Republic of the Philippines

Court of Appeals
Manila

FIFTEENTH DIVISION

JOSE TANAID CAJES,* CA-G.R. SP NO. 176592

Petitioner,
Members:

CORALES, J., Chairperson

- versus- CALPATURA, &
JORGE-WAGAN, JJ.

BAM! EXHIBITS, INC. and

PAMELO R. TANDO,
Private Respondents,

NATIONAL LABOR
RELATIONS COMMISSION
(SECOND DIVISION),
Public Respondent. Promulgated:

March 15, 2023

DECISION

CORALES, J.:

This is a Petition for Certiorari 1 under Rule 65 of the Rules of

Court assailing the July 29, 2022 Decision 2 and September 30, 2022
Resolution 3 of the National Labor Relations Commission (NLRC),
Second Division in NLRC LAC No. 07-002530-22. The assailed
Decision partly granted petitioner Jose Tanaid Cajes’ (Cajes) appeal
from the May 30, 2022 Decision4 of the Labor Arbiter which dismissed
* Jose T. Cajes and Jose Cajes in some parts of the rollo.
1 Rollo, pages 3-30.
2 Penned by Presiding Commissioner Julia Cecily Coching-Sosito with the concurrence of
Commissioners Nicolas B. Nicolas and Charmalou D. Aldevera, ibid., pages 32-43.
3 Ibid., pages 46-49.
4 Penned by Labor Arbiter Remedios L.P. Marcos, ibid., pages 110-118.
CA-G.R. SP No. 176592 Page 2 of 19
Decision

the complaint for illegal dismissal and money claims he filed against
private respondent Bam! Exhibits, Inc. (Bam!) and its President,
Pamelo R. Tando (Tando); and directed Cajes to return to work. The
questioned Resolution denied Cajes’ subsequent motion for
reconsideration.

On February 27, 2023, Bam! and Tando (collectively referred as

Bam!, et al.) filed a Comment. Subsequently, Cajes manifested that he
will no longer file a reply.5 Thus, this petition is now submitted for
decision.

The Antecedents

Bam! is a domestic corporation engaged in the business of design

and fabrication of exhibit booths, props, stage structures and other
physical embellishments for corporate events. In June 2014, it
employed Cajes as carpenter. Later on, Cajes was designated as
Production Head with a P24,500.00-monthly salary. 6

Allegedly, at the start of the Covid-19 pandemic in March 2020,

Cajes and other Bam! employees reported for work alternately and
adopted a skeleton workforce. However, in May 2020, Bam! issued a
memorandum that its employees would be temporarily laid-off but
would be on-call should the need arise. They were allowed to take
other job opportunities to survive during the global health crisis. In a
January 2021 zoom meeting, Tando discussed the new working
arrangement of Bam! employees. He told the regular employees that
from then on, they would be placed in on-call status taking into
account the no-work, no pay policy. In the subsequent June 2021
meeting, Tando announced the retrenchment of some employees
entitled to separation pay. Cajes was not retrenched but he was still
placed in an on-call status.7

5 See Manifestation in Lieu of Reply, ibid., pages 185-188.

6 See paragraphs 2 and 3 of Position Paper for the Respondents, and page 2 of Position Paper for
the Complainant, ibid., pages 71-72 and 53, respectively.
7 See Position Paper for the Complainant, ibid., pages 52-64.
CA-G.R. SP No. 176592 Page 3 of 19
Decision

Months passed but Cajes’ status as on-call employee remained.

Thus, he sent a message to Tando for his separation pay but Tando
refused because Cajes was needed at that time. A few months later,
Cajes allegedly learned that Bam! has secured several events and even
engaged the services of some retrenched employees, but he was never
called to report for work. As such, he took up a part-time job as
carpenter to help him ease the effects of the pandemic.8

In November 2021, Cajes reported for a four (4)-day work at

Bam!. Thereafter, he did not hear anything from Bam! and it was only
at the end of January 2022, when he was instructed to report back to
work for four (4) days a week. However, he was unable to
immediately report to Bam! because he has to finish a project for his
part-time job. Afterwards, a certain Mary Joy from Bam!’s Accounting
Department asked for Cajes’ resignation letter.9

Aggrieved, Cajes filed a Single Entry Approach (SEnA)

complaint against Bam!, et al.10 During the SEnA proceedings, Bam!,
et al. manifested that Cajes was not dismissed or terminated from
employment. He was expressly directed to report for work, but he
refused to heed the directive, and instead filed the SEnA complaint.
Bam!, et al. emphasized that Cajes could go back to work within five
(5) days from notice otherwise he shall be deemed to have abandoned
his employment. 11

The SEnA proceedings proved futile as Cajes filed on March 4,

2022 a complaint 12 for constructive dismissal; money claims for
holiday premium; non-payment of rest day premium, service
incentive leave pay (SILP), and separation pay; and payment of full
backwages, moral and exemplary damages, attorney’s fees and tax
refund (illegal dismissal case) against Bam!, et al.

