MAYON HOTEL & RESTAURANT vs. ROLANDO ADANA, et al. G.R. No.

157634, May 16, 2005

 
FACTS:
Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as employees in its
business in Legaspi City.  Its operation was suspended on March 31, 1997 due to the expiration and non-
renewal of the lease contract for the space it rented.  While waiting for the completion of the construction
of its new site, MHR continued its operation in another site with 9 of the 16 employees.  When the new
site constructed and MHR resumed its business operation, none of the 16 employees was recalled to
work. 
MHR alleged business losses as the reason for not reinstating the respondents.  On various dates,
respondents filed complaints for underpayment of wages, money claims and illegal dismissal. 

ISSUES:
Whether or not respondents were illegally dismissed by petitioner;

HELD:
Yes, the respondents were illegally dismissed.

Article 286 of the Labor Code is clear — there is termination of employment when an
otherwise bona fide suspension of work exceeds six (6) months. The cessation of employment for more
than six months was patent and the employer has the burden of proving that the termination was for a just
or authorized cause.

In this case, since April 1997 until the time the Labor Arbiter rendered its decision in July 2000, or
more than three (3) years after the supposed “temporary” lay-off, the employment of all the respondents
with petitioner had ceased, notwithstanding that the new premises had been completed and the same
resumed its operation.  This is clearly dismissal – or the permanent severance or complete separation of
the worker from the service on the initiative of the employer regardless of the reasons therefor.