G.R. No. 70361 . January 30, 1986.
ANTONINO PEDROSO and PELAGIA PEDROSO, petitioners, vs. HON. RICARDO CASTRO, HON. FEDERICO BORROMEO, HON. CECILIO SENO, MANHATTAN MANUFACTURING AND MARKETING CO. INC., and ANTONIO UY KIM, respondents.

FACTS

Petitioners Antonino and Pelagia Pedroso, husband and wife, were employees of Manhattan Manufacturing and Marketing Co., Inc. and officers of its union. On September 1, 1982, they, along with co-employee Nelio Asiao, were arrested and detained under a Presidential Commitment Order for conspiracy to commit rebellion. To maintain operations, Manhattan hired replacements. Pelagia was released on December 31, 1982, and immediately reported for work but was refused admission, being told her position was occupied by a regular replacement. Antonino was released on September 1, 1983. They subsequently filed a complaint for illegal dismissal and unfair labor practice.
The Labor Arbiter declared the dismissals of Antonino and Asiao legal but awarded separation pay, and dismissed Pelagia’s complaint on grounds of res judicata, citing a prior dismissed case filed by another employee, Consolacion Ilagan, in which Pelagia’s name was included without her consent or signature. The National Labor Relations Commission affirmed this decision.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in: (1) declaring Antonino Pedroso’s dismissal legal; and (2) dismissing Pelagia Pedroso’s complaint based on res judicata.

RULING

Yes, the NLRC committed grave abuse of discretion. The Supreme Court reversed the NLRC resolution. Regarding Antonino, the Court distinguished between dismissal without cause and dismissal for a false or non-existent cause. The arrest and detention constituted the alleged cause for termination. However, their subsequent release demonstrated the charge was unproven, rendering the cause for dismissal false and non-existent. Consequently, the dismissal was illegal. Reinstatement to their former positions was warranted, but as Manhattan had hired permanent replacements, reinstatement to substantially equivalent positions without loss of seniority rights was ordered pursuant to implementing rules.
For Pelagia, the application of res judicata was erroneous. The prior Ilagan case did not bar her complaint because she never consented to or signed that complaint, and she had not executed any release or quitclaim. Therefore, there was no identity of parties or final judgment on the merits binding upon her. Her dismissal was likewise illegal for a false cause.
The Court awarded backwages from the dates they were released and refused work—for Antonino from September 1, 1983, and for Pelagia from December 31, 1982—until actual reinstatement, but not exceeding three years, based on their latest salary. The petition was granted, and Manhattan was ordered to reinstate the petitioners to substantially equivalent positions with corresponding backwages.