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work), the petitioners’ accrued wages should only be

computed until when they were supposed to report for


FROILAN M. BERGONIO, et al. v. SOUTH EAST ASIAN work per the return-to-work Memorandum.
AIRLINES and IRENE DORNIER
G.R. No. 195227 April 21, 2014 ISSUES:
BRION, J.: (1) Is the LA’s order for reinstatement of an illegally
ART. 223 JURISDICTION OF THE LABOR ARBITERS AND dismissed employee immediately executory even during
THE COMMISSION pendency of the employer’s appeal from the decision?

DOCTRINE: (2) Should the accrued wages be computed until


Under paragraph 3, Article 223 of the Labor Code, the LA’s December 17, 2008, when the CA reversed the illegal
order for the reinstatement of an employee found illegally dismissal findings of the LA or only until February 24, 2006,
dismissed is immediately executory even during pendency when the petitioners were supposed to report for work?
of the employer’s 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, SC RULING:
at the employer’s option, merely reinstating the employee (1) YES. Under paragraph 3, Article 223 of the Labor Code,
in the payroll until the decision is reversed by the higher the LA’s order for the reinstatement of an employee found
court. Failure of the employer to comply with the illegally dismissed is immediately executory even during
reinstatement order, by exercising the options in the pendency of the employer’s appeal from the decision.
alternative, renders him liable to pay the employee’s Under this provision, the employer must reinstate the
salaries. employee – either by physically admitting him under the
conditions prevailing prior to his dismissal, and paying his
FACTS: wages; or, at the employer’s option, merely reinstating the
Petitioners filed before the LA a complaint for illegal employee in the payroll until the decision is reversed by
dismissal and illegal suspension with prayer for the higher court. Failure of the employer to comply with
reinstatement against respondents South East Asian the reinstatement order, by exercising the options in the
Airlines (SEAIR) and Irene Dornier as SEAIR’s President. alternative, renders him liable to pay the employee’s
salaries.
LA RULING: LA found the petitioners illegally dismissed Otherwise stated, a dismissed employee whose case was
and ordered the respondents, among others, to favorably decided by the LA is entitled to receive wages
immediately reinstate the petitioners with full backwages. pending appeal upon reinstatement, which reinstatement
is immediately executory. Unless the appellate tribunal
NLRC RULING: NLRC dismissed the respondents’ appeal for issues a restraining order, the LA is duty bound to
non-perfection. The NLRC likewise denied the implement the order of reinstatement and the employer
respondents’ MR, prompting the respondents to file has no option but to comply with it.
before the CA a petition for certiorari. Moreover, and equally worth emphasizing, is that an order
of reinstatement issued by the LA is self-executory, i.e.,
CA RULING: CA rendered its decision (on the illegal the dismissed employee need not even apply for and the
dismissal ruling of the LA) partly granting the respondents’ LA need not even issue a writ of execution to trigger the
petition, declaring the dismissal valid and awarded the employer’s duty to reinstate the dismissed employee.
petitioners P30,000.00 as nominal damages for the After the LA’s decision is reversed by a higher tribunal, the
respondents’ failure to observe due process. employer’s duty to reinstate the dismissed employee is
effectively terminated. This means that an employer is no
The CA agreed that the reinstatement aspect of the LA’s longer obliged to keep the employee in the actual service
decision is immediately executory even pending appeal, or in the payroll. The employee, in turn, is not required to
such that the employer is obliged to reinstate and pay the return the wages that he had received prior to the reversal
wages of the dismissed employee during the period of of the LA’s decision.
appeal until the decision (finding the employee illegally The reversal by a higher tribunal of the LA’s finding (of
dismissed including the reinstatement order) is reversed illegal dismissal), notwithstanding, an employer, who,
by a higher court. Applying this principle, the CA noted despite the LA’s order of reinstatement, did not reinstate
that the petitioners’ accrued wages could have been the employee during the pendency of the appeal up to the
properly computed until the date of the CA’s decision reversal by a higher tribunal may still be held liable for the
finding the petitioners validly dismissed. accrued wages of the employee, i.e., the unpaid salary
accruing up to the time the higher tribunal reverses the
Thus, the CA declared that, given this peculiar decision.32 The rule, therefore, is that an employee may
circumstance (of the petitioners’ failure to report for 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 LA’s decision.
By way of exception to the above rule, 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.

