Saturday, April 23, 2016

Reinstatement without backwages; when allowed.


“X x x.

Clearly, respondents committed some form of misconduct when they assisted Sheriff Calinawan in effecting the levy on the forklift and depositing the same to the municipal hall for safekeeping as they operated the forklift and took it out of company premises, all without the authority and consent from petitioner or any of its officers. However, as correctly pointed out by the CA, respondents did not perform the said acts with intent to gain or with wrongful intent. Rather, they were impelled by their belief -albeit misplaced -that they were merely facilitating the enforcement of a favorable decision in a labor standards case in order to finally collect what is due them as a matter of right, which is the balance of their unpaid benefits. In light of the foregoing, the Court upholds the right of petitioner to take the appropriate disciplinary action against respondents, but nevertheless, holds that respondents should not have been dismissed from service as a less punitive sanction, i.e., suspension, would have sufficed. In Philippine Long Distance Company v. Teves,41 the Court stressed that while it is the prerogative of the management to discipline its employees, it should not be indiscriminate in imposing the ultimate penalty of dismissal as it not only affect the employee concerned, but also those who depend on his livelihood, viz.:

While management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such management prerogatives must be exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements. The Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Its implementation should be tempered with compassion and understanding. The employer should bear in mind that, in the execution of said prerogative, what is at stake is not only the employee's position, but his very livelihood, his very breadbasket. Dismissal is the ultimate penalty that can be meted to an employee. Even where a worker has committed an infraction, a penalty less punitive may suffice, whatever missteps maybe committed by labor ought not to be visited with a consequence so severe. This is not only the laws concern for the workingman. There is, in addition, his or her family to consider. Unemployment brings untold hardships and 42 sorrows upon those dependent on the wage-earner. (Emphases and underscoring supplied)

Further, considering the fact that respondents were mere equipment operators, technicians, and electricians, and thus, not occupying managerial nor confidential positions, and that the incident concerning the forklift was only their first offense in their 14-15 years of service, the Court agrees with the CA that they should have only been meted a penalty that is less severe than dismissal, i.e., suspension. Hence, respondents could not be validly dismissed by petitioner.43

As a general rule, an illegally dismissed employee is entitled to reinstatement (or separation pay, if reinstatement is not viable) and payment of full backwages. In certain cases, however, the Court has carved out an exception to the foregoing rule and thereby ordered the reinstatement of the employee without backwages on account of the following: (a) the fact that the dismissal of the employee would be too harsh a penalty; and ( b) that the employer was in good faith in terminating the employee. 44 

The application of such exception was thoroughly discussed in the case of Pepsi-Cola Products Philippines, Inc. v. Molon,45 to wit: 

An illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. In certain cases, however, the Court has ordered the reinstatement of the employee without backwages considering the fact that (1) the dismissal of the employee would be too harsh a penalty; and (2) the employer was in good faith in terminating the employee. 

For instance, in the case of Cruz v. Minister of Labor and Employment the Court ruled as follows: 

The Court is convinced that petitioner's guilt was substantially established. Nevertheless, we agree with respondent Minister's order of reinstating petitioner without backwages instead of dismissal which may be too drastic. Denial of backwages would sufficiently penalize her for her infractions. The bank officials acted in good faith. They should be exempt from the burden of paying backwages. The good faith of the employer, when clear under the circumstances, may preclude or diminish recovery of backwages. Only employees discriminately dismissed are entitled to backpay. x x x Likewise, in the case of Jtogon-Suyoc Mines, Inc. v. National Labor Relations Commission, the Court pronounced that "[t)he ends of social and compassionate justice would therefore be served if private respondent is reinstated but without backwages in view of petitioner's good faith." 46 (Emphasis and underscoring supplied) 

To reiterate, respondents were indeed guilty of some form of misconduct and, as such, petitioner was justified in exercising disciplinary action against them. Absent any evidence to the contrary, petitioner's resort to disciplinary proceedings should be presumed to have been done in good faith. 47 Thus, perceiving that petitioner had ample ground to proceed with its disciplinary action against respondents, and that the disciplinary proceedings appear to have been conducted in good faith, the Court finds it proper to apply the exception to the rule on backwages, and consequently, direct the deletion of backwages in favor of respondents.48

X x x.”