G.R. No. 109809 July 17, 1995
Vallacar Transit, Inc., petitioner, vs. National Labor Relations Commission and Virgilio Baldezamo, respondents.

FACTS

Private respondent Virgilio Baldezamo was employed as a bus driver by petitioner Vallacar Transit, Inc. on March 25, 1984. He figured in vehicular accidents on March 30, 1984, April 22, 1985, and April 8, 1988. The last accident, caused by a tractor bumping the bus, resulted in fatalities and severe damage to the bus. Following this, Baldezamo was left without a driving assignment. He repeatedly inquired about resuming work but was told to wait. On February 28, 1989, he was informed he could not drive while the case for the 1988 accident was pending. After months without recall, he filed a complaint for illegal dismissal.
The Labor Arbiter ruled in favor of Baldezamo but awarded only separation pay and attorney’s fees. On appeal, the National Labor Relations Commission (NLRC) vacated this decision. Instead, it ordered Baldezamo’s reinstatement without loss of seniority rights, payment of one year’s back wages, and attorney’s fees. Vallacar Transit filed this petition for certiorari, arguing the NLRC committed grave abuse of discretion.

ISSUE

Whether the NLRC committed grave abuse of discretion in ordering reinstatement with back wages instead of affirming the Labor Arbiter’s award of separation pay.

RULING

The Supreme Court affirmed the NLRC’s decision, finding no grave abuse of discretion. Under Article 279 of the Labor Code, an employee unjustly dismissed is entitled to reinstatement without loss of seniority rights and to full back wages. The Labor Arbiter erred in awarding only separation pay, as this is a substitute remedy permissible only when reinstatement is no longer viable. Established jurisprudence allows separation pay in lieu of reinstatement in specific instances, such as when the position no longer exists or when strained relations exist due to a loss of trust and confidence in a confidential employee.
The case does not fall under these exceptions. Baldezamo, as a bus driver, did not occupy a position of trust and confidence where personal relations are paramount. The accidents he was involved in, particularly the 1988 incident which was caused by a third-party tractor driver, do not constitute a conclusive basis for loss of trust and confidence justifying strained relations. Moreover, no proper investigative procedure was followed to establish his culpability. Therefore, the NLRC correctly applied the law by ordering reinstatement, as the circumstances did not warrant the exceptional grant of separation pay instead.