G.R. No.
154689 November 25, 2004
UNICORN SAFETY GLASS, INC., LILY YULO and HILARIO YULO, petitioners,
vs.
RODRIGO BASARTE, JAIMELITO FLORES, TEODOLFO LOR, RONNIE DECIO,
ELMER SULTORA and JOSELITO DECIO, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a Petition for Review on Certiorari seeking to set aside the Decision1 of
the Court of Appeals dated October 18, 2001 and its subsequent Resolution
dated August 7, 2002, which reversed the decisions of the Labor Arbiter and
the National Labor Relations Commission (NLRC).
Respondents were regular employees of petitioner Unicorn Safety Glass
Incorporated, a company engaged in the business of glass manufacturing.
Respondents normally worked six (6) times a week, from Monday to Saturday,
and were paid on a weekly basis. They were likewise officers of the organized
union in petitioner company, owned and managed by the Spouses Lily and
Hilario Yulo.
On March 2, 1998, Hilario Yulo, as general manager of Unicorn, issued a
Memorandum2 informing respondents that effective April 13, 1998, their
workdays shall be reduced due to economic considerations. Yulo cited several
factors such as decrease in sales, increase in the cost of production, devaluation
of the peso and increase in minimum wage, which contributed to the current
economic state of the company. In a letter dated March 12, 1998, respondents
registered their protest to the proposed reduction of working days and
expressed doubts on the reasons offered by the company.3 Respondents also
surmised that the management was merely getting back at them for forming a
union especially since only the union officers were affected by the work
reduction.
On April 6, 1998, Hilario Yulo issued another Memorandum4 announcing the
implementation of a work rotation schedule to take effect from April 13, 1998
to April 30, 1998, which will effectively reduce respondents' workdays to
merely three days a week. A copy of the planned rotation scheme was sent to
the Department of Labor and Employment. Respondents wrote another letter
of protest dated April 7, 19985 expressing their frustrations at the apparent
lack of willingness on the part of petitioner company's management to address
their concerns and objections. On the same day, respondents met with the
Spouses Yulo and inquired as to the reasons for the imposition of the reduced
workweek. They were told that it was management's prerogative to do so.6
On April 13, 1998, instead of reporting for work, respondents filed a complaint
against petitioner company with the National Labor Relations Commission,
docketed as NLRC Case No. NCR-00-04-03277-98, for constructive dismissal
and unfair labor practice, i.e., union busting, non-payment of five days service
incentive leave pay and payment of moral and exemplary damages as well as
attorney's fees. Respondents prayed for reinstatement and payment of full
backwages.
Meanwhile, since respondents failed to report for work, petitioners sent each of
them a telegram directing them to do so. On April 18, 1998, respondents sent
Yulo a letter informing him that, in view of the management's apparent
indifference to their plight and blatant violation of their rights, a complaint was
lodged against petitioner company for constructive dismissal. Moreover, given
the working environment they were subjected to, they decided not to report for
work at all.7 Petitioner company replied by asking them to explain why they
have not been reporting for work. However, respondents neither reported for
work nor replied to petitioner company's telegrams.
On January 26, 1999, Labor Arbiter Felipe Pati rendered judgment finding that
respondents were not constructively terminated by petitioner company. Thus:
Complainants claim that they were constructively terminated.
However, evidence extant do not support this contention. What we see on
records are the telegrams, letters and memoranda sent by respondents to
complainants ordering the latter to report for work. Despite due receipt by the
complainants of these communications, they simply ignored respondents' plea.
Complainants deliberate refusal to report for work is very much evident from
the number of letters they received from respondents which were all ignored.
It is true that complainants have sent to respondent a joint letter-
reply dated April 18, 1998 (Annexes 35, Respondents Position Paper).
However, said joint letter reinforces the fact that complainants were not
terminated by respondents. In fact complainants admitted in this joint letter-
1
reply that they have decided not to report for work because they did not agree
with the report rotation adopted by respondents. From this admission and
statement of complainant, we feel that the charge of illegal dismissal they filed
against respondents is misplaced. If complainants strongly opposed the
rotation adopted by respondents, they could have initiated an illegal rotation
and not illegal dismissal case against respondents. As "good soldiers"
complainants could initiate this case while they are reporting for work based
on the adopted work rotation and let the Court decides whether or not this
rotation is valid and legal. Certainly refusal to report for work is not a proper
remedy.8
The Labor Arbiter likewise dismissed the charge of unfair labor practice for
lack of legal and factual basis. Nonetheless, the Labor Arbiter ordered
petitioner company to pay the respondents' claim for unpaid service incentive
leave pay. The Labor Arbiter disposed of the case, thus:
WHEREFORE, the instant case is hereby dismissed for lack of merit.
Respondents however, are ordered to pay complainants the total amount of
P5,110.00 for unpaid service incentive leave pay as alluded in the above
computation.
On the grounds of amicable settlement and subsequent withdrawals of their
complaints, the cases of PAQUITO MANONGSONG and ELMER SULTORA are
hereby dismissed with prejudice.
SO ORDERED.9
The case was appealed to the NLRC. During the pendency of the appeal,
however, petitioner company filed a Motion to Dismiss alleging that
respondents Basarte, Flores, Decio and Lor entered into amicable settlements
and executed a "Waiver, Release & Quitclaim."10 Respondents' representative
filed an Opposition thereto alleging that the "Waiver, Release & Quitclaim"
executed by respondents were entered into without his knowledge and not in
the presence of the Labor Arbiter; and that the amounts received by
respondents were unconscionably inadequate.
In a decision dated October 31, 2000, the NLRC sustained the findings of the
Labor Arbiter. On the issue of the amicable settlements, the NLRC stated:
We are not convinced that the amicable settlement entered into by
complainants were involuntary and that the consideration thereof are
unconscionable.
2
It is to be stressed that the complainants were the ones who went to the office
of respondent for settlement. They acknowledged having signed the "Waiver,
Release and Quitclaim" and brought the same before a Notary Public…. Given
these factual circumstances, it is hard to believe that there was
involuntariness on the part of the complainant when they settled their claims
with respondent. In fact, almost a year have already lapsed since then. It is
only now that complainants are claiming that their settlement was
involuntary.
Anent complainants' claim that the consideration of settlement is
unconscionable suffice it to state that the amount granted by way of
settlement to complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio
including that of complainant Teodolfo Lor (Records, p. 179) are more than
the judgment award.11
The dispositive portion of the NLRC's decision states:
PREMISES CONSIDERED, the appeal from the Decision dated January 26, 1999
is hereby DISMISSED for lack of merit and the Decision is AFFIRMED.
Further, the motions to dismiss filed by respondents with respect to
complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio and Teodolfo
Lor are hereby GRANTED. Thus, insofar as said complainants are concerned
their cases are dismissed with prejudice, as prayed for by respondents.
SO ORDERED.12
Unrelenting, the respondents filed a petition for certiorari with the Court of
Appeals, which found respondents' case partly meritorious.
However, it declined to make a contrary finding on the charge of unfair labor
practice for lack of clear-cut and convincing evidence. The dispositive portion
of the Court of Appeals' decision is as follows:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition is
substantially GRANTED. Private respondents are hereby ordered to reinstate to
their former positions Rodrigo Basarte, Jaimelito Flores and Ronnie Decio,
without loss of seniority rights and privileges, and to pay these three their full
backwages from April 13, 1998 until their reinstatement. Or, to award them
separation pay, in case reinstatement is no longer feasible or possible. Private
respondents are further sentenced to pay the aforenamed petitioners ten per
cent (10%) of the total awards by way of attorney's fees. Costs shall also be
taxed against private respondents.
SO ORDERED.13
Its Motion for Reconsideration having been denied, petitioners are before us on
Petition for Review on Certiorari, raising the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE
RULING OF THE LABOR ARBITER A QUO WHICH WAS AFFIRMED BY THE
NLRC HOLDING THAT PRIVATE RESPONDENTS WERE NOT ILLEGALLY
DISMISSED FROM THEIR EMPLOYMENT.
II.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
RELEASE, WAIVER AND QUITCLAIMS EXECUTED BY PRIVATE RESPONDENTS
RODRIGO BASARTE AND JAIMELITO FLORES NULL AND VOID.14
The petition lacks merit.
Constructive dismissal or a constructive discharge has been defined as quitting
because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in pay.15
Constructive dismissal, however, does not always take the form of a diminution.
In several cases, we have ruled that an act of clear discrimination, insensibility,
or disdain by an employer may become so unbearable on the part of the
employee so as to foreclose any choice on his part except to resign from such
employment. This constitutes constructive dismissal.16
In the case at bar, we agree with the Court of Appeals that petitioners' bare
assertions on the alleged reason for the rotation plan as well as its failure to
refute respondents' contention that they were targeted due to their union
activities, merit the reversal of the Labor Arbiter's decision. It was incumbent
upon petitioners to prove that the rotation scheme was a genuine business
necessity and not meant to subdue the organized union. The reasons
enumerated by petitioners in their Memoranda dated March 2, 1998 were
factors too general to actually substantiate the need for the scheme. Petitioners
cite the reduction in their electric consumption as proof of an economic slump.
3
This may be true to an extent. But it does not, by itself, prove that the rotation
scheme was the most reasonable alternative to remedy the company's
problems.
The petitioners' unbending stance on the implementation of the rotation
scheme was an indication that the rotation plan was being implemented for
reasons other than business necessity. It appears that respondents attempted
on more than one occasion to have a dialogue with petitioner Hilario Yulo to
discuss the work reduction. Good faith should have prompted Yulo to hear the
side of the respondents, to come up with a scheme amenable to both parties or
attempt to convince the employees concerned that there was no other viable
option. However, petitioners ignored the letters sent by respondents, which
compelled the latter to seek redress with the Labor Arbiter.
We are mindful that every business strives to keep afloat during these times
when prevailing economic situations turns such endeavor into a near struggle.
With as much latitude as our laws would allow, the Court has always respected
a company's exercise of its prerogative to devise means to improve its
operations. Thus, we have held that management is free to regulate, according
to its own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations, transfer
of employees, work supervision, lay off of workers and discipline, dismissal and
recall of workers.17 Further, management retains the prerogative, whenever
exigencies of the service so require, to change the working hours of its
employees.18
However, the exercise of management prerogative is not absolute. By its very
nature, encompassing as it could be, management prerogative must be
exercised in good faith and with due regard to the rights of labor—verily, with
the principles of fair play at heart and justice in mind. While we concede that
management would best know its operational needs, the exercise of
management prerogative cannot be utilized as an implement to circumvent our
laws and oppress employees. The prerogative accorded management cannot
defeat the very purpose for which our labor laws exist: to balance the
conflicting interests of labor and management, not to tilt the scale in favor of
one over the other, but to guaranty that labor and management stand on equal
footing when bargaining in good faith with each other.19
In the case at bar, the manner by which petitioners exercised their management
prerogative appears to be an underhanded circumvention of the law.
Petitioners were keen on summarily implementing the rotation plan, obviously
singling out respondents who were all union officers. The management's
apparent lack of interest to hear what the respondents had to say, created an
uncertain situation where reporting for work was tantamount to an
acquiescence in an unjust situation.
Petitioners argued that they "exerted diligent and massive efforts" to make
respondents return to work, highlighting the telegrams and memoranda sent to
respondents.20 It is well established that to constitute abandonment, two
elements must concur: (1) the failure to report for work or absence without
valid or justifiable reason, and (2) a clear intention to sever the employer-
employee relationship, with the second element as the more determinative
factor and being manifested by some overt acts. Abandoning one's job means
the deliberate, unjustified refusal of the employee to resume his employment
and the burden of proof is on the employer to show a clear and deliberate
