Session Delights Ice Cream and Fast Foods vs. Court of Appeals 612 SCRA 11 (21!

Labor Law; Illegal Dismissals; Termination of Employment; Separation Pay;

Separation pay may be awarded to an illegally dismissed employee in lieu of
reinstatement."# $urisprudence derived from this provision% separation pa# ma#
&e a'arded to an illegall# dismissed emplo#ee in lieu of reinstatement. Recourse to
the pa#ment of separation pa# is made 'hen continued emplo#ment is no longer
possi&le% in cases 'here the dismissed emplo#ee(s position is no longer availa&le% or
the continued relationship &et'een the emplo#er and the emplo#ee is no longer
via&le due to the strained relations &et'een them% or 'hen the dismissed emplo#ee
opted not to &e reinstated% or pa#ment of separation &ene)ts 'ill &e for the &est
interest of the parties involved.
Same; Same; Same; The re-omputation of the onse!uenes of illegal dismissal
upon e"eution of the deision does not onstitute an alteration or amendments of
the #nal deision being implemented.A re*computation (or an original
computation% if no previous computation has &een made! is a part of the la'+
speci)call#% Article 2,- of the .a&or Code and the esta&lished $urisprudence on this
provision+that is read into the decision. "# the nature of an illegal dismissal case%
the reliefs continue to add on until full satisfaction% as e/pressed under Article 2,-
of the .a&or Code. 0he re*computation of the conse1uences of illegal dismissal upon
e/ecution of the decision does not constitute an alteration or amendment of the
)nal decision &eing implemented. 0he illegal dismissal ruling stands2 onl# the
computation of monetar# conse1uences of this dismissal is a3ected and this is not a
violation of the principle of immuta&ilit# of )nal $udgments.
Same; Same; Same; In allowing separation pay$ the #nal deision e%eti&ely
delares that the employment relationship ended so that separation pay and
ba'wages are to be omputed up to that point.Article 2,- provides for the
conse1uences of illegal dismissal in no uncertain terms% 1uali)ed onl# &#
$urisprudence in its interpretation of 'hen separation pa# in lieu of reinstatement is
allo'ed. 4hen that happens% the )nalit# of the illegal dismissal decision &ecomes
the rec5oning point instead of the reinstatement that the la' decrees. In allo'ing
separation pa#% the )nal decision e3ectivel# declares that the emplo#ment
relationship ended so that separation pa# and &ac5'ages are to &e computed up to
that point. 0he decision also &ecomes a $udgment for mone# from 'hich another
conse1uence 6o's+the pa#ment of interest in case of dela#. 0his 'as 'hat the CA
correctl# decreed 'hen it provided for the pa#ment of the legal interest of 127 from
the )nalit# of the $udgment% in accordance 'ith our ruling in 8astern Shipping .ines%
Inc. v. Court of Appeals.
8scario vs. 9ational .a&or Relations Commission 6:1 SCRA 26: (21!
Same; Same; Soial (ustie; Separation Pay; To safeguard the spirit of soial )ustie
that the *ourt has ad&oated in fa&or of the wor'ing man$ the right to
reinstatement is to be onsidered renouned or wai&ed only when the employee
un)usti#ably or unreasonably refuses to return to wor' upon being so ordered or
after the employer has o%ered to reinstate him.0he a&sence from an order of
reinstatement of an alternative relief should the emplo#er or a supervening event
not 'ithin the control of the emplo#ee prevent reinstatement negates the ver#
purpose of the order. 0he $udgment favora&le to the emplo#ee is there&# reduced to
a mere paper victor#% for it is all too eas# for the emplo#er to simpl# refuse to have
the emplo#ee &ac5. 0o safeguard the spirit of social $ustice that the Court has
advocated in favor of the 'or5ing man% therefore% the right to reinstatement is to &e
considered renounced or 'aived onl# 'hen the emplo#ee un$usti)a&l# or
unreasona&l# refuses to return to 'or5 upon &eing so ordered or after the emplo#er
has o3ered to reinstate him. ;o'ever% separation pa# is made an alternative relief
in lieu of reinstatement in certain circumstances% li5e< (a! 'hen reinstatement can
no longer &e e3ected in vie' of the passage of a long period of time or &ecause of
the realities of the situation2 (&! reinstatement is inimical to the emplo#er(s interest2
(c! reinstatement is no longer feasi&le2 (d! reinstatement does not serve the &est
interests of the parties involved2 (e! the emplo#er is pre$udiced &# the 'or5ers(
continued emplo#ment2 (f! facts that ma5e e/ecution un$ust or ine1uita&le have
supervened2 or (g! strained relations &et'een the emplo#er and emplo#ee.
