Lansangan vs. Amkor Technology Philippines, Inc.

Full backwages under Article 279 of the Labor Code are available only to employees who were unjustly dismissed; where the dismissal was found valid and that finding became final, the employee is not entitled to reinstatement or full backwages, and Article 223's interim reinstatement remedy does not apply.

Petitioners Lunesa O. Lansangan and Rosita Cendaña were supervisory employees of respondent Amkor Technology Philippines, Inc. Respondent maintained a Code of Discipline defining "extremely serious offenses" warranting termination, including dishonesty in the form of swiping another employee's ID card or requesting another employee to swipe one's ID card to gain personal advantage. The dispute arose after an anonymous e-mail to respondent's General Manager alleged that petitioners were "stealing company time," prompting an internal investigation that led to their dismissal.

Petitioners Lunesa O. Lansangan and Rosita Cendaña were supervisory employees of respondent Amkor Technology Philippines, Inc. An anonymous e-mail was sent to respondent's General Manager alleging that petitioners were "stealing company time." Respondent investigated the matter and required petitioners to submit written explanations. In handwritten letters, petitioners admitted their wrongdoing. Respondent thereafter terminated petitioners for "extremely serious offenses" as defined in its Code of Discipline, specifically the offense of swiping another employee's ID card or requesting another employee to swipe one's ID card to gain personal advantage.

Petitioners filed a complaint for illegal dismissal. Labor Arbiter Arthur L. Amansec, by Decision of October 20, 2004, dismissed the complaint, finding petitioners guilty of dishonesty as a serious form of misconduct and fraud or breach of trust under Article 282 of the Labor Code. The Arbiter, however, ordered reinstatement without backwages as a measure of equitable and compassionate relief, citing petitioners' prior unblemished employment records, show of remorse, harshness of the penalty, and respondent's defective attendance monitoring system. Petitioners did not appeal the Arbiter's finding of guilt; instead, they moved for the issuance of a writ of reinstatement. Respondent, for its part, assailed only the reinstatement aspect of the Arbiter's decision before the NLRC.

After a series of oppositions, motions, and orders — including the issuance of a writ of execution, an alias writ of execution, and the garnishment of respondent's bank account at Equitable-PCI Bank — the NLRC, by Resolution of June 30, 2005, granted respondent's appeals by deleting the reinstatement aspect of the Arbiter's decision and setting aside the alias writ of execution and notice of garnishment. Petitioners' motion for reconsideration was denied. They then filed a petition for certiorari before the Court of Appeals, which, by Decision of September 19, 2006, affirmed the finding that petitioners were guilty of misconduct but ordered respondent to pay backwages from October 20, 2004 up to June 30, 2005, citing Article 223 of the Labor Code and Roquero vs. Philippine Airlines. Both parties' motions for partial reconsideration were denied. Only petitioners elevated the matter to the Supreme Court via a petition for review. Respondent did not appeal the appellate court's decision ordering payment of backwages for the specified period, rendering that portion final.

• Limitation of Backwages Period: Petitioner argued that the Court of Appeals erred in limiting the payment of backwages to the period from October 20, 2004 (Labor Arbiter's decision) up to June 30, 2005 (NLRC decision), contending that this was contrary to the ruling in Roquero vs. Philippine Airlines, where the employer was ordered to pay wages from the time the reinstatement order was issued until the finality of the Supreme Court's decision.
• Serious Misconduct Finding and Excessive Penalty: Petitioner argued that the Court of Appeals committed grave abuse of discretion in concluding that petitioners committed serious misconduct, fraud, dishonesty, and breach of trust. Alternatively, even assuming the swiping of ID cards occurred, the penalty of dismissal was too severe and harsh, contrary to Article 282 of the Labor Code and existing jurisprudence.

• Misapplication of Roquero: Respondent asserted that petitioners' reliance on Roquero vs. Philippine Airlines was misplaced in view of the glaring factual differences between that case and the present case.

• Entitlement to Backwages: Whether petitioners are entitled to backwages beyond the limited period awarded by the Court of Appeals, pursuant to Roquero vs. Philippine Airlines and Article 223 of the Labor Code.
• Validity of Dismissal: Whether the Court of Appeals committed grave abuse of discretion in concluding that petitioners committed serious misconduct, fraud, dishonesty, and breach of trust warranting dismissal.