intent on the part of the employee to discontinue employment.21
However, petitioners' charge of abandonment of work by respondents does not
hold water when taken in light of the complaint for constructive dismissal. We
have held that a charge of abandonment is totally inconsistent with the filing of
a complaint for constructive dismissal— and with reason.22 Respondents
cannot be said to have abandoned their jobs when precisely, the root cause of
their protest is their demand to maintain their regular work hours. What is
more, respondents even prayed for reinstatement and backwages. Clearly,
these are incompatible with the proposition that respondents sought to
abandon their work.
Anent the issue of the validity of the waivers and quitclaims executed by some
of the respondents, petitioners argue that while admittedly, the amounts
indicated therein were not substantial, it does not necessarily follow that these
were executed under duress. Moreover, the waivers and quitclaims were
executed when the complaint for illegal dismissal was already dismissed by the
Labor Arbiter. Thus, the waivers and quitclaims were executed under valid
circumstances.
We do not agree. To be sure, the law looks with disfavor upon quitclaims and
releases by employees who are inveigled or pressured into signing them by
unscrupulous employers seeking to evade their legal responsibilities. We have
clarified the standards for determining the validity of quitclaim or waiver in the
case of Periquet v. National Labor Relations Commission,23 to wit:
If the agreement was voluntarily entered into and represents a
reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear
4
proof that the waiver was wangled from an unsuspecting or gullible person, or
the terms of settlement are unconscionable on its face, that the law will step in
to annul the questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking.
In the instant case, while it is true that the complaint for illegal dismissal filed
by respondents with the Labor Arbiter has been dismissed, their appeal before
the NLRC was still pending. In fact, petitioners even filed a Motion to Dismiss
with the NLRC on the very ground that the respondents, or at least most of
them, have executed said "Waivers, Releases and Quitclaims." Petitioners
cannot therefore deny that it was in their interest to have respondents execute
the quitclaims.
Furthermore, the considerations received by respondents Basarte and Flores
were grossly inadequate considering the length of time that they were
employed in petitioner company. As correctly pointed out by the Court of
Appeals, Basarte worked for petitioner company for 21 years, that is, from
1976 to 1998, while Flores worked from 1991 to 1998. Basarte and Flores only
received P10,000.00 and P3,000.00, respectively. In contrast, Manongsong and
Soltura, two workers who opted to settle their respective cases earlier on, both
started in 1993 only, but were able to take home P16,434.00 each after
executing their waivers.
Article 279 of the Labor Code provides that an employee who is unjustly
dismissed from work is entitled to reinstatement without loss of seniority
rights and other privileges, and to his full backwages, inclusive of allowances,
and to the other benefits or their monetary equivalent computed from the time
of his actual reinstatement. However, if reinstatement is no longer possible, the
employer has the alternative of paying the employee his separation pay in lieu
of reinstatement.
WHEREFORE, the instant petition is DENIED, and the decision of the Court of
Appeals of October 18, 2001 in CA-G.R. SP No. 63577 is AFFIRMED in toto. Costs
against petitioners.
SO ORDERED.
G.R. No. 170661 December 4, 2009
RAMON B. FORMANTES, Petitioner,
vs.
DUNCAN PHARMACEUTICALS, PHILS., INC., Respondent.
DECISION
PERALTA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking to set aside the Decision1 and the Resolution2 of the
Court of Appeals (CA) in CA-G.R. SP No. 57528, which affirmed with
modification the Resolutions rendered by the National Labor Relations
Commission (NLRC), Second Division, dated October 19, 19993 and December
21, 1999,4 respectively, in NLRC NCR CA 010480-96.
Petitioner Ramon B. Formantes was employed as a medical representative by
respondent Duncan Pharmaceuticals, Phils., Inc. on September 1, 1990. He later
became the Acting District Manager of respondent for the Ilocos District.
On March 18, 1994, petitioner received a long distance call from Rey Biscaro,
Regional Sales Manager of respondent, asking him to report at the head office
on March 21, 1994. Thereafter, petitioner went to the head office and was
confronted by said Mr. Biscaro and Emeterio Shinyo, Marketing and Sales
Director, due to his attempt to sexually force himself upon his subordinate
Cynthia Magat, one of the medical representatives of respondent company.
Petitioner and Ms. Magat separately related their sides of the incident to the
respondent company’s officers. Petitioner was then compelled by respondent
to take a leave of absence.
Thereafter, Biscaro tried to induce petitioner to resign, which the latter refused.
Petitioner's salary was then withheld from him. He was not allowed to attend
the meetings and activities of the company. His subordinates no longer
reported to him and the company directed one of its district managers to take
over his position and functions without prior notice to him. Due to the
foregoing, petitioner was constrained to file a case for illegal suspension,
constructive dismissal, payment of salaries, allowances, moral and exemplary
damages on April 13, 1994 before the NLRC, Regional Arbitration Branch No. I,
San Fernando, La Union.
5
On April 19, 1994, petitioner received a telegram from Lelet Fernando of the
Human Resources Department (HRD), advising him to report to the
respondents' head office. Petitioner advised her and Biscaro that he has not
received his salary and reimbursements for incurred expenses. He also
informed them that he had already filed a case for constructive dismissal
against the respondent company.
On April 25, 1994, petitioner received a telegram5 dated April 22, 1994 from
respondent, advising him that his reasons for not reporting were unacceptable,
and ordering him to report to the office in the morning of April 25, 1994.
Petitioner was not able to report due to time constraints, as it was physically
impossible for him to report on the very same day that he received the
telegram ordering him to do so. Thereafter, respondent sent several letters to
petitioner. These letters, among others, include the following: letter6 charging
him of grave misconduct on the attempted sexual abuse upon the person of Ms.
Cynthia Magat, and directing him to submit his written explanation thereon;
letter7 recalling the company car issued to him; letter8 informing him of
violation of Rule IV.5.a of the respondent's company rules by failing to turn
over the company car, and directing him to explain in writing why no further
disciplinary action should be given to him; letter9 suspending him for one day
for failure to carry out instructions, and ordering him to report to the
company's head office; letter10 placing him under suspension without pay for
eight days for failure to return the company car without explanation.
On May 19, 2004, petitioner received a letter11 dated May 18, 1994, terminating
his employment with respondent company due to insubordination; for failure
to report to the respondent company; for failure to submit the required
operations report; and for failure to turn over the company car.
In the meantime, Executive Labor Arbiter (LA) Norma C. Olegario rendered a
decision12 dated November 10, 1995, dismissing the complaint, finding that
Formantes was validly dismissed for an attempt to sexually abuse Cynthia
Magat, but imposing a penalty on respondent for its failure to give formal notice
and conduct the necessary investigation before dismissing petitioner. The LA
found that when the first written notice was sent to petitioner on April 25,
1994, regarding the incident with Cynthia Magat, petitioner had already been
dismissed, or at least, constructively dismissed, because as early as March 23,
1994, he was no longer allowed to participate in the activities of the company
and his salary was withheld from him. The LA directed the respondent to pay
petitioner the amount of ₱1,000.00.
Dissatisfied with the Labor Arbiter's finding, petitioner appealed to the NLRC,
on grounds of grave abuse of discretion; serious errors of law; and serious
errors in the findings of facts, which, if not corrected, would cause irreparable
damage to petitioner. Petitioner alleged that the LA erred in ruling that he was
legally dismissed for sexual abuse, when the charge against him stated in the
termination letter was insubordination.
The NLRC, Second Division, in its Resolution13 dated October 19, 1999 affirmed
the findings of the LA. Petitioner filed a motion for reconsideration, which the
NLRC denied in a Resolution14 dated December 21, 1999.
Undaunted, petitioner filed a petition for certiorari under Rule 65 with the CA,
alleging that the NLRC gravely abused its discretion and acted in excess of its
jurisdiction in affirming the decision of the Labor Arbiter that petitioner's
dismissal from employment was justified on a ground not alleged in the notice
of termination and not established by substantial evidence. Petitioner further
alleged that the NLRC erred in not holding that petitioner was constructively
dismissed by the respondent.
The CA, in its Decision dated July 18, 2005, affirmed the resolutions of the
NLRC, but with the modification that the sanction imposed on respondent
company for non-observance of due process be increased from ₱1,000.00 to
₱5,000.00.
Petitioner filed a Motion for Reconsideration, which the CA denied in a
Resolution dated November 23, 2005. Hence, the instant petition assigning the
following errors:
THE JUDGMENT RENDERED [BY] THE NLRC [IS] NULL AND VOID ON THE
GROUND OF LACK OF DUE PROCESS TAKING INTO ACCOUNT THAT
PETITIONER-APPELLANT WAS UNKNOWINGLY DEPRIVED OF COMPETENT
LEGAL ASSISTANCE OF COUNSEL AS IT TURNED OUT THAT THE "COUNSEL"
WHO REPRESENTED HIM WAS LATER FOUND NOT TO BE A MEMBER OF THE
BAR AS [HE REPRESENTED HIMSELF TO BE].
THE COURT A QUO GROSSLY ERRED AND DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE
DECISIONS OF THIS HONORABLE COURT AND HAS DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS IN NOT HOLDING
THAT THE PETITIONER WAS CONSTRUCTIVELY DISMISSED BY THE
RESPONDENT COMPANY.
THE COURT A QUO GROSSLY ERRED AND DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE
6
DECISIONS OF THIS HONORABLE COURT AND HAS DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS WHEN IT
AFFIRMED THE DECISION OF THE NLRC THAT PETITIONER'S DISMISSAL
FROM EMPLOYMENT WAS JUSTIFIED ON ANOTHER GROUND NOT ALLEGED
IN THE NOTICE OF TERMINATION AND WAS NOT ESTABLISHED BY
SUBSTANTIAL EVIDENCE.15
On the alleged deprivation of due process, petitioner alleged that he was not
duly represented by a competent counsel, as Rogelio Bacolor, who represented
him in the proceedings before the NLRC, was not a member of the bar, thereby
depriving him of his right to due process. Hence, he prayed that the case be
remanded to the LA for further proceedings.
We are not persuaded.
Records will show that aside from Mr. Bacolor, petitioner was represented by
other lawyers at the commencement of the action before the NLRC and during
the proceedings before the NLRC and the Court of Appeals.
Petitioner was duly represented by Atty. Jannette B. Ines in the filing of the
Complaint,16 the Position Paper,17 and the Reply18 before the LA. He was also
represented by the same Atty. Ines during the initial stage of the hearing before
the NLRC.19 Further, although Mr. Bacolor appeared in the several stages of the
hearing before the LA and filed petitioner's memorandum of appeal, he also
retained the services of Guererro and Turgano Law Office, as collaborating
counsel. Atty. Arnel Alambra of said law office filed a Supplemental
Memorandum of Appeal20 and Reply21 to the respondent's answer to the
Supplemental Memorandum of Appeal in petitioner's behalf. Thereafter, upon
denial of the appeal by the NLRC, petitioner's motion for reconsideration22 was
filed by Arnold V. Guerrero Law Offices, together with its battery of lawyers,
which includes Atty. Arnold V. Guerrero, Atty. Ma. Josefa C. Pinza, Atty.
Carmencita M. Chua and Atty. Ma. Loralie C. Cruz. Petitioner was also
represented by said law office in the proceedings before the CA, more
particularly during the filing of the Petition for Certiorari23 under Rule 65, the
Reply24 and the Memorandum.25 Upon denial of the petition before the CA,
petitioner was also represented by another law office in the name of Argue Law
Office, which filed the petitioner's motion for reconsideration and the present
petition before this court.
In fine, petitioner was fully represented by a barrage of competent lawyers.
Thus, he cannot claim that he was deprived of due process of law.
In Rizal Commercial Banking Corporation v. Commissioner of Internal Revenue,26
this Court held that:
There is no question that the "essence of due process is a hearing before
conviction and before an impartial and disinterested tribunal" but due process
as a constitutional precept does not, always and in all situations, require a trial-
type proceeding. The essence of due process is to be found in the reasonable
opportunity to be heard and submit any evidence one may have in support of
one’s defense. "To be heard" does not only mean verbal arguments in court; one
may be heard also through pleadings. Where opportunity to be heard, either
through oral arguments or pleadings, is accorded, there is no denial of
procedural due process. (Emphasis supplied.)1avvphi1
Further, in Fernandez v. National Labor Relations Commission,27 respondents
failed to attend the hearing on the scheduled cross examination of the
petitioner's witness. Due to the foregoing, the LA deemed the case submitted
for resolution. Respondents claimed denial of due process due to non-reception
of its evidence. On appeal, the NLRC vacated the LA's Order and remanded the