Same; Same; Same; Same; It is not disputable that the grant of separation pay or
some other #nanial assistane to an employee is based on e!uity$ whih has been
de#ned as )ustie outside law$ or as being ethial rather than )ural and as belonging
to the sphere of morals than of law.=nder the circumstances% the grant of
separation pa# in lieu of reinstatement of the petitioners 'as proper. It is not
disputa&le that the grant of separation pa# or some other )nancial assistance to an
emplo#ee is &ased on e1uit#% 'hich has &een de)ned as $ustice outside la'% or as
&eing ethical rather than $ural and as &elonging to the sphere of morals than of la'.
0his Court has granted separation pa# as a measure of social $ustice even 'hen an
emplo#ee has &een validl# dismissed% as long as the dismissal has not &een due to
serious misconduct or re6ective of personal integrit# or moralit#.
.ope> vs. 9ational .a&or Relations Commission 2-, SCRA ?- (1--@!
Same2 Same2 "ene)ts2 Illegall# dismissed emplo#ees are entitled to reinstatement
and full &ac5'ages2 If reinstatement is not possi&le% the emplo#ees are entitled to
the grant of separation pa# and full &ac5'ages2 Separation pa# shall &e granted as
an option to reinstatement if reinstatement can no longer &e enforced due to the
strained relations &et'een the parties &rought a&out &# the litigation in this case.+
Article 2,- of the .a&or Code% as amended% provides that Aan emplo#ee 'ho is
un$ustl# dismissed from 'or5 shall &e entitled to reinstatement 'ithout loss of
seniorit# rights and other privileges and to his full &ac5'ages% inclusive of
allo'ances% and to his other &ene)ts or their monetar# e1uivalent computed from
the time his compensation 'as 'ithheld from him up to the time of his actual
reinstatement.B Cursuant to the said rule% illegall# dismissed emplo#ees are entitled
to reinstatement and full &ac5'ages. 0he phraseolog# of the la' means that &oth
reliefs are availa&le to the illegall# dismissed emplo#ee as a matter of course.
;o'ever% if reinstatement is not possi&le% the emplo#ees are entitled to the grant of
separation pa# and full &ac5'ages. At this instance% it must &e stressed that the
reliefs of separation pa# and &ac5'ages are cumulative% not alternative remedies.
9ot infre1uentl# had this Court ruled that separation pa# shall &e granted as an
option to reinstatement if reinstatement can no longer &e enforced due to the
strained relations &et'een the parties &rought a&out &# the litigation in this case.
Cersonal animosities have &een generated due to the attendant circumstances of
the case. Cetitioner held much rancor in her heart against private respondents.
Since reinstatement 'ould not &e to the &est interest of the parties% in lieu thereof%
the 9.RC correctl# a'arded separation pa# e1uivalent to one (1! month(s salar# for
ever# #ear of service% a fraction of at least si/ (6! months &eing considered as one
(1! 'hole #ear.
Sarona vs. 9ational .a&or Relations Commission 66: SCRA :-? (212!
Labor Law; Separation Pay; Separation pay is omputed from the ommenement
of employment up to the time of termination$ inluding the imputed ser&ie for
whih the employee is entitled to ba'wages$ with the salary rate pre&ailing at the
end of the period of putati&e ser&ie being the basis for omputation.83ectivel#%
the petitioner cannot &e deemed to have changed emplo#ers as Ro#ale and
Sceptre are one and the same. ;is separation pa# should% thus% &e computed from
the date he 'as hired &# Sceptre in April 1-,6 until the )nalit# of this decision.
