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Velasco vs.

National Labor Relations Commission


G.R.No.161694.June26,2006.*

PEPITO VELASCO, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, ANTONIOTAYAG,


ERNESTOTAYAGandRODOLFOTAYAG,respondents.

Labor Law;Judgments;Dispositive Portions;When it is clear that a passage in a judgment cannot stand


togetherwiththerestofthedecision,includingthedispositiveportion,theSupremeCourtcannotobviouslyconfer
bindingeffectonsuchconclusionreachedasitrunscontraryagainstthegrainoftherestoftheResolution.Reading
theentireResolution,itisbeyonddoubtthattheNLRCconcludedthatVelascohadfailedtoestablishthatthe
Tayagshadabandonedtheiremployment.Suchconclusioniscrucial,Velascosdefenseagainstthechargeofillegal
dismissalbeingthattheTayagshadactuallyabandonedtheiremployment,whichisrecognizedinjurisprudenceas
aformofneglectofdutyoneofthejustcausesfordismissalunderArticle282oftheLaborCode.Thedisquisitionis
alsorelevant,asitdebunkstheLaborArbiterscontentionthatitfellupontheTayagstoestablishthattheyhad
beenillegallydismissed.Instead,theNLRCcorrectlyheldthattheburdenwasuponVelascotosubstantiatehis
claimthattheTayagshadabandonedtheiremployment.Further,theNLRCconcludedthattheTayagshadstopped
reportingtothepremisesofModernFurniturebecauseVelascoandModernFurniturehadstoppedassigningthem
work.ConsideringthattheTayagswerepaidonaperpiecebasis,itnecessarilyfollowedthattheystoppedreceiving
incomeaswell.TheNLRCevenhazardedatheorythatVelascohadstoppedgivingtheTayagsworkbecauseoftheir
age.Thus,theNLRCstated:Verily,respondentsappelleesassertionthatcomplainantsappellantsabandonedtheir
workhavenofactualbasis.Giventhecontextoftheprecedingdiscussion,whichillustratedthattheTayagswere
notguiltyofabandonment,thereisnolegalbasiswhatsoeverfortheconclusionthattherewasnoshowingxxx
thattherewasillegaldismissal.ItisnotclearwhytheNLRCstatedthattherewasnoshowingalsothattherewas
illegaldismissalwhenitsprecedingdiscussionsoobviouslypointedtothecontrary.Yetwhenitisclearthatthe
cited passage cannot stand with the rest of the decision, including the dispositive portion, the Court cannot
obviouslyconferbindingeffectontheconclusionthattherewasnoillegaldismissal,asitrunscontraryagainstthe
grainoftherestoftheResolution.

Same;Illegal Dismissals;Reinstatement;Strained Relations Doctrine;An employee unjustly dismissed from


work is entitled to reinstatement and backwages, among others, though it has long been recognized that if
reinstatementisnolongerpossibleorpracticable,theemployermaybemadeinsteadtopayseparationpayinlieuof
reinstatement.Under Article 279 of the Labor Code, an employee unjustly dismissed from work is entitled to
reinstatementandbackwages,amongothers.However,ithaslongbeenrecognizedthatifreinstatementisnolonger
possible or practicable, the employer may be made instead to pay separation pay to the employee in lieu of
reinstatement.ThedispositiveportionoftheResolutionisconsistentwiththepremisethattheTayagswereentitled
to reinstatement by reason of their illegal dismissal, but they could receive instead separation pay in lieu of
reinstatementifreinstatementisnolongerpracticable.Thedispositiveportiondoesnothewtoamindsetthatthe
Tayagswerenotillegallydismissed,thethinkingwhichVelascowishestoascribeontheNLRC.Itisderivedinstead
fromtheconclusionthattheTayagswereillegallydismissed,aconclusionthatmaycontradictthecitedpassageof
theNLRCResolution,butnotthetenorandfindingsoftheResolutioninitsentirety.

Same;Same;Same;Same;Theaccepteddoctrineisthatseparationpaymayavailinlieuofreinstatementif
reinstatementisnolongerpracticalorinthebestinterestoftheparties. Theaccepteddoctrineisthatseparation
paymayavailinlieuofreinstatementifreinstatementisnolongerpracticalorinthebestinterestoftheparties.
Separationpayinlieuofreinstatementmaylikewisebeawardediftheemployeedecidesnottobereinstated.Itis
notcontrovertedthatModernFurniturehasundergonefinancialhardship,andthattheTayagshadoptedtoseek
separationpayinlieuofreinstatement.WedefertothefindingsoftheNLRC,asaffirmedbytheCourtofAppeals
andauthorizedunderjurisprudence,thatseparationpayinlieuofreinstatementiswarrantedinthiscase.

