Demex Rattancraft, Inc. and Narciso T. Dela Merced vs. Rosalio A. Leron

Abandonment of work requires both (a) failure to report for work without valid or justifiable reason and (b) a clear intention to sever the employer-employee relationship, and the employer must prove the latter through overt acts clearly showing a deliberate, unjustified refusal to resume employment; mere failure to report for work is insufficient, and an employee's immediate filing of an illegal dismissal complaint negates the clear intent to sever employment.

Demex Rattancraft, Inc. is a domestic corporation engaged in manufacturing handcrafted rattan products for local sale and export, with Narciso T. Dela Merced as its president. Rosalio A. Leron had been its weaver since 1980, paid on a piece-rate basis, with services contracted through job orders, and he did not receive standard benefits such as 13th month pay, service incentive leave, rest day pay, holiday pay, and overtime pay. Under Article 297 of the Labor Code, an employer may terminate employment for just causes, and although abandonment is not expressly enumerated, jurisprudence recognizes it as a form of or akin to neglect of duty.

In 1980, Rosalio A. Leron was hired as a weaver by Demex Rattancraft, Inc., a domestic corporation engaged in manufacturing handcrafted rattan products for local sale and export. Narciso T. Dela Merced was Demex's president. Leron was paid on a piece-rate basis, and his services were contracted through job orders. He worked from Monday to Saturday, although he was sometimes required to work on Sundays. He received his wages at the end of every week but never received standard benefits such as 13th month pay, service incentive leave, rest day pay, holiday pay, and overtime pay.

Sometime in June 2006, Leron was dismissed by Demex's foreman, Marcelo Viray, and Demex's personnel manager, Nora Francisco, both of whom accused him of instigating a campaign to remove Viray as the company's foreman. Before Leron was dismissed from service, he was given a memorandum stating that the dining chair he had previously weaved for export to Japan was rejected. For this reason, Demex expressed that it would no longer avail of his services.

On June 28, 2006, Leron did not report for work. The next day, he filed a complaint against Demex for illegal dismissal before the Labor Arbiter of Quezon City, docketed as NLRC NCR Case No. 00-06-05490-06. Demex construed Leron's failure to report to work as absence without leave. On July 3, 2006, Demex sent Leron a notice requiring him to return to work on July 5, 2006; this was personally served to Leron by one of his co-employees. On July 7, 2006, Demex sent another notice requiring him to report to work. Despite having received these two notices, Leron did not resume his post. On July 12, 2006, Leron received a third notice from Demex informing him of its decision to terminate his services on the ground of abandonment.

The Labor Arbiter and the NLRC found that Leron stopped reporting for work beginning June 28, 2006, admitted receiving the return-to-work notices, and failed to justify or offer a good reason for ignoring them; the NLRC declared that Leron's absence was a valid ground for his dismissal. The Court of Appeals, however, found that Demex failed to establish the elements constituting abandonment and that there was no clear intention on Leron's part to sever the employer-employee relationship because he filed an illegal dismissal case immediately after he was dismissed by Viray and Francisco; it also found that Demex's act of sending return-to-work notices was merely an afterthought.

• Abandonment: Petitioners justified respondent's dismissal from employment on the ground of abandonment, pointing out that respondent's unauthorized absences, non-compliance with the return-to-work notices, and alleged act of crumpling the first return-to-work notice were indicators of his intention to sever his employment.
• Return-to-Work Notices Not Afterthought: Petitioners argued that the return-to-work notices were not sent to respondent as an afterthought because they only discovered the existence of the first illegal dismissal case after they sent the first notice.
• Denial of Arbitrary Dismissal: Petitioners denied respondent's arbitrary dismissal and claimed that respondent abandoned his work starting June 28, 2006.

• Filing Illegal Dismissal Case: Respondent argued that his act of filing an illegal dismissal case negates the charge of abandonment, pointing out that he had already filed the illegal dismissal complaint against petitioners before he was given a return-to-work notice.
• Knowledge and Participation: Respondent maintained that petitioners were very much aware of the case and had actively participated in the proceedings.
• Strained Relations: Respondent argued that he cannot be faulted for his refusal to return to work because the filing of the illegal dismissal case caused a strained relationship between him and petitioners.

• Abandonment: Whether respondent Rosalio A. Leron was validly dismissed from employment by petitioners Demex Rattancraft, Inc. and Narciso T. Dela Merced on the ground of abandonment of work.
• Procedural Due Process: Whether petitioners complied with the twin-notice rule in effecting respondent's dismissal.

