GR 113099; (January, 1999) (Digest)
G.R. No. 113099 January 20, 1999
ASIA FANCY PLYWOOD CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ROBERTO MANANAP, JOSE RUBIO, AVELINA NATALIO, GERARDO ANOVER, ELIZABETH CELIS AND EDITHA RETEZ, respondents.
FACTS
Private respondents were regular employees of petitioner Asia Fancy Plywood Corporation. On March 7, 1991, they filed a complaint for unfair labor practice, illegal dismissal, and other labor violations. The complaint was later amended to focus solely on illegal dismissal. Petitioner, in its answer, contended that respondents were not dismissed but had voluntarily stopped reporting for work.
The Labor Arbiter found no evidence of dismissal and noted petitioner’s willingness to re-accept the employees. Consequently, the Arbiter ordered respondents to report back and petitioner to reinstate them to their former positions, but denied the award of backwages. Dissatisfied, private respondents appealed to the National Labor Relations Commission (NLRC).
ISSUE
Whether the NLRC committed grave abuse of discretion in modifying the Labor Arbiter’s decision by ordering petitioner to pay backwages to the employees.
RULING
Yes, the NLRC committed grave abuse of discretion. The Supreme Court granted the petition and reinstated the Labor Arbiter’s decision. The legal logic is anchored on the prerequisite for awarding backwages under Article 279 of the Labor Code and established jurisprudence. Backwages are a form of equitable relief intended to compensate employees for earnings lost due to an illegal dismissal. The fundamental requirement for such an award is a finding that the dismissal was unjust or illegal.
In this case, both the Labor Arbiter and the Supreme Court found no substantive evidence that the employees were dismissed. The petitioner consistently maintained that the employees were not terminated and expressed readiness to reinstate them. The claim of dismissal remained an unsubstantiated conclusion by the complainants. Since there was no illegal dismissal, the legal basis for granting backwages is absent. The NLRC’s decision to award backwages, despite the absence of this crucial factual and legal foundation, constituted a capricious and whimsical exercise of judgment, amounting to grave abuse of discretion. Therefore, the NLRC’s modified decision was set aside.