Almirante: Strained relations

Dominador Almirante
Labor case digest

RESPONDENT Rommel Manatad was an encoder of petitioner Bank of Lubao, Inc. at its Sta. Cruz Extension Office. He was dismissed from the service for serious misconduct tantamount to willful breach of trust. He filed a complaint for illegal dismissal asking for separation pay, backwages, 13th month pay, and moral and exemplary damages.

The labor arbiter, the National Labor Relations Commission (NLRC) and the Court of Appeals (CA) unanimously ruled that respondent was illegally dismissed. The CA modified, however, the labor arbiter and NLRC decisions ordering the reinstatement of respondent. Instead, it ordered the payment of separation pay equivalent to one month pay for every year of service, considering the animosity and antagonism that exist between petitioner and respondent. Did the CA err?

Ruling: No.

Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the 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.

Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. 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.

In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned.

Here, we agree with the CA that the relations between the parties had been already strained thereby justifying the grant of separation pay in lieu of reinstatement in favor of the respondent.

First, it cannot be gainsaid that the petitioner’s reinstatement to his former position would only serve to intensify the atmosphere of antipathy and antagonism between the parties. Undoubtedly, the petitioner’s filing of various criminal complaints against the respondent for qualified theft and the subsequent filing by the latter of the complaint for illegal dismissal against the latter, taken together with the pendency of the instant case for more than six years, had caused strained relations between the parties.

Second, considering that the respondent’s former position as bank encoder involves the handling of accounts of the depositors of the Bank of Lubao, it would not be equitable on the part of the petitioner to be ordered to maintain the former in its employ since it may only inspire vindictiveness on the part of the respondent.

Third, the refusal of the respondent to be re-admitted to work is in itself indicative of the existence of strained relations between him and the petitioner. (Bank of Lubao, Inc. vs. Rommel J. Manabat and the NLRC, G.R. No. 188722, February 1, 2012).