Philippine Airlines v. NLRC

G.R. No. 113827 (July 5, 1996)

Supreme Court upheld NLRC's ruling on 150 PAL employees: reinstatement enforceable during appeals.

Facts:

Between 1988 and 1991, approximately 150 employees recruited by Stellar Industrial Services, Inc. (SISI) to work for Philippine Airlines, Inc. (PAL) filed multiple cases against PAL. These cases primarily sought regularization, illegal dismissal, reinstatement, back wages, and wage differentials. The complaints were consolidated into two main cases: one concerning regularization, overseen by Labor Arbiter Jose de Vera, and the other regarding illegal dismissal, handled by Labor Arbiter Ramon Valentin Reyes.

On March 31, 1992, Labor Arbiter de Vera ruled that the complainants were regular employees of PAL and ordered the airline to pay over 46 million pesos in benefits and attorney's fees. This decision was under appeal at the National Labor Relations Commission (NLRC) at the time of the current petition.

Subsequently, on December 10, 1992, Labor Arbiter Reyes ruled on the illegal dismissal case, declaring the dismissal of the complainants by PAL as illegal. He ordered PAL to reinstate the complainants to their former positions without loss of seniority rights and benefits, as stipulated in the PAL-PALEA Collective Bargaining Agreement (CBA). Reyes also ordered PAL to pay the complainants approximately 23.86 million pesos in back wages, 13th month pay, vacation leave, rice entitlement, and 2.07 million pesos in attorney's fees. SISI was absolved of any liability due to lack of legal and factual basis.

On April 2, 1993, pending the resolution of the appeal, Labor Arbiter Reyes issued a writ of execution for the reinstatement of the 152 complainants, allowing PAL the option to reinstate them physically or through the payroll.

In response, PAL filed a petition for a writ of injunction with the NLRC on May 6, 1993, seeking to stop the execution of the reinstatement order. The NLRC dismissed PAL's petition for lack of merit on September 30, 1993, citing Article 223 of the Labor Code, which mandates that reinstatement orders are immediately executory, even pending appeal. PAL's motion for reconsideration was denied on December 2, 1993.

PAL subsequently filed a petition with the Supreme Court, questioning the NLRC's dismissal of its petition for injunction and the application of Article 223, arguing that the provision should not apply where the employer-employee relationship is contested.

Legal Issues:

  1. Did the NLRC commit grave abuse of discretion in dismissing PAL's petition for injunction and denying the motion for reconsideration?
  2. Is Article 223 of the Labor Code applicable in cases where the existence of an employer-employee relationship is contested?

Arguments:

  • Petitioner (PAL): PAL contended that Article 223 should not apply because the complainants were not its employees, and thus, there was no reinstatement to speak of. PAL argued that the provision is only applicable where there is clear evidence of an employer-employee relationship.

  • Respondents (Complainants and NLRC): The complainants and the NLRC maintained that the Labor Arbiter's decisions had already established the complainants as regular employees of PAL. They argued that the law's intent is to restore the status quo in the workplace pending resolution of the disputes, and that the NLRC acted within its authority in dismissing the petition for injunction.

Court's Decision and Legal Reasoning:

The Supreme Court dismissed PAL's petition for certiorari, affirming the NLRC's dismissal of the injunction petition. The Court held that the NLRC did not commit grave abuse of discretion. It emphasized that the intent of Article 223 is to ensure that reinstatement orders are immediately executory to maintain the status quo while disputes are resolved. The Court noted that the Labor Arbiter's findings, which declared the complainants as employees of PAL, were supported by substantial evidence and should be respected.

The Court rejected PAL's argument regarding the applicability of Article 223, stating that the existence of an employer-employee relationship had already been established by the Labor Arbiters. The Court also highlighted that the procedure followed by Labor Arbiter Reyes, which did not require a formal trial, was within his discretion as per the NLRC's rules.

Significant Legal Principles Established:

  1. Immediate Executory Nature of Reinstatement Orders: Under Article 223 of the Labor Code, reinstatement orders are immediately executory, even pending appeal, to preserve the status quo in employment relationships.

  2. Respect for Quasi-Judicial Findings: The factual findings of quasi-judicial bodies like the NLRC are given respect and finality by the Supreme Court when supported by substantial evidence.

  3. Discretion of Labor Arbiters: Labor Arbiters have the discretion to determine the necessity of formal hearings based on the submissions of the parties, which is a procedural aspect of labor adjudication.