G.R. No.

164856

August 29, 2007

are hereb* ordered, in lieu thereof, to pa* unto the complainants their separation pa* computed at one month for FeGver* *ear of service. &6 6RD9R9D.C 4eanwhile, the &9# replaced the /nterim Rehabilitation Receiver with a Permanent Rehabilitation Receiver. 6n appeal, the ',R# reversed the ,abor rbiter?s decision and dismissed the case for lac< of merit.+Reconsideration havin2 been denied, an 9ntr* of )ud2ment ( was issued on )ul* 13, 2000. 6n 6ctober 5, 2000, the ,abor rbiter issued a ;rit of 9=ecution 10 commandin2 the sheriff to proceed1 ==== 1. To the 6ffice of respondent P , 7uildin2 /, ,e2aspi &t., ,e2aspi @illa2e, 4a<ati #it* or to an* of its 6ffices in the Philippines and cause reinstatement of complainants to their former position and to cause the collection of the amount of FPG5"(,30(.!0 from respondent P , representin2 the bac<wa2es of said complainants on the reinstatement aspectD 2. /n case *ou cannot collect from respondent P , for an* reason, *ou shall lev* on the office e:uipment and other movables and 2arnish its deposits with an* ban< in the Philippines, sub0ect to the limitation that e:uivalent amount of such levied movables andAor the amount 2arnished in *our own 0ud2ment, shall be e:uivalent to FPG5"(,30(.!0. /f still insufficient, lev* a2ainst immovable properties of P , not otherwise e=empt from e=ecution. = = = =11 lthou2h P , filed an Hr2ent 4otion to Iuash ;rit of 9=ecution, the ,abor rbiter issued a 'otice of %arnishment12 addressed to the PresidentA4ana2er of the llied 7an< Bead 6ffice in 4a<ati #it* for the amount of P5"(,30(.!0. P , moved to lift the 'otice of %arnishment while petitioners moved for the release of the 2arnished amount. P , opposed petitioners? motion. /t also filed an Hr2ent Petition for /n0unction which the ',R# resolved as follows1 ;B9R936R9, premises considered, the Petition is partiall* %R 'T9D. ccordin2l*, the ;rit of 9=ecution dated 6ctober 5, 2000 and related F'Gotice of %arnishment Fdated 6ctober 25, 2000G are D9#, R9D valid. Bowever, the instant action is &H&P9'D9D and R939RR9D to the Receiver of Petitioner P , for appropriate action. &6 6RD9R9D.13 P , appealed to the #ourt of ppeals on the 2rounds that1 -1. b* declarin2 the writ of e=ecution and the notice of 2arnishment valid, the ',R# 2ave petitioners undue advanta2e and preference over P ,?s other creditors and hampered the tas< of the Permanent Rehabilitation ReceiverD and -2. there was no lon2er an* le2al or factual basis to reinstate petitioners as a result of the reversal b* the ',R# of the ,abor rbiter?s decision. The appellate court ruled that the ,abor rbiter issued the writ of e=ecution and the notice of 2arnishment without 0urisdiction. Bence, the ',R# erred in upholdin2 its validit*. &ince P , was under receivership, it could not have possibl* reinstated petitioners due to retrenchment and cash$flow constraints. The appellate court declared that a sta* of e=ecution ma* be warranted b* the fact that P , was under rehabilitation receivership. The dispositive portion of the decision reads1 ;B9R936R9, premises considered and in view of the fore2oin2, the instant petition is hereb* GI'!N "U! COUR&!. The assailed 'ovember 2!, 2001 Resolution, as well as the )anuar* 2+, 2002 Resolution of public respondent 'ational ,abor Relations #ommission is hereb* ANNULL!" and &!T A&I"! for havin2 been issued with 2rave abuse of discretion amountin2 to lac< or e=cess of 0urisdiction. #onse:uentl*, the ;rit

