11. WENPHIL CORPORATION vs. ALMER R. ABING and ANABELLE M. TUAZON TU AZON FACTS: •
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This case stemmed from a complaint for illegal dismissal filed by the respondents against Wenphil. On Decemb December er 8, 2000, 2000, LA eobel eobel A. !artolab !artolabac ac r"led r"led that that the respon responden dents ts had been illegally dismissed by Wenphil. According to the LA, the allegation of serio"s miscond"ct agains againstt the respon responden dents ts had no fact"a fact"all and legal legal basis. basis. #onse$ #onse$"en "ently tly,, LA !artol !artolaba abac c ordered Wenphil to immediately reinstate the respondents to their respective positions or to e$"ivalent ones, %hether act"all or in the payroll. !eca"se of the "nfavorable LA decision, Wenphil appealed to the &L'# on April (), 200(. *n the meantime, the respondents moved for the immediate e+ec"tion of the LAs December 8, 2000 decision. On Oc Octo tobe berr 2-, 2-, 200( 200(,, Wenp Wenphi hill and and the the resp respon onde dent nts s ente entere red d into into a comp compro romi mise se agreement before LA !artolabac. They agreed to the respondents payroll reinstatement %hile Wenphils appeal %ith the &L'# %as ongoing "ntil s"ch time that the $"estioned decision of LA !artolabac is either modified, amended or reversed by the onorable &ational Labor 'elations #ommission. On /an"ary 0, 2002, the &L'# iss"ed a resol"tion affirming LA !artolabacs decision %ith modifi modificat cation ions. s. *nstea *nstead d of orderi ordering ng the respon responden dents ts reinst reinstate atemen ment, t, the &L'# &L'# direct directed ed Wenphil to pay the respondents their respective separation pay. Also, the &L'# fo"nd that %hile the respondents had been illegally dismissed, they had not been illegally s"spended. #A affirmed and also 1#. 1ometime after the 1#s decision in .'. &o. ()23 became final and e+ec"tory, the respondents filed %ith LA !artolabac a motion for comp"tation and iss"ance of %rit of e+ec"tion. The respondents asserted in this motion that altho"gh the #As r"ling on the absence of illegal dismissal 4as affirmed by the 1#5 %as adverse to them, "nder the la% and settled settled 6"rispr"dence, 6"rispr"dence, they %ere still entitled to bac7%ages bac7%ages from the time of their dismissal dismissal "ntil the &L'#s decision finding them to be illegally dismissed %as reversed %ith finality. LA !artolab !artolabac ac grante granted d the respon responden dents ts motion motion and, and, in an order order dated dated &ovemb &ovember er (), 2003, directed Wenphil to pay each complainant their salaries on reinstatement covering the period from ebr"ary (9, 2002 4the date Wenphil last paid the respondents respective salaries5 to &ovember 8, 2002 4since the &L'#s decision finding the respondents illegally dismissed became final and e+ec"tory on ebr"ary 28, 20025.!oth parties appealed to the &L'# to $"estion LA !artolabacs &ovember (), 2003 order. Wenphil arg"ed that the respondents %ere no longer entitled to payment of bac7%ages in vie% vie% of the compro compromis mise e agreem agreement ent they they e+ec"t e+ec"ted ed on Octobe Octoberr 2-, 200(. 200(. Accor Accordin ding g to Wenp Wenphil hil,, the the comp compro romi mise se agre agreem emen entt prov provid ided ed that that Wenp Wenphi hil ls s oblig obligat atio ion n to pay pay the the respondents bac7%ages sho"ld cease as soon as LA !artolabacs decision %as :modified,
amended or reversed: by the &L'#. 1ince the &L'# modified the LAs r"ling by ordering the payment of separation pay in lie" of reinstatement, then the respondents, "nder the terms of the compromise agreement, %ere entitled to bac7%ages only "p to the finality of the &L'# decision. •
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The respondents $"estioned in their appeal the determined period for the comp"tation of their bac7%ages; they posited that the period for payment sho"ld end, not on &ovember 8, 2002, b"t on ebr"ary (, 2003, since the 1#s decision %hich "pheld the #As r"ling became final and e+ec"tory on ebr"ary (9, 2003. The &L'# denied the parties parties respective respective appeals in its decision decision dated
er v. ?elasco %here this #o"rt r"led that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the dismis dismissed sed employ employee ees s %ages %ages d"ring d"ring the period period of appeal appeal "ntil "ntil revers reversal al by the higher higher co"rt. The #A constr"ed this :higher co"rt: to be the #A, not the 1#. 3
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*n its petition for revie% %ith this #o"rt, Wenphil maintained that the respondents %ere no longer entitled to payment of bac7%ages in vie% of the modification of the LAs r"ling by the &L'# p"rs"ant %ith their October 2-, 200( compromise agreement. Wenphil also contended that the #As cited =fi>er case cannot apply to the present case since there %as no compromise agreement in =fi>er %here the dismissed employee %aived her entitlement to bac7%ages.
