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G.R. No.

154689 November 25, 2004 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
UNICORN SAFETY GLASS, INC., LILY YULO and HILARIO YULO, petitioners, the Department of Labor and Employment. Respondents wrote another letter
vs. of protest dated April 7, 19985 expressing their frustrations at the apparent
RODRIGO BASARTE, JAIMELITO FLORES, TEODOLFO LOR, RONNIE DECIO, lack of willingness on the part of petitioner company's management to address
ELMER SULTORA and JOSELITO DECIO, respondents. 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
DECISION 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
YNARES-SANTIAGO, J.: attorney's fees. Respondents prayed for reinstatement and payment of full
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 Meanwhile, since respondents failed to report for work, petitioners sent each of
dated August 7, 2002, which reversed the decisions of the Labor Arbiter and them a telegram directing them to do so. On April 18, 1998, respondents sent
the National Labor Relations Commission (NLRC). 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
Respondents were regular employees of petitioner Unicorn Safety Glass the working environment they were subjected to, they decided not to report for
Incorporated, a company engaged in the business of glass manufacturing. work at all.7 Petitioner company replied by asking them to explain why they
Respondents normally worked six (6) times a week, from Monday to Saturday, have not been reporting for work. However, respondents neither reported for
and were paid on a weekly basis. They were likewise officers of the organized work nor replied to petitioner company's telegrams.
union in petitioner company, owned and managed by the Spouses Lily and
Hilario Yulo.
On January 26, 1999, Labor Arbiter Felipe Pati rendered judgment finding that
respondents were not constructively terminated by petitioner company. Thus:
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 Complainants claim that they were constructively terminated.
factors such as decrease in sales, increase in the cost of production, devaluation However, evidence extant do not support this contention. What we see on
of the peso and increase in minimum wage, which contributed to the current records are the telegrams, letters and memoranda sent by respondents to
economic state of the company. In a letter dated March 12, 1998, respondents complainants ordering the latter to report for work. Despite due receipt by the
registered their protest to the proposed reduction of working days and complainants of these communications, they simply ignored respondents' plea.
expressed doubts on the reasons offered by the company.3 Respondents also Complainants deliberate refusal to report for work is very much evident from
surmised that the management was merely getting back at them for forming a the number of letters they received from respondents which were all ignored.
union especially since only the union officers were affected by the work
reduction. It is true that complainants have sent to respondent a joint letter-
reply dated April 18, 1998 (Annexes 35, Respondents Position Paper).
On April 6, 1998, Hilario Yulo issued another Memorandum4 announcing the However, said joint letter reinforces the fact that complainants were not
implementation of a work rotation schedule to take effect from April 13, 1998 terminated by respondents. In fact complainants admitted in this joint letter-

reply that they have decided not to report for work because they did not agree It is to be stressed that the complainants were the ones who went to the office
with the report rotation adopted by respondents. From this admission and of respondent for settlement. They acknowledged having signed the "Waiver,
statement of complainant, we feel that the charge of illegal dismissal they filed Release and Quitclaim" and brought the same before a Notary Public…. Given
against respondents is misplaced. If complainants strongly opposed the these factual circumstances, it is hard to believe that there was
rotation adopted by respondents, they could have initiated an illegal rotation involuntariness on the part of the complainant when they settled their claims
and not illegal dismissal case against respondents. As "good soldiers" with respondent. In fact, almost a year have already lapsed since then. It is
complainants could initiate this case while they are reporting for work based only now that complainants are claiming that their settlement was
on the adopted work rotation and let the Court decides whether or not this involuntary.
rotation is valid and legal. Certainly refusal to report for work is not a proper
remedy.8 Anent complainants' claim that the consideration of settlement is
unconscionable suffice it to state that the amount granted by way of
The Labor Arbiter likewise dismissed the charge of unfair labor practice for settlement to complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio
lack of legal and factual basis. Nonetheless, the Labor Arbiter ordered including that of complainant Teodolfo Lor (Records, p. 179) are more than
petitioner company to pay the respondents' claim for unpaid service incentive the judgment award.11
leave pay. The Labor Arbiter disposed of the case, thus:
The dispositive portion of the NLRC's decision states:
WHEREFORE, the instant case is hereby dismissed for lack of merit.
Respondents however, are ordered to pay complainants the total amount of PREMISES CONSIDERED, the appeal from the Decision dated January 26, 1999
P5,110.00 for unpaid service incentive leave pay as alluded in the above is hereby DISMISSED for lack of merit and the Decision is AFFIRMED.
Further, the motions to dismiss filed by respondents with respect to
On the grounds of amicable settlement and subsequent withdrawals of their complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio and Teodolfo
complaints, the cases of PAQUITO MANONGSONG and ELMER SULTORA are Lor are hereby GRANTED. Thus, insofar as said complainants are concerned
hereby dismissed with prejudice. their cases are dismissed with prejudice, as prayed for by respondents.


The case was appealed to the NLRC. During the pendency of the appeal, Unrelenting, the respondents filed a petition for certiorari with the Court of
however, petitioner company filed a Motion to Dismiss alleging that Appeals, which found respondents' case partly meritorious.
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" However, it declined to make a contrary finding on the charge of unfair labor
executed by respondents were entered into without his knowledge and not in practice for lack of clear-cut and convincing evidence. The dispositive portion
the presence of the Labor Arbiter; and that the amounts received by of the Court of Appeals' decision is as follows:
respondents were unconscionably inadequate.
In a decision dated October 31, 2000, the NLRC sustained the findings of the substantially GRANTED. Private respondents are hereby ordered to reinstate to
Labor Arbiter. On the issue of the amicable settlements, the NLRC stated: 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
We are not convinced that the amicable settlement entered into by separation pay, in case reinstatement is no longer feasible or possible. Private
complainants were involuntary and that the consideration thereof are 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 This may be true to an extent. But it does not, by itself, prove that the rotation
taxed against private respondents. scheme was the most reasonable alternative to remedy the company's
The petitioners' unbending stance on the implementation of the rotation
Its Motion for Reconsideration having been denied, petitioners are before us on scheme was an indication that the rotation plan was being implemented for
Petition for Review on Certiorari, raising the following assignment of errors: 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
I. 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
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE option. However, petitioners ignored the letters sent by respondents, which
RULING OF THE LABOR ARBITER A QUO WHICH WAS AFFIRMED BY THE compelled the latter to seek redress with the Labor Arbiter.
DISMISSED FROM THEIR EMPLOYMENT. We are mindful that every business strives to keep afloat during these times
when prevailing economic situations turns such endeavor into a near struggle.
II. 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
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE operations. Thus, we have held that management is free to regulate, according
RELEASE, WAIVER AND QUITCLAIMS EXECUTED BY PRIVATE RESPONDENTS to its own discretion and judgment, all aspects of employment, including hiring,
RODRIGO BASARTE AND JAIMELITO FLORES NULL AND VOID.14 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
The petition lacks merit. recall of workers.17 Further, management retains the prerogative, whenever
exigencies of the service so require, to change the working hours of its
Constructive dismissal or a constructive discharge has been defined as quitting employees.18
because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in pay.15 However, the exercise of management prerogative is not absolute. By its very
Constructive dismissal, however, does not always take the form of a diminution. nature, encompassing as it could be, management prerogative must be
In several cases, we have ruled that an act of clear discrimination, insensibility, exercised in good faith and with due regard to the rights of labor—verily, with
or disdain by an employer may become so unbearable on the part of the the principles of fair play at heart and justice in mind. While we concede that
employee so as to foreclose any choice on his part except to resign from such management would best know its operational needs, the exercise of
employment. This constitutes constructive dismissal.16 management prerogative cannot be utilized as an implement to circumvent our
laws and oppress employees. The prerogative accorded management cannot
In the case at bar, we agree with the Court of Appeals that petitioners' bare defeat the very purpose for which our labor laws exist: to balance the
assertions on the alleged reason for the rotation plan as well as its failure to conflicting interests of labor and management, not to tilt the scale in favor of
refute respondents' contention that they were targeted due to their union one over the other, but to guaranty that labor and management stand on equal
activities, merit the reversal of the Labor Arbiter's decision. It was incumbent footing when bargaining in good faith with each other.19
upon petitioners to prove that the rotation scheme was a genuine business
necessity and not meant to subdue the organized union. The reasons In the case at bar, the manner by which petitioners exercised their management
enumerated by petitioners in their Memoranda dated March 2, 1998 were prerogative appears to be an underhanded circumvention of the law.
factors too general to actually substantiate the need for the scheme. Petitioners Petitioners were keen on summarily implementing the rotation plan, obviously
cite the reduction in their electric consumption as proof of an economic slump. 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 proof that the waiver was wangled from an unsuspecting or gullible person, or
uncertain situation where reporting for work was tantamount to an the terms of settlement are unconscionable on its face, that the law will step in
acquiescence in an unjust situation. 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
Petitioners argued that they "exerted diligent and massive efforts" to make doing, and the consideration for the quitclaim is credible and reasonable, the
respondents return to work, highlighting the telegrams and memoranda sent to transaction must be recognized as a valid and binding undertaking.
respondents.20 It is well established that to constitute abandonment, two
elements must concur: (1) the failure to report for work or absence without In the instant case, while it is true that the complaint for illegal dismissal filed
valid or justifiable reason, and (2) a clear intention to sever the employer- by respondents with the Labor Arbiter has been dismissed, their appeal before
employee relationship, with the second element as the more determinative the NLRC was still pending. In fact, petitioners even filed a Motion to Dismiss
factor and being manifested by some overt acts. Abandoning one's job means with the NLRC on the very ground that the respondents, or at least most of
the deliberate, unjustified refusal of the employee to resume his employment them, have executed said "Waivers, Releases and Quitclaims." Petitioners
and the burden of proof is on the employer to show a clear and deliberate cannot therefore deny that it was in their interest to have respondents execute
intent on the part of the employee to discontinue employment.21 the quitclaims.

