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Pentagon Steel Corporation v. CA 6.

The CA held that the respondent was constructively dismissed when the
petitioner repeatedly refused to accept the respondent back to work
Topic: Conciliation and Mediation despite the valid medical reason that justified his absence from work. The
CA concluded that the respondent complied with the petitioners directive
1. The petitioner, a corporation engaged in the manufacture of G.I. wire and to submit a written explanation when the former presented the medical
nails, employed respondent Perfecto Balogo (the respondent) in its certificate to explain his absences.
wire drawing department. The petitioner alleged that the respondent
absented himself from work on August 7, 2002 without giving prior notice 7. The petitioner contends that the CA cannot use the parties actions and/or
of his absence. As a result, the petitioner sent him a letter by registered agreements during the negotiation for a compromise agreement as basis
mail dated August 12, 2002, written in Filipino, requiring an explanation for for the conclusion that the respondent was illegally dismissed because an
his absence. The petitioner sent another letter to the respondent on offer of compromise is not admissible in evidence under Section 27, Rule
August 21, 2002, also by registered mail, informing him that he had been 130 of the Rules of Court.
absent without official leave (AWOL) from August 7, 2002 to August 21,
2002. Other letters were sent to the respondent by registered mail, all Issue: Whether or not the actions or agreements of the parties during the
pointing out his absences; however, the respondent failed to compromise agreement could be used as evidence?
respond. Thus, the petitioner considered him on AWOL from August 7,
2002 Ruling:
2. Respondent then filed a complaint with the Arbitration Branch of the NLRC
for underpayment/nonpayment of salaries and wages, overtime pay, 1. NO. The correct reason for the CAs error in considering the actions and
holiday pay, service incentive leave, 13th month pay, separation pay, and agreements during the conciliation proceedings before the labor arbiter is
ECOLA alleging that he contracted flu associated with diarrhea and Article 233 of the Labor Code which states that information and statements
suffered loose bowel movement due to the infection. The respondent made at conciliation proceedings shall be treated as privileged
maintained that his illness had prevented him from reporting for work for communication and shall not be used as evidence in the
ten (10) days. When the respondent finally reported for work on August Commission. Conciliators and similar officials shall not testify in any court or
17, 2002, the petitioner refused to take him back despite the medical body regarding any matters taken up at conciliation proceedings conducted
certificate he submitted. by them.
3. During the conciliation proceedings on October 9, 2002, the respondent 2. In the present case, we find that the CA did indeed consider the statements
presented the medical certificate covering his period of absence. The the parties made during conciliation; thus, the CA erred by considering
petitioner required him, however, to submit himself to the company excluded materials in arriving at its conclusion. The reasons behind the
physician to determine whether he was fit to return to work in accordance exclusion are two-fold.
with existing policies. According to petitioner, the respondent refused to 3. First, since the law favors the settlement of controversies out of court, a
return to work and insisted that he be paid his separation pay. the person is entitled to buy his or her peace without danger of being
respondent formally amended his complaint to include his claim of illegal prejudiced in case his or her efforts fail; hence, any communication made
dismissal toward that end will be regarded as privilege indeed, if every offer to buy
4. LA held dismissed the claim of illegal dismissal and found that no dismissal peace could be used as evidence against a person who presents it, many
took place. settlements would be prevented and unnecessary litigation would result,
5. NLRC found that respondent was illegally dismissed ruling that since no prudent person would dare offer or entertain a compromise if his
abandonment has no legal basis since there was no clear intent on the or her compromise position could be exploited as a confession of weakness.
respondents part to sever the employer-employee relationship. The NLRC 4. Second, offers for compromise are irrelevant because they are not intended
found it difficult to accept the petitioners allegation that the respondent as admissions by the parties making them. A true offer of compromise does
absented himself for unknown reasons; this kind of action is inconsistent not, in legal contemplation, involve an admission on the part of a defendant
with the respondents 23 years of service and lack of derogatory record that he or she is legally liable, or on the part of a plaintiff, that his or her
during these years claim is groundless or even doubtful, since it is made with a view to avoid
controversy and save the expense of litigation. It is the distinguishing mark
of an offer of compromise that it is made tentatively, hypothetically, and in
contemplation of mutual concessions
5. While we agree with the petitioner that the CA should not have considered
the agreements and/or statements made by the parties during the
conciliation proceedings, the CAs conclusion on illegal dismissal, however,
was not grounded solely on the parties statements during conciliation, but
was amply supported by other evidence on record. Based on these other
pieces of evidence, the respondent was illegally dismissed; hence, our ruling
regarding the statement made during conciliation has no effect at all on our
final conclusion.