Same;Same;Same;Backwages;The normal consequences of a finding that an employee has been illegally


dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of
seniorityrightsand,secondly,thepaymentofbackwagescorrespondingtotheperiodfromhisillegaldismissalupto
actualreinstatement.TheTayagsarecorrectinpointingoutthattheyareentitledtofullbackwagesbyreasonof
theirillegaldismissal,notwithstandingtheawardofseparationpay.TheCourtmadethispointclearinSantosv.
NLRC,154SCRA166(1987).Thenormalconsequencesofafindingthatanemployeehasbeenillegallydismissed
are,firstly,thatthe employeebecomesentitled toreinstatementtohisformer positionwithout lossof seniority
rightsand,secondly,thepaymentofbackwagescorrespondingtotheperiodfromhisillegaldismissaluptoactual
reinstatement.Thestatutoryintentonthismatterisclearlydiscernible.Reinstatementrestorestheemployeewho
wasunjustlydismissedtothepositionfromwhichhewasremoved,thatis,tohisstatusquoantedismissal,while
thegrantofbackwagesallowsthesameemployeetorecoverfromtheemployerthatwhichhehadlostbywayof
wages as a result of his dismissal. These twin remediesreinstatement and payment of backwagesmake the
dismissedemployeewholewhocanthenlookforwardtocontinuedemployment.Thusdothesetworemediesgive
meaningandsubstance to theconstitutionalrightoflaborto securityoftenure.Thetwoformsofreliefare

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Velasco vs. National Labor Relations Commission
distinctandseparate,onefromtheother.Thoughthegrantofreinstatementcommonlycarrieswithit
an award of backwages, theinappropriateness ornonavailability of onedoes not carry with it the
inappropriatenessornonavailabilityoftheother.SeparationpaywasawardedinfavorofpetitionerLydia
SantosbecausetheNLRCfoundthatherreinstatementwasnolongerfeasibleorappropriate.Asthetermsuggests,
separation pay is the amount that an employee receives at the time of his severance from the service and, as
correctlynotedbytheSolicitorGeneralinhisComment,isdesignedtoprovidetheemployeewiththewherewithal
duringtheperiodthatheislookingforanotheremployment.Intheinstantcase,thegrantofseparationpay
wasasubstituteforimmediateandcontinuedreemploymentwiththeprivaterespondentBank.The
grantofseparationpaydidnotredresstheinjurythatisintendedtoberelievedbythesecondremedy
ofbackwages,thatis,thelossofearningsthatwouldhaveaccruedtothedismissedemployeeduring
theperiodbetweendismissal andreinstatement.Putalittledifferently,paymentofbackwagesisa
formofreliefthatrestorestheincomethatwaslostbyreasonofunlawfuldismissal;separationpay,in
contrast, is oriented towards the immediate future, the transitional period the dismissed employee
mustundergobeforelocatingareplacementjob.

Same;Same;Same;Same;PieceRateWorkers;Sincepiecerateworkersarepaidbythepiece,thereisaneedto
determine the varying degrees of production and days worked by each worker in order to determine the proper
amountofbackwages.TheCourtrecognizesthattheremaybesomedifficultyinascertainingtheproperamountof
backwages, considering that the Tayags were apparently paid on a piecerate basis. InLabor Congress of the
Philippinesv.NLRC,290SCRA509(1998),theCourtwasconfrontedwithasituationwhereinseveralworkerspaid
onapieceratebasiswereentitledtobackwagesbyreasonofillegaldismissal.However,theCourtnotedthatasthe
piecerateworkershadbeenpaidbythepiece,there[was]aneedtodeterminethevaryingdegreesofproduction
anddaysworkedbyeachworker,andthatthisissueisbestlefttothe[NLRC].Webelievethesameresultshould
obtaininthiscase,andtheNLRCbetaskedtoconducttheproperdeterminationoftheappropriateamountof
backwagesduetoeachoftheTayags.

PETITIONforreviewoncertiorariofthedecisionandresolutionoftheCourtofAppeals.

ThefactsarestatedintheopinionoftheCourt.

ProcesoM.Nacinoforpetitioner.

NepomucenoZ.Caylaoforrespondents.