However, petitioners' charge of abandonment of work by respondents does not Furthermore, the considerations received by respondents Basarte and Flores
hold water when taken in light of the complaint for constructive dismissal. We were grossly inadequate considering the length of time that they were
have held that a charge of abandonment is totally inconsistent with the filing of employed in petitioner company. As correctly pointed out by the Court of
a complaint for constructive dismissal— and with reason.22 Respondents Appeals, Basarte worked for petitioner company for 21 years, that is, from
cannot be said to have abandoned their jobs when precisely, the root cause of 1976 to 1998, while Flores worked from 1991 to 1998. Basarte and Flores only
their protest is their demand to maintain their regular work hours. What is received P10,000.00 and P3,000.00, respectively. In contrast, Manongsong and
more, respondents even prayed for reinstatement and backwages. Clearly, Soltura, two workers who opted to settle their respective cases earlier on, both
these are incompatible with the proposition that respondents sought to started in 1993 only, but were able to take home P16,434.00 each after
abandon their work. executing their waivers.

Anent the issue of the validity of the waivers and quitclaims executed by some Article 279 of the Labor Code provides that an employee who is unjustly
of the respondents, petitioners argue that while admittedly, the amounts dismissed from work is entitled to reinstatement without loss of seniority
indicated therein were not substantial, it does not necessarily follow that these rights and other privileges, and to his full backwages, inclusive of allowances,
were executed under duress. Moreover, the waivers and quitclaims were and to the other benefits or their monetary equivalent computed from the time
executed when the complaint for illegal dismissal was already dismissed by the of his actual reinstatement. However, if reinstatement is no longer possible, the
Labor Arbiter. Thus, the waivers and quitclaims were executed under valid employer has the alternative of paying the employee his separation pay in lieu
circumstances. of reinstatement.

We do not agree. To be sure, the law looks with disfavor upon quitclaims and WHEREFORE, the instant petition is DENIED, and the decision of the Court of
releases by employees who are inveigled or pressured into signing them by Appeals of October 18, 2001 in CA-G.R. SP No. 63577 is AFFIRMED in toto. Costs
unscrupulous employers seeking to evade their legal responsibilities. We have against petitioners.
clarified the standards for determining the validity of quitclaim or waiver in the
case of Periquet v. National Labor Relations Commission,23 to wit: SO ORDERED.