JUANITO A. GARCIA and AL !RTO J. "U#AGO, Petitioners, vs. $%ILI$$IN! AIRLIN!&, INC., Respondent. This petition for review assails both the Decision1 dated December 5, 2003 and the Resolution2 dated pril 1!, 200" of the #ourt of ppeals in # $%.R. &P 'o. !(5"0, which had annulled the Resolutions 3 dated 'ovember 2!, 2001 and )anuar* 2+, 2002 of the 'ational ,abor Relations #ommission -',R#. in ',R# /n0unction #ase 'o. 000103+$01, and also denied the motion for reconsideration, respectivel*. The antecedent facts of the case are as follows1 Petitioners lberto ). Duma2o and )uanito . %arcia were emplo*ed b* respondent Philippine irlines, /nc. -P ,. as ircraft 3urnishers 4aster 5#5 and ircraft /nspector, respectivel*. The* were assi2ned in the P , Technical #enter. 6n )ul* 2", 1((5, a combined team of the P , &ecurit* and 'ational 7ureau of /nvesti2ation -'7/. 'arcotics 6peratives raided the Toolroom &ection 8 Plant 9:uipment 4aintenance Division -P94D. of the P , Technical #enter. The* found petitioners, with four others, near the said section at that time. ;hen the P , &ecurit* searched the section, the* found shabu paraphernalia inside the compan*$issued loc<er of Ronaldo 7roas who was also within the vicinit*. The si= emplo*ees were later brou2ht to the '7/ for boo<in2 and proper investi2ation. 6n )ul* 2!, 1((5, a 'otice of dministrative #har2e " was served on petitioners. The* were alle2edl* 5cau2ht in the act of sniffin2 shabu inside the Toolroom &ection,5 then placed under preventive suspension and re:uired to submit their written e=planation within ten da*s from receipt of the notice. Petitioners vehementl* denied the alle2ations and challen2ed P , to show proof that the* were indeed 5cau2ht in the act of sniffin2 shabu.5 Duma2o claimed that he was in the Toolroom &ection to re:uest for an allen wrench to fi= the needles of the sewin2 and >i2>a22er machines. %arcia averred he was in the Toolroom &ection to in:uire where he could ta<e the Trac<ster?s tire for vulcani>in2. 6n 6ctober (, 1((5, petitioners were dismissed for violation of #hapter //, &ection !, rticle "! -@iolation of ,awA%overnment Re2ulations. and #hapter //, &ection !, rticle "+ -Prohibited Dru2s. of the P , #ode of Discipline. 5 7oth simultaneousl* filed a case for ille2al dismissal and dama2es. /n the meantime, the &ecurities and 9=chan2e #ommission -&9#. placed P , under an /nterim Rehabilitation Receiver due to severe financial losses. 6n )anuar* 11, 1(((, the ,abor rbiter rendered a decision! in petitioners? favor1 ;B9R936R9, conformabl* with the fore2oin2, 0ud2ment is hereb* rendered findin2 the respondents 2uilt* of ille2al suspension and ille2al dismissal and orderin2 them to reinstate complainants to their former position without loss of seniorit* ri2hts and other privile2es. Respondents are hereb* further ordered to pa* 0ointl* and severall* unto the complainants the followin21 lberto ). Duma2o $ P"0(,500.00 bac<wa2es as of 1A10A(( 3",125.00 for 13th month pa* )uanito . %arcia $ P1,2(0,C"".00 bac<wa2es as of 1A10A(( 10C,5!2.00 for 13th month pa* The amounts of P100,000.00 and P50,000.00 to each complainant as and b* wa* of moral and e=emplar* dama2esD and The sum e:uivalent to ten percent -10E. of the total award as and for attorne*s fees. Respondents are directed to immediatel* compl* with the reinstatement aspect of this Decision. Bowever, in the event that reinstatement is no lon2er feasible, respondentFsG

of 9=ecution and the 'otice of %arnishment issued b* the ,abor rbiter are hereb* li<ewise ANNULL!" and &!T A&I"!. &6 6RD9R9D.1" Bence, the instant petition raisin2 a sin2le issue as follows1 ;B9TB9R 6R '6T TB9 #6HRT 63 PP9 ,& 9RR9D /' '6T B6,D/'% TB T TB9 P9T/T/6'9R& R9 9'T/T,9D T6 TB9/R ##RH9D ; %9& DHR/'% TB9 P9'D9'#J 63 P ,?& PP9 ,.15 &impl* put, however, there are reall* two issues for our consideration1 -1. re petitioners entitled to their wa2es durin2 the pendenc* of P ,?s appeal to the ',R#K and -2. /n the li2ht of new developments concernin2 P ,?s rehabilitation, are petitioners entitled to e=ecution of the ,abor rbiter?s order of reinstatement even if P , is under receivershipK ;e shall first resolve the issue of whether the e=ecution of the ,abor rbiter?s order is le2all* possible even if P , is under receivership. ;e note that durin2 the pendenc* of this case, P , was placed b* the &9# first, under an /nterim Rehabilitation Receiver and finall*, under a Permanent Rehabilitation Receiver. The pertinent law on this matter, &ection 5-d. of Presidential Decree -P.D.. 