G.R. No. 192924, November 26, 2014
PHILIPPINE AIRLINES, INC., Petitioner, v. REYNALDO V. PAZ, Respondent.
D E C I S I O N
WHEREFORE, judgment is hereby rendered:Unyielding, PAL appealed the foregoing decision to the National Labor Relations Commission (NLRC). Pending appeal, the respondent filed a motion for partial execution of the reinstatement aspect of the decision. The LA granted the said motion and issued a partial writ of execution on May 25, 2001.
1. Declaring that this Arbitration Branch has jurisdiction over the causes of action raised by the [respondent] in this case;
2. Declaring that the causes of action raised in the complaint in this case have not been barred by prior judgment of the Secretary of Labor and Employment in his Resolution of June 1, 1999;
3. Declaring that the termination of the services of the [respondent] was not for any just or authorized cause and also without due process and therefore illegal;
4. Ordering Philippine Airlines, Inc. to reinstate immediately upon receipt of this decision [respondent] Reynaldo V. Paz to his former position as commercial pilot without loss of seniority rights and other privileges and to pay him his full backwages inclusive of allowances and other benefits or their monetary equivalent computed from June 12, 1998 up to his actual reinstatement even pending appeal but the respondent has the option to actually reinstate [the respondent] to his former position or to reinstate him merely in payroll. As of September 5, 2000, the full backwages due to the [respondent] total P2,629,420.00;
5. Ordering Philippine Airlines, Inc. to pay the [respondent] the following:6. Ordering Philippine Airlines, Inc. to pay [the respondent] attorney’s fees equivalent to 10% of the whole monetary award (Art. III, Labor Code);
Productivity Pay (P22,383.62 x 27 months…… P604,357.74 Retirement Fund Contribution (P9,800.00 x 27 months)……………….. 264,600.00 PODF (P4,663.25 x 27 months)………………..... 125,907.75 Sick Leave (P3,000.62 x 42 days)……………….. 126,026.04 Vacation Leave (P3,000.62 x 42 days)………….. 125,026.04 Rice Subsidy (P600.00 x 27 months)……………. 16,200.00 13th Month Pay (P93,265.00 x 2 years)………….. 188,030.00 Longevity Pay (P500.00 x 2 years) ……………… 1,000.00
7. Ordering Philippine Airlines, Inc. to pay [the respondent] moral damages equivalent to Five Hundred Thousand Pesos (P500,00.00) and exemplary damages of Five Hundred Thousand Pesos (P500,000.00)
Indeed, other than [the respondent’s] self-serving assertions, he has failed to substantiate his claim that he was in Iligan City and that he reported for work a week after June 5, 1998. [PAL], on the other hand, has presented photographs of the complainant picketing [at the PAL’s] premises on June 15 & 26, 1998. x x xNotwithstanding the reversal of the LA decision, the respondent pursued his move for the issuance of a writ of execution, claiming that he was entitled to reinstatement salaries which he supposedly earned during the pendency of the appeal to the NLRC. On August 28, 2001, the LA granted the motion and issued the corresponding writ of execution.15
x x x x
In sum, [PAL’s] concrete evidence submitted in the proceedings below should prevail over the self-serving assertions of [the respondent]. Consequently, we are of the view that [PAL] acted within its rights when it refused to accept [the respondent] when he reported for work on June 26, 1998. This is consistent with the finding[s] of the DOLE Secretary when he declared the strikers to have lost their employment status. x x x.
x x x x
WHEREFORE, premises considered, the appeal is hereby GRANTED, and the decision dated March 5, 2001, is REVERSED and SET ASIDE for utter lack of merit.
WHEREFORE, the NLRC Resolution dated June 28, 2002 is AFFIRMED with the MODIFICATION that, in lieu of reinstatement salaries, petitioner Philippine Airlines, Inc. is ordered to pay respondent Paz separation pay equivalent to one month salary for every year of service, to be computed from the time respondent commenced employment with petitioner PAL until the time the Labor Arbiter issued the writ ordering respondent’s reinstatement, i.e., on May 25, 2001.The CA ruled that while the respondent is entitled to reinstatement, the prevailing circumstances rendered the same difficult if not impossible to execute. It noted that at the time the reinstatement was ordered, there was no vacant B747-400 pilot position available for the respondent. Further complicating the situation is the fact that PAL has been under receivership since July 1998. Thus, in lieu of reinstatement salaries, the CA ordered PAL to pay the respondent separation pay equivalent to one (1) month salary for every year of service.22
Accordingly, compliance with the reinstatement order is not affected by the fact that private respondent’s previous position had been filled-up. In reinstatement pending appeal, payroll reinstatement is an alternative to actual reinstatement. Hence, public respondent did not err when it upheld the Labor Arbiter that private respondent is entitled to reinstatement salaries during the period of appeal.On August 3, 2010, PAL filed the instant petition with the Court, contending that the CA acted in a manner contrary to law and jurisprudence when it upheld the award of reinstatement salaries to the respondent.25
WHEREFORE, premises considered, the modification contained in Our January 31, 2005 Decision is DELETED and SET ASIDE. The June 28, 2002 Resolution of the National Labor Relations Commission is hereby REINSTATED in toto.