8 See Position Paper for the Complainant, ibid.

9 See Position Paper for the Complainant, ibid.
10 See paragraph 14 of Position Paper for the Complainant, ibid.
11 See Responding Party’s Manifestation / Proposal, rollo, pages 91-91A.
12 Ibid., page 51.
CA-G.R. SP No. 176592 Page 4 of 19
Decision

In his Position Paper, 13 Cajes averred that he was illegally

dismissed on January 31, 2022. He was placed on floating status, and
Bam!, et al.’s failure to give him work from March 2020 to November
2021, or for a period of more than one (1) year and six (6) months,
coupled with the impossibility and difficulty for him to continue
reporting for work is tantamount to constructive dismissal.
Furthermore, due to strained relationship, Cajes sought the payment
of separation pay and full backwages. He also prayed for the payment
of moral and exemplary damages, and attorney’s fees payable to the
Public Attorney’s Office (PAO) pursuant to Republic Act (R.A.) No.
9406.

Bam!, et al. reiterated that Cajes was not terminated from work.
Bam!’s business suffered at the height of the pandemic, thus, it
implemented temporary lay-off, work rotation, flexible work
arrangements, and allowed employees to engage in other means of
earning income without severing ties with the company. Nonetheless,
Cajes was able to ply his trade as a carpenter during those times when
Bam! could not assign to him any project. Bam! pointed out that it
deliberately retained Cajes as its employee because of his skill,
experience, and familiarity with the nature of the business. When the
quarantine restrictions became more relaxed in the latter part of 2021,
Bam! was able to gradually work on events. Hence, it asked Cajes to
report for work albeit projects were sparse or entailed only a few days
of work per week. When the business environment eventually
improved, Bam! called Cajes to resume his work, as shown by the
screenshots of the messages between Tando and Cajes. However,
Cajes begged off for various reasons. In a January 31, 2022 meeting,
Cajes manifested his intention to resign from work but none was
tendered. In a February 3, 2022 letter,14 Bam!, et al. directed Cajes to
either report for work on February 4, 2022 or formalize his intention to
resign; or be considered on absence without leave. Cajes ignored the
said letter as well as the subsequent February 7, 2022 letter15 directing
him to report for work on February 9, 2022. Instead, he lodged the

13 See Position Paper for the Complainant, supra, at note 7.

14 Rollo, page 89.
15 Ibid., page 90.
CA-G.R. SP No. 176592 Page 5 of 19
Decision

SEnA complaint and continued to disregard the return-to-work orders.

Bam!, et al. added that in their Motion to Set Case for Mandatory
Conciliation and Mediation Conference filed before the Labor Arbiter,
they reiterated the return-to-work order but Cajes did not concede.
Cajes did not also accept the P10,000.00 financial assistance. Bam!, et
al. argued that Cajes’ obstinate refusal to resume work can be equated
to resignation, hence, he is not entitled to separation pay. He is not
also entitled to holiday and rest day premiums as there was no proof
that he rendered work on a holiday and during his rest days. Similarly,
attorney’s fees cannot be awarded to Cajes there being no proof of bad
faith, while the claim for tax refund has no merit because no amount
was withheld from his wages for the years 2020 to 2021. Lastly, Tando
argued that he should not be held personally liable for Cajes’ claims as
he has been very gracious in his communications with petitioner and
there was no evidence that he assented to an unlawful act.16

In his Reply,17 Cajes denied any intention to resign. He clarified

that the “mention of resignation was only hypothetical as he was then
inquiring if he would be receiving separation pay should he resign”.

