ARTICLE 223 Reinstatement Aspect of LAs decision

(5) G.R. Nos. 142732-33 December 4, 2007

the decision of the Labor Arbiter. The Court of Appeals then promulgated its decision denying due course to and dismissing the petitions. Issue: Whether or not the dismissal of Genuino was for a just cause and in accordance with due process. Held: The dismissal was for a just cause but lacked due process. The requirements of twin notices must be met. The two-notice requirement of the Labor Code is an essential part of the due process. The first notice informing the employee of the charges should neither be pro-forma nor vague. It should set out clearly what the employee is being held liable for. The employee should be afforded ample opportunity to be heard and not mere opportunity. Ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could not be in accordance with due process. While the Court held that Citibank failed to observe procedural due process, it never the less found Genuinos dismissal justified. While the bank gave genuine an opportunity to deny the truth of the allegations in writing and participate in the administrative investigation, the fact remains that the charges were too general to enable Genuino to intelligently and adequately prepare her defense. Article 282 (c) of the Labor Code provides that an employer may terminate an employment for fraud or willful breach of the trust reposed in him/her employer or duly authorized representative. In order to constitute as just cause for dismissal, loss of confidence should relate to acts inimical to interests of the employer. Also, the act complained of should have arisen from the performance of the employees duties. For loss of trust and confidence to be a valid ground for an employees dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant the employeess separation from work. As Assistant Vice-President of Citibanks Treasury Department, Genuino was tasked to solicit investments, and peso and dollar deposits for, and keep them in Citibank; and to sell and push for the sale of Citibanks financial products, such as MBS, for the account and benefit of Citibank. She held the position of trust and confidence. There is no way she could deny any knowledge of the Banks policies, nor her understanding of these policies as reflected

MARILOU S. GENUINO vs. NATIONAL LABOR RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA x - - - - - - - - - - - - - - - - - - - - - - -x G.R. Nos. 142753-54 CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA vs. NATIONAL LABOR RELATIONS COMMISSION and MARILOU GENUINO VELASCO, JR., J.: Facts: Genuino was employed by Citibank in January 1992 as Treasury Sales Division Head with the rank of Assistant VicePresident. On August 23, 1993, Citibank sent Genuino a letter charging her with knowledge and involvement in transactions which were irregular or event fraudulent. In the same letter, Genuino was informed she was under preventive suspension. On September 27, 1993, Citibank informed Genuino of the result of their investigation. It found that Genuino, together with Santos personally and actively participated through the use of facilities of Genuinos family corporation, Global Pacific in the diversion of bank clients funds to products of other companies that yielded higher interests than Citibank offers. And that Genuino and Santos realized substantial financial gains, all in violation of existing company policy and Corporation Code under which carries penal sanction. In view of the foregoing circumstances, Genuinos employment was terminated by Citibank on grounds of (1) serious misconduct, (2) willful breach of the trust reposed upon her by the bank, and (3) commission of a crime against the bank. Genuino filed before the Labor Arbiter a Complaint against Citibank for illegal suspension and illegal dismissal with damages and prayer for temporary restraining order and/or writ of preliminary injunction. The Labor Arbiter rendered a Decision finding the dismissal of Genuino to be without just cause. The NLRC reversed

in the survey done by the bank. She could not likewise feign ignorance of the businesses of Citibank, and of Global and Torrance. Assuming that Citibank did not engage in the same securities dealt with by Global and Torrance; nevertheless, it is to the interests of Citibank to retain its clients and continue investing in Citibank. Curiously, Genuino did not just dissuade the depositors from withdrawing their money from Citibank but was even instrumental in the transfers of moneys from Citibank to a competing bank through Global and Torrance, the corporations being controlled by her. Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal pursuant to Art.223, par. 3 of the Labor Code. If the decision of the Labor Arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid then, the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without the need of refund. Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC decision. (6) G.R. No. 164856, January 20, 2009 JUANITO A. GARCIA and ALBERTO J. DUMAGO vs. PHILIPPINE AIRLINES, INC. Facts: Philippine Airlines filed a case against its employees herein petitioners for allegedly caught in the act of sniffing shabu when a team of company security personnel and law enforcers raided the PAL Technical Centers Tool room Section. After due notice, PAL dismissed petitioner for transgressing companys Code of Discipline prompting them to file a Complaint for illegal dismissal which the Labor Arbiter (LA) in its decision ruled on their favor ordering PAL to immediately comply with the reinstatement aspect of the decision. Prior to the judgment, SEC placed PAL under Interim Rehabilitation Receiver who subsequently replaced by Permanent Rehabilitation Receiver. On appeal, NLRC

