ENLI and Ligon vs. Dela Cruz

A valid preventive suspension ripens into constructive dismissal when the employer fails to reinstate the employee—actually or through payroll—after the 30-day maximum period under Section 9, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, without extending the suspension with pay.

ENLI is a language school business teaching different languages to local and international students, operating branches in Calamba and Sta. Rosa, Laguna. In August 2011, ENLI hired Dela Cruz as Marketing Officer for its Calamba branch; she was later promoted to Branch Administrator, with duties encompassing daily operations, teacher scheduling, attendance sheets, cash disbursements, payroll, financial reports, and responsibility for closing the branch after business hours. The dispute arose from the convergence of two parallel events: ENLI's investigation of alleged infractions committed by Dela Cruz in her managerial capacity, and Dela Cruz's filing of a complaint for underpayment of salaries before the Labor Arbiter.

ENLI, a language school operating branches in Calamba and Sta. Rosa, Laguna, hired Dela Cruz in August 2011 as Marketing Officer for its Calamba branch. She was later promoted to Branch Administrator, a position that entrusted her with managing daily operations, fixing teacher schedules, handling attendance sheets, cash disbursements, payroll, and financial reports, and closing the branch after business hours. In this capacity, Dela Cruz herself admitted she managed the Calamba branch as if she were the owner thereof.

Trouble began when ENLI allegedly received client complaints that calls and messages to the Calamba branch went unanswered and that Dela Cruz frequently arrived late. The branch's financial reports were also not submitted, prompting ENLI's Finance Officer to inspect the income and expense reports. Orders were allegedly given to Dela Cruz to submit the required financial reports, but she repeatedly failed to comply. Through a Letter dated May 29, 2012, Dela Cruz was directed to submit the required documents for audit, but she refused to acknowledge receipt and disregarded the directive.

On May 30, 2012, Dela Cruz reported to the barangay hall ENLI's non-payment of the teachers' salaries. Five days later, on June 5, 2012, she filed a complaint before the Labor Arbiter for underpayment of salaries and other money claims. Meanwhile, ENLI's investigation of Dela Cruz continued, revealing alleged infractions including non-issuance of official receipts, insubordination, gross disrespect to authorities, and frequent absences. Dela Cruz was also alleged to have received a check for P100,000.00 issued in her name instead of ENLI's. On June 21, 2012, Dela Cruz accompanied a student to ENLI's Sta. Rosa branch to demand a tuition refund and allegedly caused a scene. The following day, Ligon's mother received a report that someone would take company properties from the Calamba branch, prompting her to report the matter to the barangay hall.

On June 22, 2012, a Notice to Suspend was issued to Dela Cruz requiring her to explain several infractions: non-issuance of official receipts, supporting juvenile delinquents' activities, insubordination, constant absence resulting in serious loss of income, disrespect to authorities, and dishonesty in corporate transaction amounting to over P100,000.00. She was placed under "temporary suspension" for 30 days pending investigation. Dela Cruz refused to acknowledge receipt. The next day, Ligon took over the Calamba branch and met three students who demanded tuition refunds—refunds allegedly sought upon Dela Cruz's advice, she having represented that she would instead send someone to teach them at their homes.

In July 2012, ENLI learned of Dela Cruz's pending complaint before the Labor Arbiter. On July 22, 2012, the 30-day suspension period lapsed, but Dela Cruz did not report back for work. ENLI made no effort to reinstate her—neither actually nor through payroll—nor did it issue a return-to-work notice or conclude the investigation. In her complaint, Dela Cruz averred that for June 2012 she received only P500.00 instead of her P12,000.00 salary, and that it was her barangay complaint about unpaid salaries that prompted Ligon to accuse her of misappropriating student fees. She claimed to have been suspended without any suspension letter and to have been illegally terminated. Petitioners, in their position paper, maintained that Dela Cruz was not dismissed but only preventively suspended, justified by her access to confidential reports and financial documents.