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

G.R. No. 170661 December 4, 2009 On April 19, 1994, petitioner received a telegram from Lelet Fernando of the
Human Resources Department (HRD), advising him to report to the
RAMON B. FORMANTES, Petitioner, respondents' head office. Petitioner advised her and Biscaro that he has not
vs. received his salary and reimbursements for incurred expenses. He also
DUNCAN PHARMACEUTICALS, PHILS., INC., Respondent. 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,
PERALTA, J.: 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
Before this Court is a Petition for Review on Certiorari under Rule 45 of the impossible for him to report on the very same day that he received the
Rules of Court seeking to set aside the Decision1 and the Resolution2 of the telegram ordering him to do so. Thereafter, respondent sent several letters to
Court of Appeals (CA) in CA-G.R. SP No. 57528, which affirmed with petitioner. These letters, among others, include the following: letter6 charging
modification the Resolutions rendered by the National Labor Relations him of grave misconduct on the attempted sexual abuse upon the person of Ms.
Commission (NLRC), Second Division, dated October 19, 19993 and December Cynthia Magat, and directing him to submit his written explanation thereon;
21, 1999,4 respectively, in NLRC NCR CA 010480-96. 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
Petitioner Ramon B. Formantes was employed as a medical representative by over the company car, and directing him to explain in writing why no further
respondent Duncan Pharmaceuticals, Phils., Inc. on September 1, 1990. He later disciplinary action should be given to him; letter9 suspending him for one day
became the Acting District Manager of respondent for the Ilocos District. 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 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 On May 19, 2004, petitioner received a letter11 dated May 18, 1994, terminating
confronted by said Mr. Biscaro and Emeterio Shinyo, Marketing and Sales his employment with respondent company due to insubordination; for failure
Director, due to his attempt to sexually force himself upon his subordinate to report to the respondent company; for failure to submit the required
Cynthia Magat, one of the medical representatives of respondent company. operations report; and for failure to turn over the company car.
Petitioner and Ms. Magat separately related their sides of the incident to the
respondent company’s officers. Petitioner was then compelled by respondent In the meantime, Executive Labor Arbiter (LA) Norma C. Olegario rendered a
to take a leave of absence. decision12 dated November 10, 1995, dismissing the complaint, finding that
Formantes was validly dismissed for an attempt to sexually abuse Cynthia
Thereafter, Biscaro tried to induce petitioner to resign, which the latter refused. Magat, but imposing a penalty on respondent for its failure to give formal notice
Petitioner's salary was then withheld from him. He was not allowed to attend and conduct the necessary investigation before dismissing petitioner. The LA
the meetings and activities of the company. His subordinates no longer found that when the first written notice was sent to petitioner on April 25,
reported to him and the company directed one of its district managers to take 1994, regarding the incident with Cynthia Magat, petitioner had already been
over his position and functions without prior notice to him. Due to the dismissed, or at least, constructively dismissed, because as early as March 23,
foregoing, petitioner was constrained to file a case for illegal suspension, 1994, he was no longer allowed to participate in the activities of the company
constructive dismissal, payment of salaries, allowances, moral and exemplary and his salary was withheld from him. The LA directed the respondent to pay
damages on April 13, 1994 before the NLRC, Regional Arbitration Branch No. I, petitioner the amount of ₱1,000.00.
San Fernando, La Union.
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 DECISIONS OF THIS HONORABLE COURT AND HAS DEPARTED FROM THE
damage to petitioner. Petitioner alleged that the LA erred in ruling that he was ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS WHEN IT
legally dismissed for sexual abuse, when the charge against him stated in the AFFIRMED THE DECISION OF THE NLRC THAT PETITIONER'S DISMISSAL
The NLRC, Second Division, in its Resolution13 dated October 19, 1999 affirmed SUBSTANTIAL EVIDENCE.15
the findings of the LA. Petitioner filed a motion for reconsideration, which the
NLRC denied in a Resolution14 dated December 21, 1999. On the alleged deprivation of due process, petitioner alleged that he was not
duly represented by a competent counsel, as Rogelio Bacolor, who represented
Undaunted, petitioner filed a petition for certiorari under Rule 65 with the CA, him in the proceedings before the NLRC, was not a member of the bar, thereby
alleging that the NLRC gravely abused its discretion and acted in excess of its depriving him of his right to due process. Hence, he prayed that the case be
jurisdiction in affirming the decision of the Labor Arbiter that petitioner's remanded to the LA for further proceedings.
dismissal from employment was justified on a ground not alleged in the notice
of termination and not established by substantial evidence. Petitioner further We are not persuaded.
alleged that the NLRC erred in not holding that petitioner was constructively
dismissed by the respondent. 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 CA, in its Decision dated July 18, 2005, affirmed the resolutions of the the proceedings before the NLRC and the Court of Appeals.
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 Petitioner was duly represented by Atty. Jannette B. Ines in the filing of the
₱5,000.00. 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
Petitioner filed a Motion for Reconsideration, which the CA denied in a the NLRC.19 Further, although Mr. Bacolor appeared in the several stages of the
Resolution dated November 23, 2005. Hence, the instant petition assigning the hearing before the LA and filed petitioner's memorandum of appeal, he also
following errors: retained the services of Guererro and Turgano Law Office, as collaborating
counsel. Atty. Arnel Alambra of said law office filed a Supplemental
THE JUDGMENT RENDERED [BY] THE NLRC [IS] NULL AND VOID ON THE Memorandum of Appeal20 and Reply21 to the respondent's answer to the
GROUND OF LACK OF DUE PROCESS TAKING INTO ACCOUNT THAT Supplemental Memorandum of Appeal in petitioner's behalf. Thereafter, upon
PETITIONER-APPELLANT WAS UNKNOWINGLY DEPRIVED OF COMPETENT denial of the appeal by the NLRC, petitioner's motion for reconsideration22 was
LEGAL ASSISTANCE OF COUNSEL AS IT TURNED OUT THAT THE "COUNSEL" filed by Arnold V. Guerrero Law Offices, together with its battery of lawyers,
WHO REPRESENTED HIM WAS LATER FOUND NOT TO BE A MEMBER OF THE which includes Atty. Arnold V. Guerrero, Atty. Ma. Josefa C. Pinza, Atty.
BAR AS [HE REPRESENTED HIMSELF TO BE]. 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
THE COURT A QUO GROSSLY ERRED AND DECIDED A QUESTION OF Reply24 and the Memorandum.25 Upon denial of the petition before the CA,
SUBSTANCE NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE petitioner was also represented by another law office in the name of Argue Law
DECISIONS OF THIS HONORABLE COURT AND HAS DEPARTED FROM THE Office, which filed the petitioner's motion for reconsideration and the present
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 On the issue of petitioner's dismissal on another ground not alleged in the
this Court held that: 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
There is no question that the "essence of due process is a hearing before alleged in the notice of termination. The notice of termination stated that
conviction and before an impartial and disinterested tribunal" but due process petitioner was dismissed due to failure to report to the office; failure to submit
as a constitutional precept does not, always and in all situations, require a trial- reports; and failure to file written explanations despite repeated instructions
type proceeding. The essence of due process is to be found in the reasonable and notices.
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 The argument is not meritorious.
may be heard also through pleadings. Where opportunity to be heard, either
through oral arguments or pleadings, is accorded, there is no denial of In Rubberworld (Phils.), Inc. v. NLRC,29 we held that:
procedural due process. (Emphasis supplied.)1avvphi1
It is now axiomatic that if just cause for termination of employment actually
Further, in Fernandez v. National Labor Relations Commission,27 respondents exists and is established by substantial evidence in the course of the
failed to attend the hearing on the scheduled cross examination of the proceedings before the Labor Arbiter, the fact that the employer failed, prior to
petitioner's witness. Due to the foregoing, the LA deemed the case submitted such termination, to accord to the discharged employee the right of formal
for resolution. Respondents claimed denial of due process due to non-reception notice of the charge or charges against him and a right to ventilate his side with
of its evidence. On appeal, the NLRC vacated the LA's Order and remanded the respect thereto, will not operate to eradicate said just cause so as to impose on
case for further proceedings. The issue is whether the failure to attend hearings the employer the obligation of reinstating the employee and otherwise granting
before the LA is a waiver of the right to present evidence. This court held that: him such other concomitant relief as is appropriate in the premises. x x x

Private respondents were able to file their respective position papers and the Although petitioner was dismissed from work by the respondent on the ground
documents in support thereof, and all these were duly considered by the labor of insubordination, this Court cannot close its eyes to the fact that the ground of
arbiter. Indeed, the requirements of due process are satisfied where the parties sexual abuse committed against petitioner's subordinate actually exists and
are given the opportunity to submit position papers. In any event, Respondent was established by substantial evidence before the LA.
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 When petitioner filed the complaint for constructive dismissal on April 13,
arbiter, and the parties cannot demand it as a matter of right. In other 1994, he was still unsure of the actual ground for his suspension and
words, the filing of position papers and supporting documents fulfilled constructive dismissal. The very reason why he sought refuge in the labor
the requirements of due process. Therefore, there was no denial of this right tribunals was to ascertain the ground for his termination. In keeping with its
because private respondents were given the opportunity to present their side. 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
Taken altogether, although petitioner, during some parts of the trial her and the proceedings taken thereon, the LA made a finding that petitioner
proceedings before the LA was not represented by a member of the bar, he was was validly dismissed due to the sexual abuse committed against his
given reasonable opportunity to be heard and submit evidence to support his subordinate. However, the LA imposed a monetary penalty upon respondent
arguments, through the medium of pleadings filed in the labor tribunals. He for its failure to observe procedural due process.
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. 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 08.Q. - Then, what happened, if any, when you were already upstairs of the
evidence to support the ground for his dismissal. apartment?

