Manila Doctors College and Teresita O. Turla Vs. Emmanuel M. Olores
G.R. No. 225044. October 3, 2016


Respondent was a faculty member of petitioner Manila Doctors College (MDC) assigned at the Humanities Department of the College of Arts and Sciences. 7 On June 7, 2010, he was dismissed for Grave Misconduct, Gross Inefficiency, and Incompetence, after due investigation finding him guilty of employing a grading system that was not in accordance with the guidelines set by MDC. Respondent lost no time in filing a case for illegal dismissal, money claims, regularization, damages, and attorney’s fees against petitioners MDC and Teresita. Turla (petitioners), President of MDC, before the NLRC, claiming that there was no just cause for his dismissal, and that he should be accorded a permanent appointment after having served as an instructor on a full-time basis for five (5) consecutive years.

LA Ruling:

On December 8, 2010, LA Arthur L. Amansec (LA Amansec) rendered a Decision declaring respondent to have been illegally dismissed after finding that his act of liberally implementing the guidelines in arriving at his students’ final grades did not constitute serious misconduct, as he was not inspired by malice, bad faith, personal gain or outright malevolence; and that his five (5)-year continuous service as faculty member without any derogatory record belies the charge of inefficiency and incompetence against him.

Accordingly, LA Amansec ordered petitioners to reinstate respondent as faculty member under the same terms and conditions of his employment, without loss of seniority rights, but denied payment of backwages on the grounds that (1) no malice or bad faith attended respondent’s dismissal, (2) respondent had showed disrespect to his superior by writing a letter containing disrespectful remarks, and (3) respondent failed to inform or discuss with said superior his decision to depart from the guidelines in giving grades. 20 LA Amansec specifically stated in his December 8, 2010 Decision that, “[MDC] is hereby ordered to reinstate [respondent] as faculty member under the same terms and conditions of his employment, without loss of seniority rights but without backwages. However, instead of being reinstated, [respondent] is hereby given the option to receive a separation pay equivalent to his full month’s pay for every year of service, a fraction of at least six months to be considered a full year or the amount of Pl00,000.00 (his monthly salary of P20,000.00 multiplied by the equivalent of five years’ service). ”

Petitioners filed an appeal before the NLRC. The appeal was initially dismissed for non-perfection. However, upon motion for reconsideration, the NLRC, in a Decision dated September 30, 2011, reinstated and granted the appeal and, accordingly, reversed the December 8, 2010 Decision of LA Amansec and dismissed the complaint a quo for lack of merit. He found respondent guilty of serious misconduct when he defied the prescribed grading system and arbitrarily adjusted the grades of his students. Separately, the NLRC ordered the payment to respondent of service incentive leave pay for a period of 3 years, considering petitioners’ failure to prove payment thereof.

On January 11, 2012, while the case was pending appeal, respondent filed a Motion for Issuance of Writ of Execution seeking to collect (a) the service incentive leave pay ordered in the September 30, 2011 Decision of the NLRC, and ( b) the equivalent wages from the issuance of the December 8, 2010 Decision of LA Amansec ordering reinstatement until the finality of the September 30, 2011 Decision of the NLRC reversing the LA, or on November 5, 2011, as per Entry of Judgment dated December 5, 2011.

In an Order dated October 23, 2012, LA Romelita N. Rioflorido (LA Rioflorido) granted respondent’s motion and ordered the issuance of a writ of execution for the total amount of P213,076.92.

Aggrieved, petitioners sought an injunction and/or temporary restraining order (TRO) in a petition before the NLRC

NLRC Ruling:

The NLRC granted the petition and modified the Order dated October 23, 2012 of LA Rioflorido by deleting the award of the supposed reinstatement backwages in the amount of P201,538.46. It retained, however, the grant of service incentive leave pay of Pl 1,538.46.

Anent the deletion of the award of reinstatement backwages, the NLRC observed that since respondent’s dismissal was eventually determined to be legal, there is no more basis for either payroll reinstatement backwages or separation pay.

Respondent filed a Motion for Partial Reconsideration, which was, however, denied, prompting him to elevate the matter via a petition for certiorari before the CA.

CA Ruling:

The CA reversed the Decision and Resolution of the NLRC, citing jurisprudence to the effect that the LA’s order of reinstatement is immediately executory; thus, the employer has to either re-admit the employee to work under the same terms and conditions prevailing prior to his dismissal, or to reinstate him in the payroll; and that even if such order of reinstatement is reversed on appeal, the employer is still obliged to reinstate and pay the wages of the employee during the period of appeal until reversal by a higher court or tribunal.

Petitioners moved for a reconsideration, arguing that the December 8, 2010 Decision of LA Amansec explicitly granted respondent, not petitioners, the option of being reinstated or being paid separation pay, and that respondent had not exercised said option. The motion was denied; hence, the instant petition.


Whether or not respondent is entitled to reinstatement backwages

SC Ruling:

The SC denied the petition.

Reinstatement pending appeal

Under Article 223 (now Article 229 47) of the Labor Code, “the decision of the [LA] reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement x x x.” Verily, the employer is duty-bound to reinstate the employee, failing which, the employer is liable instead to pay the dismissed employee’s salary.

In case of reversal of LA decision the duty to reinstate is terminated

However, in the event that the LA’ s decision is reversed by a higher tribunal, the employer’s duty to reinstate the dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep the employee in the actual service or in the payroll. The employee, in tum, is not required to return the wages that he had received prior to the reversal of the LA’s decision.

Liability for accrued wages for refusal to reinstate; exception

Notwithstanding the reversal of the finding of illegal dismissal, an employer, who, despite the LA’s order of reinstatement, did not reinstate the employee during the pendency of the appeal up to the reversal by a higher tribunal may still be held liable for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time of the reversal. By way of exception, an employee may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.

Decision to reinstate with alternative option to receive separation pay

The statement of such directive is only secondarily followed by the alternative option given to respondent. This is consistent with the above-stated conclusion that the duty to reinstate is initiated by, as it only devolves upon, the employer from the time the LA renders its Decision directing reinstatement.

Therefore, the Court cannot subscribe to the theory postulated by petitioners that the aforementioned LA Decision took out from their hands the duty to reinstate respondent, for to do so would be to frustrate the immediate and self-executory nature of the reinstatement aspect of the LA’s Decision as provided by law. To emphasize, to the point of repetition, petitioners were duty-bound to reinstate respondent either by admitting him back to work under the same terms and conditions prevailing prior to his dismissal, or by merely reinstating him in the payroll, which alternative options must be exercised in good faith; otherwise, they are bound to pay his accrued salaries.

Implementing reinstatement ordered in the middle of semester

In the case of the University of Santo Tomas vs. NLRC, the Court, while pronouncing that the dismissed faculty members must be actually reinstated during the pendency of the labor dispute between the faculty union and the University, took into account the fact that the return-to-work order was given in the middle of the first semester of the academic year, and that any change of faculty members at such time would adversely affect and prejudice the students.

Consequently, the Court ordered that actual reinstatement take effect at the start of the second semester, and adjudged the faculty members as entitled to full wages, backwages and other benefits prior to reinstatement to their actual teaching loads.

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