Two individuals were employed by a cable and radio corporation, one as a general systems analyst (analyst) and the other, a technical operations support manager (manager). They were allegedly very close as they lived in the same apartment. Sometime in 1984, the corporation received reports that equipment and spare parts worth thousands of dollars under the custody of the manager were missing. After a thorough investigation, it was discovered that the manager had entered into a partnership with a commercial and industrial company. This industrial company was a supplier of the corporation, often recommended by their manager.
In addition, the corporation also discovered an air conditioning unit missing and found that the unit was in the manager’s possession. He would use it for his own personal use without authorization from the corporation and with the intent to defraud it. It was also discovered that the analyst violated “company regulations by involving herself in transactions conflicting with the company’s interests” since it was proven that she had full knowledge of the loss and whereabouts of the air conditioner yet failed to inform her employer and even signed as a witness to the articles of partnership.
As a result, the analyst was placed under preventive suspension for one month and asked to explain her side. She did not, however. Thus, after the lapse of her preventive suspension, she was informed of her dismissal. The analyst then filed a case for illegal suspension and dismissal aside from other benefits.
The Labor Arbiter ruled in favor of the analyst and ordered her reinstatement to her position as well as full back wages and other benefits she would have received if it were not for the illegal dismissal. The National Labor Relations Commission (NLRC) affirmed the decision but limited back wages to two (2) years.
The Supreme Court (SC) upheld the NLRC’s decision to reinstate the analyst for being dismissed without valid cause. Citing Art. 279 of the Labor Code and Section 3 of the Implementing Rules and Regulations of the Labor Code, the law clearly provides that “an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to backwages.”
By way of exception, reinstatement of an employee is not necessary when the situation has ensued strained relations between the employer and the employee. Here, the proper remedy would be to grant the employee separation pay or separation pay with backwages. For separation pay to be granted by the court instead of reinstatement, the employee must occupy a position of trust and confidence, where an antagonistic atmosphere will “adversely affect the efficiency and productivity of the employee concerned.” The Court gave examples of positions of trust and confidence –
[W]here the employee is a Vice-President for Marketing and as such, enjoys the full trust and confidence of top management; or is the Officer-In-Charge of the extension office of the bank where he works; or is an organizer of a union who was in a position to sabotage the union’s efforts to organize the workers in commercial and industrial establishments; or is a warehouseman of a non-profit organization whose primary purpose is to facilitate and maximize voluntary gifts by foreign individuals and organizations to the Philippines; or is a manager of its Energy Equipment Sales.
The SC did not find a system analyst to be a position of trust and confidence and “that if reinstated, it may well lead to strained relations between employer and employee. Hence, this does not constitute an exception to the general rule mandating reinstatement for an employee who has been unlawfully dismissed” (Globe Mackay v. NLRC, G.R. No. 82511, 3 March 1992, J. Romero).