case for further proceedings. The issue is whether the failure to attend hearings
before the LA is a waiver of the right to present evidence. This court held that:
Private respondents were able to file their respective position papers and the
documents in support thereof, and all these were duly considered by the labor
arbiter. Indeed, the requirements of due process are satisfied where the parties
are given the opportunity to submit position papers. In any event, Respondent
NLRC and the labor arbiter are authorized under the Labor Code to decide
a case on the basis of the position papers and documents submitted. The
holding of an adversarial trial depends on the discretion of the labor
arbiter, and the parties cannot demand it as a matter of right. In other
words, the filing of position papers and supporting documents fulfilled
the requirements of due process. Therefore, there was no denial of this right
because private respondents were given the opportunity to present their side.
Taken altogether, although petitioner, during some parts of the trial
proceedings before the LA was not represented by a member of the bar, he was
given reasonable opportunity to be heard and submit evidence to support his
arguments, through the medium of pleadings filed in the labor tribunals. He
was also able to present his version of the Magat incident during his direct
examination conducted by his lawyer Atty. Jannette Inez.28 Thus, he cannot
claim that he was denied due process.
7
On the issue of petitioner's dismissal on another ground not alleged in the
notice of termination, petitioner argued that the LA's justification for his
dismissal on the ground of sexual abuse is not proper, as said ground is not
alleged in the notice of termination. The notice of termination stated that
petitioner was dismissed due to failure to report to the office; failure to submit
reports; and failure to file written explanations despite repeated instructions
and notices.
The argument is not meritorious.
In Rubberworld (Phils.), Inc. v. NLRC,29 we held that:
It is now axiomatic that if just cause for termination of employment actually
exists and is established by substantial evidence in the course of the
proceedings before the Labor Arbiter, the fact that the employer failed, prior to
such termination, to accord to the discharged employee the right of formal
notice of the charge or charges against him and a right to ventilate his side with
respect thereto, will not operate to eradicate said just cause so as to impose on
the employer the obligation of reinstating the employee and otherwise granting
him such other concomitant relief as is appropriate in the premises. x x x
Although petitioner was dismissed from work by the respondent on the ground
of insubordination, this Court cannot close its eyes to the fact that the ground of
sexual abuse committed against petitioner's subordinate actually exists and
was established by substantial evidence before the LA.
When petitioner filed the complaint for constructive dismissal on April 13,
1994, he was still unsure of the actual ground for his suspension and
constructive dismissal. The very reason why he sought refuge in the labor
tribunals was to ascertain the ground for his termination. In keeping with its
duties, the LA, in order to ascertain the petitioner's cause for constructive
dismissal, required the parties to submit their respective position papers and
their respective replies thereto. After analyzing the pleadings submitted before
her and the proceedings taken thereon, the LA made a finding that petitioner
was validly dismissed due to the sexual abuse committed against his
subordinate. However, the LA imposed a monetary penalty upon respondent
for its failure to observe procedural due process.
The LA would be rendered inutile if she would just seal her lips after finding
that a just cause for dismissal exists merely because the said ground was not
stated in the notice of termination.
Contrary to petitioner's allegation, We hold that there exists substantial
evidence to support the ground for his dismissal.
The findings of facts of quasi-judicial agencies, which have acquired expertise in
the specific matters entrusted to their jurisdiction, are accorded by this Court
not only respect but even finality if they are supported by substantial evidence.
Only substantial, not preponderance, of evidence is necessary. Section 5, Rule
133 of the Rules of Court, provides that in cases filed before administrative or
quasi-judicial bodies, a fact may be deemed established if it is supported by
substantial evidence, or that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.30
After a meticulous review of the records, We find that the Decision of the LA, as
affirmed by the NLRC and the CA, is supported by substantial evidence. The LA
arrived at her decision after a careful consideration of all the facts and evidence
on record.
The LA anchored her decision upon the Sworn Statement31 given by Cynthia
Magat to the Mangaldan Police Station, dated April 14, 1994, to wit:
xxxx
06.Q. - You have stated that you were attempted (sic) by you boss, MR. RAMON
B. FORMANTES, to sexually abuse you, will you relate briefly how the incident
took place?
A. - That we have a meeting at about 10:30 o'clock in the morning of March 9,
1994 at the Maraman Office at Caranglaan, Dagupan City. After the meeting, we
proceeded to my apartment at Anolid, Mangaldan, Pangasinan to get the data
he (Mr. Formantes) was asking.
07.Q. - Upon reaching you apartment at Anolid, Mangaldan, what happened, if
any?
A. - We entered the apartment and then while I was looking for the papers
needed, he asked permission to see the apartment and so I showed him the
lower portion. And then he asked again and wished to go upstairs, so I
consented since he is [an] outstanding friend and my boss without any malice
to him and we went upstairs.
8
08.Q. - Then, what happened, if any, when you were already upstairs of the
apartment?
A. - That he went inside my room looking at my things. When I told him we
better go downstairs since it is not proper got (sic) us to stay there because I
am alone, he suddenly opened my closet without my permission. I closed the
closet and as I persuading (sic) him to go downstairs, he started teasing me and
holding my hands saying "Cheng, na-e-excite yata ako sa iyo." I resisted his
touch and told him not to tease me that way. Then finally, we went downstairs
and I started again to look for the papers I needed. As I was looking at my
things, he suddenly went upstairs so I ran after him. I caught up with him at the
door of my room. Then, he said, "Cheng, galing ako sa La Union pagod ako,
pwede bang magpahinga? Since I trusted him and he is like a brother to me, I
said yes. I turned on the electric fan and TV set and I went downstairs. Since it
was hot, I decided to buy coke, after which I went upstairs with the coke and
my MBS reports. When I entered the room, he was already wearing only his
"kamiseta" since he said it was hot. I was trying to give him a shirt but he said
he was comfortable that way. I gave him the coke and I asked him how to do my
MBS reports. He taught me and after that when I decided to do my reports
downstairs, he stopped and suddenly embraced me from behind and pulled me
down to the bed.
09.Q. - And when you fell down on the bed, what did Mr. Ramon Formantes do,
if any?
A. - Then, he said "Cheng, na-mimiss lang kita at ang barkada natin, palambing
naman." I said that was not my idea of "lambing" and I resisted him. As I was
getting up, he then pulled me again to the bed, this time he pinned me to the
bed, he went on top of me and was asking for a kiss. He said, "Cheng isang kiss
lang titigil na ako." I was shocked. And then he was trying to get in between my
legs, but I kept on kicking him with my left leg. He was trying to get my mouth,
but I kept on banging my face on the bed. By then, my face was full of his saliva,
as he started kissing the right side of my face down to the neck. He then held
my left buttock and held my lower jaw with his left hand. He squeezed my left
buttock and started to put his tongue in my mouth. By now, I could not shout
since he was kissing my mouth, but before he got my mouth I told him,
"Monching, don't do this to me, you are my friend." He said "I'm also your boss."
Since I was kicking him and pushing him, I was finally able to get away from
him. When I stood up, I asked him "Bakit mo nagawa ito sa akin, kaibigan kita."
He said, "Cheng, I'm sorry. Nadala lang ako." He told me not to tell this to Art,
my counterpart in Baguio. Since I really wanted to get out of the house as fast as
I could, so I just said, just don't do it again. We went out and he went to La
Union."
The same Sworn Statement further provides that:
10.Q. - Was there any more incident that transpired after the one you have just
related?
A - Yes, sir. On March 11, 1994, Friday, about 7:15 o’clock in the morning, Mr.
Ramon Formantes arrived at my apartment saying he came from Manila. He
asked me if he could sit down. I let him in and left the door open. Then he said,
"May tao ba sa taas?" I told him there was none though my fiancee was upstairs.
Then he started to hold my inner thigh saying, Cheng, maligo ka na hihintayin
kita. I told him I'll just meet him at Nipa or Maraman. I was resisting his touch,
but he kept on touching me and holding me at the back. Without my knowledge,
my fiancee was seeing what was happening downstairs so he started to make
noise and Monching heard this and he got scared and left. Then on March 18,
1994, Friday, Monching went to my apartment again at around 7:20 o'clock in
the morning, but this time I did not let him in, I just opened the door a little. He
got irritated with my defensiveness and left my place.
The evidence on record sufficiently supports the finding of sexual abuse against
petitioner. In addition to her sworn statement to the police, she sufficiently
narrated petitioner's attempt to sexually abuse her in her handwritten letter 32
dated March 23, 1994 addressed to Reynaldo Biscaro. She also narrated the
same incident in another letter33 addressed to the president of the union, Joel
Soco.
It may be trite to point out that the findings of a trial court on the credibility of
witnesses deserve great weight, given the clear advantage of a trial judge over
an appellate justice in the appreciation of testimonial evidence. 34 The LA, being
in the position to observe the demeanor of both the petitioner and Ms. Magat
during their testimony, gave more credence to the testimony 35 of Ms. Magat. On
the other hand, aside from his self-serving testimony, petitioner was not able to
sufficiently contradict the charge of sexual abuse against him. Moreover, the
courts usually give credence to the testimony of a woman who is a victim of
sexual assault, because normally no woman would be willing to undergo the
humiliation of a public trial and testify on the details of her ordeal if it be not to
condemn an injustice.36
In Villarama v. National Labor Relations Commission,37 wherein a managerial
employee committed sexual harassment against his subordinate, the Court held
that sexual harassment is a valid cause for separation from service.
9
As a managerial employee, petitioner is bound by a more exacting work ethic.
He failed to live up to this higher standard of responsibility when he succumbed
to his moral perversity. And when such moral perversity is perpetrated against
his subordinate, he provides a justifiable ground for his dismissal for lack of
trust and confidence. It is the right, nay, the duty of every employer to protect
its employees from over sexed superiors.
As a manager, petitioner enjoyed the full trust and confidence of respondent
and his subordinates. By committing sexual abuse against his subordinate, he
clearly demonstrated his lack of fitness to continue working as a managerial
employee and deserves the punishment of dismissal from the service.
Aside from the findings of sexual abuse, petitioner is also guilty of
insubordination. Records show that after filing a case for constructive dismissal
on April 13, 1994 against the respondent, petitioner continued working and
performing his functions with the respondent company until his termination on
May 19, 1994.38 However, despite receipt of the various notices sent by
respondent to him to report to the office and to submit written explanations
relative to his failure to follow instructions, the records of the case are bereft of
showing that he filed any written explanation to any of these notices. His
continued failure to carry out the reasonable oral or written instructions of his
supervisor is punishable by insubordination, which is provided under Rule
IV.5.a of the Operational Instruction OI-A-AP25, Work Rules.39 While petitioner
cannot be faulted in believing that respondent constructively dismissed him
from work, he was still, strictly speaking, respondent's employee when he
received the written notices. As an employee, he should have at least responded
thereto, as instructed.
We now come to the issue of constructive dismissal.
Constructive dismissal exists when an act of clear discrimination, insensibility
or disdain by an employer has become so unbearable to the employee leaving
him with no option but to forego with his continued employment.40
In the case at bar, petitioner, while still employed with the respondent, was
compelled to resign and forced to go on leave. He was not allowed to
participate in the activities of the company. His salary was no longer remitted
to him. His subordinates were directed not to report to him and the company
directed one of its district managers to take over his position and do his
functions without prior notice to him.
These discriminatory acts were calculated to make petitioner feel that he is no form of damages would serve to deter employers from future violations of the
longer welcome nor needed in respondent company − short of sending him an statutory due process rights of employees. At the very least, it provides a
actual notice of termination. We, therefore, hold that respondent constructively vindication or recognition of this fundamental right granted to the latter under
dismissed petitioner from the service. the Labor Code and its Implementing Rules.44