(2) 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 employer’s unjustified act or omission. Note that
under the second test, the delay must be without the
employer’s fault. If the delay is due to the employer’s
unjustified refusal, the employer may still be required to
pay the salaries notwithstanding the reversal of the LA’s
decision.
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 LA’s 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 non-execution 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
LA’s May 31, 2005 decision before it was reversed in the
CA’s decision.
Second, the cause of the delay –whether the delay was not
due to the employer’s unjustified act or omission. We There was negotiation between Union and Jardine under
answer this test in the negative; we find that the delay in NCMB, and parties reached an amicable settlement. In the
the execution of the reinstatement pending appeal was settlement, the petitioners accepted their redundancy pay
due to the respondents’ unjustified acts. For one, the without prejudice to their right to question the legality of
respondents filed several pleadings to suspend the their dismissal with the NLRC.
execution of the LA’s reinstatement order. These
pleadings, to our mind, show a determined effort on the Jardine paid the petitioners a separation package
respondents’ part to prevent or suspend the execution of composed of their severance pay, plus their grossed up
the reinstatement pending appeal. transportation allowance.
The respondents did not sufficiently notify the petitioners
of their intent to actually reinstate them; neither did the On June 1, 1999, the petitioners and the Union filed a
respondents give them ample opportunity to comply with complaint against Jardine with the NLRC for illegal
the return-to-work directive. dismissal and unfair labor practice.**Labor Arbiter - LA
Lastly, the petitioners continuously and actively pursued ruled in Union’s favor. In its decision, they held that the
the execution of the reinstatement aspect of the LA’s hiring of contractual employees to replace the petitioners
decision, i.e., by filing several motions for execution of the directly contradicts the concept of redundancy which
reinstatement order, and motion to cite the respondents involves the trimming down of the workforce because a
in contempt and re-computation of the accrued wages for task is being carried out by too many people. LA explained
the respondents’ continued failure to reinstate them. that the company’s action was a circumvention of the right
These facts altogether show that the respondents were of the petitioners to security of tenure.- it was error for
not at all sincere in reinstating the petitioners. These facts Jardine to simply lump together the seven petitioners as
– when taken together with the fact of delay – reveal the employees whose positions have become redundant
respondents’ obstinate resolve and willful disregard of the without explaining why their respective positions
immediate and self-executory nature of the reinstatement became superfluous in relation to the other positions and
aspect of the LA’s decision. employees of the company.**NLRC - dismissed the
appeals and affirmed the LA’s decision in its entirety**CA
- CA reversed the LA’s and the NLRC’s rulings, and granted
Jardine’s petition for certiorari.- CA found that Jardine’s
EUGENE S. ARABIT, EDGARDO C. SADSAD, LOWELL C. act of hiring contractual employees in replacement of the
FUNTANOZ, GERARDO F.PUNZALAN, FREDDIE M. petitioners does not run counter to the argument that
MENDOZA, EMILIO B. BELEN, VIOLETA C. DIUMANO their positions are already superfluous. According to the
andMB FINANCE EMPLOYEES ASSOCIATION FFW CHAPTER CA, the hiring of contractual employees is a management
(FEDERATION OF FREEWORKERS), Petitioners,vs.JARDINE prerogative that Jardine has the right to exercise. In the
PACIFIC FINANCE, INC. (FORMERLY MB FINANCE), absence of any showing of malice or arbitrariness on the
Respondent.[G.R. No. 181719, April 21, 2014 part of Jardine in implementing its redundancy program,
FACTS: the courts must not interfere with the company’s exercise
of a bona fide management decision. - CA further held that
Petitioners were former regular employees of Jardine successfully established that for the years 1996 to
respondent Jardine Pacific Finance, Inc.(formerly MB 1998, the company incurred serious losses. The appellate
Finance). Who were also officers and members of MB court also observed that the reduction in the number of
Finance Employees Association-FFW Chapter (the Union) -- workers, made necessary by the introduction of the
-- a legitimate labor union and the sole exclusive services of an independent contractor, is justified when
bargaining agent of the employees of Jardine. undertaken to implement more economic and efficient
methods of production.
Due to financial losses, Jardine decided to reorganize
and implement a redundancy program among its ISSUE: WON CA correctly rule that the NLRC committed
employees. The petitioners were among those grave abuse of discretion when it found that Jardine validly
affected by the redundancy program. Jardine thereafter terminated the petitioners’ employment because of
hired contractual employees to undertake the functions redundancy
these employees used to perform.
RULING: SC Granted the petition. it stated that: We cannot
The Union filed a notice of strike with the National accept Jardine’s shallow understanding of the concepts of
Conciliation and Mediation Board(NCMB), questioning the redundancy and retrenchment in determining the validity
termination of employment of the petitioners who were of the severance of an employer-employee relationship.
