Case Digest: Triad Security v. Ortega, G.R. No. 160871, February 6, 2006

  Labor Law | Appeal 

• Silvestre Ortega, Jr., Ariel Alvaro, Richard Sevillano, Martin Callueng, and Isagani Capila were formerly employed by petitioners Triad Security & Allied Services, Inc. and Anthony U. Que as security guards.
• Respondents filed a complaint against petitioners for underpayment/nonpayment of salaries, overtime pay, premium pay, service incentive leave pay, holiday pay, and attorney’s fees.
• Labor Arbiter: Ruled in favor of respondents, ordering reinstatement, backwages, separation pay, money claims, and attorney’s fees.
• Since petitioners failed to appeal timely, the decision became final and executory and a writs of execution was issued to garnish funds.
• Petitioners the filed motions to recompute and lift notices of garnishment, both denied by the labor arbiter.
• NLRC: Dismissed petitioners' appeal and motions for reconsideration.
• Court of Appeals: Issued a temporary restraining order preventing the execution or enforcement of the labor arbiter's order.
• CA then ruled that backwages for respondents should be computed from termination until actual reinstatement, citing Article 223 of the Labor Code.
• CA noted a "procedural but fatal flaw" by petitioners for not seeking recourse from the NLRC before filing a petition for certiorari, violating procedural rules and the doctrine of exhaustion of administrative remedies

WoN the rules of procedure of the NLRC do not provide for any remedy or procedure for challenging the order granting a writ of execution. NO

The petition is partially meritorious.

First, we shall resolve the procedural issue posed in this petition.

Petitioners contend that based on the rules of procedure of the NLRC, the order granting the issuance of the 2nd alias writ of execution could not have been the proper subject of an appeal before the NLRC neither could petitioners have sought the remedy of certiorari from the NLRC. Petitioners argue that the rules of procedure of the NLRC do not provide for any remedy or procedure for challenging the order granting a writ of execution; hence, the pertinent provision of the Revised Rules of Court should apply which in this case is Section 1 of Rule 41. It states:

Section 1. Subject of appeal – An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

x x x x

(f) An order of execution;

x x x x

In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.

Moreover, Rule III, Section 4 of the Rules of Procedure of the NLRC expressly proscribes the filing of a petition for certiorari –

SECTION 4. PROHIBITED PLEADINGS & MOTIONS. The following pleadings, motions or petitions shall not be allowed in the cases covered by these Rules:

x x x x

c) Petition for Certiorari, Mandamus or Prohibition.

Therefore, inasmuch as the NLRC had no authority to issue the writ of certiorari, recourse to the Court of Appeals was only proper.

In addition, petitioners maintain that the doctrine of exhaustion of administrative remedies is not absolute as it accepts of certain exceptions such as when an appeal would not be an adequate remedy there being an order or execution already issued and the implementation of said writ loomed as a great probability.

We do not agree.

It is a basic tenet of procedural rules that for a special civil action for a petition for certiorari to prosper, the following requisites must concur: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.

In this case, petitioners insist that the NLRC is bereft of authority to rule on a matter involving grave abuse of discretion that may be committed by a labor arbiter. Such conclusion, however, proceeds from a limited understanding of the appellate jurisdiction of the NLRC under Article 223 of the Labor Code which states:

ART. 223. APPEAL

Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter.

In the case of Air Services Cooperative v. Court of Appeals, we had the occasion to explain the scope of said article of the Labor Code to mean –

x x x Also, while the title of Article 223 seems to provide only for the remedy of appeal as that term is understood in procedural law and as distinguished from the office of certiorari, nonetheless, a closer reading thereof reveals that it is not as limited as understood by the petitioners x x x.

x x x x

Abuse of discretion is admittedly within the ambit of certiorari and its grant thereof to the NLRC indicates the lawmakers’ intention to broaden the meaning of appeal as that term is used in the Code x x x

Likewise, in the same case, this Court quoted with approval the following observation of the Court of Appeals:

We do not see how appeal would have been inadequate or ineffectual under the premises. On the other hand, being the administrative agency especially tasked with the review of labor cases, [the NLRC] is in a far better position to determine whether petitioners’ grounds for certiorari are meritorious. Neither is there any cause for worry that appeal to the Commission would not be speedy as the Labor Code provides that the Commission shall decide cases before it, within twenty (20) calendar days from receipt of the Answer of Appellee x x x.

Given the foregoing, we hold that the Court of Appeals correctly dismissed the petition for certiorari brought before it. Notwithstanding this procedural defect committed by petitioners, in the interest of substantial justice, we shall proceed to resolve the other issues presented by petitioners.