TINGA,J.:

ThereislittledifficultyonthepartoftheCourtinupholdingtherulingschallengedinthisPetitionforReviewand
confirmingthefindingthatprivaterespondentsinthiscasewereillegallydismissed.Further,itisclearthatprivate
respondentsshouldbeawardedfullbackwages,anentitlementdeniedthemevenastheyweregrantedseparation
pay in lieu of reinstatement. We affirm, subject to modification on the matter of backwages. Petitioner Pepito
Velasco (Velasco) is the ownermanager of Modern Furniture Manufacturing (Modern Furniture). 1Private
respondentErnestoTayagwashiredasacarpenterbyVelascoandModernFurniturein1968,whilehisrelatives,
coprivaterespondentsAntonioTayagandRodolfoTayag,werehiredinthesamecapacityin1970.Allthreewere
paidonapieceratebasis.2

AccordingtotheTayags,in1998,VelascoandModernFurniturestartedlayingoffworkersduetobusiness
losses, albeitwith thepromise to the dismissed workers thatthey would be rehired shouldthe business again
prosper. Purportedly, Antonio and Ernesto Tayag were laid off in December of 1999, while Rodolfo Tayag was
dismissedinMayof2000. 3AllthreefiledcomplaintsforillegaldismissalagainstModernFurnitureandVelasco
with the National Labor Relations Commission, Regional Arbitration Branch No. III, based in San Fernando,
Pampanga.4TheTayagssoughtseparationpayinlieuofreinstatement,aswellas13thmonthpay,holidaypay,
overtimepay,andexemplarydamages.5

Velasco and Modern Furniture have a different version. They claimed that while they had indeed suffered
businesslosses in 1998,causingthemto lay off someworkers, they subsequentlyagreed withtheir employees,
including the Tayags, to pay wages on a piecerate basis. In the first part of the year 2000, Ernesto Tayag
inexplicablystoppedreportingtowork.InJuneofthatyear,AntonioandRodolfoTayagalsostoppedreportingfor
work.6Velascoclaimedthathenextheardfromthethreewhenhewasservedsummonsintheinstantcase. 7Itwas
thusarguedthattheTayagswerenotactuallyterminated,butinsteadhadabandonedtheirwork.

Afterthe complaints ofthe Tayags wereconsolidated, LaborArbiterEduardo J. Carpiorendered aDecision


dated15September2000dismissingthecomplaintsforillegaldismissal.TheLaborArbiterreasonedthatsince
VelascoandModernFurniturehaddeniedterminatingtheemployeesinthefirstplace,theburdenfelluponthe

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Velasco vs. National Labor Relations Commission
Tayagstoprovebysubstantialevidencethattheywereactuallyterminated. 8TheLaborArbiterconcludedthatthe
contentionsoftheTayagsofdismissalwereunsubstantiated,andthushedismissedthecomplaints.

Onappeal,theNLRCsetasidetheDecisionoftheLaborArbiterinitsResolutiondated26March2002. 9The
NLRCheldthattheLaborArbiterhadmisappreciatedthefactsofthecase.ItwasnotedthatVelascoandModern
FurniturehadadmittedthatsincetheTayagswerepaidonaperpiecebasis,theywerenotrequiredtogotothe
workplace.Infact,theTayagswereonlyrequiredtoreportforworkwhennewjoborderscameinandtheywere
called upon by Velasco and Modern Furniture. TheNLRC found that there was no instance from the evidence
adducedwhereinVelascoorModernFurniturecalledupontheTayagstoreportforwork. 10Fromthesefacts,the
NLRCconcludedthattheTayagshadnotreportedtothepremisesofModernFurnituresimplybecausetheywere
notgivenanywork,asinfacttheyhadactuallybeendismissed.Thus,theNLRCdidnotagreewiththecontention
thattheTayagshadabandonedwork,andconcludedinsteadthattheywereentitledtoseparationpayinlieuof
reinstatement.Nonetheless,theothermonetaryclaimsoftheTayagsweredismissedforlackofmerit. 11

VelascofiledaPetitionforCertiorariandProhibitionwiththeCourtofAppeals,assailingtheResolutionofthe
NLRC. In a Decision12dated 30 September 2003, the Court of Appeals sustained the NLRC and dismissed the
petition. The appellate court agreed that it was Velasco, as employer, who had the burden to prove that the
terminationwasforjustorauthorizedcauses,andthatVelascohadfailedtoovercomesuchburden. 13TheCourtof
Appealsalsodeemedtheawardofseparationpayasproper,withthefindingofillegaldismissalandseparationpay
beingaproperalternativeremedyshouldreinstatementbenolongerpossible. 14

Hence this petition, brought forth after the Court of Appeals had denied Velascos Motion for
Reconsideration.15ThecruxofVelascosargumentsbeforethisCourtrestsononesentenceintheResolutionofthe
NLRC,whichstates:

Viewed inthis light, the relief available to complainantsappellants isreinstatementwithout backwagesthere


beingnoshowingalsothattherewasillegaldismissal.16

VelascoarguesthatsincetheNLRChadconcludedthattherewasnoillegaldismissal,theCourtofAppealserredin
concludinginsteadthattheTayagswereillegallydismissed. 17Fromthesamepremise,Velascoalsoclaimsthatthe
CourtofAppealsalsoerredingrantingseparationpay,consideringtheallegedfindingoftheNLRCthattherewas
noillegaldismissal.18

Theproperperspectiveshouldbeasserted.ThisbeinganappealbycertiorariunderRule45fromadecisionof
theCourtofAppeals,thepetitionermustbeabletoestablishanerroroflawimputabletotheCourtofAppeals,
sinceitisthedecisionofthatcourtthatisprimarilyreviewedbythisCourt.Inshort,thepetitionermuststakethe
petitiononthepositionthatinerrorwastheCourtofAppealsitself,ratherthantheagenciesbelow.

