Title
Jordan vs. Grandeur Security and Services, Inc.
Case
G.R. No. 206716
Decision Date
Jun 18, 2014
Employee reassigned, not dismissed; reinstatement ordered but misinterpreted. NLRC's backwages ruling nullified; employee must return to work, no monetary claims.
complaint
illegal deductions
series of rulings

Case Summary (G.R. No. 206716)

Factual Background

On May 23, 2007, Jordan, together with co-employees Valentino Galache and Ireneo Esguerra (collectively, the complainants), filed individual complaints for money claims against Nicolas Pablo and Grandeur Security. They alleged non-payment of minimum wages, holiday and premium pay, service incentive leave, and thirteenth month pay, as well as non-payment of the cost of living allowance. They likewise claimed that Grandeur Security illegally deducted P500.00 per annum as premiums for insurance policies. Galache additionally sought overtime pay for work allegedly rendered beyond eight hours.

On May 28, 2007, Jordan amended his complaint to add illegal dismissal. The case was docketed as NLRC-NCR Case No. 05-05003-07. Grandeur Security denied that Jordan was terminated. It asserted that it issued Jordan a memorandum dated May 23, 2007 reassigning him from Quezon City to Taguig City, and it further claimed that Jordan abandoned his work and chose to file an illegal dismissal case instead of complying with the memorandum. Grandeur Security also denied the non-payment of the money claims.

Labor Arbiters Ruling

In a decision dated May 27, 2008, the LA held that Jordan had merely been transferred to another workplace. The LA reasoned that Jordan’s immediate filing of an illegal dismissal case after issuance of the memorandum undermined Grandeur Security’s abandonment theory. Based on the LA’s factual evaluation, Grandeur Security did not dismiss Jordan.

On money claims, the LA awarded the complainants monetary benefits except for Galache’s overtime claim due to lack of proof of overtime work beyond eight hours. The LA’s dispositive portion dismissed illegal dismissal for lack of merit but ordered reinstatement “to his former position without any backwages,” and further directed payment of salary differentials, holiday pay differentials, cost of living allowance, thirteenth month differentials, and service incentive leave pay, as well as return of the deducted insurance premiums. The LA also required Grandeur Security to submit a compliance report within ten days indicating whether reinstatement was physical or “merely in their payroll.”

Developments After the May 27, 2008 Decision

Grandeur Security partially appealed the May 27, 2008 LA decision before the NLRC only as to the monetary awards. It did not contest the reinstatement order. Grandeur Security claimed it mailed Jordan a return-to-work order dated July 11, 2008. It presented evidence of the registry mailing through Registry Receipt No. 00299 and the registry return card bearing a signature. The NLRC denied Grandeur Security’s partial appeal and later denied reconsideration. The May 27, 2008 LA decision became final and executory on January 20, 2010, and the NLRC issued an entry of judgment in NLRC-NCR Case No. 05-05003-07.

Execution followed upon the complainants’ motion. After the NLRC issued a writ of execution, Grandeur Security paid Jordan P80,000.00 and Jordan executed a quitclaim on his money claims on March 3, 2010. The quitclaim reflected that the reinstatement issue remained pending for determination by the LA.

On December 15, 2010, the LA closed and terminated the proceedings in NLRC-NCR Case No. 05-05003-07. It relied on two grounds: the complainants’ individual quitclaims and Jordan’s alleged waiver of his right to be reinstated. The LA found that Jordan did not report for work despite receipt of the return-to-work letter.

Jordan appealed on January 10, 2011, insisting he did not receive the return-to-work letter. He challenged the signature on the registry return card as not his and not that of his wife, Evelyn Jordan, and he submitted specimen signatures. He also presented a letter from the Meycauayan, Bulacan Post Office indicating it could not issue a certification of mailing due to damage to its delivery books in 2009. Jordan then sought backwages and separation pay, framing his prayers as consequences of Grandeur Security’s failure to comply with the LA’s reinstatement order.

NLRC Proceedings

In a decision dated February 21, 2011, the NLRC set aside the LA’s December 15, 2010 closure order. The NLRC gave weight to Jordan and Evelyn’s specimen signatures and concluded Jordan did not receive the return-to-work letter. The NLRC also noted that the signature appearing on the registry return card appeared more similar to Esguerra’s signature. As a result, the NLRC ruled that Jordan was entitled to backwages and separation pay for Grandeur Security’s failure to comply with the reinstatement order, and it awarded attorneys’ fees.

Upon denial of Grandeur Security’s motion for reconsideration on March 28, 2011, Grandeur Security filed a petition in the CA under Rule 65 of the Rules of Court.

