LABOR LAW Isnihayah Pangandaman

LINO A. FERNANDEZ, JR., v. MANILA ELECTRIC COMPANY (MERALCO)

G.R. No. 226002, 25 June 2018, SECOND DIVISION (Peralta, J.)

DOCTRINE OF THE CASE

Under the doctrine of strained relations, the payment of separation pay is

considered an acceptable alternative to reinstatement when the latter option is no longer
desirable or viable.

FACTS

Petitioner Fernandez was an employee of respondent Manila Electric Company

(MERALCO) until his termination for allegedly participating in an illegal strike. Petitioner
filed a case for illegal dismissal. The Labor Arbiter and the NLRC declared that Fernandez
was illegally dismissed. The CA sustained the motion. The judgement became final and
executory.

During the execution proceedings, both parties filed several motions regarding the
reinstatement of the petitioner. The labor arbiter ruled that petitioner cannot be reinstated.
Instead, the petitioner was given a separation pay. Petitioner elevated the case to the CA
but it was denied for lack of merit. Hence, this petition.

ISSUE

Whether or not petitioner should be reinstated.

HELD

YES. The Court ruled that the petitioner is subject to reinstatement. An illegally
dismissed employee is entitled to reinstatement as a matter of right. The award for
separation of pay is a mere exception to the rule. It is an alternative upon: (a) when
reinstatement cannot be effected in view of the passage of a long period of time; (b)
reinstatement is inimical to the employer’s interest; (c) reinstatement is no longer feasible;
(d) reinstatement does not serve the best interests of parties involved; (e) the employer
is prejudiced by the worker’s continued employment; (f) facts that make execution unjust
or inequitable have supervened; (g) strained relations between the employer and
employee.

The doctrine of strained relation cannot be applied indiscriminately since every

labor dispute almost invariably results in “strained relation;” otherwise, reinstatement can
never be possible simply because some hostility is endangered between the parties as a
result of their disagreement. It must be adequately supported by substantial evidence
showing that the relationship of employer and employee is indeed strained resulting as
necessary consequence of judicial controversy. The doctrine of strained relation can only
be invoked only against employees whose position demand trust and confidence, or
whose differences with their employer are of such degree that preclude reinstatement.

The Court further ruled that reinstatement cannot be barred especially when the
employee has indicated the aversion to return to work, or does not occupy a position of
trust and confidence, or has no say in the operation of the employer. The petitioner
showed his intent and willingness to be reinstated. The confidential relation between the
petitioner and respondent was also not established. The petitioner was a Leadman which
does not require trust and confidence.
LABOR LAW Isnihayah Pangandaman

CONSOLIDATED DISTILLERS OF THE FAR EAST, INC. v. ROGEL N. ZARAGOZA

G.R. No. 229302, 20 June 2018, SECOND DIVISION (CAGUIOA, J.)

DOCTRINE OF THE CASE

When there is a supervening event that renders reinstatement impossible,

backwages is computed from the time of dismissal until the finality of the decision ordering
separation pay.

FACTS:

The present case is an offshoot of the petition G. R. No. 196038 wherein the Court
ruled that respondent Rogel Zaragoza (Rogel) was illegally dismissed by the petitioner
Consolidated Distillers of the Far East (Condis). The Court ordered the reinstatement and
payment of the backwages of the respondent Rogel.

After the finality of the decision, Rogel moved for the issuance of an alias writ of
execution against Condis for his reinstatement and payment of backwages, accrued
salaries, and allowances. But Condis opposed the motion on the ground that the
execution of Asset Purchase Agreement with Emperador Distillers, Inc. was a
supervening event that made it impossible to reinstate Rogel to his former position.

The LA ruled in favor of Rogel but the decision was overturned by the NLRC. The
NLRC ruled that the reinstatement was indeed impossible because of the Asset Purchase
Agreement but the backwages should be computed from the finality of the Court’s
Resolution in Illegal Dismissal case in March 30, 2012. Rogel filed for petition to the CA.
The CA ruled that backwages should be computed from the date of the illegal dismissal
until the finality of the decision of the CA, and the separation pay from the date of
employment until the finality of the CA decision. Hence, this petition. Condis argues that
that it should only be liable for backwages and separation pay until the year of 2007 when
the Asset Purchase Agreement was executed. It claims the execution of Asset Purchase
Agreement meant that no position to which Rogel could be reinstated into.

ISSUE

Whether or not Condis liable for backwages and separation pay until the finality of
the decision awarding separation pay.

HELD

YES. When there is a supervening event that renders reinstatement impossible,

backwages is computed from the time of dismissal until the finality of the decision ordering
separation pay. The reason for this is the order of separation pay terminates the
employment relationship only upon the finality if the decision ordering the separation pay.
The finality of the decision represents the final settlement of rights and obligations of the
parties against each other.

Here, the award of separation pay in lieu of reinstatement was made subsequent
to the finality of the Decision in the Illegal Dismissal Case. Condis cannot therefore evade
its liability to Rogel for backwages and separation pay computed until the finality of this
decision which affirms the order of granting separation pay.

Further, Condis cannot find support in Olympia Housing, wherein the Court
considered that employer was able to prove in separate labor case that it had closed its
business and followed the statutory requirements arising from the closure of the business.
The backwages and separation pay given was computed only until the date of closure of
the business of the employer. Here, Condis failed to show that in 2007 it had closed its
business and that it had complied with all the statutory requirement arising therefrom. The
Asset Purchase Agreement does not mean that Condis closed its business. Condis failed
to submit any document which showed in 2007, it had notified the DOLE or its employees
of the closure of its business and the reason for its closure.