"ased on this Court(s ruling in Dasagana Concrete Croducts% et al. v. 9.RC% et al.%
the intervening period &et'een the da# an emplo#ee 'as illegall# dismissed and
the da# the decision )nding him illegall# dismissed &ecomes )nal and e/ecutor#
shall &e considered in the computation of his separation pa# as a period of
AimputedB or AputativeB service< Separation pa#% e1uivalent to one month(s salar#
for ever# #ear of service% is a'arded as an alternative to reinstatement 'hen the
latter is no longer an option. Separation pa# is computed from the commencement
of emplo#ment up to the time of termination% including the imputed service for
'hich the emplo#ee is entitled to &ac5'ages% 'ith the salar# rate prevailing at the
end of the period of putative service &eing the &asis for computation.
Same; +a'wages; +a'wages is a remedy a%ording the employee a way to reo&er
what he has lost by reason of the unlawful dismissal.+"ac5'ages is a remed#
a3ording the emplo#ee a 'a# to recover 'hat he has lost &# reason of the unla'ful
dismissal. In a'arding &ac5'ages% the primordial consideration is the income that
should have accrued to the emplo#ee from the time that he 'as dismissed up to his
reinstatement and the length of service prior to his dismissal is de)nitel#
inconse1uential. As earl# as 1--6% this Court% in "ustamante% et al. v. 9.RC% et al.%
clari)ed in no uncertain terms that if reinstatement is no longer possi&le%
&ac5'ages should &e computed from the time the emplo#ee 'as terminated until
the )nalit# of the decision% )nding the dismissal unla'ful.
Same; Separation Pay; In ase separation pay is awarded and reinstatement is no
longer feasible$ ba'wages shall be omputed from the time of illegal dismissal up
to the #nality of the deision should separation pay not be paid in the meantime.
In case separation pa# is a'arded and reinstatement is no longer feasi&le%
&ac5'ages shall &e computed from the time of illegal dismissal up to the )nalit# of
the decision should separation pa# not &e paid in the meantime. It is the
emplo#ee(s actual receipt of the full amount of his separation pa# that 'ill
e3ectivel# terminate the emplo#ment of an illegall# dismissed emplo#ee.
Ether'ise% the emplo#er*emplo#ee relationship su&sists and the illegall# dismissed
emplo#ee is entitled to &ac5'ages% ta5ing into account the increases and other
&ene)ts% including the 1:th month pa#% that 'ere received &# his co*emplo#ees
'ho are not dismissed. It is the o&ligation of the emplo#er to pa# an illegall#
dismissed emplo#ee or 'or5er the 'hole amount of the salaries or 'ages% plus all
other &ene)ts and &onuses and general increases% to 'hich he 'ould have &een
normall# entitled had he not &een dismissed and had not stopped 'or5ing.
Same; Damages; ,oral Damages; E"emplary Damages; ,oral damages may be
reo&ered where the dismissal of the employee was tainted by bad faith or fraud$ or
where it onstituted an at oppressi&e to labor$ and done in a manner ontrary to
morals$ good ustoms or publi poliy while e"emplary damages are reo&erable
only if the dismissal was done in a wanton$ oppressi&e$ or male&olent manner.
Doral damages and e/emplar# damages at C2?%. each as indemnit# for the
petitioner(s dismissal% 'hich 'as tainted &# &ad faith and fraud% are in order. Doral
damages ma# &e recovered 'here the dismissal of the emplo#ee 'as tainted &#
&ad faith or fraud% or 'here it constituted an act oppressive to la&or% and done in a
manner contrar# to morals% good customs or pu&lic polic# 'hile e/emplar# damages
are recovera&le onl# if the dismissal 'as done in a 'anton% oppressive% or
malevolent manner.
Folden Ace "uilders vs. 0alde 62 SCRA 2@G (21!
a&or .a'2 Separation Ca#2 Separation pa# is a'arded 'hen reinstatement no longer
advisa&le2 "ac5'ages is that earned &ut not collected due to un$ust dismissal.+0he
&asis for the pa#ment of &ac5'ages is di3erent from that for the a'ard of
separation pa#. Separation pa# is granted 'here reinstatement is no longer
advisa&le &ecause of strained relations &et'een the emplo#ee and the emplo#er.
