Republic

of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 118651 October 16, 1997
PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and
LOURDES A. DE JESUS, respondents.

FRANCISCO, J.:
The facts are as follows:
Private respondent Lourdes A. de Jesus is petitioners' reviser/trimmer since 1980. As
reviser/trimmer, de Jesus based her assigned work on a paper note posted by petitioners. The posted
paper which contains the corresponding price for the work to be accomplished by a worker is
identified by its P.O. Number. On August 15, 1992, de Jesus worked on P.O. No. 3853 by trimming the
cloths' ribs. She thereafter submitted tickets corresponding to the work done to her supervisor.
Three days later, de Jesus received from petitioners' personnel manager a memorandum requiring
her to explain why no disciplinary action should be taken against her for dishonesty and tampering
of official records and documents with the intention of cheating as P.O. No. 3853 allegedly required
no trimming. The memorandum also placed her under preventive suspension for thirty days starting
from August 19, 1992. In her handwritten explanation, de Jesus maintained that she merely
committed a mistake in trimming P.O. No. 3853 as it has the same style and design as P.O. No. 3824
which has an attached price list for trimming the ribs and admitted that she may have been negligent
in presuming that the same work was to be done with P.O. No. 3853, but not for dishonesty or
tampering. Petitioners' personnel department, nonetheless, terminated her from employment and
sent her a notice of termination dated September 18, 1992.
On September 22, 1992, de Jesus filed a complaint for illegal dismissal against petitioners. The Labor
Arbiter who heard the case noted that de Jesus was amply accorded procedural due process in her
termination from service. Nevertheless, after observing that de Jesus made some further trimming on
P.O. No. 3853 and that her dismissal was not justified, the Labor Arbiter held petitioners guilty of
illegal dismissal. Petitioners were accordingly ordered to reinstate de Jesus to her previous position
without loss of seniority rights and with full backwages from the time of her suspension on August
19, 1992. Dissatisfied with the Labor Arbiter's decision, petitioners appealed to public respondent
National Labor Relations Commission (NLRC). In its July 21, 1994 decision, the NLRC 1 ruled that de
Jesus was negligent in presuming that the ribs of P.O. No. 3853 should likewise be trimmed for
having the same style and design as P.O. No. 3824, thus petitioners cannot be entirely faulted for
dismissing de Jesus. The NLRC declared that the status quo between them should be maintained and
affirmed the Labor Arbiter's order of reinstatement, but without backwages. The NLRC further
"directed petitioner to pay de Jesus her back salaries from the date she filed her motion for execution
on September 21, 1993 up to the date of the promulgation of [the] decision." 2 Petitioners filed their
partial motion for reconsideration which the NLRC denied, hence this petition anchored substantially
on the alleged NLRC's error in holding that de Jesus is entitled to reinstatement and back salaries. On

March 6, 1996, petitioners filed its supplement to the petition amplifying further their arguments. In
a resolution dated February 20, 1995, the Court required respondents to comment thereon. Private
respondent de Jesus and the Office of the Solicitor General, in behalf of public respondent NLRC,
subsequently filed their comments. Thereafter, petitioners filed two rejoinders [should be replies] to
respondents' respective comments. Respondents in due time filed their rejoinders.
There are two interrelated and crucial issues, namely: (1) whether or not de Jesus was illegally
dismissed, and (2) whether or not an order for reinstatement needs a writ of execution.
Petitioners insist that the NLRC gravely abused its discretion in holding that de Jesus is entitled to
reinstatement to her previous position for she was not illegally dismissed in the first place. In
support thereof, petitioners quote portions of the NLRC decision which stated that "respondents
[petitioners herein] cannot be entirely faulted for dismissing the complainant" 3 and that there was
"no illegal dismissal to speak of in the case at bar". 4 Petitioners further add that de Jesus breached
the trust reposed in her, hence her dismissal from service is proper on the basis of loss of confidence,
citing as authority the cases of Ocean Terminal Services, Inc. v. NLRC, 197 SCRA 491; Coca-Cola
Bottlers Phil., Inc. v. NLRC, 172 SCRA 751, and Piedad v. Lanao del Norte Electric Cooperative, 5 154
SCRA 500.
The arguments lack merit.
The entire paragraph which comprises the gist of the NLRC's decision from where petitioners
derived and isolated the aforequoted portions of the NLRC's observation reads in full as follows:
We cannot fully subscribe to the complainant's claim that she trimmed the ribs of PO3853 in
the light of the sworn statement of her supervisor Rebecca Madarcos (Rollo, p. 64) that no
trimming was necessary because the ribs were already of the proper length. The
complainant herself admitted in her sinumpaang salaysay (Rollo, p. 45) that "Aking napansin
na hindi pantay-pantay ang lapad ng mga ribs PO3853 mas maigsi ang nagupit ko sa mga
ribs ng PO3853 kaysa sa mga ribs ng mga nakaraang PO's. The complainant being an
experienced reviser/trimmer for almost twelve (12) years should have called the attention
of her supervisor regarding her observation of PO3853. It should be noted that complainant
was trying to claim as production output 447 pieces of trimmed ribs of PO3853 which
respondents insists that complainant did not do any. She was therefore negligent in
presuming that the ribs of PO3853 should likewise be trimmed for having the same style and
design as PO3824. Complainant cannot pass on the blame to her supervisor whom she
claimed checked the said tickets prior to the submission to the Accounting Department. As
explained by respondent, what the supervisor does is merely not the submission of tickets
and do some checking before forwarding the same to the Accounting Department. It was
never disputed that it is the Accounting Department who does the detailed checking and
computation of the tickets as has been the company policy and practice. Based on the
foregoing and considering that respondent cannot be entirely faulted for dismissing
complainant as the complainant herself was also negligent in the performance of her job, We
hereby rule that status quo between them should be maintained as a matter of course. We
thus affirm the decision of Labor Arbiter reinstating the complainant but without backwages.
The award of backwages in general are granted on grounds of equity for earnings which a
worker or employee has lost due to his illegal dismissal. (Indophil Acrylic Mfg. Corporation
vs. NLRC, G.R. No. 96488 September 27, 1993) There being no illegal dismissal to speak in
the case at bar, the award for backwages should necessarily be deleted. 6
We note that the NLRC's decision is quite categorical in finding that de Jesus was merely negligent in
the performance of her duty. Such negligence, the Labor Arbiter delineated, was brought about by the
petitioners' plain improvidence. Thus:

After careful assessment of the allegations and documents available on record, we are
convinced that the penalty of dismissal was not justified.
At the outset, it is remarkable that respondents did not deny nor dispute that P.O. 3853 has
the same style and design as P.O. 3824; that P.O. 3824 was made as guide for the work done
on P.O. 3853; and, most importantly, that the notation correction on P.O. 3824 was made
only after the error was discovered by respondents' Accounting Department.
Be that as it may, the factual issue in this case is whether or not complainant trimmed the
ribs of P.O. 3853?
Respondents maintained that she did not because the record in Accounting Department
allegedly indicates that no trimming is to be done on P.O. 3853. Basically, this allegation is
unsubstantiated.
It must be emphasized that in termination cases the burden of proof rests upon the
employer.
In the instant case, respondents' mere allegation that P.O. 3853 need not be trimmed does
not satisfy the proof required to warrant complainant's dismissal.
Now, granting that the Accounting record is correct, we still believe that complainant did
some further trimming on P.O. 3853 based on the following grounds:
Firstly, Supervisor Rebecca Madarcos who ought to know the work to be performed because
she was in-charged of assigning jobs, reported no anomally when the tickets were submitted
to her.
Incidentally, supervisor Madarcos testimony is suspect because if she could recall what she
ordered the complainant to do seven (7) months ago (to revise the collars and plackets of
shirts) there was no reason for her not to detect the alleged tampering at the time
complainant submitted her tickets, after all, that was part of her job, if not her main job.
Secondly, she did not exceed her quota, otherwise she could have simply asked for more.
That her output was remarkably big granting it is true, is well explained in that the parts she
had trimmed were lesser compared to those which she had cut before.
In this connection, respondents misinterpreted the handwritten explanation of the
complainant dated 20 August 1992, because the letter never admits that she never trimmed
P.O. 3853, on the contrary the following sentence,
Sa katunayan nakapagbawas naman talaga ako na di ko inaasahang inalis na
pala ang presyo ng Sec. 9 P.O. 3853 na ito.
is crystal clear that she did trim the ribs on P.O. 3853. 7
Gleaned either from the Labor Arbiter's observations or from the NLRC's assessment, it distinctly
appears that petitioners' accusation of dishonesty and tampering of official records and documents
with intention of cheating against de Jesus was not substantiated by clear and convincing evidence.
Petitioners simply failed, both before the Labor Arbiter and the NLRC, to discharge the burden of
proof and to validly justify de Jesus' dismissal from service. The law, in this light, directs the

employers, such as herein petitioners, not to terminate the services of an employee except for a just
or authorized cause under the Label Code. 8 Lack of a just cause in the dismissal from service of an
employee, as in this case, renders the dismissal illegal, despite the employer's observance of
procedural due process. 9 And while the NLRC stated that "there was no illegal dismissal to speak of
in the case at bar" and that petitioners cannot be entirely faulted therefor, said statements are
inordinate pronouncements which did not remove the assailed dismissal from the realm of illegality.
Neither can these pronouncements preclude us from holding otherwise.
We also find the imposition of the extreme penalty of dismissal against de Jesus as certainly harsh
and grossly disproportionate to the negligence committed, especially where said employee holds a
faithful and an untarnished twelve-year service record. While an employer has the inherent right to
discipline its employees, we have always held that this right must always be exercised humanely, and
the penalty it must impose should be commensurate to the offense involved and to the degree of its
infraction. 10 The employer should bear in mind that, in the exercise of such right, what is at stake is
not only the employee's position but her livelihood as well.
Equally unmeritorious is petitioners' assertion that the dismissal is justified on the basis of loss of
confidence. While loss of confidence, as correctly argued by petitioners, is one of the valid grounds
for termination of employment, the same, however, cannot be used as a pretext to vindicate each and
every instance of unwarranted dismissal. To be a valid ground, it must be shown that the employee
concerned is responsible for the misconduct or infraction and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confidence demanded by his position. 11
In this case, petitioners were unsuccessful in establishing their accusations of dishonesty and
tampering of records with intention of cheating. Indeed, even if petitioners' allegations against de
Jesus were true, they just the same failed to prove that her position needs the continued and
unceasing trust of her employers. The breach of trust must be related to the performance of the
employee's
functions. 12 Surely, de Jesus who occupies the position of a reviser/trimmer does not require the
petitioners' perpetual and full confidence. In this regard, petitioners' reliance on the cases of Ocean
Terminal Services, Inc. v. NLRC; Coca-Cola Bottlers Phil., Inc. v. NLRC; and Piedad v. Lanao del Norte
Electric Cooperative, which when perused involve positions that require the employers' full trust and
confidence, is wholly misplaced. In Ocean Terminal Services, for instance, the dismissed employee
was designated as expediter and canvasser whose responsibility is mainly to make emergency
procurements of tools and equipments and was entrusted with the necessary cash for buying them.
The case of Coca-Cola Bottlers, on the other hand, involves a sales agent whose job exposes him to the
everyday financial transactions involving the employer's goods and funds, while that of Piedad
concerns a bill collector who essentially handles the employer's cash collections. Undoubtedly, the
position of a reviser/trimmer could not be equated with that of a canvasser, sales agent, or a bill
collector. Besides, the involved employees in the three aforementioned cases were clearly proven
guilty of infractions unlike private respondent in the case at bar. Thus, petitioners dependence on
these cited cases is inaccurate, to say the least. More, whether or not de Jesus meets the day's quota
of work she, just the same, is paid the daily minimum wage. 13
Corollary to our determination that de Jesus was illegally dismissed is her imperative entitlement to
reinstatement and backwages as mandated by
law. 14 Whence, we move to the second issue, i.e., whether or not an order for reinstatement needs a
writ of execution.
Petitioners' theory is that an order for reinstatement is not self-executory. They stress that there
must be a writ of execution which may be issued by the NLRC or by the Labor Arbiter motu proprio or
on motion of an interested party. They further maintain that even if a writ of execution was issued, a
timely appeal coupled by the posting of appropriate supersedeas bond, which they did in this case,
effectively forestalled and stayed execution of the reinstatement order of the Labor Arbiter. As

supporting authority, petitioners emphatically cite and bank on the case of Maranaw Hotel Resort
Corporation (Century Park Sheraton Manila) v. NLRC, 238 SCRA 190.
Private respondent de Jesus, for her part, maintains that petitioners should have reinstated her
immediately after the decision of the Labor Arbiter ordering her reinstatement was promulgated
since the law mandates that an order for reinstatement is immediately executory. An appeal, she
says, could not stay the execution of a reinstatement order for she could either be admitted back to
work or merely reinstated in the payroll without need of a writ of execution. De Jesus argues that a
writ of execution is necessary only for the enforcement of decisions, orders, or awards which have
acquired finality. In effect, de Jesus is urging the Court to re-examine the ruling laid down in
Maranaw.
Article 223 of the Labor Code, as amended by R.A. No. 6715 which took effect on March 21, 1989,
pertinently provides:
Art. 223. Appeal. Decision, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. Such appeal may be entertained only on
any of the following grounds:
xxx xxx xxx
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 herein.
xxx xxx xxx
We initially interpreted the aforequoted provision in Inciong v. NLRC. 15 The Court 16 made this brief
comment:
The decision of the Labor Arbiter in this case was rendered on December 18, 1988, or three
(3) months before Article 223 of the Labor Code was amended by Republic Act 6715 (which
became law on March 21, 1989), providing that a decision of the Labor Arbiter ordering the
reinstatement of a dismissed or separated employee shall be immediately executory insofar
as the reinstatement aspect is concerned, and the posting of an appeal bond by the employer
shall not stay such execution. Since this new law contains no provision giving it retroactive
effect (Art. 4, Civil Code), the amendment may not be applied to this case.
which the Court adopted and applied in Callanta v. NLRC. 17 In Zamboanga City Water District v. Buat,
18 the Court construed Article 223 to mean exactly what it says. We said:
Under the said provision of law, the decision of the Labor Arbiter reinstating a dismissed or
separated employee insofar as the reinstatement aspect is concerned, shall be immediately
executory, even pending appeal. The employer shall reinstate the employee concerned either
by: (a) actually admitting him back to work under the same terms and conditions prevailing
prior to his dismissal or separation; or (b) at the option of the employer, merely reinstating
him in the payroll. Immediate reinstatement is mandated and is not stayed by the fact that the
employer has appealed, or has posted a cash or surety bond pending appeal. 19

We expressed a similar view a year earlier in Medina v. Consolidated Broadcasting System (CBS)
DZWX 20 and laid down the rule that an employer who fails to comply with an order of reinstatement
makes him liable for the employee's salaries. Thus:
Petitioners construe the above paragraph to mean that the refusal of the employer to
reinstate an employee as directed in an executory order of reinstatement would make it
liable to pay the latter's salaries. This interpretation is correct. Under Article 223 of the
Labor Code, as amended, an employer has two options in order for him to comply with an
order of reinstatement, which is immediately executory, even pending appeal. Firstly, he can
admit the dismissed employee back to work under the same terms and conditions prevailing
prior to his dismissal or separation or to a substantially equivalent position if the former
position is already filled up as we have ruled in Union of Supervisors (RB) NATU vs. Sec. of
Labor, 128 SCRA 442 [1984]; and Pedroso vs. Castro, 141 SCRA 252 [1986]. Secondly, he can
reinstate the employee merely in the payroll. Failing to exercise any of the above options, the
employer can be compelled under pain of contempt, to pay instead the salary of the
employee. This interpretation is more in consonance with the constitutional protection to
labor (Section 3, Art. XIII, 1987 Constitution). The right of a person to his labor is deemed to
be property within the meaning of the constitutional guaranty that no one shall be deprived
of life, liberty, and property without due process of law. Therefore, he should be protected
against any arbitrary and unjust deprivation of his job (Bondoc vs. People's Bank and Trust
Co., Inc., 103 SCRA 599 [1981]). The employee should not be left without any remedy in case
the employer unreasonably delays reinstatement. Therefore, we hold that the unjustified
refusal of the employer to reinstate an illegally dismissed employee entitles the employee to
payment of his salaries . . . . 21
The Court, however, deviated from this construction in the case of Maranaw. Reinterpreting the
import of Article 223 in Maranaw, the Court 22 declared that the reinstatement aspect of the Labor
Arbiter's decision needs a writ of execution as it is not self-executory, a declaration the Court
recently reiterated and adopted in Archilles Manufacturing Corp. v. NLRC. 23
We note that prior to the enactment of R.A. No. 6715, Article 223 24 of the Labor Code contains no
provision dealing with the reinstatement of an illegally dismissed employee. The amendment
introduced by R.A. No. 6715 is an innovation and a far departure from the old law indicating thereby
the legislature's unequivocal intent to insert a new rule that will govern the reinstatement aspect of a
decision or resolution in any given labor dispute. In fact, the law as now worded employs the phrase
"shall immediately be executory" without qualification emphasizing the need for prompt compliance.
As a rule, "shall" in a statute commonly denotes an imperative obligation and is inconsistent with the
idea of discretion 25 and that the presumption is that the word "shall", when used in a statute, is
mandatory. 26 An appeal or posting of bond, by plain mandate of the law, could not even forestall nor
stay the executory nature of an order of reinstatement. The law, moreover, is unambiguous and clear.
Thus, it must be applied according to its plain and obvious meaning, according to its express terms.
In Globe-Mackay Cable and Radio Corporation v. NLRC, 27 we held that:
Under the principles of statutory construction, if a statute is clear, plain and free from
ambiguity, it must be given its literal meaning and applied without attempted interpretation.
This plain-meaning rule or verba legis derived from the maxim index animi sermo est (speech
is the index of intention) rests on the valid presumption that the words employed by the
legislature in a statute correctly express its intent or will and preclude the court from
construing it differently. The legislature is presumed to know the meaning of the words, to
have used words advisedly, and to have expressed its intent by the use of such words as are
found in the statute. Verba legis non est recedendum, or from the words of a statute there
should be no departure. 28

And in conformity with the executory nature of the reinstatement order, Rule V, Section 16 (3) of the
New Rules of Procedure of the NLRC strictly requires the Labor Arbiter to direct the employer to
immediately reinstate the dismissed employee. Thus:
In case the decision includes an order of reinstatement, the Labor Arbiter shall direct the
employer to immediately reinstate the dismissed or separated employee even pending
appeal. The order of reinstatement shall indicate that 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.
In declaring that reinstatement order is not self-executory and needs a writ of execution, the Court, in
Maranaw, adverted to the rule provided under Article 224. We said:
It must be stressed, however, that although the reinstatement aspect of the decision is
immediately executory, it does not follow that it is self-executory. There must be a writ of
execution which may be issued motu proprio or on motion of an interested party. Article 224
of the Labor Code provides:
Art. 224. Execution of decision, orders or awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbitter
or voluntary arbitrator may, motu proprio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it becomes final and executory . .
. (emphasis supplied)
The second paragraph of Section 1, Rule VIII of the New Rules of Procedure of the NLRC also
provides:
The Labor Arbiter, POEA Administrator, or the Regional Director, or his duly authorized
hearing officer of origin shall, motu proprio or on motion of any interested party, issue a writ
of execution on a judgment only within five (5) years from the date it becomes final and
executory . . . . No motion for execution shall be entertained nor a writ he issued unless the
Labor Arbiter is in possession of the records of the case which shall include an entry of
judgment. (emphasis supplied)
xxx xxx xxx
In the absence then of an order for the issuance of a writ of execution on the reinstatement
aspect of the decision of the Labor Arbiter, the petitioner was under no legal obligation to
admit back to work the private respondent under the terms and conditions prevailing prior
to her dismissal or, at the petitioner's option, to merely reinstate her in the payroll. An
option is a right of election to exercise a privilege, and the option in Article 223 of the Labor
Code is exclusively granted to the employer. The event that gives rise for its exercise is not
the reinstatement decree of a Labor Arbiter, but the writ for its execution commanding the
employer to reinstate the employee, while the final act which compels the employer to
exercise the option is the service upon it of the writ of execution when, instead of admitting
the employee back to his work, the employer chooses to reinstate the employee in the
payroll only. If the employer does not exercise this option, it must forthwith admit the
employee back to work, otherwise it may be punished for contempt. 29
A closer examination, however, shows that the necessity for a writ of execution under Article 224
applies only to final and executory decisions which are not within the coverage of Article 223. For
comparison, we quote the material portions of the subject articles:

Art. 223. Appeal. . . .

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 herein.
xxx xxx xxx
Art. 224. Execution of decisions, orders, or awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter
or voluntary arbitrator may, motu propio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it becomes final and executory,
requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or
awards of the Secretary of Labor and Employment or regional director, the Commission, the
Labor Arbiter or med-arbiter, or voluntary arbitrators. In any case, it shall be the duty of the
responsible officer to separately furnish immediately the counsels of record and the parties
with copies of said decisions, orders or awards. Failure to comply with the duty prescribed
herein shall subject such responsible officer to appropriate administrative sanctions.
Article 224 states that the need for a writ of execution applies only within five (5) years from the date
a decision, an order or award becomes final and executory. It can not relate to an award or order of
reinstatement still to be appealed or pending appeal which Article 223 contemplates. The provision
of Article 223 is clear that an award 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 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 enacting the law, the legislature is presumed to have
ordained a valid and sensible law, one which operates no further than may be necessary to achieve
its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved
and the evil sought to be remedied. 30 And where the statute is fairly susceptible of two or more
constructions, that construction should be adopted which will most tend to give effect to the manifest
intent of the lawmaker and promote the object for which the statute was enacted, and a construction
should be rejected which would tend to render abortive other provisions of the statute and to defeat
the object which the legislator sought to attain by its enactment. 31 In introducing a new rule on the
reinstatement aspect of a labor decision under R.A. No. 6715, Congress should not be considered to
be indulging in mere semantic exercise. On appeal, however, the appellate tribunal concerned may
enjoin or suspend the reinstatement order in the exercise of its sound discretion.
Furthermore, the rule is that all doubts in the interpretation and implementation of labor laws should
be resolved in favor of labor. 32 In ruling that an order or award for reinstatement does not require a
writ of execution the Court is simply adhering and giving meaning to this rule. Henceforth, we rule
that an award or order for reinstatement is self-executory. After receipt of the decision or resolution
ordering the employee's reinstatement, the employer has the right to choose whether to re-admit the

employee to work under the same terms and conditions prevailing prior to his dismissal or to
reinstate the employee in the payroll. In either instance, the employer has to inform the employee of
his choice. The notification is based on practical considerations for without notice, the employee has
no way of knowing if he has to report for work or not.
WHEREFORE, the petition is DENIED and the decision of the Labor Arbiter is hereby REINSTATED.
Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 152329

April 22, 2003

ALEJANDRO ROQUERO, petitioner,

vs.
PHILIPPINE AIRLINES, INC., respondent.
PUNO, J.:
Brought up on this Petition for Review is the decision of the Court of Appeals dismissing Alejandro
Roquero as an employee of the respondent Philippine Airlines, Inc.
Roquero, along with Rene Pabayo, were ground equipment mechanics of respondent Philippine Airlines,
Inc. (PAL for brevity). From the evidence on record, it appears that Roquero and Pabayo were caught redhanded possessing and using Methampethamine Hydrochloride or shabu in a raid conducted by PAL
security officers and NARCOM personnel.
The two alleged that they did not voluntarily indulge in the said act but were instigated by a certain Jojie
Alipato who was introduced to them by Joseph Ocul, Manager of the Airport Maintenance Division of
PAL. Pabayo alleged that Alipato often bragged about the drugs he could smuggle inside the company
premises and invited other employees to take the prohibited drugs. Alipato was unsuccessful, until one day,
he was able to persuade Pabayo to join him in taking the drugs. They met Roquero along the way and he
agreed to join them. Inside the company premises, they locked the door and Alipato lost no time in
preparing the drugs to be used. When they started the procedure of taking the drugs, armed men entered the
room, arrested Roquero and Pabayo and seized the drugs and the paraphernalia used.1 Roquero and Pabayo
were subjected to a physical examination where the results showed that they were positive of drugs. They
were also brought to the security office of PAL where they executed written confessions without the benefit
of counsel.2
On March 30, 1994, Roquero and Pabayo received a "notice of administrative charge"3 for violating the
PAL Code of Discipline. They were required to answer the charges and were placed under preventive
suspension.
Roquero and Pabayo, in their "reply to notice of administrative charge,"4 assailed their arrest and asserted
that they were instigated by PAL to take the drugs. They argued that Alipato was not really a trainee of
PAL but was placed in the premises to instigate the commission of the crime. They based their argument on
the fact that Alipato was not arrested. Moreover, Alipato has no record of employment with PAL.