• Timeliness of Appeal: Petitioners argued that Dela Cruz's appeal before the NLRC was filed out of time, asserting that she received the Labor Arbiter's decision on April 1, 2013 as stated in her Notice of Appeal, making her April 25, 2013 appeal beyond the 10-day reglementary period.
• Grave Abuse of Discretion: Petitioners contended that the NLRC gravely abused its discretion in giving due course to and granting Dela Cruz's appeal despite its alleged untimeliness, and in reversing the Labor Arbiter's decision.
• Conflicting Factual Findings: Petitioners argued that the CA erred in not reviewing the conflicting rulings of the Labor Arbiter and the NLRC, invoking jurisprudence that permits such review when factual findings conflict.
• Substantial Evidence: Petitioners maintained that the NLRC's decision should be reversed for failure to muster the quantum of proof required in administrative proceedings, i.e., substantial evidence.
• Abandonment: Petitioners raised, for the first time in their Reply before the CA, that Dela Cruz abandoned her employment by failing to report for work after the lapse of her preventive suspension on July 22, 2012.

• Procedural Bar: Dela Cruz sought the denial of the petition for having raised the issue concerning the legality of her dismissal, which was not raised in petitioners' certiorari petition before the CA.
• Finality of NLRC Findings: Dela Cruz argued that the factual findings of the NLRC can no longer be disturbed.

• Scope of CA Review: Whether the CA erred in not reviewing the conflicting rulings of the Labor Arbiter and the NLRC.
• Timeliness of Appeal: Whether the NLRC gravely abused its discretion in finding that Dela Cruz seasonably filed her appeal.
• Constructive Dismissal: Whether Dela Cruz's preventive suspension ripened into constructive dismissal upon the lapse of the 30-day maximum period without reinstatement.
• Abandonment: Whether Dela Cruz abandoned her employment by failing to report back to work after the expiration of the preventive suspension.

• Scope of CA Review: No. The CA correctly limited its review to whether the NLRC committed grave abuse of discretion in admitting Dela Cruz's appeal, consistent with the limited scope of certiorari under Rule 65, which is not an appeal and does not permit review of the entire NLRC decision for reversible error.
• Timeliness of Appeal: No. The NLRC did not gravely abuse its discretion in relying on Dela Cruz's allegation in her Memorandum of Appeal that she received the Labor Arbiter's decision on April 15, 2013, especially absent any contrary proof such as a return card from petitioners.
• Constructive Dismissal: Yes. The preventive suspension, though initially valid, ripened into constructive dismissal as of July 22, 2012, when the 30-day period expired without ENLI reinstating Dela Cruz actually or through payroll, extending the suspension with pay, or concluding the investigation.
• Abandonment: No. Abandonment was not established because Dela Cruz's absence was the result of the employer's failure to recall her, not a deliberate intent to sever the employment relationship, and the defense was raised only in a reply before the CA in violation of the NLRC Rules of Procedure.

• Scope of CA Review: Under St. Martin Funeral Home vs. NLRC, the NLRC's decision may be reviewed by the CA through a special civil action for certiorari under Rule 65. Because certiorari is not an appeal, it does not permit review of the entire NLRC decision for reversible errors on questions of fact and law. The CA thus correctly confined itself to the arguments in the certiorari petition, which assailed only the NLRC's Resolutions dated January 23, 2014 and March 31, 2014 on the timeliness issue—not the NLRC Decision dated June 28, 2013 on the merits. On review under Rule 45, the Court's task was limited to determining whether the CA correctly ruled on the presence or absence of grave abuse of discretion by the NLRC. The CA's ruling was affirmed: the NLRC committed no whim or caprice in relying on Dela Cruz's Memorandum of Appeal, particularly given petitioners' failure to present contrary evidence such as a return card.

• Timeliness of Appeal: The NLRC gave more weight to the date of receipt stated in Dela Cruz's Memorandum of Appeal (April 15, 2013) over that in her Notice of Appeal (April 1, 2013), reasoning that a Memorandum of Appeal is what is necessary to perfect an appeal. Having received the decision on April 15, 2013, Dela Cruz's appeal filed on April 25, 2013 was within the 10-day reglementary period. Petitioners presented no contrary evidence. The NLRC's reliance on the Memorandum of Appeal was not capricious, and the CA correctly denied the certiorari petition on this ground.