• Abandonment: No. Abandonment requires both failure to report for work without valid or justifiable reason and a clear intention to sever the employer-employee relationship; the second element was not proven, and Leron's immediate filing of an illegal dismissal complaint negated abandonment.
• Procedural Due Process: No. Petitioners admitted sending two return-to-work notices and then a dismissal notice, without complying with the twin-notice rule requiring an initial notice of charges and a subsequent notice of findings.

• Abandonment: Article 297 of the Labor Code enumerates the just causes for termination by the employer. Although abandonment is not expressly enumerated, jurisprudence recognizes it as a form of or akin to neglect of duty. Abandonment is a clear and deliberate intent to discontinue one's employment without any intention of returning. Two elements must concur: (a) failure to report for work or absence without valid or justifiable reason; and (b) a clear intention to sever the employer-employee relationship. Mere failure to report to work is insufficient; the employer must adduce clear evidence of the employee's deliberate, unjustified refusal to resume employment, manifested through overt acts. Intent cannot be lightly inferred or legally presumed from ambivalent acts; the overt acts, considered as a whole, must clearly show the employee's objective of discontinuing employment. The NLRC relied on petitioners' evidence—the Sinumpaang Salaysay of the employee who served the first return-to-work notice, the second return-to-work notice dated July 7, 2006, and the termination notice—and declared that Leron's absence was a valid ground for dismissal. The Court found grave abuse of discretion. Petitioners failed to prove the second element of abandonment, which is regarded as the more decisive factor. Their cited acts—absences, non-compliance with return-to-work notices, and alleged crumpling of the first return-to-work notice—did not convincingly show a clear and unequivocal intention to sever employment. Leron filed an illegal dismissal case on June 29, 2006, the day after he was unceremoniously dismissed by his superiors on June 28, 2006. Petitioners' narrative that he abandoned his work starting June 28 would mean that he instituted an illegal dismissal complaint right after his first day of absence, which is illogical. He even pursued the illegal dismissal case after it was dismissed without prejudice on the ground of improper venue. His non-compliance with the return-to-work notices and alleged crumpling of the first notice were equivocal acts that failed to show a clear intention to sever employment. Strained relations caused by being legitimately disappointed after being unfairly treated could explain hesitation to report back immediately; his actuations explained a grievance, not an intent to abandon work entirely. The employer bears the burden of proving that an employee's dismissal was for a just or authorized cause, and petitioners failed to clearly establish abandonment.
• Procedural Due Process: Petitioners also failed to comply with procedural due process, particularly the twin-notice rule. They admitted that after sending two return-to-work notices, they sent a notice to respondent informing him of his dismissal. Valid termination requires the employer to send an initial notice to the employee, stating the specific grounds or causes for dismissal and directing the submission of a written explanation answering the charges. After considering the employee's answer, the employer must give another notice informing the employee of the employer's findings and reason for termination. These are the operative acts that terminate an employer-employee relationship. In Kams International, Inc. vs. National Labor Relations Commission, the Court stressed that abandonment of work does not per se sever the employer-employee relationship; it is merely a form of neglect of duty, and the operative act that ultimately puts an end to the relationship is the dismissal of the employee after complying with the procedure prescribed by law. Having failed to clearly establish abandonment and having failed to comply with procedural due process, the dismissal was illegal.

• Abandonment of Work — Abandonment is a clear and deliberate intent to discontinue one's employment without any intention of returning. To justify dismissal on this ground, two elements must concur: (a) failure to report for work or absence without valid or justifiable reason; and (b) a clear intention to sever the employer-employee relationship. Mere failure to report to work is insufficient; the employer must adduce clear evidence of the employee's deliberate, unjustified refusal to resume employment, manifested through overt acts. Intent cannot be lightly inferred or legally presumed from ambivalent acts; the overt acts, considered as a whole, must clearly show the employee's objective of discontinuing employment. In this case, Leron's absences, non-compliance with return-to-work notices, and alleged crumpling of the first notice did not convincingly show a clear and unequivocal intention to sever employment.
• Abandonment Does Not Per Se Sever Employment — Abandonment of work is merely a form of neglect of duty, which is a just cause for termination. The operative act that ultimately puts an end to the employer-employee relationship is the dismissal of the employee after complying with the procedure prescribed by law. The Court applied this doctrine in holding that Demex's termination of Leron was not valid merely because he failed to report for work; procedural due process still had to be observed.
• Twin-Notice Rule — Valid termination requires the employer to send an initial notice to the employee stating the specific grounds or causes for dismissal and directing the submission of a written explanation answering the charges. After considering the employee's answer, the employer must give another notice informing the employee of the employer's findings and reason for termination. Petitioners failed to comply with this rule because they sent two return-to-work notices and then a dismissal notice without the required initial notice of charges and opportunity to explain.
• Burden of Proof in Illegal Dismissal — The employer has the burden of proving that an employee's dismissal from service was for a just or authorized cause. Demex failed to clearly establish that Leron abandoned his work, so the dismissal was illegal.
• Review of Factual Findings under Rule 45 — Only questions of law may be raised in a petition for review under Rule 45. The determination of whether an employee is guilty of abandonment is a factual matter, and the Court of Appeals' finding would generally be binding. However, an exception applies when there is a variance between the findings of the Court of Appeals and the National Labor Relations Commission, as in this case.