The findings of facts of quasi-judicial agencies, which have acquired expertise in A. - That he went inside my room looking at my things. When I told him we
the specific matters entrusted to their jurisdiction, are accorded by this Court better go downstairs since it is not proper got (sic) us to stay there because I
not only respect but even finality if they are supported by substantial evidence. am alone, he suddenly opened my closet without my permission. I closed the
Only substantial, not preponderance, of evidence is necessary. Section 5, Rule closet and as I persuading (sic) him to go downstairs, he started teasing me and
133 of the Rules of Court, provides that in cases filed before administrative or holding my hands saying "Cheng, na-e-excite yata ako sa iyo." I resisted his
quasi-judicial bodies, a fact may be deemed established if it is supported by touch and told him not to tease me that way. Then finally, we went downstairs
substantial evidence, or that amount of relevant evidence which a reasonable and I started again to look for the papers I needed. As I was looking at my
mind might accept as adequate to justify a conclusion.30 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,
After a meticulous review of the records, We find that the Decision of the LA, as pwede bang magpahinga? Since I trusted him and he is like a brother to me, I
affirmed by the NLRC and the CA, is supported by substantial evidence. The LA said yes. I turned on the electric fan and TV set and I went downstairs. Since it
arrived at her decision after a careful consideration of all the facts and evidence was hot, I decided to buy coke, after which I went upstairs with the coke and
on record. 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
The LA anchored her decision upon the Sworn Statement31 given by Cynthia MBS reports. He taught me and after that when I decided to do my reports
Magat to the Mangaldan Police Station, dated April 14, 1994, to wit: 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,
06.Q. - You have stated that you were attempted (sic) by you boss, MR. RAMON if any?
B. FORMANTES, to sexually abuse you, will you relate briefly how the incident
took place? 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
A. - That we have a meeting at about 10:30 o'clock in the morning of March 9, getting up, he then pulled me again to the bed, this time he pinned me to the
1994 at the Maraman Office at Caranglaan, Dagupan City. After the meeting, we bed, he went on top of me and was asking for a kiss. He said, "Cheng isang kiss
proceeded to my apartment at Anolid, Mangaldan, Pangasinan to get the data lang titigil na ako." I was shocked. And then he was trying to get in between my
he (Mr. Formantes) was asking. 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,
07.Q. - Upon reaching you apartment at Anolid, Mangaldan, what happened, if as he started kissing the right side of my face down to the neck. He then held
any? 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,
A. - We entered the apartment and then while I was looking for the papers "Monching, don't do this to me, you are my friend." He said "I'm also your boss."
needed, he asked permission to see the apartment and so I showed him the Since I was kicking him and pushing him, I was finally able to get away from
lower portion. And then he asked again and wished to go upstairs, so I him. When I stood up, I asked him "Bakit mo nagawa ito sa akin, kaibigan kita."
consented since he is [an] outstanding friend and my boss without any malice He said, "Cheng, I'm sorry. Nadala lang ako." He told me not to tell this to Art,
to him and we went upstairs. 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

The same Sworn Statement further provides that: 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
10.Q. - Was there any more incident that transpired after the one you have just to his moral perversity. And when such moral perversity is perpetrated against
related? 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.
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, As a manager, petitioner enjoyed the full trust and confidence of respondent
"May tao ba sa taas?" I told him there was none though my fiancee was upstairs. and his subordinates. By committing sexual abuse against his subordinate, he
Then he started to hold my inner thigh saying, Cheng, maligo ka na hihintayin clearly demonstrated his lack of fitness to continue working as a managerial
kita. I told him I'll just meet him at Nipa or Maraman. I was resisting his touch, employee and deserves the punishment of dismissal from the service.
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 Aside from the findings of sexual abuse, petitioner is also guilty of
noise and Monching heard this and he got scared and left. Then on March 18, insubordination. Records show that after filing a case for constructive dismissal
1994, Friday, Monching went to my apartment again at around 7:20 o'clock in on April 13, 1994 against the respondent, petitioner continued working and
the morning, but this time I did not let him in, I just opened the door a little. He performing his functions with the respondent company until his termination on
got irritated with my defensiveness and left my place. 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
The evidence on record sufficiently supports the finding of sexual abuse against relative to his failure to follow instructions, the records of the case are bereft of
petitioner. In addition to her sworn statement to the police, she sufficiently showing that he filed any written explanation to any of these notices. His
narrated petitioner's attempt to sexually abuse her in her handwritten letter 32 continued failure to carry out the reasonable oral or written instructions of his
dated March 23, 1994 addressed to Reynaldo Biscaro. She also narrated the supervisor is punishable by insubordination, which is provided under Rule
same incident in another letter33 addressed to the president of the union, Joel IV.5.a of the Operational Instruction OI-A-AP25, Work Rules.39 While petitioner
Soco. 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
It may be trite to point out that the findings of a trial court on the credibility of thereto, as instructed.
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 We now come to the issue of constructive dismissal.
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 Constructive dismissal exists when an act of clear discrimination, insensibility
sufficiently contradict the charge of sexual abuse against him. Moreover, the or disdain by an employer has become so unbearable to the employee leaving
courts usually give credence to the testimony of a woman who is a victim of him with no option but to forego with his continued employment.40
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 In the case at bar, petitioner, while still employed with the respondent, was
condemn an injustice.36 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
In Villarama v. National Labor Relations Commission,37 wherein a managerial to him. His subordinates were directed not to report to him and the company
employee committed sexual harassment against his subordinate, the Court held directed one of its district managers to take over his position and do his
that sexual harassment is a valid cause for separation from service. 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 Nominal damages are adjudicated in order that a right of the plaintiff that has
there was a just cause for his dismissal from the service. 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
Thus, we hold the dismissal as valid, but we find that there was non-compliance him.45 Thus, for respondent's violation of petitioner's statutory rights,
with the twin procedural requirements of notice and hearing for a lawful respondent is sanctioned to pay petitioner nominal damages in the amount of
dismissal. ₱30,000.00.

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

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

G.R. No. 177664 December 23, 2009 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
CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG, Petitioners, did not give him service incentive leave, holiday pay, rest day pay, and overtime
vs. pay. He also alleged that the petitioners did not send him a notice of
In opposing the complaint, the petitioners claimed that the respondent was a
DECISION 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
BRION, J.: 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
Before this Court is the Petition for Review on Certiorari under Rule 45 of the the respondent’s services after April 2003, as they had already lost trust and
Rules of Court assailing the Decision1 of the Court of Appeals (CA) dated confidence in him after discovering that he had forged receipts for the vehicle
February 20, 2007 and its related Resolution dated April 30, 2007 2 in CA-G.R. parts he bought for them. Since then, the respondent had been working as a
SP No. 95924. The assailed decision reversed and set aside the August 15, 2006 driver for different jeepney operators.7
Resolution3 of the National Labor Relations Commission (NLRC), and reinstated
the Labor Arbiter’s April 15, 2005 Decision4 finding respondent Roberto Obias The Labor Arbiter Ruling
(respondent) illegally dismissed from his employment.
Labor Arbiter Rennell Joseph R. Dela Cruz, in his decision of April 15, 2005,
ANTECEDENT FACTS 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
The present petition traces its roots to the complaint5 for illegal dismissal filed could only be terminated after the observance of due process. The labor arbiter
by the respondent against petitioners CRC Agricultural Trading and its owner, likewise disregarded the petitioners’ charge of abandonment against the
Rolando B. Catindig (collectively, petitioners), before the Labor Arbiter on June respondent. He thus decreed:
22, 2004.
WHEREFORE, premises considered, judgment is hereby rendered ordering
In his Sinumpaang Salaysay,6 the respondent alleged that the petitioners respondents CRC AGRICULTURAL TRADING and ROLANDO CATINDIG to pay
employed him as a driver sometime in 1985. The respondent worked for the complainant jointly and severally the following:
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 Separation Pay - ₱64,740.00
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. Backwages

Sometime in March 2003, the petitioners ordered respondent to have the Basic pay - ₱146,491.80
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 13th month pay - 12,207.65
repair shop. The latter suspected that the receipts were falsified and stopped
talking to him and giving him work assignments. The petitioners, however, still SIL - 2,347.63
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
Salary Differential - 47,944.00

Unpaid SIL - 3,467.00 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.