Despite this, however, it is impractical and unjust to reinstate petitioner, as
there was a just cause for his dismissal from the service.
Thus, we hold the dismissal as valid, but we find that there was non-compliance
with the twin procedural requirements of notice and hearing for a lawful
dismissal.
Nominal damages are adjudicated in order that a right of the plaintiff that has
been violated or invaded by the defendant may be vindicated or recognized,
and not for the purpose of indemnifying the plaintiff for any loss suffered by
him.45 Thus, for respondent's violation of petitioner's statutory rights,
respondent is sanctioned to pay petitioner nominal damages in the amount of
₱30,000.00.

Well settled is the dictum that the twin requirements of notice and hearing
constitute the essential elements of due process in the dismissal of employees.
It is a cardinal rule in our jurisdiction that the employer must furnish the
employee with two written notices before the termination of employment can
be affected: (a) the first apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (b) the second informs the
employee of the employer’s decision to dismiss him.41
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 57528 are AFFIRMED with the MODIFICATION
that the sanction imposed on respondent for non-compliance with statutory
due process is increased from ₱5,000.00 to ₱30,000.00.
SO ORDERED.

The barrage of letters42 sent to petitioner, starting from a letter dated April 22,
1994 until his termination on May 19, 1994, was belatedly made and
apparently done in an effort to show that petitioner was accorded the notices
required by law in dismissing an employee. As observed by the LA in her
decision, prior to those letters, petitioner was already constructively dismissed.

Since the dismissal, although for a valid cause, was done without due process of
law, the employer should indemnify the employee with nominal damages. In
Agabon v. National Labor Relations Commission,43 we found that the dismissal
of the employees therein was for valid and just cause because their
abandonment of their work was firmly established. Nonetheless, the employer
therein was held liable, because it was proven that it did not comply with the
twin procedural requirements of notice and hearing for a legal dismissal.
However, in lieu of payment of backwages,

we ordered the employer to pay indemnity to the dismissed employees in the

form of nominal damages, thus:

The violation of the petitioners’ right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal
damages. The amount of such damages is addressed to the sound discretion of
the court, taking into account the relevant circumstances. x x x. We believe this

