Zarate v. Olegario

G.R. No. 90655 (October 7, 1996)

SC upheld separation pay for Zarate, citing changed circumstances justify decision modifications.

Facts:

Petitioner Daniel V. Zarate, Jr. was employed by the Benguet Electric Cooperative, Inc. (BENECO) as an accountant under a probationary appointment from July 1, 1983, to December 31, 1983. However, his salary was that of a Department Head, which was against BENECO's Policy No. 3-13 that prohibited extending probationary appointments to Department Heads. Upon discovering this discrepancy, Zarate confronted BENECO's General Manager, who subsequently annotated Zarate's appointment paper to indicate he was designated to a position vacated by a previous employee.

On November 28, 1983, Zarate was informed of his termination effective December 31, 1983, without any stated grounds. This prompted him to file a case for illegal dismissal and damages against BENECO and its General Manager on January 13, 1984, which was docketed as NLRC Case No. RAB-I-00115-84.

While the case was pending, BENECO's Board of Directors issued a resolution recalling Zarate to work and appointing him temporarily as "Internal Auditor and Supervisor of the Meter Reading, Billing and Collection Division." Zarate reported back to work. On November 20, 1985, the Labor Arbiter ruled in favor of Zarate, declaring his dismissal illegal and ordering his reinstatement as an accountant with back wages.

BENECO appealed the decision to the National Labor Relations Commission (NLRC). While the appeal was pending, the Board of Directors issued another resolution on September 19, 1986, terminating Zarate's temporary appointment, citing his defiance of rules and an arrogant attitude.

On May 29, 1987, the NLRC affirmed the Labor Arbiter's decision but limited the back wages to three years. BENECO's subsequent petition for certiorari to the Supreme Court was dismissed for lack of merit on June 15, 1988, making the NLRC's decision final and executory.

In a motion filed on May 4, 1989, BENECO claimed that due to guidelines from the National Electrification Authority (NEA), it had revised its plantilla, resulting in the abolition of Zarate's position. BENECO sought to pay Zarate separation pay instead of reinstatement. The Executive Labor Arbiter ruled that reinstatement was impossible due to the abolition of Zarate's position and ordered separation pay instead. Zarate's motion for reconsideration was denied, leading to the present petition.

Legal Issues:

  1. Whether the Executive Labor Arbiter acted with grave abuse of discretion in denying reinstatement and granting separation pay instead.
  2. Whether the decisions or orders of labor arbiters can be elevated by certiorari to the Supreme Court.

Arguments:

Petitioner’s Arguments:

  • Zarate contended that the Executive Labor Arbiter failed to consider BENECO's Board Resolution No. 61-85, which recalled him to work, and that the Arbiter disregarded the final and executory judgment ordering his reinstatement.
  • He argued that his constitutional right to security of tenure would be violated if he was not reinstated to his former or an equivalent position.
  • Zarate asserted that the position of accountant was not abolished and that there were equivalent positions available.

Respondent’s Arguments:

  • BENECO argued that the abolition of Zarate's position due to compliance with NEA guidelines rendered reinstatement impossible.
  • The Executive Labor Arbiter maintained that there were no equivalent positions available for Zarate and that he was not qualified for any of the existing positions in the new plantilla.

Court’s Decision and Legal Reasoning:

The Supreme Court dismissed Zarate's petition, affirming the Executive Labor Arbiter's orders. The Court ruled that the petition was improperly filed directly to the Supreme Court instead of the NLRC, as the Labor Code provides for appeals to the NLRC within ten days of receiving the decision. The Court emphasized that the extraordinary remedy of certiorari is only available when there is no other plain, speedy, and adequate remedy.

The Court found no grave abuse of discretion by the Executive Labor Arbiter. It reiterated that findings of fact by labor tribunals, which have expertise in labor matters, are generally respected unless shown to be arbitrary or capricious. The Arbiter's conclusion that Zarate's position was abolished and that he was not qualified for any equivalent position was supported by substantial evidence.

Regarding the issue of separation pay, the Court acknowledged that while a final and executory decision typically mandates reinstatement, exceptions exist when subsequent circumstances render reinstatement impossible or unjust. The Court upheld the Arbiter's decision to grant separation pay, citing the Omnibus Rules Implementing the Labor Code, which allows for separation pay when the employee's position no longer exists for reasons not attributable to the employer.

Significant Legal Principles Established:

  • The principle that decisions of labor arbiters are final and executory unless appealed to the NLRC within the prescribed period.
  • The recognition that reinstatement may not be viable if the employee's position has been abolished or if there are no equivalent positions available, allowing for separation pay as an alternative remedy.
  • The Court's reiteration of the standard of review for labor cases, emphasizing the respect for the findings of labor tribunals unless there is clear evidence of grave abuse of discretion.