ANANIAS PANDAY, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND LUZON MAHOGANY TIMBER INDUSTRIES, INC., RESPONDENTS.

This is a petition seeking the review of the order rendered by
Deputy Minister Vicente Leogardo, Jr. of the Office of the Ministry of Labor
and Employment dated May 29, 1984. The
order authorized the separation from the service of the complainant subject to
the payment by the private respondent of separation pay equivalent to one-half
month salary for every year of service. It likewise ordered the payment of the complainant’s 13th month pay for
1977 but dismissed his claim for living allowance for lack of merit.

There is no dispute over the facts of the case. The findings of the Ministry of Labor and
Employment are as follows:

“The records show that complainant was hired by the respondent
as Branch Accountant since August 23, 1973 with a salary of P536.00,
living allowance of P54.00, canteen allowance of P150.00,
transportation allowance of P100.00, emergency allowance of P110.00
and house rental of P30.00 or a total of P980.00.

Sometime in December, 1977 complainant was called by Martin Gaw,
the owner-manager of respondent who instructed him to cut off the living
allowance of the employees starting January 1, 1978. Complainant requested that a memorandum to this effect be made so
that he would not be blamed by the workers. Respondent’s manager got angry and shouted ‘what for is the
memorandum? I am telling you to do so.’
At this point the General Manager suddenly butted in saying in a raised voice.
‘Ano ba talaga Naning (complainant) ang ibig mong sabihin? Sa tuwing magsasalita ka, panay ka ‘policy’
ng companya at panay ka records’.

From the time of that incident
complainant was deprived of free light. He was no longer given any accounting work. His per diem was abruptly cut off. All that was left for him to do was the simple clerical job of
registering or paying SSS premiums. Still complainant continued to bear it out. In 1979, however he was totally divested of all his duties and he
was compelled to approach Manager Martin Gaw to clear up matters. The latter referred him to Mr. Gerry Lumban
who was supposed to give him some work to do. It turned out, however, that no such instructions were given to said Mr.
Lumban. There was a time when
respondent unduly delayed complainant’s salary and he sought the help of the
Public Assistance Office of Ilagan, Isabela, which resulted to an agreement
wherein respondent promised to continue giving complainant his wages (Annex
‘A’).

“On April 12,1979 complainant filed a request for vacation
leave with pay for 15 days from April 14-30, 1979. On that same day he brought his son to Manila for medical
treatment and stayed there up to the end of the month. Upon his return to Isabela, he asked for his
salaries only to learn that his application for leave was disapproved. (Annex ‘B’). Hence, he filed this case for illegal dismissal, non-payment of
13th month pay for 1977, emergency allowance under P. D. 525 since 1975 up to
1977 and unpaid wages for April 16-30, 1979. (Rollo, pp. 62-64)

The petitioner’s claim
for backwages, return of seniority rights, and other benefits and privileges is
premised on his allegation that the was illegally terminated from
employment. The Office of the Minister
found and ruled that petitioner Panday was constructively dismissed from the
service by the private respondent.

Respondent Leogardo ruled for the petitioner, giving the
following reasons:

“The systematic manner by which complainant was gradually
deprived of his duties since 1977 when he tried to object to the respondent’s
decision to cut off the workers’ living allowance starting January 1978 clearly
amounted to undue harassment of complainant calculated to make him feel that
his presence in the company was no longer wanted.

When respondent did not pay complainant’s salary for April 14-30,
1979 on the pretext that his leave application for the said period was
disapproved, a case of constructive dismissal was committed. The fact that complainant reported back to
his work upon the expiration of his leave is strong evidence that he did not
abandon his job as contended by respondent. In disapproving complainant’s request for leave with pay respondent did
not cite any reason at all. If really
respondent was considerate enough it should have at least informed him before
he left for Manila that his request could not be granted. Respondent did not do so.” (Rollo, p.
44)

The private respondent was ordered to comment on the petition on
August 13, 1984. It had until September
3, 1984 to respond to the petitioner’s averments and allegations. On January 9, 1985, we issued a resolution
noting the failure of the private respondent to comply with the order to
comment within the period which expired on September 3, 1984.

Since the private respondent failed to refute the arguments on
illegal dismissal and the findings of the public respondent are not only
founded on substantial evidence but are far from arbitrary, we affirm the
factual findings.

The only complaint of the petitioner which remains is his claim
that Deputy Minister Vicente Leogardo, Jr. should have ordered his
reinstatement with backwages.

Since it has already been settled that there was indeed an
illegal dismissal, we shall now discuss whether or not the petitioner’s prayer
for reinstatement should have been granted.

