1.

Employee found guilty of habitual absenteeism and

tardiness not entitled to economic assistance. Labor
adjudicatory officials and the CA must demur the award
of separation pay based on social justice when an
employees dismissal is based on serious misconduct or
willful disobedience; gross and habitual neglect of duty;
fraud or willful breach of trust; or commission of a crime
against the person of the employer or his immediate
family grounds under Art. 282 of the Labor Code that
sanction dismissals of employees. They must be most
judicious and circumspect in awarding separation pay or
financial assistance as the constitutional policy to
provide full protection to labor is not meant to be an
instrument to oppress the employers. The commitment
of the Court to the cause of labor should not embarrass
us from sustaining the employers when they are right, as
here. In fine, we should be more cautious in awarding
financial assistance to the undeserving and those who
are unworthy of the liberality of the law. (Quiambao vs.
Manila Electric Company, G.R. No. 171023, December
18, 2009.)
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
ARSENIO S. QUIAMBAO,
Petitioner,

G.R. No. 171023

Present:
CARPIO, J., Chairperson,
LEONARDO-DE CASTRO,
BRION,
DEL CASTILLO, and
ABAD, JJ.

- versus -

MANILA ELECTRIC
COMPANY,
Promulgated:
Respondent.
December 18, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - x
DECISION
DEL CASTILLO, J.:

The liberality of the law can never be extended to the unworthy and undeserving. In several instances, the
policy of social justice has compelled this Court to accord financial assistance in the form of separation pay to a
legally terminated employee. This liberality, however, is not without limitations. Thus, when the manner and
circumstances by which the employee committed the act constituting the ground for his dismissal show his
perversity or depravity, no sympathy or mercy of the law can be invoked.
This petition for review on certiorari[1] assails the Decision[2] dated October 28, 2005 and
Resolution[3] dated January 12, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 85332, which reversed the
February 4, 2004 Decision[4] of the National Labor Relations Commission (NLRC) awarding petitioner Arsenio S.
Quiambao separation pay in the amount of P126,875.00.
Factual Antecedents
On July 16, 1986, petitioner was employed as branch teller by respondent Manila Electric Company. He
was assigned at respondents Mandaluyong office and was responsible for the handling and processing of
payments made by respondents customers.
It appears from his employment records, however, that petitioner has repeatedly violated the Company
Code of Employee Discipline and has exhibited poor performance in the latter part of his employment. Thus:
EMPLOYEES PROFILE
A. INFRACTIONS DATE
1.
2.
3.
4.
5.
6.
7.
8.
9.

Nature
Excessive absences
Excessive absences
Excessive absences
Assaulting others with
bodily harm over work
matters
Excessive tardiness
Excessive tardiness
Simple Absence
Excessive tardiness
Excessive tardiness

FROM
11/11/99
10/19/99
07/27/99
02/17/99

TO
11/24/99
10/25/99
07/29/99
02/17/99

ACTION TAKEN
10-day suspension
5-day suspension
3-day suspension
Reprimand

02/08/99
10/06/97
03/11/97
06/14/96
09/03/92

02/08/99
10/06/97
03/11/97
06/14/96
09/03/92

Reprimand
Reprimand
Reprimand
Reprimand
Reprimand

B. PERFORMANCE RATING
His merit ratings from 1995 to 1999 are as follows:
YEAR
1999
1998
1997
1996
1995

RATING
Poor
Needs Improvement
Needs Improvement
Satisfactory
Satisfactory[5]

On March 10, 2000, a Notice of Investigation [6] was served upon petitioner for his unauthorized and
unexcused absences on November 10, 25, 26, 29, 1999; December 1, 2, 14, 15, 16, 17, 20, 21, 22, 2000; and from
February 17, 2000 up to the date of such notification letter. Petitioner was likewise required to appear at the
investigation and to present his evidence in support of his defense. However, despite receipt of such notice,
petitioner did not participate in the investigation. Consequently, in a Memorandum[7]dated March 21, 2000, the
legal department recommended petitioners dismissal from employment due to excessive, unauthorized, and
unexcused absences, which constitute (i) abandonment of work under the provisions of the Company Code of

