Strained relations doctrine

1. Concept

If employees win an illegal dismissal case, the default remedy is for them to be reinstated back to work. However, it is possible that the employees and/or the employers may ask the court that they part ways due to strained relations between them. If granted by the court, the employee is deemed separated from employment subject to payment of separation pay in addition to and on top of the full backwages and other damages in favor of the employee as a result of the finding on illegal dismissal.

Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. Over the years, however, the case law developed that where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. (Nippon Express Philippines Corporation v. Daguiso, G.R. No. 217970, 17 June 2020)

2. Reinstatement as the general rule

As reinstatement is the rule, for the exception of strained relations to apply, it should be proved that the employee concerned occupies a position where he/she enjoys the trust and confidence of...


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