The Rulings of the Labor Arbiter and NLRC

In the May 30, 2022 Decision,18 the Labor Arbiter held that Cajes
was not constructively dismissed and it was him who decided not to
report for work. In view of the Covid-19 pandemic, Cajes’ work “was
not regular”, but Bam! offered him work, whenever available. Bam!
still considered Cajes as its employee, but the latter refused to report
for work. As there was no dismissal to speak of, Cajes is not entitled
to separation pay. His claims for holiday and rest day premiums, SILP,
moral and exemplary damages, and attorney’s fees were denied for
lack of basis. The Labor Arbiter further held that the tax refund claim
must be lodged with the appropriate government agency. The
dispositive portion of the Decision reads:

16 See Position Paper for the Respondents, ibid., pages 71-83.

17 Ibid., pages 92-101.
18 Supra, at note 4.
CA-G.R. SP No. 176592 Page 6 of 19
Decision

WHEREFORE, premises considered, the instant complaint is

hereby dismissed for lack of merit.

So Ordered.

On appeal, the NLRC, through its July 29, 2022 Decision, 19

affirmed the Labor Arbiter’s findings that there was no evidence that
Cajes was illegally or constructively dismissed. The circumstances
surrounding the case do not show Bam!, et al.’s intention to dismiss
Cajes. They even manifested their need to retain him as their employee
due to his skill, experience, and familiarity with the nature of Bam!’s
business. However, the NLRC ruled that the defense of abandonment
of work will not prosper for lack of proof that Cajes received the
return-to-work orders. As there was neither dismissal nor
abandonment of work, the NLRC ordered Cajes to return to work but
without backwages. It disposed the appeal as follows:

WHEREFORE, the complainant’s appeal is PARTLY

GRANTED. Accordingly, the Decision of the Labor Arbiter
Remedios L.P. Marcos dated May 30, 2022 is MODIFIED to direct
complainant Jose T. Cajes to RETURN TO WORK within ten (10)
days from receipt of this Decision. Likewise, respondent Bam
Exhibits Inc. is ordered to ACCEPT him. Complainant’s failure to
comply with this directive shall be deemed as abandonment of work.

SO ORDERED. (As written in the original text of the Decision)

Cajes moved for reconsideration which the NLRC denied in its

assailed September 30, 2022 Resolution.20

Hence, this petition for certiorari raising the following issues:21

I.
WHETHER THE NLRC (SECOND DIVISION)
COMMITTED GRAVE ABUSE OF DISCRETION

19 Supra, at note 2.
20 Supra, at note 3.
21 See pages 7-8 of Petition for Certiorari, supra, at note 1.
CA-G.R. SP No. 176592 Page 7 of 19
Decision

AMOUNTING TO LACK OR EXCESS OF JURISDICTION

WHEN IT HELD THAT THE PETITIONER FAILED TO
ESTABLISH THE FACT OF HIS DISMISSAL.

II.
WHETHER THE NLRC (SECOND DIVISION)
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT HELD THAT THE PETITIONER WAS NOT
ILLEGALLY DISMISSED AND IS NOT ENTITLED TO
THE PAYMENT OF HIS MONETARY CLAIMS, MORAL
AND EXEMPLARY DAMAGES, AND ATTORNEY’S
FEES. (As written in the original text of the Petition for
Certiorari)

Cajes faults the NLRC in looking for an unequivocal act of

dismissal although the circumstances surrounding his case clearly
show that he was constructively dismissed when he was put on
floating status for one (1) year and six (6) months and was asked to
resign when he failed to immediately report for work. The economic
impact of the Covid-19 pandemic cannot be used to justify the
extension of employees’ floating status for more than six (6) months.
Cajes adds that Bam!, et al. neither filed an Establishment Report for
the extension of his floating status nor reported the adoption of a
flexible work arrangement or temporary closure before the
Department of Labor and Employment (DOLE). He did not agree to
be put on floating status or to be placed in such situation beyond six
(6) months. Thus, he was dismissed when he was temporarily laid-off
in May 2020. Cajes also lamented that he was not afforded procedural
due process as he was abruptly dismissed without prior notice and
was not given any chance to defend the continuity of his employment.
He insists on his entitlement to SILP, separation pay, backwages, moral
and exemplary damages, and attorney’s fees.22