• Constructive Dismissal: Preventive suspension is allowed under Section 8, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, but only when the employee's continued employment poses a serious and imminent threat to the life or property of the employer or co-workers. It is not a penalty but a disciplinary measure pending investigation. Dela Cruz's preventive suspension was initially justified because, as branch manager, she had unlimited access to the branch's finances, property, and records. However, Section 9 of the same Rules limits preventive suspension to a maximum of 30 days, after which the employer has a positive duty to reinstate the employee—actually or through payroll—or extend the suspension provided the employee is paid wages and benefits during the extension. When the period exceeds the maximum without reinstatement, constructive dismissal sets in. Here, the 30-day period expired on July 22, 2012 without ENLI reinstating Dela Cruz, extending the suspension with pay, issuing a return-to-work notice, or concluding the investigation. These circumstances, taken together, established constructive dismissal as of July 22, 2012. The NLRC was thus correct in reversing the Labor Arbiter, though not because Dela Cruz was illegally dismissed on June 22, 2012, but because the valid preventive suspension ripened into constructive dismissal upon its lapse. Dela Cruz was entitled to backwages from July 22, 2012 up to the finality of the decision, and to separation pay in lieu of reinstatement given the passage of seven years.

• Abandonment: Section 12, Rule V of the 2011 NLRC Rules of Procedure proscribes parties from alleging or proving facts and causes of action not included in the complaint or raised in the position papers. Petitioners raised abandonment only in their Reply before the CA, rendering it procedurally improper. Substantively, abandonment requires two concurrence of elements: first, failure to report for work or absence without valid or justifiable reason, and second, a clear intention to sever the employer-employee relationship, the latter being the more determinative factor as manifested by overt acts. Dela Cruz's absence was not a deliberate act of abandonment but a consequence of constructive dismissal by ENLI. Her filing of a complaint for underpayment of salaries was inconsistent with an intent to abandon. Moreover, ENLI's failure to comply with requisite notices of explanation and termination indicated that abandonment was a mere afterthought.

• Preventive Suspension — Under Section 8, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, an employer may place a worker under preventive suspension only if the employee's continued employment poses a serious and imminent threat to the life or property of the employer or co-workers. It is not a penalty but a disciplinary measure pending investigation. When justified, the suspended employee is not entitled to salaries and benefits for the suspension period. In this case, the Court found the preventive suspension initially justified because Dela Cruz, as branch manager, had unlimited access to the branch's finances, property, and records.

• Maximum Duration of Preventive Suspension and Constructive Dismissal — Under Section 9 of the same Rules, preventive suspension shall not exceed 30 days. The employer has a positive duty to reinstate the employee upon lapse of the period—actually or through payroll—or may extend the suspension provided wages and benefits are paid during the extension. When the suspension exceeds the maximum without reinstatement, or is for an indefinite period, constructive dismissal sets in. Instances tantamount to constructive dismissal include: (1) prolonged suspension due to the employer's neglect to conclude the investigation; (2) preventive suspension coupled with lack of intention to conduct a final investigation; (3) suspension in excess of the 30-day limit as a predetermined effort to dismiss; and (4) failure to recall the employee after expiration of suspension taken together with a precondition that the employee withdraw complaints. In this case, the employer's failure to reinstate, extend with pay, issue a return-to-work notice, or conclude the investigation established constructive dismissal as of July 22, 2012.

• Abandonment — To constitute abandonment, two elements must concur: first, failure to report for work or absence without valid or justifiable reason, and second, a clear intention to sever the employer-employee relationship. The second element, being manifested by overt acts, is the more determinative factor. Mere absence or failure to report back after a suspension does not constitute abandonment where the absence is the result of the employer's failure to recall the employee. The filing of a labor complaint is inconsistent with an intent to abandon.

• Scope of Certiorari Review of NLRC Decisions — Under St. Martin Funeral Home vs. NLRC, the NLRC's decision may be reviewed by the CA through certiorari under Rule 65. Because certiorari is not an appeal, it does not permit review of the entire NLRC decision for reversible errors on questions of fact and law. The review is limited to whether the NLRC committed grave abuse of discretion. On Rule 45 review, the Court's task is confined to determining whether the CA correctly ruled on the presence or absence of grave abuse of discretion.

