Facts:

Petitioners-employees filed a complaint for illegal dismissal against respondent PAL who
dismissed them after they were allegedly caught in the act of sniffing shabu within its
premises. The Labor Arbiter ruled for the petitioners and ordered immediately for their
reinstatement. Prior to this decision, SEC had placed PAL under an Interim Rehabilitation
Receiver, and subsequently under a Permanent Rehabilitation Receiver. PAL appealed and
the Labor Tribunal ruled in their favor. Subsequently, the Labor Arbiter issued a writ of
execution for the reinstatement and issued a notice of garnishment. The Labor Tribunal
affirmed the writ and notice but suspended and referred the action to the Rehabilitation
Receiver of PAL. On appeal, CA found for respondent PAL.

Issue:
Whether or not PAL being under corporate rehabilitation suspends any monetary claims to
it.

Ruling: YES.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for
claims before any court, tribunal or board against the corporation shall ipso jure be
suspended. As stated early on, during the pendency of petitioners complaint before the
Labor Arbiter, the SEC placed respondent under an Interim Rehabilitation Receiver. After
the Labor Arbiter rendered his decision, the SEC replaced the Interim Rehabilitation
Receiver with a Permanent Rehabilitation Receiver.
While reinstatement pending appeal aims to avert the continuing threat or danger to the
survival or even the life of the dismissed employee and his family, it does not contemplate
the period when the employer-corporation itself is similarly in a judicially monitored state
of being resuscitated in order to survive.