'o. (02$ , as amended, provides that1 &9#T/6' 5. /n addition to the re2ulator* and ad0udicative functions of the &ecurities and 9=chan2e #ommission over corporations, partnerships and other forms of associations re2istered with it as e=pressl* 2ranted under e=istin2 laws and decrees, it shall have ori2inal and e=clusive 0urisdiction to hear and decide cases involvin21 ==== d. Petitions of corporations, partnerships or associations to be declared in the state of suspension of pa*ments in cases where the corporation, partnership or association possesses propert* to cover all of its debts but foresees the impossibilit* of meetin2 them when the* respectivel* fall due or in cases where the corporation, partnership or association has no sufficient assets to cover its liabilities, but is under the Fmana2ement of a rehabilitation receiver orG 4ana2ement #ommittee created pursuant to this Decree. The same P.D., in &ection !-c. provides that1 &9#T/6' !. /n order to effectivel* e=ercise such 0urisdiction, the #ommission shall possess the followin2 powers1 ==== c. To appoint one or more receivers of the propert*, real or personal, which is the sub0ect of the action pendin2 before the #ommission in accordance with the pertinent provisions of the Rules of #ourt in such other cases whenever necessar* in order to preserve the ri2hts of the parties$liti2ants andAor protect the interest of the investin2 public and creditors1LProvided, finally, That upon appointment of a mana2ement committee, rehabilitation receiver, board or bod*, pursuant to this Decree, all actions for claims a2ainst corporations, partnerships or associations under mana2ement or receivership pendin2 before an* court, tribunal, board or bod* shall be suspended accordin2l*. ==== ;orth stressin2, upon appointment b* the &9# of a rehabilitation receiver, all actions for claims a2ainst the corporation pendin2 before an* court, tribunal or board shall ipso 0ure be suspended. The purpose of the automatic sta* of all pendin2 actions for claims is to enable the rehabilitation receiver to effectivel* e=ercise itsAhis powers free from an* 0udicial or e=tra$0udicial interference that mi2ht undul* hinder or prevent the rescue of the corporation.1! 4ore importantl*, the suspension of all actions for claims a2ainst the corporation embraces all phases of the suit, be it before the trial court or an* tribunal or before this #ourt.1C 'o other action ma* be ta<en, includin2 the rendition of 0ud2ment durin2 the

state of suspension. /t must be stressed that what are automaticall* sta*ed or suspended are the proceedin2s of a suit and not 0ust the pa*ment of claims durin2 the e=ecution sta2e after the case had become final and e=ecutor*.1+ 3urthermore, the actions that are suspended cover all claims a2ainst the corporation whether for dama2es founded on a breach of contract of carria2e, labor cases, collection suits or an* other claims of a pecuniar* nature.1( 'o e=ception in favor of labor claims is mentioned in the law.201avvphi1 This #ourt?s adherence to the above$stated rule has been resolute and steadfast as evidenced b* its oft$repeated application in a plethora of cases involvin2 P ,, the most recent of which is Philippine irlines, /nc. v. Mamora.21 &ince petitioners? claim a2ainst P , is a mone* claim for their wa2es durin2 the pendenc* of P ,?s appeal to the ',R#, the same should have been suspended pendin2 the rehabilitation proceedin2s. The ,abor rbiter, the ',R#, as well as the #ourt of ppeals should have abstained from resolvin2 petitioners? case for ille2al dismissal and should instead have directed them to lod2e their claim before P ,?s receiver.22 Bowever, to still re:uire petitioners at this time to re$file their labor claim a2ainst P , under the peculiar circumstances of the case 8 that their dismissal was eventuall* held valid with onl* the matter of reinstatement pendin2 appeal bein2 the issue 8 this #ourt deems it le2all* e=pedient to suspend the proceedin2s in this case. ;B9R936R9, the instant petition is P RT/ ,,J %R 'T9D in that the instant proceedin2s herein are &H&P9'D9D until further notice from this Court . ccordin2l*, respondent Philippine irlines, /nc. is hereb* "IR!CT!" to :uarterl* update the #ourt as to the status of its on2oin2 rehabilitation. 'o costs. &6 6RD9R9D.

