macatlang petition), filed a petition for
review before the Court of Appeals
insisting that the appeal was not perfected
due to failure of the Corporations to post
the correct amount of the bond which is
equivalent to the judgment award.

SARA LEE PHILS, INC. v MACATLANG

While the case was pending before the


appellate court, the NLRC prematurely
issued an order setting aside the decision
of the Labor Arbiter for being procedurally
infirmed.

FACTS:

CA: post additional P1b appeal bond

SC DECISION: post P725M in cash or


surety bond
HELD:
MR not meritorious.
The Corporations score this Court for
failing to consider the ruling in McBurnie v.
Ganzon4 which purportedly required only
the posting of a bond equivalent to 10% of
the monetary award. The Corporations
gravely misappreciated the ruling in
McBurnie. The 10% requirement pertains
to the reasonable amount which the NLRC
would accept as the minimum of the bond
that should accompany the motion to
reduce bond in order to suspend the
period to perfect an appeal under the
NLRC rules. The 10% is based on the
judgment award and should in no case be
construed as the minimum amount of
bond to be posted in order to perfect
appeal. There is no room for a different
interpretation when McBurnie made it
clear that the percentage of bond set is
provisional, thus:
The foregoing shall not be misconstrued to
unduly hinder the NLRCs exercise of its
discretion, given that the percentage of
bond that is set by this guideline shall be
merely provisional. The NLRC retains its
authority and duty to resolve the motion
and determine the final amount of bond
that shall be posted by the appellant, still
in accordance with the standards of
"meritorious
grounds"
and
"reasonable amount." Should the
NLRC, after considering the motions
merit, determine that a greater
amount or the full amount of the
bond needs to be posted by the
appellant, then the party shall
comply accordingly. The appellant
shall be given a period of 10 days
from notice of the NLRC order within
which to perfect the appeal by
posting the required appeal bond.
The
Corporations
entered
into
a
compromise with some of the former Aris

employees which they designate as


Confession of Judgment. The Corporations
reason that a resort to judgment by
confession is the acceptable alternative to
a compromise agreement because of the
impossibility to obtain the consent to a
compromise of all the 5,984 complainants.
A
confession
of
judgment
is
an
acknowledgment that a debt is justly due
and cuts off all defenses and right of
appeal. It is used as a shortcut to a
judgment in a case where the defendant
concedes liability. It is seen as the written
authority of the debtor and a direction for
entry of judgment against the debtor.9
A compromise is a contract whereby the
parties, by making reciprocal concessions,
avoid a litigation or put an end to one
already commenced. It is an agreement
between two or more persons, who, for
preventing or putting an end to a lawsuit,
adjust their difficulties by mutual consent
in the manner which they agree on, and
which everyone of them prefers to the
hope of.
Article 227 of the Labor Code of the
Philippines
authorizes
compromise
agreements voluntarily agreed upon by
the parties, in conformity with the basic
policy of the State "to promote and
emphasize the primacy of free collective
bargaining and negotiations, including
voluntary arbitration, mediation and
conciliation, as modes of settling labor or
industrial disputes."14
CONFESSION OF JUDGMENT
The undersigned counsel, by virtue of the
special authority granted by HILLSHIRE
earlier attached as Annex "B" and made
an integral part hereof seeks the approval
of this Honorable Court of this Judgment
by Confession under the following terms
and conditions, to wit:
1. HILLSHIRE will pay to the 5,984
respondents (complainants) the total
amount of THREE HUNDRED FORTY TWO

MILLION TWO HUNDRED EIGHTY-FOUR


THOUSAND AND EIGHT HUNDRED PESOS
(PhP342,284,800.00) or at FIFTY SEVEN
THOUSAND
TWO
HUNDRED
PESOS
(PhP57,200.00) for each respondent
(complainant) inclusive of the attorneys
fees of EIGHT THOUSAND FIVE HUNDRED
EIGHTY PESOS (PhP8,580.00) which each
respondent (complainant) will actually pay
to their counsel of record as the total
consideration for the dismissal with
prejudice of all the pending cases before
this Honorable Court and all the cases
pending before the National Labor
Relations Commission against all the
petitioners.
Our Decision highlights the importance of
an appeal bond such that said amount
should be the base amount for negotiation
between
the
parties.
As
it
is,
the P342,284,800.00 compromise is still
measly compared to the P725 Million bond
we set in this case, as it only accounts to
approximately 50% of the reduced appeal
bond.
In Arellano v. Powertech Corporation,19 we
voided the P150,000.00 compromise for
the P2.5 Million judgment on appeal to the
NLRC. We note that the compromise is a
mere 6% of the contingent sum that may
be received by petitioners and the
minuscule
amount
is
certainly
questionable
because
it
does
not
represent a true and fair amount which a
reasonable agent may bargain for his
principal.
The complainants filed a motion for
reconsideration asking this Court to
modify its Decision on the ground that the
parties have entered into a compromise
agreement. The complainants justified
their acquiescence to the compromise on
the possibility that it will take another
decade before the case may be resolved
and attained finality. We beg to disagree
In our Decision, we have already directed
the NLRC to act with dispatch in resolving
the merits of the case upon receipt of the
cash or surety bond in the amount of P725