In a Memorandum dated July 14, 1994, Roquero and Pabayo were dismissed by PAL.5 Thus, they filed a
case for illegal dismissal.6
In the Labor Arbiter's decision, the dismissal of Roquero and Pabayo was upheld. The Labor Arbiter found
both parties at fault PAL for applying means to entice the complainants into committing the infraction
and the complainants for giving in to the temptation and eventually indulging in the prohibited activity.
Nonetheless, the Labor Arbiter awarded separation pay and attorney's fees to the complainants.7
While the case was on appeal with the National Labor Relations Commission (NLRC), the complainants
were acquitted by the Regional Trial Court (RTC) Branch 114, Pasay City, in the criminal case which
charged them with "conspiracy for possession and use of a regulated drug in violation of Section 16, Article
III of Republic Act 6425," on the ground of instigation.
The NLRC ruled in favor of complainants as it likewise found PAL guilty of instigation. It ordered
reinstatement to their former positions but without backwages.8 Complainants did not appeal from the
decision but filed a motion for a writ of execution of the order of reinstatement. The Labor Arbiter granted
the motion but PAL refused to execute the said order on the ground that they have filed a Petition for
Review before this Court.9 In accordance with the case of St. Martin Funeral Home vs. NLRC and
Bienvenido Aricayos,10 PAL's petition was referred to the Court of Appeals.11
During the pendency of the case with the Court of Appeals, PAL, and Pabayo filed a Motion to
Withdraw/Dismiss the case with respect to Pabayo, after they voluntarily entered into a compromise
agreement.12 The motion was granted in a Resolution promulgated by the Former Thirteenth Division of the
Court of Appeals on January 29, 2002.13
The Court of Appeals later reversed the decision of the NLRC and reinstated the decision of the Labor
Arbiter insofar as it upheld the dismissal of Roquero. However, it denied the award of separation pay and
attorney's fees to Roquero on the ground that one who has been validly dismissed is not entitled to those
benefits.14
The motion for reconsideration by Roquero was denied. In this Petition for Review on Certiorari under
Rule 45, he raises the following issues:
1. Whether or not the instigated employee shall be solely responsible for an action arising from the
instigation perpetrated by the employer;
2. Can the executory nature of the decision, more so the reinstatement aspect of a labor tribunal's
order be halted by a petition having been filed in higher courts without any restraining order or
preliminary injunction having been ordered in the meantime?
3. Would the employer who refused to reinstate an employee despite a writ duly issued be held
liable to pay the salary of the subject employee from the time that he was ordered reinstated up to
the time that the reversed decision was handed down?15
I
There is no question that petitioner Roquero is guilty of serious misconduct for possessing and using shabu.
He violated Chapter 2, Article VII, section 4 of the PAL Code of Discipline which states:
"Any employee who, while on company premises or on duty, takes or is under the influence of
prohibited or controlled drugs, or hallucinogenic substances or narcotics shall be dismissed."16

Serious misconduct is defined as "the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment."17 For serious misconduct to warrant the dismissal of an employee, it (1) must be serious; (2)
must relate to the performance of the employee's duty; and (3) must show that the employee has become
unit to continue working for the employer.18
It is of public knowledge that drugs can damage the mental faculties of the user. Roquero was tasked with
the repair and maintenance of PAL's airplanes. He cannot discharge that duty if he is a drug user. His
failure to do his job can mean great loss of lives and properties. Hence, even if he was instigated to take
drugs he has no right to be reinstated to his position. He took the drugs fully knowing that he was on duty
and more so that it is prohibited by company rules. Instigation is only a defense against criminal liability. It
cannot be used as a shield against dismissal from employment especially when the position involves the
safety of human lives.
Petitioner cannot complain he was denied procedural due process. PAL complied with the twin-notice
requirement before dismissing the petitioner. The twin-notice rule requires (1) the notice which apprises the
employee of the particular acts or omissions for which his dismissal is being sought along with the
opportunity for the employee to air his side, and (2) the subsequent notice of the employer's decision to
dismiss him.19 Both were given by respondent PAL.
II
Article 223 (3rd paragraph) of the Labor Code20 as amended by Section 12 of Republic Act No. 6715,21 and
Section 2 of the NLRC Interim Rules on Appeals under RA No. 6715, Amending the Labor Code,22
provide that an order of reinstatement by the Labor Arbiter is immediately executory even pending appeal.
The rationale of the law has been explained in Aris (Phil.) Inc. vs. NLRC:23
"In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor
Arbiter reinstating a dismissed or separated employee, the law itself has laid down a
compassionate policy which, once more, vivifies and enhances the provisions of the 1987
Constitution on labor and the working man.
xxx

xxx

xxx

These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic
force, which the Constitution also expressly affirms with equal intensity. Labor is an indispensable
partner for the nation's progress and stability.
xxx

xxx

xxx

. . . In short, with respect to decisions reinstating employees, the law itself has determined a
sufficiently overwhelming reason for its execution pending appeal.
xxx

xxx

xxx

. . . Then, by and pursuant to the same power (police power), the State may authorize an
immediate implementation, pending appeal, of a decision reinstating a dismissed or separated
employee since that saving act is designed to stop, although temporarily since the appeal may be
decided in favor of the appellant, a continuing threat or danger to the survival or even the life of
the dismissed or separated employee and his family."

The order of reinstatement is immediately executory. The unjustified refusal of the employer to reinstate a
dismissed employee entitles him to payment of his salaries effective from the time the employer failed to
reinstate him despite the issuance of a writ of execution.24 Unless there is a restraining order issued, it is
ministerial upon the Labor Arbiter to implement the order of reinstatement. In the case at bar, no restraining
order was granted. Thus, it was mandatory on PAL to actually reinstate Roquero or reinstate him in the
payroll. Having failed to do so, PAL must pay Roquero the salary he is entitled to, as if he was reinstated,
from the time of the decision of the NLRC until the finality of the decision of this Court.
We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are applied
only in a suppletory manner and only to effectuate the objectives of the Labor Code and not to defeat
them.25 Hence, 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. 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.
IN VIEW WHEREOF, the dismissal of petitioner Roquero is AFFIRMED, but respondent PAL is ordered
to pay the wages to which Roquero is entitled from the time the reinstatement order was issued until the
finality of this decision.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. NO. 148247 August 7, 2006
AIR PHILIPPINES CORPORATION, Petitioner,
vs.
ENRICO E. ZAMORA, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Only those pleadings, parts of case records and documents which are material and pertinent, in that they
may provide the basis for a determination of a prima facie case of abuse of discretion, are required to be
attached to a petition for certiorari. A petition lacking such documents contravenes paragraph 2, Section 1,
Rule 65 and may be dismissed outright under Section 3, Rule 46. However, if it is shown that the omission
has been rectified by the subsequent submission of the documents required, the petition must be given due
course or reinstated, if it had been previously dismissed. 1
Other pleadings and portions of case records need not accompany the petition, unless the court will require
them in order to aid it in its review of the case. Omission of these documents from the petition will not
warrant its dismissal. 2
For being allegedly contrary to the foregoing rule, the Resolutions dated January 11, 2001 and May 23,
2001 of the Court of Appeals in CA G.R. SP No. 62388 entitled, "Air Philippines Corporation, Petitioner,

versus, National Labor Relations Commission (5th Division) and Enrico Zamora, Respondents" are sought
to be annuled in the Petition for Review on Certiorari under Rule 45 that is now before us. 3
The facts are not in dispute.
Enrico Zamora (Zamora) was employed with Air Philippines Corporation (APC) as a B-737 Flight Deck
Crew. 4 He applied for promotion to the position of airplane captain and underwent the requisite training
program. After completing training, he inquired about his promotion but APC did not act on it; instead, it
continued to give him assignments as flight deck crew. Thus, Zamora filed a Complaint with the Labor
Arbiter. He argued that the act of APC of withholding his promotion rendered his continued employment
with it oppressive and unjust. He therefore asked that APC be held liable for constructive dismissal. 5
APC denied that it dismissed complainant. It pointed out that, when the complaint was filed on May 14,
1997, complainant was still employed with it. It was only on May 22, 1997 that complainant stopped
reporting for work, not because he was forced to resign, but because he had joined a rival airline, Grand
Air. 6
In a Decision dated September 16, 1998, the Labor Arbiter ruled in favor of Zamora and declared APC
liable for constructive dismissal. It held:
WHEREFORE, judgment is hereby rendered finding respondent liable for illegal dismissal and ordering
the respondent to:
1. Reinstate complainant to his position as B-737 Captain without loss of seniority right immediately upon
receipt thereof (sic);
2. Pay complainant his full backwages from May 15, 1997 up to the promulgation of this decision on (sic)
the amount of P1,732,500 (sic);
3. Pay complainant the amount of TWO MILLION PESOS (P2,000,000.00) in the concept of moral
damages and ONE MILLION PESOS (P1,000,000.00) as exemplary damages;
4. Pay attorneys fees equivalent to TEN PERCENT (10%) of the total award. (Emphasis supplied)
SO ORDERED. 7
Zamora immediately filed a Motion for Execution of the order of reinstatement. On November 6, 1998, the
Labor Arbiter granted the motion and issued a writ of execution directing APC to reinstate complainant to
his former position. 8
Meanwhile, APC filed with the NLRC an appeal assailing the finding of the Labor Arbiter that it was liable
for constructive dismissal. 9
The NLRC granted the appeal in a Resolution dated February 10, 1999. It held that no dismissal,
constructive or otherwise, took place for it was Zamora himself who voluntarilly terminated his
employment by not reporting for work and by joining a competitor Grand Air. 10
However, upon Motion for Reconsideration 11 filed by Zamora, the NLRC, in a Resolution dated December
17, 1999, modified its earlier Resolution, thus:

WHEREFORE, the instant Motion for Reconsideration filed by complainant is DENIED for lack of merit
and the appealed decision AFFIRMED, while the instant petition for injunction filed by respondent is
GRANTED.
However, respondent Air Philippines Corporation is ordered to pay complainant his unpaid salaries and
allowances in the total amount of P198,502.30 within fifteen (15) days from receipt of this resolution. 12
(Emphasis supplied)
Displeased with the modification, APC sought a partial reconsideration of the foregoing resolution 13 but
the NLRC denied the same. In its Resolution of October 11, 2000, the NLRC justifed the award of unpaid
salaries in this manner:
The grant of salaries and allowances to complainant arose from the order of his reinstatement which is
executory even pending appeal of respondent questioning the same, pursuant to Article 223 of the Labor
Code. In the eyes of the law, complainant was as if actually working from the date respondent received the
copy of the appealed decision of the Labor Arbiter directing the reinstatement of complainant based on his
finding that the latter was illegally dismissed from employment. 14 (Emphasis supplied)
This prompted APC (hereafter referred to as petitioner) to file a Petition for Certiorari with the Court of
Appeals to have the December 17, 1999 Resolution of the NLRC partially annulled and its October 11,
2000 Resolution set aside on the ground that these were issued with grave abuse of discretion. Petitioner
attached to its petition, certified true copies of the Resolutions of the NLRC dated February 10, 1999,
December 17, 1999 and October 11, 2000 and the Decision of the Labor Arbiter dated September 16, 1998,
and photocopies of the February 24, 1999 notice of garnishment, March 11, 1999 Order of the Labor
Arbiter authorizing Sheriff Fulgencio Lavarez to implement the writ of execution, and March 23, 1999
Resolution of the NLRC enjoining implementation of the writ of execution. 15
In a Resolution dated January 11, 2001, the Court of Appeals dismissed the petition for failure of petitioner
to "x x x attach copies of all pleadings (such complaint, answer, position paper) and other material portions
of the record as would support the allegations therein x x x." 16
Petitioner filed a Motion for Reconsideration from the said Resolution and attached to it the pleadings and
portions of the case record required by the Court of Appeals. 17 Zamora (hereafter referred to as respondent)
filed an Opposition to Motion for Reconsideration. 18
In a Resolution dated May 23, 2001, the Court of Appeals denied the motion for reconsideration, thus:
Up for consideration is petitioners motion for reconsideration (pages 64-71 of the Rollo) of this Courts
resolution of dismissal (page 54, id.), which was promulgated on January 11, 2001. Considering private
respondents undisputed comment on said motion (pages 159-161. id.), the same is hereby DENIED. The
resolution of dismissal stands. 19 (Emphasis supplied)
And so, herein Petition for Review on Certiorari under Rule 45. Petitioner would have us annul and set
aside the January 11, 2001 and May 23, 2001 Resolutions of the Court of Appeals on the following
grounds:
A. The Honorable Court of Appeals did not rule in accordance with prevailing laws and jurisprudence
when it dismissed the petition for certiorari filed by petitioner APC on the ground that petitioner APC
supposedly failed to attach copies of all pleadings (such as complaint, answer, position papers) and other
materials portions of the record as would support the allegations therein.

B. The Honorable Court of Appeals did not rule in accordance with prevailing laws and jurisprudence when
it denied petitioner APCs motion for reconsideration in spite of the fact that petitioner APC submitted
copies of all pleadings and documents mentioned in its petition for certiorari.
C. The Honorable Court of Appeals did not rule in accordance with prevailing laws and jurisprudence when
it denied petitioner APCs motion for reconsideration on a new ground namely, the alleged failure of
petitioner APC to dispute respondent Zamoras comment and/or opposition to motion for reconsideration
("Opposition"), in spite of the fact that (i) the Honorable Court of Appeals did not order petitioner APC to
reply to the said opposition; and (ii) the said Opposition is patently unmeritorious. 20
Respondent filed his Comment to the petition. 21
We grant the petition.
We agree with petitioner on the first and second issues.
In its Resolution of January 11, 2001, the Court of Appeals cited as ground for the dismissal of the petition
for certiorari its lack of certified true copies of the pleadings and material portions of the case record. This
is an erroneous ruling, petitioner insists, for the deficiency was excusable: pleadings and other portions of
the case records were not attached to the petition because these documents had no bearing on the sole issue
raised therein, which was, whether the NLRC committed grave abuse of discretion in awarding unpaid
salaries to respondent despite having adjudged the latter at fault for abandonment of employment. 22
Respondent disagrees. He argues that the requirements under Section 1, Rule 65 are mandatory and
jurisdictional; petitioners failure to comply with them was a valid ground for the dismissal of its petition. 23
Both views are actually correct.
Certiorari, being an extraordinary remedy, the party seeking it must strictly observe the requirements for its
issuance. 24 Some of these requirements are found in paragraph 2, Section 1 of Rule 65, which reads:
SECTION. 1. Petition for certiorari.
xxxx
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant and pertinent thereto x x x.
These requirements are emphasized in Section 3, Rule 46, thus:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements.
xxxx
[The petition] shall be x x x accompanied by a clearly legible duplicate original or certified true copy of the
judgment, order, resolution, or ruling subject thereof, such material portions of the record as are referred to
therein, and other documents relevant or pertinent thereto x x x.
xxxx
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for
the dismissal of the petition.

Note that the foregoing rules speak of two sets of documents to be attached to the petition. The first set
consists of certified true copies of the judgment, order or resolution subject of the petition. Duplicate
originals or certified true copies thereof must be appended to enable the reviewing court to determine
whether the court, body or tribunal, which rendered the same committed grave abuse of discretion. 25 The
second set consists of the pleadings, portions of the case record and other documents which are material
and pertinent to the petition. 26 Mere photocopies thereof may be attached to the petition. 27 It is this second
set of documents which is relevant to this case.
As a general rule, a petition lacking copies of essential pleadings and portions of the case record may be
dismissed. 28 This rule, however, is not petrified. As the exact nature of the pleadings and parts of the case
record which must accompany a petition is not specified, much discretion is left to the appellate court to
determine the necessity for copies of pleading and other documents. 29 There are, however, guideposts it
must follow.
First, not all pleadings and parts of case records are required to be attached to the petition. Only those
which are relevant and pertinent must accompany it. The test of relevancy is whether the document in
question will support the material allegations in the petition, whether said document will make out a prima
facie case of grave abuse of discretion as to convince the court to give due course to the petition. 30
Second, even if a document is relevant and pertinent to the petition, it need not be appended if it is shown
that the contents thereof can also found in another document already attached to the petition. Thus, if the
material allegations in a position paper are summarized in a questioned judgment, it will suffice that only a
certified true copy of the judgment is attached. 31
Third, a petition lacking an essential pleading or part of the case record may still be given due course or
reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required, 32 or
that it will serve the higher interest of justice that the case be decided on the merits. 33
It is readily apparent in this case that the Court of Appeals was overzealous in its enforcement of the rules.
To begin with, the pleadings and other documents it required of petitioner were not at all relevant to the
petition. It is noted that the only issue raised by petitioner was whether the NLRC committed grave abuse
of discretion in granting respondent unpaid salaries while declaring him guilty of abandonment of
employment. Certainly, copies of the Resolutions of the NLRC dated February 10, 1999, December 17,
1999 and October 11, 2000 would have sufficed as basis for the Court of Appeals to resolve this issue.
After all, it is in these Resolutions that the NLRC purportedly made contrary findings.
There was no need at all for copies of the position papers and other pleadings of the parties; these would
have only cluttered the docket. Besides, a summary of the material allegations in the position papers can be
found in both the September 16, 1998 Decision of the Labor Arbiter and the February 10, 1999 Resolution
of the NLCR. Quick reference to copies of the decision and resolution would have already satisfied any
question the court may have had regarding the pleadings of the parties.
The attachments of petitioner to its petition for certiorari were already sufficient even without the pleadings
and portions of the case record. It was therefore unreasonable of the Court of Appeals to have dismissed it.
More so that petitioner later corrected the purported deficiency by submitting copies of the pleadings and
other documents.
This brings us to the third issue. Again, we agree with petitioner that the Court of Appeals erred in denying
its motion for reconsideration.
In its May 23, 2001 Resolution, the Court of Appeals cited as basis for denying the motion for
reconsideration of petitioner from the January 11, 2000 Resolution the latters purported failure to

contravene the Opposition filed by respondent. 34 This is certainly a curious ground to deny a motion for
reconsideration. As pointed out by petitioner, a reply to an opposition to a motion for reconsideration is not
filed as a matter of course. An order from the court may issue though to direct the movant to file a reply. In
this case, no such order came from the Court of Appeals instructing petitioner to counter the Opposition
filed by respondent. Hence, it cannot be assumed that in failing to file a reply, petitioner, in effect,
conceded to the Opposition of respondent.
It is not as if the Opposition which respondent filed required any answer. The matters discussed therein
were not even germane to the issue raised in the motion for reconsideration. It was as though respondent
passed in silence petitioners arguments against the January 11, 2000 Resolution. If we are to be technical
about it, it was instead the motion for reconsideration of petitioner which was not contravened by
respondent. It was error on the part of the Court of Appeals to have denied it.
In sum, we annul and set aside the January 11, 2000 and May 23, 2001 Resolutions of the Court of
Appeals. There is no more obstacle then to the petition for certiorari taking its course. However, rather
than remand it to the Court of Appeals for resolution, we resolve it here and now to expedite matters. 35
We hold that the NLRC did not commit grave abuse of discretion in holding petitioner liable to respondent
for P198,502.30.
The premise of the award of unpaid salary to respondent is that prior to the reversal by the NLRC of the
decision of the Labor Arbiter, the order of reinstatement embodied therein was already the subject of an
alias writ of execution even pending appeal. Although petitioner did not comply with this writ of execution,
its intransigence made it liable nonetheless to the salaries of respondent pending appeal. There is logic in
this reasoning of the NLRC. In Roquero v. Philippine Airlines, Inc., we resolved the same issue as follows:
We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are applied
only in a suppletory manner and only to effectuate the objectives of the Labor Code and not to defeat them.
[36][25]
Hence, 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. 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. 37
There is a policy elevated in this ruling. In Aris (Phil.) Inc. v. National Labor Relations Commission, we
held:
In short, with respect to decisions reinstating employees, the law itself has determined a sufficiently
overwhelming reason for its execution pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may authorize an immediate
implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that
saving act is designed to stop, although temporarily since the appeal may be decided in favor of the
appellant, a continuing threat or danger to the survival or even the life of the dismissed or separated
employee and his family. 38
We cannot do less. The petition for certiorari in CA G.R. SP No. 62388 must be dismissed.
WHEREFORE, the petition is GRANTED.The January 11, 2000 and May 23, 2001 Resolutions of the
Court of Appeals are ANNULLED AND SET ASIDE, and the Petition for Certiorari docketed as CA

G.R. SP No. 62388 is DISMISSED. The Resolutions dated December 17, 1999 and October 11, 2000 of
the National Labor Relations Commission are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 177026

January 30, 2009

LUNESA O. LANSANGAN AND ROCITA CENDAA, Petitioners,

vs.
AMKOR TECHNOLOGY PHILIPPINES, INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:
An anonymous e-mail was sent to the General Manager of Amkor Technology Philippines (respondent)
detailing allegations of malfeasance on the part of its supervisory employees Lunesa Lansangan and Rosita
Cendaa (petitioners) for "stealing company time."1 Respondent thus investigated the matter, requiring
petitioners to submit their written explanation. In handwritten letters, petitioners admitted their
wrongdoing.2 Respondent thereupon terminated petitioners for "extremely serious offenses" as defined in
its Code of Discipline,3 prompting petitioners to file a complaint for illegal dismissal against it.4
Labor Arbiter Arthur L. Amansec, by Decision of October 20, 2004,5 dismissed petitioners complaint, he
having found them guilty of
"[s]wiping another employees [sic] I.D. card or requesting another employee to swipe ones I.D. card to
gain personal advantage and/or in the interest of cheating", an offense of dishonesty punishable as a serious
form of misconduct and fraud or breach of trust under Article 282 of the Labor Code:
xxxx
which allows the dismissal of an employee for a valid cause. (Emphasis and underscoring supplied)
The Arbiter, however, ordered the reinstatement of petitioners to their former positions without backwages
"as a measure of equitable and compassionate relief" owing mainly to petitioners prior unblemished
employment records, show of remorse, harshness of the penalty and defective attendance monitoring
system of respondent.6
Respondent assailed the reinstatement aspect of the Arbiters order before the National Labor Relations
Commission (NLRC).

