PANUNCILLO vs.

CAP PHILIPPINES Case Digest

MILAGROS PANUNCILLO v. CAP PHILIPPINES, INC.
515 SCRA 323 (2007)

FACTS: Milagros Panuncillo was hired as Office Senior Clerk by CAP Philippines Inc. In
order to secure the education of her son, Panuncillo procured an educational plan which
she had fully paid but which she later sold to Josefina Pernes for P37,000. Before the
actual transfer of the plan could be effected, however, Panuncillo pledged it for P50,000
to John Chua who, however, sold it to Benito Bonghanoy. Bonghanoy in turn sold the
plan to Gaudioso R. Uy for P60,000.

Having gotten wind of the transactions subsequent to her purchase of the plan, Josefina
informed CAP Philippines Inc. that Panuncillo had "swindled" her but that she was
willing to settle the case amicably as long as Panuncillo will pay the amount involved
and the interest.

CAP Philippines Inc. terminated the services of Panuncillo. Panuncillo sought

reconsideration of her dismissal. Acting on Panuncillos motion for reconsideration, CAP
Philippines Inc. denied the same. Panuncillo thus filed a complaint for illegal dismissal,
13th month pay, service incentive leave pay, damages and attorneys fees against CAP
Philippines Inc.

The Labor Arbiter, while finding that the dismissal was for a valid cause, found the same
too harsh. He thus ordered the reinstatement of Panuncillo to a position one rank lower
than her previous position. On appeal, the National Labor Relations Commission
(NLRC) reversed the decision of the Labor Arbiter. It held that Panuncillos dismissal
was illegal and accordingly ordered her reinstatement to her former position.

CAP Philippines Inc. challenged the NLRC Decision before the appellate court via
Petition for Certiorari. The appellate court reversed the NLRC Decision and held that the
dismissal was valid and that CAP Philippines Inc. complied with the procedural
requirements of due process. Hence, the present petition.

ISSUE: Whether or not Milagros has been illegally dismissed

HELD: Panuncillos repeated violation of Section 8.4 of CAP Philippines Incs Code of
Discipline, she violated the trust and confidence of CAP Philippines Inc. and its
customers. To allow her to continue with her employment puts CAP Philippines Inc.
under the risk of being embroiled in unnecessary lawsuits from customers similarly
situated as Josefina, et al. Clearly, CAP Philippines Inc. exercised its management
prerogative when it dismissed Panuncillo.

Under the Labor Code, the employer may terminate an employment on the ground of
serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work. Infractions of company rules
and regulations have been declared to belong to this category and thus are valid causes
for termination of employment by the employer.

The employer cannot be compelled to continue the employment of a person who was
found guilty of maliciously committing acts which are detrimental to his interests. It will
be highly prejudicial to the interests of the employer to impose on him the charges that
warranted his dismissal from employment. Indeed, it will demoralize the rank and file if
the undeserving, if not undesirable, remain in the service. It may encourage him to do
even worse and will render a mockery of the rules of discipline that employees are
required to observe. This Court was more emphatic in holding that in protecting the
rights of the laborer, it cannot authorize the oppression or self-destruction of the
employer.

There can thus be no doubt that Panuncillo was given ample opportunity to explain her
side. Parenthetically, when an employee admits the acts complained of, as in
Panuncillos case, no formal hearing is even necessary.

TERMINATION OF EMPLOYMENT RELIEFS FOR ILLEGAL DISMISSAL-

REINSTATEMENT PENDING APPEAL

MT. CARMEL COLLEGE VS. JOCELYN RESUENA, EDDIE

VILLALON,SYLVIA SEDAYON and ZONSAYDA EMNACE

DOCTRINES/PRINCIPLES:
1. Art. 223 of the Labor Code provides that reinstatement is immediately
executory even pending appeal only when the Labor Arbiter himself
ordered the reinstatement.
2. Art. 224 of the Labor Code applies when the order of reinstatement was
first decided upon appeal to the NLRC. In other words, the Labor Arbiter
himself did not order reinstatement.
3. Art. 279 of the Labor Code provides thatbackwages are to be computed
from the time of illegal dismissal until reinstatement or upon petitioners
payment of separation pay to respondents if reinstatement is not longer
feasible.