Employee Discipline (ii) and gross and habitual neglect of duty under Article 282 of the Labor Code of
thePhilippines. Through a Notice of Dismissal [8] dated March 28, 2000, petitioners employment was terminated
effective March 29, 2000.
Proceedings before the Labor Arbiter
On July 3, 2001, petitioner filed a complaint before the Arbitration Branch of the NLRC against
respondent assailing the legality of his dismissal. While petitioner did not dispute his absences, he nonetheless
averred that the same were incurred with the corresponding approved application for leave of absence. He also
claimed that he was denied due process.
On November 29, 2002, the Labor Arbiter rendered a Decision [9] dismissing petitioners complaint for
lack of merit. The Labor Arbiter ruled that no evidence was presented to prove that the absences of petitioner were
authorized; that petitioner was deprived of due process; and that petitioners habitual absenteeism without leave did
not violate the companys rules and regulations which justified his termination on the ground of gross and habitual
neglect of duties under Article 282(b) of the Labor Code.
Proceedings before the NLRC
Petitioner appealed to the NLRC which affirmed the legality of his dismissal due to habitual
absenteeism. Nonetheless, the NLRC awarded separation pay in favor of petitioner citing the case of Philippine
Geothermal, Inc. v. National Labor Relations Commission.[10] The dispositive portion of the NLRC Decision
reads:
WHEREFORE, the decision appealed from is hereby MODIFIED to the
extent that the respondent is hereby ordered to pay the complainant separation pay
amounting to P126,875.00 (P18,125.00 x 14 yrs./2 = P126,875.00).
SO ORDERED.[11]
Respondent
filed
a
Motion
for
Reconsideration [12] impugning
grant of separation pay, which motion was denied by the NLRC in a

the

Resolution[13] dated May 20, 2004.

Proceedings before the Court of Appeals
Aggrieved, respondent filed with the CA a petition for certiorari. On October 28, 2005, the CA nullified
the NLRCs Decision and reinstated the Labor Arbiters Decision dismissing the complaint. It ruled that the award
of separation pay is neither justified nor warranted under the circumstances. Thus:
We find, then, that the award of separation pay was capricious, whimsical,
and unwarranted, both for the award being without factual and legal basis and for
ignoring that the valid cause of dismissal was serious misconduct on the part of the
employee.
Respondent Quiambao was dismissed for excessive unauthorized absences.
His dismissal was, in fact, upheld by both the Labor Arbiter and the NLRC. We should
agree with their determination.
But we should hold here further that Quiambao committed a serious
misconduct that merited no consideration or compassion. He was guilty not of mere
absenteeism only, for such absences, unexcused and habitual, reflected worse than
inefficiency, but a gross and habitual neglect of duty bordering on dishonesty. He had no
compelling reason to be absent from work, substantially prejudicing his employer, which
was a public utility whose distribution of electricity to its customers within its franchise
area was a service that was very vital and of utmost necessity to the lives of all its
customers. The responsibility required of the petitioners employees was, in fact, publicly

imposed by the petitioner in its Company Code On Employee Discipline, aforequoted,

whereby it gave primacy to the maintenance of discipline as a matter of fundamental
importance.[14]
Petitioner moved for a reconsideration, but to no avail.
Issue
Hence, this petition for review on certiorari raising the sole issue of whether or not a validly dismissed
employee may be entitled to separation pay.
Petitioners Arguments
Petitioner contends that the CA grievously erred in concluding that he is guilty of serious misconduct and
in deleting the award of separation pay. He argues that the NLRC, whose findings are entitled to great respect and
finality, regarded his unauthorized absences as gross and habitual neglect of duty only. Citing Philippine
Geothermal, Inc. v. National Labor Relations Commission,[15] where an employee who was terminated on similar
ground of gross and habitual neglect of duties because of continued and unexplained absences, and who was
nonetheless granted separation pay, petitioner claims that the same accommodation should likewise be extended to
him. He insists that his absences do not amount to serious misconduct considering that his infractions did not
reflect on his moral character. It did not create imminent or substantial injury to the companys operation and the
consuming public, and were not committed for self-interest or unlawful purpose but on account of domestic and
marital problems. Taking into account all these and his 14 years of service in the company, petitioner invokes the
principles of social justice and equity in justifying his entitlement to separation pay.
Our Ruling
The petition lacks merit.
The Labor Arbiter, the NLRC and the
Court of Appeals found petitioner
guilty of gross and habitual neglect of
duty.
The Labor Arbiter and the NLRC are one in holding that petitioners unauthorized absences and
repeated infractions of company rules on employee discipline manifest gross and habitual neglect of duty that
merited the imposition of the supreme penalty of dismissal from work. The only difference in their ruling is that
the NLRC awarded separation pay. The CA, after reviewing the records of the case, affirmed the findings of the
labor tribunals. And, on the basis of these findings, further concluded that petitioners infractions are worse than
inefficiency; they border on dishonesty constituting serious misconduct.
We have examined the records which indeed show that petitioners unauthorized absences as well as
tardiness are habitual despite having been penalized for past infractions. In Gustilo v. Wyeth Philippines, Inc.,
[16]
we held that a series of irregularities when put together may constitute serious misconduct. We also held that
gross neglect of duty becomes serious in character due to frequency of instances. [17] Serious misconduct is said to
be a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and indicative of wrongful intent and not mere error of judgment. [18] Oddly, petitioner never advanced
any valid reason to justify his absences. Petitioners intentional and willful violation of company rules shows his
utter disregard of his work and his employers interest. Indeed, there can be no good faith in intentionally and
habitually incurring unexcusable absences. Thus, the CA did not commit grave abuse of discretion amounting to
lack or excess of jurisdiction in equating petitioners gross neglect of duty to serious misconduct.
Petitioner is not entitled to separation
pay.
Besides, even assuming that the ground for petitioners dismissal is