In the case at bar, Velasco claims that the Court of Appeals erred in ruling that the Tayags were illegally
dismissedbecausetheNLRChadpurportedlyconcludedotherwise.Wearenotpersuaded.

WehaveexaminedtheentiretyoftheResolutionoftheNLRC,aswellasthecontroversialsentence.Thephrase
therebeingnoshowingalsothattherewasillegaldismissalisclearlyofftangentwiththerestoftheResolution,
aswellasthedispositiveportionthereof.

TheResolutionoftheNLRCiseight(8)pageslong.Itdevotedthefirstfour(4)pagestothefactualnarrativeand
asummaryoftherulingoftheLaborArbiter.TheResolutionthenproceededtodiscussthepositionoftheLabor
ArbiterthatwithVelascoscounterallegationofabandonmenttheburdenofproofshiftedtotheTayagstoestablish
bysubstantialevidencethattheywereterminatedbyVelasco.Onthispoint,theNLRCconcludedthat[theTayags
opposing]contentionhasmerit.19TheNLRCthenproceededtocitethelegaldoctrinesonabandonment,includinga
statementthattheburdenofproofwasontheemployertoshowanunequivocalintentonthepartoftheemployee
todiscontinueemployment.20

WenowquotethenextthreepagesoftheResolution,culminatingintheparagraphcontainingthecontroverted
passage:

Inthiscase,complainantsappellantsAntonioandErnestoTayagcontendthattheywerelaidoffinDecember1999,
whilecomplainantappellantRodolfoTayagwaslaidoffinMay,2000andthatrespondentsappelleespromisedto
recallthemassoonasbusinessgetsbetter.Ontheotherhand,respondentsappellantscontendthatcomplainant
appellantErnestoTayagvoluntarilydidnotcometotheworkpremisesforaboutsix(6)monthsorsinceFebruary,
2000;thatinJune,2000,complainantsappellantsAntonioandRodolfoTayaglikewisefornoapparentreasonfailed
toreportatrespondentsappelleespremises.Moreover,respondentsappelleesrepeatedlyassertthat:

Apparently,complainantsappellantsarebeingpaidonaperpiecebasisandnotrequiredtogototheworkplace,
theyhavethelibertytogoornottogototheworkplaceandtherefore,theycannotclaimtohavebeenillegally
dismissedifrespondentappelleedoesnotnotifyorcallthemforwork.Itshouldalsobenotedthatthecomplainants
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Velasco vs. National Labor Relations Commission
appellantsworkisbasedonordersreceivedbytherespondentappellee,thus,iftherearenoworkorders,theyhave
no work.Furthermore, hereincomplainantsappellantsare nottheonlyworkers engagedbyhereinrespondent
appellee,thusworkordersareusuallydividedamongthemandifthereareonlyfeworders,otherworkerswould
havenowork.(p.55,Records)

Fromtheforegoing,itisclearthatcomplainantsappellantsonlygotoworkwhenthereareorders
that need to be done and when they are called upon by respondentsappellees. The choice to call
complainantsappellants rests on respondentsappellees, so the latter has no basis to complain that
complainantsappellantsfailedtoappearattheworkpremises.Fromtheevidenceadduced,therewas
no instance where respondentsappellees called upon complainantsappellants to report for work
because there are orders tobe done and the latter refused. What respondentsappellees are merely
sayingisthatcomplainantsappellantshadvoluntarilyfailedtogotothepremises.Clearly,thereason
whycomplainantsappellantsdonotappearattheworkpremisesisthefactthattheyarenotcalled
upontodoworkpursuanttotheirallegedagreementofpayingbypaymentratebasis.Itisundisputed
thatsinceearly2000, complainantappellantErnestoTayagwasnotgivenworkwhilecomplainants
appellantsAntonioandRodolfoTayagwerenotalsogivenworksinceMay,2000.Hence,complainants
appellantsbelievedandconcludedthattheywerelaidoff.Havingworkedformorethanthirty(30)years
withrespondentsappellees,AntonioTayagandErnestoTayagarebothfiftyfive(55)yearsofagewhileRodolfo
Tayagisfortysix(46)yearsold.Wecanthussafelyconcludethatanotherreasonwhyrespondentsappellantsdonot
calluponthemtoworkisbecauseoftheirhavingbecomeold.Verily,respondentsappelleesassertionthat
complainantsappellantsabandoned theirwork havenofactual basis. Wenotethat even duringthe
hearing of this case until the Decision was issued, there has been no offer of work made by
respondentsappelleestocomplainantsappellants.

