A company employed a man to be a payloader and bulldozer operator at its quarrying site in Palompon, Leyte. After working for this company for over fourteen (14) years, the employee was informed that he would be suspended from work for seven (7) days without pay and without any explanation as to the reason for his suspension. After the lapse of his suspension, he was informed that his suspension was extended for another seven (7) days without pay. After that, he was no longer allowed to return to work. When the employee asked for the status of his employment, the company told him that he would be rehired in due time.
After eight months of waiting without any word from his employer, he filed a complaint for illegal suspension and dismissal with the Labor Arbiter (LA) and prayed for an award of separation pay, including a claim for moral damages and attorney’s fees. The LA found the company guilty of illegal dismissal and ordered the reinstatement of the employee with payment of his back wages, without loss of seniority rights and other benefits. Both the National Labor Relations Commission and Court of Appeals upheld the LA’s decision.
The Supreme Court (SC) likewise affirmed the illegal dismissal and the order of reinstatement against the company. The SC explained the legal consequences of an illegal dismissal as well as when the grant of separation pay is proper in lieu of an order of reinstatement –
The legal consequences of an illegal dismissal are reinstatement of the employee without loss of seniority rights and other privileges, and payment of his full back wages, inclusive of allowances, and other benefits or their monetary equivalent. Clearly, the law intended reinstatement to be the general rule. It is only when reinstatement is no longer feasible that payment of separation pay is awarded to an illegally dismissed employee.
Reinstatement is the restoration to a state or condition from which one had been removed or separated. In providing foremost for the reinstatement of an illegally dismissed employee, the Labor Code not only recognizes the security of tenure granted by law to regular employees, but also gives substance and meaning to the protection accorded by the Constitution to labor. Employment is significant to every working man. It is the means by which he sustains himself and his family, hence, the law mandates the reinstatement of an illegally dismissed employee to his former position. Payment of separation pay as a substitute for reinstatement is allowed only under exceptional circumstances, viz: (1) when reasons exist which are not attributable to the fault or beyond the control of the employer, such as, when the employer, who is in severe financial strait and has suffered serious business losses, has ceased operations, implemented retrenchment, or abolished the position due to the installation of labor-saving devices; (2) when the illegally dismissed employee has contracted a disease and his reinstatement will endanger the safety of his co-employees; or, (3) where strained relationship exists between the employer and the dismissed employee.
Lastly, the SC clarified that even though the employee did not include a prayer for reinstatement, the omission “cannot be considered as an implied waiver to be reinstated.” A mere procedural lapse should not affect his substantive right to reinstatement (Pheschem Industrial Corp v. Moldez, G.R. 161158, 9 May 2005, J. Puno).