The Supreme Court held that an illegally dismissed employee is generally entitled to reinstatement, but this right is not absolute. The exception arises when the relationship between the employer and employee has become so strained that reinstatement is no longer feasible. However, the Court clarified that ‘strained relations’ must be proven with concrete evidence and cannot be based merely on impressions or the filing of a complaint by the employee. This ruling emphasizes the importance of due process and the employee’s right to assert their rights without fear of reprisal.

When Workplace Disputes Escalate: Can ‘Strained Relations’ Justify Denying Reinstatement?

In the case of Reynaldo G. Cabigting v. San Miguel Foods, Inc., the central issue before the Supreme Court was whether the doctrine of ‘strained relations’ could bar the reinstatement of an employee who had been illegally dismissed. Cabigting, an inventory controller at San Miguel Foods, Inc., was terminated due to alleged redundancy. He filed a complaint, arguing that his termination was illegal, as he was not a sales office coordinator, the position purportedly made redundant. The Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) both found that Cabigting’s dismissal was indeed illegal. However, the Court of Appeals (CA) reversed the NLRC’s order of reinstatement, citing ‘strained relations’ between Cabigting and San Miguel Foods. This led to Cabigting’s appeal to the Supreme Court.

The Supreme Court emphasized that only questions of law may be entertained in a petition for review on certiorari, with certain exceptions. After reviewing the records, the Court found no reason to deviate from the factual findings of the LA, NLRC, and CA, which all agreed that Cabigting was illegally dismissed. Thus, the Supreme Court proceeded to address the lone issue of ‘strained relations’ to determine if the CA was correct in not reinstating Cabigting.

Article 279 of the Labor Code explicitly provides for reinstatement in cases of unjust dismissal.

Article 279. Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

The Court acknowledged that reinstatement may not always be feasible, particularly when the relationship between the employer and employee has been irreparably damaged. However, the Supreme Court referred to limitations on this “strained relations” principle. As defined in Globe-Mackay Cable and Radio Corporation v. National Labor Relations Commission, to warrant the application of the “strained relations” exception, the employee must occupy a position of trust and confidence, and reinstatement would likely generate antipathy, affecting their efficiency.

x x x If, in the wisdom of the Court, there may be a ground or grounds for non-application of the above-cited provision, this should be by way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations between the employer and the employee.

In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned.

Besides, no strained relations should arise from a valid and legal act of asserting one’s right; otherwise, an employee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his employer had already become strained.

The Supreme Court emphasized that strained relations should not arise from an employee’s valid assertion of their rights. Otherwise, employers could easily circumvent the law by claiming that the employment relationship is strained whenever an employee files a complaint.

In Cabigting’s case, the LA and CA concluded that strained relations existed without providing concrete evidence or analysis. The Supreme Court found that these conclusions were based on mere impressions, failing to demonstrate how Cabigting’s reinstatement would generate antipathy and adversely affect his efficiency. Additionally, the Supreme Court found that there was no finding that Cabigting’s position entailed a constant communion with the respondent.

San Miguel Foods argued that Cabigting’s pleadings contained imputations of malice and bad faith, thereby straining the relationship. The Court rejected this argument, stating that the words used by Cabigting, in themselves, were insufficient to prove strained relations, especially given the evidence of illegal dismissal. Therefore, the Court held that filing a complaint cannot be a valid basis for claiming strained relations, since no one should be penalized for claiming what they believe is their due.

Ultimately, the Supreme Court granted Cabigting’s petition and ordered his reinstatement to his previous position as an inventory controller without loss of seniority rights. This ruling reaffirms an illegally dismissed employee’s right to reinstatement unless there is compelling evidence of genuine strained relations that would make such reinstatement impractical.

FAQs

What was the key issue in this case?	The key issue was whether the doctrine of ‘strained relations’ could be used to deny reinstatement to an employee who was illegally dismissed. The court needed to determine if the relationship between the employee and employer was so damaged that reinstatement was impractical.
What does ‘strained relations’ mean in this context?	‘Strained relations’ refers to a situation where the animosity between the employer and employee is so severe that it would be detrimental to the workplace to force them to continue working together. The employer has to prove that reinstating the employee would negatively affect efficiency and productivity.
What must an employer prove to successfully argue ‘strained relations’?	The employer must prove that the employee occupies a position of trust and confidence and that the reinstatement would likely create an atmosphere of antipathy that would adversely affect efficiency and productivity. The employer has to show the atmosphere of antipathy with factual circumstances, not impressions alone.
Can an employee’s act of filing a complaint be grounds for ‘strained relations’?	No, the Supreme Court clarified that strained relations should not arise from an employee’s act of asserting their legal rights. If the filing of a complaint automatically justified strained relations, employers could easily avoid reinstatement.
What is the general rule regarding reinstatement of illegally dismissed employees?	The general rule is that an employee who is unjustly dismissed is entitled to reinstatement to their former position without loss of seniority rights. Reinstatement is considered a matter of right under the Labor Code.
What happens if the employee’s former position no longer exists?	In such cases, the employer is typically directed to create an equivalent position and immediately reinstate the employee without loss of seniority rights. This ensures that the employee is made whole despite the changes in the company structure.
What are the implications for employers following this ruling?	Employers must be prepared to provide substantial evidence of strained relations if they wish to avoid reinstating an illegally dismissed employee. Vague claims or those based on the mere filing of a complaint will not suffice.
What is the significance of this Supreme Court decision?	This decision reinforces the protection of employees’ rights and emphasizes that the ‘strained relations’ doctrine is a narrow exception to the general rule of reinstatement. It serves as a reminder that employers must act fairly and in good faith.

This case underscores the importance of upholding an employee’s right to security of tenure and ensuring that the ‘strained relations’ doctrine is not misused to circumvent labor laws. It also highlights that courts will critically evaluate claims of strained relations to protect employees from unfair labor practices.

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: Reynaldo G. Cabigting v. San Miguel Foods, Inc., G.R. No. 167706, November 5, 2009