gross and habitual neglect of duty, still, he is not entitled to severance pay. In Central Philippines Bandag
Retreaders, Inc. v. Diasnes,[19] we discussed the parameters of awarding separation pay to dismissed employees as
a measure of financial assistance, viz:
To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must
demur the award of separation pay based on social justice when an employees dismissal
is based on serious misconduct or willful disobedience; gross and habitual neglect of
duty; fraud or willful breach of trust; or commission of a crime against the person of the
employer or his immediate family - grounds under Art. 282 of the Labor Code that
sanction dismissals of employees. They must be most judicious and circumspect in
awarding separation pay or financial assistance as the constitutional policy to provide full
protection to labor is not meant to be an instrument to oppress the employers. The
commitment of the Court to the cause of labor should not embarrass us from sustaining
the employers when they are right, as here. In fine, we should be more cautious in
awarding financial assistance to the undeserving and those who are unworthy of the
liberality of the law.[20] (Emphasis supplied.)
WHEREFORE, the petition is DENIED for lack of merit. The assailed October 28, 2005 Decision
and January 12, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 85332 are AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

ARTURO D. BRION
Associate Justice

ROBERTO A. ABAD
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons attestation, it is
hereby certified that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice

[1]
[2]

[3]
[4]

[5]
[6]
[7]
[8]
[9]
[10]

[11]
[12]
[13]
[14]
[15]
[16]

[17]
[18]

[19]
[20]

Per Special Order No. 775 dated November 3, 2009.

Additional member per Special Order No. 776 dated November 3, 2009.
Rollo, pp. 9-18.
Id. at 35-42; penned by Associate Justice Lucas P. Bersamin and concurred in by Associate Justices
Renato C. Dacudao and Celia C. Librea-Leagogo.
Id. at 44-45.
Id. at 27-31; penned by Commissioner Angelita A. Gacutan and concurred in by Presiding Commissioner
Raul T. Aquino and Commissioner Victoriano R. Calaycay.
CA rollo, pp. 37-38.
Id. at 36.
Id. at 37-38.
Id. at 39.
Rollo, pp. 21-26.
G.R. No. 106370, September 8, 1994, 236 SCRA 371. We pronounced in this case that an employee
whose dismissal was found to have been justified by unauthorized absences may recover separation pay
equivalent to one-half month pay for every year of service.
Rollo, p. 31.
CA rollo, pp. 80-87.
Id. at 24-25.
Rollo, pp. 40-41.
Supra note 10.
483 Phil. 69, 78 (2004), citing Piedad v. Lanao del Norte Electric Cooperative, Inc., 237 Phil. 481, 488
(1987)
Divina Luz P. Aquino-Simbulan v. Nicasio Bartolome, AM No. MTJ-05-1588, June 5, 2009.
Philippine Long Distance Company v. The Late Romeo F. Bolso, G.R. No. 159701, August 17, 2007, 530
SCRA 550, 560.
G.R. No. 163607, July 14, 2008, 558 SCRA 194.
Id. at 207.

2. No work no pay scheme is not significant in

determining employer-employee relationship. 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 employeremployee relationship.