₱277,198.08 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
10% attorney’s fees - 27,719.80 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
GRAND TOTAL - ₱304,917.80 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
SO ORDERED.8 dismiss him. Thus, the respondent is entitled to full backwages without
deduction of earnings derived elsewhere from the time his compensation was
The NLRC Ruling 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
The petitioners and the respondent both appealed the labor arbiter’s decision respondent, as the relationship between them had already been strained.
to the NLRC. The petitioners specifically questioned the ruling that the
respondent was illegally dismissed. The respondent, for his part, maintained Petitioners moved to reconsider the decision, but the CA denied the motion for
that the labor arbiter erred when he ordered the payment of separation pay in lack of merit in its Resolution dated April 30, 2007.
lieu of reinstatement.
In the present petition, the petitioners alleged that the CA erred when it
The NLRC, in its resolution of August 15, 2006,9 modified the labor arbiter’s awarded the respondent separation pay, backwages, salary differentials, and
decision. The NLRC ruled that the respondent was not illegally dismissed and attorney’s fees. They reiterated their view that an abandoning employee like
deleted the labor arbiter’s award of backwages and attorney’s fees. The NLRC respondent is not entitled to separation benefits because he is no different from
reasoned out that it was respondent himself who decided to move his family one who voluntarily resigns.
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 THE COURT’S RULING
employed by the petitioners under a "no work no pay" scheme.
We do not find the petition meritorious.
The CA Decision
The existence of an employer-employee relationship
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 A paramount issue that needs to be resolved before we rule on the main issue
work, like the respondent, is no different from one who voluntarily resigned; of illegal dismissal is whether there existed an employer-employee relationship
both are not entitled to separation pay and to salary differentials. The between the petitioners and the respondent. This determination has been
petitioners added that since they had already four regular drivers, the rendered imperative by the petitioners’ denial of the existence of employer-
respondent’s job was already unnecessary and redundant. They further argued employee relationship on the reasoning that they only called on the respondent
that they could not be compelled to retain the services of a dishonest employee. when needed.

The elements to determine the existence of an employment relationship are: absence without valid or justifiable reason, and (2) a clear intent, manifested
(1) the selection and engagement of the employee; (2) the payment of wages; through overt acts, to sever the employer-employee relationship. The employer
(3) the power of dismissal; and (4) the employer’s power to control the bears the burden of showing a deliberate and unjustified refusal by the
employee’s conduct. The most important element is the employer’s control of employee to resume his employment without any intention of returning.12
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 In the present case, the petitioners did not adduce any proof to show that the
present in this case.10 respondent clearly and unequivocally intended to abandon his job or to sever
the employer-employee relationship. Moreover, the respondent’s filing of the
First, the petitioners engaged the services of the respondent in 1995. Second, complaint for illegal dismissal on June 22, 2004 strongly speaks against the
the petitioners paid the respondent a daily wage of ₱175.00, with allowances petitioners’ charge of abandonment; it is illogical for an employee to abandon
ranging from ₱140.00 to ₱200.00 per day. The fact the respondent was paid his employment and, thereafter, file a complaint for illegal dismissal. As we held
under a "no work no pay" scheme, assuming this claim to be true, is not in Samarca v. Arc-Men Industries, Inc.:13
significant. The "no work no pay" scheme is merely a method of computing
compensation, not a basis for determining the existence or absence of Abandonment is a matter of intention and cannot lightly be presumed from
employer-employee relationship. Third, the petitioners’ power to dismiss the certain equivocal acts. To constitute abandonment, there must be clear proof of
respondent was inherent in the fact that they engaged the services of the deliberate and unjustified intent to sever the employer-employee relationship.
respondent as a driver. Finally, a careful review of the record shows that the Clearly, the operative act is still the employee’s ultimate act of putting an end to
respondent performed his work as driver under the petitioners’ supervision his employment. [Emphasis in the original]
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 Respondent was constructively dismissed
needed his services. Undoubtedly, the petitioners exercised control over the
means and methods by which the respondent accomplished his work as a Case law defines constructive dismissal as a cessation of work because
driver. continued employment has been rendered impossible, unreasonable, or
unlikely, as when there is a demotion in rank or diminution in pay or both or
We conclude from all these that an employer-employee relationship existed when a clear discrimination, insensibility, or disdain by an employer becomes
between the petitioners and respondent. unbearable to the employee.14

The respondent did not abandon his job 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
In a dismissal situation, the burden of proof lies with the employer to show that were not. In fact, the employee who is constructively dismissed might have
the dismissal was for a just cause. In the present case, the petitioners claim that been allowed to keep coming to work. Constructive dismissal is therefore a
there was no illegal dismissal, since the respondent abandoned his job. The dismissal in disguise. The law recognizes and resolves this situation in favor of
petitioners point out that the respondent freely quit his work as a driver when employees in order to protect their rights and interests from the coercive acts
he was suspected of forging vehicle parts receipts. of the employer.15

Abandonment of work, or the deliberate and unjustified refusal of an employee In the present case, the petitioners ceased verbally communicating with the
to resume his employment, is a just cause for the termination of employment respondent and giving him work assignment after suspecting that he had
under paragraph (b) of Article 282 of the Labor Code, since it constitutes forged purchase receipts. Under this situation, the respondent was forced to
neglect of duty.11 The jurisprudential rule is that abandonment is a matter of leave the petitioners’ compound with his family and to transfer to a nearby
intention that cannot be lightly presumed from equivocal acts. To constitute place. Thus, the respondent’s act of leaving the petitioners’ premises was in
abandonment, two elements must concur: (1) the failure to report for work or reality not his choice but a situation the petitioners created.

The Due Process Requirement In the present case, reinstatement is no longer feasible because of the strained
relations between the petitioners and the respondent. Time and again, this
Even assuming that a valid ground to dismiss the respondent exists, the Court has recognized that strained relations between the employer and
petitioners failed to comply with the twin requirements of notice and hearing employee is an exception to the rule requiring actual reinstatement for illegally
under the Labor Code. 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
The long established jurisprudence holds that to justify the dismissal of an a viable substitute that protects the interests of both parties while ensuring
employee for a just cause, the employer must furnish the worker with two that the law is respected.
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 In this case, the antagonism between the parties cannot be doubted, evidenced
informing the employee of the employer’s decision to dismiss him. This by the petitioners’ refusal to talk to the respondent after their suspicion of
decision, however, must come only after the employee is given a reasonable fraudulent misrepresentation was aroused, and by the respondent’s own
period from receipt of the first notice within which to answer the charge, and decision to leave the petitioners’ compound together with his family. Under
ample opportunity to be heard and defend himself with the assistance of his these undisputed facts, a peaceful working relationship between them is no
representative, if he so desires. The requirement of notice is not a mere longer possible and reinstatement is not to the best interest of the parties. The
technicality, but a requirement of due process to which every employee is payment of separation pay is the better alternative as it liberates the
entitled. 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 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. The respondent having been compelled to litigate in order to seek redress, the
It does not also appear that the petitioners held a hearing where the CA correctly affirmed the labor arbiter’s grant of attorney’s fees equivalent to
respondent was given the opportunity to answer the charges of abandonment. 10% of the total monetary award.19
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 The records of this case, however, are incomplete for purposes of computing
termination of employment. Under these facts, the respondent’s dismissal was the exact monetary award due to the respondent. Thus, it is necessary to
illegal.16 remand this case to the Labor Arbiter for the sole purpose of computing the
proper monetary award.
Backwages, Separation Pay, and Attorney’s Fees
WHEREFORE, premises considered, we hereby DENY the petition. The Decision
The respondent’s illegal dismissal carries the legal consequence defined under of the Court of Appeals dated February 20, 2007 and its Resolution dated April
Article 279 of the Labor Code: the illegally dismissed employee is entitled to 30, 2007 in CA-G.R. SP No. 95924 are AFFIRMED and the case is REMANDED to
reinstatement without loss of seniority rights and other privileges and to his the Labor Arbiter for the sole purpose of computing the full backwages,
full backwages, inclusive of allowances and other benefits or their monetary inclusive of allowances and other benefits of respondent Roberto Obias,
equivalent, computed from the time his compensation was withheld from him computed from the date of his dismissal up to the finality of the decision, and
up to the time of his actual reinstatement. Thus, an illegally dismissed employee separation pay in lieu of reinstatement equivalent to one month salary for
is entitled to two reliefs: backwages and reinstatement. Where reinstatement is every year of service, computed from the time of his engagement up to the
no longer viable as an option, backwages shall be computed from the time of finality of this decision.
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 SO ORDERED.
awarded as an alternative in case reinstatement in not possible.18