22 See Petition for Certiorari, supra, at note 1.

CA-G.R. SP No. 176592 Page 8 of 19
Decision

Bam!, et al., maintain that Cajes was not dismissed from work,
but was temporarily laid-off or placed on floating status pursuant to
DOLE Department Order (D.O.) No. 218, Series of 2020 and Section
4(f)(2) of the Bayanihan to Recover as One Act. They cannot be held
liable for being unable to provide work to Cajes during the Covid-19
pandemic as they had no control as to when to reopen their business.
These notwithstanding, they still contacted Cajes to return to work
when “jobs became available.” Particularly, he was offered work in
June 2021, and he admittedly worked in November 2021. There was
no prolonged lay-off; and his acquiescence to working with Bam! three
(3) months prior to filing the illegal dismissal case and Bam!, et al.’s
continuous offer for him to work negate his claim of constructive
dismissal. Bam!, et al. argue that Cajes’ incessant refusal to report for
work despite notice constitutes an overt act of resignation. Lastly, they
reiterate that Cajes is not entitled to his money claims and Tando
cannot be held solidarily liable with the company absent proof of bad
faith or malice.23

This Court’s Ruling

The petition is meritorious.

Grave abuse of discretion connotes judgment exercised in a

capricious and whimsical manner that is tantamount to lack of
jurisdiction. To be considered “grave,” the discretionary authority
must be exercised in a despotic manner by reason of passion or
personal hostility, and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act all in contemplation of law.24 In labor cases, grave
abuse of discretion is committed if the NLRC capriciously,
whimsically, or arbitrarily disregarded evidence which is material to
or decisive of the controversy.25 It has been consistently held by the
Supreme Court that factual findings of administrative bodies would
23 See Comment [To petitioner’s Petition for Certiorari dated 16 December 2022], rollo, pages 165-
177.
24 See Ayungo v. Beamko Shipmanagement Corporation, G.R. No. 203161. February 26, 2014 citing

Ramos v. BPI Family Savings Bank, G.R. No. 203186. December 4, 2013.
25 See Leonis Navigation Co., Inc. v. Villamater, G.R. No. 179169. March 3, 2010.
CA-G.R. SP No. 176592 Page 9 of 19
Decision

not be accorded finality if such findings and conclusions are not

supported by substantial evidence 26 or if the administrative bodies
grossly misappreciated evidence of such nature as to compel a
contrary conclusion.27

After a careful examination of the records and having in mind

the foregoing considerations, We find merit in Cajes’ imputation of
grave abuse of discretion on the part of the NLRC when it affirmed the
Labor Arbiter’s ruling that there was no constructive dismissal.

Cajes: Constructively Dismissed

Constructive dismissal exists if an act of clear discrimination,

insensibility, or disdain by an employer becomes so unbearable
on the part of the employee that it could foreclose any choice
by him/her except to forego his/her continued employment.28 It is an
act amounting to dismissal but made to appear as if it was not.
Constructive dismissal is therefore a dismissal in disguise. In fact, the
employee who is constructively dismissed might have been allowed to
keep coming to work. 29 Thus, the test of constructive dismissal is
whether a reasonable person in the employee’s position would have
felt compelled to give up his/her position under the circumstances.30
The law recognizes and resolves this situation in favor of employees in
order to protect their rights and interests from the coercive acts of the
employer.31

The totality of the attendant circumstances in this case show that

Cajes was constructively dismissed from employment.

On March 8, 2020, former President Rodrigo R. Duterte

recognized that Covid-19 is a threat to national security, thus, he

26 See Spouses Genato v. Viola, G.R. No. 169706. February 5, 2010.

27 See Functional, Inc. v. Granfil, G.R. No. 176377. November 16, 2011.
28 See Ico v. STI, Inc., G.R. No. 185100. July 9, 2014.
29 See Mcmer Corporation, Inc. v. NLRC, G.R. No. 193421. June 4, 2014.
30 See Ang v. San Joaquin, Jr., G.R. No. 185549. August 7, 2013.
31 See Mcmer Corporation, Inc. v. NLRC, supra, at note 29.
CA-G.R. SP No. 176592 Page 10 of 19
Decision

issued Proclamation No. 922 declaring a state of public health

emergency throughout the entire Philippines. On March 16, 2020, the
President placed the entire Luzon under Enhanced Community
Quarantine until April 14, 2020 which was extended further for several
months. In line with this, the Department of Trade and Industry and
DOLE issued Interim Guidelines on Workplace Prevention and
Control of Covid-19 (The Interim Guidelines) wherein employers were,
among others, allowed to adopt alternative work arrangement for
employees such as working-hour shifts, work from home where
feasible and on rotation basis to minimize contact rate. In Labor
Advisory No. 11, Series of 2020, the DOLE emphasized that as “better
alternatives to outright termination of the services of the employees or
the total closure of the establishments, flexible work arrangements
referred to under Labor Advisory No. 09, Series of 2020, including, but
not limited to, other work arrangements, such as telecommuting, work
from home, reduction of workdays/hours, rotation of workers and
forced leaves” are highly encouraged in establishments that continue
to operate.