10
G.R. No. 177664 December 23, 2009
CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO OBIAS,
Respondents.
DECISION
BRION, J.:
Before this Court is the Petition for Review on Certiorari under Rule 45 of the
Rules of Court assailing the Decision1 of the Court of Appeals (CA) dated
February 20, 2007 and its related Resolution dated April 30, 2007 2 in CA-G.R.
SP No. 95924. The assailed decision reversed and set aside the August 15, 2006
Resolution3 of the National Labor Relations Commission (NLRC), and reinstated
the Labor Arbiter’s April 15, 2005 Decision4 finding respondent Roberto Obias
(respondent) illegally dismissed from his employment.
ANTECEDENT FACTS
The present petition traces its roots to the complaint5 for illegal dismissal filed
by the respondent against petitioners CRC Agricultural Trading and its owner,
Rolando B. Catindig (collectively, petitioners), before the Labor Arbiter on June
22, 2004.
In his Sinumpaang Salaysay,6 the respondent alleged that the petitioners
employed him as a driver sometime in 1985. The respondent worked for the
petitioners until he met an accident in 1989, after which the petitioners no
longer allowed him to work. After six years, or in February 1995, the
petitioners again hired the respondent as a driver and offered him to stay
inside the company’s premises. The petitioners gave him a ₱3,000.00 loan to
help him build a hut for his family.
Sometime in March 2003, the petitioners ordered respondent to have the
alternator of one of its vehicles repaired. The respondent brought the vehicle to
a repair shop and subsequently gave the petitioners two receipts issued by the
repair shop. The latter suspected that the receipts were falsified and stopped
talking to him and giving him work assignments. The petitioners, however, still
paid him ₱700.00 and ₱500.00 on April 15 and 30, 2004, respectively, but no
longer gave him any salary after that. As a result, the respondent and his family
11
moved out of the petitioners’ compound and relocated to a nearby place. The
respondent claimed that the petitioners paid him a daily wage of ₱175.00, but
did not give him service incentive leave, holiday pay, rest day pay, and overtime
pay. He also alleged that the petitioners did not send him a notice of
termination.
In opposing the complaint, the petitioners claimed that the respondent was a
seasonal driver; his work was irregular and was not fixed. The petitioners paid
the respondent ₱175.00 daily, but under a "no work no pay" basis. The
petitioners also gave him a daily allowance of ₱140.00 to ₱200.00. In April
2003, the respondent worked only for 15 days for which he was paid the
agreed wages. The petitioners maintained that they did not anymore engage
the respondent’s services after April 2003, as they had already lost trust and
confidence in him after discovering that he had forged receipts for the vehicle
parts he bought for them. Since then, the respondent had been working as a
driver for different jeepney operators.7
The Labor Arbiter Ruling
Labor Arbiter Rennell Joseph R. Dela Cruz, in his decision of April 15, 2005,
ruled in the respondent’s favor declaring that he had been illegally dismissed.
The labor arbiter held that as a regular employee, the respondent’s services
could only be terminated after the observance of due process. The labor arbiter
likewise disregarded the petitioners’ charge of abandonment against the
respondent. He thus decreed:
WHEREFORE, premises considered, judgment is hereby rendered ordering
respondents CRC AGRICULTURAL TRADING and ROLANDO CATINDIG to pay
complainant jointly and severally the following:
Separation Pay - ₱64,740.00
Backwages
Basic pay - ₱146,491.80
13th month pay - 12,207.65
SIL - 2,347.63
Salary Differential - 47,944.00
Unpaid SIL - 3,467.00
__________
₱277,198.08
10% attorney’s fees - 27,719.80
__________
GRAND TOTAL - ₱304,917.80
SO ORDERED.8
The NLRC Ruling
The petitioners and the respondent both appealed the labor arbiter’s decision
to the NLRC. The petitioners specifically questioned the ruling that the
respondent was illegally dismissed. The respondent, for his part, maintained
that the labor arbiter erred when he ordered the payment of separation pay in
lieu of reinstatement.
The NLRC, in its resolution of August 15, 2006,9 modified the labor arbiter’s
decision. The NLRC ruled that the respondent was not illegally dismissed and
deleted the labor arbiter’s award of backwages and attorney’s fees. The NLRC
reasoned out that it was respondent himself who decided to move his family
out of the petitioners’ lot; hence, no illegal dismissal occurred. Moreover, the
respondent could not claim wages for the days he did not work, as he was
employed by the petitioners under a "no work no pay" scheme.
The CA Decision
The petitioners filed on August 30, 2006 a petition for certiorari with the CA
alleging that the NLRC erred in awarding the respondent separation pay and
salary differentials. They argued that an employee who had abandoned his
work, like the respondent, is no different from one who voluntarily resigned;
both are not entitled to separation pay and to salary differentials. The
petitioners added that since they had already four regular drivers, the
respondent’s job was already unnecessary and redundant. They further argued
that they could not be compelled to retain the services of a dishonest employee.
12
The CA, in its decision dated February 20, 2007, reversed and set aside the
NLRC resolution dated August 15, 2006, and reinstated the labor arbiter’s April
15, 2005 decision.
The CA disregarded the petitioners’ charge of abandonment against the
respondent for their failure to show that there was deliberate and unjustified
refusal on the part of the respondent to resume his employment. The CA also
ruled that the respondent’s filing of a complaint for illegal dismissal manifested
his desire to return to his job, thus negating the petitioners’ charge of
abandonment. Even assuming that there had been abandonment, the
petitioners denied the respondent due process when they did not serve him
with two written notices, i.e., (1) a notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) a
subsequent notice which advises the employee of the employer’s decision to
dismiss him. Thus, the respondent is entitled to full backwages without
deduction of earnings derived elsewhere from the time his compensation was
withheld from him, up to the time of his actual reinstatement. The CA added
that reinstatement would no longer be beneficial to both the petitioners and
respondent, as the relationship between them had already been strained.
Petitioners moved to reconsider the decision, but the CA denied the motion for
lack of merit in its Resolution dated April 30, 2007.
In the present petition, the petitioners alleged that the CA erred when it
awarded the respondent separation pay, backwages, salary differentials, and
attorney’s fees. They reiterated their view that an abandoning employee like
respondent is not entitled to separation benefits because he is no different from
one who voluntarily resigns.
THE COURT’S RULING
We do not find the petition meritorious.
The existence of an employer-employee relationship
A paramount issue that needs to be resolved before we rule on the main issue
of illegal dismissal is whether there existed an employer-employee relationship
between the petitioners and the respondent. This determination has been
rendered imperative by the petitioners’ denial of the existence of employer-
employee relationship on the reasoning that they only called on the respondent
when needed.
The elements to determine the existence of an employment relationship are:
(1) the selection and engagement of the employee; (2) the payment of wages;
(3) the power of dismissal; and (4) the employer’s power to control the
employee’s conduct. The most important element is the employer’s control of
the employee’s conduct, not only as to the result of the work to be done, but
also as to the means and methods to accomplish it. All the four elements are
present in this case.10
First, the petitioners engaged the services of the respondent in 1995. Second,
the petitioners paid the respondent a daily wage of ₱175.00, with allowances
ranging from ₱140.00 to ₱200.00 per day. The fact the respondent was paid
under a "no work no pay" scheme, assuming this claim to be true, is not
significant. The "no work no pay" scheme is merely a method of computing
compensation, not a basis for determining the existence or absence of
employer-employee relationship. Third, the petitioners’ power to dismiss the
respondent was inherent in the fact that they engaged the services of the
respondent as a driver. Finally, a careful review of the record shows that the
respondent performed his work as driver under the petitioners’ supervision
and control. Petitioners determined how, where, and when the respondent
performed his task. They, in fact, requested the respondent to live inside their
compound so he (respondent) could be readily available when the petitioners
needed his services. Undoubtedly, the petitioners exercised control over the
means and methods by which the respondent accomplished his work as a
driver.
We conclude from all these that an employer-employee relationship existed
between the petitioners and respondent.
The respondent did not abandon his job
In a dismissal situation, the burden of proof lies with the employer to show that
the dismissal was for a just cause. In the present case, the petitioners claim that
there was no illegal dismissal, since the respondent abandoned his job. The
petitioners point out that the respondent freely quit his work as a driver when
he was suspected of forging vehicle parts receipts.
Abandonment of work, or the deliberate and unjustified refusal of an employee
to resume his employment, is a just cause for the termination of employment
under paragraph (b) of Article 282 of the Labor Code, since it constitutes
neglect of duty.11 The jurisprudential rule is that abandonment is a matter of
intention that cannot be lightly presumed from equivocal acts. To constitute
abandonment, two elements must concur: (1) the failure to report for work or
13
absence without valid or justifiable reason, and (2) a clear intent, manifested
through overt acts, to sever the employer-employee relationship. The employer
bears the burden of showing a deliberate and unjustified refusal by the
employee to resume his employment without any intention of returning.12
In the present case, the petitioners did not adduce any proof to show that the
respondent clearly and unequivocally intended to abandon his job or to sever
the employer-employee relationship. Moreover, the respondent’s filing of the
complaint for illegal dismissal on June 22, 2004 strongly speaks against the
petitioners’ charge of abandonment; it is illogical for an employee to abandon
his employment and, thereafter, file a complaint for illegal dismissal. As we held
in Samarca v. Arc-Men Industries, Inc.:13
Abandonment is a matter of intention and cannot lightly be presumed from
certain equivocal acts. To constitute abandonment, there must be clear proof of
deliberate and unjustified intent to sever the employer-employee relationship.
Clearly, the operative act is still the employee’s ultimate act of putting an end to
his employment. [Emphasis in the original]
Respondent was constructively dismissed
Case law defines constructive dismissal as a cessation of work because
continued employment has been rendered impossible, unreasonable, or
unlikely, as when there is a demotion in rank or diminution in pay or both or
when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.14
The test of constructive dismissal is whether a reasonable person in the
employee’s position would have felt compelled to give up his position under the
circumstances. It is an act amounting to dismissal but is made to appear as if it
were not. In fact, the employee who is constructively dismissed might have
been allowed to keep coming to work. Constructive dismissal is therefore a
dismissal in disguise. The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the coercive acts
of the employer.15
In the present case, the petitioners ceased verbally communicating with the
respondent and giving him work assignment after suspecting that he had
forged purchase receipts. Under this situation, the respondent was forced to
leave the petitioners’ compound with his family and to transfer to a nearby
place. Thus, the respondent’s act of leaving the petitioners’ premises was in
reality not his choice but a situation the petitioners created.
The Due Process Requirement
Even assuming that a valid ground to dismiss the respondent exists, the
petitioners failed to comply with the twin requirements of notice and hearing
under the Labor Code.
The long established jurisprudence holds that to justify the dismissal of an
employee for a just cause, the employer must furnish the worker with two
written notices. The first is the notice to apprise the employee of the particular
acts or omissions for which his dismissal is sought. This may be loosely
considered as the charge against the employee. The second is the notice
informing the employee of the employer’s decision to dismiss him. This
decision, however, must come only after the employee is given a reasonable
period from receipt of the first notice within which to answer the charge, and
ample opportunity to be heard and defend himself with the assistance of his
representative, if he so desires. The requirement of notice is not a mere