In the meantime, petitioners, without appealing the Arbiters finding them guilty of "dishonesty as a form
of serious misconduct and fraud or breach of trust," moved for the issuance of a "writ of reinstatement."7
After a series of oppositions, motions and orders,8 the Arbiter issued an alias writ of execution following
which respondents bank account at Equitable-PCI Bank was garnished. Respondent thereupon moved for
the quashal of the alias writ of execution and lifting of the notice of garnishment, which the Arbiter denied
by Order of January 26, 2005, drawing respondent to appeal to the NLRC.
After consolidating respondents appeal from the Labor Arbiters order of reinstatement and subsequent
appeal/order denying the quashal of the alias writ of execution and lifting of the notice of garnishment, the
NLRC, by Resolution of June 30, 2005,9 granted respondents appeals by deleting the reinstatement aspect
of the Arbiters decision and setting aside the Arbiters Alias Writ of Execution and Notice of Garnishment.
Thus the NLRC disposed as follows:
ACCORDINGLY, the appeal is hereby GRANTED. The Labor Arbiters Decision dated October 20, 2004
is hereby MODIFIED by DELETING the portion that ruled for appelle[e]s reinstatement. Consequently,
the Writ of Execution dated November 19, 2004, the subsequent Alias Writ of Execution dated January 26,
2005, and the Notice of Garnishment dated January 14, 2005 served upon Equitable PCI Bank by Sheriff
Agripina Sangel are hereby ordered to be SET ASIDE.
SO ORDERED. (Underscoring supplied)
Petitioners motion for reconsideration of the NLRC Resolution having been denied, they filed a petition
for certiorari before the Court of Appeals which, by Decision10 of September 19, 2006, while affirming the
finding that petitioners were guilty of misconduct and the like, ordered respondent to "pay petitioners their
corresponding backwages without qualification and deduction for the period covering October 20, 2004
(date of the Arbiters decision) up to June 30, 2005 (date of the NLRC Decision)," citing Article 223 of the
Labor Code and Roquero v. Philippine Airlines.11
Both parties filed their respective motions for partial reconsideration which were denied.12 Only petitioners
have come to this Court via the present petition for review,13 contending that:
I
WITH ALL DUE RESPECT, THE ORDER OF THE HONORABLE COURT OF APPEALS LIMITING
THE PAYMENT OF BACKWAGES [TO] THE PETITIONERS FROM OCTOBER 20, 2004 (ARBITER
DECISION) UP TO JUNE 30, 2005 (NLRC DECISION) ONLY IS CONTRARY TO THE CASE OF
ALEJANDRO ROQUERO VS. PHILIPPINE AIRLINES, INC.[,] G.R. NO. 152329, APRIL [22,] 2003
[AND]
II
. . . THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
CONCLUDING THAT THE PETITIONERS COMMITTED SERIOUS MISCONDUCT, FRAUD,
DISHONESTY AND BREACH OF TRUST. BUT EVEN ASSUMING THAT THE PETITIONERS
COMMITTED THE SWIPING IN OF IDENTIFICATION CARD, THE PENALTY OF DISMISSAL IS
TOO SEVERE, HARSH AND CONTRARY TO ARTICLE 282 OF THE LABOR CODE OF THE
PHILIPPINES AND EXISTING JURISPRUDENCE.14
Since respondent did not appeal from the appellate courts decision, the said courts order for it to pay
backwages to petitioners for the therein specified period has become final.

Petitioners highlight the Courts ruling in Roquero v. Philippine Airlines15 where the therein employer was
ordered to pay the wages to which the therein employee was entitled from the time the reinstatement order
was issued until the finality of this Courts decision16 in favor of the therein employee. Thus, petitioners
contend that the payment of backwages should not be computed only up to the promulgation by the NLRC
of its decision.
In its Comment,17 respondent asserts that, inter alia, petitioners reliance on Roquero is misplaced in view
of the glaring factual differences between said case and the present case.
The petition fails.
The decision of the Arbiter finding that petitioners committed "dishonesty as a form of serious misconduct
and fraud, or breach of trust" had become final, petitioners not having appealed the same before the NLRC
as in fact they even moved for the execution of the reinstatement aspect of the decision. It bears recalling
that it was only respondent which assailed the Arbiters decision to the NLRC to solely question the
propriety of the order for reinstatement, and it succeeded.1avvphil.zw+
Roquero, as well as Article 22318 of the Labor Code on which the appellate court also relied, finds no
application in the present case. Article 223 concerns itself with an interim relief, granted to a dismissed or
separated employee while the case for illegal dismissal is pending appeal, as what happened in Roquero. It
does not apply where there is no finding of illegal dismissal, as in the present case.
The Arbiter found petitioners dismissal to be valid. Such finding had, as stated earlier, become final,
petitioners not having appealed it. Following Article 279 which provides:
xxxx
In cases of regular employment, the employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement (Emphasis, underscoring
and italics supplied),
petitioners are not entitled to full backwages as their dismissal was not found to be illegal. Agabon v.
NLRC19 so states payment of backwages and other benefits is justified only if the employee was unjustly
dismissed.
WHEREFORE, the petition is DENIED.
No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 142732-33

December 4, 2007

MARILOU S. GENUINO, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM FERGUSON,
and AZIZ RAJKOTWALA, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. Nos. 142753-54
CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MARILOU GENUINO, respondents.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks to set aside the September 30, 1999 Decision1
and March 31, 2000 Resolution2 of the Court of Appeals (CA) in the consolidated cases docketed as CAG.R. SP Nos. 51532 and 51533. The appellate court dismissed the parties' petitions involving the National
Labor Relations Commission's (NLRC's) Decision3 and Resolution,4 which held that Marilou S. Genuino
was validly dismissed by Citibank, N.A. (Citibank). The NLRC likewise ordered the payment of salaries
from the time that Genuino was reinstated in the payroll to the date of the NLRC decision. Upon
reconsideration, however, the CA modified its decision and held that Citibank failed to observe due process
in CA-G.R. SP No. 51532; hence, Citibank should indemnify Genuino in the amount of PhP 5,000. Both
parties are now before this Court assailing portions of the CA's rulings. In G.R. Nos. 142732-33, Genuino
assails the CA's finding that her dismissal was valid. In G.R. Nos. 142753-54, Citibank questions the CA's
finding that Citibank violated Genuino's right to procedural due process and that Genuino has a right to
salaries.
Citibank is an American banking corporation duly licensed to do business in the Philippines. William
Ferguson was the Manila Country Corporate Officer and Business Head of the Global Finance Bank of
Citibank while Aziz Rajkotwala was the International Business Manager for the Global Consumer Bank of
Citibank.5
Genuino was employed by Citibank sometime in January 1992 as Treasury Sales Division Head with the
rank of Assistant Vice-President. She received a monthly compensation of PhP 60,487.96, exclusive of
benefits and privileges.6
On August 23, 1993, Citibank sent Genuino a letter charging her with "knowledge and/or involvement" in
transactions "which were irregular or even fraudulent." In the same letter, Genuino was informed she was
under preventive suspension.7
Genuino wrote Citibank on September 13, 1993 and asked the bank the following:
a. Confront our client with the factual and legal basis of your charges, and afford her an
opportunity to explain;
b. Substantiate your charge of fraudulent transactions against our client; or if the same cannot be
substantiated;

c. Correct/repair/compensate the damage you have caused our client.8

On September 13, 1993, Citibank, through Victorino P. Vargas, its Country Senior Human Resources
Officer, sent a letter to Genuino, the relevant portions of which read:
As you are well aware, the bank served you a letter dated August 23, 1993 advising you that
ongoing investigations show that you are involved and/or know of irregular transactions which are
at the very least in conflict with the bank's interest, and, may even be fraudulent in nature.
These transactions are those involving Global Pacific and/or Citibank and the following bank
clients, among others:
1. Norma T. de Jesus
2. Carmen Intengan/Romeo Neri
3. Mario Mamon
4. Vienna Ochoa/IETI
5. William Samara
6. Roberto Estandarte
7. Rita Browner
8. Ma. Redencion Sumpaico
9. Cesar Bautista
10. Teddy Keng
11. NDC-Guthrie
12. Olivia Sy
In view of the foregoing, you are hereby directed to explain in writing three (3) days from your
receipt hereof why your employment should not be terminated in view of your involvement in
these irregular transactions. You are also directed to appear in an administrative investigation of
the matter which is set on Tuesday, Sept. 21, 1993 at 2:00 P.M. at the HR Conference Room, 6th
Floor, Citibank Center. You may bring your counsel if you so desire.9
Genuino's counsel replied through a letter dated September 17, 1993, demanding for a bill of particulars
regarding the charges against Genuino. Citibank's counsel replied on September 20, 1993, as follows:
1.2. [T]he bank has no intention of converting the administrative investigation of this case to a full
blown trial. What it is prepared to do is give your client, as required by law and Supreme Court
decisions, an opportunity to explain her side on the issue of whether she violated the conflict of
interest ruleeither in writing (which could be in the form of a letter-reply to the September 13,
1993 letter to Citibank, N.A.) or in person, in the administrative investigation which is set for
tomorrow afternoon vis--vis the bank clients/parties mentioned in the letter of Citibank, N.A.

xxxx
2.2. You will certainly not deny that we have already fully discussed with you what is meant by
the conflict with the bank's interest vis--vis the bank clients/parties named in the September 13,
1993 letter of Citibank to Ms. Genuino. As we have repeatedly explained to you, what the bank
meant by it is that your client and Mr. Dante Santos, using the facilities of their family
corporations (Torrance and Global) appear to have participated in the diversion of bank clients'
funds from Citibank to, and investment thereof in, other companies and that they made money in
the process, in violation of the conflict of law rule. It is her side of this issue that Citibank, N.A. is
waiting to receive/hear from Ms. Genuino.10
Genuino did not appear in the administrative investigation held on September 21, 1993. Her lawyers wrote
a letter to Citibank's counsel asking "what bank clients' funds were diverted from the bank and invested in
other companies, the specific amounts involved, the manner by which and the date when such diversions
were purportedly affected." In reply, Citibank's counsel noted Genuino's failure to appear in the
investigation and gave Genuino up to September 23, 1993 to submit her written explanation. Genuino did
not submit her written explanation.11
On September 27, 1993, Citibank informed Genuino of the result of their investigation. It found that
Genuino with Santos used "facilities of Genuino's family corporation, namely, Global Pacific, personally
and actively participated in the diversion of bank clients' funds to products of other companies that yielded
interests higher than what Citibank products offered, and that Genuino and Santos realized substantial
financial gains, all in violation of existing company policy and the Corporation Code, which for your
information, carries a penal sanction."12
Genuino's 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.13
On October 15, 1993, Genuino filed before the Labor Arbiter a Complaint14 against Citibank docketed as
NLRC Case No. 00-10-06450-93 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 Decision15
on May 2, 1994, the dispositive portion of which reads:
WHEREFORE, finding the dismissal of the complainant Marilou S. Genuino to be without just
cause and in violation of her right to due process, respondent CITIBANK, N.A., and any and all
persons acting on its behalf or by or under their authority are hereby ordered to reinstate
complainant immediately to her former position as Treasury Sales Division Head or its equivalent
without loss of seniority rights and other benefits, with backwages from August 23, 1993 up to
April 30, 1994 in the amount of P493,800.00 (P60,000 x 8.23 mos.) subject to adjustment until
reinstated actually or in the payroll.
Respondents are likewise ordered to pay complainant the amount of 1.5 Million Pesos and
P500,000.00 by way of moral and exemplary damages plus 10% of the total monetary award as
attorney's fees.16
Both parties appealed to the NLRC. The NLRC, in its September 3, 1994 Decision in NLRC-NCR Case
No. 00-10-06450-93 (CA No. 006947-94), reversed the Labor Arbiter's decision with the following
modification:
WHEREFORE, Judgment is hereby rendered (1) SETTING ASIDE the appealed decision of the
Labor Arbiter; (2) DECLARING the dismissal of the complainant valid and legal on the ground of
serious misconduct and breach of trust and confidence and consequently DISMISSING the
complaint a quo; but (3) ORDERING the respondent bank to pay the salaries due to the

complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a
month, as found by the Labor Arbiter) up to and until the date of this decision.
SO ORDERED.17
The parties' motions for reconsideration were denied by the NLRC in a resolution dated October 28, 1994.18
The Ruling of the Court of Appeals
On December 6, 1994, Genuino filed a petition for certiorari docketed as G.R. No. 118023 with this Court.
Citibank's petition for certiorari, on the other hand, was docketed as G.R. No. 118667. In the January 27,
1999 Resolution, we referred these petitions to the CA pursuant to our ruling in St. Martin Funeral Home v.
NLRC.19
Genuino's petition before the CA was docketed as CA-G.R. SP No. 51532 while Citibank's petition was
docketed as CA-G.R. SP No. 51533. Genuino prayed for the reversal of the NLRC's decision insofar as it
declared her dismissal valid and legal. Meanwhile, Citibank questioned the NLRC's order to pay Genuino's
salaries from the date of reinstatement until the date of the NLRC's decision.
The CA promulgated its decision on September 30, 1999, denying due course to and dismissing both
petitions.20 Both parties filed motions for reconsideration and on March 31, 2000, the appellate court
modified its decision and held:
WHEREFORE, save for the MODIFICATION ordering Citibank, N.A. to pay Ms. Marilou S.
Genuino five thousand pesos (P5,000.00) as indemnity for non-observance of due process in CAG.R. SP No. 51532, this Court's 30 September 1999 decision is REITERATED and AFFIRMED
in all other respects.
SO ORDERED.21
Hence, we have this petition.
The Issue
WHETHER OR NOT THE DISMISSAL OF GENUINO IS FOR A JUST CAUSE AND IN
ACCORDANCE WITH DUE PROCESS
In G.R. Nos. 142732-33, Genuino contends that Citibank failed to observe procedural due process in
terminating her employment. This failure is allegedly an indication that there were no valid grounds in
dismissing her. In G.R. Nos. 142753-54, Citibank questions the ruling that Genuino has a right to
reinstatement under Article 223 of the Labor Code. Citibank contends that the Labor Arbiter's finding is not
supported by evidence; thus, the decision is void. Since a void decision cannot give rise to any rights,
Citibank opines that there can be no right to payroll reinstatement.
The dismissal was for just cause but lacked due process
We affirm that Genuino was dismissed for just cause but without the observance of due process.
In a string of cases, 22 we have repeatedly said that the requirement of twin notices must be met. In the
recent case of King of Kings Transport, Inc. v. Mamac, we explained:
To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or
grounds for termination against them, and a directive that the employees are given the opportunity
to submit their written explanation within a reasonable period. "Reasonable opportunity" under the
Omnibus Rules means every kind of assistance that management must accord to the employees to
enable them to prepare adequately for their defense. This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give the employees an opportunity to
study the accusation against them, consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge against the
employees. A general description of the charge will not suffice. Lastly, the notice should
specifically mention which company rules, if any, are violated and/or which among the grounds
under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or
conference wherein the employees will be given the opportunity to: (1) explain and clarify their
defenses to the charge against them; (2) present evidence in support of their defenses; and (3)
rebut the evidence presented against them by the management. During the hearing or conference,
the employees are given the chance to defend themselves personally, with the assistance of a
representative or counsel of their choice. Moreover, this conference or hearing could be used by
the parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the
charge against the employees have been considered; and (2) grounds have been established to
justify the severance of their employment.23
The Labor Arbiter found that Citibank failed to adequately notify Genuino of the charges against her. On
the contrary, the NLRC held that "the function of a 'notice to explain' is only to state the basic facts of the
employer's charges, which x x x the letters of September 13 and 17, 1993 in question have fully served."24
We agree with the CA that the dismissal was valid and legal, and with its modification of the NLRC ruling
that PhP 5,000 is due Genuino for failure of Citibank to observe due process.
The Implementing Rules and Regulations of the Labor Code provide that any employer seeking to dismiss
a worker shall furnish the latter a written notice stating the particular acts or omissions constituting the
grounds for dismissal.25 The purpose of this notice is to sufficiently apprise the employee of the acts
complained of and enable him/her to prepare his/her defense.
In this case, the letters dated August 23, September 13 and 20, 1993 sent by Citibank did not identify the
particular acts or omissions allegedly committed by Genuino. The August 23, 1993 letter charged
Genuino with having "some knowledge and/or involvement" in some transactions "which have the
appearance of being irregular at the least and may even be fraudulent." The September 13, 1993 letter, on
the other hand, mentioned "irregular transactions" involving Global Pacific and/or Citibank and 12 bank
clients. Lastly, the September 20, 1993 letter stated that Genuino and "Mr. Dante Santos, using the facilities
of their family corporations (Torrance and Global) appear to have participated in the diversion of bank
clients' funds from Citibank to, and investment thereof in, other companies and that they made money in
the process, in violation of the conflict of law rule [sic]." The extent of Genuino's alleged knowledge and
participation in the diversion of bank's clients' funds, manner of diversion, and amounts involved; the acts
attributed to Genuino that conflicted with the bank's interests; and the circumstances surrounding the
alleged irregular transactions, were not specified in the notices/letters.

While the bank gave Genuino 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.
The two-notice requirement of the Labor Code is an essential part of 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. As explained in King of Kings Transport, Inc., 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 we hold that Citibank failed to observe procedural due process, we nevertheless find Genuino's
dismissal justified.
Citibank maintains that Genuino was aware of the bank's Corporate Policy Manual specifically Chapter 3
on "Principles and Policies" with regard to avoiding conflicts of interest. She had even submitted a Conflict
of Interest Survey to Citibank. In that survey, she denied any knowledge of engaging in transactions in
conflict with Citibank's interests. Citibank, for its part, submitted evidence showing 99% ownership of
Global stocks by Genuino and Santos. In July 1993, Citibank discovered that Genuino and Santos were
instrumental in the withdrawal by bank depositors of PhP 120 million of investments in Citibank. This
amount was subsequently invested in another foreign bank, Internationale Nederlanden Bank, N.V., under
the control of Global and Torrance, another corporation controlled by Genuino and Santos. 26 Citibank also
filed two criminal complaints against Genuino and Santos for violations of the conflict of interest rule
provided in Sec. 31 in relation to Sec. 14427 of the Corporation Code.28
We note also that during the proceedings before the Labor Arbiter, Citibank presented the following
affidavits, with supporting documentary evidence against Genuino:
1) Vic Lim, an officer of Citibank who investigated the anomalies of Genuino and Santos,
concluded that Genuino and Santos realized substantial financial gains out of the transfer of
monies as supported by the following documents:
1) [S]ome of the Term Investment Applications (TIA), Applications for Money Transfer, all filled
up in the handwriting of Ms. Marilou Genuino. These documents cover/show the transfer of the
monies of the Citibank clients from their money placements/deposits with Citibank, N.A. to
Global and/or Torrance.
2) [S]ome of the checks that were drawn by Global and Torrance against their Citibank accounts
in favor of the other companies by which Global and Torrance transferred the monies of the bank
clients to the other companies.
3) [S]ome of the checks drawn by the other companies in favor of Global or Torrance by which
the other companies remitted back to Global and/or Torrance the monies of the bank clients
concerned.
4) [S]ome of the checks drawn by Global and Torrance against their Citibank accounts in favor of
Mr. Dante Santos and Ms. Marilou Genuino, covering the shares of the latter in the spreads or
margins Global and Torrance had derived from the investments of the monies of the Citibank
clients in the other companies.

