G.R. No. 193756 - Reyes vs. RP Guardians Security Agency, Inc.

Petitioners: Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio M. Calanno, Rogelio A. Supe, Jr., Roland R. Trinidad, and Aurelio A. Duldulao.
Respondent: RP Guardians Security Agency, Inc., which hired the petitioners as security guards.

Petitioners were deployed to various client sites of the respondent, with one of the significant assignments to the branches of Banco Filipino Savings and Mortgage Bank.
In September 2006, the security contract between the respondent and Banco Filipino was terminated.
Petitioners were informed individually via separate letters that their assignment with Banco de Oro had ended.

Following termination, through two separate memoranda dated September 21, 2006, and September 29, 2006, petitioners were instructed to turnover their duties to the incoming security agency.
They were advised they would be placed on a "floating" status while awaiting a new assignment.
Despite their status, petitioners had to wait several months without being given a new assignment.

Due to the prolonged period without assignment, petitioners filed a complaint on April 10, 2007, alleging constructive dismissal.
The labor dispute centered on whether the placement on floating status beyond a reasonable period (six months) effectively constituted a dismissal.

On August 20, 2007, the Labor Arbiter rendered a decision in favor of the petitioners, awarding separation pay, backwages, refund of trust fund contributions, moral and exemplary damages, and attorney’s fees.
Respondent appealed the decision to the National Labor Relations Commission (NLRC).
On April 9, 2008, the NLRC affirmed the finding of constructive dismissal based on the initial Labor Arbiter decision, though it deleted the award for moral and exemplary damages.

The respondent sought a petition for certiorari before the Court of Appeals (CA) after the NLRC decision and subsequent denial of motion for reconsideration.
On February 26, 2010, the CA dismissed the respondent’s petition and affirmed the NLRC’s decision in favor of the petitioners.
On May 18, 2010, the CA issued an Amended Decision modifying its earlier ruling by:

Reducing the computed separation pay from one month’s pay per year of service to one-half month’s pay per year of service, based on Section 6.5(4) of DOLE Department Order No. 14.
Reducing the refund of the trust fund contribution from ₱60.00 to ₱30.00 per payday.
Deleting the award for backwages and attorney’s fees.

Petitioners challenged the CA’s amended rulings on the ground that the decision on substantive issues concerning backwages and separation pay was contrary to law and Supreme Court precedents.
They contended that proof of grave abuse of discretion, fraud, or error of law was lacking to justify the CA’s modification of awards previously granted by the Labor Arbiter and NLRC.
Emphasis was placed on the doctrine that constructive dismissal entitles an employee to reinstatement (if feasible) or separation pay in addition to full backwages, with both forms of relief being separate and distinct.

The petition for review under Rule 45 of the Rules of Court was filed, challenging the CA’s modifications.
Ultimately, the Supreme Court granted the petition, reversed, and set aside the May 18, 2010 Amended Decision and the September 13, 2010 Resolution of the CA, and reinstated the April 9, 2008 NLRC decision.
The case was remanded to the Labor Arbiter for a detailed computation of the monetary benefits due to petitioners.

Reducing the separation pay from one month pay per year of service to one-half month pay per year of service.
Reducing the refund of the trust fund contribution from ₱60.00 to ₱30.00 per payday.
Deleting the award for backwages and attorney’s fees.

Whether the CA improperly decided a substantive question of law during the motion for reconsideration stage, thereby infringing on the petitioners’ due process and right to fair play and justice.

Whether the determination of constructive dismissal (specifically, the qualification of a prolonged floating status beyond six months as being equivalent to dismissal) was correctly applied based on existing jurisprudence.

Whether the distinct reliefs granted for illegal dismissal - reinstatement (or separation pay when reinstatement is not feasible) and backwages - should be awarded concomitantly under the circumstances presented.