technicality, but a requirement of due process to which every employee is
entitled.
The petitioners clearly failed to comply with the two-notice requirement.
Nothing in the records shows that the petitioners ever sent the respondent a
written notice informing him of the ground for which his dismissal was sought.
It does not also appear that the petitioners held a hearing where the
respondent was given the opportunity to answer the charges of abandonment.
Neither did the petitioners send a written notice to the respondent informing
the latter that his service had been terminated and the reasons for the
termination of employment. Under these facts, the respondent’s dismissal was
illegal.16
Backwages, Separation Pay, and Attorney’s Fees
The respondent’s illegal dismissal carries the legal consequence defined under
Article 279 of the Labor Code: the illegally dismissed employee is entitled to
reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time his compensation was withheld from him
up to the time of his actual reinstatement. Thus, an illegally dismissed employee
is entitled to two reliefs: backwages and reinstatement. Where reinstatement is
no longer viable as an option, backwages shall be computed from the time of
the illegal termination up to the finality of the decision.17 Separation pay
equivalent to one month salary for every year of service should likewise be
awarded as an alternative in case reinstatement in not possible.18
14
In the present case, reinstatement is no longer feasible because of the strained
relations between the petitioners and the respondent. Time and again, this
Court has recognized that strained relations between the employer and
employee is an exception to the rule requiring actual reinstatement for illegally
dismissed employees for the practical reason that the already existing
antagonism will only fester and deteriorate, and will only worsen with possible
adverse effects on the parties, if we shall compel reinstatement; thus, the use of
a viable substitute that protects the interests of both parties while ensuring
that the law is respected.
In this case, the antagonism between the parties cannot be doubted, evidenced
by the petitioners’ refusal to talk to the respondent after their suspicion of
fraudulent misrepresentation was aroused, and by the respondent’s own
decision to leave the petitioners’ compound together with his family. Under
these undisputed facts, a peaceful working relationship between them is no
longer possible and reinstatement is not to the best interest of the parties. The
payment of separation pay is the better alternative as it liberates the
respondent from what could be a highly hostile work environment, while
releasing the petitioners from the grossly unpalatable obligation of maintaining
in their employ a worker they could no longer trust.
The respondent having been compelled to litigate in order to seek redress, the
CA correctly affirmed the labor arbiter’s grant of attorney’s fees equivalent to
10% of the total monetary award.19
The records of this case, however, are incomplete for purposes of computing
the exact monetary award due to the respondent. Thus, it is necessary to
remand this case to the Labor Arbiter for the sole purpose of computing the
proper monetary award.
WHEREFORE, premises considered, we hereby DENY the petition. The Decision
of the Court of Appeals dated February 20, 2007 and its Resolution dated April
30, 2007 in CA-G.R. SP No. 95924 are AFFIRMED and the case is REMANDED to
the Labor Arbiter for the sole purpose of computing the full backwages,
inclusive of allowances and other benefits of respondent Roberto Obias,
computed from the date of his dismissal up to the finality of the decision, and
separation pay in lieu of reinstatement equivalent to one month salary for
every year of service, computed from the time of his engagement up to the
finality of this decision.
SO ORDERED.
G.R. No. 169227 July 5, 2010
PHILIPPINE RURAL RECONSTRUCTION MOVEMENT (PRRM), Petitioner,
vs.
VIRGILIO E. PULGAR, Respondent.
DECISION
BRION, J.:
Before us is the petition for review on certiorari1 filed by the Philippine Rural
Reconstruction Movement (PRRM) to assail the Court of Appeals’ (CA) decision,
dated May 25, 2005,2 and its resolution, dated August 5, 2005,3 in CA-G.R. SP
No. 62036. The appellate court set aside the National Labor Relations
Commission’s (NLRC) January 28, 2000 decision, and held that PRRM illegally
dismissed respondent Virgilio Pulgar (Pulgar) from employment.
BACKGROUND FACTS
PRRM is a non-stock, non-profit, non-governmental organization. Pulgar was
the manager of PRRM’s branch office – the Tayabas Bay Field Office (TBFO) – in
Quezon Province. When Pulgar was reassigned to PRRM’s central office, PRRM,
through Goyena Solis (Solis), conducted an investigation into alleged financial
anomalies committed at the TBFO.
In her investigation report, Solis stated that part of the funds allotted to the
TBFO was missing or not properly accounted for. The report also stated that
some of the receipts that the TBFO submitted to liquidate the organization’s
financial transactions were fictitious and manufactured.4
The PRRM management sent Pulgar a copy of the report, together with a
memorandum, asking him to explain these findings.5
In a letter dated February 24, 1997, Pulgar admitted that TBFO’s reported
expenses did not reflect its actual expenses. He explained that as field manager,
he presumed he had the discretion to determine when and how the funds
would be used, as long as the use was devoted to the implementation of TBFO
projects. Thus, there were instances when he used the funds intended for one
project to sustain the activities of other projects. Pulgar further admitted that
some of the receipts he submitted to liquidate TBFO’s expenses were not genuine;
he claimed that he had to produce fake receipts to comply with the central
15
office’s requirements and deadlines, otherwise the release of TBFO’s
subsequent funds would be delayed. Pulgar also disclosed that he had, on his
own initiative, opened a separate bank account at the Capitol Bank6 for TBFO’s
savings; the account had a remaining balance of ₱206,958.50. Lastly, Pulgar
manifested his willingness to attend a meeting with the senior officers,
scheduled on February 28, 1997, to further explain his side.7
On March 4, 1997, Pulgar met with PRRM representatives to discuss the
findings of the investigation report. During the meeting, Pulgar furnished these
representatives with a photocopy of a savings account passbook with
Account Number 1103508 under Pulgar’s name at the Cooperative Bank
of Quezon. The passbook showed that the account had a balance of
₱207,693.10. According to Pulgar, this balance represented the TBFO savings
he mentioned in his response. At this point, two versions of the story develop.
PRRM maintains that while the investigation was ongoing, Pulgar went on leave
on March 3-10, March 20-25, and April 1-15, 1997. After the lapse of his last
leave on April 15, 1997, Pulgar no longer reported to work, leading PRRM to
believe that Pulgar had abandoned his work to evade any liability arising from
the investigation. PRRM was therefore surprised to learn that Pulgar had filed
an illegal dismissal case on April 3, 1997.
Pulgar tells another tale. According to him, on March 17, 1997, he submitted a
letter to PRRM to complain that he was not given the right to confront and
question Solis,8 but his letter went unanswered. Thereafter, on March 31, 1997,
he was not allowed to enter the premises of the organization. Pulgar also
alleges that PRRM’s representatives removed his personal properties and
records from his office, placed them in boxes and kept them in storage.
Believing he was constructively dismissed by PRRM’s actions, Pulgar filed a
complaint against PRRM on April 3, 1997 for illegal dismissal, illegal
suspension, and nonpayment of service incentive leave pay and 13th month
pay. Pulgar also asked for actual damages, moral damages, and attorney’s fees.
At the mandatory conferences before Labor Arbiter Pablo Espiritu, Jr. (Labor
Arbiter), Pulgar dropped the illegal suspension charge, as well as his claim for
payment of service incentive leave with pay.9
On March 31, 1999, the Labor Arbiter found in his decision10 that Pulgar had
been illegally dismissed and ordered PRRM to pay Pulgar ₱319,387.50 as full
backwages. However, the Labor Arbiter chose not to award Pulgar moral or
exemplary damages after finding that PRRM had legitimate grounds to
investigate Pulgar. Due to the strained relations between PRRM and Pulgar, the
Labor Arbiter opted to award Pulgar separation pay instead of ordering his
reinstatement.
On appeal, the NLRC reversed the Labor Arbiter in its January 28, 2000 decision
and dismissed Pulgar’s complaint,11 giving more weight to PRRM’s allegation
that Pulgar abandoned his work. This prompted Pulgar to bring the matter to
the CA via a petition for review on certiorari (should be petition for certiorari)
under Rule 65 of the 1997 Rules on Civil Procedure.12
On May 25, 2005, the CA rendered the assailed decision,13 granting Pulgar’s
petition and reinstating the Labor Arbiter’s decision. The appellate court noted
that PRRM never rebutted Pulgar’s contentions that he had been prevented
from entering the premises and that his personal effects were taken from his
office and placed in storage. The CA further observed that PRRM presented no
evidence to prove that Pulgar abandoned his job. Reasoning that filing an illegal
dismissal complaint is inconsistent with the charge of abandonment, the
appellate court concluded that Pulgar had been illegally dismissed.
In the present petition, filed after the appellate court denied PRRM’s Motion for
Reconsideration, PRRM raises the issue of whether Pulgar was illegally
dismissed from employment.
PRRM posits that it did not dismiss Pulgar from employment. Rather, Pulgar
chose not to return to work, after his leave of absence, to evade any criminal
liability that might arise from the ongoing investigation PRRM was conducting
regarding the alleged financial anomalies Pulgar committed when he was the
field manager of the TBFO. PRRM opines that Pulgar filed the present illegal
dismissal case as a diversionary tactic to avoid having to submit himself to
PRRM’s ongoing investigation. Lastly, PRRM asks this Court to order Pulgar to
return the PRRM funds still in his custody amounting to ₱207,693.10.
On the other hand, Pulgar claims that this Court should respect the Labor
Arbiter’s factual finding that he was illegally dismissed since the Labor Arbiter
had the opportunity to observe the actuations, behavior and demeanor of the
parties. Pulgar further alleges that PRRM can no longer claim the PRRM funds
in his possession since the Labor Arbiter had already ruled that PRRM failed to
raise the award of these funds as a relief in its Position Paper. Since PRRM
never appealed this part of the Labor Arbiter’s decision, it is now bound by
these findings.
THE COURT’S RULING
16
We grant the petition.
Procedural issue
Under the Rules of Court and settled doctrine, a petition for review on certiorari
under Rule 45 of the Rules of Court is limited to questions of law. As a rule, the
findings of fact of the CA are final and conclusive, and this Court will not review
them on appeal.14 This rule, however, is not absolute and admits of several
exceptions.15
To resolve the issue of whether PRRM is guilty of illegal dismissal, we
necessarily have to determine the veracity of the parties' allegations, a function
we are ordinarily barred from performing when deciding a Rule 45 petition.
However, due to the conflicting factual findings of the NLRC and the CA, as well
as the presence of some relevant facts that, had they been considered by the CA,
would have justified a different conclusion, we find the review of the evidence
on record compelling and proper.
The illegal dismissal issue
In concluding that Pulgar was constructively dismissed from employment, the
CA relied on two main factors: (a) Pulgar’s claim that he was barred from
entering the premises on March 31, 1997; and (b) the fact that Pulgar
immediately filed a complaint for illegal dismissal against PRRM. At first glance,
the CA’s decision appears correct. But the facts are not as simple as they appear
to be.
Primarily, we underscore the fact that when Pulgar filed an illegal dismissal
complaint on April 3, 1997, he was still on leave from the organization. In other
words, from PRRM’s standpoint, Pulgar was still its employee when he
filed the illegal dismissal case against the organization.
Pulgar claims that he was forced to file an illegal dismissal complaint against
PRRM while he was on leave because he was not allowed to enter the office
premises on March 31, 1997. But aside from making this allegation, Pulgar
failed to provide any other details on how he was prevented from entering the
premises. Was he physically prevented from entering the premises by a
security guard? Did the senior officers of PRRM refuse to let him into the office
when he reported to work? We are left to guess the particulars of how PRRM
prevented Pulgar from entering the premises, leaving us to doubt the veracity
of this allegation.
To bolster his contention that he was constructively dismissed, Pulgar asserts
that his personal things were taken from his office, placed in boxes and put in
storage. To support this allegation, he attached three photographs.16 But the
only thing seen in these photographs is a storage room with sealed boxes on the