G.R. No. 169227 July 5, 2010 office’s requirements and deadlines, otherwise the release of TBFO’s
subsequent funds would be delayed. Pulgar also disclosed that he had, on his
PHILIPPINE RURAL RECONSTRUCTION MOVEMENT (PRRM), Petitioner, own initiative, opened a separate bank account at the Capitol Bank6 for TBFO’s
vs. savings; the account had a remaining balance of ₱206,958.50. Lastly, Pulgar
VIRGILIO E. PULGAR, Respondent. 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
BRION, J.: representatives with a photocopy of a savings account passbook with
Account Number 1103508 under Pulgar’s name at the Cooperative Bank
Before us is the petition for review on certiorari1 filed by the Philippine Rural of Quezon. The passbook showed that the account had a balance of
Reconstruction Movement (PRRM) to assail the Court of Appeals’ (CA) decision, ₱207,693.10. According to Pulgar, this balance represented the TBFO savings
dated May 25, 2005,2 and its resolution, dated August 5, 2005,3 in CA-G.R. SP he mentioned in his response. At this point, two versions of the story develop.
No. 62036. The appellate court set aside the National Labor Relations
Commission’s (NLRC) January 28, 2000 decision, and held that PRRM illegally PRRM maintains that while the investigation was ongoing, Pulgar went on leave
dismissed respondent Virgilio Pulgar (Pulgar) from employment. 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
BACKGROUND FACTS 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
PRRM is a non-stock, non-profit, non-governmental organization. Pulgar was an illegal dismissal case on April 3, 1997.
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, Pulgar tells another tale. According to him, on March 17, 1997, he submitted a
through Goyena Solis (Solis), conducted an investigation into alleged financial letter to PRRM to complain that he was not given the right to confront and
anomalies committed at the TBFO. 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
In her investigation report, Solis stated that part of the funds allotted to the alleges that PRRM’s representatives removed his personal properties and
TBFO was missing or not properly accounted for. The report also stated that records from his office, placed them in boxes and kept them in storage.
some of the receipts that the TBFO submitted to liquidate the organization’s
financial transactions were fictitious and manufactured.4 Believing he was constructively dismissed by PRRM’s actions, Pulgar filed a
complaint against PRRM on April 3, 1997 for illegal dismissal, illegal
The PRRM management sent Pulgar a copy of the report, together with a suspension, and nonpayment of service incentive leave pay and 13th month
memorandum, asking him to explain these findings.5 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
In a letter dated February 24, 1997, Pulgar admitted that TBFO’s reported payment of service incentive leave with pay.9
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 On March 31, 1999, the Labor Arbiter found in his decision10 that Pulgar had
projects. Thus, there were instances when he used the funds intended for one been illegally dismissed and ordered PRRM to pay Pulgar ₱319,387.50 as full
project to sustain the activities of other projects. Pulgar further admitted that backwages. However, the Labor Arbiter chose not to award Pulgar moral or
some of the receipts he submitted to liquidate TBFO’s expenses were not genuine; exemplary damages after finding that PRRM had legitimate grounds to
he claimed that he had to produce fake receipts to comply with the central investigate Pulgar. Due to the strained relations between PRRM and Pulgar, the

Labor Arbiter opted to award Pulgar separation pay instead of ordering his We grant the petition.
Procedural issue
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 Under the Rules of Court and settled doctrine, a petition for review on certiorari
that Pulgar abandoned his work. This prompted Pulgar to bring the matter to under Rule 45 of the Rules of Court is limited to questions of law. As a rule, the
the CA via a petition for review on certiorari (should be petition for certiorari) findings of fact of the CA are final and conclusive, and this Court will not review
under Rule 65 of the 1997 Rules on Civil Procedure.12 them on appeal.14 This rule, however, is not absolute and admits of several
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 To resolve the issue of whether PRRM is guilty of illegal dismissal, we
that PRRM never rebutted Pulgar’s contentions that he had been prevented necessarily have to determine the veracity of the parties' allegations, a function
from entering the premises and that his personal effects were taken from his we are ordinarily barred from performing when deciding a Rule 45 petition.
office and placed in storage. The CA further observed that PRRM presented no However, due to the conflicting factual findings of the NLRC and the CA, as well
evidence to prove that Pulgar abandoned his job. Reasoning that filing an illegal as the presence of some relevant facts that, had they been considered by the CA,
dismissal complaint is inconsistent with the charge of abandonment, the would have justified a different conclusion, we find the review of the evidence
appellate court concluded that Pulgar had been illegally dismissed. on record compelling and proper.

In the present petition, filed after the appellate court denied PRRM’s Motion for The illegal dismissal issue
Reconsideration, PRRM raises the issue of whether Pulgar was illegally
dismissed from employment.
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
PRRM posits that it did not dismiss Pulgar from employment. Rather, Pulgar entering the premises on March 31, 1997; and (b) the fact that Pulgar
chose not to return to work, after his leave of absence, to evade any criminal immediately filed a complaint for illegal dismissal against PRRM. At first glance,
liability that might arise from the ongoing investigation PRRM was conducting the CA’s decision appears correct. But the facts are not as simple as they appear
regarding the alleged financial anomalies Pulgar committed when he was the to be.
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 Primarily, we underscore the fact that when Pulgar filed an illegal dismissal
return the PRRM funds still in his custody amounting to ₱207,693.10. 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.
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 Pulgar claims that he was forced to file an illegal dismissal complaint against
parties. Pulgar further alleges that PRRM can no longer claim the PRRM funds PRRM while he was on leave because he was not allowed to enter the office
in his possession since the Labor Arbiter had already ruled that PRRM failed to premises on March 31, 1997. But aside from making this allegation, Pulgar
raise the award of these funds as a relief in its Position Paper. Since PRRM failed to provide any other details on how he was prevented from entering the
never appealed this part of the Labor Arbiter’s decision, it is now bound by premises. Was he physically prevented from entering the premises by a
these findings. 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
THE COURT’S RULING of this allegation.

To bolster his contention that he was constructively dismissed, Pulgar asserts Noticing that even at the Central Office, project funds allotted for one field office
that his personal things were taken from his office, placed in boxes and put in or branch were used to sustain the operation of other on-going activities of
storage. To support this allegation, he attached three photographs.16 But the another field office/branch or even of the Central Office, I presumed that the
only thing seen in these photographs is a storage room with sealed boxes on the same is also applicable in the field office. That is, as field manager, it was to my
floor. Taken at face value, there is nothing in the photographs that proves that discretion as to where and how the fund should be used so long as its
the boxes in the storage room even contain Pulgar’s personal things. Absent utilization concerns the implementation of the project. With this in mind, I
such proof, we cannot use these pictures to prove that Pulgar was made some major decisions at the field office which I believe could be of great
constructively dismissed from employment. help make the operations smooth sailing.

