Citytrust Banking Corp. v. NLRC

G.R. No. 104860 (July 11, 1996)

Facts:

Private respondent Ma. Anita Ruiz was employed as the internal auditor of Citytrust Banking Corporation. On November 1, 1974, she was appointed as the manager of the Quiapo branch, a position she refused, claiming it was a demotion. Following her refusal, she was suspended and subsequently terminated on November 8, 1974, after receiving clearance from the Department of Labor. In response, Ruiz filed a complaint for illegal dismissal.

The National Labor Relations Commission (NLRC) ordered her reinstatement as branch manager, urging her to accept the position, with the warning that refusal could lead to loss of employment. Ruiz appealed to the Minister of Labor but was unsuccessful. Both parties then escalated the matter to the Office of the President, which ordered her reinstatement to her former position as internal auditor and the payment of backwages.

Citytrust contested the reinstatement, arguing that the position of internal auditor had been abolished and replaced with that of a resident inspector. The Office of the President modified its decision, ordering Ruiz's reinstatement to a substantially equivalent position without loss of seniority rights and the benefits she would have received had she not been dismissed.

On August 14, 1978, Ruiz was reinstated as the manager of the Auditing Department, but she contested this position, claiming it was not equivalent to that of a resident inspector. A Labor Arbiter later ruled that the position was not substantially equivalent, ordering her reinstatement to the position of resident inspector or a similar role if that position was filled.

The NLRC affirmed this decision, and Citytrust's subsequent appeals to the Supreme Court were dismissed. Ruiz sought the production of payroll records for the computation of her monetary award, which Citytrust opposed. The NLRC eventually issued a writ of execution for the monetary award due to Ruiz, which Citytrust sought to contest through various petitions.

Legal Issues:

1. Whether the NLRC erred in denying Citytrust's petition for injunction against the alias writ of execution.
2. Whether Ruiz was entitled to backwages beyond the three-year limitation set by the Supreme Court in a previous ruling.
3. Whether the position to which Ruiz was reinstated was substantially equivalent to her former position.

Arguments:

• Petitioner (Citytrust):

  • Argued that the NLRC abused its discretion in dismissing the petition for injunction, claiming the writ of execution did not conform to the Supreme Court's ruling limiting backwages to three years without qualification or deduction.
  • Contended that Ruiz was only entitled to three years of backwages and that the alias writ of execution varied the terms of the judgment.

• Respondent (Ruiz):

  • Asserted that she was entitled to reinstatement without loss of seniority rights and to backwages for the period of illegal dismissal.
  • Claimed that the position of manager of the Auditing Department was not substantially equivalent to that of resident inspector, thus justifying her claims for additional compensation.

Court's Decision and Legal Reasoning:

The Supreme Court dismissed Citytrust's petition for certiorari, affirming the NLRC's decision. The Court held that the order for execution was based on a final and executory judgment, which is not appealable. The Court emphasized that the writ of execution was valid as it sought to enforce a final judgment regarding Ruiz's reinstatement and compensation.

The Court clarified that Ruiz was entitled to backwages for the period of her illegal dismissal (November 8, 1974, to August 13, 1978) and that her reinstatement should have been to a position equivalent to her former role. The Court reiterated that the law mandates strict compliance with reinstatement orders to ensure that employees unjustly dismissed are made whole.

The Court also noted that Ruiz's retirement on March 1, 1991, rendered reinstatement moot, but she was still entitled to the difference in pay between the positions of resident inspector and manager of the Auditing Department from August 14, 1978, to her retirement date.

Significant Legal Principles Established:

1. The principle of reinstatement without loss of seniority rights for employees who have been illegally dismissed.
2. The entitlement of employees to backwages for the duration of their illegal dismissal, with the understanding that backwages are for earnings lost due to the dismissal.
3. The finality of orders of execution based on final judgments, emphasizing that such orders are not subject to appeal.