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STRAINED RELATIONS DOCTRINE APPLIES WHEN, ALTHOUGH THE EMPLOYEE DOES NOT OCCUPY A POSITION OF TRUST, THERE IS DEMONSTRATED LITIGIOUSNESS BETWEEN THE PARTIES
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Strained relations must be applied based on the following considerations: (1) the employee must occupy a position where he or she enjoys the trust and confidence of his or her employer; (2) it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned; (3) it cannot be applied indiscriminately because some hostility is invariably engendered between the parties as a result of litigation; and (4) it cannot arise from a valid and legal act of asserting one’s right.
Thus, the SC held in the following case:
Papertech, Inc. vs. Katando
G.R. No. 236020, January 8, 2020
Reinstatement; Strained Relations; Exception to the rule that strained relations doctrine does not apply to a position that is not reposed of trust and confidence; Demonstrated litigiousness of the parties showed that their relationship is strained; Legal interest; The imposition of an interest is not warranted as the employer should not be penalized for the delay in payment of monetary awards because it was the employee who opted to elevate the case
Facts:
On June 6, 1996, Petitioner Papertech (Papertech) hired respondent Josephine P. Katando (Katando) as a machine operator in its office in Pasig City. In 2007, Katando and other employees of Papertech filed a Petition for Certification Election. They conducted a picket in the company. This prompted Papertech to file a Complaint for illegal strike against Katando and the other participants in the picket. Papertech prayed that the participants be declared to have lost their employment.
Labor Arbiter (LA) Thomas T. Que (LA Que) ruled in favor of Papertech. But his ruling was reversed by the National Labor Relations Commission (NLRC) on appeal in a Decision dated May 29, 2009. The NLRC ordered the reinstatement of Katando and her fellow employees. The ruling of the NLRC was upheld by the
CA and the Supreme Court and became final and executory.
Upon motion of Katando and other employees, LA Que issued a Writ of Execution on April 17, 2013, ordering their reinstatement at Papertech’s premises in Pasig City. On May 14, 2013, Papertech sent a notice to Katando and other employees ordering them to report to various posts in Cagayan de Oro, Davao City, Cebu City, Iloilo City, and Pangasinan, under pain of removal in case of non-compliance. They filed a Manifestation with Urgent Motion to Cite Respondent Company in Contempt and to Order Payment of their Salaries. LA Que denied their manifestation with motion, so they filed a verified petition for extraordinary remedies before the NLRC.
The NLRC granted the petitionand declared the Order of LA Que null and void. The nLRC ordered LA Que to resolve the issues on the salaries as contained in Katando and her co-respondents’ manifestation with motion, and to proceed with the execution of the NLRC Decision dated May 29, 2009. Papertech assailed the NLRC Resolutions before the CA.
On December 14, 2013, Katando received a memorandum from Papertech stating that due to urgency of business, she will be transferred to its Makati office. The memorandum states that she will still be under the same employment terms and conditions but will be tasked to clean the area. Three days later, Katando received another memorandum asking her to explain why she should not be subjected to disciplinary action for failing to sign the December 14, 2013 memorandum, for her refusal to transfer to the Makati office, and for shouting at Papertech’s representative. Papertech sent Katando another memorandum imposing a seven-day suspension upon her for her disrespectful behavior to her fellow employees and officials of the company.
Katando served her suspension. However, she was suspended yet again for one week for her disobedience or refusal to transfer as directed. Katando then filed a complaint for illegal suspension before the NLRC. Papertech issued a memorandum to Katando reiterating her transfer to its Makati office. Thereafter, Papertech issued a notice to Ktando requiring her to explain within 48 hours why she refused to receive the memorandum reiterating her transfer to Makati office.
Papertech issued another notice directing Katando to explain why she should not be administratively charged for refusing to transfer to its Makati office. Despite submitting her explanation, Papertech issued a notice dismissing her for her insubordination. Katando filed a complaint for illegal dismissal, among others, against Papertech and its Chairman and Human Resource Manager.
On May 26, 2014, LA Apita-Battung issued a Decision finding Katando’s suspension illegal.