Abandonment of work; Requisites. 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. 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
absence without valid or justifiable reason, and (2) a clear
intent, manifested through overt acts, to sever the employeremployee relationship.
Ibid; Burden of proof. The employer bears the burden of
showing a deliberate and unjustified refusal by the employee to
resume his employment without any intention of returning.
Constructive Dismissal; Definition. 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.
Ibid.; Test. The test of constructive dismissal is whether a
reasonable person in the employees 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. (CRC Agricultural Trading, et al. vs. NLRC, G.R. No.
177664, December 23, 2009.)

SECOND DIVISION
CRC AGRICULTURAL TRADING and
ROLANDO B. CATINDIG,
Petitioners,

versus

Present:
CARPIO, J., Chairperson,
LEONARDO-DE CASTRO,
BRION,
DEL CASTILLO, and
ABAD, JJ.

NATIONAL LABOR
RELATIONS
COMMISSION
ROBERTO OBIAS,
Respondents.

G.R. No. 177664

and
Promulgated:

December 23, 2009

x ------------------------------------------------------------------------------------------x
DECISION
BRION, J.:
Before this Court is the Petition for Review on Certiorari under
Rule 45 of the Rules of Court assailing the Decision [1] 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 Resolution [3] of the
National Labor Relations Commission (NLRC), and reinstated the Labor
Arbiters April 15, 2005 Decision [4] finding respondent Roberto Obias
(respondent) illegally dismissed from his employment.
ANTECEDENT FACTS
The present petition traces its roots to the complaint [5] 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 companys

premises. The petitioners gave him a P3,000.00 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 P700.00 and P500.00 on April 15 and 30, 2004, respectively, but
no longer gave him any salary after that. As a result, the respondent
and his family moved out of the petitioners compound and relocated
to a nearby place. The respondent claimed that the petitioners paid
him a daily wage of P175.00, 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 respondentP175.00 daily, but under a
no work no pay basis. The petitioners also gave him a daily
allowance of P140.00 to P200.00. 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
respondents 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 respondents favor declaring that he had been
illegally dismissed. The labor arbiter held that as a regular employee,
the respondents 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

P64,740.00

P146,491.80

Backwages
Basic
pay

13th month
SIL

pay

12,207.65
-

2,347.63
Differential
SIL

Salary
Unpaid
-

47,944.00
3,467.00

__________
P277,198.08
10% attorneys
fees
__________
GRAND
TOTAL
917.80

27,719.80

P304,

SO ORDERED.[8]

The NLRC Ruling

The petitioners and the respondent both appealed the labor
arbiters 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 arbiters decision. The NLRC ruled that the respondent was not
illegally dismissed and deleted the labor arbiters award of backwages
and attorneys 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 respondents job was

already unnecessary and redundant. They further argued that they

could not be compelled to retain the services of a dishonest employee.
The CA, in its decision dated February 20, 2007, reversed and
set aside the NLRC resolution dated August 15, 2006, and reinstated
the labor arbiters April 15, 2005decision.
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 respondents 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 employers
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 attorneys 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 COURTS 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 employers power to control the employees conduct. The most
important element is the employers control of the employees 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 P175.00, with allowances ranging
fromP140.00 to P200.00 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 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 respondents 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 employees 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 employees 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 respondents 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 employers 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 respondents
dismissal was illegal.[16]
Backwages, Separation Pay, and Attorneys Fees
The respondents 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]
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 respondents 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 arbiters grant of
attorneys 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.
ARTURO

D.

BRION
Associate Just
ice
WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson
TERESITA J. LEONARDO-DE
CASTRO
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice

ROBERTO A. ABAD
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairpersons Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice

[1]

Penned by Associate Justice Jose Catral Mendoza, and concurred in by Associate

Justice Remedios A. Salazar-Fernando and Associate Justice Ramon M. Bato, Jr.; rollo,
pp. 64-74.

[2]

Id. at 82.

[3]

Id. at 30-36.

[4]

Id. at 25-29.

[5]

Id. at 20.

[6]

Id. at 23-24.

[7]

Id. at 21-22.

[8]

Id. at 29.

[9]

Supra note 3.

[10]

See Chavez v. National Labor Relations Commission, 489 Phil. 444 (2005).