,llllllllllllllll G.R. No. 164856 Janua() 20, 2009

JUANITO A. GARCIA and AL !RTO J. "U#AGO, Petitioners, vs. $%ILI$$IN! AIRLIN!&, INC., Respondent. D9#/&/6' CAR$IO #ORAL!&, J.: Petitioners )uanito . %arcia and lberto ). Duma2o assail the December 5, 2003 Decision and pril 1!, 200" Resolution of the #ourt of ppeals 1 in # $%.R. &P 'o. !(5"0 which 2ranted the petition for certiorari of respondent, Philippine irlines, /nc. -P ,., and denied petitioners? 4otion for Reconsideration, respectivel*. The dispositive portion of the assailed Decision reads1 ;B9R936R9, premises considered and in view of the fore2oin2, the instant petition is hereb* %/@9' DH9 #6HR&9. The assailed 'ovember 2!, 2001 Resolution as well as the )anuar* 2+, 2002 Resolution of public respondent 'ational ,abor Relations #ommission F',R#G is hereb* ''H,,9D and &9T &/D9 for havin2 been issued with 2rave abuse of discretion amountin2 to lac< or e=cess of 0urisdiction. #onse:uentl*, the ;rit of 9=ecution and the 'otice of %arnishment issued b* the ,abor rbiter are hereb* li<ewise ''H,,9D and &9T &/D9. &6 6RD9R9D.2 The case stemmed from the administrative char2e filed b* P , a2ainst its emplo*ees$ herein petitioners3 after the* were alle2edl* cau2ht in the act of sniffin2 shabu when a team of compan* securit* personnel and law enforcers raided the P , Technical #enter?s Toolroom &ection on )ul* 2", 1((5. fter due notice, P , dismissed petitioners on 6ctober (, 1((5 for trans2ressin2 the P , #ode of Discipline,"promptin2 them to file a complaint for ille2al dismissal and

dama2es which was, b* Decision of )anuar* 11, 1(((, 5resolved b* the ,abor rbiter in their favor, thus orderin2 P , to, inter alia, immediatel* compl* with the reinstatement aspect of the decision. Prior to the promul2ation of the ,abor rbiter?s decision, the &ecurities and 9=chan2e #ommission -&9#. placed P , -hereafter referred to as respondent., which was sufferin2 from severe financial losses, under an /nterim Rehabilitation Receiver, who was subse:uentl* replaced b* a Permanent Rehabilitation Receiver on )une C, 1(((. 3rom the ,abor rbiter?s decision, respondent appealed to the ',R# which, b* Resolution of )anuar* 31, 2000, reversed said decision and dismissed petitioners? complaint for lac< of merit.! Petitioners? 4otion for Reconsideration was denied b* Resolution of pril 2+, 2000 and 9ntr* of )ud2ment was issued on )ul* 13, 2000.C &ubse:uentl* or on 6ctober 5, 2000, the ,abor rbiter issued a ;rit of 9=ecution -;rit. respectin2 thereinstatement aspect of his )anuar* 11, 1((( Decision, and on 6ctober 25, 2000, he issued a 'otice of %arnishment -'otice.. Respondent thereupon moved to :uash the ;rit and to lift the 'otice while petitioners moved to release the 2arnished amount. /n a related move, respondent filed an Hr2ent Petition for /n0unction with the ',R# which, b* Resolutions of 'ovember 2!, 2001 and )anuar* 2+, 2002, affirmed the validit* of the ;rit and the 'otice issued b* the ,abor rbiter but suspended and referred the action to the Rehabilitation Receiver for appropriate action. Respondent elevated the matter to the appellate court which issued the herein challen2ed Decision and Resolution nullif*in2 the ',R# Resolutions on two 2rounds, essentiall* espousin2 that1 *1+ a subse:uent findin2 of a valid dismissal removes the basis for implementin2 the reinstatement aspect of a labor arbiter?s decision -the first 2round., and *2+ the impossibilit* to compl* with the reinstatement order due to corporate rehabilitation provides a reasonable 0ustification for the failure to e=ercise the options under rticle 223 of the ,abor #ode -the second 2round.. 7* Decision of u2ust 2(, 200C, this #ourt P RT/ ,,J %R 'T9D the present petition and effectivel* reinstated the ',R# Resolutions insofar as it suspended the proceedin2s, viz1 &ince petitioners? claim a2ainst P , is a mone* claim for their wa2es durin2 the pendenc* of P ,?s appeal to the ',R#, the same should have been suspended pendin2 the rehabilitation proceedin2s. The ,abor rbiter, the ',R#, as well as the #ourt of ppeals should have abstained from resolvin2 petitioners? case for ille2al dismissal and should instead have directed them to lod2e their claim before P ,?s receiver. Bowever, to still re:uire petitioners at this time to re$file their labor claim a2ainst P , under peculiar circumstances of the case8 that their dismissal was eventuall* held valid with onl* the matter of reinstatement pendin2 appeal bein2 the issue8 this #ourt deems it le2all* e=pedient to suspend the proceedin2s in this case. ;B9R936R9, the instant petition is P RT/ ,,J %R 'T9D in that the instant proceedin2s herein are &H&P9'D9D until further notice from this #ourt. ccordin2l*, respondent Philippine irlines, /nc. is hereb* D/R9#T9D to :uarterl* update the #ourt as to the status of its on2oin2 rehabilitation. 