LA Ruling:
On January 30, 2015, LA Nicolas ruled in favor of Katando declaring the dismissal illegal.
LA Nicolas held that there was no just cause for Katando’s termination.
Papertech failed to prove the existence of a legitimate urgency justifying her transfer to the Makati office. In fact, they did not disprove the certification from the Makati City Business Permit Office that it is not a registered entity in Makati City.
LA Nicolas ordered Papertech to pay backwages. However, Katando’s prayer for reinstatement was not granted. Instead, Papertech was ordered to pay her separation pay.
Katando partially appealed to the NLRC.
NLRC Ruling:
The NLRC denied the partial appeal but ordered Papertech to pay Katando her backwages and separation pay.
The NLRC agreed with the LA that separation pay should be given to Katando in lieu of her reinstatement. Katando appealed to the Court of Appeals (CA).
CA Ruling:
The CA granted Katando’s petition and ordered Papertech to immediately reinstate her to her previous position without loss of seniority rights in addition to the award of backwages.
The CA ruled that the doctrine of strained relations cannot apply to Katando as she is part of the rank and file workforce and does not occupy a managerial or key position in the company. In addition, there is no proof of strained rleations between her and Papertech. It is not sufficient that the parties were involved in several cases because no strained relations should arise from a valid and legal act of asserting one’s right.
Papertech filed a motion for reconsideration but it was denied by the CA. Thus, it filed a petition for review on certiorari before the Supreme Court (SC) seeking the reversal of the ruling of the CA.
Issue/s:
Whether or not the doctrine of strained relations can apply on employee who does not occupy a position of trust and confidence but there is demonstrated litigiousness between the parties
SC Ruling:
The SC granted the petition.
The SC held that the doctrine of strained relations was first introduced in the case of Balaquezon Employees & Workers Transportation Union vs. Zamora where the court awarded backwages as severance pay based on equity.
Further, the SC expounded on the doctrine of strained relations in the case of Globe-Mackay Cable and Radio Corp. vs. NLRC. According to the Court, the following are considerations in applying the doctrine of strained relations: (1) the employee must occupy a position where he or she enjoys the trust and confidence of his or her employer; (2) it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned; (3) it cannot be applied indiscriminately because some hostility is invariably engendered between the parties as a result of litigation; and (4) it cannot arise from a valid and legal act of asserting one’s right.
After Globe-Mackay, the SC clarified that the doctrine cannot apply when the employee has not indicated an aversion to returning to work, or does not occupy a position of trust and confidence in, or has no say in the operation of, the employer’s business. In addition, strained relations between the parties must be prove as a fact.
Although Katando does not occupy a position of trust and confidence as a machine operator, the circumstances of this case nonetheless calls for the application of the doctrine of strained relations. Papertech and Katando have been in conflict since 2008, or for 11 years.
Citing the case of Digitel Telecommunications Philippines, Inc. vs. Digitel Employees Union, the SC held that the length of time from the occurrence of the incident to its resolution and the demonstrated litigiousness of the parties showed that the parties here sufficiently demonstrated that their relationship is strained. The SC noted that Papertech is willing to pay the judgment award of separation. Clearly,
Papertech does not want Katando back as its employee.
What remained in Papertech’s Pasig City premises was its sales, marketing, and distribution operations. In that case, the CA held that the transfer of Papertech’s manufacturing and production departments to its provincial plants was valid. Consequently, the positions held by Katando and her co-respondents in Pasig City were abolished. Bearing this in mind, Katando’s reinstatement as a machine operator in Papertech’s Pasig City premises is no longer possible. Thus, separation pay is the only viable option for Katando.
In addition to the monetary awards to Katando, legal interest to be counted from the time of extrajudicial or judicial demand, if the amount was established with reasonable certainty, or otherwise from the date of judgment of the court which quantified the amount until full payment, may also be imposed.
However, the imposition of legal interest is subject to the discretion of the court. Considering that Papertech was willing to pay Katando’s backwages and separation pay after LA Nicolas rendered his Decision. The SC found that the imposition of an interest in this case is not warranted. Papertech should not be penalized for the delay in payment of the monetary awards because it was Katando who opted to elevate the case before the NLRC and the CA.