Airborne Maintenance and Allied Services, Inc. vs. Egos

An employer who fails to prove compliance with the requisites of Article 301 of the Labor Code — namely, a bona fide suspension of business operations not exceeding six months, prior notice to DOLE and the affected employee, a clear and compelling economic reason for the temporary shutdown, and the absence of available posts for reassignment — cannot validly place an employee on floating status, and the employee's resulting non-deployment constitutes constructive dismissal.

Airborne Maintenance and Allied Services, Inc. is a company engaged in providing manpower services to various clients. Respondent Arnulfo M. Egos was hired by Airborne as a janitor and assigned to the Balintawak Branch of Meralco, one of Airborne's clients. The arrangement was such that respondent's continued employment depended on Airborne's service contract with Meralco; when that contract expired and was awarded to a new contractor, the question arose whether Airborne had a valid basis to cease deploying respondent or to place him on floating status under Article 301 of the Labor Code.

On April 9, 1992, Airborne Maintenance and Allied Services, Inc. hired Arnulfo M. Egos as a janitor and assigned him to the Balintawak Branch of Meralco, a client of Airborne. Egos remained in that assignment for nearly twenty years.

On June 30, 2011, the service contract between Airborne and Meralco-Balintawak Branch expired. A new contract was awarded to Landbees Corporation, which absorbed all of Airborne's employees at that site except Egos, allegedly because he had a heart ailment. Egos consulted another doctor, Dr. Rina Porciuncula of the Our Lady of the Angels Clinic in Sta. Maria, Bulacan, and was declared in good health and fit to work. He presented the duly issued medical certificate to Airborne, but it was disregarded. Egos also reported for work and made several follow-ups beginning July 1, 2011, seeking a new assignment, but Airborne ignored him and told him there was no work available. He had left his cellphone number with Christine Solis, Airborne's Administrative Officer, but never received a call from the company.

Feeling aggrieved, Egos filed a complaint for constructive/illegal dismissal on August 5, 2011. Airborne, for its part, claimed that Egos was never dismissed from service. It asserted that upon termination of its contract with Meralco-Balintawak, it directed all employees including Egos to report to its office for reposting. When Egos failed to do so, Airborne sent a letter dated August 12, 2011 to his last known address directing him to report to a new assignment at Meralco Commonwealth Business Center; the letter was returned to sender with the notation "RTS unknown." A second letter dated September 21, 2011 was sent reiterating the directive, and it too was returned with the same notation. Egos contended that the letters were mere afterthoughts, sent only after Airborne had become aware of the illegal dismissal complaint, and that the incomplete address on the letters was intentionally done to ensure he would not receive them.

The Labor Arbiter dismissed the complaint on June 4, 2012. On appeal, the NLRC reversed the Labor Arbiter on December 27, 2012, finding that Egos was constructively dismissed. The NLRC credited Egos's allegation that Airborne denied him employment because of a purported heart ailment, and found that despite his medical clearance, Airborne still gave him no assignment. The NLRC regarded the two letters as afterthoughts sent with incomplete addresses so that Egos would not receive them. The CA affirmed the NLRC on August 28, 2015, and denied reconsideration on January 22, 2016.

• Grave Abuse of Discretion by the CA: Petitioner argued that the CA committed grave abuse of discretion in affirming the NLRC's finding of constructive dismissal and in assuming that petitioner claimed abandonment as a defense.
• Erroneous Conclusions of Fact and Law: Petitioner contended that the CA erred in dismissing its petition for certiorari by relying solely on the NLRC's erroneous conclusions of fact and law, despite what petitioner characterized as clear and unequivocal jurisprudence on the matter.
• Floating Status Under Article 301: Petitioner argued that there was no dismissal to speak of because it had validly placed respondent on floating status when its contract with Meralco was terminated, invoking Article 301 (formerly Article 286) of the Labor Code, which permits a bona fide suspension of business operations for a period not exceeding six months without terminating employment.
• New Evidence on Appeal: Petitioner countered that respondent introduced for the first time on appeal new factual allegations and spurious, fabricated, and self-serving evidence that should not be given credence.

• Constructive/Illegal Dismissal: Respondent argued that he was constructively and illegally dismissed, emphasizing that he made several follow-ups since July 1, 2011, but Airborne merely ignored him and never gave him a new assignment.
• Letters as Afterthoughts: Respondent maintained that the letters dated August 12 and September 21, 2011 were mere afterthoughts, sent only after Airborne had become aware of the illegal dismissal complaint, and that the incomplete address was intentionally done to prevent him from receiving them.
• Ignored Contact Information: Respondent pointed out that he left his cellphone number with Christine Solis, Airborne's Administrative Officer, but never received any call from Airborne regarding a new assignment.

• Constructive Dismissal: Whether the CA committed grave abuse of discretion in affirming the NLRC's declaration that respondent was constructively dismissed.
• Floating Status: Whether petitioner validly placed respondent on floating status under Article 301 of the Labor Code following the termination of its contract with Meralco.

• Constructive Dismissal: No. The CA correctly affirmed the NLRC; respondent was constructively dismissed, as petitioner's acts of ignoring follow-ups, failing to prove bona fide suspension, and sending belated notices with incomplete addresses amounted to a dismissal in disguise.
• Floating Status: No. Petitioner failed to prove compliance with the requisites of Article 301 of the Labor Code — no notice to DOLE or the employee, no clear and compelling economic reason for suspension, and no showing that no available posts existed for reassignment.