From the facts of the case, we regret that we cannot order
reinstatement. We agree with the Deputy
Minister that “complainant as branch accountant occupied a position
involving trust and confidence and in the light of the estranged (sic) relation
between the complainant and the respondent that may not permit the full restoration
of an employment relationship based on trust and confidence, we have to allow
termination of the employer-employee relationship but upon the payment of
separation pay equivalent to one-half (1/2) month for every year of service
rendered.” (p. 5, Order)

The case of Lepanto Consolidated Mining Co.
v. Court of Appeals, 1 SCRA 1251[1961], provides us
with a definition of a ‘position of trust and confidence’. It is one where a person is ‘entrusted with
confidence on delicate matters, or with the custody, handling, or care and
protection of employer’s property x x x.’

A few examples were given by the Court the case Globe-Mackay
Cable and Radio Corporation v. National
Labor Relations Commission and Imelda Salazar,
G. R. No. 82511, March 3,1992, to illustrate the principle:

“x x x where the employee is a Vice-President for Marketing and as
such, enjoys the full trust and confidence of top management (Asiaworld
Publishing House, Inc. v. Ople, 152 SCRA 219 [1987]); or is the
Officer-in-Charge of the extension office of the bank where he works (Citytrust
Finance Corp. v. NLRC, 157 SCRA 87 [1988]); or is an organizer of a union who
was in a position to sabotage the union’s efforts to organize the workers in
commercial and industrial establishments (Bautista v. Inciong, 158 SCRA 665
[1988]); or is a warehouseman of a non-profit organization whose primary
purpose is to facilitate and maximize voluntary gifts by foreign individuals
and organizations to the Philippines (Esmalin v. NLRC, 177 SCRA 537 [1989]); or
is a manager of its Energy Equipment Sales (Maglutac v. NLRC, 189 SCRA 767
[1990]).”

In fact, the classification of a Credit     and Collection Supervisor by management as
managerial/supervisory was sustained by this Court in the case of Tabacalera
Insurance Co. v. National Labor Relations
Commission, 152 SCRA 667 [1987]. The reasons for a similar ruling apply to the position of branch
accountant which the petitioner was then holding.

If the respondent had been a laborer, clerk or other
rank-and-file employee, there would be no problem in ordering her reinstatement
with facility. An officer in such a key
position as Vice President for Marketing (or as Chief Accountant as in the
present case) can work effectively only if she enjoys the full trust and
confidence of top management. (See
Asiaworld Publishing House v. Ople, 152 SCRA 219 [1987], page 227)

The case of Metro Drug Corp. v. National
Labor Relations Commission, 143 SCRA 132 [1986] aptly
describes the difference in treatment between the positions of trust on one
hand and mere clerical positions on the other. It states:

“Managerial personnel and other employees occupying positions
of trust and confidence are entitled to security of tenure, fair standards of
employment, and the protection of labor laws. However, the rules on termination of employment, penalties for
infractions, and resort to concerted action are not necessarily the same as
those for ordinary employees.

“A special and unique employment relationship exists between a
corporation and its cashiers. More than
most key positions, that of cashier calls for the utmost trust and
confidence. x x x”

“When an employee accepts a promotion to a managerial position
or to an office requiring full trust and confidence she gives up some of the
rigid guaranties available to ordinary workers. Infractions which if committed by others would be overlooked or
condoned or penalties mitigated may be visited with more severe disciplinary
action. A company’s resort to acts of
self-defense would be more easily justified. It would be most unfair to
require an employer to continue
employing as its cashier a person
whom it reasonably believes is no longer capable of giving full and
wholehearted trustworthiness in the stewardship of company funds.”

Reinstatement in the
present case is no longer possible not only because of the strained
relationship between the employee and the employer but also because of the
length of time that has passed from the date the incident occurred to its resolution.

Jurisprudence is replete with cases illustrating the principle.

Thus, the case of Sealand Service, Inc v.
National Labor Relations Commission 190 SCRA 347
[1990], held:

“To order reinstatement at this juncture
would no longer serve any prudent purpose. The non-enforcement of this particular
relief is dictated and justified
by the consideration that supervening facts and circumstances have transpired
which make execution on that score unjust or render such execution
inequitable. As we have observed in
previous cases, the relationship between petitioners and private respondent has
been severely strained by reason of their respective imputations of bad faith
which is very evident from the vehement and consistent stand of petitioners in
refusing to reinstate private respondent. For the same reason stated in said cases, that is, to prevent further
delay in the execution of the decision to the prejudice of private respondent
and to spare him from the agony of having to work anew with the petitioners
under an atmosphere of antagonism, and so that the latter do not have to endure
the continued services of private respondent in whom they have lost confidence,
private respondent should be awarded separation pay as an alternative to
reinstatement.” (Emphasis supplied)