also union officers. The Union alleged unfair labor practice The fact that they are found together in just one provision
on the part of Jardine, as well as discrimination in the does not necessarily give rise to the conclusion that the
dismissal of its officers and members. difference between them is immaterial. Redundancy exists
where the services of an employee are in excess of what is Petitioner corporation is organized and operating under
reasonably demanded by the actual requirements of the and by virtue of the laws of the Republic of the Philippines.
enterprise. A position is redundant where it is superfluous, It is a holding company that owns shares in project
and superfluity of a position or positions may be the companies such as Mirant Sual Corporation and Mirant
outcome of a number of factors, such as over hiring of Pagbilao Corporation (Mirant Pagbilao) which operate and
workers, decreased volume of business, or dropping of a maintain power stations located in Sual, Pangasinan and
particular product line or service activity previously Pagbilao, Quezon, respectively. Petitioner corporation and
manufactured or undertaken by the enterprise. its related companies maintain around 2,000 employees
Retrenchment, on the other hand, is used interchangeably detailed in its main office and other sites. Petitioner
with the term "lay-off." It is the termination of corporation had changed its name to CEPA Operations in
employment initiated by the employer through no fault of 1996 and to Southern Company in 2001. In 2002, Southern
the employee’s and without prejudice to the latter, Company was sold to petitioner Mirant whose corporate
resorted to by management during periods of business parent is an Atlanta-based power producer in the United
recession, industrial depression, or seasonal fluctuations, States of America. Petitioner corporation is now known as
or during lulls occasioned by lack of orders, shortage of Team Energy Corporation.
materials, conversion of the plant for a new production
program or the introduction of new methods or more Petitioner Edgardo A. Bautista (Bautista) was the President
efficient machinery, or of automation. Simply put, it is an of petitioner corporation when respondent was
act of the employer of dismissing employees because of terminated from employment.
losses in the operation of a business, lack of work, and
considerable reduction on the volume of his business, a Respondent was hired by Mirant Pagbilao on January 3,
right consistently recognized and affirmed by this Court. In 1994 as its Logistics Officer. In 2002, when Southern
the case at bench, respondents did not dispute that after Company was sold to Mirant, respondent was already a
laying-off complainants herein, they engaged the services Supervisor of the Logistics and Purchasing Department of
of an agency to perform the tasks use (sic) to be done by petitioner. At the time of the severance of his
complainants. This is [in direct] contradiction to the employment, respondent was the Procurement Supervisor
concept of redundancy which precisely requires the of Mirant Pagbilao assigned at petitioner corporations
trimming down of the [workforce] because a task is being corporate office. As Procurement Supervisor, his main task
carried out by just too many people. The subsequent was to serve as the link between the Materials
contracting out to an agency the functions or duties that Management Department of petitioner corporation and its
used to be the domain of individual complainants herein is staff, and the suppliers and service contractors in order to
a circumvention of their constitutional rights to security of ensure that procurement is carried out in conformity with
tenure, and therefore illegal.** set policies, procedures and practices. In addition,
respondent was put in charge of ensuring the timely,
Aside from the guidelines for the selection of employees economical, safe and expeditious delivery of materials at
who will be terminated, the Court, in Asian Alcohol Corp. the right quality and quantity to petitioner corporations
v. NLRC, the Guidelines in implementing redundancy are as plant. Respondent was also responsible for guiding and
follows: For the implementation of a redundancy program overseeing the welfare and training needs of the staff of
to be valid, the employer must comply with the following the Materials Management Department. Due to the
requisites: (1) written notice served on both the nature of respondents functions, petitioner corporation
employees and the Department of Labor and Employment considers his position as confidential.
at least one month prior to the intended date of
retrenchment; (2) payment of separation pay equivalent Respondent filed a complaint for illegal dismissal and
to at least one month pay or at least one month pay for money claims for 13th and 14th month pay, bonuses and
every year of service, whichever is higher; (3) good faith in other benefits, as well as the payment of moral and
abolishing the redundant positions; and (4) fair and exemplary damages and attorneys fees. It is the
reasonable criteria in ascertaining what positions are to be contention of respondent that he was illegally dismissed
declared redundant and accordingly abolished. by petitioner corporation due to the latters non-
compliance with the twin requirements of notice and
G.R. No. 181490 : April 23, 2014 hearing. He asserts that while there was a notice charging
him of unjustified refusal to submit to random drug
MIRANT (PHILIPPINES) CORPORATION, ET. AL., testing, there was no notice of hearing and petitioner
Petitioners, v. JOSELITO A. CARO, Respondent. corporations investigation was not the equivalent of the
hearing required under the law which should have
VILLARAMA, JR., J.: accorded respondent the opportunity to be heard.

