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ARCHILLES MANUFACTURING CORPORATION v. NLRC

FACTS:

The petitioners in this case are Archilles Manufacturing Corporation (ARCHILLES), Alberto Yu, and Adrian Yu. They are the Chairman and Vice-President of ARCHILLES, respectively. The private respondents include Geronimo Manuel, Arnulfo Diaz, Jaime Carunungan, and Benjamin Rindon, who were employed as laborers in ARCHILLES' steel factory. ARCHILLES had a bunkhouse in the work area for its workers, including the private respondents. In 1988, ARCHILLES implemented a prohibition on workers bringing their families to the bunkhouse after an incident occurred. However, despite the prohibition, the private respondents continued to bring their families, causing annoyance to other workers. This was reported to ARCHILLES.

On May 11, 1990, ARCHILLES instructed the private respondents to remove their families from the bunkhouse and explain their violation of the company rule. The private respondents complied by removing their families, but they failed to report to the management and were absent from May 14 to 18, 1990. As a consequence, ARCHILLES terminated their employment for abandonment and violation of the company rule.

The private respondents subsequently filed a complaint for illegal dismissal, which was ruled in their favor by the Labor Arbiter. The Labor Arbiter ordered their reinstatement, payment of backwages, proportionate 13th-month pay for 1990, and attorney's fees. ARCHILLES appealed the decision and the case was elevated to the National Labor Relations Commission (NLRC). The private respondents also filed a motion for the issuance of a writ of execution for their immediate reinstatement pending appeal.

ARCHILLES opposed the motion for reinstatement, and the NLRC vacated the Labor Arbiter's decision. However, the NLRC ordered ARCHILLES to pay the "withheld" salaries, proportionate 13th-month pay, and attorney's fees to the private respondents. In response, the petitioners filed a petition to partially annul the NLRC decision.

ISSUES:

  1. Whether a writ of execution is still necessary to enforce the Labor Arbiter's order of immediate reinstatement pending appeal.

  2. Whether dismissal for cause results in the forfeiture of the employee's right to a 13th month pay.

  3. Whether the award of attorney's fees is proper in the instant case.

RULING:

  1. Yes, a writ of execution is still necessary to enforce the Labor Arbiter's order of immediate reinstatement even when pending appeal.

  2. No, dismissal for cause does not result in the forfeiture of the employee's right to a 13th month pay.

  3. Yes, the award of attorney's fees is proper in the instant case.

PRINCIPLES:

  • The decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending appeal. (Art. 223 of the Labor Code)

  • Dismissal for cause does not result in the forfeiture of the employee's right to a 13th month pay.

  • Attorney's fees may be awarded when the employee is illegally dismissed and the employer acted in bad faith.