Instead of reinstating the employee, this Court has in several
cases awarded separation pay although the employee was found to be illegally
dismissed (Divine Word High School
v. NLRC, 143 SCRA 346 [1986]). The case
of Globe Mackay Cable and Radio Corporation v. NLRC, supra, states:

“The following reasons have been advanced by the Court for
denying reinstatement under the facts of the case and the law applicable
thereto: “x x x that reinstatement
can no longer be effected in view of the long passage of
time (22 years of litigation) or because of the realities of the situation
(Balaquezon EWTU v. Zamora, 97 SCRA 5 [1980]); or that it would be inimical to
the employer’s interest (San Miguel Corporation v. Deputy Minister of Labor and
Employment, 145 SCRA 204 [1989]); or that reinstatement may no longer be
feasible (Hydro Resources Contractors Corporation v. Pagalibuan, 172 SCRA 404
[1989]); or that it will not serve the best interests of the parties involved
(Century Textile Mills, Inc. v. NLRC, 161 SCRA 528 [1988]); or that the company
would be prejudiced by the workers’ continued employment (Gubac v. NLRC, 187
SCRA 412 [1990]); or that it will not serve any prudent purpose as when
supervening facts have transpired which make execution on that score unjust or
inequitable (Sealand Service, Inc. v. NLRC, 190 SCRA 347 [1990]; or, to an
increasing extent, due to the resultant atmosphere of ‘antipathy and
antagonism’ or ‘strained relations’ or ‘irretrievable estrangement’ between the
employer and the employee (Commercial Motors Corporation v. Commissioners, 192
SCRA 191 [1990]; and other cited cases).

Considering the length of time that has transpired between the
occurrence of the employee’s cause of action and its resolution and the
circumstances, we are constrained to grant backwages and separation pay
in lieu of reinstatement.

In the case of Mercury Drug Co., Inc.
v. Court of Industrial Relations 56 SCRA 694
[1974] we adopted the policy of fixing the amount of backwages to a just and
reasonable level without qualification and deduction to do away with the
attendant delay in awarding backwages because of the extended hearing to prove
the earnings elsewhere of each and every employee. Under this policy we have consistently awarded backwages to the
maximum of only three (3) years. (Feati
University Faculty Club (Paflu) v. Feati University, 58 SCRA 395 [1974];
Lepanto Consolidated Mining Company v. Encarnacion, 136 SCRA 256 [1985]; Akay
Printing Press v. Ministry of Labor and Employment, 140 SCRA 381 [1985]. However, considering the peculiar circumstances
of the present case, we cannot apply the three-year backwages rule.

Neither shall we apply Republic Act 6715 which provides that
backwages shall be awarded to cover the period from dismissal to the employer’s
date of actual reinstatement because said law has no retroactive effect as held
in the case of Sealand Service, Inc. v. NLRC,
supra.

“It may be mentioned in passing that the amendatory provision
in RA 6715, which entitled an employee who is unjustly dismissed from work to
his full backwages inclusive of allowance, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement has no application in the case
at bar, said amendment having taken effect on March 21, 1989, after the
decision sought to be enforced in the case had become final and executory. We have ruled in Lantion, et al. v. NLRC, G.
R. No. 82028, January 29, 1990, that said amendment has no retroactive
application.”

Instead, we adopt the principle in the case of New Manila Candy Workers Union (Naconwa-Paflu) v. Court of Industrial
Relations, 86 SCRA 37 [1978], where five years backwages were
awarded on account of the employer’s unfair labor practices and the long number
of years during which the workers have been deprived of their work and their
wages.

The case
further holds that:

“Where there have been serious unfair labor practices
committed by the employer in laying off or shutting out the workers, obstinacy
or deceit in trying to defeat the judgment for reinstatement by unilateral
closure without just cause of the plant or factory or by other similar evasive
or deceitful means, and consequent prolonged non­-satisfaction of the judgment
for reinstatement and backwages, the Court will impose, as stated in Davao Free
Workers Front (60 SCRA 428), ‘an element of punitive damages against respondent
employer by way of example and for the public good’ and award the equivalent of
five (5) years backwages without deduction or qualification or even more.”

Obviously, the employer in this case was in bad faith when it
ordered the petitioner to cut the other employees’ living allowances. More so, when the petitioner requested for
written authority to effect the said management order which management refused
so that blame would be laid on the petitioner. This started harassment activities and the withdrawal of the
petitioner’s benefits, usual workload, and responsibilities. Moreover, the case has already dragged on
for several years to the prejudice of the petitioner.

WHEREFORE, premises considered the prayer for
reinstatement is DENIED but the order rendered by Deputy Minister Vicente
Leogardo, Jr. dated May 29, 1984 is modified to cover five (5) years
backwages. The order is AFFIRMED in
other respects.

SO ORDERED.

Feliciano, Bidin, Davide, Jr., and
Romero, JJ., concur.