Viewed in this light, the relief available to complainantsappellants is reinstatement without


backwages there being no showing also that there was illegal dismissal.However, it is clear that
respondentsappellees are no longer interested in calling complainantsappellants back to work because of the
financialdifficultyofthebusinessandthatcomplainantsappellantsontheotherhand,areaskingforseparation
pay.Suchbeingthecase,separationpayinlieuofreinstatementwithoutbackwagesistheproperreliefinthe
instantcase.21

ReadingtheentireResolution,itisbeyonddoubtthattheNLRCconcludedthatVelascohadfailedtoestablishthat
theTayagshadabandonedtheiremployment.Suchconclusioniscrucial,Velascosdefenseagainstthechargeof
illegal dismissal being that the Tayags had actually abandoned their employment, which is recognized in
jurisprudence as a form of neglect of duty one of the just causes for dismissal under Article 282 of the Labor
Code.22Thedisquisitionisalsorelevant,asitdebunkstheLaborArbiterscontentionthatitfellupontheTayagsto
establishthattheyhadbeenillegallydismissed.Instead,theNLRCcorrectlyheldthattheburdenwasuponVelasco
tosubstantiatehisclaimthattheTayagshadabandonedtheiremployment.

Further, the NLRC concluded that the Tayags had stopped reporting to the premises of Modern Furniture
becauseVelascoandModernFurniturehadstoppedassigningthemwork.ConsideringthattheTayagswerepaidon
aperpiecebasis,itnecessarilyfollowedthattheystoppedreceivingincomeaswell.TheNLRCevenhazardeda
theory that Velascohadstopped giving theTayags workbecauseoftheirage. Thus, theNLRC stated: Verily,
respondentsappelleesassertionthatcomplainantsappellantsabandonedtheirworkhavenofactualbasis. 23

Giventhecontextoftheprecedingdiscussion,whichillustratedthattheTayagswerenotguiltyofabandonment,
there is no legal basis whatsoever for the conclusion that there was no showing x x x that there was illegal
dismissal.ItisnotclearwhytheNLRCstatedthattherewasnoshowingalsothattherewasillegaldismissal
whenitsprecedingdiscussionsoobviouslypointedtothecontrary.Yetwhenitisclearthatthecitedpassagecannot
standwiththerestofthedecision,includingthedispositiveportion,theCourtcannotobviouslyconferbindingeffect
on the conclusion that there was no illegal dismissal, as it runs contrary against the grain of the rest of the
Resolution.

Indeed, thedispositiveportionof theResolutionclearlysupports thepremise that theTayags wereillegally


dismissed,therebeinganawardofseparationpayinlieuofreinstatement.

WHEREFORE,premisesconsidered,theappealispartlyGRANTEDandtheDecisiondated15September2000
findingthatcomplainants-appellants simply did not report for work or were the ones who abandoned their work
is hereby ordered SET ASIDE. A new Decision is hereby issued ordering respondents-appellees to award
complainants-appellants separation pay in lieu of reinstatement computed at one-half (1/2) month pay for every
year of service computed as follows:

1) Antonio Tayag Separation Pay: From 1970 to May 2000 = 30 P72,000.00

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Velasco vs. National Labor Relations Commission
yrs. P1,200.00 x 4 wks x 30 yrs. x 1/2 mo.

2) Ernesto Tayag Separation Pay: From 1968 to Dec. 199931 P93,000.00


yrs. P1,500.00 x 4 wks. x 31 yrs. x 1/2 mo.

3) Rodolfo Tayag Separation Pay: From 1970 to May 2000 = 30 P90,000.00


yrs. P1,500.00 x 4 wks. x 30 yrs. x 1/2 mo.

GRAND TOTAL P255,000.00

SOORDERED.24

UnderArticle279oftheLaborCode,anemployeeunjustlydismissedfromworkisentitledtoreinstatementand
backwages, among others. However, it has long been recognized that if reinstatement is no longer possible or
practicable,theemployermaybemadeinsteadtopayseparationpaytotheemployeeinlieuofreinstatement. 25The
dispositiveportionoftheResolutionisconsistentwiththepremisethattheTayagswereentitledtoreinstatement
by reason of their illegal dismissal, but they could receive instead separation pay in lieu of reinstatement if
reinstatementisnolongerpracticable.ThedispositiveportiondoesnothewtoamindsetthattheTayagswerenot
illegally dismissed, the thinking which Velasco wishes to ascribe on the NLRC. It is derived instead from the
conclusionthattheTayagswereillegallydismissed,aconclusionthatmaycontradictthecitedpassageoftheNLRC
Resolution,butnotthetenorandfindingsoftheResolutioninitsentirety.

