Garcia and Dumago v. Philippine Airlines (G.r. No. 164856)

GARCIA AND DUMAGO V. PHILIPPINE AIRLINES (G.R. NO.
164856)
Facts:
Petitioners-employees filed a complaint for illegal dismissal against respondent PAL who dismissed them
after they were allegedly caught in the act of sniffing shabu within its premises. The Labor Arbiter ruled
for the petitioners and ordered immediately for their reinstatement. Prior to this decision, SEC had
placed PAL under an Interim Rehabilitation Receiver, and subsequently under a Permanent
Rehabilitation Receiver. PAL appealed and the Labor Tribunal ruled in their favor. Subsequently, the
Labor Arbiter issued a writ of execution for the reinstatement and issued a notice of garnishment. The
Labor Tribunal affirmed the writ and notice but suspended and referred the action to the Rehabilitation
Receiver of PAL. On appeal, CA found for respondent PAL.
Issue:
Whether or not PAL being under corporate rehabilitation suspends any monetary claims to it.
Ruling: YES.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before
any court, tribunal or board against the corporation shall ipso jure be suspended. As stated early on,
during the pendency of petitioners’ complaint before the Labor Arbiter, the SEC placed respondent
under an Interim Rehabilitation Receiver. After the Labor Arbiter rendered his decision, the SEC replaced
the Interim Rehabilitation Receiver with a Permanent Rehabilitation Receiver.
While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or
even the life of the dismissed employee and his family, it does not contemplate the period when the
employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to
survive.
JUANITO A. GARCIA and ALBERTO J. DUMAGO,
Petitioners,
Versus
PHILIPPINE AIRLINES, INC.,
Respondent.
FACTS:
The case stemmed from the administrative charge filed by Philippine Airlines (PAL) against its
employees-herein petitioners after they were allegedly caught in the act of sniffing shabu when a team
of company security personnel and law enforcers raided the PAL Technical Center’s Toolroom Section on
July 24, 1995.
After due notice, PAL dismissed petitioners for transgressing the PAL Code of Discipline, prompting them
to file a complaint for illegal dismissal and damages which was resolved by the Labor Arbiter in their
favor, thus ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the
decision.
Subsequently, the Labor Arbiter issued a Writ of Execution respecting the reinstatement decision and
issued a Notice of Garnishment.
Respondent elevated the matter to the appellate court which issued the herein challenged Decision and
Resolution nullifying the NLRC Resolutions on two grounds, essentially espousing that:
(1) a subsequent finding of a valid dismissal removes the basis for implementing the reinstatement
aspect of a labor arbiter’s decision; and
(2) the impossibility to comply with the reinstatement order due to corporate rehabilitation provides a
reasonable justification for the failure to exercise the options under Article 223 of the Labor Code (the
second ground).
HENCE, this Petition.
RULING:
Amplification of the First Ground:
The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court.
It settles the view that the Labor Arbiter’s order of reinstatement is immediately executory and the
employer has to either re-admit them to work under the same terms and conditions prevailing prior to
their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the
alternative, employer must pay the employee’s salaries.
Amplification of the Second Ground

The Court sustains the appellate court’s finding that the peculiar predicament of a corporate
rehabilitation rendered it impossible for respondent to exercise its option under the circumstances.
The test is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending
appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer’s
unjustified act or omission. If the delay is due to the employer’s unjustified refusal, the employer may
still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s decision.
WHEREFORE, the petition is PARTIALLY DENIED. Insofar as the Court of Appeals Decision and Resolution
annulling the NLRC Resolutions affirming the validity of the Writ of Execution and the Notice of
Garnishment are concerned, the Court finds no reversible error.
SO ORDERED.

Garcia and Dumago v. Philippine Airlines (G.r. No. 164856)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Garcia and Dumago v. Philippine Airlines (G.r. No. 164856)

Uploaded by

Copyright:

Available Formats

GARCIA AND DUMAGO V. PHILIPPINE AIRLINES (G.R. NO.

HENCE, this Petition.

Amplification of the First Ground:

Amplification of the Second Ground

You might also like