VENANCIO S. REYES vs. RP GUARDIAN SECURITY AGENCY INC.

The Facts:

Petitioners Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio M. Calanno,

In September 2006, respondent's security contract with Banco Filipino was terminated. In
separate letters,petitioners were individually informed of the termination of the security
contract with Banco de Oro. In two (2) memoranda, dated September 21, 2006 and September
29, 2006, petitioners were directed to turnover their duties and responsibilities to the incoming
security agency and were advised that they would be placed on floating status while waiting for
available post. Petitioners waited for their next assignment, but several months lapsed and they
were not given new assignments.

Consequently, on April 10, 2007, petitioners filed a complaint for constructive dismissal.

In its position paper, respondent claimed that there was no dismissal, of petitioners,
constructive or otherwise, and asserted that their termination was due to the expiration of the
service contract which was coterminus with their contract of employment.

On August 20, 2007, the Labor Arbiter (LA) rendered a decision in favor of petitioners ordering
respondent to pay petitioners separation pay, backwages, refund of trust fund, moral and
exemplary damages, and attorneys fees.

Aggrieved, respondent appealed to the NLRC.

On April 9, 2008, the NLRC promulgated its decision sustaining the finding of constructive
dismissal by the LA, and the awards she made in the decision. The award of moral and
exemplary damages, however, were deleted.

Upon denial of its motion for reconsideration, respondent filed a petition for certiorari before
the CA.

On February 26, 2010, the CA rendered a decision dismissing the petition and affirming the
assailed NLRC decision and resolution.

On motion for reconsideration, the CA issued the Amended Decision dated May 18, 2010,
modifying its earlier decision. Citing Section 6.5 (4) of Department Order No. 14 of the
Department of Labor and Employment (DOLE D.O. No. 14), otherwise known as Guidelines
Governing the Employment and Working Conditions of Security Guards and Similar Personnel in
the Private Security Industry, the CA reduced the computation of the separation pay from one
month pay per year of service to one-half month pay for every year of service; reduced the
refund of trust fund contribution from Sixty (P60.00) Pesos to Thirty (P30.00)Pesos; and deleted
the award of backwages and attorney's fees.

Hence, this petition anchored on the following:

GROUNDS FOR THE PETITION

The Court of Appeals has decided a question of substance in a way that is not in accord
with law and with applicable decisions of the Supreme Court concerning the Petitioner's
8.0
basic right to fair play, justice and due process, with more reason that a conclusion of law
cannot be made in the motion for reconsideration.
The first decision promulgated by the Court of Appeals on February 26, 2010 affirming the
decision of the NLRC awarding both backwages and separation pay of one month pay for
8.1
every year of service can only be set aside upon proof of grave abuse of discretion, fraud or
error of law.
Petitioners are entitled to backwages for the period covered from the time the Labor
8.2 Arbiter rendered the decision in their favor on August 20, 2007 until said decision was
reversed by the Court of Appeals in its Amended Decision promulgated on May 18, 2010.

There is no doubt that petitioners were constructively dismissed. The LA, the NLRC and the CA
were one in their conclusion that respondent was guilty of illegal dismissal when it placed
petitioners on floating status beyond the reasonable six-month period after the termination of
their service contract with Banco de Oro. Temporary displacement or temporary off-detail of
security guard is, generally, allowed in a situation where a security agency's client decided not
to renew their service contract with the agency and no post is available for the relieved security
guard. Such situation does not normally result in a constructive dismissal. Nonetheless, when
the floating status lasts for more than six (6) months, the employee may be considered to have
been constructively dismissed. No less than the Constitution guarantees the right of workers to
security of tenure, thus, employees can only be dismissed for just or authorized causes and after
they have been afforded the due process of law.

Settled is the rule that that an employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges, and to his full backwages,
inclusive of allowances and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld up to the time of actual reinstatement. If
reinstatement is not possible, however, the award of separation pay is proper.

Backwages and reinstatement are separate and distinct reliefs given to an illegally dismissed
employee in order to alleviate the economic damage brought about by the employee's
dismissal. "Reinstatement is a restoration to a state from which one has been removed or
separated" while "the payment of backwages is a form of relief that restores the income that
was lost by reason of the unlawful dismissal." Therefore, the award of one does not bar the
other.

In the case of Aliling v. Feliciano, citing Golden Ace Builders v. Talde, the Court explained:

Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.
The two reliefs provided are separate and distinct. In instances where reinstatement is no
longer feasible because of strained relations between the employee and the employer,
separation pay is granted. In effect, an illegally dismissed employee is entitled to either
reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents' illegal dismissal, then, are reinstatement without loss
of seniority rights, and payment of backwages computed from the time compensation was
withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an
option, separation pay equivalent to one (1) month salary for every year of service should be
awarded as an alternative. The payment of separation pay is in addition to payment of
backwages. [Emphasis Supplied]

Furthermore, the entitlement of the dismissed employee to separation pay of one month for
every year of service should not be confused with Section 6.5 (4) of DOLE D.O. No. 14 which
grants a separation pay of one-half month for every year service, to wit:

6.5 Other Mandatory Benefits. In appropriate cases, security guards/similar personnel are
entitled to the mandatory benefits as listed below, although the same may not be included in
the monthly cost distribution in the contracts, except the required premiums for their coverage:

a. Maternity benefit as provided under the SSS Law;

b. Separation pay if the termination of employment is for authorized cause as provided by law
and as enumerated below:

Half-Month Pay Per Year of Service, but in no case less than One Month Pay, if separation is due
to:

1. Retrenchment or reduction of personnel effected by management to prevent serious losses;

2. Closure or cessation of operation of an establishment not due to serious losses or financial

3. Illness or disease not curable within a period of 6 months and continued employment is
prohibited by law or prejudicial to the employee's health or that of co-employees; or
4. Lack of service assignment for a continuous period of 6 months.

The said provision contemplates a situation where a security guard is removed for authorized
causes such as when the security agency experiences a surplus of security guards brought about
by lack of clients. In such a case, the security agency has the option to resort to retrenchment
upon compliance with the procedural requirements of "two-notice rule" set forth in the Labor
Code and to pay separation pay of one-half month for every year of service.

In this case, respondent would have been liable for reinstatement and payment of backwages.
Reinstatement, however, was no longer feasible because, as found by the LA, respondent had
already ceased operation of its business. Thus, backwages and separation pay, in the amount of
one month for every year of service, should be paid in lieu of reinstatement.

As to their claim of attorney's fees, petitioners were compelled to file an action for the recovery
of their lawful wages and other benefits and, in the process, incurred expenses. Hence,
petitioners are entitled to attorney's fees equivalent to ten percent (10%) of the monetary
award.

Finally, as to the refund of the trust fund contribution, a perusal of the records shows that the
amount deducted for the trust fund contribution from each petitioner varies. Some petitioners
were deducted the amount of P15.00 every payday while others were deducted P30.00 every
payday. Thus, the Court deems it proper to refer the computation of the same to the LA.

WHEREFORE, the petition is GRANTED. The May 18, 2010 Amended Decision and the
September 13, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 106643
are REVERSED and SET ASIDE. The April 9, 2008 Decision of the National Labor Relations
Commission, modifying the August 20, 2007 Decision of the Labor Arbiter, is REINSTATED.

The case is REMANDED to the Labor Arbiter for further proceedings to make a detailed
computation of the exact amount of monetary benefits due petitioners.

SO ORDERED.