Buhain v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Ceferino P. Buhain, after nearly 18 years of employment with respondent Swift Foods Inc., was dismissed following an audit that revealed a significant financial discrepancy of P2,500,000.00 attributed to a salesman under his supervision. The petitioner, who was on sick leave during the audit, denied knowledge of the irregularity. Despite his claims, he was subsequently terminated for alleged gross violation of company rules and regulations. Procedural History: The petitioner's dismissal was initially deemed illegal by a voluntary arbitrator, who ordered reinstatement with backwages, damages, and attorney's fees. The respondent company appealed to the Court of Appeals, which modified the arbitrator's decision, replacing reinstatement with separation pay but retaining damages and attorney's fees. The Court of Appeals later issued a resolution affirming the modification but clarifying that backwages should be awarded from the date of preventive suspension until the time of illegal dismissal. Both parties filed separate petitions for review with the Supreme Court; the respondent's petition was denied. The petitioner's instant petition seeks a modification of the Court of Appeals' resolution regarding the period for backwages. The Petition: This Petition for Review on Certiorari, filed under Rule 45 of the Revised Rules of Civil Procedure, challenges the Court of Appeals' Resolution dated June 13, 2000. The petitioner argues that the appellate court erred in limiting the award of backwages and benefits to the period from his preventive suspension until his illegal dismissal, contending that full backwages and all benefits should be awarded from the date of preventive suspension up to the finality of judgment, in accordance with Article 279 of the Labor Code and established jurisprudence, specifically the ruling in Bustamante v. NLRC.
Issue(s)
Whether the award of backwages should be computed from the time of preventive suspension until the time of illegal dismissal, or from the time of preventive suspension until the finality of the judgment. Whether the respondent employer acted in good faith in dismissing the petitioner.
Ruling
The petition is GRANTED. The assailed Resolution of the Court of Appeals dated June 13, 2000, is MODIFIED. Respondent Swift Foods, Inc. is ordered to pay petitioner Ceferino P. Buhain full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the time he was placed on preventive suspension on May 13, 1996, up to the date of the finality of judgment in this case. The Writ of Preliminary Injunction issued by the Court of Appeals is LIFTED.
Ratio Decidendi
On the computation of backwages: The Court held that Article 279 of the Labor Code mandates that an employee who is unjustly dismissed is entitled to full backwages, inclusive of allowances and other benefits, computed from the time his compensation was withheld up to the time of his actual reinstatement. The Court reiterated the principle that an illegally dismissed employee is considered not to have left his office, thus entitled to all rights and privileges from the moment he was unduly deprived of them until restored. The Court found the Court of Appeals' limitation of backwages from preventive suspension to illegal dismissal to be an eight-day period, which runs counter to the clear mandate of Article 279. Therefore, the petitioner is entitled to full backwages and benefits from May 13, 1996, up to the finality of the judgment, as reinstatement is no longer feasible. The Court also reaffirmed the ruling in Bustamante v. NLRC that backwages should not be diminished by earnings from other employment during the period of illegal dismissal. On the employer's claim of good faith: The Court rejected the respondent's argument that it acted in good faith, citing the lack of just cause for dismissal and the failure to afford the petitioner due process. The Court noted that the shortage occurred while the petitioner was on leave and that the imputation of negligence was unfounded. Furthermore, the petitioner was not given written notice of charges, nor an adequate opportunity to be heard, and the documents forming the basis of his dismissal were not shown to him. The Court also pointed out the respondent's premature publication of the petitioner's separation, which exposed him to public scorn. The Court distinguished the present case from Itogon-Suyoc Mines, Inc. v. NLRC and Manila Electric Co. v. NLRC, where there was a finding of just cause and due process was afforded, thus establishing good faith on the part of the employers.
Main Doctrine
Full backwages, inclusive of allowances and other benefits, should be computed from the time of preventive suspension up to the finality of the judgment, in cases of illegal dismissal, in accordance with Article 279 of the Labor Code. An employer's claim of good faith in dismissing an employee is unavailing if no just cause for dismissal is proven and due process is not afforded.