REINSTATEMENT

The normal consequences of a finding that an employee has been illegally dismissed [there beingno
valid cause], are that the employee becomes entitled to reinstatement to his former position without
loss of seniority and the payment of backwages.

Reinstatement restores the employee who was unjustly dismissed to the position from which he was
removed, that is, to his status quo ante dismissal; while the grant of backwages allows the same
employee to recover from the employer that which he had lost by way of wages as a result of his
dismissal.

Twin remedies:

1. Reinstatement
2. Payment of backwages

- Make the dismissed employee whole whi can then look forward to continued employment. Thus, do
these two remedies give meaning and substance to the constitutional right of labor to security of
tenure.

When the employer is guilty of unfair labor practice, the Ministry of Labor’s order for reinstatement
follows as a matter of course. The employer guilty of unfair labor practice, may be required to reinstate
the worker with full backwages.

Reinstatement – means restoration to a state of condition from which one has been removed or
separated. One who is reinstated assumes the position he occupied prior to the dismissal and is,
ordinarily, entitled only to the last salary in that position.

In an order of reinstatement, the employer may not be compelled to reemploy more persons than the
economic operation of his business requires. If the employer’s commercial or financial cirmcumstances
have changed, the court cannot compel the employer, despite the latter’s unfair labor practice, to
reinstate such number of employees as may exceed his needs under the altered conditions.

If the employer has already hired a replacement, reinstatement of the illegally dismissed employee to
his former position would be neither fair nor just. The employer’s remedy is to reinstate the employee
to a substantially equivalent position.

Reinstatement of an illegally dismissed employee will not be insisted upon an employer who, while the
illegal dismissal complaint was pending, had to resort to retrenchment due to losses adequately proven.

Other instances justifying nonreinstatement:

Injury or disability of the employee
Dissolution of the company
Merger of the companies
Sale of the company
Closure of the company
Insolvency of the company
Abolition of the position
Difficulty in enforcing the employee’s reinstatement because the employer is in a foreign country
Recession
Attainment of retirement age

“Strained Relations” may be invoked only against employees whose positions demand trust and
confidence, or whose differences with their employer are of such nature or degree as to preclude
reinstatement.

The grant of separation pay in lieu of reinstatement is a substitute for the immediate and continued re
employment with the employer.

Payment of backwages is a form of relief that restores the income that was lost by reason of unlawful
dismissal; separation pay, in contrast, is oriented towards the immediate future, the transitional period
the dismissed employee must undergo before locating a replacement job.

The remedy of refusal of the employer to reinstate the employee despite several writs of execution is
not the grant of additional backwages to serve as damages but to file a motion to cite the employer for
contempt.

The reinstatement may be actual or merely in payroll, at the employer’s option.

Payroll Reinstatement simply mean that although not admitted back to work, the employee would
nevertheless be included in the payroll and entitled to receive her salary and other benefits as if she
were in fact working.

If the Labor Arbiter has not ordered reinstatement of the employee, the NLRC cannot award backwages
for the period when the appeal was pending at the NLRC.
Reinstate during appeal is warranted only when the labor arbiter has ruled that the dismissed employee
should be reinstated.

Although the reinstatement aspect of the decision is immediately executor, it does not follow that it is
self-executory. There must be a writ of execution which may be issued motu proprio or on the motion of
the interested party.

Moral damages may be awarded to compensate one for diverse injuries such as mental anguish,
besmirched reputation, wounded feelings and social humiliation.

Moral Damages is recoverable only where the dismissal or suspension of the employee was attended by
bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to
morals, good customs or public policy.

Doctrine of piercing the corporate veil applies only in three cases:

1. Defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an
existing obligation;
2.Fraud cases or when the corporate entity is used to justify wrong, protect fraud, or define crime; or
3.Alter ego cases where the corporation is so organized and controlled and its affairs are so conducted
as to make it merely an instrumentality, agenc, conduit or adjunct of another corporation.
Piercing the veil doctrine applies even to sole proprietorship. It is the act of holding behind the separate
and distinct personalities of juridical entities to perpetuate fraud, commit illegal acts, evade one’s
obligations that the equitable piercing doctrine was formulated to address and prevent.

It is the attempt to isolate themselves from and hide behind the supposed separate and distinct
personality so as to evade their liabilities is precisely what the classifies doctrine of piercing the veil of
corporate entity seeks to prevent.

Once an employee resigns and executes a quitclaim in favor of the employer, he is stopped from filing
any further money claim against the employer arising from his employment. However, when the
voluntariness of the execution of the quitclaim or release is put in issue or when it is proved that there is
an unwritten agreement entitling the employee to other remuneration or benefits, then such money
claim of the employee may still be given due course.

Requisites of effectual quitclaim:

1.The employee executes the deed of quitclaim voluntarily
2.There is no fraud or deceit on the part of any parties
3.The consideration of the quitclaim is credible and reasonable
4.The contract is not contrary to law, public order, public policy or morals or good custom or prejudicial
to a third person with a right recognized by law.

Dire necessity is not an acceptable ground for annulling the releases, especially since it has not been
shown that the employees had been forced to execute them.

ART. 300. TERMINATION BY EMPLOYEE

Resignation is the voluntary act of an employee who “finds himself” in a situation where he believes
that personal reason cannot be sacrificed in favor of the exigency of the service, then he has no other
choice but to dissociate himself from his employment.

Resignation is withdrawable even if the employee, has called it “irrevocable”. But after it is accepted or
approved by the employer, its withdrawal needs the employer’s consent.

A constructive discharge is a “quitting because continued employment is rendered impossible,

unreasonable or unlikely. As an offer involving a demotion in rank and a diminution in pay.

Constructive dismissal in other words, is an employer’s act amounting to dismissal but made to appear
as if were not. In fact, the employee who is the target of constructive dismissal may be allowed to keep
on coming to work. Constructive dismissal is a dismissal in disguise.

Ann employee may be deemed to have resigned from his position, and such “resignation” may be
accepted and made effective by the management although the employee did not mention the word
“resign” and/or “resignation”.

ART. 301. WHEN EMPLOYEMENT NOT DEEMED TERMINATED

Under At\rt. 301, the bona fide suspension of the operation of a business or undertaking for a period
not exceeding for six months, or the fulfillment by the employee of a military or civic duty does not
terminate employment.

The so-called “floating status” of an employee should last inly for a legally prescribed period of time.
When that floating status of an employee lasts for more than six months, he may be considered to have
been illegally dismissed from the service.

ART. 302. RETIREMENT

The retirement pay law under this article applies to private sector employees who have served the
employer establishment for atleast five years and reached age 60 or 65. It covers either full-time or part-
time employees, regular or non-regular.

Retirement – withdrawal from office, public station, business, occupation or public duty. It is the result
of a bilateral act of the parties, a voluntary agreement between the employer and the employee
whereby the latter, after reaching a certain age, agrees and or consents to sever his employment with
the former.

Two types of Retirement:

a. Compulsory – takes place at 65
b. Optional – primarily determined by the collective bargaining agreement or other employment
contract or employer’s retirement plan.