Corollary thereto, on October 23, 2020, the DOLE, through D.O.

No. 215, Series of 2020,32 amended Section 12, Title I, Book Six of the
Omnibus Rules Implementing the Labor Code, to wit:

Section 12. Suspension of relationship. – The employer-employee

relationship shall be deemed suspended in case of suspension of
operation of the business or undertaking of the employer for a period
not exceeding six (6) months, unless the suspension is for the
purpose of defeating the rights of the employees under the Code,
and in case of mandatory fulfillment by the employee of a military
or civic duty. The payment of wages of the employee as well as the
grant of other benefits and privileges while he is ON SUSPENDED
EMPLOYMENT OR on military or civic duty shall be subject to
EXISTING laws and decrees and to the applicable individual or
collective bargaining agreement and voluntary employer practice or
policy.

IN CASE OF DECLARATION OF WAR, PANDEMIC AND

32 Rule Amending Section 12 of Rule I, Rules Implementing Book VI of the Labor Code on
Suspension of Employment Relationship
CA-G.R. SP No. 176592 Page 11 of 19
Decision

SIMILAR, NATIONAL EMERGENCIES, THE EMPLOYER AND

THE EMPLOYEES, THROUGH THE UNION, IF ANY, OR WITH
THE ASSISTANCE OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, SHALL MEET IN GOOD FAITH FOR THE
PURPOSE OF EXTENDING THE SUSPENSION OF
EMPLOYMENT FOR A PERIOD NOT EXCEEDING SIX (6)
MONTHS: PROVIDED, THAT THE EMPLOYER SHALL
REPORT TO THE DEPARTMENT OF LABOR AND
EMPLOYMENT, THROUGH THE REGIONAL OFFICER, THE
EXTENSION OF SUSPENSION OF EMPLOYMENT TEN (10)
DAYS PRIOR TO THE EFFECTIVITY THEREOF SUBJECT TO
INSPECTION; PROVIDED, HOWEVER, THAT THE
EMPLOYEES SHALL NOT LOSE EMPLOYMENT IF THEY FIND
ALTERNATIVE EMPLOYMENT DURING THE EXTENDED
SUSPENSION OF EMPLOYMENT EXCEPT IN CASES OF
WRITTEN, UNEQUIVOCAL AND VOLUNTARY
RESIGNATION; PROVIDED FURTHER, THAT SHOULD
RETRENCHMENT BE NECESSARY BEFORE OR AFTER THE
EXPIRATION OF THE EXTENSION OF SUSPENSION OF
EMPLOYMENT, THE AFFECTED EMPLOYEE SHALL BE
ENTITLED TO SEPARATION PAY AS PRESCRIBED BY THE
LABOR CODE, COMPANY POLICIES OR COLLECTIVE
BARGAINING AGREEMENT, WHICHEVER IS HIGHER;
PROVIDED, FINALLY, THAT THE RETRENCHED EMPLOYEES
SHALL HAVE PRIORITY IN THE RE-HIRING IF THEY
INDICATE THEIR DESIRE TO RESUME THEIR WORK NOT
LATER THAN ONE (1) MONTH FROM THE RESUMPTION OF
OPERATIONS.

THIS NOTWITHSTANDING, BY MUTUAL AGREEMENT OF

THE EMPLOYER AND THE EMPLOYEES, THROUGH THE
UNION, IF ANY, OR WITH THE ASSISTANCE OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, EMPLOYEES
MAY BE RECALLED TO WORK OR RETRENCHED SUBJECT TO
THE REQUIREMENT OF NOTICE AND SEPARATION PAY,
ANYTIME BEFORE THE EXPIRATION OF THE EXTENSION OF
SUSPENSION OF EMPLOYMENT.