5) [S]ome of the checks drawn by Torrance and Global in favor of Citibank clients by which
Global and Torrance remitted back to said bank clients their principal investments (or portions
thereof) and the rates of interests realized from their investment placed with the other companies
less the spreads made by Global and/or Torrance, Mr. Dante L. Santos and Ms. Marilou
Genuino.29
In Lim's Reply-Affidavit with attached supporting documents, he stated that out of the competing money
placement activities, Genuino and Santos derived financial gains amounting to PhP 2,027,098.08 and PhP
2,134,863.80, respectively.30
2) Marilyn Bautista, a Treasury Sales Specialist in the Treasury Department of the Global Consumer Bank
of Citibank and whose superiors were Genuino and Santos, stated that:
Based on documents that have subsequently come to my knowledge, I realized that the two
(Genuino and Dante L. Santos), with the active cooperation of Redencion Sumpaico (the
Accountant of Global) had brokered for their own benefits and/or of Global the sale of the
financial products of Citibank called "Mortgage Backed Securities" or MBS and in the process
made money at the expense of the (Citibank) investors and the bank.31
3) Patrick Cheng attested to other transactions from which Genuino, Santos, and Global brokered the
Mortgage Backed Securities (MBS), namely: ICC/Nemesio and Olivia Sy transaction, San Miguel
Corporation/ICC, CIPI/Asiatrust, FAPE, PERAA and Union Bank, and NDC-Guthrie transactions.32
In her defense, Genuino asserts that Citibank has no evidence of any wrongful act or omission imputable to
her. According to her, she did not try to conceal from the bank her participation in Global and she even
disclosed the information when Global designated Citibank as its depositary. She avers there was no
conflict of interest because Global was not engaged in Citibank's accepting deposits and granting loans, nor
in money placement activities that compete with Citibank's activities; and neither does Citibank invest in
the outlets used by Global. She claims that the controversy between Santos and Global had already been
amicably resolved in a Compromise Agreement between the two parties.33
Genuino further asserts that the letter of termination did not indicate what existing company policy had
been violated, and what acts constituted serious misconduct or willful breach of the trust reposed by the
bank. She claims that Lim's testimony that the checks issued by Global in her name were profits was
malicious, hearsay, and lacked factual basis. She also posits that as to the withdrawals of clients, she could
not possibly dictate on the depositors. She pointed out that the depositors even sent Citibank a letter dated
August 25, 1993 informing the bank that the withdrawals were made upon their express instructions.
Genuino avers the bank's loss of confidence should have to be proven by substantial evidence, setting out
the facts upon which loss of confidence in the employee may be made to rest.34
Contrary to the Labor Arbiter's finding, the NLRC found the following facts supported by the records:
a) Respondent bank has a conflict of interest rule, embodied in Chapter 3 of its Corporate Policy
Manual, prohibiting the officers of the bank from engaging in business activities, situations or
circumstances that are in conflict with the interest of the bank.
b) Complainant was familiar with said conflict of interest rule of the bank and of her duty to
disclose to the bank in writing any personal circumstances which conflicts or appears to be in
conflict with Citibank's interest.
c) Complainant is a substantial stockholder of Global Pacific, but she did not disclose fact to the
bank.

d) Global Pacific is engaged in money placement business like Citibank, N.A.; that in carrying out
its said money placement business, it used funds belonging to Citibank clients which were
withdrawn from Citibank with participation of complainant and Dante L. Santos. In one
transaction of this nature, P120,000,000.00 belonging to Citibank clients was withdrawn from
Citibank, N.A. and placed in another foreign bank, under the control of Global Pacific. Said big
investment money was returned to Citibank, N.A. only when Citibank, N.A. filed an injunction
suit.
e) Global Pacific also engaged in the brokering of the ABS or MBS, another financial product of
Citibank. It was the duty of complainant Genuino and Dante L. Santos to sell said product on
behalf of Citibank, N.A. and for Citibank N.A.'s benefit. In the brokering of the ABS or MBS,
Global Pacific made substantial profits which otherwise would have gone to Citibank, N.A. if only
they brokered the ABS or MBS for and on behalf of Citibank, N.A.
Art. 282(c) of the Labor Code provides that an employer may terminate an employment for fraud or willful
breach by the employee of the trust reposed in him/her by his/her employer or duly authorized
representative. In order to constitute as just cause for dismissal, loss of confidence should relate to acts
inimical to the interests of the employer.35 Also, the act complained of should have arisen from the
performance of the employee's duties.36 For loss of trust and confidence to be a valid ground for an
employee's dismissal, it must be substantial and not arbitrary, and must be founded on clearly established
facts sufficient to warrant the employee's separation from work.37 We also held that:
[L]oss of confidence is a valid ground for dismissing an employee and proof beyond reasonable
doubt of the employee's misconduct is not required. It is sufficient if there is some basis for such
loss of confidence or if the employer has reasonable ground to believe or to entertain the moral
conviction that the employee concerned is responsible for the misconduct and that the nature of his
participation therein rendered him unworthy of the trust and confidence demanded by his
position.38
As Assistant Vice-President of Citibank's Treasury Department, Genuino was tasked to solicit investments,
and peso and dollar deposits for, and keep them in Citibank; and to sell and/or push for the sale of
Citibank's financial products, such as the MBS, for the account and benefit of Citibank.39 She held a
position of trust and confidence. There is no way she could deny any knowledge of the bank's policies nor
her understanding of these policies as reflected 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 even dissuade
the depositors from withdrawing their monies from Citibank, and was even instrumental in the transfers of
monies from Citibank to a competing bank through Global and Torrance, the corporations under Genuino's
control.
All the pieces of evidence compel us to conclude that Genuino did not have her employer's interest. The
letter of the bank's clients which attested that the withdrawals from Citibank were made upon their
instructions is of no import. It did not explain why they preferred to invest in Global and Torrance, nor did
it mention that Genuino tried to dissuade them from withdrawing their deposits. Genuino herself admitted
her relationship with some of the depositors in her affidavit, to wit:
6. Contrary to the allegations of Mr. Lim in par. 6.1 up to 8.1 concerning the alleged scheme
employed in the questioned transactions, insinuating an "in" and "out" movement of funds of the
seven (7) depositors, the truth is that after said "depositors" instructed/authorized us to
effect the withdrawal of their respective monies from Citibank to attain the common goal of
higher yields utilizing Global as the vehicle for bulk purchases of securities or papers not
dealt with/offered by Citibank, said pooled investment remained with Global, and were
managed through Global for over a year until the controversy arose;

10. The seven (7) "depositors" mentioned in Mr. Lim's Affidavits are the long-time friends of
affiant Genuino who had formed a loosely constituted investment group for purposes of realizing
higher yields derivable from pooled investments, and as the advisor of the group she had in effect
chosen Citibank as the initial repository of their respective monies prior to the implementation of
plans for pooled investments under Global. Hence, she had known and dealt with said "depositors"
before they became substantial depositors of Citibank. She did not come across them because of
Citibank.40 (Emphasis supplied.)
All told, Citibank had valid grounds to dismiss Genuino on ground of loss of confidence.
In view of Citibank's failure to observe due process, however, nominal damages are in order but the amount
is hereby raised to PhP 30,000 pursuant to Agabon v. NLRC. The NLRC's order for payroll reinstatement is
set aside.
In Agabon, we explained:
The violation of the petitioners' right to statutory due process by the private respondent warrants
the payment of indemnity in the form of nominal damages. The amount of such damages is
addressed to the sound discretion of the court, taking into account the relevant circumstances.
Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at
P30,000.00. We believe this form of damages would serve to deter employers from future
violations of the statutory due process rights of employees. At the very least, it provides a
vindication or recognition of this fundamental right granted to the latter under the Labor Code and
its Implementing Rules.41
Thus, the award of PhP 5,000 to Genuino as indemnity for non-observance of due process under the CA's
March 31, 2000 Resolution in CA-G.R. SP No. 51532 is increased to PhP 30,000.
Anent the directive of the NLRC in its September 3, 1994 Decision ordering Citibank "to pay the salaries
due to the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a
month, as found by the Labor Arbiter) up to and until the date of this decision," the Court hereby cancels
said award in view of its finding that the dismissal of Genuino is for a legal and valid ground.
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, which states:
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 herein.
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 s/he 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/her employer under existing laws,
collective bargaining agreement provisions, and company practices.42 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 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.
WHEREFORE, the petitions of Genuino in G.R. Nos. 142732-33 are DENIED for lack of merit. The
petitions of Citibank in G.R. Nos. 142753-54 are GRANTED. The September 30, 1999 Decision and
March 31, 2000 Resolution in CA-G.R. SP Nos. 51532 and 51533 are AFFIRMED with
MODIFICATION that Genuino is entitled to PhP 30,000 as indemnity for non-observance of due process.
Item (3) in the dispositive portion of the September 3, 1994 Decision of the NLRC in NLRC-NCR Case
No. 00-10-06450-93 (CA No. 006947-94) is DELETED and SET ASIDE, and said NLRC decision is
MODIFIED as follows:
WHEREFORE, Judgment is hereby rendered (1) SETTING ASIDE the appealed decision of the
Labor Arbiter; (2) DECLARING the dismissal of the complainant valid and legal on the ground of
serious misconduct and breach of trust and confidence and consequently DISMISSING the
complaint a quo; but (3) ORDERING the respondent bank to pay the complainant nominal
damages in the amount of PhP 30,000.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 164856

January 20, 2009

JUANITO A. GARCIA and ALBERTO J. DUMAGO, Petitioners,

vs.
PHILIPPINE AIRLINES, INC., Respondent.
DECISION
CARPIO MORALES, J.:
Petitioners Juanito A. Garcia and Alberto J. Dumago assail the December 5, 2003 Decision and April 16,
2004 Resolution of the Court of Appeals1 in CA-G.R. SP No. 69540 which granted the petition for
certiorari of respondent, Philippine Airlines, Inc. (PAL), and denied petitioners Motion for
Reconsideration, respectively. The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered and in view of the foregoing, the instant petition is hereby GIVEN
DUE COURSE. The assailed November 26, 2001 Resolution as well as the January 28, 2002 Resolution of
public respondent National Labor Relations Commission [NLRC] is hereby ANNULLED and SET ASIDE
for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.
Consequently, the Writ of Execution and the Notice of Garnishment issued by the Labor Arbiter are hereby
likewise ANNULLED and SET ASIDE.
SO ORDERED.2
The case stemmed from the administrative charge filed by PAL against its employees-herein petitioners3
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 Centers Toolroom Section on July 24, 1995.

After due notice, PAL dismissed petitioners on October 9, 1995 for transgressing the PAL Code of
Discipline,4 prompting them to file a complaint for illegal dismissal and damages which was, by Decision
of January 11, 1999,5 resolved by the Labor Arbiter in their favor, thus ordering PAL to, inter alia,
immediately comply with the reinstatement aspect of the decision.
Prior to the promulgation of the Labor Arbiters decision, the Securities and Exchange Commission (SEC)
placed PAL (hereafter referred to as respondent), which was suffering from severe financial losses, under
an Interim Rehabilitation Receiver, who was subsequently replaced by a Permanent Rehabilitation Receiver
on June 7, 1999.
From the Labor Arbiters decision, respondent appealed to the NLRC which, by Resolution of January 31,
2000, reversed said decision and dismissed petitioners complaint for lack of merit.6
Petitioners Motion for Reconsideration was denied by Resolution of April 28, 2000 and Entry of Judgment
was issued on July 13, 2000.7
Subsequently or on October 5, 2000, the Labor Arbiter issued a Writ of Execution (Writ) respecting the
reinstatement aspect of his January 11, 1999 Decision, and on October 25, 2000, he issued a Notice of
Garnishment (Notice). Respondent thereupon moved to quash the Writ and to lift the Notice while
petitioners moved to release the garnished amount.
In a related move, respondent filed an Urgent Petition for Injunction with the NLRC which, by Resolutions
of November 26, 2001 and January 28, 2002, affirmed the validity of the Writ and the Notice issued by the
Labor Arbiter but suspended and referred the action to the Rehabilitation Receiver for appropriate action.
Respondent elevated the matter to the appellate court which issued the herein challenged Decision and
Resolution nullifying the NLRC Resolutions on two grounds, essentially espousing that: (1) a subsequent
finding of a valid dismissal removes the basis for implementing the reinstatement aspect of a labor arbiters
decision (the first ground), and (2) the impossibility to comply with the reinstatement order due to
corporate rehabilitation provides a reasonable justification for the failure to exercise the options under
Article 223 of the Labor Code (the second ground).
By Decision of August 29, 2007, this Court PARTIALLY GRANTED the present petition and effectively
reinstated the NLRC Resolutions insofar as it suspended the proceedings, viz:
Since petitioners claim against PAL is a money claim for their wages during the pendency of PALs
appeal to the NLRC, the same should have been suspended pending the rehabilitation proceedings. The
Labor Arbiter, the NLRC, as well as the Court of Appeals should have abstained from resolving
petitioners case for illegal dismissal and should instead have directed them to lodge their claim before
PALs receiver.
However, to still require petitioners at this time to re-file their labor claim against PAL under peculiar
circumstances of the case that their dismissal was eventually held valid with only the matter of
reinstatement pending appeal being the issue this Court deems it legally expedient to suspend the
proceedings in this case.
WHEREFORE, the instant petition is PARTIALLY GRANTED in that the instant proceedings herein are
SUSPENDED until further notice from this Court. Accordingly, respondent Philippine Airlines, Inc. is
hereby DIRECTED to quarterly update the Court as to the status of its ongoing rehabilitation. No costs.
SO ORDERED.8 (Italics in the original; underscoring supplied)

By Manifestation and Compliance of October 30, 2007, respondent informed the Court that the SEC, by
Order of September 28, 2007, granted its request to exit from rehabilitation proceedings.9
In view of the termination of the rehabilitation proceedings, the Court now proceeds to resolve the
remaining issue for consideration, which is whether petitioners may collect their wages during the period
between the Labor Arbiters order of reinstatement pending appeal and the NLRC decision overturning that
of the Labor Arbiter, now that respondent has exited from rehabilitation proceedings.
Amplification of the First Ground
The appellate court counted on as its first ground the view that a subsequent finding of a valid dismissal
removes the basis for implementing the reinstatement aspect of a labor arbiters decision.
On this score, the Courts attention is drawn to seemingly divergent decisions concerning reinstatement
pending appeal or, particularly, the option of payroll reinstatement. On the one hand is the jurisprudential
trend as expounded in a line of cases including Air Philippines Corp. v. Zamora,10 while on the other is the
recent case of Genuino v. National Labor Relations Commission.11 At the core of the seeming divergence is
the application of paragraph 3 of Article 223 of the Labor Code which reads:
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)
The view as maintained in a number of cases is that:
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.12 (Emphasis in the original; italics and underscoring supplied)
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to
receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a
restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith.13
The opposite view is articulated in Genuino which states:
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 s/he 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/her 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 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.14 (Emphasis, italics and underscoring supplied)

It has thus been advanced that there is no point in releasing the wages to petitioners since their dismissal
was found to be valid, and to do so would constitute unjust enrichment.
Prior to Genuino, there had been no known similar case containing a dispositive portion where the
employee was required to refund the salaries received on payroll reinstatement. In fact, in a catena of
cases,15 the Court did not order the refund of salaries garnished or received by payroll-reinstated employees
despite a subsequent reversal of the reinstatement order.
The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render inutile
the rationale of reinstatement pending appeal.
x x x [T]he law itself has laid down a compassionate policy which, once more, vivifies and enhances the
provisions of the 1987 Constitution on labor and the working man.
xxxx
These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic force,
which the Constitution also expressly affirms with equal intensity. Labor is an indispensable partner for the
nation's progress and stability.
xxxx
x x x In short, with respect to decisions reinstating employees, the law itself has determined a sufficiently
overwhelming reason for its execution pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may authorize an immediate
implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that
saving act is designed to stop, although temporarily since the appeal may be decided in favor of the
appellant, a continuing threat or danger to the survival or even the life of the dismissed or separated
employee and his family.16
The social justice principles of labor law outweigh or render inapplicable the civil law doctrine of unjust
enrichment espoused by Justice Presbitero Velasco, Jr. in his Separate Opinion. The constitutional and
statutory precepts portray the otherwise "unjust" situation as a condition affording full protection to labor.
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.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse
payroll reinstatement and simply find work elsewhere in the interim, if any is available. Notably, the option
of payroll reinstatement belongs to the employer, even if the employee is able and raring to return to work.
Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In the face of the grim
possibilities, the rise of concerned employees declining payroll reinstatement is on the horizon.
Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also
institutes a scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente

lite merely serve as a bond posted in installment by the employer. For in the event of a reversal of the
Labor Arbiters decision ordering reinstatement, the employer gets back the same amount without having to
spend ordinarily for bond premiums. This circumvents, if not directly contradicts, the proscription that the
"posting of a bond [even a cash bond] by the employer shall not stay the execution for reinstatement."17
In playing down the stray posture in Genuino requiring the dismissed employee on payroll reinstatement to
refund the salaries in case a final decision upholds the validity of the dismissal, the Court realigns the
proper course of the prevailing doctrine on reinstatement pending appeal vis--vis the effect of a reversal
on appeal.
Respondent insists that with the reversal of the Labor Arbiters Decision, there is no more basis to enforce
the reinstatement aspect of the said decision. In his Separate Opinion, Justice Presbitero Velasco, Jr.
supports this argument and finds the prevailing doctrine in Air Philippines and allied cases inapplicable
because, unlike the present case, the writ of execution therein was secured prior to the reversal of the Labor
Arbiters decision.
The proposition is tenuous. First, the matter is treated as a mere race against time. The discussion stopped
there without considering the cause of the delay. Second, it requires the issuance of a writ of execution
despite the immediately executory nature of the reinstatement aspect of the decision. In Pioneer Texturing
Corp. v. NLRC,18 which was cited in Panuncillo v. CAP Philippines, Inc.,19 the Court observed:
x x x 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 enacting the law, the legislature is presumed to have ordained a
valid and sensible law, one which operates no further than may be necessary to achieve its specific purpose.
Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be
remedied. x x x In introducing a new rule on the reinstatement aspect of a labor decision under Republic
Act No. 6715, Congress should not be considered to be indulging in mere semantic exercise. x x x20 (Italics
in the original; emphasis and underscoring supplied)
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.21 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.22
Amplification of the Second Ground
The remaining issue, nonetheless, is resolved in the negative on the strength of the second ground relied
upon by the appellate court in the assailed issuances. The Court sustains the appellate courts finding that
the peculiar predicament of a corporate rehabilitation rendered it impossible for respondent to exercise its
option under the circumstances.

The spirit of the rule on reinstatement pending appeal animates the proceedings once the Labor Arbiter
issues the decision containing an order of reinstatement. The immediacy of its execution needs no further
elaboration. Reinstatement pending appeal necessitates its immediate execution during the pendency of the
appeal, if the law is to serve its noble purpose. At the same time, any attempt on the part of the employer to
evade or delay its execution, as observed in Panuncillo and as what actually transpired in Kimberly,23
Composite,24 Air Philippines,25 and Roquero,26 should not be countenanced.
After the labor arbiters 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.
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 employers unjustified act or
omission. 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 Labor Arbiters decision.
In Genuino, there was no showing that the employer refused to reinstate the employee, who was the
Treasury Sales Division Head, during the short span of four months or from the promulgation on May 2,
1994 of the Labor Arbiters Decision up to the promulgation on September 3, 1994 of the NLRC Decision.
Notably, the former NLRC Rules of Procedure did not lay down a mechanism to promptly effectuate the
self-executory order of reinstatement, making it difficult to establish that the employer actually refused to
comply.
In a situation like that in International Container Terminal Services, Inc. v. NLRC27 where it was alleged
that the employer was willing to comply with the order and that the employee opted not to pursue the
execution of the order, the Court upheld the self-executory nature of the reinstatement order and ruled that
the salary automatically accrued from notice of the Labor Arbiter's order of reinstatement until its ultimate
reversal by the NLRC. It was later discovered that the employee indeed moved for the issuance of a writ
but was not acted upon by the Labor Arbiter. In that scenario where the delay was caused by the Labor
Arbiter, it was ruled that the inaction of the Labor Arbiter who failed to act upon the employees motion for
the issuance of a writ of execution may no longer adversely affect the cause of the dismissed employee in
view of the self-executory nature of the order of reinstatement.28
The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer to
submit a report of compliance within 10 calendar days from receipt of the Labor Arbiters decision,29
disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion for the
issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ. With
the new rules in place, there is hardly any difficulty in determining the employers intransigence in
immediately complying with the order.
In the case at bar, petitioners exerted efforts30 to execute the Labor Arbiters order of reinstatement until
they were able to secure a writ of execution, albeit issued on October 5, 2000 after the reversal by the
NLRC of the Labor Arbiters decision. Technically, there was still actual delay which brings to the
question of whether the delay was due to respondents unjustified act or omission.
It is apparent that there was inaction on the part of respondent to reinstate them, but whether such omission
was justified depends on the onset of the exigency of corporate rehabilitation.
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.31 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.

Case law recognizes that unless there is a restraining order, the implementation of the order of
reinstatement is ministerial and mandatory.32 This injunction or suspension of claims by legislative fiat33
partakes of the nature of a restraining order that constitutes a legal justification for respondents noncompliance with the reinstatement order. Respondents failure to exercise the alternative options of actual
reinstatement and payroll reinstatement was thus justified. Such being the case, respondents obligation to
pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did not attach.
While 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 employercorporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.
The parallelism between a judicial order of corporation rehabilitation as a justification for the non-exercise
of its options, on the one hand, and a claim of actual and imminent substantial losses as ground for
retrenchment, on the other hand, stops at the red line on the financial statements. Beyond the analogous
condition of financial gloom, as discussed by Justice Leonardo Quisumbing in his Separate Opinion, are
more salient distinctions. Unlike the ground of substantial losses contemplated in a retrenchment case, the
state of corporate rehabilitation was judicially pre-determined by a competent court and not formulated for
the first time in this case by respondent.
More importantly, there are legal effects arising from a judicial order placing a corporation under
rehabilitation. Respondent was, during the period material to the case, effectively deprived of the
alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction but
also in view of the interim relinquishment of management control to give way to the full exercise of the
powers of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for
actual physical reinstatement pending appeal to optimize the utilization of resources. Then again, though
the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the
subsistence of the injunction on claims.
In sum, the obligation to pay the employees salaries upon the employers failure to exercise the alternative
options under Article 223 of the Labor Code is not a hard and fast rule, considering the inherent constraints
of corporate rehabilitation.
WHEREFORE, the petition is PARTIALLY DENIED. Insofar as the Court of Appeals Decision of
December 5, 2003 and Resolution of April 16, 2004 annulling the NLRC Resolutions affirming the validity
of the Writ of Execution and the Notice of Garnishment are concerned, the Court finds no reversible error.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 173076

October 10, 2007

MT. CARMEL COLLEGE, petitioner,

vs.
JOCELYN RESUENA, EDDIE VILLALON, SYLVIA SEDAYON and ZONSAYDA EMNACE,
respondents.
DECISION

CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner seeks the
reversal of the Decision1 dated 2 June 2006 of the Court of Appeals in CA-G.R. CEB-SP No. 01615
entitled, Mt. Carmel College v. National Labor Relations Commission, Labor Arbiter Phibun D. Pura,
Jocelyn Resuena, et al. Petitioner seeks remedy from this Court for an alleged illegal execution of the
Decision2 dated 30 October 2001 by the National Labor Relations Commission (NLRC) in NLRC CASE
No. V-000176-2000 (RAB CASE Nos. 06-06-10393-98; 06-06-10394-98; 06-06-10395-98; 06-06-1041498) as affirmed by the Court of Appeals in CA-G.R. SP No. 80639 in a Decision3 dated 17 March 2004,
insisting it was not in accord with the dispositive portion thereof. Petitioner is not appealing the judgment
itself but the manner of execution of the same.
The following are the factual antecedents of the instant Petition:
Petitioner Mt. Carmel College is a private educational institution. It is administered by the Carmelite
Fathers at New Escalante, Negros Occidental. Respondents were employees of petitioner, namely: Jocelyn
Resuena (Accounting Clerk), Eddie Villalon (Elementary Department Principal); Sylvia Sedayon
(Treasurer), and Zonsayda Emnace (Secretary to the Director).
On 21 November 1997, respondents, together with several faculty members, non-academic personnel, and
other students, participated in a protest action 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 25 April 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.
Separate complaints were filed by each of the four respondents against petitioner before Regional
Arbitration Branch VI of the NLRC in Bacolod City. Respondents charged petitioner with illegal dismissal
and claimed 13th month pay, separation pay, damages and attorneys fees. The cases were docketed as RAB
Cases No. 06-06-10393-98, 06-06-10394-98, 06-06-10395-98, and 06-06-10414-98. All four cases were
consolidated, and Labor Arbiter Ray T. Drilon thereafter issued a Decision4 dated 25 May 1999 affirming
the validity of respondents termination by petitioner on the ground of loss of trust and confidence.
Although the Decision found respondents to have been legally dismissed, as equitable relief, however, they
were awarded separation pay computed at one month pay for every year of service,5 their proportionate 13th
month pay, and attorneys fees. Their claims for moral and exemplary damages were denied. In issuing the
aforesaid Decision, the Labor Arbiter ruled:
WHEREFORE, premises considered, judgment is hereby rendered ordering [herein petitioner]
Mount Carmel College represented by Fr. Modesto Malandac to pay [herein respondents] Jocelyn
Resuena, Zonsayda Emnace, Eddie Villalon and Sylvia Sedayon, their respective 13th month pay,
separation pay and attorneys fee in the total sum of THREE HUNDRED THIRTY-FOUR
THOUSAND EIGHT HUNDRED SEVENTY-FIVE PESOS AND 67/100 (P334,875.47) to be
deposited with this office within ten (10) days from receipt of this decision.
The complaint for moral and exemplary damages is hereby dismissed for lack of legal basis.
All other claims are hereby dismissed for lack of merit.6
On 9 September 1999, Labor Arbiter Drilon issued to the parties a Notice of Judgment/Decision of his 25
May 1999 Decision. The notice indicated that a "decision of the Labor Arbiter reinstating a dismissed or
separated employee, in so far 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 employee (sic) merely
reinstated in the payroll."7
In the meantime, petitioner appealed to the NLRC Fourth Division in Cebu City, seeking the reversal of the
portion of the Labor Arbiters Decision dated 25 May 1999 awarding separation pay to respondents. The
NLRC dismissed the appeal in its Decision dated 30 October 2001. In the same Decision dismissing the
appeal, the NLRC reversed and modified the 25 May 1999 Decision of the Labor Arbiter, and declared the
termination of respondents to be illegal. It ordered the reinstatement of respondents, with payment of
backwages or payment of separation pay in lieu thereof. The pertinent portion of the 30 October 2001
NLRC Decision reads:
We rule that complainants were illegally dismissed and must therefore be ordered reinstated with
payment of backwages from the time they were illegally dismissed up to the time of their actual
reinstatement.
All other claims are hereby dismissed for lack of merit.
WHEREFORE, premises considered the instant appeal is hereby DISMISSED for lack of merit
and the appealed decision is hereby AFFIRMED with modification ordering the [herein petitioner]
the payment of the backwages of the [herein respondents] from May 15, 1998 up to May 25, 1999,
further directing the reinstatement of the [respondents] to their original positions without loss of
seniority or in lieu thereof the payment of their separation pay as computed in the appealed
decision.8
Petitioner filed a Motion for Reconsideration of the 30 October 2001 Decision of the NLRC. The said
Motion was denied in the 19 June 2003 Resolution of the NLRC.
The case was elevated to the Court of Appeals via a Special Civil Action for Certiorari and Prohibition,
docketed as CA-G.R. SP No. 80639 where petitioner assailed the aforementioned NLRC Decision dated 30
October 2001 and Resolution dated 19 June 2003, arguing that there is more than enough basis for loss of
trust and confidence as ground for dismissing respondents. It also reiterated compliance with the twin
requirements of notice and hearing. The Court of Appeals denied the petition in a Decision promulgated on
17 March 2004, ruling thus:
Consequently, we find no grave abuse of discretion committed by the NLRC in ruling that [herein
respondents] have been illegally dismissed. Likewise, said [NLRC] correctly held that even if such
participation of [respondents] in the protest picket is rather improper under the circumstances or
disappointing to the School Administrator who had rightly expected them to take the side of the
administration or at least stayed neutral on the demand for ouster of Fr. Malandac and Barairo,
dismissal is definitely too harsh where a less punitive action such as reprimand or disciplinary
action would have been sufficient. Considering the long years of faithful service of [respondents]
in the School without previous record of misconduct, as duly noted by the NLRC in its decision,
their termination on the basis of alleged loss of confidence by taking part in an otherwise
legitimate and constitutionally-protected right to free speech and peaceful assembly, is certainly
illegal and unjustified.
xxxx
Having been illegally dismissed, [respondents] are entitled to back wages from the time of their
termination until reinstatement, and if reinstatement is no longer possible, the grant of separation
pay equivalent to one (1) month for every year of service. However, in this case since the Labor
Arbiter did not order reinstatement, the NLRC correctly excluded the period of the appeal in the
computation of back wages due to [respondents].

Finally, on the prayer for injunctive relief sought by petitioner on the ground that [public
respondent] Labor Arbiter exceeded his jurisdiction in issuing the writ of execution despite the
fact that his decision did not order reinstatement and that he is bereft of authority to implement the
decision of the NLRC (Fourth Division).
xxxx
Considering that there is already an entry of judgment on the Decision dated October 30, 2001,
and in view of Our disposition of this petition, we find no more obstacle for the enforcement of the
said judgment even pending appeal, in accordance with Sections 1 and 2, Rule VIII of the NLRC
Rules of Procedure, as amended, as well as Sections 2, 4 and 6, Rule III of the NLRC Manual on
Execution of Judgment.
xxxx
WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED for lack of merit. The assailed Decision and Resolution are
AFFIRMED.9
No Motion for Reconsideration of the afore-quoted Court of Appeals Decision in CA-G.R. SP No. 80639
was filed and it became final and executory on 14 April 2004.
At about the same time as the foregoing developments in CA-G.R. SP No. 80639, Labor Arbiter Phibun D.
Pura issued an Order on 19 May 2003 opining on the self-executory nature of a reinstatement order:
To be sure the Court has not been consistent in its interpretation of Art. 223. The nagging issue
has always been whether the reinstatement order is self-executory. Citing the divergent views of
the court beginning with Inciong v. NLRC followed by the deviation in interpretation in Maranaw
Hotel Corporation (Century Park Sheraton Manila) v. NLRC, as reiterated and adopted in
Archilles Manufacturing Corporation v. NLRC and Purificacion Ram v. NLRC, the Court in the
1997 Pioneer case has laid down the doctrine that henceforth an Order or award for reinstatement
is self-executory, meaning that it does not require a writ of execution, much less a motion for its
issuance, as maintained by petitioner. x x x.
Successive writs of execution pertaining to the backwages and accrued salaries of the respondents were
issued by Labor Arbiter Pura on these dates: 9 June 2003,10 10 December 2003,11 and 20 January 2004.12
The first writ of execution, issued on 9 June 2003, directed the sheriff to collect from petitioner, the amount
of P503,028.05 representing backwages from 15 May 1998 to 25 May 1999. Based on the Sheriffs Report
dated 25 June 2003, reinstatement had not been effected. There was a Notice of Garnishment issued to the
Equitable-PCI Bank Escalante Branch. Labor Arbiter Pura ordered the release of the garnished amount of
P508,168.05 with the said bank for deposit to the Cashier of NLRC Regional Arbitration Branch VI in
Bacolod City. Petitioner moved to quash the Writ of Execution dated 9 June 2003. It was denied.
By 4 December 2003, the NLRC entered in its Book of Entries of Judgment its Decision dated 30 October
2001. The records of the case were endorsed back to NLRC Regional Arbitration Branch VI for the
execution of its final and executory decision, as no restraining order was issued by the Court of Appeals.
After an exchange of pleadings, respondents filed an Ex-Parte Motion for Issuance of Writ of Execution
with the Labor Arbiter considering that the Entry of Judgment was already issued by the NLRC. On 10
December 2003, the Labor Arbiter granted the Motion and issued the second Writ of Execution. On motion
of respondents, the Labor Arbiter ordered the release to them of the garnished amount of P503,028.05
deposited with the Cashier of NLRC Regional Arbitration Branch VI.

However, the foregoing amount was considered to be only a partial payment of the monetary awards due
the respondents and the unpaid balance thereof continued to grow to P1,307,806.50. Respondents thus filed
a motion for partial writ of execution, which the Labor Arbiter granted by issuing the third Writ of
Execution on 20 January 2004.13 Under the foregoing writs of execution, the aggregate amount of
P1,736.592.0814 was garnished by Bailiff/Acting Sheriff Romeo D. Pasustento, representing respondents
accrued salaries, backwages, attorneys fees and sheriffs fees computed from the promulgation of the
NLRC Decision 30 October 2001.
Respondents filed on 14 July 2004 yet another Motion to Issue a Writ of Execution to collect backwages
from 1 January 2004 to 30 June 2004. Petitioner opposed the motion, but the Motion to Issue a Writ of
Execution was granted.
On 31 January 2005, Labor Arbiter Pura issued an Order15 adopting the computation of the Fiscal Examiner
of NLRC Regional Arbitration Branch VI and issuing a writ of execution to enforce the NLRC Decision
dated 30 October 2001. The dispositive portion of the said Order reads:
In light of the foregoing, we have no choice but to adopt the computation of the RAB Fiscal
Examiner, hereto attached and forming part of the record of these cases and conformably thereto,
we grant the Motion to Issue Writ of Execution on backwages for the period stated in this
computation, taking into consideration the grant of differentials as there are benefits which
accrued to the [herein respondents] and which they should have enjoyed had they been employed
and/or reinstated, as the case may be, and such other amount as may accrue until actually
reinstated or in lieu of reinstatement, to pay [respondents] separation pay to be computed at one
(1) month salary for every year of service in addition to backwages the formula adopted by the
Labor Arbiter in the Decision dated May 25, 1999, page 7, paragraph 1.
Let therefore a Writ of Execution be, as it is hereby issued to enforce judgment in the above
entitled cases.16
On 8 February 2005, petitioner filed a Motion for Reconsideration of the foregoing Order contending that
the judgment of the NLRC mandated the payment of separation pay as computed in the appealed decision.
Respondents likewise filed a Manifestation and Motion to include the month of November 2004 in the
computation. In an Order dated 10 February 2005, the Labor Arbiter denied the petitioners Motion for
Reconsideration. On 22 February 2005, he issued an Alias Writ of Execution17 for the collection from
petitioner of the amount of P1,131,035.00 representing respondents backwages, separation pay, and
attorneys fees. Petitioner filed a Motion to Quash the Alias Writ of Execution on 17 March 2005.18
On 15 April 2005, the Labor Arbiter issued an Order where it found no compelling reason to warrant the
grant of the Motion to Quash the Alias Writ of Execution. The afore-stated Order thus reads:
WHEREFORE, for lack of merit the Motion to Quash the Alias Writ dated March 17, 2005 is
denied. [Respondents] Motion to Include February and March 2005 in the Computation of wages
is hereby GRANTED. The entry of appearance of the collaborating counsel is duly noted.19
From the said Order of the Labor Arbiter, petitioner filed with the NLRC an appeal with an application for
issuance of a writ of preliminary injunction on the execution of judgment, docketed as NLRC Case No. V000377-05. Petitioner assailed the 15 April 2005 Order of the Labor Arbiter averring that the latter
seriously committed errors when he ordered the payment and garnishment of backwages beyond the period
15 May 1998 to 25 May 1999. The NLRC dismissed the petitioners appeal in a Resolution20 dated 15
August 2005 for lack of merit. Petitioner filed a Motion for Reconsideration but it was denied by the NLRC
in a Resolution dated 30 November 2005, disposed of as follows:
WHEREFORE, premises considered, the appeal of respondents is hereby DISMISSED for lack of
merit. The 15 April 2005 Order of Labor Arbiter Phibun Pura is AFFIRMED.21

From the foregoing, petitioner filed with the Court of Appeals a Special Civil Action for Certiorari and
Prohibition, docketed as CA-G.R. CEB-SP No. 01615, praying for the setting aside and nullification of the
Resolutions dated 15 August 2005 and 30 November 2005 of the NLRC in NLRC Case No. V-000377-05.
Petitioner contended that the NLRC acted with grave abuse of discretion when it denied its appeal and
motion for reconsideration and in not ruling that there was already satisfaction of judgment. The crux of
petitioners case, as succinctly worded by the Court of Appeals in CA-G.R. CEB-SP No. 01615:
[P]etitioner seeks to annul and set aside the resolutions dated August 15, 2005 and November 30,
2005 of the respondent NLRC in NLRC Case No. V-000377-05 when the latter refuses to
invalidate the various writs of executions and to refund petitioner of whatever excess there might
be on the theory that the execution done by the respondent Labor Arbiter was illegal and in fact
goes beyond what is stated in the decision dated October 30, 2001 of the respondent NLRC in
NLRC Case No. V-000176-2000.22
The Court of Appeals eventually dismissed CA-G.R. CEB-SP No. 01615, ruling as follows:
Thus, petitioners avowal that their liability for private respondents backwages is limited from
May 15, 1998 up to May 25, 1999 is untenable on these grounds:
First, there is no showing, in the case at bench, that petitioner exercised its option to reinstate
private respondents to their former position or to grant them separation pay. Accordingly,
backwages have to be granted to private respondents until their reinstatement to their former
position is effected or upon petitioners payment of separation pay to private respondents if
reinstatement is no longer feasible; and
Second, the decision dated March 17, 2004 of the 17th Division of the Court of Appeals in CAG.R. SP No. 80639 acquiesced the propriety of the issuance of the writs of execution by the
respondent labor arbiter on June 9, 2003, December 10, 2003 and January 30, 2004. On April 14,
2004, the said decision which sanctioned the payment of backwages even beyond May 25, 1999,
became final and executory x x x.
xxxx
In light of the foregoing disquisition, we hereby find public respondent NLRC to have acted
accordingly and without grave abuse of discretion when it issued the questioned Resolutions dated
August 15, 2005 and November 30, 2005, respectively. Grave abuse of discretion means such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, in other
words where the power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. It is not
sufficient that a tribunal, in the exercise of power, abused its discretion; such abuse must be grave.
WHEREFORE, in view of the foregoing, the present petition is hereby DISMISSED and the
assailed Resolutions dated August 15, 2005 and November 30, 2005, respectively, issued by the
respondent NLRC in NLRC Case No. V-000377-05 are hereby AFFIRMED.23
Hence, petitioner filed the instant Petition for Review on Certiorari, raising the following issues:
I.
THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING THE LABOR ARBITER
AND THE NLRC THAT THE AWARD OF BACKWAGES GOES BEYOND THE PERIOD
FROM 15 MAY 1998 UP TO 25 MAY 1999 ON THE SUPPOSITION THAT

REINSTATEMENT IS SELF-EXECUTORY AND DOES NOT NEED A WRIT OF

EXECUTION FOR ITS ENFORCEMENT.
II.
THE HONORABLE COURT OF APPEALS ERRED IN NOT FINIDING THAT THE
CONTINUING GRANT AND AWARD OF BACKWAGES UP TO THE PRESENT IS
CONTRARY TO LAW AND JURISPRUDENCE AS LAID DOWN BY THIS HONORABLE
SUPREME COURT.
Petitioner prays that this Court render judgment (a) annulling and setting aside the assailed Decision on 02
June 2006 of the Court of Appeals in CA-G.R. CEB-SP No. 01615 and all its orders and issuances; (b)
ordering that backwages be computed and executed corresponding only to the period from 15 May 1998 to
25 May 1999; (c) ordering that separation pay be computed based on the computation as originally
submitted by the Labor Arbiter, P344,875.47, which corresponds to the date of respondents employment
until 15 May 1998; (d) that no other award except for backwages for the period 15 May 1998 to 25 May
1999 and separation pay amounting to P344,875.47 shall be paid by petitioner; and (e) that the respondents
be ordered to refund and pay the alleged excess in the amounts garnished by virtue of the Writs of
Execution dated 9 June 2003, 10 December 2003, and 30 January 2004.
In sum, the resolution of this petition hinges on the following issues: (1) whether reinstatement in the
instant case is self-executory and does not need a writ of execution for its enforcement; and (2) whether the
continuing award of backwages is proper.
Petitioner insists that what is at issue is the manner of execution of the NLRC Decision dated 30 October
2001 in NLRC CASE No. V-000176-2000 (RAB CASE Nos. 06-06-10393-98; 06-06-10394-98; 06-0610395-98; 06-06-10414-98), as affirmed by the Decision dated 17 March 2004 of the Court of Appeals in
CA-G.R. No. 80639.
In ruling on the consolidated complaints filed by the four respondents, 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 backwages
of respondents from 15 May 1998 up to 25 May 1999. It further directed the reinstatement of respondents
or payment of separation pay, with backwages. This was affirmed by the Court of Appeals.
While petitioner concedes that the case pertaining to the complaints for illegal dismissal filed by the
respondents before the Labor Arbiter had been resolved with finality by the Court of Appeals in CA-G.R.
No. 80639, no other remedy having been taken therefrom, it however assails the correctness and validity of
the execution of the judgment therein. Petitioner avers that the Court of Appeals erred in upholding the
Labor Arbiter and the NLRC that the award of backwages goes beyond the period 15 May 1998 to 25 May
1999 on the supposition that reinstatement is self-executory and does not need a writ of execution for its
enforcement. Petitioner postulates that the Labor Arbiter went beyond the terms of the NLRC Decision, as
affirmed by the Court of Appeals, and erroneously used as bases inapplicable law24 and jurisprudence25 in
the execution of the same. Petitioner contends that the Labor Arbiters reliance on Pioneer Texturizing
Corp. v. National Labor Relations Commission26 is misplaced, for it applied Article 223 of the Labor Code
27
since reinstatement was ordered at the Labor Arbiters level while in the instant case, reinstatement was
ordered upon appeal to the NLRC. Petitioner argues that the relevant statutory and regulatory provisions
herein are Article 224 of the Labor Code,28 and Rule III of the NLRC Manual for Execution of Judgment,29
given that there was no order of reinstatement at the Labor Arbiter level but only at the NLRC level.
Petitioner insists that, applying Article 224 of the Labor Code in the instant case, any reinstatement aspect
of the NLRC Decision, as affirmed by the Court of Appeals, should have been done through the issuance of
a Writ of Execution as it is no longer self-executory. It furthermore contends that it was impossible to

reinstate respondents, whether by way of an immediate execution or by way of a self-executory nature,

since there was nothing to execute pending appeal because there was no order for reinstatement.
Petitioner vehemently raises the argument that the award of backwages subject to execution is limited to
the period prior to the appeal and does not include the period during the pendency of the appeal, on the
contention that reinstatement during appeal is warranted only when the Labor Arbiter rules that the
dismissed employee should be reinstated. In support of its foregoing argument, petitioner invokes Filflex
Industrial & Manufacturing Corporation v. National Labor Relations Commission30 where this Court ruled:
In other words, reinstatement during appeal is warranted only when the labor arbiter (LA) himself
rules that the dismissed employee should be reinstated. In the present case, neither the dispositive
portion nor the text of the labor arbiters decision ordered the reinstatement of private respondent.
Further, the back wages granted to private respondent were specifically limited to the period prior
to the filing of the appeal with Respondent NLRC. In fact, the LAs decision ordered her
separation from service for the parties "mutual advantage and most importantly to physical and
health welfare of the complainant." Hence, it is an error and an abuse of discretion for the NLRC
to hold that the award of limited back wages, by implication, included an order for private
respondents reinstatement.
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.
Petitioners reliance on Filflex is misplaced and inapplicable to the case at bar. Indeed in Filflex, this Court
ruled that the award of backwages is limited to the period prior to the filing of the appeal with the NLRC.
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
backwages may be awarded. In fact, Filfex deleted the award of backwages granted during appeal,
reiterating that an award of backwages by the NLRC during the period of appeal is totally inconsistent with
its finding of a valid dismissal. In the instant petition, the NLRC Decision dated 30 October 2001 finding
the termination of respondents illegal, had the effect of reversing Labor Arbiter Drilons Decision dated 25
May 1999.
This Court sees no cogent reason as to the relevance of a discussion on whether or not reinstatement is selfexecutory. However, since petitioner raised this issue, this Court has opted to discuss it. Verily, Article 223
of the Labor Code is not applicable in the instant case. The said provision stipulates that 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.
Petitioner contends that the statutory provision applicable is Article 224 of the Labor Code, as well as Rule
III, Section 2(b) of the NLRC Manual on Execution of Judgment, because the case was decided on appeal.
Furthermore, it is a decision which is of a final and executory nature. The provisions invoked by petitioner
reads:
Art. 224. Execution of decisions, orders or awards. -- (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter or
voluntary arbitrator may, motu proprio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it becomes final and executory x x x.31
If the execution be for the reinstatement of any person to any position, office or employment, such
writ shall be served by the sheriff upon the losing party or upon any other person required by law

to obey the same, and such party or person may be punished for contempt if he disobeys such
decisions, order for reinstatement.32
The records of the case indicate that when Labor Arbiter Drilon issued its 25 May 1999 Decision, there was
no order of reinstatement yet although the dispositive portion of the 31 January 2005 Order issued by Labor
Arbiter Pura already provided for reinstatement or payment of separation pay, to wit:
In light of the foregoing, we have no choice but to adopt the computation of the RAB Fiscal
Examiner, hereto attached and forming part of the record of these cases and conformably thereto,
we grant the Motion to Issue Writ of Execution on backwages for the period stated in this
computation, taking into consideration the grant of differentials as there are benefits which
accrued to the complainants and which they should have enjoyed had they been employed and/or
reinstated, as the case may be, and such other amount as may accrue until actually reinstated or in
lieu of reinstatement, to pay complainants separation pay to be computed at one (1) month salary
for every year of service in addition to backwages the formula adopted by the Labor Arbiter in the
Decision dated May 25, 1999, page 7, paragraph 1.
Let therefore a Writ of Execution be, as it is hereby issued to enforce judgment in the above
entitled cases.33
Art. 223 of the Labor Code provides that reinstatement is immediately executory even pending appeal only
when the Labor Arbiter himself ordered the reinstatement. In this case, the original Decision of Labor
Arbiter Drilon did not order reinstatement. Reinstatement in this case was actually ordered by the NLRC,
affirmed by the Court of Appeals. The order of Labor Arbiter Pura on 31 January 2005 directing
reinstatement was issued after the Court of Appeals Decision dated 17 March 2004 which affirmed the
NLRCs order of reinstatement. Thus, Art. 223 finds no application in the instant case. Considering that the
order for reinstatement was first decided upon appeal to the NLRC and affirmed with finality by the Court
of Appeals in CA-G.R. SP 80369 on 17 March 2004, petitioner rightly invoked Art. 224 of the Labor Code.
As contemplated by Article 224 of the Labor Code, the Secretary of Labor and Employment or any
Regional Director, the Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu
proprio or on motion of any interested party, issue a writ of execution on a judgment within five (5) years
from the date it becomes final and executory. Consequently, under Rule III of the NLRC Manual on the
Execution of Judgment, it is provided that if the execution be for the reinstatement of any person to a
position, an office or an employment, such writ shall be served by the sheriff upon the losing party or upon
any other person required by law to obey the same, and such party or person may be punished for contempt
if he disobeys such decision or order for reinstatement.34
However, as we can glean from the succeeding discussion, the above findings will not affect the award of
backwages for the period beyond 25 May 1999.
Anent the second issue, petitioner contends that the 25 May 1999 Decision of Labor Arbiter Drilon did not
order the reinstatement of respondents. Petitioner posits that since there was no finding of illegal dismissal
at the Labor Arbiters level, then it follows that there was no reinstatement aspect, and its liability for
backwages is limited to the period from 15 May 1998 up to 25 May 1999, i.e., from dismissal to
promulgation of the Labor Arbiters Decision only, as allegedly determined by the NLRC in its Decision
dated 30 October 2001. It argues that while the said NLRC Decision awarded backwages from 15 May
1998 to 25 May 1999 only, the Writs of Execution issued pursuant thereto ordered the payment of
backwages way beyond the period stated in the Decision35 it is supposed to execute.
Petitioners argument is absurd. Abbott v. National Labor Relations Commission,36 as cited by petitioner,
declared that there exists a big difference when what is sought to be reviewed is the manner of execution of
a decision and not the decision itself. "While it is true that the decision itself has become final and
executory and so can no longer be challenged, there is no question that it must be enforced in accordance
with its terms and conditions. Any deviation therefrom can be the subject of a proper appeal."37 In the