FACTS:
PetitionerMt. Carmel College is a private educational institution and respondents
were its employees. Respondents were dismissed for joining the protest action against
the school administration. The Labor Arbiter (LA) found that they were not illegally
dismissed but ordered that they be awarded 13th month pay, separation pay and
attorneys fees. The NLRC reversed the findings of the LA finding the termination of the
respondents as illegal and ordering the payment of backwages of respondents.It further
directed the reinstatement of respondents by way of payment of separation pay, with
backwages. This was affirmed by the Court of Appeals.
Petitioner is appealing not the judgment of the NLRC but the manner of
execution of the same. Petitioner argues that the CA erred in upholding the LA and the
NLRC that the award for backwages goes beyond the period May 15, 1998 to May 25,
1999 on the supposition that reinstatement is self-executory and does not need a writ of
execution for its enforcement.Petitioner avers that the LA went beyond the terms of the
NLRC Decision, as affirmed by the CA, and erroneously used as bases inapplicable law
and jurisprudence in the execution of the same.Petitioner contends 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.

ISSUES:
1.Whetherreinstatement in the case is self-executory and does not need a writ of
execution for its enforcement.
2. Whether the continuing award of backwages is proper.

RULING:
1.No(though the court sees no cogent reason as to the relevance of a discussion
of this issue only that petitioner raised it as an issue).The court states that the above
findings will not affect the award of backwages for the period beyond May 25, 1999.
Article 224 applies in the given case since the order of reinstatement was
first decided upon appeal to the NLRC and affirmed with finality by the CA.
2. Yes. The court found out that there is a conflict between the dispositive
portion of the falloand the body of the decision. The fallo stated that respondents were
illegally dismissed and must therefore be ordered reinstated with payment of
backwages from the time were illegally dismissed up to the time of their actual
reinstatement. In view thereof, the court declared that the fallocontrols.
Applying Article 279 of the Labor Code, the court emphasized that
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 not longer feasible.

GARCIA AND DUMAGO V. PHILIPPINE AIRLINES (G.R. NO. 164856)

Facts:
Petitioners-employees filed a complaint for illegal dismissal against respondent PAL
who dismissed them after they were allegedly caught in the act of sniffing shabu within
its premises. The Labor Arbiter ruled for the petitioners and ordered immediately for
their reinstatement. Prior to this decision, SEC had placed PAL under an Interim
Rehabilitation Receiver, and subsequently under a Permanent Rehabilitation Receiver.
PAL appealed and the Labor Tribunal ruled in their favor. Subsequently, the Labor
Arbiter issued a writ of execution for the reinstatement and issued a notice of
garnishment. The Labor Tribunal affirmed the writ and notice but suspended and
referred the action to the Rehabilitation Receiver of PAL. On appeal, CA found for
respondent PAL.

Issue:
Whether or not PAL being under corporate rehabilitation suspends any monetary claims
to it.

Ruling: YES.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for
claims before any court, tribunal or board against the corporation shall ipso jure be
suspended. As stated early on, during the pendency of petitioners complaint before the
Labor Arbiter, the SEC placed respondent under an Interim Rehabilitation Receiver.
After the Labor Arbiter rendered his decision, the SEC replaced the Interim
Rehabilitation Receiver with a Permanent Rehabilitation Receiver.
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 employer-corporation itself is similarly in a judicially
monitored state of being resuscitated in order to survive.

Sarona vs NLRC 2012

Facts:

Petitioner, a security guard in Sceptre since April 1976, was asked by Sceptres
operations manager on June 2003, to submit a resignation letter as a
requirement for an application in Royale and to fill up an employment application
form for the said company. He was then assigned at Highlight Metal Craft Inc.
from July 29 to August 8, 2003 and was later transferred to Wide Wide World
Express Inc. On September 2003, he was informed that his assignment at
WWWE Inc. was withdrawn because Royale has been allegedly replaced by
another security agency which he later discovered to be untrue. Nevertheless, he
was once again assigned at Highlight Metal sometime in September 2003 and
when he reported at Royales office on October 1, 2003, he was informed that he
would no longer be given any assignment as instructed by Sceptres general
manager.
He thus filed acomplaint for illegal dismissal. The LA ruled in petitioners favor as
he found him illegally dismissed and was not convinced by the respondents
claim on petitioners abandonment.
Respondents were ordered to pay back wages computed from the day he
was dismissed up to the promulgation of his decision on May 11, 2005.The LA
also ordered for the payment of separation pay but refused to pierce Royales
corporate veil.
Respondents appealed to the NLRC claiming that the LA acted with grave abuse
of discretion upon ruling on the illegal dismissal of petitioner. NLRC partially
affirmed the LAs decision with regard to petitioners illegal dismissal and
separation pay but modified the amount of backwages and limited it to only 3
 months of his last month salary reducing P95, 600 to P15, 600 since he worked
for Royale for only 1 month and 3 days.
Petitioner did not appeal to LA but raised the validity of LAs findings on piercing
Royales corporate personality and computation of his separation pay and such
petition was dismissed by the NLRC. Petitioner elevated NLRCs decision to the
CA on a petition for certiorari, and the CA disagreed with the NLRCs decision of
not proceeding to review the evidence for determining if Royale is Sceptres alter
ego that would warrant the piercing of its corporate veil.
Issue:
Whether or not Royales corporate fiction should be pierced for the purpose
of compelling it to recognize the petitioners length of service with Sceptre and
for holding it liable for the benefits that have accrued to him arising from his
employment with Sceptre.
Whether or not petitioners back wages should be limited to his salary for 3
months