• Entitlement to Backwages: No. Petitioners are not entitled to full backwages because their dismissal was found valid and that finding became final, Roquero and Article 223 being inapplicable where there is no finding of illegal dismissal.
• Validity of Dismissal: No grave abuse of discretion. The Labor Arbiter's finding that petitioners committed dishonesty as a serious form of misconduct and fraud or breach of trust had become final, petitioners not having appealed it before the NLRC.

• Entitlement to Backwages: The Labor Arbiter found petitioners' dismissal to be valid, and that finding became final because petitioners did not appeal it — they even moved for execution of the reinstatement aspect. Only respondent appealed, and solely to question the reinstatement order. Roquero vs. Philippine Airlines and Article 223 of the Labor Code concern interim relief granted to a dismissed or separated employee while a case for illegal dismissal is pending appeal. They do not apply where, as here, there is no finding of illegal dismissal. Article 279 of the Labor Code provides that an employee who is unjustly dismissed is entitled to reinstatement and full backwages computed from the time compensation was withheld up to actual reinstatement. Since petitioners' dismissal was not found to be illegal, they are not entitled to full backwages. Agabon vs. NLRC confirms that payment of backwages and other benefits is justified only if the employee was unjustly dismissed.

• Validity of Dismissal: The Arbiter's finding that petitioners committed "dishonesty as a form of serious misconduct and fraud, or breach of trust" was not appealed by petitioners and thus became final. Petitioners cannot now challenge that finding before the Supreme Court, having failed to question it at the proper stage. The issue of whether the penalty of dismissal was too severe was likewise foreclosed by the finality of the Arbiter's finding of guilt, which petitioners themselves did not contest.

• Finality of Labor Arbiter's Finding of Valid Dismissal — Where an employee does not appeal the Labor Arbiter's finding that the dismissal was for just cause, that finding becomes final and executory, and the employee is thereafter precluded from challenging the validity of the dismissal or the proportionality of the penalty in subsequent proceedings. The Court applied this principle by holding that petitioners, having failed to appeal the Arbiter's finding of guilt, could no longer contest it before the Supreme Court.

• Entitlement to Full Backwages Under Article 279 — Full backwages are available only to employees who were unjustly dismissed; where the dismissal was valid, the employee is not entitled to reinstatement or full backwages. The Court relied on Agabon vs. NLRC to confirm that payment of backwages and other benefits is justified only if the employee was unjustly dismissed.

• Inapplicability of Article 223 Interim Reinstatement to Valid Dismissals — Article 223 of the Labor Code provides that the reinstatement aspect of a Labor Arbiter's decision is immediately executory pending appeal, but this interim relief applies only in cases of illegal dismissal. It does not apply where the dismissal was found valid, as in the present case.

• "Article 223 concerns itself with an interim relief, granted to a dismissed or separated employee while the case for illegal dismissal is pending appeal, as what happened in Roquero. It does not apply where there is no finding of illegal dismissal, as in the present case." — This passage articulates the ratio decidendi distinguishing Article 223's interim reinstatement remedy from cases involving valid dismissal.

• "petitioners are not entitled to full backwages as their dismissal was not found to be illegal. Agabon v. NLRC so states –– payment of backwages and other benefits is justified only if the employee was unjustly dismissed." — This passage states the controlling rule on entitlement to backwages and ties it to the finality of the valid dismissal finding.

• Roquero vs. Philippine Airlines, Inc., 449 Phil. 437 (2003) — Distinguished. The Court held that Roquero, which concerned interim relief pending appeal in an illegal dismissal case, finds no application where the dismissal was found valid and that finding became final.

• Agabon vs. NLRC, G.R. No. 158693, November 17, 2004, 442 SCRA 573 — Followed. The Court cited Agabon for the proposition that payment of backwages and other benefits is justified only if the employee was unjustly dismissed.

• Article 282, Labor Code — Cited by the Labor Arbiter as the just cause provision under which petitioners' dismissal was upheld, specifically serious misconduct, fraud, dishonesty, and breach of trust.

• Article 223, Labor Code — Cited by the Court of Appeals in ordering limited backwages; the Supreme Court held it inapplicable because it concerns interim reinstatement relief pending appeal in illegal dismissal cases, not valid dismissals.

• Article 279, Labor Code — Cited by the Supreme Court for the rule that an employee who is unjustly dismissed is entitled to reinstatement and full backwages; since petitioners' dismissal was valid, they are not entitled to full backwages.

Leonardo A. Quisumbing (Chairperson), Renato C. Corona, Dante O. Tinga, and Arturo D. Brion concurred.