Cornista-Domingo v. NLRC (G.R. No. 156761)


Respondent Philippine Veterans Banks was placed under receivership and as a consequence adopted a retrenchment and reorganization program. The Monetary Board then ordered for respondent bank’s liquidation which resulted to the termination of employment of all its employees and the payment of separation pays and other benefits. The labor union moved for the prohibition of the liquidation proceedings. Then, Congress passed a law authorizing the Central Bank to reopen respondent bank. Thereafter several former employees of respondent bank initiated a series of cases for reinstatement. Respondent bank and the Union entered into a Compromise Agreement for the amicable settlements of all other cases and claims pending with the NLRC. A number of the employees, herein petitioners, contested the compromise agreement. Separate petitions were then filed by respondent bank, Union and herein petitioners which were remanded to the CA and thereafter consolidated. CA declared the compromise agreement null and void. Petitioners argue that the law which reopened and rehabilitated respondent bank gave them right to be reinstated.


Whether or not the law which reopened and rehabilitated respondent bank entitled petitioners herein for reinstatement.

*click here for the Labor law issue*

Ruling: NO.

As we see it, upon implementation of Monetary Board Resolution No. 612 and prior to the passage of R.A. No. 7169, the Bank ceased to exist. Its subsequent rehabilitation was not an ordinary rehabilitation. R.A. No. 7169 had to be passed as a legislative fiat to breathe life into the Bank. While it is true that the Bank used its old name, a new law had to be enacted to restructure its outstanding liabilities. As it is, the Bank’s present state of finances, the enormous cost of backwages and other benefits that have to be paid its employees seeking to be reinstated would surely put an end to the economic viability of the Bank.

The enactment of R.A. No. 7169 did not nullify Monetary Board Resolution No. 612 which earlier placed the Bank under liquidation and caused the termination of employment of the petitioners. The Bank’s subsequent rehabilitation did not, by any test of reason, “revive” what was already a dead relationship between the petitioners and the Bank. Neither did such rehabilitation affect the Court’s pronouncement in Philippine Veterans Bank Employees Union-NUBE v. Philippine Veterans Bank that the actions of the Monetary Board and its duly appointed liquidator were valid and that the former employees’ claim for back wages must be rejected as they were lawfully separated. Reinstatement is a relief accorded only to an employee who was illegally dismissed.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s