Ruling:
The doctrine of piercing the corporate veil is applicable on alter ego cases,
where a corporation is merely a farce since it is a mere alter ego or business
conduit of a person, or where the corporation is so organized and controlled and
its affairs are so conducted as to make it merely an instrumentality,
agency, conduit or adjunct of another corporation.
The respondents scheme reeks of bad faith and fraud and compassionate
justice dictates that Royale and Sceptre be merged as a single entity, compelling
Royale to credit and recognize the petitioners length of service with Sceptre.
The respondents cannot use the legal fiction of a separate corporate personality
for ends subversive of the policy and purpose behind its creation or which could
not have been intended by law to which it owed its being.
Also, Sceptre and Royale have the same principal place of business. As early as
October 14, 1994, Aida and Wilfredo became the owners of the property used by
Sceptre as its principal place of business by virtue of a Deed of Absolute Sale
they executed with Roso. Royale, shortly after its incorporation, started to hold
office in the same property. These, the respondents failed to dispute.
Royale also claimed a right to the cash bond which the petitioner posted when
he was still with Sceptre. If Sceptre and Royale are indeed separate entities,
Sceptre should have released the petitioners cash bond when he resigned and
Royale would have required the petitioner to post a new cash bond in its favor.
The way on how petitioner was made to resign from Sceptre then later on made
an employee of Royale, reflects the use of the legal fiction of the separate
corporate personality and is an implication of continued employment. Royale is a
 continuation or successor or Sceptre since the employees of Sceptre and of
Royale are the same and said companies have the same principal place of
business.
Because petitioners rights were violated and his employer has not changed, he
is entitled to separation pay which must be computed from the time he was hired
until the finality of this decision. Royale is also ordered to pay him backwages
from his dismissal on October 1, 2003 until the finality of this decision.
However, the amount already received by petitioner from the respondents shall
be deducted. He is also awarded moral and exemplary damages amounting to
P 25, 000.00 each for his dismissal which was tainted with bad faith and fraud.
Petition is granted. CAs decision is reversed and set aside.

G.R. No. 172149 February 8, 2010

SESSION DELIGHTS ICE CREAM AND FAST FOODS vs. CA

FACTS:

Adonis Flora filed a complaint for illegal dismissal against Session Delights, which was
ruled favourably by the Labor Arbiter. The decision ordered Session Delights to pay
Flora back wages, separation pay in lieu of reinstatement, indemnity and attorneys
fees. Upon appeal, NLRC also ruled in favor of complainant. CA Decision affirmed but
deleted the proportional 13th month pay and the award of indemnity (P5000) for failure
to observe due process. In the course of the execution of the judgement, the Finance
Analyst submitted an updated computation of the award which included the
proportionate amount of 13th month pay. This was objected by Session, claiming that
this was not consistent with the decision but the same was denied by NLRC. The CA,
however, partially granted the petition by deleting the awarded proportionate 13th month
pay.

ISSUE: WON the updated computation was proper

Held: Yes, the updated computation was proper. The issue in the case at bar is not the
correctness of the awards, the finality of the CAs judgment, nor the petitioners failure to
appeal. Rather, it is the propriety of the computation of the awards made, whether this
violated the principle of immutability of final judgments.