floor. Taken at face value, there is nothing in the photographs that proves that
the boxes in the storage room even contain Pulgar’s personal things. Absent
such proof, we cannot use these pictures to prove that Pulgar was
constructively dismissed from employment.
We further note that at the time PRRM was conducting an investigation into the
alleged anomalies committed in the liquidation and use of PRRM funds at the
TBFO during Pulgar’s management, Pulgar went on a number of leaves,
specifically on March 3-10, 1997, then on March 20-25, 1997, and finally on
April 1-15, 1997. The timing and frequency of these leaves, while not indicative
of Pulgar’s intention to sever his employment, at the very least, imply Pulgar’s
active efforts to evade the organization’s ongoing investigation.
Significantly, while Pulgar claims he was constructively dismissed when he was
barred from the premises on March 31, 1997, he still filed his application for
leave for April 1-15, 1997. The fact alone that Pulgar was able to return to the
office to file his application for leave for April 1-15, 1997 raises doubt as to his
purported ban from the premises. More importantly, if Pulgar truly believed
that he had already been constructively dismissed on March 31, 1997, reason
dictates that he would no longer bother to apply for a leave of absence from
PRRM for April 1-15, 1997. The fact that he did belies his contention that he
believed he had already been constructively dismissed on March 31, 1997.
Also worth mentioning is the fact that Pulgar continued to receive his salary
from PRRM even after March 31, 1997, or the date of his alleged constructive
dismissal. In fact, Pulgar received his salary up until April 15, 1997, when his
vacation and sick leaves had been consumed.
These circumstances, taken together, lead us to conclude that PRRM did not
terminate Pulgar’s employment. On the contrary, what appears from the
evidence is that it was Pulgar himself who terminated his employment with
PRRM when he filed an illegal dismissal complaint against the organization
while he was on leave.
The key to understanding Pulgar’s motive in severing his employment with
PRRM lies in Pulgar’s letter dated February 24, 1997, written in response to the
investigation report that implicated him in these financial anomalies. He wrote:
17
Noticing that even at the Central Office, project funds allotted for one field office
or branch were used to sustain the operation of other on-going activities of
another field office/branch or even of the Central Office, I presumed that the
same is also applicable in the field office. That is, as field manager, it was to my
discretion as to where and how the fund should be used so long as its
utilization concerns the implementation of the project. With this in mind, I
made some major decisions at the field office which I believe could be of great
help make the operations smooth sailing.
For instance, there were cases when funds for the FSP were used to finance
the operations of the Community-based Mangrove and Community based
Reforestation projects and other side activities (e.g. Rapid Site Assessment,
election campaign) in order to accomplish the project/activity on time.
Likewise, cost savings measures were undertaken so that funds could be made
available to the office when the immediate need for the fund arises particularly
during situations when the release from the Central Office were delayed. And
since the implementing guidelines from the CO was silent on the maintenance
of another account for savings made by the field office, I took the initiative to
open a separate account for the field office’s savings. By doing this, possible
disruption of work at the field and the delay in the salary of the staff were
prevented.
As for the inconsistencies of the liquidation documents submitted, this was
necessary in order to comply with the requirements and deadlines set by
the Central Office, otherwise, the release for the succeeding quarter or period
in questions will be put on hold. Given the situation and with the continuity of
the field office’s operation still in mind, I was forced to adjust the documents
submitted just to meet the deadlines and avoid disruption of work.
However, never had I intentionally done this with malicious intent of, as Ms.
Solis puts it, using the fund for personal gain. As I will explain later, funds were
used to finance activities that were related to the operations of the field office
and whatever savings were made remains in safekeeping for possible use of the
office’s operation. x x x
With regard to the case of the AECI project, its account has been required to be
closed and cash advances liquidated (with accompanying Official Receipts) by
November 1996 or exactly by the end of its six months of implementation. This
being the case, and with the slight delay met in the implementation of the
project, adjustment in the documents became a necessary evil in order to
comply with the requirements of the CO.17 [Emphasis supplied.]
In the same letter, Pulgar manifested that the TBFO had savings in the amount
of ₱206,958.50, which he deposited with Capitol Bank under Account No. 2-
042-00188-9.18 At the meeting with PRRM senior officers on March 4, 1997,
Pulgar also admitted that the TBFO’s savings in the amount of ₱207,693.10
were actually deposited with the Cooperative Bank of Quezon in an account
under his name.
From Pulgar’s own admissions, we consider the following facts to be
established:
First, Pulgar took funds intended for one activity or project and
applied them to other activities/projects.
Second, Pulgar took the savings from the TBFO and placed them in a
bank account under his own name. To date, Pulgar has not turned
over these funds to the PRRM.
Third, Pulgar submitted manufactured and fake receipts to PRRM to
liquidate TBFO’s expenses.
Noticeably, from Pulgar’s disclosures alone, a prima facie case for estafa can
already be made out against Pulgar. With the danger of criminal prosecution
hanging over his head, Pulgar’s abrupt decision to terminate his employment
with PRRM becomes easily understandable.
While we recognize the rule that in illegal dismissal cases, the employer bears
the burden of proving that the termination was for a valid or authorized cause,
in the present case, however, the facts and the evidence do not establish a
prima facie case that the employee was dismissed from employment. Before
the employer must bear the burden of proving that the dismissal was
legal, the employee must first establish by substantial evidence the fact of
his dismissal from service. Logically, if there is no dismissal, then there can be
no question as to its legality or illegality.19 Bare allegations of constructive
dismissal, when uncorroborated by the evidence on record, cannot be given
credence.20
As we said in Machica v. Roosevelt Services Center, Inc.:21
The rule is that one who alleges a fact has the burden of proving it; thus,
petitioners were burdened to prove their allegation that respondents dismissed
them from their employment. It must be stressed that the evidence to prove
this fact must be clear, positive and convincing. The rule that the employer
bears the burden of proof in illegal dismissal cases finds no application
18
here because the respondents deny having dismissed the petitioners.22
[Emphasis supplied.]
Although under normal circumstances, an employee’s act of filing an illegal
dismissal complaint against his employer is inconsistent with abandonment; in
the present case, we simply cannot use that one act to conclude that Pulgar
did not terminate his employment with PRRM, and in the process ignore
the clear, substantial evidence presented by PRRM that proves otherwise.
Our ruling on this point in Leopard Integrated Services, Inc. v. Macalinao is very
relevant. We said: 231avvphi1
The fact that respondent filed a complaint for illegal dismissal, as noted by the
CA, is not by itself sufficient indicator that respondent had no intention of
deserting his employment since the totality of respondent's antecedent acts
palpably display the contrary. In Abad v. Roselle Cinema, the Court ruled that:
The filing of a complaint for illegal dismissal should be taken into account
together with the surrounding circumstances of a certain case. In Arc-Men Food
Industries Inc. v. NLRC, the Court ruled that the substantial evidence
proffered by the employer that it had not, in the first place, terminated
the employee, should not simply be ignored on the pretext that the
employee would not have filed the complaint for illegal dismissal if he had
not really been dismissed. "This is clearly a non-sequitur reasoning that can
never validly take the place of the evidence of both the employer and the
employee."24 [Emphasis supplied.]
While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor
dispute will be automatically decided in favor of labor. Management also has its
rights which are entitled to respect and enforcement in the interest of simple
fair play. Out of its concern for those with less privileges in life, the Supreme
Court has inclined, more often than not, toward the worker and upheld his
cause in his conflicts with the employer. Such favoritism, however, has not
blinded the Court to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the applicable law and
doctrine.25
PRRM’S monetary claim is belatedly raised
Examining the records of the case, it appears that Pulgar has not yet returned
the money he took from the TBFO and deposited in his name to PRRM.
We have previously ruled on the Labor Arbiter’s jurisdiction to rule on all
money claims, including those of the employer, arising out of the employer-
employee relationship.26 Unfortunately for PRRM, it never raised as an issue
the money allegedly still in Pulgar’s custody in the proceedings before the
Labor Arbiter, or even before the NLRC. As the Labor Arbiter held:
One final note. The Labor Code allows for claims made by employers against
employees arising from employer-employee relations. In this case, the records
show that Pulgar holds the amount of ₱207,693.10 as alleged "savings" as
manager of TBFO. PRRM attached Annex 11, which is a savings passbook of
Pulgar with Cooperative Bank of Quezon Province, the existence of which was
not denied by Pulgar before this Arbitration Branch. There is nothing on record
which would show that this amount has been returned to PRRM. x x x
However, a perusal of PRRM’s pleadings would reveal that the latter does
not raise as a relief an award for the return of the ₱207,693.10. [A]s it
were, we cannot act on the same in view of PRRM’s failure (for reasons known
only to it) to pray for such award. [Emphasis supplied.]27
As a factual matter, this issue should have been raised at the earliest
opportunity before the Labor Arbiter, to allow both parties to present their
evidence.1avvphi1 The rule is well-settled that points of law, theories, issues
and arguments not adequately brought to the attention of the trial court need
not be, and ordinarily will not be considered by a reviewing court as they
cannot be raised for the first time on appeal28 because this would be offensive
to the basic rules of fair play, justice and due process.29
WHEREFORE, premises considered, we GRANT the petition. The May 25, 2005
Decision and the August 5, 2005 Resolution of the Court of Appeals in CA-G.R.
SP No. 62036 are REVERSED and SET ASIDE. The January 28, 2000 Decision of
the National Labor Relations Commission in NLRC NCR CA No. 019914-99 is
REINSTATED.
SO ORDERED.
19
G.R. No. 180285 July 6, 2010
MA. SOCORRO MANDAPAT, petitioner,
vs.
ADD FORCE PERSONNEL SERVICES, INC. and COURT OF APPEALS,
Respondents.
DECISION
PEREZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, seeking to reverse and set aside the 27 July 2007 Decision 1 and the 17
October 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 98868.
The factual premise of the case follows –
On 15 September 2003, petitioner Ma. Socorro Mandapat was hired as Sales
and Marketing Manager for respondent Add Force Personnel Services, Inc. As
detailed in her appointment letter, her duties include negotiation and
consummation of contracts with clients who wanted to avail of respondent’s
services. She reported directly to the Chief Executive Officer (CEO), Colwyn Ron
C. Longstaff (Longstaff).2
Respondent claims that during her five-month stint as sales manager,
petitioner failed to close a single deal or contract with any client. In addition,
petitioner issued several proposals to clients which were either grossly
disadvantageous to respondent or disregarded the client’s budget ceiling.
Petitioner also sent out several communications to clients containing erroneous
data and computations; submitted fictitious daily activity reports and
reimbursement slips; and consistently failed to submit her reports, such as the
daily activity report, expense report, weekly sales call plan and internet-based
calendar system on time.3
These infractions were contained in a show-cause notice sent to petitioner on
23 February 2004, directing her to explain why she should not be disciplined
for gross and habitual neglect of duties and willful breach of trust. Petitioner
was also preventively suspended and was asked to turn over pending tasks and
to leave the office premises. We quote the pertinent portion of the
memorandum:
xxxx
Please remember that as Sales Manager and head of the Sales Department, the
company demands from you a disciplined approach on the implementation of