Petitioners insist that their monetary obligation, as contained in the 28 February 2000 decision of the labor arbiter, had already been fully satisfied. They posit the argument that with respondents’ receipt of their separation pay, they had opted not to seek reinstatement to their former jobs and elected instead to sever their employment with petitioner Triad Security. In fact, according to petitioners, respondents had already found new employments and to award them further backwages would be tantamount to unjust enrichment. Thus, petitioners maintain that there is no more basis to hold them liable for the accrued backwages stated in the 30 September 2002 computation.

Again, petitioners’ argument is untenable.

Article 279 of the Labor Code, as amended, states:

ART. 279. SECURITY OF TENURE

In cases of regular employment the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

As the law now stands, an illegally dismissed employee is entitled to two reliefs, namely: backwages and reinstatement. These are separate and distinct from each other.37 However, separation pay is granted where reinstatement is no longer feasible because of strained relations between the employee and the employer.38 In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable and backwages.39

Backwages and separation pay are, therefore, distinct reliefs granted to one who was illegally dismissed from employment. The award of one does not preclude that of the other as this court had, in proper cases, ordered the payment of both.40

In this case, the labor arbiter ordered the reinstatement of respondents and the payment of their backwages until their actual reinstatement and in case reinstatement is no longer viable, the payment of separation pay. Under Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending appeal." The same provision of the law gives the employer the option of either admitting the employee back to work under the same terms and conditions prevailing before his dismissal or separation from employment or the employer may choose to merely reinstate the employee to the payroll. It bears emphasizing that the law mandates the prompt reinstatement of the dismissed or separated employee. This, the petitioners failed to heed. They are now before this Court insisting that they have fully disposed of their legal obligation to respondents when they paid the latter’s separation pay. We do not agree.

It should be pointed out that an order of reinstatement by the labor arbiter is not the same as actual reinstatement of a dismissed or separated employee. Thus, until the employer continuously fails to actually implement the reinstatement aspect of the decision of the labor arbiter, their obligation to respondents, insofar as accrued backwages and other benefits are concerned, continues to accumulate. It is only when the illegally dismissed employee receives the separation pay that it could be claimed with certainty that the employer-employee relationship has formally ceased thereby precluding the possibility of reinstatement. In the meantime, the illegally dismissed employee’s entitlement to backwages, 13th month pay, and other benefits subsists. Until the payment of separation pay is carried out, the employer should not be allowed to remain unpunished for the delay, if not outright refusal, to immediately execute the reinstatement aspect of the labor arbiter’s decision.

The records of this case are bereft of any indication that respondents were actually reinstated to their previous jobs or to the company payroll. Instead, they were given, albeit with much resistance from petitioners, the full amount of the money judgment stated in the 28 February 2000 decision of the labor arbiter, inclusive of separation pay, more than two years after the labor arbiter had issued his decision on the illegal dismissal case filed by Respondents. As the law clearly requires petitioners to pay respondents’ backwages until actual reinstatement, we resolve that petitioners are still liable to respondents for accrued backwages and other benefits from 25 February 2000 until 16 December 2002, the day before the labor arbiter ordered the release to respondents of ₱603,794.77 representing the full satisfaction of 28 February 2000 judgment, including separation pay.

Nor can we give credence to petitioners claim that they could not reinstate respondents as the latter had already found jobs elsewhere. It is worthy to note here that respondents were minimum wage earners who were left with no choice after they were illegally dismissed from their employment but to seek new employment in order to earn a decent living. Surely, we could not fault them for their perseverance in looking for and eventually securing new employment opportunities instead of remaining idle and awaiting the outcome of this case.

We agree, however, with petitioners that the amount of basic salary used by the Computation and Examination Unit of the NLRC was erroneous. In said computation, the amount of respondents’ basic salary from 25 February 1999 until 30 September 2002 (the date of the computation) was pegged at ₱250.00. However, the prevailing daily minimum wage on 25 February 2000 was only ₱223.5041 and it was only on 1 November 2000 when the rate was increased to ₱250.00.42 Clearly, the Computation and Examination Unit of the NLRC was mistaken in its calculation. We, therefore, hold that from 25 February up to 31 October 2000, petitioners are liable for accrued backwages at the rate of ₱223.50 per day and from 1 November 2000 until 16 December 2002, they should be held accountable for accrued backwages of ₱250.00 per day. In addition, they should pay respondents any additional cost of living allowance which may have been prescribed within the period 25 February 2000 until 16 December 2002 and other benefits to which respondents are entitled to during said span of time.

WHEREFORE, premises considered, this Court AFFIRMS the Decision of the Court of Appeals dated 31 July 2003 and the Order dated 23 April 2003 of the Labor Arbiter declaring petitioners liable for additional accrued backwages. The amount of money claims due the respondents is, however, MODIFIED. Let the records of this case be remanded to the Computation and Examination Unit of the NLRC for proper computation of subject money claims as above-discussed. Costs against petitioners.