'o costs. &6 6RD9R9D.+ -/talics in the ori2inalD underscorin2 supplied. 7* 4anifestation and #ompliance of 6ctober 30, 200C, respondent informed the #ourt that the &9#, b* 6rder of &eptember 2+, 200C, 2ranted its re:uest to e=it from rehabilitation proceedin2s.( /n view of the termination of the rehabilitation proceedin2s, the #ourt now proceeds to resolve the remainin2 issuefor consideration, which is whether petitioners ma* collect their wa2es durin2 the period between the ,abor rbiter?s order of reinstatement pendin2 appeal and the ',R# decision overturnin2 that of the ,abor rbiter, now that respondent has e=ited from rehabilitation proceedin2s. Amplification of the First Ground

The appellate court counted on as its first 2round the view that a subse:uent findin2 of a valid dismissal removes the basis for implementin2 the reinstatement aspect of a labor arbiter?s decision. 6n this score, the #ourt?s attention is drawn to seemin2l* diver2ent decisions concernin2 reinstatement pendin2 appeal or, particularl*, the option of pa*roll reinstatement. 6n the one hand is the 0urisprudential trend as e=pounded in a line of cases includin2 Air Philippines Corp. v. Zamora, 10 while on the other is the recent case ofGenuino v. National Labor elations Commission .11 t the core of the seemin2 diver2ence is the application of para2raph 3 of rticle 223 of the ,abor #ode which reads1 /n an* event, the decision of the ,abor rbiter reinstatin2 a dismissed or separated emplo*ee, insofar as the reinstatement aspect is concerned, shall immediatel* be e=ecutor*, pendin2 appeal. The emplo*ee shall either be admitted bac< to wor< under the same terms and conditions prevailin2 prior to his dismissal or separation or, at the option of the emplo*er, merel* reinstated in the pa*roll. The postin2 of a bond b* the emplo*er shall not sta* the e=ecution for reinstatement provided herein. -9mphasis and underscorin2 supplied. The view as maintained in a number of cases is that1 = = = F!G,-n ./ t0- o(d-( o/ (-.nstat-1-nt o/ t0- La2o( A(2.t-( .s (-,-(s-d on a33-a4, .t .s o24.gato() on t0- 3a(t o/ t0- -134o)-( to (-.nstat- and 3a) t05ag-s o/ t0- d.s1.ss-d -134o)-- du(.ng t0- 3-(.od o/ a33-a4 unt.4 (-,-(sa4 2) t0- 0.g0-( 6ou(t. 6n the other hand, if the emplo*ee has been reinstated durin2 the appeal period and such reinstatement order is reversed with finalit*, the emplo*ee is not re:uired to reimburse whatever salar* he received for he is entitled to such, more so if he actuall* rendered services durin2 the period.12 -9mphasis in the ori2inalD italics and underscorin2 supplied. /n other words, a dismissed emplo*ee whose case was favorabl* decided b* the ,abor rbiter is entitled to receive wa2es pendin2 appeal upon reinstatement, which is immediatel* e=ecutor*. Hnless there is a restrainin2 order, it is ministerial upon the ,abor rbiter to implement the order of reinstatement and it is mandator* on the emplo*er to compl* therewith.13 The opposite view is articulated in Genuino which states1 /f the decision of the labor arbiter is later reversed on appeal upon the findin2 that the 2round for dismissal is valid, then t0- -134o)-( 0as t0- (.g0t to (-7u.(- t0d.s1.ss-d -134o)-- on 3a)(o44 (-.nstat-1-nt to (-/und t0- sa4a(.-s s80(-6-.,-d while the case was pendin2 appeal, or it can be deducted from the accrued benefits that the dismissed emplo*ee was entitled to receive from hisAher emplo*er under e=istin2 laws, collective bar2ainin2 a2reement provisions, and compan* practices. Bowever, if the emplo*ee was reinstated to wor< durin2 the pendenc* of the appeal, then the emplo*ee is entitled to the compensation received for actual services rendered without need of refund. #onsiderin2 that %enuino was not reinstated to wor< or placed on pa*roll reinstatement, and her dismissal is based on a 0ust cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the &eptember 3, 1((" ',R# Decision.1" -9mphasis, italics and underscorin2 supplied. /t has thus been advanced that there is no point in releasin2 the wa2es to petitioners since their dismissal was found to be valid, and to do so would constitute un0ust enrichment. Prior to Genuino, there had been no <nown similar case containin2 a dispositive portion where the emplo*ee was re:uired to refund the salaries received on pa*roll reinstatement. /n fact, in a catena of cases, 15 the #ourt did not order the refund of salaries 2arnished or received b* pa*roll$reinstated emplo*ees despite a subse:uent reversal of the reinstatement order. The dearth of authorit* supportin2 Genuino is not difficult to fathom for it would otherwise render inutile the rationale of reinstatement pendin2 appeal. = = = FTGhe law itself has laid down a compassionate polic* which, once more, vivifies and enhances the provisions of the 1(+C #onstitution on labor and the wor<in2 man. ====

