G.R. No. 194467, July 13, 2020
MELCHOR A. CUADRA, MELENCIO TRINIDAD, AND SERAFIN TRINIDAD, PETITIONERS, VS. SAN MIGUEL CORPORATION, RESPONDENT.

FACTS

Petitioners Melchor Cuadra, Melencio Trinidad, and Serafin Trinidad were among complainants in an illegal dismissal case against Lippercon Services, Inc. and San Miguel Corporation (SMC). In a December 15, 1994 Decision, Labor Arbiter Manuel R. Caday declared Lippercon a labor-only contractor and SMC as the true employer, ordering the reinstatement of the complainants as regular employees effective the date of the decision. The National Labor Relations Commission modified this to separation pay. The Court of Appeals, in a 1999 Resolution, ultimately ordered reinstatement. After this became final, a Writ of Execution was issued. During execution, the parties entered into a compromise agreement approved by Labor Arbiter Antonio R. Macam on June 25, 2003. Petitioners each received P550,000.00 and were reinstated on July 1, 2003. However, SMC reckoned their employment date from July 1, 2003, as reflected on their new IDs, not from their original hiring dates (1985 for Cuadra, 1988 for the Trinidads). Petitioners filed a grievance, arguing their length of service should be reckoned from their original hiring dates. The Voluntary Arbitrator ruled in their favor. SMC appealed to the Court of Appeals, which reversed the Voluntary Arbitrator, declaring that petitioners’ length of service must be reckoned from the time they were declared regular employees on December 15, 1994. Petitioners filed the present Petition for Review.

ISSUE

Whether the length of service of petitioners for the purpose of computing benefits should be reckoned from their original hiring dates (1985/1988), from the date they were declared regular employees (December 15, 1994), or from the date of their reinstatement pursuant to the compromise agreement (July 1, 2003).

RULING

The Supreme Court granted the petition and reversed the Court of Appeals. The length of service of petitioners must be reckoned from their original hiring dates (1985 for Cuadra, 1988 for Melencio and Serafin Trinidad). The Court held that reinstatement, as ordered by the Labor Arbiter and affirmed by the Court of Appeals, restores an employee to the position from which they were removed, along with seniority rights and other privileges. The compromise agreement and quitclaim did not sever the employer-employee relationship; they settled monetary claims but did not constitute a new hiring. The quitclaim’s language showed it was a settlement of “money claims and benefits” connected to the illegal dismissal case, not a payment of separation pay that would terminate the relationship. Since the illegal dismissal was declared void, petitioners are deemed not to have left their posts, and their service is considered continuous. Therefore, their seniority and length of service for computing future benefits are continuous from their original dates of hire.