In Pfizer, Inc. v. Velasco, the Supreme Court addressed the obligations of an employer when an employee is ordered reinstated pending appeal. The Court ruled that employers must either reinstate the employee to their former position under the same terms and conditions or, at the employer’s option, reinstate the employee on payroll. An employer cannot impose new conditions that make reinstatement difficult, and the employee is entitled to wages during the appeal period, even if the dismissal is later found to be valid. This ensures employees are protected during legal battles over termination.

Navigating Reinstatement: When a Job Offer Isn’t Quite a Return

Geraldine Velasco, a Professional Health Care Representative at Pfizer, Inc., faced accusations of company policy violations while on leave for a high-risk pregnancy. Pfizer issued show-cause notices and placed her under preventive suspension. Velasco filed a complaint for illegal suspension, leading to her termination. The Labor Arbiter initially ruled in Velasco’s favor, ordering reinstatement with backwages, but the NLRC removed the damages. Pfizer appealed to the Court of Appeals, which upheld the dismissal’s validity but ordered Pfizer to pay Velasco’s wages from the Labor Arbiter’s decision until the Court of Appeals’ decision. The central legal question was whether Pfizer should pay Velasco wages during the appeal period, given the eventual validation of her dismissal.

The Supreme Court upheld the Court of Appeals’ resolution, emphasizing the immediately executory nature of reinstatement orders. The Court underscored the importance of Article 223 of the Labor Code, which mandates immediate execution of reinstatement orders, even pending appeal. The intent is to provide immediate relief to dismissed employees. The Court referenced the landmark case of Pioneer Texturizing Corporation v. National Labor Relations Commission, stating that:

The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal.

Pfizer’s argument hinged on the claim that it offered Velasco reinstatement, which she refused, thus negating its obligation to pay wages. However, the Court found Pfizer’s offer inadequate, as it required Velasco to report to the main office in Makati City, a significant change from her previous station in Baguio City. This implied relocation, without adequate justification, did not constitute a genuine offer of reinstatement under the same terms and conditions. The Supreme Court emphasized that reinstatement means restoring the employee to their previous condition, as illustrated in Asian Terminals, Inc. v. Villanueva:

Reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee.

Building on this principle, the Court clarified that employers cannot use the reinstatement process to impose unreasonable burdens on employees. The right to transfer personnel, a management prerogative, cannot be exercised with grave abuse of discretion. There was no legitimate reason presented for Velasco’s relocation, undermining the validity of the offered reinstatement. Further, the Court addressed the issue of whether Velasco’s choice of opting for separation pay negates Pfizer’s obligation to give her backwages during the time that her case was on appeal with the Court of Appeals.

The Court also distinguished this case from Genuino v. National Labor Relations Commission, which had previously suggested that employees on payroll reinstatement might have to refund salaries if their dismissal was later deemed valid. The Supreme Court clarified this position in the landmark ruling of Garcia v. Philippine Airlines, Inc., stating that:

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.

This ruling ensures that employees are not penalized for availing themselves of reinstatement orders, providing financial security during legal proceedings. The Supreme Court thus firmly rejected the notion of requiring refunds, protecting employees from financial instability during prolonged litigation. Employers must comply in good faith with reinstatement orders, providing either actual work or payroll reinstatement under equivalent terms and conditions. The intent of labor laws is to protect employees and provide them with monetary relief during the appeal process.

In summary, Pfizer, Inc. v. Velasco reinforces the self-executory nature of reinstatement orders and clarifies the employer’s responsibilities during appeals. It protects employees from undue hardship and ensures compliance with labor standards. By mandating payment of wages during the appeal period, the Supreme Court provides a crucial safeguard for employees facing potentially lengthy legal battles, reinforcing the principles of social justice and equitable labor practices.

FAQs

What was the key issue in this case?	The key issue was whether Pfizer was obligated to pay Geraldine Velasco’s wages from the date of the Labor Arbiter’s decision ordering her reinstatement until the Court of Appeals declared her dismissal valid. This centered on the executory nature of reinstatement orders.
What does “reinstatement pending appeal” mean?	Reinstatement pending appeal means that a dismissed employee is either readmitted to work under the same conditions or, at the employer’s discretion, reinstated on payroll while the case is being appealed. This ensures the employee receives income during the appeal process.
Can an employer change the terms of employment during reinstatement pending appeal?	No, an employer cannot unilaterally change the terms and conditions of employment during reinstatement pending appeal. The employee must be reinstated to their former position or a substantially equivalent one.
What happens if the appellate court later finds the dismissal was valid?	Even if the appellate court later finds the dismissal was valid, the employer is still obligated to pay the employee’s wages during the period of appeal until the reversal. The employee is not required to refund these wages.
What is the employer’s responsibility when a reinstatement order is issued?	The employer must immediately comply with the reinstatement order, either by actually reinstating the employee or placing them on payroll. Delay or evasion of this order is not permitted.
Can an employee choose separation pay instead of reinstatement?	Yes, an employee can opt for separation pay instead of reinstatement. However, this choice does not negate the employer’s prior obligation to comply with the reinstatement order in good faith.
What if the employer offers reinstatement but requires relocation to a different city?	If the employer requires relocation without a valid reason, it may not be considered a genuine offer of reinstatement. The court will examine whether the relocation is justified and doesn’t impose undue hardship on the employee.
What was the significance of the Garcia v. Philippine Airlines case in relation to this ruling?	Garcia v. Philippine Airlines clarified that employees are not required to refund wages received during reinstatement pending appeal, even if the dismissal is later deemed valid. This overrules any prior conflicting jurisprudence.

The Pfizer v. Velasco case provides essential guidance on employer obligations and employee rights during reinstatement pending appeal. The Supreme Court’s decision ensures that employees are protected from potential employer abuse and receive the wages they are entitled to during the appeal process. This ruling emphasizes the importance of complying with reinstatement orders in good faith and under the same terms and conditions as before the dismissal.

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: Pfizer, Inc. v. Velasco, G.R. No. 177467, March 09, 2011