These duties and responsibilities of the &tate are imposed not so much to e=press s*mpath* for the wor<in2man as to forcefull* and meanin2full* underscore labor as a primar* social and economic force, which the #onstitution also e=pressl* affirms with e:ual intensit*. ,abor is an indispensable partner for the nationNs pro2ress and stabilit*. ==== = = = /n short, with respect to decisions reinstatin2 emplo*ees, the law itself has determined a sufficientl* overwhelmin2 reason for its e=ecution pendin2 appeal. ==== = = = Then, b* and pursuant to the same power -police power., the &tate ma* authori>e an immediate implementation, pendin2 appeal, of a decision reinstatin2 a dismissed or separated emplo*ee since that savin2 act is desi2ned to stop, althou2h temporaril* since the appeal ma* be decided in favor of the appellant, a continuin2 threat or dan2er to the survival or even the life of the dismissed or separated emplo*ee and his famil*.1! The social 0ustice principles of labor law outwei2h or render inapplicable the civil law doctrine of un0ust enrichment espoused b* )ustice Presbitero @elasco, )r. in his &eparate 6pinion. The constitutional and statutor* precepts portra* the otherwise 5un0ust5 situation as a condition affordin2 full protection to labor. 9ven outside the theoretical trappin2s of the discussion and into the mundane realities of human e=perience, the 5refund doctrine5 easil* demonstrates how a favorable decision b* the ,abor rbiter could harm, more than help, a dismissed emplo*ee. The emplo*ee, to ma<e both ends meet, would necessaril* have to use up the salaries received durin2 the pendenc* of the appeal, onl* to end up havin2 to refund the sum in case of a final unfavorable decision. /t is mira2e of a stop$2ap leadin2 the emplo*ee to a ris<* cliff of insolvenc*. dvisabl*, the sum is better left unspent. /t becomes more lo2ical and practical for the emplo*ee to refuse pa*roll reinstatement and simpl* find wor< elsewhere in the interim, if an* is available. 'otabl*, the option of pa*roll reinstatement belon2s to the emplo*er, even if the emplo*ee is able and rarin2 to return to wor<. Prior to Genuino, it is unthin<able for one to refuse pa*roll reinstatement. /n the face of the 2rim possibilities, the rise of concerned emplo*ees declinin2 pa*roll reinstatement is on the hori>on. 3urther, the Genuino rulin2 not onl* disre2ards the social 0ustice principles behind the rule, but also institutes a scheme undul* favorable to mana2ement. Hnder such scheme, the salaries dispensed pendente lite merel* serve as a bond posted in installment b* the emplo*er. 3or in the event of a reversal of the ,abor rbiter?s decision orderin2 reinstatement, the emplo*er 2ets bac< the same amount without havin2 to spend ordinaril* for bond premiums. This circumvents, if not directl* contradicts, the proscription that the 5postin2 of a bond Feven a cash bondG b* the emplo*er shall not sta* the e=ecution for reinstatement.5 1C /n pla*in2 down the stra* posture in Genuino re:uirin2 the dismissed emplo*ee on pa*roll reinstatement to refund the salaries in case a final decision upholds the validit* of the dismissal, the #ourt reali2ns the proper course of the prevailin2 doctrine on reinstatement pendin2 appeal vis$O$vis the effect of a reversal on appeal. Respondent insists that with the reversal of the ,abor rbiter?s Decision, there is no more basis to enforce the reinstatement aspect of the said decision. /n his &eparate 6pinion, )ustice Presbitero @elasco, )r. supports this ar2ument and finds the prevailin2 doctrine in Air Philippines and allied cases inapplicable because, unli<e the present case, the writ of e=ecution therein was secured prior to the reversal of the ,abor rbiter?s decision. The proposition is tenuous. 3irst, the matter is treated as a mere race a2ainst time. The discussion stopped there without considerin2 the cause of the dela*. &econd, it re:uires the issuance of a writ of e=ecution despite the immediatel* e=ecutor* nature of the reinstatement aspect of the decision. /n Pioneer Te=turin2 #orp. v. ',R#,1+which was cited in Panuncillo v. CAP Philippines, !nc.,1( the #ourt observed1 = = = The provision of rticle 223 is clear that an award Fb* the ,abor rbiterG for reinstatement shall be immediately e"ecutory even pendin# appeal and the postin2 of a bond b* the emplo*er shall not sta* the e=ecution for reinstatement. The le2islative intent is :uite obvious, i.e., to ma<e an award of reinstatement immediatel*