[11]

See Victory Liner, Inc. v. Race, G.R. No. 164820, March 28, 2007, 519 SCRA 356,
373.
[12]

Pentagon Steel Corporation v. Court of Appeals, G.R. No. 174141, June 26, 2009.

[13]

459 Phil. 506, 516 (2003).

[14]

La Rosa v. Ambassador Hotel, G.R. No. 177059, March 13, 2009; Segue v. Triumph
International (Phils.), Inc., G.R. No. 164804, January 30, 2009, 577 SCRA 323, 333.

[15]

Uniwide Sales Warehouse Club v. National Labor Relations Commission, G.R. No.
154503, February 29, 2008, 547 SCRA 220, 236.

[16]

Mendoza v. National Labor Relations Commission, 350 Phil. 486 (1998).

[17]

See RBC Cable Master System v. Baluyot, G.R. No. 172670, January 20, 2009, 576
SCRA 668, 679.
[18]

See Mt. Carmel College v. Resuena, G.R. No. 173076, October 10, 2007, 535 SCRA
518, 541.
[19]

Macasero v. Southern Industrial Gases Philippines, G.R. No. 178524, January 30,
2009, 577 SCRA 500, 507.

3. Requirement for appeals involving monetary award. Appeals

involving monetary awards are perfected only upon compliance
with the following mandatory requisites, namely: (1) payment of
the appeal fees; (2) filing of the memorandum of appeal; and
(3) payment of the required cash or surety bond.
Appeal bond; Mandatory nature. The posting of a bond is
indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the labor arbiter. The
intention of the lawmakers to make the bond a mandatory
requisite for the perfection of an appeal by the employer is
clearly expressed in the provision that an appeal by the
employer may be perfected only upon the posting of a cash or
surety bond. The word only in Articles 223 of the Labor Code
makes it unmistakably plain that the lawmakers intended the
posting of a cash or surety bond by the employer to be the
essential and exclusive means by which an employers appeal
may be perfected. The word may refers to the perfection of
an appeal as optional on the part of the defeated party, but not
to the compulsory posting of an appeal bond, if he desires to
appeal. The meaning and the intention of the legislature in
enacting a statute must be determined from the language
employed; and where there is no ambiguity in the words used,
then there is no room for construction
Ibid; Requisites for reduction. The bond may be reduced upon
motion by the employer, this is subject to the conditions that (1)
the motion to reduce the bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the
monetary award is posted by the appellant; otherwise, the filing
of the motion to reduce bond shall not stop the running of the
period to perfect an appeal. The qualification effectively
requires that unless the NLRC grants the reduction of the cash
bond within the 10-day reglementary period, the employer is
still expected to post the cash or surety bond securing the full
amount within the said 10-day period.

Ibid.; Appeal bond requirements is jurisdictional. Article 223,

which prescribes the appeal bond requirement, is a rule of
jurisdiction and not of procedure. There is little leeway for
condoning a liberal interpretation thereof, and certainly none
premised on the ground that its requirements are mere
technicalities. It must be emphasized that there is no inherent
right to an appeal in a labor case, as it arises solely from grant
of statute, namely, the Labor Code. Non-compliance with such
legal requirements is fatal and has the effect of rendering the
judgment final and executory. (Ramirez vs. CA, G.R. No. 182626,
December 4, 2009.)
4. Admissibility of evidence submitted for the first time on appeal.
Indubitably, the NLRC is not precluded from receiving evidence
on appeal as technical rules of evidence are not binding in labor
cases. There is, however, a caveat to this policy. The delay in
the submission of evidence should be clearly explained and
should adequately prove the employers allegation of the cause
for termination.
Money claims; Prescription. Under Article 1139 of the Civil Code,
actions prescribe by the mere lapse of the time prescribed by
law. That law may either be the Civil Code or special laws as
specifically mandated by Article 1148. In labor cases, the
special law on prescription is Article 291 of the Labor Code
which provides:
Article 291. Money Claims. All money claims arising from
employer-employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall
be barred forever. (Emphasis supplied)
Ibid.; Accrual of money claims. The Labor Code has no specific
provision on when a monetary claim accrues. Thus, again the
general law on prescription applies. Article 1150 of the Civil
Code provides that
Article 1150. The time for prescription for all kinds of actions,
when there is no special provision which ordains otherwise,

shall be counted from the day they may be brought.