ISSUES: 1. Whether Whether the c!"r!#$e c!"r!#$e a%ree!en a%ree!entt &'(d )e a *a(#d %r'nd %r'nd +r "et#t# "et#t#ner ner nt t "a, "a, )ac-&a%e$. . Whether Whether the P+#/er P+#/er r'(#n% r'(#n% a""(#e$ a""(#e$ #n the the c!"'tat# c!"'tat#n n #n the #n$tant #n$tant ca$e. ca$e. 1. NO. NO. Apparently, %hen the &L'# changed the LAs decision 4specifically, the order to a%ard separa separatio tion n pay in lie" of reinst reinstate atemen ment5, t5, Wenphil Wenphil read read this this to mean mean to be the :modif :modifica icatio tion: n: envisioned in the compromise agreement, Wenphil li7e%ise effectively concl"ded that separation pay and bac7%ages are the same or are interchangeable reliefs. This concl"sion can be ded"ced from Wenphi Wenphils ls insist insistenc ence e not to pay the respon responden dents ts remaini remaining ng bac7%a bac7%ages ges "nder "nder its errone erroneo"s o"s reasoning that this %as the effect of the &L'#s order to Wenphil to pay separation pay in lie" of reinstatement.
We emphasi>e that the basis for the payment of bac7%ages is different from that of the a%ard of separation separation pay. 1eparation 1eparation pay is granted granted %here reinstatemen reinstatementt is no longer advisable advisable beca"se beca"se of strained relations bet%een the employee and the employer. !ac7%ages represent compensation compensation that sho"ld have been earned b"t %ere not collected beca"se of the "n6"st dismissal. The basis for comp"t comp"ting ing separa separatio tion n pay is "s"all "s"ally y the length length of the employ employee ees s past past servic service, e, %hile %hile that that for bac7%ages is the act"al period %hen the employee %as "nla%f"lly prevented from %or7ing. ad Wenphil really %anted to p"t a stop to the r"nning of the period for the payment of the respondents bac7%ages, then it sho"ld have immediately complied %ith the &L'#s order to a%ard the employees their separation pay in lie" of reinstatement. This action %o"ld have immediately severed the employer@employee relationship. o%ever, the records are bereft of any evidence that Wenphil Wenphil act"ally act"ally paid the respondent respondents s separation separation pay. pay. Th"s, the employer@emp employer@employee loyee relationshi relationship p bet%een Wenphil and the respondents never ceased and the employment stat"s remained pending and "ncertain "ntil the #A act"ally rendered its decision that the respondents had not been illegally dismissed. *n the conte+t of the parties agreement, it %as only at this point that the payment of bac7%ages sho"ld have stopped. *n the present case, the parties compromise agreement simply provided that Wenphils obligation to pay the respondents bac7%ages shall end the moment the &L'# modifies, amends or reverses the illegal dismissal decision of LA !artolabac. On its face, there is nothing invalid %ith s"ch stip"lation. *ndeed, had the &L'# reversed the LA, the obligation to pay bac7%ages %o"ld have stopped. The &L'#, ho%ever, did not decree a reversal of the finding of illegal dismissal. *n fact, it affirmed the illegal dismissal concl"sion, confining itself merely to a modification of the conse$"ences of the illegal dismissal from reinstatement to the payment of separation pay. This :modification: of co"rse %e cannot accept; the option "nder the legal policy is solely limited to a r"ling that the respondent respondents s had not been illegally dismissed. dismissed. Other%ise, Other%ise, %e %o"ld be violating violating the Labor #odes policy entitling illegally dismissed employees to their right to bac7%ages even d"ring the period of appeal. The a%ard of separation pay is not inconsistent %ith the payment of bac7%ages. Th"s, "ntil a higher co"rts or trib"nals reversal of the finding that an employee had been illegally dismissed, the employee employee %o"ld be entitled entitled to receive receive his reinstatement reinstatement salary or bac7%ages bac7%ages d"ring the period of appeal "ntil s"ch reversal. This is in line %ith the Labor #odes policy that an order of reinstatement, %hich can either be act"al or thro"gh the payroll, is immediately e+ec"tory and is not affected by the period of appeal. . 0ES. Among 0ES. Among these vie%s, the commanding one is the r"le in =fi>er, %hich merely echoes the r"lings %e made in the cases of 'o$"ero v. =hilippine Airlines and arcia v. =hilippine Airlines Airlines that the period for comp"ting the bac7%ages d"e to the respondents d"ring the period of appeal sho"ld end on the date that a higher co"rt reversed the labor arbitration r"ling of illegal dismissal. *n this case, the higher co"rt %hich first reversed reversed the &L'#s &L'#s r"ling %as not the 1# b"t rather the #A. *n this light, the #A %as correct %hen it fo"nd that that the period of comp"tation sho"ld end on A"g"st 23, 200. The date %hen the 1#s decision became final and e+ec"tory need not matter as the r"le in 'o$"ero, arcia and =fi>er merely referred to the date of reversal, not the date of the "ltimate finality of s"ch reversal. 41O''B sobrang haba. haha.5 99
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