• "To justify the dismissal of an employee based on abandonment of work, there must be a showing of overt acts clearly evidencing the employee's intention to sever the employer-employee relationship." — This states the core rule on abandonment and frames the Court's analysis of whether Demex proved Leron's intent to sever employment.
• "Abandonment of work has been construed as "a clear and deliberate intent to discontinue one's employment without any intention of returning back."" — This defines abandonment and supplies the standard against which Leron's acts were measured.
• "To justify the dismissal of an employee on this ground, two (2) elements must concur, namely: "(a) the failure to report for work or absence without valid or justifiable reason; and, (b) a clear intention to sever the employer-employee relationship."" — This enumerates the two elements of abandonment, which the Court found were not both established.
• "abandonment of work does not per se sever the employer-employee relationship. It is merely a form of neglect of duty, which is in turn a just cause for termination of employment. The operative act that will ultimately put an end to this relationship is the dismissal of the employee after complying with the procedure prescribed by law." — This explains why abandonment alone does not terminate employment and why compliance with procedural due process remains necessary.

• Pare vs. National Labor Relations Commission, 376 Phil. 288, 292 (1999) — Cited for the two elements of abandonment and the rule that mere failure to report to work is insufficient; the employer must adduce clear evidence of the employee's deliberate, unjustified refusal to resume employment. Followed.
• Kams International, Inc. vs. National Labor Relations Commission, 373 Phil. 950, 958, 959 (1999) — Cited for the rule that abandonment does not per se sever employment and that intent cannot be lightly inferred from ambivalent acts; the operative act is dismissal after complying with procedure. Followed.
• Flores vs. Nuestro, 243 Phil. 712, 715 (1988) — Cited for the definition of abandonment as a clear and deliberate intent to discontinue employment without intention of returning. Followed.
• Stanley Fine Furniture vs. Gallano, 748 Phil. 624, 638 (2014) — Cited for recognizing abandonment as a form of or akin to neglect of duty under Article 297. Followed.
• King of Kings Transport, Inc. vs. Mamac, 553 Phil. 108, 115-117 (2007) — Cited for the twin-notice rule in termination. Followed.
• Polymedic General Hospital vs. National Labor Relations Commission, 219 Phil. 385 (1985) and Austria vs. National Labor Relations Commission, 369 Phil. 557, 565 (1999) — Cited for the employer's burden of proving a just or authorized cause. Followed.
• Pascual vs. Burgos, G.R. No. 171722, January 11, 2016, 778 SCRA 189, 204 — Cited for the rule that only questions of law may be raised under Rule 45 and that factual findings supported by substantial evidence are binding, with an exception for variance between the Court of Appeals and the NLRC. Followed.
• Medina vs. Asistio, Jr., 269 Phil. 225 (1990) — Cited for the exception allowing review of factual findings when there is a variance between the Court of Appeals and the NLRC. Followed.

• Article 297, Labor Code — Enumerates the just causes for termination by the employer. Although abandonment is not expressly listed, jurisprudence recognizes it as a form of or akin to neglect of duty. The dismissal for abandonment must therefore satisfy the just-cause requirement and the employer's burden of proof.
• Rule 45, Section 1, Rules of Court — Provides that only questions of law may be raised in a petition for review. The Court noted that abandonment is a factual matter but reviewed the finding because of the variance between the Court of Appeals and the National Labor Relations Commission.

• Justice Presbitero J. Velasco, Jr. (Chairperson)
• Justice Lucas P. Bersamin
• Justice Samuel R. Martires
• Justice Alexander G. Gesmundo