In the Philippines, employees who are illegally dismissed generally have the right to be reinstated to their former positions. This case clarifies that the choice between reinstatement and separation pay does not automatically belong to the employer, even if the initial ruling offers both options. The Supreme Court emphasizes that reinstatement remains the primary remedy, and separation pay is only considered if reinstatement is no longer feasible due to strained relations, which must be proven by the employer. This decision reinforces the protection of employees’ rights against illegal dismissal and ensures that reinstatement is prioritized unless compelling reasons justify otherwise.

When ‘Alternative’ Becomes the Main Issue: Who Decides Reinstatement After Unjust Termination?

The case of Johnson & Johnson (Phils.), Inc. v. Johnson Office & Sales Union-FFW arose from a complaint filed by Ma. Jesusa Bonsol and Rizalinda Hirondo against Johnson & Johnson (Phils.), Inc. for illegal dismissal. The National Labor Relations Commission (NLRC) initially ruled that while the dismissal was illegal, the employees’ violations of company procedure meant they wouldn’t receive backwages but were entitled to reinstatement or separation pay. The core legal question revolves around interpreting the NLRC’s resolution: Did it grant the employer the exclusive option to choose between reinstatement and separation pay, or did the employees have a say in the matter?

The petitioners, Johnson & Johnson, argued that the NLRC’s original resolution gave them the exclusive option to choose between reinstating the employees or paying separation pay. They based this argument on the wording of the resolution, which stated the employees were entitled to reinstatement or, in the alternative, separation pay. The company also contended that the relationship between the parties had become so strained that reinstatement was no longer a viable option. They asserted that forcing reinstatement would not be in the best interests of either party.

However, the Supreme Court disagreed with Johnson & Johnson’s interpretation. The Court emphasized the well-established principle that an illegally dismissed employee is entitled to reinstatement as a matter of right. The Court acknowledged that there are exceptions to this rule, such as when reinstatement is not feasible due to strained relations between the employer and employee. But, the burden of proving such circumstances lies with the employer. As such, the Court cited the case of Quijano v. Mercury Drug Corporation, reiterating that separation pay in lieu of reinstatement is allowed only if the employer demonstrates that reinstatement would not be mutually beneficial.

The Court clarified that the NLRC’s resolution should not be interpreted as granting the employer the exclusive right to choose between reinstatement and separation pay. Instead, the resolution affirmed the employees’ right to reinstatement as the primary remedy for illegal dismissal. The phrase “or in the alternative, payment of separation pay” was simply an acknowledgement of the legal principle that separation pay may be awarded in certain circumstances where reinstatement is not feasible. This statement did not give Johnson & Johnson the power to unilaterally decide to pay separation pay instead of reinstating the employees.

Building on this principle, the Supreme Court highlighted that the NLRC has the authority to execute its judgments and resolve any issues that arise during the implementation process. In this case, the NLRC properly exercised its authority when it issued a subsequent resolution explicitly ordering the reinstatement of the employees. The Court also dismissed Johnson & Johnson’s claim of strained relations, deferring to the factual findings of the NLRC and the Court of Appeals. The court emphasized that the strained relations must be of such a nature or degree as to adversely affect the employer-employee relationship; this must be supported by substantial evidence.

The Court also addressed the argument that the NLRC’s subsequent resolution modified the original, final, and executory resolution. It stated that the subsequent resolution did not alter the original ruling because the primary relief granted to the employees was reinstatement. The phrase “or in the alternative, to payment of separation pay” did not grant the employer an option but rather affirmed the state of the law. The Supreme Court emphasized that a court’s judgment must be construed in its entirety, including the ratio decidendi, to understand its true intent and meaning. In this case, the ratio decidendi of the NLRC’s resolution was that the employees were illegally dismissed and therefore entitled to reinstatement.

Furthermore, the Court addressed Johnson & Johnson’s argument that the employees were not entirely blameless because they violated certain company policies. The Court acknowledged that the NLRC had considered these violations in its decision, resulting in the denial of backwages. However, the Court clarified that these violations did not negate the employees’ right to reinstatement. The finding that the employees were not entirely faultless only affected their entitlement to backwages and did not justify denying them reinstatement to their former positions.

In conclusion, the Supreme Court upheld the Court of Appeals’ decision, affirming the NLRC’s order for the reinstatement of Ma. Jesusa Bonsol and Rizalinda Hirondo. The Court reiterated that reinstatement is the primary remedy for illegal dismissal, and separation pay is only appropriate when reinstatement is not feasible due to strained relations, which must be proven by the employer. This decision reinforces the protection of employees’ rights and clarifies the interpretation of NLRC resolutions that offer both reinstatement and separation pay as remedies.

FAQs

What was the key issue in this case?	The key issue was whether the employer had the exclusive option to choose between reinstating illegally dismissed employees or paying them separation pay, based on the wording of the NLRC resolution.
What did the Supreme Court decide?	The Supreme Court ruled that the employer did not have the exclusive option. Reinstatement is the primary remedy for illegal dismissal, and separation pay is only considered if reinstatement is not feasible.
What is the primary remedy for illegal dismissal in the Philippines?	The primary remedy for illegal dismissal is reinstatement to the employee’s former position without loss of seniority rights and privileges.
When is separation pay awarded instead of reinstatement?	Separation pay is awarded instead of reinstatement only when reinstatement is not feasible due to strained relations between the employer and employee, and this must be proven by the employer.
Who has the burden of proving that reinstatement is not feasible?	The employer has the burden of proving that reinstatement is not feasible due to strained relations or other valid reasons.
What does ‘strained relations’ mean in this context?	‘Strained relations’ refers to a situation where the relationship between the employer and employee has been damaged to the point where a harmonious working environment is no longer possible.
Did the employees’ violation of company policies affect their right to reinstatement?	The employees’ violation of company policies only affected their entitlement to backwages but did not negate their right to reinstatement, as the violations were not serious enough to justify dismissal.
What is the role of the NLRC in implementing its resolutions?	The NLRC has the authority to execute its judgments and resolve any issues that arise during the implementation process, including clarifying the manner in which its resolutions should be carried out.

This case underscores the importance of protecting employees’ rights against illegal dismissal and ensuring that reinstatement is prioritized as the primary remedy. Employers must provide substantial evidence to justify the payment of separation pay in lieu of reinstatement. This ruling serves as a reminder of the legal safeguards available to employees in the Philippines.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Johnson & Johnson (Phils.), Inc. v. Johnson Office & Sales Union-FFW, G.R. No. 172799, July 06, 2007