We further note that at the time PRRM was conducting an investigation into the For instance, there were cases when funds for the FSP were used to finance
alleged anomalies committed in the liquidation and use of PRRM funds at the the operations of the Community-based Mangrove and Community based
TBFO during Pulgar’s management, Pulgar went on a number of leaves, Reforestation projects and other side activities (e.g. Rapid Site Assessment,
specifically on March 3-10, 1997, then on March 20-25, 1997, and finally on election campaign) in order to accomplish the project/activity on time.
April 1-15, 1997. The timing and frequency of these leaves, while not indicative Likewise, cost savings measures were undertaken so that funds could be made
of Pulgar’s intention to sever his employment, at the very least, imply Pulgar’s available to the office when the immediate need for the fund arises particularly
active efforts to evade the organization’s ongoing investigation. during situations when the release from the Central Office were delayed. And
since the implementing guidelines from the CO was silent on the maintenance
Significantly, while Pulgar claims he was constructively dismissed when he was of another account for savings made by the field office, I took the initiative to
barred from the premises on March 31, 1997, he still filed his application for open a separate account for the field office’s savings. By doing this, possible
leave for April 1-15, 1997. The fact alone that Pulgar was able to return to the disruption of work at the field and the delay in the salary of the staff were
office to file his application for leave for April 1-15, 1997 raises doubt as to his prevented.
purported ban from the premises. More importantly, if Pulgar truly believed
that he had already been constructively dismissed on March 31, 1997, reason As for the inconsistencies of the liquidation documents submitted, this was
dictates that he would no longer bother to apply for a leave of absence from necessary in order to comply with the requirements and deadlines set by
PRRM for April 1-15, 1997. The fact that he did belies his contention that he the Central Office, otherwise, the release for the succeeding quarter or period
believed he had already been constructively dismissed on March 31, 1997. 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
Also worth mentioning is the fact that Pulgar continued to receive his salary submitted just to meet the deadlines and avoid disruption of work.
from PRRM even after March 31, 1997, or the date of his alleged constructive However, never had I intentionally done this with malicious intent of, as Ms.
dismissal. In fact, Pulgar received his salary up until April 15, 1997, when his Solis puts it, using the fund for personal gain. As I will explain later, funds were
vacation and sick leaves had been consumed. 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
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 With regard to the case of the AECI project, its account has been required to be
PRRM when he filed an illegal dismissal complaint against the organization closed and cash advances liquidated (with accompanying Official Receipts) by
while he was on leave. 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
The key to understanding Pulgar’s motive in severing his employment with comply with the requirements of the CO.17 [Emphasis supplied.]
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:
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, here because the respondents deny having dismissed the petitioners.22
Pulgar also admitted that the TBFO’s savings in the amount of ₱207,693.10 [Emphasis supplied.]
were actually deposited with the Cooperative Bank of Quezon in an account
under his name. Although under normal circumstances, an employee’s act of filing an illegal
dismissal complaint against his employer is inconsistent with abandonment; in
From Pulgar’s own admissions, we consider the following facts to be the present case, we simply cannot use that one act to conclude that Pulgar
established: did not terminate his employment with PRRM, and in the process ignore
the clear, substantial evidence presented by PRRM that proves otherwise.
First, Pulgar took funds intended for one activity or project and Our ruling on this point in Leopard Integrated Services, Inc. v. Macalinao is very
applied them to other activities/projects. relevant. We said: 231avvphi1

Second, Pulgar took the savings from the TBFO and placed them in a The fact that respondent filed a complaint for illegal dismissal, as noted by the
bank account under his own name. To date, Pulgar has not turned CA, is not by itself sufficient indicator that respondent had no intention of
over these funds to the PRRM. deserting his employment since the totality of respondent's antecedent acts
palpably display the contrary. In Abad v. Roselle Cinema, the Court ruled that:
Third, Pulgar submitted manufactured and fake receipts to PRRM to
liquidate TBFO’s expenses. 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
Noticeably, from Pulgar’s disclosures alone, a prima facie case for estafa can proffered by the employer that it had not, in the first place, terminated
already be made out against Pulgar. With the danger of criminal prosecution the employee, should not simply be ignored on the pretext that the
hanging over his head, Pulgar’s abrupt decision to terminate his employment employee would not have filed the complaint for illegal dismissal if he had
with PRRM becomes easily understandable. 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
While we recognize the rule that in illegal dismissal cases, the employer bears employee."24 [Emphasis supplied.]
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 While the Constitution is committed to the policy of social justice and the
prima facie case that the employee was dismissed from employment. Before protection of the working class, it should not be supposed that every labor
the employer must bear the burden of proving that the dismissal was dispute will be automatically decided in favor of labor. Management also has its
legal, the employee must first establish by substantial evidence the fact of rights which are entitled to respect and enforcement in the interest of simple
his dismissal from service. Logically, if there is no dismissal, then there can be fair play. Out of its concern for those with less privileges in life, the Supreme
no question as to its legality or illegality.19 Bare allegations of constructive Court has inclined, more often than not, toward the worker and upheld his
dismissal, when uncorroborated by the evidence on record, cannot be given cause in his conflicts with the employer. Such favoritism, however, has not
credence.20 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
As we said in Machica v. Roosevelt Services Center, Inc.:21 doctrine.25

The rule is that one who alleges a fact has the burden of proving it; thus, PRRM’S monetary claim is belatedly raised
petitioners were burdened to prove their allegation that respondents dismissed
them from their employment. It must be stressed that the evidence to prove Examining the records of the case, it appears that Pulgar has not yet returned
this fact must be clear, positive and convincing. The rule that the employer the money he took from the TBFO and deposited in his name to PRRM.
bears the burden of proof in illegal dismissal cases finds no application

We have previously ruled on the Labor Arbiter’s jurisdiction to rule on all G.R. No. 180285 July 6, 2010
money claims, including those of the employer, arising out of the employer-
employee relationship.26 Unfortunately for PRRM, it never raised as an issue MA. SOCORRO MANDAPAT, petitioner,
the money allegedly still in Pulgar’s custody in the proceedings before the vs.
Labor Arbiter, or even before the NLRC. As the Labor Arbiter held: ADD FORCE PERSONNEL SERVICES, INC. and COURT OF APPEALS,
One final note. The Labor Code allows for claims made by employers against
employees arising from employer-employee relations. In this case, the records DECISION
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 PEREZ, J.:
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 Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
However, a perusal of PRRM’s pleadings would reveal that the latter does Court, seeking to reverse and set aside the 27 July 2007 Decision 1 and the 17
not raise as a relief an award for the return of the ₱207,693.10. [A]s it October 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 98868.
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 The factual premise of the case follows –

As a factual matter, this issue should have been raised at the earliest On 15 September 2003, petitioner Ma. Socorro Mandapat was hired as Sales
opportunity before the Labor Arbiter, to allow both parties to present their and Marketing Manager for respondent Add Force Personnel Services, Inc. As
evidence.1avvphi1 The rule is well-settled that points of law, theories, issues detailed in her appointment letter, her duties include negotiation and
and arguments not adequately brought to the attention of the trial court need consummation of contracts with clients who wanted to avail of respondent’s
not be, and ordinarily will not be considered by a reviewing court as they services. She reported directly to the Chief Executive Officer (CEO), Colwyn Ron
cannot be raised for the first time on appeal28 because this would be offensive C. Longstaff (Longstaff).2
to the basic rules of fair play, justice and due process.29
Respondent claims that during her five-month stint as sales manager,
WHEREFORE, premises considered, we GRANT the petition. The May 25, 2005 petitioner failed to close a single deal or contract with any client. In addition,
Decision and the August 5, 2005 Resolution of the Court of Appeals in CA-G.R. petitioner issued several proposals to clients which were either grossly
SP No. 62036 are REVERSED and SET ASIDE. The January 28, 2000 Decision of disadvantageous to respondent or disregarded the client’s budget ceiling.
the National Labor Relations Commission in NLRC NCR CA No. 019914-99 is Petitioner also sent out several communications to clients containing erroneous
REINSTATED. data and computations; submitted fictitious daily activity reports and
reimbursement slips; and consistently failed to submit her reports, such as the
SO ORDERED. 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

xxxx 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
Please remember that as Sales Manager and head of the Sales Department, the properties.6
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. Petitioner denied that she was negligent and proffered that she faithfully and
However, from Management’s evaluation of your performance these last five painstakingly performed her duties as sales manager. She faulted Longstaff for
(5) months, you have not only failed to set a good example to your subordinates his indecisiveness and the lack of support personnel and staff for the sales
but you have, in fact, been the first one to violate company rules and department.71avvphi1
Respondent insisted that petitioner was not dismissed, that instead, she
On account of the sensitivity of the position you currently hold, please be tendered her resignation. Hence, the claim for reinstatement had no basis.
informed that Management has decided to put you on PREVENTIVE Respondent countered that petitioner was properly placed on preventive
SUSPENSION during the course of the investigation of this matter. Accordingly, suspension because of the risk she posed on the property and business of
you are requested to immediately turnover to Ms. Abigail E. Villavert all of your respondent.8
pending tasks and, thereafter, leave the office premises.
On 30 September 2005, the labor arbiter rendered judgment9 finding petitioner
For your information and appropriate action. to have been illegally and constructively dismissed, thus:

