G.R. No. 116637 April 21, 1995
Coca-Cola Salesforce Union, for and in behalf of its members, namely: Jerry Calibot and Romeo Duval, petitioner, vs. National Labor Relations Commission, Coca-Cola Bottlers Phils. Inc., Armand Capati and Jorge Cajator, respondents.

FACTS

Petitioner union filed a complaint for illegal dismissal, unfair labor practice, and damages on behalf of its members, Jerry Calibot and Romeo Duval, who were dismissed by private respondent Coca-Cola Bottlers Phils. Inc. in April 1993 over an alleged short delivery. The case was assigned to Labor Arbiter Saludares. The parties mutually agreed to submit the case for resolution based solely on their respective position papers, pleadings, and documentary evidence, without a formal trial. On February 23, 1994, the Labor Arbiter ruled in favor of the employees, declaring their dismissal illegal, ordering their reinstatement (either physically or via payroll), and awarding backwages and other monetary claims.
Private respondent appealed to the National Labor Relations Commission (NLRC). In its Resolution dated May 16, 1994, the NLRC modified the Labor Arbiter’s decision. It found the conclusion on illegal dismissal not well-substantiated and remanded the case to the arbitration branch for further proceedings to clarify factual matters. Subsequently, in a Resolution dated July 20, 1994, the NLRC denied the petitioner’s motion for reconsideration and explicitly ordered the stoppage of the employees’ payroll reinstatement.

ISSUE

Whether the NLRC committed grave abuse of discretion in: (1) remanding the illegal dismissal case to the labor arbiter for further proceedings; and (2) ordering the stoppage of the payroll reinstatement of the dismissed employees.

RULING

Yes, the NLRC committed grave abuse of discretion. On the first issue, Section 4, Rule V of the NLRC’s New Rules of Procedure empowers the Labor Arbiter, not the Commission, to determine the necessity of a formal hearing after the parties submit their position papers. In this case, both parties expressly agreed to submit the case for decision based on the records and evidenced no desire for a formal trial. The Labor Arbiter, acting within his discretion, rendered a decision based on the submitted evidence. The NLRC’s order for remand, opposed by both parties and unsupported by the rules, constituted an evasion of its duty to review the case on appeal based on the existing records. This was a capricious and whimsical exercise of judgment, amounting to grave abuse of discretion, as correctly observed by the Solicitor General.
On the second issue, Article 223 of the Labor Code mandates that a Labor Arbiter’s order of reinstatement is immediately executory, even pending appeal. The employer must either physically readmit the employee or reinstate them in the payroll. The posting of a bond does not stay this execution. Consequently, the NLRC’s order to stop the payroll reinstatement was a patent legal error. Since the remand order was issued with grave abuse of discretion and must be set aside, the ancillary order to stop the reinstatement likewise fails. The NLRC is ordered to decide the appeal on the merits based on the existing record.