OtherthantheerroneouscontentionthattheNLRChadconcludedthattherewasnoillegaldismissal,Velascos
only remaining argument is that the payment of separation pay was misplaced, since no evidence as to the
necessitythereofwaspresented.VelascocitestheCourtscommentinQuijanov.MercuryDrugCorp.26thatthe
doctrine of strained relations should be strictly construed x x x Every labor dispute almost always results in
strainedrelations,andthephrasecannotbegivenanoverarchinginterpretationxxxx 27

InQuijano, it was the employer who was seeking that the employee be granted separation pay instead of
reinstatement, while in this case Velasco consistently argued against the award of separation pay. Of course,
followingVelascoslogic,theTayagsshouldinsteadbereinstated.Nonetheless,theCourtfindsnoreasontodisturb
therulingthattheTayagsshouldbeawardedseparationpayinlieuofreinstatement.Thecitedremarksofthe
CourtinQuijanoweremadeinthecontextofpointingoutthat[s]omeunscrupulousemployersxxxhavetaken
advantageoftheovergrowthofthisdoctrineofstrainedrelationsbyusingitasacovertogetridofitsemployees
andthusdefeattheirrighttojobsecurity. 28

Theaccepteddoctrineisthatseparationpaymayavailinlieuofreinstatementifreinstatementisnolonger
practicalorinthebestinterestoftheparties. 29Separationpayinlieuofreinstatementmaylikewisebeawardedif
theemployeedecidesnottobereinstated. 30ItisnotcontrovertedthatModernFurniturehasundergonefinancial
hardship,andthattheTayagshadoptedtoseekseparationpayinlieuofreinstatement.Wedefertothefindingsof
theNLRC,asaffirmedbytheCourtofAppealsandauthorizedunderjurisprudence,thatseparationpayinlieuof
reinstatementiswarrantedinthiscase.

Finally,theTayagsargueintheirMemorandumbeforethisCourtthattheNLRCandCourtofAppealshad
erredinnotawardingthemfullbackwages.31TheNLRC,whileawardingseparationpaytotheTayags,heldthat
theyhadfailedtoestablishsufficientfactualbasisfortheirothermonetaryclaims. 32TheCourtofAppealsremained
silentonthataspect.

The Tayags are correct in pointing out that they are entitled to full backwages by reason of their illegal
dismissal,notwithstandingtheawardofseparationpay.TheCourtmadethispointclearinSantosv.NLRC.33

Thenormalconsequencesofafindingthatanemployeehasbeenillegallydismissedare,firstly,thattheemployee
becomesentitledtoreinstatementtohisformerpositionwithoutlossofseniorityrightsand,secondly,thepayment
ofbackwagescorrespondingtotheperiodfromhisillegaldismissaluptoactualreinstatement.Thestatutoryintent
on this matter is clearly discernible. Reinstatement restores the employee who was unjustly dismissed to the
positionfromwhichhewasremoved,thatis,tohisstatusquoantedismissal,whilethegrantofbackwagesallows
thesameemployeetorecoverfromtheemployerthatwhichhehadlostbywayofwagesasaresultofhisdismissal.
These twinremediesreinstatement andpayment of backwagesmakethe dismissed employee wholewho can
then look forward to continued employment. Thus do these two remedies give meaning and substance to the
constitutionalrightoflabortosecurityoftenure.Thetwoformsofreliefaredistinctandseparate,onefrom
theother.Thoughthegrantofreinstatementcommonlycarrieswithitanawardofbackwages,the
inappropriateness or nonavailability of one does not carry with it the inappropriateness or non
availabilityoftheother.SeparationpaywasawardedinfavorofpetitionerLydiaSantosbecausetheNLRC

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Velasco vs. National Labor Relations Commission
foundthatherreinstatementwasnolongerfeasibleorappropriate.Asthetermsuggests,separationpayisthe
amount thatan employeereceivesatthetimeof hisseverance fromtheserviceand, as correctly notedby the
SolicitorGeneralinhisComment,isdesignedtoprovidetheemployeewiththewherewithalduringtheperiodthat
heislookingforanotheremployment.Intheinstantcase,thegrantofseparationpaywasasubstitutefor
immediateandcontinuedreemploymentwiththeprivaterespondentBank.Thegrantofseparation
paydidnotredresstheinjurythatisintendedtoberelievedbythesecondremedyofbackwages,that
is,thelossofearningsthatwouldhaveaccruedtothedismissedemployeeduringtheperiodbetween
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
orientedtowardstheimmediatefuture,thetransitionalperiodthedismissedemployeemustundergo
beforelocatingareplacementjob.Itwasgrievouserroramountingtograveabuseofdiscretiononthepartofthe
NLRC to have considered an award of separation pay as equivalent to the aggregate relief constituted by
reinstatementpluspaymentofbackwagesunderArticle280oftheLaborCode.Thegrantofseparationpaywas
a proper substitute only for reinstatement; it could not be an adequate substitute both for
reinstatementandforbackwages.Ineffect,theNLRCinitsassaileddecisionfailedtogivetopetitionerthefull
relieftowhichshewasentitledunderthestatute.34(Emphasissupplied)

