325 - Pheschem Industrial Corp. v. Moldez

Pheschem Industrial Corp. v.
Moldez (ESCAÑO) disturb the identical rulings of the labor arbiter, the NLRC and the Court
G.R. No. 161158| March 9, 2005| Puno, J. of Appeals. The legal consequences of an illegal dismissal are
REINSTATEMENT - DEFINITION reinstatement of the employee without loss of seniority rights and other
privileges, and payment of his full backwages, inclusive of allowances,
PETITIONER: PHESCHEM INDUSTRIAL CORPORATION, represented and other benefits or their monetary equivalent. Clearly, the law intended
by its Manager, WILFREDO M. SARMIENTO reinstatement to be the general rule. It is only when reinstatement is no
RESPONDENTS: PABLITO V. MOLDEZ longer feasible that payment of separation pay is awarded to an illegally
SUMMARY dismissed employee.
FACTS: Reinstatement is the restoration to a state or condition from which one

had been removed or separated. In providing foremost for the
 The facts show that on June 13, 1983, petitioner PHESCHEM reinstatement of an illegally dismissed employee, the Labor Code not
INDUSTRIAL CORPORATION employed respondent PABLITO only recognizes the security of tenure granted by law to regular
V. MOLDEZ as operator of its payloader and bulldozer at its employees, but also gives substance and meaning to the protection
quarrying site in Palompon, Leyte. accorded by the Constitution to labor. Employment is significant to every
 Respondent alleged that on November 13, 1997, he was notified working man. It is the means by which he sustains himself and his
by Engr. Isidro Viacrusis, petitioner's personnel officer, that he family, hence, the law mandates the reinstatement of an illegally
was suspended from work without pay for a period of seven (7) dismissed employee to his former position. Payment of separation pay
days, without being informed of its reason. After seven (7) days as a substitute for reinstatement is allowed only under exceptional
or on November 19, 1997, he reported back to work only to be circumstances, viz: (1) when reasons exist which are not attributable to
told that the President of the corporation, Tomas Y. Tan, was ill the fault or beyond the control of the employer, such as, when the
and his suspension had been extended for another 7 days employer, who is in severe financial strait and has suffered serious
without pay. Again, no reason was offered for said decision. business losses, has ceased operations, implemented retrenchment, or
After the lapse of the extension, respondent was not... allowed abolished the position due to the installation of labor-saving devices; (2)
to return to work. When he inquired about the status of his when the illegally dismissed employee has contracted a disease and his
employment, Viacrusis assured him that he will be rehired in due reinstatement will endanger the safety of his co-employees; or, (3) where
time. Eight (8) months passed but respondent received no word strained relationship exists between the employer and the dismissed
from petitioner. employee.
 On July 6, 1998, respondent filed a complaint against petitioner The circumstances in the case at bar do not warrant the award of
for illegal suspension and dismissal. He prayed for separation pay to respondent in lieu of reinstatement to his former
reinstatement, or if reinstatement is not possible, an award of position.
separation pay, including a claim for moral damages and
attorney's fees. On the issue of backwages, we reject the position of petitioner that its
 The NLRC dismissed petitioner's appeal for lack of merit and computation should be made only after the finality of the NLRC decision.
affirmed in toto the decision of the labor arbiter. On appeal, the Article 279 of the Labor Code provides that an illegally dismissed
Court of Appeals upheld the congruent findings of the labor employee shall be entitled, inter alia, to the payment of his full
arbiter and the NLRC. backwages, inclusive of allowances and to his other benefits or their
monetary equivalent computed from the time his compensation was
ISSUE/s: withheld from him, i.e., from the time of his illegal dismissal, up to the
time of his actual reinstatement. Thus, where reinstatement is adjudged,
W/N reinstatement can still be adjudged to the respondent the award of backwages and other benefits continues beyond the date of
notwithstanding the fact that respondents cause of action and prayer the labor arbiter's decision ordering reinstatement and extends up to the
was only a prayer for separation pay? time said order of reinstatement is actually carried out.
IN VIEW WHEREOF, the petition is DISMISSED. The Decision and
RULING: Yes.
Resolution of the Court of Appeals in CA-G.R. SP No. 61514, dated
A review of the records of the case reveals no compelling reason to
March 21, 2003 and December 12, 2003, respectively, are affirmed in
toto. No pronouncement as to costs.
DOCTRINE:
Reinstatement is the restoration to a state or condition from which one

had been removed or separated. In providing foremost for the
reinstatement of an illegally dismissed employee, the Labor Code not
only recognizes the security of tenure granted by law to regular
employees, but also gives substance and meaning to the protection
accorded by the Constitution to labor.

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FACTS: Reinstatement is the restoration to a state or condition from which one

Reinstatement is the restoration to a state or condition from which one

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