THE EXTENSION OF SUSPENSION OF EMPLOYMENT

SHALL NOT AFFECT THE RIGHT OF THE EMPLOYEES TO
SEPARATION PAY. THE FIRST SIX (6) MONTHS OF
SUSPENSION OF EMPLOYMENT SHALL BE INCLUDED IN
THE COMPUTATION OF THE EMPLOYEES’ SEPARATION PAY.
CA-G.R. SP No. 176592 Page 12 of 19
Decision

(Emphases appear in the original text of D.O. No. 215, Series of 2020;
underscoring supplied)

As borne by the records, in March 2020 at the onset of the Covid-

19 pandemic, Bam! adopted alternative work arrangement for its
employees. In May 2020, Bam! temporarily laid-off its employees,
including Cajes, and allowed them to engage in other means of earning
without severing ties with the company. These measures adopted by
Bam! at the height of the pandemic are valid pursuant to The Interim
Guidelines and Labor Advisory No. 11, Series of 2020.

However, upon the effectivity of D.O. No. 215, Series of 2020,

Bam! should have complied with the mandate of Section 12, Title I,
Book Six of the Omnibus Rules Implementing the Labor Code, as
amended. Regrettably, the procedure was not observed in this case.
Bam! did not present evidence that upon effectivity of D.O. No. 215,
Series of 2020, it met with Cajes in good faith for the purpose of
discussing the extension of the suspension of his employment for a
period not exceeding six (6) months. Bam! did not also report to the
DOLE the extension of Cajes’ suspension of employment. Instead,
Cajes’ on-call status remained for several more months or for an
additional period of one (1) year until he was called upon for a four
(4)-day work in November 2021. Perforce, the extension of the
suspension of Cajes’ employment for more than six (6) months sans
compliance with D.O. No. 215, Series of 2020 is detestable and
tantamount to constructive dismissal.

Furthermore, the January 2021 zoom meeting wherein Tando

supposedly discussed the new working arrangement of Bam!’s
employees, and the June 2021 meeting whereby Tando announced the
retrenchment of some employees and the retention of Cajes as on-call
employee did not validate the extension of the latter’s suspension of
employment as these conferences happened more than six (6) months
or long after the lapse of the initial six (6)-month period of his
suspension of employment.
CA-G.R. SP No. 176592 Page 13 of 19
Decision

Even assuming that there was a valid extension of six (6) months,
Cajes’ temporary lay-off should not have exceeded one (1) year based
on the clear and unambiguous provision of D.O. No. 215, Series of
2020. However, the alleged return to work orders were issued by Bam!
on September 6, 2021 and January 17, 2022 or more than one (1) year
from May 2020 when Cajes’ was initially placed on temporary lay-off.
Bam!’s failure to recall Cajes to work or permanently retrench him after
the allowed period of one (1) year is tantamount to his dismissal from
employment.

It has long been recognized by the Supreme Court that

employees cannot forever be temporarily laid-off. It bears stressing
that except as to the period of temporary lay-off, the guidelines under
D.O. No. 215, Series of 2020 are similar to Article 301 of the Labor Code,
which reads:

Art. 301. When Employment not Deemed Terminated. The bona-

fide suspension of the operation of a business or undertaking for a
period not exceeding six (6) months, or the fulfillment by the
employee of a military or civic duty shall not terminate employment.
In all such cases, the employer shall reinstate the employee to his
former position without loss of seniority rights if he indicates his
desire to resume his work not later than one (1) month from the
resumption of operations of his employer or from his relief from the
military or civic duty.

Accordingly, the following disquisition in Innodata Knowledge

Services, Inc. v. Inting33 should be applied, by analogy, in this case, thus:

Certainly, the employees cannot forever be temporarily laid-

off. Hence, in order to remedy this situation or fill the hiatus, Article
301 may be applied to set a specific period wherein employees may
remain temporarily laid-off or in floating status. Article 301 states:

xxx

The law set six (6) months as the period where the operation
of a business or undertaking may be suspended, thereby also

33 G.R. No. 211892. December 6, 2017.

CA-G.R. SP No. 176592 Page 14 of 19
Decision

suspending the employment of the employees concerned. The

resulting temporary lay-off, wherein the employees likewise cease to
work, should also not last longer than six (6) months. After the
period of six (6) months, the employees should either then be
recalled to work or permanently retrenched following the
requirements of the law. Failure to comply with this requirement
would be tantamount to dismissing the employees, making the
employer responsible for such dismissal. Elsewise stated, an
employer may validly put its employees on forced leave or floating
status upon bona fide suspension of the operation of its business for
a period not exceeding six (6) months. In such a case, there is no
termination of the employment of the employees, but only a
temporary displacement. When the suspension of the business
operations, however, exceeds six (6) months, then the employment
of the employees would be deemed terminated, and the employer
would be held liable for the same. (Emphases supplied)

