College of the Immaculate Conception v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Respondent Atty. Marius F. Carlos was appointed Acting Dean of the College of the Immaculate Conception's Department of Business Administration and Accountancy on June 1, 1995, and subsequently as Dean of the Department of Business, Economics and Accountancy from June 1, 1996, to May 31, 2000. Upon the expiration of his term as Dean, he was appointed as a full-time professor. Respondent then requested overload pay, which the petitioner denied, citing the Faculty Manual. Petitioner also requested respondent vacate the Dean's office and explain his engagement in the practice of law and teaching at another institution without prior permission. Respondent argued his demotion was unlawful and arbitrary, and that his non-renewal as Dean was tainted with abuse of discretion. Procedural History: The petitioner initially denied respondent's claim for overload pay and requested he vacate the Dean's office. After respondent's explanation regarding his external teaching and law practice, petitioner offered him two options: remain a full-time professor without external teaching or become a part-time professor with freedom to teach elsewhere and practice law, but lose tenure. Respondent failed to respond, leading to petitioner not assigning him teaching loads for the succeeding semester, citing CHED Memorandum No. 19, S. 1998. Respondent protested this sanction, arguing it was disproportionate to the alleged violation. He then filed a complaint for unfair labor practice, illegal dismissal, backwages, and damages, which the Labor Arbiter ruled in his favor, ordering reinstatement and backwages. The petitioner appealed to the National Labor Relations Commission (NLRC), which set aside the Labor Arbiter's decision, dismissed the complaint, but ordered reinstatement as a full-time professor without backwages. The NLRC found the non-assignment of teaching load to be a sanction under the CHED Memorandum. Petitioner's motion for clarification regarding reimbursement of payroll reinstatement benefits was denied. Subsequently, petitioner filed a petition for certiorari with the Court of Appeals (CA), which dismissed the petition, affirming the NLRC's ruling. The CA denied petitioner's motion for reconsideration, leading to the instant petition. The Petition: Petitioner filed a petition for review on certiorari under Rule 45 of the Rules of Court, primarily questioning whether the reversal of the Labor Arbiter's findings by the NLRC and CA necessitates the reimbursement of salaries and benefits received by the respondent pursuant to the immediate execution of the Labor Arbiter's erroneous decision ordering his reinstatement as Department Dean. Petitioner argued that since the respondent was not illegally dismissed and the NLRC correctly found that he should have been reinstated only as a full-time professor, not Dean, the respondent should refund the salaries received during the payroll reinstatement. The Supreme Court, however, affirmed the CA's decision, holding that even if the Labor Arbiter's order of reinstatement is reversed on appeal, the employer is still obligated to pay the wages of the dismissed employee during the period of appeal until reversal by a higher court, and the employee is not required to reimburse salaries received under such circumstances, especially when the reversal merely corrected the position of reinstatement rather than nullifying the dismissal entirely.
Issue(s)
Whether the respondent should reimburse the petitioner for salaries and benefits received during the pendency of the appeal, despite the reversal of the Labor Arbiter's order of reinstatement. Whether the Labor Arbiter's decision ordering reinstatement as Dean, which was subsequently found to be erroneous, affects the employee's entitlement to wages received during the appeal period.
Ruling
The petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 83321, dated August 31, 2004 and March 11, 2005, respectively, are AFFIRMED.
Ratio Decidendi
On the issue of reimbursement of salaries received during the pendency of the appeal: The Court ruled in the negative. Citing Air Philippines Corporation v. Zamora and Roquero v. Philippine Airlines, Inc., the Court reiterated that even if the Labor Arbiter's order of reinstatement is reversed on appeal, an employee who has been reinstated during the appeal period, whether to actual work or on payroll, is not required to reimburse the salaries received. This is because such payment is considered earned compensation for services rendered or an entitlement during the period of appeal until the reversal by the higher court. The Court emphasized that the law, specifically Article 223 of the Labor Code, makes the reinstatement aspect of a Labor Arbiter's decision immediately executory, and the employer's posting of a bond does not stay this execution. The Court clarified that the pertinent law is not concerned with the wisdom or propriety of the LA's order, but with its immediate executory nature. The Court further distinguished the present case from the Genuino ruling, which allowed reimbursement, by highlighting that in Genuino, the employee was not reinstated to work or placed on payroll reinstatement, and the dismissal was found to be based on a just cause. In the present case, the NLRC did not reverse the reinstatement order entirely but merely declared the correct position for reinstatement, which was full-time professor, not Dean, as the deanship was for a fixed term. Therefore, the employee was still entitled to receive wages pending appeal. On the effect of the Labor Arbiter's erroneous order of reinstatement: The Court held that the Labor Arbiter's error in ordering reinstatement to a position (Dean) whose term had expired does not alter the fact that the order for reinstatement was immediately executory pending appeal. Article 223 of the Labor Code mandates that the reinstatement aspect of a Labor Arbiter's decision is immediately executory, and the employee shall either be admitted back to work or reinstated in the payroll. The employer's option to reinstate in the payroll does not negate the employee's entitlement to wages during the appeal period. The Court reasoned that the purpose of immediate reinstatement pending appeal is to prevent a continuing threat to the survival of the dismissed employee and his family, and requiring reimbursement upon reversal would render the protection offered by this rule inutile and would lead to unjust enrichment for the employer, who would essentially be using the salaries paid as a bond without incurring bond premiums. The Court reaffirmed the prevailing principle that an employee cannot be compelled to reimburse salaries received during the pendency of an appeal, even if the reinstatement order is reversed.
Main Doctrine
Even if the Labor Arbiter's order of reinstatement is reversed on appeal, an employee who was reinstated during the appeal period, whether to actual work or on payroll, is not required to reimburse the salaries received, as such payment is considered earned compensation, especially when the reversal is not for illegal dismissal but for a lesser sanction.