Rasonable v. NLRC

G.R. No. 117195 (February 20, 1996)

Supreme Court reinstated Danny T. Rasonable, granting backwages, separation pay, and attorney's fees.

Facts:

On March 19, 1993, Danny T. Rasonable (petitioner) filed a complaint for illegal dismissal against Victory Liner, Inc. and Joey Guevarra (respondents) with the Regional Arbitration Branch No. III in San Fernando, Pampanga. He sought reinstatement, backwages, damages, and attorney's fees. On November 8, 1993, Labor Arbiter Ariel C. Santos ruled in favor of Rasonable, finding that he had been illegally dismissed. The Labor Arbiter ordered the respondents to pay Rasonable a total of P84,957.47, which included backwages from March 1, 1993, to November 8, 1993, 13th month pay, separation pay equivalent to one-half month salary for each year of service, and 10% of the total award as attorney's fees.

Both parties appealed the decision to the National Labor Relations Commission (NLRC). Rasonable sought an increase in the monetary awards, while the respondents argued that the Labor Arbiter had prematurely decided the case as the parties were close to reaching an amicable settlement. On March 30, 1994, the NLRC modified the Labor Arbiter's decision, increasing the separation pay to one month for every year of service but removing the award for attorney's fees. Both parties filed motions for reconsideration, which were denied.

Subsequently, the respondents filed a petition for certiorari with the Supreme Court, which was denied. Rasonable also filed a petition against the NLRC, which was given due course. He contended that the NLRC committed grave abuse of discretion by deleting the attorney's fees and failing to award other benefits, including holiday pay and service incentive leave pay.

Legal Issues:

  1. Whether the NLRC erred in deleting the award of attorney's fees to Rasonable.
  2. Whether Rasonable was entitled to additional monetary benefits, including backwages, separation pay, and 13th month pay, beyond the date of the Labor Arbiter's decision.

Arguments:

  • Petitioner's Arguments:

    • Rasonable argued that he was entitled to attorney's fees as he was forced to litigate to protect his rights after being illegally dismissed.
    • He contended that he should receive backwages, separation pay, and 13th month pay not only from the date of his dismissal until the Labor Arbiter's decision but also until the finality of that decision.

  • Respondents' Arguments:

    • The respondents claimed that the Labor Arbiter's decision was made prematurely and that the case should have been remanded for further proceedings.
    • They argued that the deletion of attorney's fees was justified and that Rasonable was not entitled to additional benefits beyond the Labor Arbiter's decision.

Court's Decision and Legal Reasoning:

The Supreme Court granted Rasonable's petition, reinstating the award of attorney's fees. The Court held that the NLRC committed grave abuse of discretion by denying attorney's fees, emphasizing that employees forced to litigate to recover wages are entitled to such fees.

Regarding the monetary benefits, the Court clarified that Rasonable was entitled to backwages, 13th month pay, and other benefits from the date of his dismissal until the finality of the Labor Arbiter's decision. The Court rejected the NLRC's reasoning that the award of separation pay implied the termination of the employment relationship as of the Labor Arbiter's decision date. The Court noted that the employer-employee relationship continues until the actual payment of separation pay, thus entitling Rasonable to backwages and other benefits during that period.

The Court reaffirmed the principle that an illegally dismissed employee is entitled to full backwages and other benefits until actual reinstatement or until the finality of the decision if reinstatement is not ordered. The Court also highlighted that the award of separation pay does not preclude the award of backwages.

Significant Legal Principles Established:

  1. An illegally dismissed employee is entitled to attorney's fees when forced to litigate to recover wages.
  2. Backwages and other benefits are due from the date of dismissal until the finality of the decision, regardless of whether separation pay is awarded.
  3. The employer-employee relationship continues until the actual payment of separation pay, allowing for the continued accrual of benefits.