CA Ruling

On April 22, 2013, the CA nullified the NLRC rulings dated February 21 and March 28, 2011. The CA held that the NLRC gravely abused its discretion in ordering Grandeur Security to pay backwages, separation pay, and attorneys’ fees despite the finality and immutability of the May 27, 2008 decision. It cited Section 9, Rule 11 of the 2011 NLRC Rules of Procedure and ruled that the appropriate consequence of an employer’s refusal to reinstate was contempt proceedings, not the substitution of backwages and separation pay.

The CA also reasoned that Jordan’s claim of non-receipt was a tactic to demand additional monetary awards. It emphasized that Jordan repeatedly and categorically prayed in his pleadings for backwages and separation pay in lieu of reinstatement. The CA further held that even if non-receipt were assumed, Jordan’s denial would not overcome the presumption of regularity in delivery of mailed items by the postman to the addressee. It found that the registry receipt and return card substantially proved delivery.

Issues Raised in the Supreme Court

The Court framed the issues as follows: (one) whether an employee who was not terminated could be reinstated; (two) whether the CA correctly ruled that the NLRC rulings dated February 21 and March 28, 2011 were null and void, including whether the NLRC had jurisdiction over Jordan’s memorandum of appeal and whether the NLRC gravely abused its discretion in substantially altering the May 27, 2008 decision; and (three) whether Jordan waived his right to work in Grandeur Security.

The Courts Ruling: Petition Unmeritorious

The Court denied the petition, agreeing with the CA. It held that the LA’s May 27, 2008 decision should be read as a whole because its dispositive portion contained apparent inconsistencies. The Court also found that the NLRC acted without jurisdiction and gravely abused its discretion in substituting the LA’s return-to-work directive with awards of backwages and separation pay.

Harmonization of the LA’s Dispositions

The Court focused on an ambiguity in the May 27, 2008 LA decision. The dispositive portion dismissed illegal dismissal for lack of merit yet ordered reinstatement. The Court considered this internally inconsistent because reinstatement generally follows illegal dismissal. Applying the principle that the dispositive portion controls only when it is definite and unequivocal, the Court invoked the exception that, where uncertainty exists, the dispositive portion must be harmonized with the body of the decision.

Upon review of the body of the May 27, 2008 decision, the Court noted that the LA found that Grandeur Security never dismissed Jordan. The LA stated that Jordan was merely relieved of duty and transferred to another client at Taguig City, and it found no illegal dismissal and no abandonment. It also found no strained relations that could justify separation pay, and it ordered Jordan to return to his position as security guard and for the employer to accept him back “without any backwages.” The Court concluded that, despite the literal use of “reinstate” and “reinstatement,” the LA intended Jordan’s physical return to work in the context of a non-termination transfer, not a reinstatement remedy in an illegal dismissal case.

The Court also treated the phrase “merely in their payroll” in the dispositive portion as surplusage, characterizing it as a clerical mistake beyond the LA’s contemplation. It explained that payroll reinstatement under Article 223 of the Labor Code is premised on circumstances such as strained relations or non-availability of positions—conditions the LA explicitly found absent. Accordingly, the Court treated the May 27, 2008 decision as ordering (1) the dismissal of illegal dismissal, (2) Jordan’s physical return to work, (3) compliance reporting within ten days, and (4) the payment of specific monetary awards covering salary differentials, cost of living allowance, thirteenth month, service incentive, holiday pays, and the return of paid insurance premiums.

The NLRC’s Lack of Jurisdiction and Substantial Alteration

The Court then examined the procedural posture after the LA’s December 15, 2010 order. It concluded that Jordan’s January 10, 2011 memorandum of appeal was in substance another illegal dismissal complaint. In it, Jordan sought backwages beginning June 2008 and separation pay in lieu of reinstatement, asserting non-receipt of the return-to-work letter. The Court held that in labor cases, it is the allegations and relief sought—not the label of the pleading—that determine jurisdiction.

The Court found jurisdictional error. It reiterated that under Article 217(a)(2) and (b) of the Labor Code, the LA has original and exclusive jurisdiction over termination disputes, while the NLRC has exclusive appellate jurisdiction. It further ruled that Jordan’s remedy for disobedience to the return-to-work order was not the filing of a complaint for illegal dismissal, but to ask that Grandeur Security be cited for indirect contempt.

Even assuming jurisdiction existed, the Court found that the NLRC committed reversible error by substantially altering a final and executory judgment. It held that while clerical errors may be corrected, final

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