We are mindful that the Covid-19 pandemic has serious

economic effects, but this should not be used as an excuse for the
employer’s non-compliance with the pertinent DOLE regulations,
particularly D.O. No. 215, Series of 2020 which obviously aims to
safeguard the respective rights of the employer and the employee. It
hardly needs reminding that the DOLE is authorized under Article 534
of the Labor Code to promulgate the necessary implementing rules
and regulations to preserve employment. The employer’s compliance
with the procedure provided in the Labor Code constitutes the
procedural due process right of an employee.35

Clearly, the NLRC’s ruling that there was no constructive

dismissal was unsupported by substantial evidence and was not in
accordance with pertinent labor laws.

34 ART. 5. Rules and Regulations. – The Department of Labor and other government agencies
charged with the administration and enforcement of this Code or any of its parts shall promulgate
the necessary implementing rules and regulations. Such rules shall become effective fifteen (15) days
after announcement of their adoption in newspapers of general circulation.
35 See Distribution & Control Products, Inc. v. Santos, G.R. No. 212616. July 10, 2017.
CA-G.R. SP No. 176592 Page 15 of 19
Decision

No Abandonment of Work

We agree with the NLRC that there was no abandonment of

work. No rational explanation exists why petitioner, who waited for
too long to be called upon to regularly resume work and earn an
income, would simply abandon his work and forego the salary and
other benefits he may be entitled to as a consequence thereof. In fact,
he immediately filed the illegal dismissal case when the extended
suspension of his employment became so unbearable that he was no
longer sure whether he can still report back to his usual work. It bears
stressing that an employee who forthwith took steps to protest his/her
layoff cannot, as a general rule, be said to have abandoned his/her
work, for it is well-settled that the filing by an employee of a complaint
for illegal dismissal is proof enough of his/her desire to return to work,
thus negating any suggestion of abandonment. Indeed, it would be
illogical for petitioner to have left his job and thereafter seek redress
by filing a complaint against his employer.36

Cajes Entitled to Backwages, Separation Pay, SILP, and

Attorney’s Fees

Consequently and pursuant to Article 29437 of the Labor Code,

Cajes is entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages which must be computed
from the time of his constructive dismissal on December 2020, when
the allowed six (6)-month period of temporary lay-off ended there
being no valid extension, up to the finality of the decision ordering
separation pay.38

36 See Baron v. EPE Transport, Inc., G.R. No. 202645. August 5, 2015; See Josan, JPS, Santiago
Cargo Movers v. Aduna, G.R. No. 190794. February 22, 2012.
37 Art. 294. [279] Security of Tenure – In case of regular employment, the employer shall not

terminate the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
(Emphasis supplied)
38 See Bani Rural Bank, Inc. v. De Guzman, G.R. No. 170904. November 13, 2013, citing Session

Delights Ice Cream and Fast Foods v. Court of Appeals, G.R. No. 172149. February 8, 2010.
CA-G.R. SP No. 176592 Page 16 of 19
Decision

Jurisprudentially, separation pay may be awarded in lieu of

reinstatement under the following circumstances, viz.: a) when
reinstatement can no longer be effected in view of the passage of a long
period of time or because of the realities of the situation; b)
reinstatement is inimical to the employer's interest; c) reinstatement is
no longer feasible; d) reinstatement does not serve the best interest of
the parties involved; e) the employer is prejudiced by the workers'
continued employment; f) facts that make execution unjust or
inequitable have supervened; or g) strained relations between the
employer and employee. 39 It appears from the records that the
relationship of the parties was already ruptured even prior to the filing
of the illegal dismissal case; and from the beginning, Cajes already
signified his apprehension in continuously working for Bam! albeit the
latter insisted for his immediate return to work. Hence, reinstatement
would not serve the best interest of the parties and separation pay
must be awarded to Cajes instead of reinstatement. In accordance with
the consistent ruling of the Supreme Court in a catena of cases, the
award of separation pay should be equivalent to one (1)-month salary
for every year of service.40