The question is whether a re-computation in the course of execution, of the labor

arbiters original computation of the awards made pegged as of the time the decision
was rendered and confirmed with modification by a final CA decision, is legally proper.
 The Court held that under the terms of the decision under execution, no essential
change is made by a re-computation as this step is a necessary consequence that flows
from the nature of the illegality of dismissal declared in that decision. A re-computation
(or an original computation, if no previous computation has been made) is a part of the
law specifically, Article 279 of the Labor Code and the established jurisprudence on
this provision that is read into the decision. By the nature of an illegal dismissal case,
the reliefs continue to add on until full satisfaction, as expressed under Article 279 of the
Labor Code. The re-computation of the consequences of illegal dismissal upon
execution of the decision does not constitute an alteration or amendment of the final
decision being implemented. The illegal dismissal ruling stands; only the computation of
the monetary consequences of this dismissal is affected and this is not a violation of the
principle of immutability of final judgments.

Assailed decision is AFFIRMED. Labor Arbiter is asked to conduct another RE-

COMPUTATION to determine actual award based on Courts directives.

Javellana, Jr. vs. Belen, G.R. Nos. 181913 & 182158, March 5, 2010

Facts:

Belen was hired by Javellana as company driver and assigned him the tasks of picking
up and delivering live hogs, feeds, and lime stones used for cleaning the pigpens. On
August 19, 1999 Javellana gave him instructions to (a) pick up lime stones in Tayabas,
Quezon; (b) deliver live hogs at Barrio Quiling, Talisay, Batangas; (c) have the delivery
truck repaired; and (d) pick up a boar at Joliza Farms in Norzagaray, Bulacan. Petitioner
Belen further alleged that his long and arduous day finally ended at 4:30 a.m. of the
following day, August 20, 1999. But after just three hours of sleep, respondent Javellana
summoned him to the office. When he arrived at 8:20 a.m., Javellana had left. After
being told that the latter would not be back until 4:00 p.m., Belen decided to go home
and get some more sleep. Petitioner Belen was promptly at the office at 4:00 p.m. but
respondent Javellana suddenly blurted out that he was firing Belen from work. Deeply
worried that he might not soon get another job, Belen asked for a separation pay. When
Javellana offered him only P5,000.00, he did not accept it. Javellana claimed, on the
other hand, that he hired petitioner Belen in 1995, not as a company driver, but as
family driver. Belen did not do work for his farm on a regular basis, but picked up feeds
or delivered livestock only on rare occasions when the farm driver and vehicle were
unavailable.

Regarding petitioner Belen's dismissal from work, respondent Javellana insisted that he
did it for a reason. Belen intentionally failed to report for work on August 20, 1999 and
this warranted his dismissal.

Issue:
Does the amount that the Labor Arbiter awarded petitioner Belen represent all that he
will get when the decision in his case becomes final or does it represent only the
amount that he was entitled to at the time the Labor Arbiter rendered his decision,
leaving room for increase up to the date the decision in the case becomes final?

Ruling:

Article 279 of the Labor Code, as amended by Section 34 of Republic Act 6715
instructs:
Art. 279. Security of Tenure. - 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.

Clearly, the law intends the award of backwages and similar benefits to accumulate past
the date of the Labor Arbiter's decision until the dismissed employee is actually
reinstated. But if, as in this case, reinstatement is no longer possible, this Court has
consistently ruled that backwages shall be computed from the time of illegal dismissal
until the date the decision becomes final.

As it happens, the parties filed separate petitions before this Court. The petition in G.R.
181913, filed by respondent Javellana, questioned the CA's finding of illegality of
dismissal while the petition in G.R. 182158, filed by petitioner Belen, challenged the
amounts of money claims awarded to him. The Court denied the first with finality in its
resolution of September 22, 2008; the second is the subject of the present case.
Consequently, Belen should be entitled to backwages from August 20, 1999, when he
was dismissed, to September 22, 2008, when the judgment for unjust dismissal in G.R.
181913 became final. Separation pay, on the other hand, is equivalent to one month
pay for every year of service, a fraction of six months to be considered as one whole
year. Here that would begin from January 31, 1994 when petitioner Belen began his
service. Technically the computation of his separation pay would end on the day he was
dismissed on August 20, 1999 when he supposedly ceased to render service and his
wages ended. But, since Belen was entitled to collect backwages until the judgment for
illegal dismissal in his favor became final, here on September 22, 2008, the computation
of his separation pay should also end on that date. Further, since the monetary awards
remained unpaid even after it became final on September 22, 2008 because of issues
raised respecting the correct computation of such awards, it is but fair that respondent
Javellana be required to pay 12% interest per annum on those awards from September
22, 2008 until they are paid. The 12% interest is proper because the Court treats
monetary claims in labor cases the equivalent of a forbearance of credit. It matters not
that the amounts of the claims were still in question on September 22, 2008. What is
decisive is that the issue of illegal dismissal from which the order to pay monetary
awards to petitioner Belen stemmed had been long terminated.