instant case, however, the manner of execution falls squarely within the terms of the Decision it seeks to
implement.
The 30 October 2001 NLRC Decision ruled as follows:
We rule that complainants were illegally dismissed and must therefore be ordered reinstated with
payment of backwages from the time they were illegally dismissed up to the time of their actual
reinstatement.
All other claims are hereby dismissed for lack of merit.
WHEREFORE, premises considered the instant appeal is hereby DISMISSED for lack of merit
and the appealed decision is hereby AFFIRMED with modification ordering the respondents the
payment of the backwages of the complainants from May 15, 1998 up to May 25, 1999, further
directing the reinstatement of the complainants to their original positions without loss of seniority
or in lieu thereof the payment of their separation pay as computed in the appealed decision.38
When the afore-quoted NLRC Decision was appealed to the Court of Appeals in CA-G.R. SP No. 80639,
there seemed to be a contradiction between the body and the fallo of the appellate courts Decision dated 17
March 2004. Petitioner cites the following from the text of the Court of Appeals Decision:
However, in this case since the Labor Arbiter did not order reinstatement, the NLRC correctly
excluded the period of the appeal in the computation of back wages due to private respondents.39
The dispositive portion of the same Decision, however, concludes:
WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED for lack of merit. The assailed Decision and Resolution are
AFFIRMED.40
The general rule is that where there is conflict between the dispositive portion or the fallo and the body of
the decision, the fallo controls. This rule rests on the theory that the fallo is the final order while the opinion
in the body is merely a statement ordering nothing.41 Clearly, the award of backwages to respondents does
not merely cover the period from 15 May 1998 up to 25 May 1999 alone.42 The findings of the NLRC,
which were affirmed with finality in CA-G.R. SP No. 80639, and subject of execution in the instant
petition, pronounced:
We rule that [respondents] were illegally dismissed and must therefore be ordered reinstated with
payment of backwages from the time they were illegally dismissed up to the time of their actual
reinstatement.
All other claims are hereby dismissed for lack of merit.
WHEREFORE, premises considered the instant appeal is hereby DISMISSED for lack of merit
and the appealed decision is hereby AFFIRMED with modification ordering the [petitioner]
payment of the backwages of the [respondents] from May 15, 1998 up to May 25, 1999, further
directing the reinstatement of the [respondents] to their original positions without loss of seniority
or in lieu thereof the payment of their separation pay as computed in the appealed decision.43
The above ruling of the NLRC in its Decision dated 30 October 2001 had the effect of reversing and
modifying the findings of the Labor Arbiter. Under Article 218(c) of the Labor Code, the Commission is
empowered to "correct, amend, or waive any error, defect or irregularity whether in substance or form," in
the exercise of its appellate jurisdiction.44 The dispositive portion of the Labor Arbiters Decision as

worded is clear and needs no further interpretation. The NLRC found respondents to have been illegally
dismissed by petitioner, and ordered reinstatement and payment of backwages. Additionally, it stated that
where reinstatement is not possible, separation pay as computed in the appealed decision should be
awarded to respondents. Petitioner interprets the dispositive portion of the NLRC Decision to mean that it
is ordered to pay respondents backwages from 15 May 1998 to 25 May 1999 only. Petitioner seems to have
missed that the aforestated NLRC Decision also directed it to reinstate respondents, or in lieu thereof, pay
separation pay. This, petitioner failed to do. Petitioner did not exercise the option of either reinstatement or
paying the separation pay of respondents.
Backwages are to be computed from the time of illegal dismissal until reinstatement or upon petitioners
payment of separation pay to respondents if reinstatement is no longer possible. Article 279 of the Labor
Code, as amended, states:
Art. 279. Security of Tenure. x x x
In cases of regular employment the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his
actual reinstatement.
Thus, an illegally dismissed employee is entitled to two reliefs: backwages 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 backwages.45
The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority
rights, and payment of backwages 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.46 The payment of separation
pay is in addition to payment of backwages.
Concomitantly, it is evident that respondents backwages should not be limited to the period from 15 May
1998 to 25 May 1999. The backwages due respondents must be computed from the time they were unjustly
dismissed until their actual reinstatement to their former position or upon petitioners payment of
separation pay to them if reinstatement is no longer feasible. Thus, until petitioner actually implements the
reinstatement aspect of the NLRC Decision dated 30 October 2001, as affirmed in the Court of Appeals
Decision dated 17 March 2004 in CA-G.R. SP No. 80639, its obligation to respondents, insofar as accrued
backwages and other benefits are concerned, continues to accumulate.
This Court takes this occasion to reiterate that execution is the final stage of litigation, the end of the suit. It
can not and should not be frustrated except for serious reasons demanded by justice and equity.47
"Litigation must end sometime and somewhere. An effective and efficient administration of justice requires
that, once a judgment has become final, the winning party be not, through a mere subterfuge, be deprived
of the fruits of the verdicts. Courts must, therefore, guard against any scheme calculated to bring about that
result. Constituted as they are to put an end to controversies, courts should frown upon any attempt to
prolong them."48
WHEREFORE, the instant petition is dismissed. The Decision dated 2 June 2006 of the Court of Appeals
in CA-G.R. CEB-SP No. 01615 is AFFIRMED. Petitioner is ORDERED to (1) reinstate respondents to
their original positions without loss of seniority rights, with payment of (a) backwages computed from 15
May 1998, the time compensation of respondents was withheld from them when they were unjustly

terminated, up to the time of reinstatement; and (b) accrued 13th month pay for the same period; OR in lieu
of reinstatement, (2) pay respondents (a) separation pay, in the amount equivalent to one (1) month pay for
every year of service; and (b) backwages, computed from 15 May 1998, the time compensation of
respondents was withheld from them when they were unjustly terminated, up to the time of payment
thereof; and (c) the accrued 13th month pay for the same period. For this purpose, the records of this case
are hereby REMANDED to the Labor Arbiter for proper computation of the subject money claims as
discussed above. Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 147806

November 12, 2002

NERISSA BUENVIAJE, SONIA FLORES, BELMA OLIVIO,

GENALYN PELOBELLO, MARY JANE MENOR, JOSIE RAQUERO,
ESTRELITA MANAHAN, REBECCA EBOL, and ERLINDA ARGA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (SPECIAL FORMER SEVENTH DIVISION),
HONORABLE ARBITER ROMULUS PROTASIO, COTTONWAY MARKETING
CORPORATION and MICHAEL G. TONG, President and General Manager, respondents.
DECISION
PUNO, J.:
This petition seeks to set aside the Decision dated March 13, 2000 and Resolution dated February 13, 2001
of the Court of Appeals in CA-G.R. SP No. 53204 entitled "Cottonway Marketing Corp. vs. National Labor
Relations Commission, et al."
The facts are as follows:
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
On December 19, 1995, Labor Arbiter Romulus S. Protasio issued a Decision finding petitioners'
retrenchment valid and ordering Cottonway to pay petitioners' separation pay and their proportionate
thirteenth month pay.2
On appeal, the NLRC, in its Decision dated March 26, 1996, reversed the Decision of the Labor Arbiter
and ordered the reinstatement of petitioners without loss of seniority rights and other privileges. It also
ordered Cottonway to pay petitioners their proportionate thirteenth month pay and their full backwages
inclusive of allowances and other benefits, or their monetary equivalent computed from the time their
salaries were withheld from them up to the date of their actual reinstatement.3

Cottonway filed a motion for reconsideration which was denied by the Commission in a Resolution dated
July 31, 1996.4
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, 1996.6
On November 6, 1997, petitioners filed with the NLRC a motion for execution of its Decision on the
ground that it had become final and executory.7
On December 4, 1996, the Research and Investigation Unit of the NLRC issued a computation of the
monetary award in accordance with the March 26 Decision of the NLRC.8
Meanwhile, Cottonway filed a motion for reconsideration of the Supreme Court Resolution of October 14,
1996 dismissing the petition for certiorari. The motion for reconsideration was denied with finality on
January 13, 1997.9
On March 4, 1997, Cottonway filed a manifestation with the NLRC reiterating their allegations in their
manifestation dated August 30, 1996, and further alleging that petitioners have already found employment
elsewhere.10
On March 13, 1997, the Research and Investigation Unit of the NLRC issued an additional computation of
petitioners' monetary award in accordance with the March 26 NLRC decision.11
On the same date, Cottonway filed with the NLRC a supplemental manifestation praying that the
Commission allow the reception of evidence with respect to their claim that petitioners have found new
employment. The Commission denied Cottonways prayer in an Order dated March 24, 199712 and
Resolution dated July 24, 1997.13
Nonetheless, on April 8, 1998, 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
The April 8 Order of the Labor Arbiter, however, was set aside by the Commission in its Resolution dated
September 21, 1998. The Commission ruled that its Decision dated March 26, 1996 has become final and
executory and it is the ministerial duty of the Labor Arbiter to issue the corresponding writ of execution to
effect full and unqualified implementation of said decision.15 The Commission thus ordered that the records
of the case be remanded to the Labor Arbiter for execution. Cottonway moved for reconsideration of said
resolution, to no avail.
Hence, Cottonway filed a petition for certiorari with the Court of Appeals seeking the reversal of the ruling
of the NLRC and the reinstatement of the Order dated April 8, 1998 issued by Labor Arbiter Romulus S.
Protasio.
The appellate court granted the petition in its Decision dated March 13, 2000.16 It ruled that petitioners'
reinstatement was no longer possible as they deliberately refused to return to work despite the notice given

by Cottonway. The Court of Appeals thus held that the amount of backwages due them should be computed
only up to the time they received their notice of termination. It said:
"Petitioner's termination of private respondents' employment by reason of their failure to report for work
despite due notice being valid, it would change the substance of the questioned March 26, 1996 decision
which awards backwages to the complainants up to their reinstatement. Again, private respondents'
reinstatement is no longer possible because of the supervening event which is their valid termination. The
deliberate failure to report for work after notice to return bars reinstatement. It would be unjust and
inequitable then to require petitioner to pay private respondents their backwages even after the latter were
validly terminated when in fact petitioner dutifully complied with the reinstatement aspect of the decision.
Thus, the period within which the monetary award of private respondents should be based is limited up to
the time of private respondents' receipt of the respective notices of termination on August 27, 1998."17
The Court of Appeals denied petitioners' motion for reconsideration in a Resolution issued on February 13,
2001.18
Petitioners now question the Decision and Resolution of the Court of Appeals. They impute the following
errors:
"I. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of and/or
in excess of jurisdiction in rendering the assailed decision in CA-G.R. No. SP 53204 without first
performing its ministerial duty of taking initial judicial action thereon unlawfully depriving the
petitioners the opportunity to comment and/or file responsive pleadings to the petition resulting to
their being unlawfully denied a day in court;
II. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of and/or
in excess of jurisdiction in rendering a decision in CA-G.R. No. SP 53204 reversing and setting
aside the lawful and appropriate September 21, 1998 and March 31, 1999 resolutions of the
Honorable NLRC and reinstating the irregular and illegal April 8, 1998 Order of Honorable
Arbiter Romulus Protasio; and
III. That the Honorable Court of Appeals gravely abused its discretion amounting to lack of and/or
in excess of jurisdiction in issuing the February 13, 2001 Resolution which denied petitioners'
motion for reconsideration from the decision of March 13, 2000 without stating the legal basis
therefor."19
We proceed directly to the central issue in this case which is the computation of petitioners' backwages
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.
We agree with the 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. The dispositive portion
of the decision read:
"WHEREFORE, the decision appealed from is hereby REVERSED. Respondent Cottonway Marketing
Corporation is hereby ordered to reinstate the complainants without loss of seniority rights and other
privileges and to pay them the following: (1) their proportionate 13th month pay for 1994; and (2) their full

backwages inclusive of allowances and other benefits, or their monetary equivalent computed from the time
their salaries were withheld from them up to the date of their actual reinstatement.
SO ORDERED."
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.20
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
"The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of
backwages as enunciated in said Pines City Educational Center case, by now holding that conformably with
the evident legislative intent as expressed in Rep. Act No. 6715, above-quoted, backwages to be awarded to
an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings
derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is
that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support
himself and family, while full backwages have to be paid by the employer as part of the price or penalty he
has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in Rep. Act
No. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule
or the "deduction of earnings elsewhere" rule. Thus, a closer adherence to the legislative policy behind Rep.
Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages
the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In
other words, the provision calling for "full backwages" to illegally dismissed employees is clear, plain and
free from ambiguity and, therefore, must be applied without attempted or strained interpretation. Index
animi sermo est." (emphasis supplied)
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. A decision that has attained finality becomes the law of the case regardless of any claim that it is
erroneous. The writ of execution must therefore conform to the judgment to be executed and adhere strictly
to the very essential particulars.23
To justify the modification of the final and executory decision of the NLRC dated March 26, 1996, the
Court of Appeals cited the existence of a supervening event, that is, the valid termination of petitioners'
employment due to their refusal to return to work despite notice from respondents reinstating them to their
former position.
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 employer-employee relationship.24
The facts of this case do not support the claim of Cottonway that petitioners have abandoned their desire to
return to their previous work at said company. It appears that three months after the NLRC had rendered its
decision ordering petitioners reinstatement to their former positions, Cottonway sent individual notices to
petitioners mandating them to immediately report to work. The standard letter, signed by the companys
legal counsel, Atty. Ambrosio B. De Luna, and sent to each of the petitioners read:
"June 5, 1996
Dear Ms. Alivid,25
By virtue of the decision of the National Labor Relation(s) Commission dated March 26, 1996 in Belma
Alivid vs. Network Fashion, Inc., JCT Intl Trading and, Cotton Mktg., Corp., NLRC CASE NO. NCR010210-96 and NLRC NCR-00-10-07238-94, you are hereby ordered to report for work within five (5)
days from receipt of this letter, otherwise, your failure will be deemed lack of interest to continue and
considered to have abandoned your employment with the company.
Please give this matter your utmost attention.
Very truly your(s),
(Sgd) AMBROSIO B. DE LUNA
Legal Counsel"
The petitioners, however, were not able to promptly comply with the order. Instead, their counsel, Atty.
Roberto LL. Peralta, sent a reply letter to Atty. De Luna stating that his clients were not in a position to
comply with said order since the NLRC has not yet finally disposed of the case. The reply letter stated:26
"June 20, 1996
ATTY. AMBROSIO B. DE LUNA
Unit 2-D Bouganvilla (sic) Mansions
91 P. Tuazon Street, Cubao
Quezon City
Compaero,
Your letter dated June 5, 1996 to our clients, Erlinda Arga, et al., complainants in NLRC NCR CASE NO.
00-10-07238-94, Genalyn Pelobello, et al. vs. Network Fashion, et al., was referred to us for reply.
Please be informed that our said clients are not in a position now to comply with your order for them to
report for work within five (5) days from receipt thereof since the National Labor Relations Commission,
First Division, has yet to finally disposed off (sic) the case.
However, if it is now a case that your client, Mr. Michael Tong, is yielding to the Decision dated March 26,
1996 of the NLRC, we are then willing to sit down with you relative to the satisfaction of the same to avoid
said decision from being enforced by the sheriff.
Trusting your cooperation on this matter.

Thank you.
Very truly yours,
(Sgd) ROBERTO LL. PERALTA
Counsel For The Complainants"
Consequently, Cottonway sent the petitioners individual notices of termination. The standard letter of
termination which was likewise signed by counsel and individually addressed to petitioners stated:
"August 1, 1996
BELMA ALIVID
c/o Sonia Flores
#1256-A St. Nino Street
Tondo(,) Manila
Dear Ms. Alivid,27
For your failure to report for work as per letter dated June 5, 1996 within the period of five days from
receipt of the same, you are considered to have lost your employment status effective this date with the
company on the ground of failure to report for work.
Please be guided accordingly.
Very truly yours,
(Sgd) Ambrosio B. De Luna
Legal Counsel of
Network Fashion(,) Inc."
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. This, however, does not necessarily mean that
petitioners were no longer interested in resuming their employment at Cottonway as it has not been shown
that their employment in the other companies was permanent. It should be expected that petitioners would
seek other means of income to tide them over during the time that the legality of their termination is under
litigation. Furthermore, petitioners never abandoned their suit against Cottonway. While the case was
pending appeal before the NLRC, the Court of Appeals and this Court, petitioners continued to file
pleadings to ensure that the company would comply with the directive of the NLRC to reinstate them and
to pay them full backwages in case said decision is upheld. Moreover, in his reply to the companys first
letter, petitioners counsel expressed willingness to meet with the companys representative regarding the
satisfaction of the NLRC decision.
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. Article 223 of the Labor
Code provides:

"ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. x x x
xxxxxxxxx
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 herein. x x x
x x x x x x x x x."
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. We are, therefore, not impressed with the claim of respondent
company that petitioners have been validly dismissed on August 1, 1996 and hence their backwages should
only be computed up to that time. We hold that petitioners are entitled to receive full backwages computed
from the time their compensation was actually withheld until their actual reinstatement, or if reinstatement
is no longer possible, until the finality of the decision, in accordance with the Decision of the NLRC dated
March 26, 1996 which has attained finality.28
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals dated March 13,
2000 and Resolution dated February 13, 2001 in CA-G.R. SP No. 53204 are REVERSED and SET ASIDE.
Let the records of this case be remanded to the Labor Arbiter for execution in accordance with the Decision
of the NLRC dated March 26, 1996.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 177467

March 9, 2011

PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINAND CORTES, AND/OR
ALFRED MAGALLON, AND/OR ARISTOTLE ARCE, Petitioners,
vs.
GERALDINE VELASCO, Respondent.
DECISION

LEONARDO-DE CASTRO, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure to annul and set
aside the Resolution1 dated October 23, 2006 as well as the Resolution2 dated April 10, 2007 both issued by
the Court of Appeals in CA-G.R. SP No. 88987 entitled, "Pfizer, Inc. and/or Rey Gerardo Bacarro, and/or
Ferdinand Cortes, and/or Alfred Magallon, and/or Aristotle Arce v. National Labor Relations Commission
Second Division and Geraldine Velasco." The October 23, 2006 Resolution modified upon respondents
motion for reconsideration the Decision3 dated November 23, 2005 of the Court of Appeals by requiring
PFIZER, Inc. (PFIZER) to pay respondents wages from the date of the Labor Arbiters Decision4 dated
December 5, 2003 until it was eventually reversed and set aside by the Court of Appeals. The April 10,
2007 Resolution, on the other hand, denied PFIZERs motion for partial reconsideration.
The facts of this case, as stated in the Court of Appeals Decision dated November 23, 2005, are as follows:
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.
On 26 June 2003, 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.
In response, Velasco sent a letter addressed to Cortez dated 28 June 2003 denying the charges. In her letter,
Velasco claimed that the transaction with Mercury Drug, Magsaysay Branch covered by her check (no.
1072) in the amount of P23,980.00 was merely to accommodate two undisclosed patients of a certain Dr.
Renato Manalo. In support thereto, Velasco attached the Doctors letter and the affidavit of the latters
secretary.
On 12 July 2003, Velasco received a "Second Show-cause 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.
That same day, Velasco filed a complaint for illegal suspension with money claims before the Regional
Arbitration Branch. The following day, 17 July 2003, PFIZER sent her a letter inviting her to a disciplinary
hearing to be held on 22 July 2003. Velasco received it under protest and informed PFIZER via the
receiving copy of the said letter that she had lodged a complaint against the latter and that the issues that
may be raised in the July 22 hearing "can be tackled during the hearing of her case" or at the preliminary
conference set for 5 and 8 of August 2003. She likewise opted to withhold answering the Second Showcause Notice. On 25 July 2003, Velasco received a "Third Show-cause Notice," together with copies of the

affidavits of two Branch Managers of Mercury Drug, asking her for her comment within 48 hours. Finally,
on 29 July 2003, PFIZER informed Velasco of its "Management Decision" terminating her employment.
On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal,
ordering her reinstatement with backwages and further awarding moral and exemplary damages with
attorneys fees. On appeal, the NLRC affirmed the same but deleted the award of moral and exemplary
damages.5
The dispositive portion of the Labor Arbiters Decision dated December 5, 2003 is as follows:
WHEREFORE, judgment is hereby rendered declaring that complainant was illegally dismissed.
Respondents are ordered to reinstate the complainant to her former position without loss of seniority rights
and with full backwages and to pay the complainant the following:
1.

Full backwages (basic salary, company benefits, all allowances

as of December 5, 2003 in the amount of

P572,780.00);

13th Month Pay, Midyear, Christmas and performance bonuses

in the amount of

P105,300.00;

3.

Moral damages of

P50,000.00;

4.

Exemplary damages in the amount of

P30,000.00;

5.

Attorneys Fees of 10% of the award excluding damages in the

amount of

P67,808.00.

The total award is in the amount of

P758,080.00.6

2.