Cajes is also entitled to SILP for lack of proof that the same has
already been paid. It need not be overemphasized that in claims for
payment of SILP, among others, the burden rests on the employer to
prove payment considering that all pertinent personnel files, payrolls,
records, remittances, and other similar documents are in the custody
and control of the employer.41

The award of attorney’s fees equivalent to 10% of the total award

at the time of actual payment is likewise warranted because Cajes was
forced to litigate and incur expenses to protect his rights and interest.42
However, since Cajes is represented by the PAO, the award of

39 See Abaria v. NLRC, G.R. No. 154113. December 7, 2011.

40 See DUP Sound Phils. and/or Tan v. Court of Appeals and Pial, G.R. No. 168317. November 21,
2011 citing Diversified Security, Inc. v. Bautista, G.R. No. 152234. April 15, 2010; Macasero v.
Southern Industrial Gases Philippines, G.R. No. 178524. January 30, 2009.
41 See Verizon Communications Philippines, Inc. v. Margin, G.R. No. 216599. September 16, 2020.
42 See Alpha Ship Management Corporation v. Calo, G.R. No. 192034. January 13, 2014.
CA-G.R. SP No. 176592 Page 17 of 19
Decision

attorney’s fees must be deposited in the latter’s account pursuant to

R.A. No. 9406.43

However, Cajes’ prayer for moral and exemplary damages will

not prosper. There is no evidence that Bam! deliberately failed to
comply with D.O. No. 215, Series of 2020 to deprive Cajes of his
entitlement to separation pay. Cajes also failed to show that his
dismissal was attended by bad faith, fraud, or was done in a manner
contrary to morals, good customs or public policy, or that the employer
committed an act oppressive to labor to warrant an award for moral
damages. Likewise, an award of exemplary damages is warranted if
the dismissal was effected in a wanton, oppressive, or malevolent
manner,44 which is not the case herein.

Tando Not Solidarily Liable

Finally, it must be clarified that only Bam! is liable for payment

of the monetary awards. In labor cases, corporate directors and
officers are generally not liable with the corporation for payment of
separation pay because the corporation is invested by law with a
personality separate and distinct from those persons composing it as
well as from that of any other legal entity to which it may be related.
To hold a director or officer personally liable for corporate obligation
is the exception and it only occurs when the following requisites are
present: 1) the complaint must allege that the director or officer
assented to the patently unlawful acts of the corporation, or that the
director or officer was guilty of gross negligence or bad faith; and 2)
there must be proof that the director or officer acted in bad faith.45
None of the exceptions is present in this case. Cajes’ complaint did not
allege bad faith or malice on the part of Tando to evade any judgment
against the corporation. There is also no evidence that he acted in bad
faith when Cajes was illegally dismissed.

43 See Our Haus Realty Development Corporation v. Parian, G.R. No. 204651. August 6, 2014.
44 See Maquiling v. Philippine Tuberculosis Society, Inc., G.R. No. 143384. February 4, 2005.
45 See Jaime Bilan Montealegre and Chamon’te, Inc. v. Spouses De Vera, G.R. No. 208920. July 10,

2019.
CA-G.R. SP No. 176592 Page 18 of 19
Decision

WHEREFORE, the petition for certiorari is hereby GRANTED.

The July 29, 2022 Decision and September 30, 2022 Resolution of the
National Labor Relations Commission, Second Division in NLRC LAC
No. 07-002530-22 are ANNULLED and SET ASIDE. Private
respondent Bam! Exhibits, Inc. is ORDERED to pay petitioner Jose
Tanaid Cajes’ separation pay, in lieu of reinstatement, full backwages
computed from December 2020 until finality of this Decision, service
incentive leave pay, and attorney’s fees equivalent to 10% of the total
monetary award to be deposited at the National Treasury. The case is
REMANDED to the Labor Arbiter for proper computation of the
amounts due to petitioner in conformity with Our disquisition.

SO ORDERED.

Original Signed
PEDRO B. CORALES
Associate Justice

WE CONCUR:

Original Signed
CARLITO B. CALPATURA
Associate Justice

Original Signed
WILHELMINA B. JORGE-WAGAN
Associate Justice
CA-G.R. SP No. 176592 Page 19 of 19
Decision

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is
hereby certified that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of
the opinion of the Court.

Original Signed
PEDRO B. CORALES
Associate Justice
Chairperson, Fifteenth Division