reversed said decision and dismissed petitioners complaint for lack of merit. Subsequently, LA issued a Writ of Execution respecting the reinstatement aspect of his decision. Respondent filed an Urgent Petition for Injunction with the NLRC. The NLRC affirmed the validity of the Writ and the Notice issued by LA but suspended and referred the action to the Rehabilitation Receiver for appropriate action. On appeal, the appellate court partially granted the petition and effectively reinstated the NLRC resolution insofar as it suspended the proceedings. By manifestation, respondent informed the Court that SEC issued an Order granting its request to exit from rehabilitation proceedings. Issue: Whether or not petitioner may collect their wages during the period between the LAs Order of reinstatement pending appeal and the NLRC decision overturning that of the LA, now that PAL has exited from rehabilitation proceedings. Held: A dismissed employee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the employer to comply therewith. The Court reaffirms the prevailing principle that even if the order of reinstatement of the LA 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 LAs 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 filing to exercise the options in the alternative, employer must pay the employees salaries. When reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive. (7) G.R. No. 173076, October 10, 2007

MT. CARMEL COLLEGE vs. JOCELYN RESUENA, EDDIE VILLALON, SYLVIA SEDAYON AND ZONSAYDA EMNACE CHICO-NAZARIO, J.: Facts: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner is not appealing the judgment itself but the manner of execution of the same. Petitioner Mt. Carmel College is a private educational institution. It is administered by the Carmelite Fathers at New Escalante, Negros Occidental. Respon dents were employees of petitioner. Respondents, together with several faculty members, nonacademic personnel, and other students, participated in a protest a ction against petitioner. Thereafter, petitioners Director, Rev. Fr. Modesto E. Malandac, issued a Memorandum to each of the respondents. The Memorandum directed respondents to explain in writing why they should not be dismissed for loss of trust and confidence for joining the protest action against the school administration. Petitioner maintained that respondents were occupying positions of highly confidential nature. After a hearing conducted by petitioners Fact-Finding Committee and submission of its Report on 25April 1998 recommending dismissal or suspension of respondents, petitioner issued written notices of termination to respondents on 7 May 1998. Respondents were terminated by petitioner on 15 May 1998. Respondents charged petitioner with illegal dismissal and claimed 13th month pay, separation pay, damages and attorneys fees. Labor Arbiter Drilon found that they were not illegally dismissed but ordered that they be awarded 13th month pay, separation pay and attorneys fees in the amount of P334,875.47. Upon appeal to the NLRC, the NLRC reversed the findings of the Labor Arbiter ruling that the termination of respondents was illegal and ordering the payment of back wages of respondents from 15 May 1998 up to 25 May 1999. It further directed the reinstatement of respondents or payment of separation pay, with back wages. This was affirmed by the Court of Appeals. ISSUES: (1) whether reinstatement in the instant case is selfexecutory and does not need a writ of execution for its enforcement; and (2) whether the continuing award of back wages is proper.

Held: An order for reinstatement must be specifically declared and cannot be presumed; like back wages, it is a separate and distinct relief given to an illegally dismissed employee. There being no specific order for reinstatement and the order being for complainants separation, there can be no basis for the award of salaries/back wages during the pendency of appeal. This Court had declared in the aforesaid case that reinstatement during appeal is warranted only when the Labor Arbiter himself rules that the dismissed employee should be reinstated. But this was precisely because on appeal to the NLRC, it found that there was no illegal dismissal; thus, neither reinstatement nor back wages may be awarded. An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and back wages. The normal consequences of respondents illegal dismissal, then, ar e reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages. Yupangco Cotton Mills, Inc. vs. CA (2002) Facts: Petitioner contended that a sheriff of the NLRC erroneously and un lawfully levied certain properties which it claims as its own. It filed a 3rd party claim with the Labor Arbiter and recovery of property and damages with the RTC. The RTC dismissed the case. In the CA, the court dismissed the petition on the ground of forum shopping and that the proper remedy was appeal in due course, not certiorari or mandamus. Petitioner filed a MFR and argued that the filing of a complaint for accion reinvindicatoria with the RTC was proper because it is a remedy specifically granted to an owner (whose properties were subject to a writ of execution to enforce a decision rendered in a labor dispute in which it was not a party). The MFR was denied. Hence, petitioner filed this appeal.

Issue: Whether the CA has jurisdiction over the case Held: YES. A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. Thus, a third party may avail himself of the following alternative remedies: a) File a third party claim with the sheriff of the Labor Arbiter, and b) If the third party claim is denied, the third party may appeal the denial to the NLRC. Even if a third party claim was denied, a third party may still file a proper action with a competent court to recover ownership of the property illegally seized by the sheriff. The filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the Regional Trial Court. And, the institution of such complaint will not make petitioner guilty of forum shopping.