Million within 10 days from receipt of the


Decision. If indeed the parties want an
immediate and expeditious resolution of
the case, then the NLRC should be
unhindered with technicalities to dispose
of the case. Accepting an outrageously low
amount of consideration as compromise
defeats the complainants legitimate
claim.
In fine, we will not hesitate to strike down
a compromise agreement which is
unconscionable and against public policy.
RULING: DENIED MR AND DIRECTED NLRC
TO ACT WITH DISPATCH TO RESOLVE THE
MERITS OF THE CASE UPON PERFECTION
OF THE APPEAL.

WENPHIL v ABING
FACTS:
This case stemmed from a complaint for
illegal dismissal filed by the respondents
against Wenphil.

LA Geobel A. Bartolabac ruled8 that the


respondents had been illegally dismissed
by Wenphil. According to the LA, the
allegation of serious misconduct against
the respondents had no factual and legal
basis.9 Consequently,
LA
Bartolabac
ordered Wenphil to immediately reinstate
the respondents to their respective
positions or to equivalent ones, whether
actuall or in the payroll. Also, the LA
ordered Wenphil to pay the respondents
their backwages from February 3, 2000
until
the
date
of
their
actual
reinstatement.10
Wenphil appealed to the NLRC on April 16,
200111. In the meantime, the respondents
moved for the immediate execution of the
LAs December 8, 2000 decision.12
COMPROMISE AGREEMENT. Wenphil and
the
respondents
entered
into
a

compromise
agreement13 before
LA
Bartolabac.
They
agreed
to
the
respondents payroll reinstatement while
Wenphils appeal with the NLRC was
ongoing. Wenphil also agreed to pay the
accumulated salaries of the respondents
for the payroll period from April 5, 2001
until October 15, 2001.14 As for the
remaining payroll period starting October
16, 2001, Wenphil committed itself to
credit the respective salaries of the
respondents to their ATM payroll accounts
until such time that the questioned
decision of LA Bartolabac is either
modified, amended or reversed by the
Honorable
National
Labor
Relations
Commission.15
NLRC:
affirmed w/ modif instead of
ordering the respondents reinstatement,
the NLRC directed Wenphil to pay the
respondents their resp. separation pay at
the rate of 1 month salary for each yr of
service
CA: reversed; there was enough evid. that
the respondents are quilty of serious
misconduct thus their dismissal was for a
valid cause.
SC: denied the petition for review; they did
NOT file MR thus the decision was final
and executory.
MOTION FOR RECOMPUTATION. After the
SC Decision became final and executory,
the respondents filed w/ LA Bartolabac a
motion for recomputation and issuance of
writ of execution. granted and directed
Wenphil to pay each complainant their
salaries on resintatement
CONTENTION: they are no longer entitled
to backwages bec. of the compromise
agreement they executed.
NLRC: affirmed
CA: reversed the
prescribed a diff.com

NLRC

ruling

and

The CA ruled that the NLRC committed


grave abuse of discretion when it affirmed
the LAs computed period which was from
February 15, 2002 to November 8, 2002.
The CA cited the case of Pfizer v Velasco
where the Court ruled that even if the
order of reinstatement is reversed on
appeal, it is obligatory on the part of the
ER to reinstate and pay the dismissed EEs

wages during the period of appeal until


reversal by the higher court. The CA
construed this higher court to be the CA,
not the SC.
The CA reasoned out that it was a "higher
court" than the NLRC when it reversed the
NLRCs rulings; thus, the period for
computation
should
end
when
it
promulgated its decision reversing that of
the NLRC, and not on the date when the
SC affirmed its decision.
HELD:
Petition is denied.
An order of reinstatement is immediately
executory even pending appeal. The
employer has the obligation to reinstate
and pay the wages of the dismissed
employee during the period of appeal until
reversal by the higher court.
Since
the
decision
is
immediately
executory, it is the duty of the employer to
comply with the order of reinstatement,
which can be done either actually or
through payroll reinstatement. As provided
under Article 223 of the Labor Code, this
immediately executory nature of an order
of reinstatement is not affected by the
existence of an ongoing appeal. The
employer has the duty to reinstate the
employee in the interim period until a
reversal is decreed by a higher court or
tribunal.
Even outside the theoretical trappings of
the discussion and into the mundane
realities of human experience, the "refund
doctrine" easily demonstrates how a
favorable decision by the Labor Arbiter
could harm, more than help, a dismissed
employee. The employee, to make both
ends meet, would necessarily have to use
up the salaries received during the
pendency of the appeal, only to end up
having to refund the sum in case of a final
unfavorable decision. It is mirage of a
stop-gap leading the employee to a risky
cliff of insolvency.
We see the situation discussed above to
be present in the case before us as
Wenphil observed the mandate of Article
223 to immediately comply with the order
of reinstatement by the LA. On October
29, 2001, while Wenphils appeal with the