• "Section 9 is clear that the employer had the positive duty of reinstating the preventively suspended employee upon the lapse of the 30-day period sans extension. When the period of preventive suspension exceeds the maximum period allowed without reinstating the employee actually or through payroll, or when the preventive suspension is for an indefinite period, constructive dismissal sets in." — This passage articulates the controlling rule on when a valid preventive suspension ripens into constructive dismissal, forming the ratio decidendi of the case.

• "To successfully raise abandonment as a just cause for dismissal, two elements must concur: first, failure to report for work or absence without valid or justifiable reason, and second, a clear intention to sever the employer-employee relationship. The second element, being manifested by overt acts, is the more determinative factor." — This is the canonical formulation of the elements of abandonment, frequently cited in labor jurisprudence.

• "Thus, her absence from work was not due to a deliberate act of abandonment on her part but an act of constructive dismissal on the part of ENLI. Also telling is the fact that ENLI did not comply with the requisite notices of explanation and termination, thus, indicating that the defense of abandonment was a mere afterthought." — This passage applies the abandonment doctrine to the facts and explains why the employer's defense failed.

• St. Martin Funeral Home vs. NLRC, 356 Phil. 81 (1998) — Controlling precedent establishing that the NLRC's decision may be reviewed by the CA through certiorari under Rule 65, but that such review is limited to grave abuse of discretion and does not constitute a full appeal.

• Agcolicol, Jr. vs. Casiño, 787 Phil. 516 (2016) — Followed for its enumeration of instances where preventive suspension amounts to or is tantamount to constructive dismissal, including prolonged suspension due to employer neglect, lack of intention to conduct final investigation, suspension exceeding 30 days as a predetermined effort to dismiss, and failure to recall the employee coupled with a precondition to withdraw complaints.

• Pido vs. National Labor Relations Commission, 545 Phil. 507 (2007) — Cited for the doctrine that constructive dismissal sets in when the preventive suspension period exceeds the maximum allowed without reinstatement, actually or through payroll, or when the suspension is for an indefinite period.

• Philippine National Bank vs. Gregorio, 818 Phil. 321 (2017) — Followed for the proposition that certiorari is not an appeal and does not permit review of the entire NLRC decision for reversible errors, and that Rule 45 review of the CA's ruling is limited to questions of law.

• Macasero vs. Southern Industrial Gases Philippines, 597 Phil. 494 (2009) — Cited for the exceptions to the general rule that the Court does not entertain questions of fact in a Rule 45 petition, including when the findings of fact are conflicting—applicable here because the Labor Arbiter and NLRC rendered conflicting rulings.

• Columbus Philippine Bus Corp. vs. National Labor Relations Commission, 417 Phil. 81 (2001) — Cited for the two-element test for abandonment: failure to report for work without valid reason, and a clear intention to sever the employer-employee relationship, the latter being the more determinative factor.

• Section 8, Rule XXIII, Book V, Omnibus Rules Implementing the Labor Code — Authorizes preventive suspension only when the employee's continued employment poses a serious and imminent threat to the life or property of the employer or co-workers. Applied to uphold the initial validity of Dela Cruz's suspension given her managerial access to branch finances and records.

• Section 9, Rule XXIII, Book V, Omnibus Rules Implementing the Labor Code — Limits preventive suspension to a maximum of 30 days and imposes on the employer the positive duty to reinstate the employee upon lapse of the period, or to extend the suspension provided wages and benefits are paid during the extension. Applied to find that constructive dismissal set in on July 22, 2012 when ENLI failed to reinstate Dela Cruz after the 30-day period expired.

• Section 12, Rule V, 2011 NLRC Rules of Procedure (as amended) — Proscribes parties from alleging or proving facts and causes of action not referred to or included in the complaint or raised in the position papers, including in replies. Applied to reject petitioners' defense of abandonment, which was raised only in their Reply before the CA.

Caguioa, Lazaro-Javier, Lopez, and Gaerlan, JJ., concurred.