(Emphasis supplied)
The day the action may be brought is the day a claim started as
a legal possibility. In the present case, the day came when
petitioner learned of Asiakonstrukts deduction from his salary
of the amount of advances he had received but had, by his
claim, been settled, the same having been reflected in his
payslips, hence, it is assumed that he learned of it at the time
he received his monthly paychecks. (Anabe vs. Asian
Construction, et al., G.R. No. 183233, December 23, 2009.)
5. Permanent disability and Total disability; Meaning. Permanent
disability is inability of a worker to perform his job for more than
120 days, regardless of whether or not he loses the use of any
part of his body.
Total disability, on the other hand, means the disablement of an
employee to earn wages in the same kind of work of similar
nature that he was trained for, or accustomed to perform, or
any kind of work which a person of his mentality and
attainments could do. It does not mean absolute helplessness.
In disability compensation, it is not the injury which is
compensated, but rather it is the incapacity to work resulting in
the impairment of ones earning capacity. (Iloreta vs. Philippine
Transmarine Carriers, Inc. et al., G.R. No. 183908, December 4,
2009.)
6. Dismissal based on grounds not alleged in the notice of
termination not necessarily illegal.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 petitioners
subordinate actually exists and was established by substantial
evidence before the LA. 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.

Sexual abuse by manager ground for termination. 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.
Failure to observe procedural due process for termination
entitles employee to nominal damages. 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. Thus, for respondents violation of
petitioners statutory rights, respondent is sanctioned to pay
petitioner nominal damages in the amount of P30,000.00.
(Formantes vs. Duncan Pharmaceuticals, G.R. No. 170661,
December 4, 2009.)
7. Dismissal of corporate officer falls under the jurisdiction of
regular courts not NLRC. A corporate officers dismissal is
always a corporate act, or an intra-corporate controversy which
arises between a stockholder and a corporation. The question of
remuneration involving a stockholder and officer, not a mere
employee, is not a simple labor problem but a matter that
comes within the area of corporate affairs and management
and is a corporate controversy in contemplation of the
Corporation Code.
The determination of the rights of a director and corporate
officer dismissed from his employment as well as the
corresponding liability of a corporation, if any, is an intracorporate dispute subject to the jurisdiction of the regular
courts. (Okol vs. Slimmers World International, et al., G.R. No.
160146, December 11, 2009.)
8. Labor-only contracting; Pure supply of manpower to assist in
sales and distribution of products is prohibited as labor-only
contracting. In plainer terms, the contracted personnel (acting
as sales route helpers) were only engaged in the marginal work
of helping in the sale and distribution of company products;

they only provided the muscle work that sale and distribution
required and were thus necessarily under the companys control
and supervision in doing these tasks.
Still another way of putting it is that the contractors were not
independently selling and distributing company products, using
their own equipment, means and methods of selling and
distribution; they only supplied the manpower that helped the
company in the handing of products for sale and distribution. In
the context of D.O. 18-02, the contracting for sale and
distribution as an independent and self-contained operation is a
legitimate contract, but the pure supply of manpower with the
task of assisting in sales and distribution controlled by a
principal falls within prohibited labor-only contracting. (Cocacola Bottlers Philippines vs. Dela Cruz, G.R. No. 184977,
December 7, 2009.)
9. Suspension of labor-claims during corporate rehabilitation.
Labor claims are included among the actions suspended upon
the placing under rehabilitation of employer-corporations. The
law is clear: upon the creation of a management committee or
the appointment of a rehabilitation receiver, all claims for
actions shall be suspended accordingly. No exception in favor
of labor claims is mentioned in the law. (Tiangco vs. Uniwide
Sales Warehouse Club, Inc., et al., G.R. No. 168697, December
14, 2009.)
Ibid.; Period or duration of the stay order. Petitioners seek to
have the suspension of proceedings lifted on the ground that
the SEC already approved respondent USWCIs SARP. However,
there is no legal ground to do so because the suspensive effect
of the stay order is not time-bound. The stay order continues to
be in effect as long as reasonably necessary to accomplish its
purpose. (Tiangco vs. Uniwide, G.R. No. 168697, December 14,
2009.)
10. Drug-Free Workplace Policy; Importance of confirmatory test
after drug test. The importance of the confirmatory test is
underscored in Plantation Bays own Policy and Procedures, in
compliance with Republic Act No. 9165, requiring that a