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.27 (Emphasis and underscoring in the original)Briefly, in Garcia, the petitioners were dismissed by their employer, respondent PAL, after they were allegedly caught in the act of sniffing shabu when a team of company security personnel and law enforcers raided the PAL Technical Center’s Toolroom Section. After they filed a complaint for illegal dismissal, respondent PAL was placed under rehabilitation receivership due to serious financial losses. Eventually, the LA resolved the case in favor of the petitioners and ordered their immediate reinstatement. Upon appeal, however, the NLRC reversed the LA decision and dismissed the complaint. Even then, the LA issued a writ of execution, with respect to the reinstatement aspect of the decision, and issued a notice of garnishment. Respondent PAL filed an urgent petition for injunction with the NLRC but the latter, by way of Resolutions dated November 26, 2001 and January 28, 2002, affirmed the validity of the writ and the notice issued by the LA but suspended and referred the action to the rehabilitation receiver. On appeal, the CA ruled in favor of respondent PAL and nullified the NLRC resolutions, holding that (1) a subsequent finding of a valid dismissal removes the basis for the reinstatement aspect of a LA decision, and (2) the impossibility to comply with the reinstatement order due to corporate rehabilitation justifies respondent PAL’s failure to exercise the options under Article 223 of the Labor Code. When the case was further elevated to this Court, the petition was partially granted and reinstated the NLRC resolutions insofar as it suspended the proceedings. Subsequently, respondent PAL notified the Court that it has exited from the rehabilitation proceedings. The Court then proceeded to determine the main issue of whether the petitioners therein are entitled to collect salaries pertaining to the period when the LA’s order of reinstatement is pending appeal to the NLRC until it was reversed.
After the labor arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.It is clear from the records that PAL failed to reinstate the respondent pending appeal of the LA decision to the NLRC. It can be recalled that the LA rendered the decision ordering the reinstatement of the respondent on March 5, 2001. And, despite the self-executory nature of the order of reinstatement, the respondent nonetheless secured a partial writ of execution on May 25, 2001. Even then, the respondent was not reinstated to his former position or even through payroll.
The test is two-fold: (1) there must be 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. 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 Labor Arbiter’s decision.30 (Italics ours and emphasis and underscoring deleted)
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before any court, tribunal or board against the corporation shall ipso jure be suspended. As stated early on, during the pendency of petitioners’ complaint before the Labor Arbiter, the SEC placed respondent under an Interim Rehabilitation Receiver. After the Labor Arbiter rendered his decision, the SEC replaced the Interim Rehabilitation Receiver with a Permanent Rehabilitation Receiver.In light of the fact that PAL’s failure to comply with the reinstatement order was justified by the exigencies of corporation rehabilitation, the respondent may no longer claim salaries which he should have received during the period that the LA decision ordering his reinstatement is still pending appeal until it was overturned by the NLRC. Thus, the CA committed a reversible error in recognizing the respondent’s right to collect reinstatement salaries albeit suspending its execution while PAL is still under corporate rehabilitation.
Case law recognizes that unless there is a restraining order, the implementation of the order of reinstatement is ministerial and mandatory. This injunction or suspension of claims by legislative fiat partakes of the nature of a restraining order that constitutes a legal justification for respondent’s non-compliance with the reinstatement order. Respondent’s failure to exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. Such being the case, respondent’s obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did not attach.32 (Citations omitted)
* Additional member per Special Order No. 1887 dated November 24, 2014 vice Associate Justice Presbitero J. Velasco, Jr.
1Rollo, pp. 3-25.
2 Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Rebecca De Guia-Salvador and Mariflor P. Punzalan Castillo, concurring; id. at 28-32.
3 Id. at 48.
4 Id. at 34-35, 48.
5 Id. at 34, 49.
6 Id. at 49.
8 Id. at 33-34, 49.
9 Id. at 34.
10 Id. at 34-36.
11 Issued by LA Luis D. Flores; id. at 33-45.
12 Id. at 43-45.
13 Id. at 46-59.
14 Id. at 55, 58, 59.
15 Id. at 127-128.
16 Id. at 60-61.
17 Id. at 65-66.
18 Id. at 88-95.
19 Id. at 97-99.
20 Id. at 124-134.
21 Id. at 133.
22 Id. at 131-133.
23 Id. at 28-32.
24 Id. at 31-32.
25 Id. at 12.
26 G.R. No. 164856, January 20, 2009, 576 SCRA 479.
27 Id. at 489, citing Genuino v. National Labor Relations Commission, 564 Phil. 315, 335 (2007).
28 449 Phil. 437 (2003).
29 Id. at 446.
30 Supra note 26, at 494.
31Rollo, pp. 83-84.
32 Supra note 26, at 496.