a. Reinstatement

REINSTATEMENT

Reinstatement means the restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. It presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee. (Pfizer, Inc., et al. v. Velasco, G.R. No. 177467, 2011)

General Rule: Reinstatement and backwages are awarded

Upon the expiry of such period, the employer shall thereafter

• Reinstate the worker in his former or in a substantially equivalent position or
• The employer may extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker (IRR Labor Code, Sec. 9, Rule XXIII, Book V)

Prescriptive Period

Bring action for reinstatement within 4 years from the time of dismissal. (Civil Code, Art. 1146)

Two options given to employers

Two options given to employers pending appeal of a labor arbiter’s reinstatement order

Under Labor Code, Art. 229 [223], the employer may choose actual or payroll reinstatement while the labor arbiter’s reinstatement order is immediately executory pending appeal. A final reinstatement award must be implemented according to its terms.

• Actual Reinstatement

Restoration of an illegally dismissed employee to the position s/he had occupied prior to the illegal dismissal.

• Payroll Reinstatement

The employer, instead of physically reinstating the employee to his former or substantially equivalent position, chooses to reinstate the employee in the payroll only by paying him wages and other benefits without however allowing or requiring him to actually report for work.

In Case of Reinstatement:

All service credited for retirement, resignation or separation for which corresponding benefits have been awarded under this Act or other laws shall be excluded in the computation of service

Reinstatement; payment of backwages

An order of reinstatement by the labor arbiter is not the same as actual reinstatement of a dismissed or separated employee. Pending appeal, the employer may comply with the immediately executory reinstatement order through actual or payroll reinstatement; the order alone does not constitute compliance. Backwages and other benefits under a final award must be computed in accordance with that award and applicable law.

It is only when the illegally dismissed employee receives the separation pay (in case of strained relations) that it could be claimed with certainty that the EER has formally ceased thereby precluding the possibility of reinstatement. In the meantime, the illegally dismissed employee’s entitlement to backwages, 13th month pay, and other benefits subsists. Until the payment of separation pay is carried out, the employer should not be allowed to remain unpunished for the delay, if not outright refusal, to immediately execute the reinstatement aspect of the labor arbiter’s decision.

Further, the employer cannot refuse to reinstate the illegally dismissed employee by claiming that the latter had already found a job elsewhere. Minimum wage earners are left with no choice after they are illegally dismissed from their employment, but to seek new employment in order to earn a decent living. Surely, we could not fault them for their perseverance in looking for and eventually securing new employment opportunities instead of remaining idle and awaiting the outcome of the case. (Triad Security & Allied Services, Inc, et al. v Ortega, G.R. No. 160871, 2006)

Actual, Not Payroll, Reinstatement

Under the law, “the striking or locked out employees shall return to work and the employer shall readmit them.” The Court has interpreted this to mean, as a general rule, actual, not payroll, readmission to the EEs’ positions. (Azucena Vol. II-A, 9th ed., 2016, p. 655)

With respect to the Secretary's Order allowing payroll reinstatement instead of actual reinstatement for the individual respondents herein, an amendment to the previous Orders issued by her office, the same is usually not allowed. Article 263(g) of the Labor Code aforementioned states that all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout. The phrase "under the same terms and conditions" makes it clear that the norm is actual reinstatement. This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental to the national interest. (University of Immaculate Concepcion, Inc. v. Secretary of Labor, G.R. No. 151379, 2005)

Thus, placing the striking employees to substantially equivalent positions could not be considered reinstatement “under the same terms and conditions prevailing before the strike.” The remedy of payroll reinstatement is nowhere to be found in the orders of the Secretary of Labor and hence it should not have been imposed by the public respondent NLRC. Article 263(g) is one such limitation provided by law. To the extent that Art. 263(g) calls for the admission of all workers under the same terms and conditions prevailing before the strike. It was error for the NLRC to order the alternative remedies of payroll reinstatement or actual reinstatement. However, the order did not amount to grave abuse of discretion. Such error is merely an error of judgment which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. In the light of our rulings on the impropriety of the substantially equivalent academic assignments and the need to defer the changes of teachers until the end of the first semester, the payroll reinstatement will actually minimize the petitioners problems in the payment of full backwages. (University of Sto. Tomas v. NLRC, G.R. No. 89920, 1990)

Forfeiture of Reinstatement

The Court has ruled that a striker who failed to report for work when one had the opportunity to do so waived his right to reinstatement. (East Asiatic v. CIR, G.R. L-29068, 1971)