enforceable, even pendin2 appeal. To re:uire the application for and issuance of a writ of e=ecution as prere:uisites for the e=ecution of a reinstatement award would certainl* betra* and run counter to the ver* ob0ect and intent of rticle 223, i.e., the immediate e=ecution of a reinstatement order. The reason is simple. n application for a writ of e=ecution and its issuance could be dela*ed for numerous reasons. mere continuance or postponement of a scheduled hearin2, for instance, or an inaction on the part of the ,abor rbiter or the ',R# could easil* dela* the issuance of the writ thereb* settin2 at nau2ht the strict mandate and noble purpose envisioned b* rticle 223. /n other words, if the re:uirements of rticle 22" Fincludin2 the issuance of a writ of e=ecutionG were to 2overn, as we so declared in $arana%, then the e=ecutor* nature of a reinstatement order or award contemplated b* rticle 223 will be undul* circumscribed and rendered ineffectual. /n enactin2 the law, the le2islature is presumed to have ordained a valid and sensible law, one which operates no further than ma* be necessar* to achieve its specific purpose. &tatutes, as a rule, are to be construed in the li2ht of the purpose to be achieved and the evil sou2ht to be remedied. = = = /n introducin2 a new rule on the reinstatement aspect of a labor decision under Republic ct 'o. !C15, #on2ress should not be considered to be indul2in2 in mere semantic e=ercise. = = = 20 -/talics in the ori2inalD emphasis and underscorin2 supplied. The #ourt reaffirms the prevailin2 principle that even if the order of reinstatement of the ,abor rbiter is reversed on appeal, it is obli2ator* on the part of the emplo*er to reinstate and pa* the wa2es of the dismissed emplo*ee durin2 the period of appeal until reversal b* the hi2her court. 21 /t settles the view that the ,abor rbiterNs order of reinstatement is immediatel* e=ecutor* and the emplo*er has to either re$admit them to wor< under the same terms and conditions prevailin2 prior to their dismissal, or to reinstate them in the pa*roll, and that failin2 to e=ercise the options in the alternative, emplo*er must pa* the emplo*ee?s salaries.22 Amplification of the Second Ground The remainin2 issue, nonetheless, is resolved in the ne2ative on the stren2th of the second 2round relied upon b* the appellate court in the assailed issuances. The #ourt sustains the appellate court?s findin2 that the peculiar predicament of a corporate rehabilitation rendered it impossible for respondent to e=ercise its option under the circumstances. The spirit of the rule on reinstatement pendin2 appeal animates the proceedin2s once the ,abor rbiter issues the decision containin2 an order of reinstatement. The immediac* of its e=ecution needs no further elaboration.Reinstatement pendin2 appeal necessitates its immediate e=ecution durin2 the pendenc* of the appeal, if the law is to serve its noble purpose. t the same time, an* attempt on the part of the emplo*er to evade or dela* its e=ecution, as observed in Panuncillo and as what actuall* transpired in &imberly,23 Composite,2" Air Philippines,25 and o'uero,2! should not be countenanced. A/t-( t0- 4a2o( a(2.t-(9s d-6.s.on .s (-,-(s-d 2) a 0.g0-( t(.2una4, t0- -134o)-1a) 2- 2a((-d /(o1 6o44-6t.ng t0- a66(u-d 5ag-s, ./ .t .s s0o5n t0at t0- d-4a) .n -n/o(6.ng t0- (-.nstat-1-nt 3-nd.ng a33-a4 5as 5.t0out /au4t on t0- 3a(t o/ t0-134o)-(. The test is two$fold1 -1. there must be actual dela* or the fact that the order of reinstatement pendin2 appeal was not e=ecuted prior to its reversalD and -2. the dela* must not be due to the emplo*er?s un0ustified act or omission. /f the dela* is due to the emplo*er?s un0ustified refusal, the emplo*er ma* still be re:uired to pa* the salaries notwithstandin2 the reversal of the ,abor rbiter?s decision. /n Genuino, there was no showin2 that the emplo*er refused to reinstate the emplo*ee, who was the Treasur* &ales Division Bead, durin2 the short span of four months or from the promul2ation on 4a* 2, 1((" of the ,abor rbiter?s Decision up to the promul2ation on &eptember 3, 1((" of the ',R# Decision. 'otabl*, the former ',R# Rules of Procedure did not la* down a mechanism to promptl* effectuate the self$e=ecutor* order of reinstatement, ma<in2 it difficult to establish that the emplo*er actuall* refused to compl*. /n a situation li<e that in !nternational Container (erminal )ervices, !nc. v. NL C2C where it was alle2ed that the emplo*er was willin2 to compl* with the order and that the emplo*ee opted not to pursue the e=ecution of the order, the #ourt upheld the self$e=ecutor* nature of the reinstatement order and ruled that the salar* automaticall* accrued from notice of the ,abor rbiterNs order of reinstatement until its ultimate reversal b* the ',R#. /t was later discovered that the emplo*ee indeed moved for the issuance of a writ but was not acted upon b* the ,abor rbiter. /n that scenario where the dela* was caused b* the ,abor rbiter, it was ruled that the inaction of the ,abor rbiter who failed to act upon the emplo*ee?s motion for the