confirmatory test must be conducted if an employee is found

positive for drugs in the Employees Prior Screening Test, and
that both tests must arrive at the same positive result.
But where the confirmatory test results were released earlier
than those of the drug test, the veracity of the confirmatory
results is put to doubt. (Plantation Bay Resort and Spa vs.
Dubrico, et al., G.R. No. 182216, December 4, 2009.)
11. POEA Standard Employment Contract; Permanent disability
defined. Permanent disability refers to the inability of a worker
to perform his job for more than 120 days, regardless of
whether he loses the use of any part of his body. What
determines petitioners entitlement to permanent disability
benefits is his inability to work for more than 120 days.
Ibid; Right of seafarer to ask for second-opinion on the finding
of fitness to work. The provision of POEA Standard Employment
Contract does not preclude the seafarer from getting a second
opinion as to his condition for purposes of claiming disability
benefits. While it is the company-designated physician who
must declare that the seaman suffers a permanent disability
during employment, it does not deprive the seafarer of his right
to seek a second opinion, hence, the Contract recognizes the
prerogative of the seafarer to request a second opinion and, for
this purpose, to consult a physician of his choice.
Ibid; Effect of failure of company designated physician to certify
the seafarers fitness to work. Given a seafarers entitlement to
permanent disability benefits when he is unable to work for
more than 120 days, the failure of the company-designated
physician to pronounce petitioner fit to work within the 120-day
period entitles him to permanent total disability benefit in the
amount of US$60,000.00. (Abante vs. KJGS Fleet Management
Manila, G.R. No. 182430, December 4, 2009.)
12. POEA Standard Employment Contract; Compensation and
benefits for injury or illness; Effect of failure of seafarer to
submit himself for medical examination within 3 days from
repatriation. Even assuming that petitioner was repatriated for
medical reasons, he failed to submit himself to the company-

designated doctor in accordance with the post-employment

medical examination requirement under paragraph 3 of Section
20(B) of the POEA Standard Employment Contract. Failure to
comply with this requirement which is a sine qua non bars the
filing of claim for disability benefits.
xxx
3. Upon sign-off from the vessel for medical treatment, the
seafarer is entitled to sickness allowance equivalent to his basic
wage until he is declared fit to work or the degree of permanent
disability has been assessed by the company-designated
physician but in no case shall this period exceed one hundred
twenty (120) days.
For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated
physician within three working days upon his return except
when he is physically incapacitated to do so, in which case, a
written notice to the agency within the same period is deemed
as compliance. Failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of
the right to claim the above benefits. If a doctor appointed by
the seafarer disagrees with the assessment, a third doctor may
be agreed jointly between the Employer and the seafarer. The
third doctors decision shall be final and binding on both parties
xxx
(Musnit vs. Sea Star Shipping Corporation, G.R. No. 182623,
December 4, 2009.)
13. Executory character of assumption and certification order.
Assumption and certification orders are executory in character
and are to be strictly complied with by the parties, even during
the pendency of any petition questioning their validity.
Regardless therefore of its motives, or of the validity of its
claims, the employer must readmit all striking employees and
give them back their respective jobs. Accepting back the
workers is not a matter of option, but of obligation mandated by

law for the employer to faithfully comply with. Its compulsory

character is mandated, not to cater to a narrow segment of
society, or to favor labor at the expense of management, but to
serve the greater interest of society by maintaining the
economic equilibrium.
Ibid.; Implementation of return to work order cannot be made to
depend upon the discretion of the employer. Certainly, the
determination of who among the strikers could be admitted
back to work cannot be made to depend upon the discretion of
employer, lest we strip the certification or assumption-ofjurisdiction orders of the coercive power that is necessary for
attaining their laudable objective. The return-to-work order does
not interfere with the managements prerogative, but merely
regulates it when, in the exercise of such right, national
interests will be affected. The rights granted by the Constitution
are not absolute. They are still subject to control and limitation
to ensure that they are not exercised arbitrarily. The interests of
both the employers and employees are intended to be
protected and not one of them is given undue preference. (YSS
Employees Union vs. YSS Laboratories, Inc., G.R. No. 155125,
December 4, 2009.)
Last Edited: Friday, August 19, 2011
Caveat: Subsequent court and administrative rulings, or
changes to, or repeal of, laws, rules and regulations may have
rendered the whole or part of this article inaccurate or obsolete.

http://www.laborlaw.usc-law.org/2010/04/17/december2009/