Impossible Reinstatement

1. Concept

Impossible reinstatement – refers to the non-feasibility or non-probability of reinstating an employee.

2. Grounds

The following are the grounds for impossibility of reinstatement:

1) When the former position of the illegally dismissed employee no longer exists; or

2) When the employer’s business has closed down; or

3) When the employer-employee relationship has already been strained as to render the reinstatement impossible; or

4) A “considerable time” has lapsed between the dismissal and the resolution of the case. (Manila Jockey Club, Inc. v. Trajano, G.R. No. 160982, June 26, 2013, Per Bersamin, J.)

a. Non-existence of former position

‘[R]einstatement means 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. Reinstatement 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.’ (DUP Sound Phils. v. CA, G.R. No. 168317, November 21, 2011, Per Peralta, J.)

b. Employer’s business has closed down

‘Reinstatement pre-supposes that the previous position from which one had been removed still exists or that there is an unfilled position more or less of similar nature as the one previously occupied by the employee. Admittedly, no such position is available. Reinstatement therefore becomes a legal impossibility. The law cannot exact compliance with what is impossible.’ (Pizza Inn/Consolidated Foods Corporation v. NLRC, G.R. No. 74531, June 28, 1988, Per Paras, J., cited in Galindez v. Rural Bank of Llanera, Inc., G.R. No. 852, July 5, 1989, Per Melencio-Herrera, J.)

Olympia Housing, Inc. v. Lapastora, G.R. No. 187691, January 31, 2016, Per Reyes, J.:

• [T]he Court finds the recognition of the validity of OHI’s cessation of business in the Decision dated November 22, 2002 of the NLRC, which was affirmed by the CA and this Court, a supervening event which inevitably alters the judgment award in favor of [the Complainant]. The NLRC noted that OHI complied with all the statutory requirements, including the filing of a notice of closure with the DOLE and furnishing written notices of termination to all employees effective 30 days from receipt.38 OHI likewise presented financial statements substantiating its claim that it is operating at a loss and that the closure of business is necessary to avert further losses.39 The action of the OHI, the NLRC held, is a valid exercise of management prerogative.

• Thus, while the finding of illegal dismissal in favor of [the Complainant] subsists, his reinstatement was rendered a legal impossibility with OHI’s closure of business.

c. Strained relations

JS Unitrade Merchandise, Inc. v. Samson, Jr., G.R. No. 200504, February 26, 2020, Per Lazaro-Javier, J.:

• [The Complainant] essentially alleged [that he was] hired… as Key Account Manager… [Subsequently] he got promoted to Senior Key Account Manager… After a year, he netted a 104% growth in sales. He was even given an award for his achievement.

• In view of his excellent performance, [S.] Po and [E.] Bargan, through Interoffice Memorandum dated January 9, 2007, directed him to further develop the business in the Key Accounts within South Luzon. For this assignment, he was promoted to Associate Area Sales Manager for South Luzon with a monthly salary of P45,000.00 starting February 1, 2007. He was eventually awarded Best Key Account Management, Best in Charmee Feminine Protection Products, Best in Adult Diapers Category, and Runner-up in Diaper Category. He even went to Beijing, China on an incentive trip. From January to August 2007, he averaged a performance growth of 102%.

• But things changed in mid-2007. [E,] Bargan started to single him out by not appraising his performance from January to June 2007. He was one of the two (2) Key Managers who did not enjoy the performance appraisal bonus. He got faulted for alleged gaps and executional flaws in the selling areas though the same were not his fault. He was offered the option of being demoted to Senior Key Account Manager or receiving remuneration upon his exit from the company.

• He got replaced by a certain [J.] Lim. On September 6, 2007, he was assigned to office work without field and personnel supervisory functions. He performed only clerical work. He felt harassed, shamed, and humiliated. On September 18, 2007, he stopped reporting for work and filed a complaint before the National Labor and Relations Commission (NLRC).

[SC Resolution] [The Complainant] cannot… be said to have abandoned his job. Although [the Complainant] failed to report for work and surrendered his work tools to [the Company], these were obviously done on the mistaken belief that he was singled out and demoted by [the Company]. Hence, [the Complainant]’s acts cannot be construed as abandonment of his job, as he immediately filed a complaint for constructive dismissal a week after he stopped reporting for work.

• Clearly, what happened was a case of misunderstanding between management and employee. This being the case, the Court holds that although there was no constructive dismissal by [the Company], neither was there any abandonment of work by [the Complainant]. Both parties must therefore bear the consequences of their respective actions.

• Since there is no illegal dismissal nor abandonment to speak of here, the logical step would have been to allow [the Complainant] to resume his position as Associate Area Sales Manager for South Luzon. As it was, [the Complainant]’s reinstatement is no longer feasible because of the parties’ strained relation. Labor Arbiter Riofloriod aptly observed “(i)t is unthinkable that any productive working relationship could be restored. Certainly, reinstating complainant would no longer be in his best interest.”

• Here, the labor arbiter and the Court of Appeals were correct in awarding separation pay in lieu of reinstatement because of the strained relation between [the Complainant] and [the Complainant].

d. Lapse of considerable time

Manila Jockey Club, Inc. v. Trajano, G.R. No. 160982, June 26, 2013, Per Bersamin, J.:

• Reinstatement of [the Complainant is no longer feasible. More than 14 years have already passed since she initiated her complaint for illegal dismissal in 1998, filing her position paper on September 3, 1998, before the Court could finally resolve her case. The lapse of that long time has rendered her reinstatement an impractical, if not an impossible, option for both her and MJCI. Consequently, an award of separation pay has become the practical alternative, computed at one month pay for every year of service.

3. Separation Pay

‘In case the reinstatement is no longer possible, however, an award of separation pay, in lieu of reinstatement, will be justified.’ (Manila Jockey Club, Inc. v. Trajano, G.R. No. 160982, June 26, 2013, Per Bersamin, J.)

Related: Separation Pay

Similar Posts