Bustamante v. NLRC
G.R. No. 111651 (March 15, 1996)
Facts:
The case involves a group of petitioners—Osmalik S. Bustamante, Paulino A. Bantayan, Fernando L. Bustamante, Mario D. Sumonod, and Sabu J. Lamaran—who were employed by Evergreen Farms, Inc., a company engaged in banana production in Davao del Norte. The petitioners were initially hired as laborers and harvesters, with employment contracts for six months from January 2, 1990, to July 2, 1990. However, they had been working for the company since September 1989 and had previous employment with the same company from 1985 to 1989.
On June 25, 1990, the petitioners were terminated from their employment on the grounds of poor performance attributed to their age, as none of them were below forty years old. Following their dismissal, the petitioners filed a complaint for illegal dismissal with the Regional Arbitration Branch of the National Labor Relations Commission (NLRC) in Davao City.
On April 26, 1991, the labor arbiter ruled in favor of the petitioners, declaring their dismissal illegal and ordering their reinstatement along with six months of backwages. The NLRC affirmed this decision on March 8, 1993. However, after the private respondent filed a motion for reconsideration, the NLRC issued a resolution on May 3, 1993, which upheld the finding of illegal dismissal but deleted the award of backwages, reasoning that the termination was due to a mistaken interpretation of the law and not bad faith.
Legal Issues:
The primary legal issue in this case is whether the petitioners are entitled to backwages following their illegal dismissal, especially after the NLRC's resolution that removed the backwages award.
Arguments:
Petitioners' Argument: The petitioners contended that the NLRC gravely abused its discretion by deleting the award of backwages. They argued that their dismissal was illegal, and as such, they were entitled to backwages from the time of their dismissal until reinstatement.
Respondent's Argument: The respondent company argued that the termination was based on a mistaken interpretation of the law and that there was no bad faith involved in their actions. They contended that the petitioners should not be compensated for backwages due to the absence of bad faith in the termination.
Court's Decision and Legal Reasoning:
The Supreme Court ruled in favor of the petitioners, reinstating the award of backwages. The Court emphasized that it was undisputed that the petitioners were illegally dismissed. It cited Article 280 of the Labor Code, which defines regular employment and states that any employee who has rendered at least one year of service, whether continuous or broken, is considered a regular employee.
The Court noted that the petitioners had been employed in various capacities over several years, performing tasks essential to the company's operations. This established their status as regular employees. The Court rejected the respondent's argument that the termination was not made in bad faith, stating that the repeated hiring and rehiring of the petitioners under probationary status was a tactic to avoid granting them regular employee status and the associated benefits.
The Court also distinguished this case from the cited precedent of Manila Electric Company vs. NLRC, where the employee had a valid cause for dismissal. In contrast, the petitioners had not committed any act warranting termination, thus entitling them to full backwages and benefits from the time of their illegal dismissal until reinstatement.
Significant Legal Principles Established:
Regular Employment Definition: The ruling reaffirmed the definition of regular employment under Article 280 of the Labor Code, emphasizing that employees who have rendered at least one year of service, regardless of continuity, are entitled to regular status.
Bad Faith in Employment Practices: The Court highlighted that employers cannot evade their obligations to employees by manipulating employment contracts to maintain a casual status, which constitutes bad faith.
Entitlement to Backwages: The decision clarified that employees who are illegally dismissed are entitled to backwages from the time of dismissal until reinstatement, regardless of the employer's claims of mistaken interpretation of the law.