G.R. No. 117378 - GIL CAPILI AND RICARDO CAPILI, VS. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL CAPITAL REGION (FIRST DIVISION), BENIGNO SANTOS, DELFIN YUSON, LUISITO SANTOS, URSINO BASISTER, RICARDO REYES, JOSELITO SANTOS, JORGE BINUYA AND NICOLAS MULINGBAYAN.D E C I S I O N - Supreme Court E-Li

Ruling

WHEREFORE, decision is hereby rendered declaring the breakage (sic) of relationship between respondent Ricardo Capili and complainants Benigno T. Santos, Delfin Yuson, Luisito Santos, Ursino Basister, Ricardo Reyes, Joselito Santos, Jorge Binuya and Nicholas Mulingbayan, as a product of misunderstanding and misappreciation of the situation by both parties and, therefore, respondents are hereby directed to reinstate them to their former position without loss of seniority rights and other benefits, but without back wages (p. 7, Annex "F, " underscoring supplied). [4] Private respondents appealed to the National Labor Relations Commission. They reiterated their prayer for separation pay equivalent to one (1) month salary for every year of service and, in addition, three (3) years back wages. Respondent NLRC upheld the finding of the Labor Arbiter that the case arose due to simple misunderstanding between the complaining drivers on one hand and their employers on the other. However, it took exception to the relief granted to private respondents and modified the appealed decision accordingly by holding that - Since there was misunderstanding between the parties and this misunderstanding resulted in animosity and strained relationship between them, we deem it proper and most prudent approach to maintain industrial peace for respondents to pay the complainants their separation pay of one half (1/2) month for every year of service, based on their daily earnings of P200.00. [5] The petitioners moved to have the above disquisition of respondent NLRC reconsidered but the latter denied the motion. They now come to us arguing that since there was a clear finding of abandonment by the Labor Arbiter consisting in the failure of private respondents to report for work without justifiable reason, the award of separation pay could not be warranted. The NLRC brushed aside the arguments of petitioners. It emphasized that if it were the finding of the Labor Arbiter that private respondents were guilty of abandonment he would not have ordered reinstatement but dismissal of the case. Thus on 9 August 1994 NLRC denied reconsideration. Petitioners impute grave abuse of discretion on the part of respondent NLRC in awarding separation pay to private respondents. We agree with petitioners. The legal basis for the award of separation pay is clearly provided by Art. 279 of the Labor Code which states that the remedy for illegal dismissal is reinstatement without loss of seniority rights plus back wages computed from the time compensation was withheld up to reinstatement. However there may be instances where reinstatement is not a viable remedy as where the relations between employer and employee have been so severely strained that it is no longer advisable to order reinstatement or where the employee decides not to be reinstated. In such events, the employer will instead be ordered to pay separation pay. [6] A reading of Art. 279 in relation to Art. 282 of the Labor Code revea