From: WHEREFORE, premises considered, judgment is hereby entered finding that

complainant was illegally and constructively dismissed on 2/23/04 thus,
Corporate Counsel
1) Respondent company ADD Force Personnel Services, Inc. to pay her
Approved by: 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
JACQUES A. DUPASQUIER P109,280.00, and the combined amounts of her leaves (VL & SL) of
Chairman P107,913.68 (30 days/year x P2,276.66/day x 1.58 years);

Accompanied by her letter in response to the show-cause memorandum, 2) Respondent company ADD Force Personnel Services, Inc., in lieu of
petitioner tendered her resignation dated 25 February 2004 supposedly in complainant’s reinstatement, to pay her separation pay of one (1)
protest of the preventive suspension meted on her.4 month per year of service/putative service reckoned from 09/15/03
until finality of this decision or actual payment which as of date,
On 15 March 2004, petitioner filed a complaint for constructive dismissal with amounts to P136,600.00 (P68,300.00 x 2 years);
the labor arbiter.
3) Respondents ADD Force Personnel Services, Inc., JACQUES A.
In her position paper, petitioner alleged that she was constructively dismissed, DUPASQUIER (Chairman), COLWYN RON C. LONGSTAFF (CEO), ATTY.
as indicated by the following actions of respondent – first, she was illegally CRISTINA SAMSON (Corporate Counsel), to pay her in solido moral
placed on preventive suspension; second, her access to the internet was cut off; damages of P200,000.00 and exemplary damages of P100,000.00;
and third, she was pressured by respondent into resigning in exchange for
payment of separation pay.5

4) Respondent ADD Force Personnel Services, Inc. to pay her Furthermore, the appellate court declared that the issue of preventive
proportionate 13th month pay (Jan. to 02/23/04), last month’s salary suspension had been rendered moot by petitioner’s resignation.14
(February, 01-23, 2003) and reimbursements P2,000.00;
Petitioner moved for reconsideration but it was denied in a Resolution issued
5) Respondent ADD Force Personnel Services, Inc. to pay her 10% of on 17 October 2007.15
the total award as attorney’s fees.10
The principal issue to be resolved in the instant petition is whether petitioner
The labor arbiter found that petitioner was illegally suspended without basis. was constructively dismissed.
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 Constructive dismissal exists when an act of clear discrimination, insensibility
petitioner was constructively dismissed by respondent.11 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
The National Labor Relations Commission (NLRC)12 affirmed with modification
the findings of the labor arbiter. The NLRC deleted the award of moral and Upon perusal of the records of this case, we find no evidence to support
exemplary damages for lack of sufficient basis. A motion for reconsideration discrimination which led to constructive dismissal.
was filed by respondent but it was denied for lack of merit.
Petitioner reiterates that she was constructively dismissed. She harps on the
On 21 June 2007, respondent filed a manifestation and motion stating that the alleged pattern of harassment committed by respondent as tantamount to
NLRC had issued a writ of execution for the amount of money claims. Unable to constructive dismissal, such as, illegally placing her under preventive
satisfy these claims, the sheriff garnished the bank accounts of respondent. suspension, the disconnection of her internet account, and the pressure exerted
by respondent to force her to resign.17
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 Petitioner claims that the preventive suspension meted upon her is illegal for
well as that of the labor arbiter’s. being indefinite, as the duration of her suspension was not stated in the
company’s memorandum.
The dispositive portion provides:
On the other hand, respondent employer argues that petitioner’s preventive
WHEREFORE, the petition for certiorari is GRANTED. The Decision of the suspension for one day can hardly be considered indefinite, given the fact that
National Labor Relations Commission dated 27 November 2006 affirming the petitioner immediately resigned one day after the suspension.
Labor Arbiter’s decision; its Resolution, dated 28 February 2007, denying
petitioner’s motion for reconsideration; and the Decision of the Labor Arbiter, We find that there was no act of discrimination committed against petitioner
dated 30 September 2005, are SET ASIDE. Ma. Socorro Mandapat’s Complaint that would render her employment unbearable.
for illegal dismissal is DISMISSED.13
Preventive suspension may be legally imposed against an employee whose
The Court of Appeals ruled that petitioner was not constructively dismissed but alleged violation is the subject of an investigation. The purpose of his
that the latter chose to resign from her job. Petitioner’s bare allegation that she suspension is to prevent him from causing harm or injury to the company as
was coerced into resigning was not given credence by the appellate court. With well as to his fellow employees.
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. 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 interest of respondent. Respondent has every right to protect its assets and
as follows: operations pending investigation of petitioner.

Section 8. Preventive suspension. The employer may place the worker Neither could we consider the acts of disconnection of computer and internet
concerned under preventive suspension only if his continued employment access privileges as harassment. Respondent clearly explained that the
poses a serious and imminent threat to the life or property of the employer or cessation of her internet and network privileges were but a consequence of the
of his co-workers. investigation against her and not for the purpose of harassment.22 The Court of
Appeals gave merit to respondent’s explanation and held, thus:
Section 9. Period of suspension. No preventive suspension shall last longer than
thirty (30) days. The employer shall thereafter reinstate the worker in his x x x while her suspension, cessation of internet privileges, and exclusion from
former or in a substantially equivalent position or the employer may extend the local network access were but a consequence of the investigation against her,
period of suspension provided that during the period of extension, he pays the and were intended to prevent her from having further access to the company’s
wages and other benefits due to the worker. In such case, the worker shall not network-based documents and forms.23
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. The acts respondent complains about are just measures enforced by
respondent to protect itself while the investigation was ongoing.
When preventive suspension exceeds the maximum period allowed without
reinstating the employee either by actual or payroll reinstatement 18 or when Petitioner claims that Longstaff forced her to resign by baiting her with the
preventive suspension is for indefinite period,19 only then will constructive promise of separation pay;24 but respondent maintains that there was nothing
dismissal set in. illegal in giving petitioner the option to either resign or be separated for a just
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 We agree with the Court of Appeals that there was no coercion employed on
be pointed out that the inclusion of the phrase "during the course of petitioner. The appellate court made the following observation:
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 Unfortunately, however, before the investigation could proceed to the second
suspension has been rendered moot by petitioner’s resignation tendered a day step of the termination process into a hearing or conference, Mandapat chose to
after the suspension was made effective. 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
Petitioner contests the grounds for her suspension as she denies posing a would be fired for her transgressions, and beat the company to it by resigning.
danger on the lives of the officers or employees of respondent or of their Indeed, by the disrespectful tenor of her memorandum, Mandapat practically
properties. Petitioner adds that she was not in a position to bind respondent to indicated that she was no longer interested in continuing cordial relations,
any contract, therefore, she could not and would not be able to sabotage the much less gainful employment with Add Force.26
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 Mere allegations of threat or force do not constitute evidence to support a
committed by the employee concerned.21 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
Respondent is correct. Indeed, as sales manager, petitioner had the power and be real or serious, there being evident disproportion between the evil and the
authority to enter into contracts that would bind respondent, regardless of resistance which all men can offer, leading to the choice of doing the act which
whether these contracts would prove to be beneficial or prejudicial to the 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

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.