TheSantosrulehasbeenrepeatedlyaffirmedbythisCourt,andmustbeappliedtothiscase. 35Evenassumingthat
theTayagshadnotadducedanyevidencetoestablishtheamountofbackwagestobepaid,itcannotbedeniedthat
underthelaw,particularlyArticle279oftheLaborCode,theyareentitledtobackwagesasamatterofright,owing
totheirillegaldismissal.Hence,theNLRCandtheCourtofAppealserredinnotawardingbackwagesaswell.
However,theCourtrecognizesthattheremaybesomedifficultyinascertainingtheproperamountofbackwages,
consideringthattheTayagswereapparentlypaidonapieceratebasis.InLaborCongressofthePhilippinesv.
NLRC,36theCourtwasconfrontedwithasituationwhereinseveralworkerspaidonapieceratebasiswereentitled
tobackwagesbyreasonofillegaldismissal.However,theCourtnotedthatasthepiecerateworkershadbeenpaid
bythepiece,there[was]aneedtodeterminethevaryingdegreesofproductionanddaysworkedbyeachworker,
andthatthisissueisbestlefttothe[NLRC]. 37Webelievethesameresultshouldobtaininthiscase,andthe
NLRCbetaskedtoconducttheproperdeterminationoftheappropriateamountofbackwagesduetoeachofthe
Tayags.38

Nonetheless,evenasthecaseshouldberemandedtotheNLRCfortheproperdeterminationofbackwages,
nothinginthisdecisionshouldbeconstruedinamannerthatwouldimpedetheawardofseparationpaytothe
TayagsaspreviouslyrenderedbytheNLRC,andaffirmedbytheCourtofAppeals.

WHEREFORE,thePetitionisDENIED.TheResolutionoftheNationalLaborRelationsCommissiondated26
March 2002 and the Decision of the Court of Appeals dated 30 September 2003 are AFFIRMED, with the
MODIFICATIONthatbackwagesshallbeawardedtorespondentsinsuchamountsasshallbedeterminedbythe
National Labor Relations Commission. In this regard, the case is hereby REMANDED to the National Labor
RelationsCommissionforthedeterminationofthebackwagesduerespondents,conformablywiththisDecision.
SaidCommissionisfurtherDIRECTEDTORESOLVEtheissueofbackwageswithinsixty(60)daysfromitsreceipt
ofacopyofthisDecisionandoftherecordsofthecaseandtosubmittothisCourtareportofitscompliance
herewithwithinten(10)daysfromtherenditionofitsresolution.Costsagainstpetitioner.

SOORDERED.

Quisumbing(Chairperson),Carpio,CarpioMoralesandVelasco,Jr.,JJ.,concur.

Petitiondenied,resolutionoftheNationalLaborRelationsCommissionaffirmedwithmodification.

Notes.The practice of penning a decision days before the scheduled promulgation thereof and leaving the
dispositive portion for typing at a time close to the date of promulgation should be encouraged. (Castaos vs.
Escao,Jr.,251SCRA174[1995])

Thematterofattorneysfeescannotbetouchedupononlyinthedispositiveportionofthedecisionthetext
itselfmuststatethereasonswhyattorneysfeesarebeingawarded.(ValiantMachineryandMetalCorporationvs.
NationalLaborRelationsCommission,252SCRA369[1996])

o0o
*
THIRDDIVISION. complaintofRodolfoTayag,hadbeendocketedasNLRCCaseNo.RABIII
1
Rollo,p.84. 06139000.
5
2
Id.,atp.85. Rollo,p.21.
6
3
Id.,atp.20. Id.
7
4
Antonio and Ernesto Tayag first filed their complaint, docketed as Id.,atp.86.
NLRCCaseNo.RABIII061314000;whichwaslaterconsolidatedwiththe 8
Id.,atp.87.