FACTS: In a decision dated August 31, 2005, Labor Arbiter Aliman


D. Mangandog found respondent to have been illegally
dismissed. The Labor Arbiter also found that the quitclaim First. The policy was not clear on what constitutes
purportedly executed by respondent was not a bona fide unjustified refusal when the subject drug policy prescribed
quitclaim which effectively discharged petitioners of all the that an employees unjustified refusal to submit to a
claims of respondent in the case at bar. If at all, the Labor random drug test shall be punishable by the penalty of
Arbiter considered the execution of the quitclaim as a termination for the first offense. To be sure, the term
clear attempt on the part of petitioners to mislead its unjustified refusal could not possibly cover all forms of
office into thinking that respondent no longer had any refusal as the employees resistance, to be punishable by
cause of action against petitioner corporation. termination, must be unjustified. To the mind of the Court,
it is on this area where petitioner corporation had fallen
On appeal to the NLRC, petitioners alleged that the short of making it clear to its employees as well as to
decision of the Labor Arbiter was rendered with grave management as to what types of acts would fall under the
abuse of discretion for being contrary to law, rules and purview of unjustified refusal. Even petitioner
established jurisprudence, and contained serious errors in corporations own Investigating Panel recognized this
the findings of facts which, if not corrected, would cause ambiguity.
grave and irreparable damage or injury to petitioners. The
NLRC, giving weight and emphasis to the inconsistencies in Crisanto F. Castro, Jr. vs Ateneo De Naga University, et
respondents explanations, considered his omission as al., G.R. No. 175293, 23 July 2014
unjustified refusal in violation of petitioner corporations
drug policy. Respondent filed a motion for
reconsideration, while petitioners filed a motion for partial Facts: started his employment with respondent Ateneo
reconsideration of the NLRC decision. In a Resolution de Naga University (University) in the first semester of
dated June 30, 2006, the NLRC denied both motions. school year 1960-1961. At the time of his dismissal, he
was a regular and full-time faculty member of the
ISSUES: University's Accountancy Department in the College of
Commerce with a monthly salary of P29,846.20.3
1) Whether the petition for certiorari filed by respondent Allegedly, he received on February 22, 2000 a letter from
with the CA should have been summarily dismissed as it respondent Fr. Joel Tabora, SJ., the University President,
lacked the requisite verification and certification against informing him that his contract (which was set to expire
forum shopping under Sections 4 and 5, Rule 7 of the on May 31, 2000) would no longer be renewed.4 After
Rules; several attempts to discuss the matter with Fr. Tabora in
person, and not having been given any teaching load or
2) Whether respondent was illegally dismissed other assignments effective June 2000, he brought his
complaint for illegal dismissal.
HELD:
The University denied the allegation of illegal dismissal,
LABOR LAW
and maintained that the petitioner was a participant and
regular contributor to the Ateneo de Naga Employees