NLRC was pending, it entered into a


compromise
agreement
with
the
respondents. In this agreement, Wenphil
committed to reinstate the respondents in
its payroll. However, the commitment
came with a condition: Wenphil stipulated
that its obligation to pay the wages due to
the respondents would cease if the
decision of the LA would be "modified,
amended or reversed, by the NLRC.
EFFECT: Thus, when the NLRC rendered its
decision on the appeal affirming the LAs
finding that the respondents were illegally
dismissed, but modifying the award of
reinstatement to payment of separation
pay,
Wenphil
stopped
paying
the
respondents wages.
REINSTATEMENT
SALARIES.
The
reinstatement
salaries
due
to
the
respondents were, by their nature,
payment of unworked backwages. These
were salaries due to the respondents
because they had been prevented from
working despite the LA and the NLRC
findings that they had been illegally
dismissed.

2
RELIEFS.
We
point
out
that
reinstatement and backwages are two
separate reliefs available to an illegally
dismissed
employee.
The
normal
consequences of a finding that an
employee has been illegally dismissed are:
first, that the employee becomes
entitled to reinstatement to his
former position without loss of
seniority rights; and second, the
payment of backwages covers the
period running from his illegal
dismissal
up
to
his
actual
reinstatement.48 These two reliefs are
not inconsistent with one another
and the labor arbiter can award both
simultaneously.
NOTE:
Moreover,
the
relief
of
separation pay may be granted in lieu
of reinstatement but it cannot be a
substitute
for
the
payment
of
backwages.
In
instances
where
reinstatement is no longer feasible
because
of
strained
relations
between the employee and the
employer, separation pay should be
granted. In effect, an illegally dismissed

employee should be entitled to either


reinstatement if viable, or separation
pay if reinstatement is no longer be viable,
plus backwages in either instance.49 The
rationale for such policy of distinction was
vividly explained in Santos v. NLRC under
these terms:50
NOT INTERCHANGEABLE. Apparently,
when the NLRC changed the LAs decision
(specifically, the order to award separation
pay in lieu of reinstatement), Wenphil read
this to mean to be the "modification"
envisioned in the compromise agreement,
Wenphil likewise effectively concluded
that separation pay and backwages are
the same or are interchangeable reliefs.
This conclusion can be deduced from
Wenphils insistence not to pay the
respondents remaining backwages under
its erroneous reasoning that this was the
effect of the NLRCs order to Wenphil to
pay
separation
pay
in
lieu
of
reinstatement.
DISTINCTIONS:
SEPARATION PAY
It is granted where
reinstatement is no
longer
advisable
because of strained
relations
between
the employee and
the employer
The
basis
for
computing
separation pay is
usually the length
of the employees
past service,

BACKWAGES
Compensation that
should have been
earned but were not
collected
because
of
the
unjust
dismissal.
while
that
for
backwages is the
actual period when
the employee was
unlawfully
prevented
from
working.51

Had Wenphil really wanted to put a stop to


the running of the period for the payment
of the respondents backwages, then it
should have immediately complied with
the NLRCs order to award the employees
their
separation
pay
in
lieu
of
reinstatement. This action would have
immediately
severed
the
employeremployee relationship. However, the
records are bereft of any evidence that
Wenphil actually paid the respondents
separation pay. Thus, the employeremployee
relationship
between

Wenphil and the respondents never


ceased and the employment status
remained pending and uncertain until
the CA actually rendered its decision
that the respondents had not been
illegally dismissed. In the context of
the parties agreement, it was only at
this point that the payment of
backwages should have stopped.
COMPROMISE AGREEMENT. In the
present case, the parties compromise
agreement simply provided that Wenphils
obligation to pay the respondents
backwages shall end the moment the
NLRC modifies, amends or reverses the
illegal dismissal decision of LA Bartolabac.
On its face, there is nothing invalid with
such stipulation. Indeed, had the NLRC
reversed the LA, the obligation to pay
backwages would have stopped. The
NLRC, however, did not decree a reversal
of the finding of illegal dismissal. In fact, it
affirmed the illegal dismissal conclusion,
confining itself merely to a modification of
the consequences of the illegal dismissal
from reinstatement to the payment of
separation pay.
This "modification" of course we cannot
accept; the option under the legal policy is
solely limited to a ruling that the
respondents had not been illegally
dismissed. Otherwise, we would be
violating the Labor Codes policy entitling
illegally dismissed employees to their right
to backwages even during the period of
appeal.
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. It
settles 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 employees salaries. [emphasis


ours]
RULING: CA DECISION AFFIRMED W/
MODIF. THE PERIOD OF COMPUTATION OF
BACKWAGS OF RESPONDENTS SHD BE
FROM FEB. 16, 2002 UNTIL AUG 2003
WHEN THE CA PROMULGATED ITS
DECISION.