G.R. No. 236020 - Papertech, Inc. vs. Katando

On June 6, 1996, Papertech, Inc. hired Josephine P. Katando as a machine operator at its Pasig City office, establishing a long-term employment relationship.
In 2007, Katando, along with other employees, initiated labor-related actions by filing a Petition for Certification Election.
The employees participated in a picket on February 28, 2008, leading Papertech to file a Complaint for Illegal Strike on May 24, 2008, seeking the termination of those involved.
Labor Arbiter Thomas T. Que, Jr. initially ruled in favor of Papertech on May 30, 2008; however, his decision was reversed by the NLRC on appeal on May 29, 2009, resulting in the reinstatement of Katando and her co-employees.

Despite the reinstatement order becoming final and executory on September 2, 2011, further developments unfolded.
On May 14, 2013, Papertech directed Katando and other employees to report to various posts in different locations (Cagayan de Oro, Davao City, Cebu City, Iloilo City, and Pangasinan), under threat of removal, triggering a Manifestation with an Urgent Motion by Katando for salary payments and to cite Papertech in contempt.
Labor Arbiter Que denied the manifestation on August 5, 2013, prompting the filing of a verified petition for extraordinary remedies before the NLRC.
The NLRC issued Resolutions on September 30, 2013, and November 29, 2013, declaring prior administrative orders null and void, and directing the execution of the reinstatement order.

On December 14, 2013, Papertech sent a memorandum to Katando announcing her transfer to the Makati office; the memorandum clarified that all employment terms would remain the same though the job assignment changed to cleaning tasks.
Shortly thereafter, on December 17, 2013, another memorandum was sent requiring her to explain her refusal to sign or comply with the transfer and for her alleged disrespectful behavior.
Subsequent disciplinary actions included a seven-day suspension imposed on December 26, 2013, for insubordination and further suspension for similar conduct when she again refused the transfer.
On February 6 and February 17, 2014, additional memos were served to reiterate the transfer order and demand explanations for her non-compliance.
Ultimately, on February 24, 2014, Papertech dismissed Katando for alleged insubordination.

Katando initiated a complaint for illegal suspension and later for illegal dismissal, seeking reinstatement, backwages, separation pay, moral and exemplary damages, and attorney’s fees.
On January 30, 2015, Labor Arbiter Nicolas issued a decision declaring Katando illegally dismissed; he ordered Papertech to pay backwages, separation pay computed at one month’s pay per year of service (from June 6, 1996, until the decision becomes final), and attorney’s fees.
However, the Labor Arbiter did not grant Katando’s prayer for reinstatement, emphasizing the absence of just cause for termination.
The NLRC, in its May 25, 2015 ruling, upheld the Labor Arbiter’s decision on backwages and separation pay, agreeing that separation pay was more appropriate than reinstatement given the circumstances.

On November 9, 2015, the CA nullified certain NLRC resolutions regarding extraordinary remedies and ruled that if the employees (including Katando) refused their reassignment following the valid exercise of management prerogative by Papertech—specifically the abolition of the Pasig City positions—they should be awarded separation pay.
On August 18, 2017, the CA reversed its earlier decision in favor of Katando’s petition ordering her reinstatement without loss of seniority and the award of backwages, holding that the doctrine of strained relations did not apply because Katando was a rank-and-file employee and her reinstatement request was expressed.
Papertech subsequently filed a motion for reconsideration, which was denied by the CA, leading to the filing of a petition for review on certiorari before the Supreme Court.

The protracted conflict between Papertech and Katando spans over 11 years, with multiple labor cases (illegal strike, illegal suspension, and illegal dismissal among others) contributing to an atmosphere of antipathy.
Papertech’s conduct, including its repeated attempts at transfer and dismissal, underscored a deteriorated relationship, indicating that even before the latest disputes, strained relations were evident.

Whether the CA erred in its decision to reinstate Katando to her former position instead of awarding her separation pay.
Whether the prolonged litigations and protracted disputes between the parties justified the application of the doctrine of strained relations, thereby making reinstatement unviable.
Whether Papertech’s actions and the existing facts support the conclusion that the employment relationship was too conflicted to allow for a harmonious reinstatement.