issuance of a writ of e=ecution ma* no lon2er adversel* affect the cause of the dismissed emplo*ee in view of the self$e=ecutor* nature of the order of reinstatement.2+ The new ',R# Rules of Procedure, which too< effect on )anuar* C, 200!, now re:uire the emplo*er to submit areport of compliance within 10 calendar da*s from receipt of the ,abor rbiter?s decision, 2( disobedience to which clearl* denotes a refusal to reinstate. The emplo*ee need not file a motion for the issuance of the writ of e=ecution since the ,abor rbiter shall thereafter motu proprio issue the writ. :.t0 t0- n-5 (u4-s .n 34a6-, t0-(- .s 0a(d4) an) d.//.6u4t) .n d-t-(1.n.ng t0- -134o)-(9s .nt(ans.g-n6- .n .11-d.at-4) 6o134).ng 5.t0 t0- o(d-(. /n the case at bar, petitioners e=erted efforts 30 to e=ecute the ,abor rbiter?s order of reinstatement until the* were able to secure a writ of e=ecution, albeit issued on 6ctober 5, 2000 after the reversal b* the ',R# of the ,abor rbiter?s decision. Technicall*, there was still actual dela* which brin2s to the :uestion of whether the dela* was due to respondent?s un0ustified act or omission. /t is apparent that there was inaction on the part of respondent to reinstate them, but whether such omission was 0ustified depends on the onset of the e=i2enc* of corporate rehabilitation. /t is settled that upon appointment b* the &9# of a rehabilitation receiver, all actions for claims before an* court, tribunal or board a2ainst the corporation shall ipso *ure be suspended.31 s stated earl* on, durin2 the pendenc* of petitioners? complaint before the ,abor rbiter, the &9# placed respondent under an /nterim Rehabilitation Receiver. fter the ,abor rbiter rendered his decision, the &9# replaced the /nterim Rehabilitation Receiver with a Permanent Rehabilitation Receiver. #ase law reco2ni>es that unless there is a restrainin2 order, the implementation of the order of reinstatement is ministerial and mandator*. 32 This in0unction or suspension of claims b* le2islative fiat 33 parta<es of the nature of a restrainin2 order that constitutes a le2al 0ustification for respondent?s non$compliance with the reinstatement order. Respondent?s failure to e=ercise the alternative options of actual reinstatement and pa*roll reinstatement was thus 0ustified. &uch bein2 the case, respondent?s obli2ation to pa* the salaries pendin2 appeal, as the normal effect of the non$e=ercise of the options, did not attach. ;hile reinstatement pendin2 appeal aims to avert the continuin2 threat or dan2er to the survival or even the life of the dismissed emplo*ee and his famil*, it does not contemplate the period when the emplo*er$corporation itself is similarl* in a *udicially monitored state of bein2 resuscitated in order to survive. The parallelism between a 0udicial order of corporation rehabilitation as a 0ustification for the non$e=ercise of its options, on the one hand, and a claim of actual and imminent substantial losses as 2round for retrenchment, on the other hand, stops at the red line on the financial statements. 7e*ond the analo2ous condition of financial 2loom, as discussed b* )ustice ,eonardo Iuisumbin2 in his &eparate 6pinion, are more salient distinctions. Hnli<e the 2round of substantial losses contemplated in a retrenchment case, the state of corporate rehabilitation was 0udiciall* pre$determined b* a competent court and not formulated for the first time in this case b* respondent. 4ore importantl*, there are le2al effects arisin2 from a 0udicial order placin2 a corporation under rehabilitation. Respondent was, durin2 the period material to the case, effectivel* deprived of the alternative choices under rticle 223 of the ,abor #ode, not onl* b* virtue of the statutor* in0unction but also in view of the interim relin:uishment of mana2ement control to 2ive wa* to the full e=ercise of the powers of the rehabilitation receiver. Bad there been no need to rehabilitate, respondent ma* have opted for actual ph*sical reinstatement pendin2 appeal to optimi>e the utili>ation of resources. Then a2ain, thou2h the mana2ement ma* thin< this wise, the rehabilitation receiver ma* decide otherwise, not to mention the subsistence of the in0unction on claims. /n sum, the obli2ation to pa* the emplo*ee?s salaries upon the emplo*er?s failure to e=ercise the alternative options under rticle 223 of the ,abor #ode is not a hard and fast rule, considerin2 the inherent constraints of corporate rehabilitation. ;B9R936R9, the petition is P RT/ ,,J D9'/9D. /nsofar as the #ourt of ppeals Decision of December 5, 2003 and Resolution of pril 1!, 200" annullin2 the ',R# Resolutions affirmin2 the validit* of the ;rit of 9=ecution and the 'otice of %arnishment are concerned, the #ourt finds no reversible error.

&6 6RD9R9D.