LEGAL NOTE 0132: THE DOCTRINE OF STRAINED RELATIONS IN LABOR LAW. REINSTATEMENT OR SEPARATION PAY?
SOURCE: APO CHEMICAL MANUFACTURING CORPORATION and MICHAEL CHENG VS. RONALDO A. BIDES (G.R. NO. 186002, 19 SEPTEMBER 2012, MENDOZA, J.) SUBJECT/S: WHEN IS SEPARATION PAY GIVEN IN LIEU OF REINSTATEMENT?; THE DOCTRINE OF STRAINED RELATIONS; HOW MUCH SHOULD BE GIVEN AS SEPARATION PAY? (BRIEF TITLE: APO CHEMICAL VS. BIDES).
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SUBJECTS/DOCTRINES/DIGEST:
CAN THE SUPREME COURT DETERMINE THE APPLICABILITY OF THE DOCTRINE OF STRAINED RELATIONS?
AS A GENERAL RULE NO BECAUSE IT IS A FACTUAL QUESTION.
BUT IT CAN IN THE EXERCISE OF ITS EQUITY JURISDICTION WHEN THE FACTUAL FINDINGS OF THE ARBITER AND THE NLRC ARE CONFLICTING AS IN THIS CASE.
As the records bear out, the LA found that patent animosity existed between ACMC and Bides considering the confrontation that took place between the latter and Matthew. This confrontation coupled with Bides’ refusal to be reinstated led to the LA’s finding of “strained relations” necessitating an award of separation pay in lieu of reinstatement. The NLRC, on the other hand, deleted the said award for lack of factual basis. The CA reinstated the LA’s finding of “strained relations” and explained that toomuch enmity had developed between ACMC and Bides that necessarily barred the latter’s reinstatement.
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WHAT IS REALLY THE RULE: REINSTATEMENT OR SEPARATION PAY?
THE RULE IS REINSTATEMENT.
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WHEN IS SEPARATION PAY APPLICABLE?
WHEN THERE IS “STRAINED RELATIONS”.
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WHEN IS THERE “STRAINED RELATIONS”?
WHEN IT IS LIKELY THAT, IF REINSTATED, AN ATMOSPHERE OF ANTIPATHY AND ANTAGONISM WOULD BE GENERATED AS TO ADVERSELY AFFECT THE EFFICIENCY AND PRODUCTIVITY OF THE EMPLOYEE CONCERNED.
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WHAT IS THE DOCTRINE OF STRAINED RELATIONS?
UNDER THIS DOCTRINE THE PAYMENT OF SEPARATION PAY IS CONSIDERED AN ACCEPTABLE ALTERNATIVE TO REINSTATEMENT WHEN THE LATTER OPTION IS NO LONGER DESIRABLE OR VIABLE.
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WHAT IS THE BENEFIT THAT CAN BE DERIVED FROM SUCH DOCTRINE?
ON ONE HAND, SUCH PAYMENT LIBERATES THE EMPLOYEE FROM WHAT COULD BE A HIGHLY OPPRESSIVE WORK ENVIRONMENT. ON THE OTHER HAND, IT RELEASES THE EMPLOYER FROM THE GROSSLY UNPALATABLE OBLIGATION OF MAINTAINING IN ITS EMPLOY A WORKER IT COULD NO LONGER TRUST.
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SUPPOSE THE EMPLOYEE ASKS FOR SEPARATION INSTEAD OF REINSTATEMENT. CAN THE EMPLOYER INSISTS ON REINSTATEMENT.
NO. IF THE EMPLOYEE DECIDES NOT TO BE REINSTATED AND DEMANDS FOR SEPARATION PAY, THE DOCTRINE OF STRAINED RELATIONS APPLIES.
Moreover, the doctrine of strained relations has been made applicable to cases where the employee decides not to be reinstated and demands for separation pay.
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HOW MUCH SHOULD BE THE SEPARATION PAY?
IN POLYFOAM-RGC INTERNATIONAL CORPORATION V. CONCEPCION, 22 THE COURT RULED THAT “IF REINSTATEMENT IS NO LONGER FEASIBLE X X X, SEPARATION PAY EQUIVALENT TO ONE MONTH SALARY FOR EVERY YEAR OF SERVICE SHALL BE AWARDED AS AN ALTERNATIVE.”
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BUT IN THIS CASE THE CA AWARDED ONLY ONE HALF MONTH PAY FOR EVERY YEAR OF SERVICE. SHALL IT BE INCREASED TO ONE MONTH PER YEAR OF SERVICE?
NO. CONSIDERING, HOWEVER, THAT BIDES DID NOT QUESTION THAT PORTION OF THE CA DECISION, THE COURT IS OF THE VIEW THAT HE WAS SATISFIED.
TO VIEW THE SC DECISION PLEASE CLICK THE FILE BELOW:
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