G.R. No. 197353; April 1, 2013.
ALEXANDER B. BAÑARES, Petitioner, vs. TABACO WOMEN’S TRANSPORT SERVICE COOPERATIVE (TAWTRASCO), represented by DIR. RENOL BARCEBAL, ET AL., Respondents.

FACTS

Petitioner Alexander B. Bañares was the general manager of respondent Tabaco Women’s Transport Service Cooperative (TAWTRASCO) until his services were terminated on March 6, 2006. He filed a complaint for illegal dismissal. On August 22, 2006, the Labor Arbiter (LA) rendered a Decision finding illegal dismissal, ordering his reinstatement without loss of seniority rights and payment of backwages and damages amounting to ₱119,600. TAWTRASCO did not appeal, and the decision became final and executory. TAWTRASCO paid the monetary award but did not immediately reinstate petitioner. The parties eventually entered into a Compromise Agreement, approved by the LA on February 5, 2007, wherein petitioner waived a portion of his backwages and agreed to installment payments, while TAWTRASCO undertook to reinstate him effective February 6, 2007.
On February 24, 2007, petitioner received a memorandum order requiring him to report to the company’s Virac, Catanduanes terminal, with enumerated duties. Petitioner protested that this contravened the compromise agreement for reinstatement as general manager. On March 20, 2007, TAWTRASCO served another memorandum assigning him to the Virac terminal for two months, then splitting his time between Virac and the Araneta Center Bus Terminal. Petitioner reported to Virac but subsequently raised grievances regarding the poor condition of the terminal, lack of office facilities and allowances, deviation from his original work, and instructions to other employees not to follow his orders. On April 12, 2007, management discovered petitioner had not reported for work since March 31, 2007. In a letter-reply dated April 12, 2007, petitioner explained his absence, stating the reinstatement was “artificial, fake, fictitious and a sham,” detailing the inhumane conditions and demanding payment of his salary. He stated he would only return when provided with necessary work conditions and authority.
On April 27, 2007, petitioner filed a complaint for nonpayment of salaries and withholding of privileges but later manifested its withdrawal to give way to execution proceedings. On April 14, 2008, the LA issued an Order effectively granting an alias writ of execution for reinstatement salaries.

ISSUE

Whether the Court of Appeals erred in setting aside the NLRC and Labor Arbiter’s rulings which found that petitioner was not reinstated as mandated and was entitled to payment of salaries.

RULING

The Supreme Court granted the petition, reversed the Court of Appeals Decision and Resolution, and reinstated the NLRC Decision dated July 7, 2009. The Court held that reinstatement must be to the former position or substantially equivalent position without loss of seniority rights. The employer’s act of assigning petitioner to a different location with inadequate facilities and support, coupled with evidence that employees were instructed not to follow his orders, constituted a constructive dismissal. The reinstatement was not in good faith but was a “sham,” forcing petitioner into an impossible situation. His refusal to report under those conditions was justified and did not constitute abandonment. Consequently, petitioner was entitled to payment of his full backwages and allowances from the date of the compromise agreement (February 6, 2007) until actual reinstatement. The case was remanded to the Labor Arbiter for recomputation of monetary awards.