PFIZER appealed to the National Labor Relations Commission (NLRC) but its appeal was denied via the
NLRC Decision7 dated October 20, 2004, which affirmed the Labor Arbiters ruling but deleted the award
for damages, the dispositive portion of which is as follows:
WHEREFORE, premises considered, the instant appeal and the motion praying for the deposit in escrow of
complainants payroll reinstatement are hereby denied and the Decision of the Labor Arbiter is affirmed
with the modification that the award of moral and exemplary damages is deleted and attorneys fees shall
be based on the award of 13th month pay pursuant to Article III of the Labor Code.8
PFIZER moved for reconsideration but its motion was denied for lack of merit in a NLRC Resolution9
dated December 14, 2004.
Undaunted, PFIZER filed with the Court of Appeals a special civil action for the issuance of a writ of
certiorari under Rule 65 of the Rules of Court to annul and set aside the aforementioned NLRC issuances.
In a Decision dated November 23, 2005, the Court of Appeals upheld the validity of respondents dismissal
from employment, the dispositive portion of which reads as follows:
WHEREFORE, the instant petition is GRANTED. The assailed Decision of the NLRC dated 20 October
2004 as well as its Resolution of 14 December 2004 is hereby ANNULED and SET ASIDE. Having found
the termination of Geraldine L. Velascos employment in accordance with the two notice rule pursuant to
the due process requirement and with just cause, her complaint for illegal dismissal is hereby
DISMISSED.10

Respondent filed a Motion for Reconsideration which the Court of Appeals resolved in the assailed
Resolution dated October 23, 2006 wherein it affirmed the validity of respondents dismissal from
employment but modified its earlier ruling by directing PFIZER to pay respondent her wages from the date
of the Labor Arbiters Decision dated December 5, 2003 up to the Court of Appeals Decision dated
November 23, 2005, to wit:
IN VIEW WHEREOF, the dismissal of private respondent Geraldine Velasco is AFFIRMED, but petitioner
PFIZER, INC. is hereby ordered to pay her the wages to which she is entitled to from the time the
reinstatement order was issued until November 23, 2005, the date of promulgation of Our Decision.11
Respondent filed with the Court a petition for review under Rule 45 of the Rules of Civil Procedure, which
assailed the Court of Appeals Decision dated November 23, 2005 and was docketed as G.R. No. 175122.
Respondents petition, questioning the Court of Appeals dismissal of her complaint, was denied by this
Courts Second Division in a minute Resolution12 dated December 5, 2007, the pertinent portion of which
states:
Considering the allegations, issues and arguments adduced in the petition for review on certiorari, the Court
resolves to DENY the petition for failure to sufficiently show any reversible error in the assailed judgment
to warrant the exercise of this Courts discretionary appellate jurisdiction, and for raising substantially
factual issues.
On the other hand, PFIZER filed the instant petition assailing the aforementioned Court of Appeals
Resolutions and offering for our resolution a single legal issue, to wit:
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
The petition is without merit.
PFIZER argues that, contrary to the Court of Appeals pronouncement in its assailed Decision dated
November 23, 2005, the ruling in Roquero v. Philippine Airlines, Inc.14 is not applicable in the case at bar,
particularly with regard to the nature and consequences of an order of reinstatement, to wit:
The order of reinstatement is immediately executory. The unjustified refusal of the employer to reinstate a
dismissed employee entitles him to payment of his salaries effective from the time the employer failed to
reinstate him despite the issuance of a writ of execution. Unless there is a restraining order issued, it is
ministerial upon the Labor Arbiter to implement the order of reinstatement. In the case at bar, no restraining
order was granted. Thus, it was mandatory on PAL to actually reinstate Roquero or reinstate him in the
payroll. Having failed to do so, PAL must pay Roquero the salary he is entitled to, as if he was reinstated,
from the time of the decision of the NLRC until the finality of the decision of the Court.15 (Emphases
supplied.)
It is PFIZERs contention in its Memorandum16 that "there was no unjustified refusal on [its part] to
reinstate [respondent] Velasco during the pendency of the appeal,"17 thus, the pronouncement in Roquero
cannot be made to govern this case. During the pendency of the case with the Court of Appeals and prior to
its November 23, 2005 Decision, PFIZER claimed that it had already required respondent to report for
work on July 1, 2005. However, according to PFIZER, it was respondent who refused to return to work
when she wrote PFIZER, through counsel, that she was opting to receive her separation pay and to avail of
PFIZERs early retirement program.
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
We do not agree.
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 Letter20 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.
As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v. National Labor Relations
Commission,21 the Court held that an award or order of reinstatement is immediately self-executory without
the need for the issuance of a writ of execution in accordance with the third paragraph of Article 22322 of
the Labor Code. In that case, we discussed in length the rationale for that doctrine, to wit:
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 enacting the law, the legislature is presumed to have ordained a
valid and sensible law, one which operates no further than may be necessary to achieve its specific purpose.
Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be
prevented. x x x In introducing a new rule on the reinstatement aspect of a labor decision under Republic
Act No. 6715, Congress should not be considered to be indulging in mere semantic exercise. x x x23 (Italics
in the original; emphasis and underscoring supplied.)
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. Thus, respondent was entitled to the wages paid to her
under the aforementioned writ of execution. At most, PFIZERs payment of the same can only be deemed
partial compliance/execution of the Court of Appeals Resolution dated October 23, 2006 and would not bar
respondent from being paid her wages from May 6, 2005 to November 23, 2005.
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 dated June 27, 2005.
PFIZER makes much of respondents non-compliance with its return- to-work directive by downplaying
the reasons forwarded by respondent as less than sufficient to justify her purported refusal to be reinstated.
In PFIZERs view, the return-to-work order it sent to respondent was adequate to satisfy the jurisprudential
requisites concerning the reinstatement of an illegally dismissed employee.
It would be useful to reproduce here the text of PFIZERs Letter dated June 27, 2005:
Dear Ms. Velasco:
Please be informed that, pursuant to the resolutions dated 20 October 2004 and 14 December 2004 rendered
by the National Labor Relations Commission and the order dated 24 May 2005 issued by Executive Labor
Arbiter Vito C. Bose, you are required to report for work on 1 July 2005, at 9:00 a.m., at Pfizers main
office at the 23rd Floor, Ayala LifeFGU Center, 6811 Ayala Avenue, Makati City, Metro Manila.
Please report to the undersigned for a briefing on your work assignments and other responsibilities,
including the appropriate relocation benefits.
For your information and compliance.
Very truly yours,
(Sgd.)
Ma. Eden Grace Sagisi
Labor and Employee Relations Manager24
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."
It is established in jurisprudence that reinstatement means restoration to a state or condition from which one
had been removed or separated. The person reinstated assumes the position he had occupied prior to his
dismissal. Reinstatement presupposes that the previous position from which one had been removed still
exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one
previously occupied by the employee.25
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.

The Court is cognizant of the prerogative of management to transfer an employee from one office to
another within the business establishment, provided that there is no demotion in rank or diminution of his
salary, benefits and other privileges and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause.26 Likewise, the management
prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind
the basic elements of justice and fair play. There must be no showing that it is unnecessary, inconvenient
and prejudicial to the displaced employee.27
The June 27, 2005 return-to-work directive implying that respondent was being relocated to PFIZERs
Makati main office would necessarily cause hardship to respondent, a married woman with a family to
support residing in Baguio City. However, PFIZER, as the employer, offered no reason or justification for
the relocation such as the filling up of respondents former position and the unavailability of substantially
equivalent position in Baguio City. A transfer of work assignment without any justification therefor, even if
respondent would be presumably doing the same job with the same pay, cannot be deemed faithful
compliance with the reinstatement order. In other words, in this instance, there was no real, bona fide
reinstatement to speak of prior to the reversal by the Court of Appeals of the finding of illegal dismissal.
In view of PFIZERs failure to effect respondent's actual or payroll reinstatement, it is indubitable that the
Roquero ruling is applicable to the case at bar. The circumstance that respondent opted for separation pay
in lieu of reinstatement as manifested in her counsels Letter28 dated July 18, 2005 is of no moment. We do
not see respondents letter as taking away the option from management to effect actual or payroll
reinstatement but, rather under the factual milieu of this case, where the employer failed to categorically
reinstate the employee to her former or equivalent position under the same terms, respondent was not
obliged to comply with PFIZERs ambivalent return-to-work order. To uphold PFIZERs view that it was
respondent who unjustifiably refused to work when PFIZER did not reinstate her to her former position,
and worse, required her to report for work under conditions prejudicial to her, is to open the doors to
potential employer abuse. Foreseeably, an employer may circumvent the immediately enforceable
reinstatement order of the Labor Arbiter by crafting return-to-work directives that are ambiguous or meant
to be rejected by the employee and then disclaim liability for backwages due to non-reinstatement by
capitalizing on the employees purported refusal to work. In sum, the option of the employer to effect
actual or payroll reinstatement must be exercised in good faith.
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.)
Similarly, we have previously held that an employees demand for separation pay may be indicative of
strained relations that may justify payment of separation pay in lieu of reinstatement.31 This is not to say,
however, that respondent is entitled to separation pay in addition to backwages. We stress here that a
finding of strained relations must nonetheless still be supported by substantial evidence.32
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.
Lastly, PFIZER exhorts the Court to re-examine the application of Roquero with a view that a mechanical
application of the same would cause injustice since, in the present case, respondent was able to gain
pecuniary benefit notwithstanding the circumstance of reversal by the Court of Appeals of the rulings of the
Labor Arbiter and the NLRC thereby allowing respondent to profit from the dishonesty she committed
against PFIZER which was the basis for her termination. In its stead, PFIZER proposes that the Court apply
the ruling in Genuino v. National Labor Relations Commission33 which it believes to be more in accord
with the dictates of fairness and justice. In that case, we canceled the award of salaries from the date of the
decision of the Labor Arbiter awarding reinstatement in light of our subsequent ruling finding that the
dismissal is for a legal and valid ground, to wit:
Anent the directive of the NLRC in its September 3, 1994 Decision ordering Citibank "to pay the salaries
due to the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a
month, as found by the Labor Arbiter) up to and until the date of this decision," the Court hereby cancels
said award in view of its finding that the dismissal of Genuino is for a legal and valid ground.
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, which states:
xxxx
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 s/he 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/her 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 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.34 (Emphases supplied.)
Thus, PFIZER implores the Court to annul the award of backwages and separation pay as well as to require
respondent to refund the amount that she was able to collect by way of garnishment from PFIZER as her
accrued salaries.
The contention cannot be given merit since this question has been settled by the Court en banc.
In the recent milestone case of Garcia v. Philippine Airlines, Inc.,35 the Court wrote finis to the stray
posture in Genuino requiring the dismissed employee placed on payroll reinstatement to refund the salaries
in case a final decision upholds the validity of the dismissal. In Garcia, we clarified the principle of
reinstatement pending appeal due to the emergence of differing rulings on the issue, to wit:
On this score, the Court's attention is drawn to seemingly divergent decisions concerning reinstatement
pending appeal or, particularly, the option of payroll reinstatement. On the one hand is the jurisprudential
trend as expounded in a line of cases including Air Philippines Corp. v. Zamora, while on the other is the

recent case of Genuino v. National Labor Relations Commission. At the core of the seeming divergence is
the application of paragraph 3 of Article 223 of the Labor Code x x x.
xxxx
The view as maintained in a number of cases is that:
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)
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to
receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a
restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith.
The opposite view is articulated in Genuino which states:
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 [he] 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 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. (Emphasis, italics and underscoring supplied)
It has thus been advanced that there is no point in releasing the wages to petitioners since their dismissal
was found to be valid, and to do so would constitute unjust enrichment.
Prior to Genuino, there had been no known similar case containing a dispositive portion where the
employee was required to refund the salaries received on payroll reinstatement. In fact, in a catena of cases,
the Court did not order the refund of salaries garnished or received by payroll-reinstated employees despite
a subsequent reversal of the reinstatement order.
The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render inutile
the rationale of reinstatement pending appeal.
xxxx
x x x Then, by and pursuant to the same power (police power), the State may authorize an immediate
implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that
saving act is designed to stop, although temporarily since the appeal may be decided in favor of the
appellant, a continuing threat or danger to the survival or even the life of the dismissed or separated
employee and his family.36

Furthermore, in Garcia, the Court went on to discuss the illogical and unjust effects of the "refund
doctrine" erroneously espoused in Genuino:
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.1avvphi1
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse
payroll reinstatement and simply find work elsewhere in the interim, if any is available. Notably, the option
of payroll reinstatement belongs to the employer, even if the employee is able and raring to return to work.
Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In the face of the grim
possibilities, the rise of concerned employees declining payroll reinstatement is on the horizon.
Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also
institutes a scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente
lite merely serve as a bond posted in installment by the employer. For in the event of a reversal of the
Labor Arbiter's decision ordering reinstatement, the employer gets back the same amount without having to
spend ordinarily for bond premiums. This circumvents, if not directly contradicts, the proscription that the
"posting of a bond [even a cash bond] by the employer shall not stay the execution for reinstatement."
In playing down the stray posture in Genuino requiring the dismissed employee on payroll reinstatement to
refund the salaries in case a final decision upholds the validity of the dismissal, the Court realigns the
proper course of the prevailing doctrine on reinstatement pending appeal vis--vis the effect of a reversal
on appeal.
xxxx
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. x x
x.37 (Emphasis supplied.)
In sum, the Court reiterates the principle that reinstatement pending appeal necessitates that it must be
immediately self-executory without need for a writ of execution during the pendency of the appeal, if the
law is to serve its noble purpose, and any attempt on the part of the employer to evade or delay its
execution should not be allowed. Furthermore, we likewise restate our ruling that an order for reinstatement
entitles an employee to receive his accrued backwages from the moment the reinstatement order was issued
up to the date when the same was reversed by a higher court without fear of refunding what he had
received. It cannot be denied that, under our statutory and jurisprudential framework, respondent is entitled
to payment of her wages for the period after December 5, 2003 until the Court of Appeals Decision dated
November 23, 2005, notwithstanding the finding therein that her dismissal was legal and for just cause.
Thus, the payment of such wages cannot be deemed as unjust enrichment on respondents part.
WHEREFORE, the petition is DENIED and the assailed Resolution dated October 23, 2006 as well as the
Resolution dated April 10, 2007 both issued by the Court of Appeals in CA-G.R. SP No. 88987 are hereby
AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 207983

April 7, 2014

WENPHIL CORPORATION, Petitioner,

vs.
ALMER R. ABING and ANABELLE M. TUAZON, Respondents.
DECISION
BRION, J.:
We resolve this petition for review on certiorari1 under Rule 45 of the Rules of Court, challenging the
August 31, 2012 decision2 and the June 20, 2013 resolution3 (assailed CA rulings) of the Court of Appeals
(CA) in CA-G.R. SP No. 117366.
These assailed CA rulings annulled and set aside the March 26, 2010 Decision4 and September 15, 20105
resolution (NLRC rulings) of the National Labor Relations Commission (NLRC) in NLRC CA No. 028233-01 (Rl-08).
The NLRC rulings, in turn, fully affirmed the November 16, 2007 Order6 of the Labor Arbiter (LA) in
NLRC-NCR Case Nos. 30-03-00993-00 and 30-03-01020-00. The LAs order found that an illegal
dismissal took place. Thus, the LA directed petitioner Wenphil Corporation (Wenphil) to pay respondents
Almer Abing and Anabelle Tuazon (respondents) their backwages for the period from February 15, 2002 to
November 8, 2002, pursuant to the rule that an order of reinstatement is immediately executory even
pending appeal.7
Factual Antecedents
This case stemmed from a complaint for illegal dismissal filed by the respondents against Wenphil,
docketed as NLRC NCR Case No. 30-03-00993-00.
On December 8, 2000, 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
Because of the unfavorable LA decision, 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
On October 29, 2001, 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

On January 30, 2002, the NLRC issued a resolution16 affirming LA Bartolabacs decision with
modifications. Instead of ordering the respondents reinstatement, the NLRC directed Wenphil to pay the
respondents their respective separation pay at the rate of one (1) month salary for every year of service.
Also, the NLRC found that while the respondents had been illegally dismissed, they had not been illegally
suspended. Thus, the period from February 3 to February 28, 2000 during which the respondents were on
preventive suspension was excluded by the NLRC in the computation of the respondents backwages.17
Subsequently, Wenphil moved for the reconsideration18 of the NLRCs January 30, 2002 resolution, but
the NLRC denied the motion in another resolution dated September 24, 2002.19
Wenphil thereafter went up to the CA via a petition for certiorari to question the NLRCs January 30, 2002
and September 24, 2002 resolutions.20 On August 27, 2003, the CA rendered its decision21 reversing the
NLRCs finding that the respondents had been illegally dismissed. According to the CA, there was enough
evidence to show that the respondents had been guilty of serious misconduct; thus, their dismissal was for a
valid cause.22 The respondents moved for the reconsideration of the CAs decision.23 In a resolution24
dated February 23, 2004, the CA denied the respondents motion.
On appeal to the Supreme Court (SC) via Rule 45 (docketed as G.R. No. 16244725 and dated December
27, 2006), the SC denied the respondents petition for review on certiorari26 and affirmed the CAs August
27, 2003 decision and February 23, 2004 resolution. The respondents did not file any motion for
reconsideration to question the SCs decision; thus, the decision became final and executory on February
15, 2007.27
The Labor Arbitration Rulings
Sometime after the SCs decision in G.R. No. 162447 became final and executory, the respondents filed
with LA Bartolabac a motion for computation and issuance of writ of execution.28 The respondents
asserted in this motion that although the CAs ruling on the absence of illegal dismissal (as affirmed by the
SC) was adverse to them, under the law and settled jurisprudence, they were still entitled to backwages
from the time of their dismissal until the NLRCs decision finding them to be illegally dismissed was
reversed with finality.29
LA Bartolabac granted the respondents motion and, in an order dated November 16, 2007,30 directed
Wenphil to pay each complainant their salaries on reinstatement covering the period from February 15,
2002 (the date Wenphil last paid the respondents respective salaries) to November 8, 2002 (since the
NLRCs decision finding the respondents illegally dismissed became final and executory on February 28,
2002).
Both parties appealed to the NLRC to question LA Bartolabacs November 16, 2007 order.31 Wenphil
argued that the respondents were no longer entitled to payment of backwages in view of the compromise
agreement they executed on October 29, 2001. According to Wenphil, the compromise agreement provided
that Wenphils obligation to pay the respondents backwages should cease as soon as LA Bartolabacs
decision was "modified, amended or reversed" by the NLRC. Since the NLRC modified the LAs ruling by
ordering the payment of separation pay in lieu of reinstatement, then the respondents, under the terms of the
compromise agreement, were entitled to backwages only up to the finality of the NLRC decision.32
The respondents questioned in their appeal the determined period for the computation of their backwages;
they posited that the period for payment should end, not on November 8, 2002, but on February 14, 2007,
since the SCs decision which upheld the CAs ruling became final and executory on February 15, 2007.33
The NLRC denied the parties respective appeals in its decision dated March 26, 201034 and affirmed in
toto the LAs order. Both parties moved for the reconsideration of the NLRCs decision but the NLRC
denied their respective motions in the resolution of September 15, 2010.35

The CAs Ruling

In its decision dated August 31, 2012,36 the CA reversed the NLRC rulings and prescribed a different
computation period.
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. In arriving at this conclusion, the CA cited
the case of Pfizer v. Velasco37 where this Court ruled 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 dismissed
employees wages during the period of appeal until reversal by the higher court.38 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.
The CA likewise held that the compromise agreement did not contain any waiver of rights for any award
the respondents might have received when the NLRC changed or modified the LAs award.39
The Petition
In its petition for review with this Court, Wenphil maintained that the respondents were no longer entitled
to payment of backwages in view of the modification of the LAs ruling by the NLRC pursuant with their
October 29, 2001 compromise agreement.
Wenphil argued that the CA utterly disregarded the terms of the parties compromise agreement whose
terms were very clear; the agreement reads:
3. That for the payroll period from October 16-31 and thereafter, their [respondents] salaries (net of
withholding tax, SSS, Philhealth and Pag-ibig) shall be credited every 10th and 25th of the succeeding
months through their respective ATM employees account until such time that the questioned decision of
the Honorable Labor Arbiter Geobel Bartolabac is modified, amended or reversed by the Honorable Labor
Relations Commission.40 [emphasis ours]
It was Wenphils assertion that since the NLRCs decision partly changed the decision of LA Bartolabac by
ordering payment of separation pay in lieu of reinstatement, the NLRC decision was a "modification" that
should operate to remove Wenphils obligation to pay the respondents backwages for the period of the
CAs reversal of the NLRCs illegal dismissal ruling.41 According to Wenphil, the words of the
compromise agreement left no room for interpretation as to the parties intentions;42 as a valid agreement
between the parties, it must be given effect and respected by the court.
Wenphil also contended that the CAs cited Pfizer case cannot apply to the present case since there was no
compromise agreement in Pfizer where the dismissed employee waived her entitlement to backwages.43
Finally, Wenphil claimed that the reliefs of reinstatement and backwages are only available to illegally
dismissed employees. A ruling that the respondents were still entitled to reinstatement pay notwithstanding
the validity of their dismissal, would amount to the courts tolerance of an unjust and equitable situation.44
The Courts Ruling
We resolve to DENY the petition. 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.

Under Article 223 of the Labor Code, "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."
The Court discussed reason behind this legal policy in Aris v. NLRC,45 where it explained:
In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter
reinstating a dismissed or separated employee, the law itself has laid down a compassionate policy which,
once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the working-man.
These provisions are the quintessence of the aspirations of the workingman for recognition of his role in the
social and economic life of the nation, for the protection of his rights, and the promotion of his welfare
These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic force,
which the Constitution also expressly affirms with equal intensity. Labor is an indispensable partner for the
nation's progress and stability. [emphasis ours]
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.
In the case of payroll reinstatement, even if the employers appeal turns the tide in its favor, the reinstated
employee has no duty to return or reimburse the salary he received during the period that the lower court or
tribunals governing decision was for the employees illegal dismissal.
Otherwise, the situation would run counter to the immediately executory nature of an order of
reinstatement. The case of Garcia v. Philippine Airlines46 is enlightening on this point:
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.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse
payroll reinstatement and simply find work elsewhere in the interim, if any is available.1wphi1 Notably,
the option of payroll reinstatement belongs to the employer, even if the employee is able and raring to
return to work.
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.47
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.

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.
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.
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
Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness
or non-availability of one does not carry with it the inappropriateness or non-availability of the other.
Separation pay was awarded in favor of petitioner Lydia Santos because the NLRC found that her
reinstatement was no longer feasible or appropriate. As the term suggests, separation pay is the amount that
an employee receives at the time of his severance from the service and, as correctly noted by the Solicitor
General in his Comment, is designed to provide the employee with "the wherewithal during the period that
he is looking for another employment." In the instant case, the grant of separation pay was a substitute for
immediate and continued re-employment with the private respondent Bank. The grant of separation pay did
not redress the injury that is intended to be relieved by the second remedy of backwages, that is, the loss of
earnings that would have accrued to the dismissed employee during the period between dismissal and
reinstatement. Put a little differently, 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. It
was grievous error amounting to grave abuse of discretion on the part of the NLRC to have considered an
award of separation pay as equivalent to the aggregate relief constituted by reinstatement plus payment of
backwages under Article 280 of the Labor Code. The grant of separation pay was a proper substitute only
for reinstatement; it could not be an adequate substitute both for reinstatement and for backwages. In effect,
the NLRC in its assailed decision failed to give to petitioner the full relief to which she was entitled under
the statute. [emphasis ours]
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.
We emphasize that the basis for the payment of backwages is different from that of the award of separation
pay. Separation pay is granted where reinstatement is no longer advisable because of strained relations
between the employee and the employer. Backwages represent compensation that should have been earned
but were not collected because of the unjust dismissal. The basis for computing separation pay is usually
the length of the employees past service, 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 employer-employee 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.
A compromise agreement should not be contrary to law, morals, good customs and public policy.
While it is true that a compromise agreement is binding between the parties and becomes the law between
them,52 it is also a rule that to be valid, a compromise agreement must not be contrary to law, morals, good
customs and public policy.53
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. As we held in the case of Garcia v. Philippine Airlines:54
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]
This ruling embodies a principle and policy of the law that cannot be watered down by any lesser
agreement except perhaps when backwages are already earned entitlements that the employee chooses to
surrender for a valuable consideration (and even then, the consideration must at least be equitable). This
legal policy emphasizes, too, the rule that separation pay cannot be a substitute for backwages but only for
reinstatement. The award of separation pay is not inconsistent with the payment of backwages. Thus, until a
higher courts or tribunals reversal of the finding that an employee had been illegally dismissed, the
employee would be entitled to receive his reinstatement salary or backwages during the period of appeal
until such reversal. This is in line with the Labor Codes policy that an order of reinstatement, which can
either be actual or through the payroll, is immediately executory and is not affected by the period of appeal.
Period for Computation of Backwages
The records show that the inconsistency between the labor arbitration rulings and the CAs ruling was on
the period for the computation of such backwages and not on whether the respondents were still entitled to
such backwages during the period of appeal until the reversal of the finding of illegal dismissal.
According to the LA, whose ruling the NLRC affirmed, the period for computation should be from
February 15, 2002 until November 8, 2002 since the NLRCs decision which affirmed the LAs finding of
illegal dismissal became final and executory on November 8, 2002. The LA started the counting of the
period on February 15, 2002 since that was the day when Wenphil last paid the respondents backwages.