the sales plans of the company as well as ability to lead your people by example.
However, from Management’s evaluation of your performance these last five
(5) months, you have not only failed to set a good example to your subordinates
but you have, in fact, been the first one to violate company rules and
procedures.
On account of the sensitivity of the position you currently hold, please be
informed that Management has decided to put you on PREVENTIVE
SUSPENSION during the course of the investigation of this matter. Accordingly,
you are requested to immediately turnover to Ms. Abigail E. Villavert all of your
pending tasks and, thereafter, leave the office premises.
For your information and appropriate action.
From:
MARIA CRISTINA S. SAMSON
Corporate Counsel
Approved by:
JACQUES A. DUPASQUIER
Chairman
Accompanied by her letter in response to the show-cause memorandum,
petitioner tendered her resignation dated 25 February 2004 supposedly in
protest of the preventive suspension meted on her.4
On 15 March 2004, petitioner filed a complaint for constructive dismissal with
the labor arbiter.
In her position paper, petitioner alleged that she was constructively dismissed,
as indicated by the following actions of respondent – first, she was illegally
placed on preventive suspension; second, her access to the internet was cut off;
and third, she was pressured by respondent into resigning in exchange for
payment of separation pay.5
20
Petitioner also questioned as illegal her preventive suspension because she did
not pose any danger to the lives of respondent’s officers, as well as its
properties.6
Petitioner denied that she was negligent and proffered that she faithfully and
painstakingly performed her duties as sales manager. She faulted Longstaff for
his indecisiveness and the lack of support personnel and staff for the sales
department.71avvphi1
Respondent insisted that petitioner was not dismissed, that instead, she
tendered her resignation. Hence, the claim for reinstatement had no basis.
Respondent countered that petitioner was properly placed on preventive
suspension because of the risk she posed on the property and business of
respondent.8
On 30 September 2005, the labor arbiter rendered judgment9 finding petitioner
to have been illegally and constructively dismissed, thus:
WHEREFORE, premises considered, judgment is hereby entered finding that
complainant was illegally and constructively dismissed on 2/23/04 thus,
ORDERING:
1) Respondent company ADD Force Personnel Services, Inc. to pay her
full backwages from date illegally dismissed on 6/23/04 until actual
payment and/or finality of this decision, which as of date amounts to
basic P1,311,360.00 (P68,300.00 x 19.2 months), 13th month pay of
P109,280.00, and the combined amounts of her leaves (VL & SL) of
P107,913.68 (30 days/year x P2,276.66/day x 1.58 years);
2) Respondent company ADD Force Personnel Services, Inc., in lieu of
complainant’s reinstatement, to pay her separation pay of one (1)
month per year of service/putative service reckoned from 09/15/03
until finality of this decision or actual payment which as of date,
amounts to P136,600.00 (P68,300.00 x 2 years);
3) Respondents ADD Force Personnel Services, Inc., JACQUES A.
DUPASQUIER (Chairman), COLWYN RON C. LONGSTAFF (CEO), ATTY.
CRISTINA SAMSON (Corporate Counsel), to pay her in solido moral
damages of P200,000.00 and exemplary damages of P100,000.00;
 4) Respondent ADD Force Personnel Services, Inc. to pay her
proportionate 13th month pay (Jan. to 02/23/04), last month’s salary
(February, 01-23, 2003) and reimbursements P2,000.00;
5) Respondent ADD Force Personnel Services, Inc. to pay her 10% of
the total award as attorney’s fees.10
The labor arbiter found that petitioner was illegally suspended without basis.
The charges of gross and habitual neglect of duties, as well as the loss of trust
and confidence were not substantiated. Thus, the labor arbiter concluded that
petitioner was constructively dismissed by respondent.11
The National Labor Relations Commission (NLRC)12 affirmed with modification
the findings of the labor arbiter. The NLRC deleted the award of moral and
exemplary damages for lack of sufficient basis. A motion for reconsideration
was filed by respondent but it was denied for lack of merit.
On 21 June 2007, respondent filed a manifestation and motion stating that the
NLRC had issued a writ of execution for the amount of money claims. Unable to
satisfy these claims, the sheriff garnished the bank accounts of respondent.
On 27 July 2007, the Court of Appeals, to which the case was elevated, enjoined
the execution of the NLRC decision and subsequently reversed its decision, as
well as that of the labor arbiter’s.
The dispositive portion provides:
WHEREFORE, the petition for certiorari is GRANTED. The Decision of the
National Labor Relations Commission dated 27 November 2006 affirming the
Labor Arbiter’s decision; its Resolution, dated 28 February 2007, denying
petitioner’s motion for reconsideration; and the Decision of the Labor Arbiter,
dated 30 September 2005, are SET ASIDE. Ma. Socorro Mandapat’s Complaint
for illegal dismissal is DISMISSED.13
The Court of Appeals ruled that petitioner was not constructively dismissed but
that the latter chose to resign from her job. Petitioner’s bare allegation that she
was coerced into resigning was not given credence by the appellate court. With
respect to the allegation of illegal suspension, the Court of Appeals upheld the
exercise by respondent of its management prerogative in suspending petitioner
pending investigation for a perceived violation of company rules.
21
Furthermore, the appellate court declared that the issue of preventive
suspension had been rendered moot by petitioner’s resignation.14
Petitioner moved for reconsideration but it was denied in a Resolution issued
on 17 October 2007.15
The principal issue to be resolved in the instant petition is whether petitioner
was constructively dismissed.
Constructive dismissal exists when an act of clear discrimination, insensibility
or disdain by an employer has become so unbearable to the employee leaving
him with no option but to forego with his continued employment.16
Upon perusal of the records of this case, we find no evidence to support
discrimination which led to constructive dismissal.
Petitioner reiterates that she was constructively dismissed. She harps on the
alleged pattern of harassment committed by respondent as tantamount to
constructive dismissal, such as, illegally placing her under preventive
suspension, the disconnection of her internet account, and the pressure exerted
by respondent to force her to resign.17
Petitioner claims that the preventive suspension meted upon her is illegal for
being indefinite, as the duration of her suspension was not stated in the
company’s memorandum.
On the other hand, respondent employer argues that petitioner’s preventive
suspension for one day can hardly be considered indefinite, given the fact that
petitioner immediately resigned one day after the suspension.
We find that there was no act of discrimination committed against petitioner
that would render her employment unbearable.
Preventive suspension may be legally imposed against an employee whose
alleged violation is the subject of an investigation. The purpose of his
suspension is to prevent him from causing harm or injury to the company as
well as to his fellow employees.
The pertinent rules dealing with preventive suspension are found in Section 8
and Section 9 of Rule XXIII, Book V of the Omnibus Rules Implementing the
Labor Code, as amended by Department Order No. 9, Series of 1997, which read
as follows:
Section 8. Preventive suspension. The employer may place the worker
concerned under preventive suspension only if his continued employment
poses a serious and imminent threat to the life or property of the employer or
of his co-workers.
Section 9. Period of suspension. No preventive suspension shall last longer than
thirty (30) days. The employer shall thereafter reinstate the worker in his
former or in a substantially equivalent position or the employer may extend the
period of suspension provided that during the period of extension, he pays the
wages and other benefits due to the worker. In such case, the worker shall not
be bound to reimburse the amount paid to him during the extension if the
employer decides, after completion of the hearing, to dismiss the worker.
When preventive suspension exceeds the maximum period allowed without
reinstating the employee either by actual or payroll reinstatement 18 or when
preventive suspension is for indefinite period,19 only then will constructive
dismissal set in.
While no period was mentioned in the show-cause memorandum, it was wrong
for petitioner to infer that her suspension was for an indefinite period. It must
be pointed out that the inclusion of the phrase "during the course of
investigation" would lead to a reasonable and logical presumption that said
suspension in fact has a duration which could very well be not more than 30
days as mandated by law. And, as the Court of Appeals correctly observed, the
suspension has been rendered moot by petitioner’s resignation tendered a day
after the suspension was made effective.
Petitioner contests the grounds for her suspension as she denies posing a
danger on the lives of the officers or employees of respondent or of their
properties. Petitioner adds that she was not in a position to bind respondent to
any contract, therefore, she could not and would not be able to sabotage the
operations of respondent.20 Upon the other hand, respondent asserts that
preventive suspension was necessary in order to protect the assets and
operations of the company pending investigation of the alleged infractions
committed by the employee concerned.21
Respondent is correct. Indeed, as sales manager, petitioner had the power and
authority to enter into contracts that would bind respondent, regardless of
whether these contracts would prove to be beneficial or prejudicial to the
22
interest of respondent. Respondent has every right to protect its assets and
operations pending investigation of petitioner.
Neither could we consider the acts of disconnection of computer and internet
access privileges as harassment. Respondent clearly explained that the
cessation of her internet and network privileges were but a consequence of the
investigation against her and not for the purpose of harassment.22 The Court of
Appeals gave merit to respondent’s explanation and held, thus:
x x x while her suspension, cessation of internet privileges, and exclusion from
local network access were but a consequence of the investigation against her,
and were intended to prevent her from having further access to the company’s
network-based documents and forms.23
The acts respondent complains about are just measures enforced by
respondent to protect itself while the investigation was ongoing.
Petitioner claims that Longstaff forced her to resign by baiting her with the
promise of separation pay;24 but respondent maintains that there was nothing
illegal in giving petitioner the option to either resign or be separated for a just
cause.25
We agree with the Court of Appeals that there was no coercion employed on
petitioner. The appellate court made the following observation:
Unfortunately, however, before the investigation could proceed to the second
step of the termination process into a hearing or conference, Mandapat chose to
resign from her job. Mandapat’s bare allegation that she was coerced into
resigning can hardly be given credence in the absence of clear evidence proving
the same. No doubt, Mandapat read the writing on the wall, knew that she
would be fired for her transgressions, and beat the company to it by resigning.
Indeed, by the disrespectful tenor of her memorandum, Mandapat practically
indicated that she was no longer interested in continuing cordial relations,
much less gainful employment with Add Force.26
Mere allegations of threat or force do not constitute evidence to support a
finding of forced resignation. In order for intimidation to vitiate consent, the
following requisites must concur: (1) that the intimidation caused the consent
to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat
be real or serious, there being evident disproportion between the evil and the
resistance which all men can offer, leading to the choice of doing the act which
is forced on the person to do as the lesser evil; and (4) that it produces a well-
grounded fear from the fact that the person from whom it comes has the
necessary means or ability to inflict the threatened injury to his person or
property.27

None of these requisites was proven by petitioner. No demand was made on

petitioner to resign. At most, she was merely given the option to either resign
or face disciplinary investigation, which respondent had every right to conduct
in light of the numerous infractions committed by petitioner. There is nothing
irregular in providing an option to petitioner. Ultimately, the final decision on
whether to resign or face disciplinary action rests on petitioner alone.

All told, the instances of harassment alleged by petitioner appear to be more

apparent than real. We find no reason to disturb the conclusion of the Court of
Appeals that petitioner resigned and was not constructively dismissed.

WHEREFORE, the petition is DENIED. The 27 July 2007 Decision of the Court of
Appeals in CA-G.R. SP No. 98868 is AFFIRMED.

SO ORDERED.

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