Page 6 of 7
Velasco vs. National Labor Relations Commission
9
Penned by Commissioner T. Genilo, concurred in by Presiding 554, 561 (2003);Labor v. National Labor Relations Commission,G.R. No.
CommissionerL.JavierandCommisionerI.Bernardo.Id.,atpp.5361. 110388,14September1995,248SCRA183,204.
10 31
Id.,atp.58. Rollo,pp.141143.
11 32
Id.,atp.59. Id.,atp.59.
12 33
PennedbyJusticeE.Bello,Jr.,concurredinbyJusticesA.Tolentino G.R.No.L76721,21September1987,154SCRA166.
34
andA.Brion.Id.,atpp.2026. Id.,atpp.171173.
13 35
Id.,atp.24. SeealsoTorillov.Leogardo,Jr.,etal.,274Phil.758,765;197SCRA
14
Id.,atp.25. 471, 478 (1991);Medina v. Consolidated Broadcasting SystemDZWK,G.R.
15
InaResolutiondated12January2004.Rollo,p.33. Nos.9905456,28May1993,222SCRA707,712;F.R.F.Enterprises,Inc.v.
16
EmphasissuppliedbyVelasco.SeeRollo,p.15.SeealsoRollo,p.59. National Labor Relations Commission,313 Phil. 493, 501502;243 SCRA
17
Rollo,pp.1415. 593, 599 (1995);Rasonable v. National Labor Relations Commission,324
18
Id.,atpp.1516. Phil. 191, 199;253 SCRA 815, 823 (1996);Aurora Land Projects Corp. v.
19
Rollo,p.57. National Labor Relations Commission,334 Phil. 44, 58;266 SCRA 48, 66
20
SeeRollo,p.57. (1997);Reformist Union of R.B. Liner, Inc. v. National Labor Relations
21
Id.,atpp.5759. Commission,334 Phil. 636, 650651;266 SCRA 713, 729 (1997);Tan v.
Seee.g.,Agabon v. National Labor Relations Commission,G.R. No.
22
Lagrama,supranote25,atp.207;p.405.
36
158693,17November2004,442SCRA573,605. 352Phil.1118;290SCRA509(1998).
37
23
Supranote21. Id.,atp.1138;p.527.
38
24
Rollo,pp.5960. TheNLRC,indeterminingtheappropriateamountofbackwages,mayvery
25
Seee.g.,Tajonera v. Lamaroza, et al.,196 Phil. 553, 565;110 SCRA wellconsiderthefollowingdiscussionbytheCourtinPulpandPaper,Inc.v.
438, 449 (1981);Samillano v. National Labor Relations Commission,353 NationalLaborRelationsCommission,344Phil.821;279SCRA408(1997),
Phil. 658, 668669;265 SCRA 788(1996);Tan v. Lagrama,436 Phil. 190, onthecomputationofcompensationofpieceworkers:Intheabsenceofwage
207;387 SCRA 393, 405 (2002). See also Section 4(b), Rule 1, Book ratesbasedontimeandmotionstudiesdeterminedbythelaborsecretaryor
VI,OmnibusRulesImplementingtheLaborCode. submittedbytheemployertothelaborsecretaryforhisapproval,wagerates
26
354Phil.112;292SCRA109(1998).MistakenlycitedbyVelascoas ofpiecerateworkersmustbebasedontheapplicabledailyminimumwage
MercuryDrugCorp.v.NationalLaborRelationsCommissionandQuijano. determinedbytheRegionalTripartiteWagesandProductivityCommission.
SeeRollo,p.17. Toensurethepaymentoffairandreasonablewagerates,Article101ofthe
27
SeeRollo,p.17. LaborCodeprovidesthattheSecretaryofLaborshallregulatethepayment
28
Quijanov.MercuryDrugCorp.,supranote26,atp.122;p.117. ofwagesbyresults,includingpakyao,pieceworkandothernoontimework.
29
Supranote25. Thesamestatutoryprovisionalsostatesthatthewageratesshouldbebased,
30
SeeStarlite Plastic Industrial Corp. v. National Labor Relations preferably,ontimeandmotionstudies,orthosearrivedatinconsultation
withrepresentativesofworkersandemployersorganizations.Intheabsence
Commission,G.R.No.78491,16March1989,171SCRA315,326;Kingsize
ofsuchprescribedwageratesforpiecerateworkers,theordinaryminimum
Manufacturing Corp. v. National Labor Relations Commission,G.R. Nos.
wageratesprescribedbytheRegionalTripartiteWagesandProductivity
11045254, 24 November 1994,238 SCRA 349, 357;Nagusara v. National
Boardsshouldapply.ThisisincompliancewithSection8oftheRules
Labor Relations Commission,352 Phil. 854, 865;290 SCRA ImplementingWageOrderNos.NCR02andNCR02Atheprevailingwage
245(1998);SolidbankCorp.v.CourtofAppeals,456Phil.879,888;409SCRA
orderatthetimeofdismissalofprivaterespondent.Id.,atpp.830831.

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