On the other hand, the CA, in setting aside the NLRCs rulings, relied on the case of Pfizer v. Velasco
where we ruled that the backwages of the dismissed employee should be granted during the period of
appeal until reversal by a higher court. Since the first CA decision which found that the respondents had not
been illegally dismissed was promulgated on August 27, 2003, then the reversal by the higher court was
effectively made on August 27, 2003.
As against this view, the respondents argued that the period for payment of their backwages should end on
February 14, 2007 since the SC decision in G.R. No. 162447 which affirmed the CAs findings that the
respondents had not been legally dismissed became final and executory on February 15, 2007.
Among these views, the commanding one is the rule in Pfizer, which merely echoes the rulings we made in
the cases of Roquero v. Philippine Airlines55 and Garcia v. Philippine Airlines56 that the period for
computing the backwages due to the respondents during the period of appeal should end on the date that a
higher court reversed the labor arbitration ruling of illegal dismissal. In this case, the higher court which
first reversed the NLRCs ruling was not the SC but rather the CA. In this light, the CA was correct when it
found that that the period of computation should end on August 27, 2003. The date when the SCs decision
became final and executory need not matter as the rule in Roquero, Garcia and Pfizer merely referred to the
date of reversal, not the date of the ultimate finality of such reversal.
As a last minor detail, we do not agree with the CA that the date of computation should start on February
15, 2002. Rather, it should be on February 16, 2002. The respondents themselves admitted in their motion
for computation and issuance of writ of execution that the last date when they were paid their backwages
was on February 15, 2002. To start the computation on the same date would result to a duplication of wages
for this day; thus, computation should start on the following date - February 16, 2002.
WHEREFORE, in light of these considerations, we hereby DENY the petition. The Court of Appeals'
decision dated August 31, 2012 and resolution dated June 20, 2013, which annulled and set aside the March
26, 2010 decision and September 15, 2010 resolution of the NLRC, are hereby AFFIRMED with
MODIFICATION. The period for the computation of backwages of respondents Almer R. Abing and
Anabelle M. Tuazon should be from February 16, 2002 until August 27, 2003, when the Court of Appeals
promulgated its decision reversing the NLRC' s finding of illegal dismissal. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 204646

April 15, 2015

SMART COMMUNICATIONS, INC., NAPOLEON L. NAZARENO, and RICARDO P. ISLA,*

Petitioners,
vs.
JOSE LENI Z. SOLIDUM, Respondent.
DECISION
CARPIO, J.:
The Case

This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. Petitioners Smart
Communications, Inc. (Smart), Napoleon L. Nazareno and Ricardo P. Isla (Isla) challenge the Court of
Appeals' 3 July 2012 Amended Decision2 and 23 November 2012 Resolution3 in CA-G.R. SP No. 115794,
affirming the National Labor Relations Commission's (NLRC) 30 July 2010 Resolution.4
The Facts
On 26 April 2004, Smart hired respondent Jose Leni Z. Solidum (Solidum) as Department Head for Smart
Buddy Activation. Smart Buddy Activation is under the Product Marketing Group which is headed by Isla.
On 21 September 2005, Islagave Solidum a memorandum5 informing him of alleged acts of dishonesty,
directing him to explain why his employment should not be terminated, and placing him under preventive
suspension without pay for 30 days. On 28 September 2005, Solidum submitted his written explanation6 in
response to the 21 September 2005 notice.
On 22 October 2005, Isla gave Solidum a memorandum7 dated 21 October 2005 informing him of a
modified set of alleged acts of dishonesty, directing him to explain why his employment should not be
terminated, extending his preventive suspension by 10 days, and inviting him to the administrative
investigation scheduled on 26 October 2005.
On 11 November 2005, Isla gave Solidum a memorandum8 dated 9 November 2005 terminating his
employment "for fraud or willful breach of trust, falsification, misrepresentation, conflict of interest,
serious misconduct and dishonesty-related offenses."9
Solidum filed against Smart a complaint10 for illegal dismissal, illegal suspension, non-payment of
salaries, actual, moral and exemplary damages, and attorneys fees.
In his 3 July 2006 Decision,11 the Labor Arbiter found that Solidums preventive suspension and dismissal
were illegal and that he was entitled to full back wages, moral and exemplary damages, and attorneys fees.
The dispositive portion of the Decision stated:
WHEREFORE, premises all considered, judgment is hereby rendered in favor of complainant and against
respondents, as follows:
1. Declaring the 20-day extended preventive suspension of complainant from October 22, 2005 to
November 10, 2005 illegal and tantamount to constructive dismissal, and ordering respondents to
jointly and severally pay complainant his corresponding salaries, benefits, privileges, allowances
and other incentives/bonuses during the period from October 22 to November 10, 2005, in the
amount of P236,061.94;
2. Ordering respondents to jointly and severally pay the complainants unpaid salaries, benefits,
privileges, allowances, and other benefits/bonuses during the 30-day preventive suspension, in the
amount of P365,896.00;
3. Declaring the dismissal of complainant effective November 11, 2005 as illegal, and ordering
respondents to reinstate the complainant to his former position, immediately upon receipt of this
decision, either physically or in the payroll, at the option of the former, and failure to exercise their
option within ten (10) days hereof, shall place the complainant on payroll reinstatement, with
payment of accrued salaries, allowances, benefits/incentives and bonuses;
4. Ordering respondents to jointly and severally pay complainant his full backwages, inclusive of
all benefits bonuses, privileges, incentives, allowances or their money equivalents, from date of
dismissal on November 11, 2005 until actual reinstatement, partially computed as follows:

a. Backwages and benefits - P2,903,561.79

b. Quarterly performance bonus - P935,640.00
c. Monthly Gas allowance - P90,693.00
d. Monthly Rice allowance - P9,000.00
e. Monthly drivers allowance - P68,175.00
f. 13th month pay (pro-rata) - P265,569.68
g. Unpaid accumulated leaves 2004 & 2005 - P472,123.87
h. Smart incentive entitlement - P7,370,250.00[;]
5. Ordering respondents to jointly and severally pay complainant for the foregone opportunity of
pursuing studies in the United Kingdom under the British Chevening Scholarship Award, in the
sum of 20,189.00 British pounds or Peso 1,982,727.37[; and]
6. Ordering respondents to jointly and severally pay complainant moral damages in the amount of
P2 million, exemplary damages in the amount of P2 million, and attorneys fees equivalent to 10%
of the judgment award.
SO ORDERED.12
On 25 July 2006, Smart appealed to the NLRC. On 13 November 2006, the Labor Arbiter issued a writ of
execution ordering the sheriff to collect from petitioners P1,440,667.93, representing Solidums accrued
salaries, allowances, benefits, incentives and bonuses from 21 July to 20 October 2006. On 15 August and
25 October 2007, 11 February, 28 April, 23 July and 11 November2008, and 22 January 2009, the Labor
Arbiter issued seven other alias writs of execution ordering the sheriff to collect from petitioners Solidums
accrued salaries, allowances, benefits, incentives and bonuses.
In its 26 January 2009 Resolution,13 the NLRC reversed the Labor Arbiters 3 July 2006 Decision and
dismissed for lack of merit Solidums complaint. Solidum filed a motion14 for reconsideration dated 9
February 2009.
On 4 May 2009, Solidum filed with the Labor Arbiter an ex-parte Motion15 praying that an alias writ of
execution be issued directing the sheriff to collect from petitioners P1,440,667.93, representing Solidums
accrued salaries, allowances, benefits, incentives and bonuses from 21 January to 20 April 2009.
In its 29 May 2009 Decision,16 the NLRC denied for lack of merit Solidums 9 February 2009 motion for
reconsideration.
The Labor Arbiters Ruling
In his 29 July 2009 Order,17 the Labor Arbiter denied for lack of merit Solidums ex-parte motion praying
that an alias writ of execution be issued directing the sheriff to collect from petitioners P1,440,667.93,
representing Solidums accrued salaries, allowances, benefits, incentives and bonuses from 21 January to
20April 2009. The Labor Arbiter held that:

In the instant case, the NLRC promulgated its Decision dated January 26, 2009 reversing this Offices
Decision dated July 03, 2006. Also, the NLRC in its Decision dated May 29, 2009 denied the
complainants motion for reconsideration of its Decision dated January 26, 2009. This Office is mindful of
the fact that the NLRC is tasked with the review of decisions promulgated by this Office, as such, it is a
higher tribunal as contemplated by law.
Verily, the recent decision of the NLRC reversing the Decision of this Office prevents any future issuance
of any writ of execution on the reinstatement aspect in line with Gracia, et al. vs. Philippine Airlines, Inc.
and International Container Terminal Services vs. NLRC.18
Solidum appealed to the NLRC.
The NLRCs Ruling
In its 31 May 2010 Decision,19 the NLRC reversed the Labor Arbiters 29 July 2009 Order. The NLRC
held that:
In the case at bar, records show that respondents appealed from the Labor Arbiters Decision to the
Commission on July 25, 2006. The Commission resolved respondents appeal on January 26, 2009,
reversing the Decision of the Labor Arbiter dated July 3, 2006. Notably, there is no showing in the records
that respondents reinstated complainant to his former position. Hence, pursuant to Article 223 of the Labor
Code, as amended, relative to the reinstatement aspect of the Labor Arbiters Decision, respondents are
obligated to pay complainants salaries and benefits, computed from July 13, 2006, when respondents
received a copy of the Labor Arbiters Decision which, among others, ordered the reinstatement of
complainant, up to the date of finality of the Commissions resolution reversing the Labor Arbiters
Decision, which, for this purpose, is reckoned on May 29, 2009, when the Commission denied
complainants Motion for Reconsideration.
Indeed, common sense dictates that complainants entitlement to reinstatement salaries/wages and benefits,
emanating from the Labor Arbiters order of reinstatement, presupposes that said order of reinstatement is
still enforceable. Here, the Labor Arbiters order of reinstatement dated July 3, 2006 was no longer
enforceable as of May 29, 2009 when the Commissions resolution reversing the Labor Arbiters order of
reinstatement is deemed to have become final as hereinabove discussed. Patently then, complainant is no
longer entitled to reinstatement salaries/wages and benefits after May 29, 2009.
Significantly, the Order of the Labor Arbiter being appealed from by complainant, denied the latters
motion for issuance of alias writ of execution for the collection of his reinstatement salaries and benefits for
the period covering January 21, 2009 to April 20, 2009. The Labor Arbiter thus committed serious error in
denying complainants motion with respect to his reinstatement salaries and benefits as he is entitled to the
same for the period starting July 13, 2006 to May 29, 2009.20
Solidum filed a motion21 for partial reconsideration. Petitioners filed a motion22 for reconsideration. In its
30July 2010 Resolution, the NLRC granted Solidums motion for partial reconsideration and denied for
lack of merit petitioners motion for reconsideration. The NLRC held that:
Our Entry of Judgment dated June 01, 2010 clearly states that the Decision promulgated by this
Commission on May 29, 2009 had become final and executory on August 10, 2009. Thus, We so hold that
the date of finality of Our Decision reversing the Labor Arbiters Decision dated July 3, 2006 is August 10,
2009, and the computation of complainants reinstatement or accrued salaries/wages and other benefits
should be up to August 10, 2009.
Anent respondents Motion for Reconsideration, We find the same unmeritorious.23

Petitoners appealed to the Court of Appeals.

In his alias writ24 of execution dated 22 October 2010, the Labor Arbiter ordered the sheriff to collect from
petitioners P1,440,667.93, representing Solidums accrued salaries, allowances, benefits, incentives and
bonuses from 21 January to 20 April 2009.
The Court of Appeals Ruling
In its 25 January 2011 Decision,25 the Court of Appeals granted petitioners petition for certiorari,
prohibition and mandamus with prayer for the issuance of a writ of preliminary injunction and/or temporary
restraining order and set aside the NLRCs 31 May 2010 Decision and 30 July 2010 Resolution. The Court
of Appeals held that:
The order of the Labor Arbiter denying Private Respondents ex-parte motion for issuance of Alias Writ of
Execution is not a final order as there was something else to be done, namely, the resolution of his
Complaint for Illegal Dismissal against Petitioners on the merits. The subject Order of the Labor Arbiter
did not put an end to the issues of illegal suspension and illegal dismissal, and, thus, partakes the nature of
an interlocutory order. It is jurisprudential that an interlocutory order is not appealable until after the
rendition of the judgment on the merits for a contrary rule would delay the administration of justice and
unduly burden the courts. Being interlocutory in nature, the subject Order could not have been validly
appealed.
Moreover, as correctly argued by the Petitioners, an appeal from an interlocutory order is a prohibited
pleading under Section 4 of the 2005 Revised Rules of Procedure of the NLRC. Consequently, the Labor
Arbiters order being interlocutory and unappealable, Public Respondent NLRC has no jurisdiction to rule
on the appeal except to dismiss the same. The assailed Decision and the Resolution, rendered in excess of
the Public Respondent NLRCs jurisdiction, are therefore null.
Besides and more importantly, records show that the Decision, dated May 29, 2009, of the NLRC in the
Illegal Dismissal Case which effectively denied Private Respondents Complaint for Illegal Dismissal
against Petitioners already attained finality on June 1, 2010. Indeed, an Entry of Judgment was accordingly
made. Clearly, Private Respondent can neither pray nor cause this Court to grant his Ex-parte Motion for
Issuance of Writ of Execution to reinstate him since his dismissal by Petitioners was finally ruled to be
legal; hence, the denial of his complaint for lack of merit. Ruling on Private Respondents Ex-parte motion
shall also have an effect of reviewing a final judgment which the law and the court abhor. It bears to stress
that when a final judgment becomes executory, it thereby becomes immutable and unalterable.26
Solidum filed a motion27 for reconsideration.
In his alias writ28 of execution dated 18 May 2011, the Labor Arbiter ordered the sheriff to collect from
petitioners P1,440,667.93, representing Solidums accrued salaries, allowances, benefits, incentives and
bonuses from 21 April to 20 July 2009. Petitioners filed with the Court of Appeals a motion29 to order
Solidum to return P2,881,335.86, representing the total amount under the 22 October 2010 and 18 May
2011 alias writs of execution.
In its 3 July 2012 Amended Decision, the Court of Appeals partly granted Solidums motion for
reconsideration and denied petitioners motion to order the return of P2,881,335.86. The Court of Appeals
held that:
[T]here was a wrong appreciation of fact relative to the date of finality of judgment. The true date when the
May 29, 2009 NLRC decision became final and executory was on August10, 2009 and not on June 1, 2010.
(Rollo, page 1895) Conformably with the foregoing, the involved portion of our ruling which is the subject

of the discussion at hand is hereby modified by changing the stated date therein from June 1, 2010 to
August 10, 2009.
xxxx
On the last issue for consideration refund of monetary award, We find necessary to quote the following
pronouncement of the High Court:
xxxx
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. (Juanito A. Garcia vs.
Philippine Airlines, Inc., G.R. No. 164856, January 20, 2009)
In view thereof, no refund will thus be permitted by this Court.30
Petitioners filed a motion31 for partial reconsideration with motion to order the return of P2,881,335.86. In
its 23 November 2012 Resolution, the Court of Appeals held that:
The move to reconsider the January 26, 2009 decision of the NLRC was denied on May 29, 2009.
Thereafter, an Entry of Judgment was issued which provides in particular the following: "this is to certify
that on May 29, 2009, a DECISION was rendered x x x and that the same has, pursuant to Rules of the
Commission, became [sic] final and executory on Aug. 10, 2009". (Rollo, p. 1895) It appears therefore that
the situation contemplated in the last paragraph of the Section 14 had been the case here. In view of this,
We find no cogent reason to reverse our earlier ruling that August 10, 2009 is the true date of finality of
subject decision.
xxxx
In the light, however, of our earlier discussion on the true date of finality of judgment, we cannot order the
return of the amounts released by way of the 8th and 9th Alias Writ of Execution. The wages, allowances,
incentives/benefits and bonuses received through the said writs covered the period from January21, 2009 to
July 20, 2009, thus, the latter is not required to reimburse the same due to the fact that one is entitled to
such amounts until the day that the reinstatement order was reversed with finality (which in this case falls
on August 10, 2009). (See Juanito A. Garcia vs. Philippine Airlines, Inc. G.R. No. 164856, January 20,
2009)32
Hence, the present petition.
The Issues
Petitioners raised as issues that the Court of Appeals erred in ruling that (1) the NLRCs 29 May 2009
Decision became final and executory on 10 August 2009, and (2) Solidum was entitled to P2,881,335.86,
representing the total amount under the 22 October 2010 and 18 May 2011 alias writs of execution.
The Courts Ruling
The petition is unmeritorious.
The NLRCs 29 May 2009 Decision became final and executory on 10 August 2009 as shown on the entry
of judgment.33 The entry of judgment states:

This is to certify that on May 29, 2009, a DECISION was rendered in the above-entitled case, the
dispositive portion of which reads as follows:
"WHERFORE, premises considered, complainants motion for reconsideration, as well as respondents
motion for injunction are hereby both DENIED for lack of merit. Accordingly, Our January 26,2009
Resolution is hereby REITERATED.
SO ORDERED."
and that the same has pursuant to the Rules of the Commission, become final and executory on Aug. 10,
2009and is hereby recorded in the Book of Entries of Judgments.
Quezon City, Philippines, June 01, 2010.34 (Boldfacing supplied)
Moreover, the certification35 issued by the NLRC states that the NLRCs 29 May 2009 Decision
becamefinal and executory on 10 August 2009:
This is to certify that the Decision in NLRC Case No. 00-11-09564-05/NLRC CA No. 049875-06, entitled:
Jose Leni Z. Solidum vs. Smart Communications, Inc., Napoleon L.Nazareno, and/or Ricky P. Isla, was
promulgated on 29 May 2009; the same was mailed on 11 June 2009 and in the absence of return cards, the
decision had become final and executory on 10 August 2009, (after sixty (60) calendar days from the date
of mailing), and had been recorded in the Book of Entries of Judgment, pursuant to Rule VII Section 14 of
the 2005 Revised Rules of Procedure of the NLRC which provides: "The Executive Clerk or Deputy
Executive Clerk shall consider the decision, resolution or order as final and executory after sixty (60)
calendar days from date of mailing in the absence of return cards, certifications from the post office, or
other proof of service to parties.36 (Boldfacing supplied)
Since the NLRCs 29 May 2009 Decision became final and executory on 10 August 2009, Solidum is
entitled to P2,881,335.86, representing his accrued salaries, allowances, benefits, incentives and bonuses
for the period 21 January to 20 July 2009.
In Bago v. NLRC,37 the Court held that employees are entitled to their accrued salaries, allowances,
benefits, incentives and bonuses until the NLRCs reversal of the labor arbiters order of reinstatement
becomes final and executory, as shown on the entry of judgment. The Court held that:
Finally, on Arlyns claim that respondents "unilaterally withheld her payroll reinstatement" after the NLRC
reversed on September 27, 2004 the Labor Arbiters decision, Article 223, paragraph 6 of the Labor Code
provides that the decision of the NLRC on appeals from decisions of the Labor Arbiter "shall become final
and executory after ten (10) calendar days from receipt thereof by the parties." The 2002 New Rules of
Procedure of the NLRC provided:
RULE VII
xxxx
SECTION 14. FINALITY OF DECISION OF THE COMMISSION AND ENTRY OF JUDGMENT.
(a) Finality of the Decisions, Resolutions or Orders of the Commission. Except as provided in Rule XI,
Section 9, the decisions, resolutions or orders of the Commission/Division shall become executory after ten
(10) calendar days from receipt of the same.
(b) Entry of Judgment. Upon the expiration of the ten (10) calendar day period provided in
paragraph (a) of this section, the decision/resolution/order shall, as far as practicable, be entered in
a book of entries of judgment.

(c) Allowance for Delay of Mail in the Issuance of Entries of Judgment. In issuing entries of
judgment, the Executive Clerk of Court or the Deputy Executive Clerk, in the absence of a return
card or certification from the post office concerned, shall determine the finality of the decision by
making allowance for delay of mail, computed sixty (60) calendar days from the date of mailing of
the decision, resolution or order.
That the Court of Appeals may take cognizance of and resolve a petition for certiorari for the nullification
of the decisions of the NLRC on jurisdictional and due process considerations does not affect the statutory
finality of the NLRC Decision. The 2002 New Rules of Procedure of the NLRC so provided:
RULE VIII
xxxx
SECTION 6. EFFECT OF FILING OF PETITION FOR CERTIORARI ON EXECUTION. - A petition for
certiorari with the Court of Appeals or the Supreme Court shall not stay the execution of the assailed
decision unless a temporary restraining order is issued by the Court of Appeals or the Supreme Court.
In the case at bar, Arlyn received the September 27, 2004 NLRC decision on October 25, 2004, and the
January 31, 2005 NLRC Resolution denying her Motion for Reconsideration on February 23, 2005. There
is no showing that the Court of Appeals issued a temporary restraining order to enjoin the execution of the
NLRC decision, as affirmed by its Resolution of January 31, 2005. If above-quoted paragraph (a) of
Section 14 of Rule VII of the 2002 NLRC New Rules of Procedure were followed, the decision of the
NLRC would have become final and executory on March 7, 2005, ten (10) calendar days from February 25,
2005. The NLRC, however, issued on June 16, 2005 a Notice of Entry of Judgment stating that the NLRC
Resolution of January 31, 2005 became final and executory on April 16, 2005, apparently following the
above-quoted last paragraph of Section 14 of Rule VII. No objection having been raised by any of the
parties to the declaration in the Notice of Entry of Judgment of the date of finality of the NLRC January 31,
2005 Resolution, Arlyn's payroll reinstatement ended on April 16, 2005. x x x
WHEREFORE, the petition is, in light of the foregoing discussions, DENIED and the questioned decision
of the court a quo is AFFIRMED with MODIFICATION in that respondent Standard Insurance, Co., Inc. is
ordered to pay the salaries due petitioner, Arlyn Bago, from the time her payroll reinstatement was
withheld after the promulgation on September 27, 2004 of the decision of the National Labor Relations
Commission until April 16, 2005 when it became final and executory.38 (Boldfacing supplied)
WHEREFORE, the petition is DENIED. The Court of Appeals' 3 July 2012 Amended Decision and 23
November 2012 Resolution in CAG.R. SP No. 115794 are AFFIRMED.
SO ORDERED.