We agree with the disposition of the appellate court that
Retirement Plan (Plan); that upon reaching the age of 60
there was illegal dismissal in the case at bar.
years on June 26, 1999, he was deemed automatically
retired under the Plan; and that he had been allowed to
While the adoption and enforcement by petitioner
teach after his retirement only on contractual basis.
corporation of its Anti-Drugs Policy is recognized as a valid
exercise of its management prerogative as an employer,
LA Quinones, explaining that Article 223 of the Labor
such exercise is not absolute and unbridled. Managerial
Code granted to the employer the option to implement
prerogatives are subject to limitations provided by law,
either a physical or a payroll reinstatement, and that,
collective bargaining agreements, and the general
therefore, the respondents must first exercise the option
principles of fair play and justice. In the exercise of its
regardless of the petitioner's employment with the
management prerogative, an employer must therefore
Government, denied the petitioner's motion, but ordered
ensure that the policies, rules and regulations on work-
the respondents to exercise the option of either actual or
related activities of the employees must always be fair and
payroll reinstatement of the petitioner. NLRC affirmed
reasonable and the corresponding penalties, when
with modification. But on MR, it reversed its decision and
prescribed, commensurate to the offense involved and to
held that his execution of the receipt and quitclaim
the degree of the infraction. The Anti-Drugs Policy of
respecting his benefits under the Plan estopped the
Mirant fell short of these requirements.
petitioner from pursuing other claims arising from his
employer-employee relationship with the University.
Petitioner corporations subject Anti-Drugs Policy fell short
of being fair and reasonable.
CA dismissed the petitioner's petition for certiorari on
the ground of its having been rendered moot and
academic by the aforecited August 31, 2005 decision of
the NLRC.

Issue: whether or not the petitioner's claim for the


payment of accrued salaries and benefits for the period
that he was not reinstated was rendered moot and
academic by: (a) his receipt of the retirement benefits
and execution of the corresponding receipt and quitclaim
in favor of the respondents; and (b) the dismissal of his
complaint for illegal dismissal by the NLRC.

Held: The Court holds that the order of reinstatement of


the petitioner was not rendered moot and academic. He
remained entitled to accrued salaries from notice of the
LA’s order of reinstatement until reversal thereof. In Islriz
Trading v. Capada, we even clarified that the employee
could be barred from claiming accrued salaries only
when the failure to reinstate him was without the fault of
the employer.

Considering that the respondents reinstated the


petitioner only in November 2002, and that their inability
to reinstate him was without valid ground, they were
liable to pay his salaries accruing from the time of the
decision of the LA (i.e., September 3, 2001) until his
reinstatement in November 2002. It did not matter that
the respondents had yet to exercise their option to
choose between actual or payroll reinstatement at that
point because the order of reinstatement was
immediately executory.