Case Digest: Bani Rural Bank, et al. v. Guzman, et al.

G.R. No.170904 November 13, 2013

BANI RURAL BANK INC. ENOC THEATER I AND II and/or RAFAEL DE GUZMAN,
Petitioners, v. TERESA DE GUZMAN, EDGAR C. TAN and TERESA G. TAN,
Respondents.

FACTS:

The respondents were employees of Bani Rural Bank, Inc. and ENOC Theatre I and II
who filed a complaint for illegal dismissal against the petitioners. The complaint was
initially dismissed by the LA but the NLRC reversed LAs decision. The NLRC, in its
resolution dated March 17, 1995, ordered that respondents be reinstated with payment
of backwages from the time of their dismissal until their actual reinstatement. Such
decision has become final and executory. Computation of backwages was referred to
Labor Arbiter Gambito.

Petitioners appealed the computation of the backwages with the NLRC. In a decision
dated July 31, 1998, the NLRC modified the terms of the March 17, 1995 resolution
insofar as it clarified the phrase less earnings elsewhere. The NLRC additionally
awarded the payment of separation pay, in lieu of reinstatement on account of the
strained relations between the parties.

As explained in the assailed Decision, what is controlling for purposes of the backwages
is the NLRC s Resolution dated 17 March 1995 which decreed that private respondents
are entitled to backwages from the time of their dismissal (constructive) until their actual
reinstatement; and considering that the award of reinstatement was set aside by the
NLRC in its final and executory Decision dated 3 July 1998 which ordered the payment
of separation pay in lieu of reinstatement to be computed up to the finality on 29
January 1999 of said Decision dated 3 July 1998, then the computation of the
backwages should also end on said date, which is 29 January 1999

ISSUE: Whether or not NLRC erred in ruling how the backwages are to be computed

HELD: No. CA decision affirming NLRC ruling sustained.

Labor Law - The computation of backwages depends on the final awards

adjudged as a consequence of illegal dismissal.

First, when reinstatement is ordered, the general concept under Article 279 of the Labor
Code, as amended, computes the backwages from the time of dismissal until the
employees reinstatement. The computation of backwages (and similar benefits
considered part of the backwages) can even continue beyond the decision of the labor
arbiter or NLRC and ends only when the employee is actually reinstated.

Second, when separation pay is ordered in lieu of reinstatement (in the event that this
aspect of the case is disputed) or reinstatement is waived by the employee (in the event
that the payment of separation pay, in lieu, is not disputed), backwages is computed
from the time of dismissal until the finality of the decision ordering separation pay.

Third, when separation pay is ordered after the finality of the decision ordering the
reinstatement by reason of a supervening event that makes the award of reinstatement
no longer possible (as in the case), backwages is computed from the time of dismissal
until the finality of the decision ordering separation pay.

As the records show, the contending parties did not dispute the NLRC s order of
separation pay that replaced the award of reinstatement on the ground of the
supervening event arising from the newly-discovered strained relations between the
parties. The parties allowed the NLRC s July 31, 1998 decision to lapse into finality and
recognized, by their active participation in the second computation of the awards, the
validity and binding effect on them of the terms of the July 31, 1998 decision.

Under these circumstances, while there was no express modification on the period for
computing backwages stated in the dispositive portion of the July 31, 1998 decision of
the NLRC, it is nevertheless clear that the award of reinstatement under the March 17,
1995 resolution (to which the respondents backwages was initially supposed to have
been computed) was substituted by an award of separation pay. As earlier stated, the
awards of reinstatement and separation pay are exclusive remedies; the change of
awards (from reinstatement to separation pay) under the NLRC s July 31, 1998 not only
modified the awards granted, but also changed the manner the respondents backwages
is to be computed. The respondents backwages can no longer be computed up to the
point of reinstatement as there is no longer any award of reinstatement to speak of.

Thus, the computation of the respondents' backwages must be from the time of the
illegal dismissal from employment until the finality of the decision ordering the payment
of separation pay. It is only when the NLRC rendered its July 31, 1998 decision ordering
the payment of separation pay (which both parties no longer questioned and which
thereafter became final) that the issue of the respondents' employment with the
petitioners was decided with finality, effectively terminating it. The respondents'
backwages, therefore, must be computed from the time of their illegal dismissal until
January 29, 1999, the date of finality of the NLRC's July 31, 1998 Decision.