"ac5'ages represent compensation that should have &een earned &ut 'ere not
collected &ecause of the un$ust dismissal. 0he &asis for computing &ac5'ages is
usuall# the length of the emplo#ee(s service 'hile that for separation pa# is the
actual period 'hen the emplo#ee 'as unla'full# prevented from 'or5ing.
Same2 Same.+0he normal conse1uences of respondents( illegal dismissal% then% are
reinstatement 'ithout loss of seniorit# rights% and pa#ment of &ac5'ages computed
from the time compensation 'as 'ithheld up to the date of actual reinstatement.
4here reinstatement is no longer via&le as an option% separation pa# e1uivalent to
one (1! month salar# for ever# #ear of service should &e a'arded as an alternative.
0he pa#ment of separation pa# is in addition to pa#ment of &ac5'ages.
Same2 Same2 Separation pa# is an accepta&le alternative to reinstatement.+=nder
the doctrine of strained relations% the pa#ment of separation pa# is considered an
accepta&le alternative to reinstatement 'hen the latter option is no longer desira&le
or via&le. En one hand% such pa#ment li&erates the emplo#ee from 'hat could &e a
highl# oppressive 'or5 environment. En the other hand% it releases the emplo#er
from the grossl# unpalata&le o&ligation of maintaining in its emplo# a 'or5er it
could no longer trust. Strained relations must &e demonstrated as a fact% ho'ever%
to &e ade1uatel# supported &# evidence+su&stantial evidence to sho' that the
relationship &et'een the emplo#er and the emplo#ee is indeed strained as a
necessar# conse1uence of the $udicial controvers#.
Same2 8mplo#ee deemed in service not onl# 'hen he 'as un$ustl# dismissed &ut
'hen he actuall# separated 'hen reinstatement &ecome impossi&le.+0he Court%
ho'ever% does not )nd the appellate court(s computation of separation pa# in order.
0he appellate court considered respondent to have served petitioner compan# for
onl# eight #ears. Cetitioner 'as hired in 1--% ho'ever% and he must &e considered
to have &een in the service not onl# until 1---% 'hen he 'as un$ustl# dismissed% &ut
until Hune :% 2?% the da# he is deemed to have &een actuall# separated (his
reinstatement having &een rendered impossi&le! from petitioner compan# or for a
total of 1? #ears.
"aIares vs. 0a&aco 4omenJs 0ransport Service Cooperative (0A40RASCE! 6-G SCRA
:1: (21:!
Same; Same; -einstatement; Dotrine of Strained -elations; Separation Pay; .nder
the dotrine of strained relations$ payment of separation pay is onsidered an
aeptable alternati&e to reinstatement when the latter option is no longer
desirable or &iable./Reinstatement is no longer via&le 'here% among other things%
the relations &et'een the emplo#er and emplo#ee have &een so severel# strained%
that it is not in the &est interest of the parties% nor is it advisa&le or practical to
order reinstatement. =nder the doctrine of strained relations% pa#ment of separation
pa# is considered an accepta&le alternative to reinstatement 'hen the latter option
is no longer desira&le or via&le. Indeed% separation pa# is made an alternative relief
in lieu of reinstatement in certain circumstances% such as< (1! 'hen reinstatement
can no longer &e e3ected in vie' of the passage of a long period of time or &ecause
of the realities of the situation2 (2! reinstatement is inimical to the emplo#er(s
interest2 (:! reinstatement is no longer feasi&le2 (G! reinstatement does not serve
the &est interests of the parties involved2 (?! the emplo#er is pre$udiced &# the
'or5ers( continued emplo#ment2 (6! facts that ma5e e/ecution un$ust or ine1uita&le
have supervened2 or (,! strained relations &et'een the emplo#er and the
emplo#ee.
Same; Same; Same; 0here reinstatement is no longer &iable as an option$
separation pay e!ui&alent to one 123 month salary for e&ery year of ser&ie should
be awarded as an alternati&e./4here reinstatement is no longer via&le as an
option% separation pa# e1uivalent to one (1! month salar# for ever# #ear of service
should &e a'arded as an alternative. In lieu of reinstatement% petitioner is entitled
to separation pa# e1uivalent to one (1! month salar# for ever# #ear of service
rec5oned from the time he commenced his emplo#ment 'ith 0A40RASCE until
)nalit# of this Decision.