• Constructive Dismissal: The Court examined the totality of circumstances and found that petitioner's acts clearly amounted to constructive dismissal as defined in Morales vs. Harbour Centre Port Terminal, Inc. — a dismissal in disguise, an act amounting to dismissal but made to appear as if it were not. Petitioner ignored respondent's repeated follow-ups for a new assignment beginning July 1, 2011, disregarded his medical certificate declaring him fit to work, and only sent notices after the complaint was filed on August 5, 2011. Those notices were returned with "RTS unknown" because the address was incomplete, which the NLRC and CA found was intentionally done. The Court agreed that the letters were mere afterthoughts, citing Skippers United Pacific, Inc. vs. NLRC for the proposition that afterthoughts cannot be given weight or credibility. The combination of these acts — not informing respondent or DOLE of any suspension, failing to prove bona fide suspension, ignoring follow-ups, and sending belated defective notices — foreclosed any choice by respondent except to forego continued employment.

• Floating Status: The Court found that petitioner failed to prove that the termination of its contract with Meralco resulted in a bona fide suspension of its business operations. Under Article 301 of the Labor Code, a bona fide suspension of operations not exceeding six months does not terminate employment, but the employer bears the burden of proving compliance with several requisites. Citing PT & T Corp. vs. National Labor Relations Commission, the Court explained that after six months of floating status, the employee must either be recalled or permanently retrenched following legal requirements; failure to comply is tantamount to dismissal. Citing Lopez vs. Irvine Construction Corp. and Mobile Protective & Detective Agency vs. Ompad, the Court held that the employer must prove (a) a clear and compelling economic reason compelling temporary shutdown, and (b) the absence of available posts to which the affected employee could be assigned. The employer must also notify DOLE and the affected employee at least one month prior to the intended date of suspension. Petitioner failed on all counts: it did not notify DOLE or respondent, did not prove any dire economic exigency justifying suspension, and did not show that no available posts existed. The mere expiration of one client contract did not amount to a bona fide suspension of business operations, as petitioner was a manpower services company with multiple clients.

• Constructive Dismissal — Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as through a demotion in rank or diminution in pay and other benefits. It is a dismissal in disguise — an act amounting to dismissal but made to appear as if it were not. It may also exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable that the employee is foreclosed from any choice except to forego continued employment. The Court applied this doctrine by finding that petitioner's cumulative acts — ignoring respondent's follow-ups, disregarding his medical clearance, and sending defective belated notices — constituted constructive dismissal.

• Floating Status and Bona Fide Suspension of Business Operations (Article 301, Labor Code) — Under Article 301 (formerly Article 286), a bona fide suspension of the operation of a business or undertaking for a period not exceeding six months does not terminate employment. The employer bears the burden of proving: (a) a clear and compelling economic reason compelling temporary shutdown of operations or a particular undertaking; (b) that there are no available posts to which the affected employee can be assigned; and (c) prior notice to DOLE and the affected employee at least one month before the intended date of suspension. After six months, the employee must either be recalled to work or permanently retrenched in accordance with law; failure to comply is tantamount to dismissal. The Court found that petitioner failed to satisfy any of these requisites, as the mere expiration of one client contract did not constitute a bona fide suspension of its overall business operations.

• "In this case, it is beyond cavil that none of the foregoing mandatory provisions of the labor law were complied with by Airborne." — The Court's finding that petitioner failed to observe the mandatory procedural and substantive requirements of labor law in terminating respondent's employment.

• "the paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work" — This passage, quoted from Lopez vs. Irvine Construction Corp., articulates the standard for bona fide suspension under Article 301: the employer must prove a clear and compelling economic reason forcing temporary shutdown.

• "After six months, the employees should either be recalled to work or permanently retrenched following the requirements of the law, and that failing to comply with this would be tantamount to dismissing the employees and the employer would thus be liable for such dismissal." — Quoted from PT & T Corp. vs. National Labor Relations Commission, this defines the six-month limit on floating status and the consequence of non-compliance.

• "Constructive dismissal exists where there is cessation of work because 'continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay' and other benefits." — The canonical definition of constructive dismissal as articulated in Morales vs. Harbour Centre Port Terminal, Inc., applied by the Court to the facts of this case.

• Skippers United Pacific, Inc. vs. NLRC, G.R. No. 148893, July 12, 2006 — Cited for the proposition that afterthoughts cannot be given weight or credibility; applied to the belated notices sent by petitioner after the filing of the complaint.
• PT & T Corp. vs. National Labor Relations Commission, 496 Phil. 164 (2005) — Cited for the rule that Article 301 sets a six-month maximum period for floating status, after which the employee must be recalled or retrenched; failure to comply is tantamount to dismissal.
• Lopez vs. Irvine Construction Corp., 741 Phil. 728 (2014) — Cited for the requirements that an employer invoking Article 301 must prove a clear and compelling economic reason for temporary shutdown and the absence of available posts for reassignment; the mere completion of one project does not amount to bona fide suspension.
• Mobile Protective & Detective Agency vs. Ompad — Cited as an example where security guards were found constructively dismissed because the employer failed to show any dire exigency justifying non-assignment.
• Morales vs. Harbour Centre Port Terminal, Inc., 680 Phil. 112 (2012) — Cited for the definition of constructive dismissal as a dismissal in disguise, applied to the totality of petitioner's acts in this case.

• Article 301 [286], Labor Code — Governs when employment is not deemed terminated: a bona fide suspension of business operations not exceeding six months, or fulfillment of military or civic duty, does not terminate employment. The employer must reinstate the employee to the former position without loss of seniority rights if the employee indicates desire to resume work not later than one month from resumption of operations. The Court applied this provision to test the validity of petitioner's claimed floating status and found non-compliance with its requisites.

Carpio (Chairperson), Perlas-Bernabe, and Lazaro-Javier, JJ., concurred. J. Reyes, Jr., J., was on wellness leave.