GR 104690; (February, 1994) (Digest)
G.R. No. 104690 February 23, 1994
ZENAIDA GACO, petitioner, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION and ORIENT LEAF TOBACCO CORPORATION, respondents.
FACTS
Petitioner Zenaida Gaco was hired by private respondent Orient Leaf Tobacco Corporation on April 17, 1974, as a Picker. After a year, she was promoted to Production Recorder, a position she held for fourteen years until the end of the 1989 working season. In April 1990, when she reported for work at the start of the new season, she found her position occupied by another employee and was demoted back to Picker. Believing this to be an unjustified constructive dismissal, she refused to report for work and filed a complaint for separation pay. The Labor Arbiter ruled in her favor, declaring the demotion unjustified and a constructive dismissal, and awarded backwages and separation pay. On appeal, the NLRC modified the decision, concurring that the demotion was unjustified but holding it did not constitute constructive dismissal, deleting the award of backwages and recomputing the separation pay to one-half month pay per year of service. Petitioner filed the present petition, arguing the NLRC gravely abused its discretion.
ISSUE
Whether the NLRC gravely abused its discretion in: 1) deleting the award of backwages; 2) computing separation pay at one-half month pay per year of service; and 3) not awarding moral damages and attorney’s fees.
RULING
The Supreme Court GRANTED the petition. The NLRC’s decision was SET ASIDE and the Labor Arbiter’s decision was REINSTATED with modification.
1. On Backwages and Constructive Dismissal: The Court sustained the Labor Arbiter’s finding that the unjustified demotion constituted constructive dismissal, defined as a quitting because continued employment is rendered impossible, unreasonable, or unlikely, such as an offer involving demotion in rank and diminution in pay. As an illegally dismissed employee, petitioner is entitled to full backwages from the time compensation was withheld (April 1990) up to the finality of the decision, less any earnings elsewhere.
2. On Separation Pay: The Court held that separation pay should be computed at one month’s pay for every year of service, a rule consistently applied in labor cases. The period for computation is from April 1974 up to the finality of the decision.
3. On Moral Damages and Attorney’s Fees: The Court noted that this issue was raised only before the Supreme Court and thus could not be a basis for imputing grave abuse of discretion to the NLRC.
The Court also found that petitioner, having been repeatedly re-hired since 1974, was a regular employee by operation of law one year after her employment, entitled to security of tenure.