After due proceedings, the Labor Arbiter (LA) declared Mr. K to have been illegally dismissed by his former employer, AB, Inc. As a consequence, the LA directed ABC, Inc. to pay Mr. K separation pay in lieu of reinstatement as well as his full backwages.
While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed a motion for reconsideration, claiming that the LA erred in awarding both separation pay and full backwages, and instead, should have ordered Mr. K’s reinstatement to his former position without loss of seniority rights and other privileges, but without payment of backwages. In this regard, ABC, Inc. pointed out that the LA’s ruling did not contain any finding of strained relations or that reinstatement was no longer feasible. In any case, it appears that no evidence was presented on this score.
(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order reinstatement without backwages correct? Explain. (3%)
(b) Assuming than on appeal, the National Labor Relations Commission (NLRC) upholds the decision of the LA, where, how, and within what timeframe should ABC, Inc. assail the NLRC ruling? (2%)
Suggested Answer:
(a) Yes. Answer
Under the Labor Code, 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. By way of exception to the reinstatement, labor law jurisprudence allows separation pay in lieu of reinstatement where reinstatement is no longer viable as an option or there is strained relations between the employer and the employee. Rule
In the case at bar, the Labor Arbiter should have ordered for reinstatement in compliance with the Labor Code. There is no finding that reinstatement is no longer viable as an option or there is strained relations between the employer and the employee. There is no basis for separation pay in lieu of reinstatement. Apply
Thus, ABC Inc.’s contention to delete the separation pay, and instead, order reinstatement without backwages, is correct. Conclusion
