December 15, 2010
Ponente: Carpio, J.
FACTS:
·
In June 1990, Myrna P. Magana was hired as a
nurse by Medicard Philippines, Inc., a health maintenance organization.
Medicard later assigned Magana as company nurse for one of its corporate
clients, the Manila Pavilion Hotel.
·
In October 1994, Manila Pavilion replaced
Magana with another nurse (not from Medicard). In lieu of a nursing-related
position, Medicard offered Magana the position of liaison officer. Finding the
offer unacceptable and with her continued non-assignment, Magana sued Medicard
and the Pavilion Hotel in the NLRC for illegal dismissal and payment of
benefits and damages.
·
Labor Arbiter: Ruled in favor of Magana. The
arbiter found Medicard to be a mere labor contractor for the Pavilion Hotel
which exercised control and termination powers over Magana. The arbiter
considered the Hotel's summary replacement of Magana indicative of lack of
cause for her dismissal and of bad faith. Consequently, the arbiter ordered the
Hotel to reinstate Magana and, with Medicard, jointly and severally pay her
backwages, 13th month pay, damages and attorney's fees.
·
NLRC: Affirmed the arbiter's ruling with
modification. It found Mediacard, not the Hotel, as Magana's employer. As such,
the CA found Medicard liable for constructive illegal dismissal, and hence, for
the payment of separation pay, 13th month pay, attorney's fees, and
reinstatement wages. The NLRC also awarded reinstatement wages to Magana for
Medicard's failure to reinstate her pending appeal as required under the second
paragraph of Article 223 [now 3rd paragraph of Art. 229] of the Labor Code.
·
CA: Reversed the NLRC ruling and deleted the
award of reinstatement wages. The CA found Magana's dismissal as valid, noting
that Medicard's failure to assign her to a suitable position within six months
after her replacement is "analogous to a suspension of operations of an
enterprise" entitling the employee to payment only of separation pay.
·
In her petition before the SC, Magana concede
dated 11 April 2006.f her constructive dismissal. However, even though the
labor arbiter's order reinstating her to her former position has been reversed
by the CA, Magana claims that she is still entitled to draw wages..
RULING:
Whether
Magana is entitled to draw wages under an arbiter's ruling ordering her
reinstatement even though such order is subsequently reversed on appeal. – YES.
·
The requirement for
employers to pay wages to employees obtaining favorable rulings in illegal
dismissal suits pending appeal is statutorily mandated under the second
paragraph of Article 223 [now third paragraph of Art. 229] of the Labor Code.
This article gives employers two options, namely, to (1) actually reinstate the
dismissed employees or, (2) constructively reinstate them in the payroll.
Either way, this must be done immediately upon the filing of their appeal,
without need of any executory writ.
·
This unusual,
mandatory order by law to execute reinstatement orders pending appeal, unheard
of in ordinary civil proceedings, is a police power measure, grounded on the
theory that the preservation of the lives of the citizens is a basic duty of
the State, that is more vital than the preservation of corporate profits. Then,
by and pursuant to the same 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 its family.
·
In Roquero v. Philippine Airlines, Inc.,
the Court held 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. 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. This same ruling was reiterated in Air Philippines Corporation v. Zamora.
·
In another case, Genuino v. National Labor Relations
Commission, a Division of the SC diverged from the Roquero ruling by requiring refund or set-off of salaries received
post-reversal of the reinstatement order. However, in the subsequent case of
Garcia v. Philippine Airlines, Inc., the ruling in Genuino was set aside and the Court reaffirmed the Roquero ruling.
In Garcia v. PAL, the Court held 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 readmit 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 employee's salaries.
·
Thus, in the present
case, Medicard is not only bound to pay Magana her reinstatement wages, had it
done so, it is precluded from recovering the amount paid post-reversal of the
arbiter's reinstatement order by the Court of Appeals.