Fernandez vs. NLRC

The filing of position papers and supporting documents satisfies the requirements of due process in labor cases, even if a party fails to appear at scheduled hearings. The Court also held that the immediate filing of an illegal dismissal complaint negates the employer's claim of abandonment, and that service incentive leave pay and full backwages must be computed from the time of dismissal until actual reinstatement, without the three-year prescriptive limit.

Employees of Agencia Cebuana-H. Lhuillier demanded salary increases and threatened to report the owner, Marguerite Lhuillier, to the Bureau of Internal Revenue for tax evasion. Lhuillier subsequently suspected them of stealing jewelry and over-declaring pawn weights. On July 19, 1990, Lhuillier verbally informed nine employees not to report for work. They filed an illegal dismissal complaint on July 23, 1990. Two other employees, Marilyn Lim and Joseph Canonigo, had previously resigned after being investigated for anomalies, with Lim admitting guilt and Canonigo tendering his resignation upon the assurance of separation pay.

• Employment and Dismissal: Eleven employees of Agencia Cebuana-H. Lhuillier filed a consolidated complaint for illegal dismissal. Nine of them (Fernandez, Adriano, Negapatan, Tomongha, Quiñanola, Campo, Villaceran, Talledo, and Gadiano) alleged that they demanded salary increases and threatened to report Lhuillier's tax evasion to the BIR. Lhuillier became angry, suspected them of stealing jewelry, and verbally terminated them on July 19, 1990. They filed their complaint on July 23, 1990. Two other employees (Lim and Canonigo) alleged they were forced to resign after demanding increases and expressing intent to join a union. Lim had been investigated for selling her own jewelry to a consumer in violation of company rules; she admitted the violation, signified her intention to resign, and eventually tendered an irrevocable resignation. Canonigo resigned after being suspected of anomalies, on the assurance of separation pay.
• Hearings Before the Labor Arbiter: During the reception of evidence, hearings were scheduled for July 5, 8, and 12, 1991. The July 5 hearing was postponed by agreement. On July 8, scheduled for the cross-examination of complainant Marilyn Lim, Lhuillier and her counsel failed to appear. On July 12, scheduled for the reception of Lhuillier's evidence, they again failed to appear. The labor arbiter deemed the case submitted for resolution based on the evidence presented. Lhuillier's counsel later explained his July 8 absence by claiming his car broke down, and moved to submit additional affidavits by August 19, 1991, which he failed to do.
• NLRC Remand: The Labor Arbiter ruled in favor of the complainants, finding illegal dismissal. On appeal, the NLRC vacated the decision and remanded the case for further proceedings. The NLRC held that under Section 11(c), Rule V of the 1990 NLRC Rules of Procedure, two successive unjustified absences during the respondent's turn to present evidence were required for waiver. Because July 8 was for cross-examination, Lhuillier's absence on July 12 was only her first absence during her turn to present evidence, rendering the labor arbiter's submission of the case premature and a denial of due process.

• Petitioners contended that the NLRC did not acquire jurisdiction over the appeal because the appeal bond posted by Lhuillier was insufficient, arguing that Article 223 of the Labor Code does not exclude damages and attorney's fees from the monetary award for bond computation.
• Petitioners maintained that Lhuillier was not denied due process because the parties had filed position papers and supporting documents, and Lhuillier's unjustified absences warranted the submission of the case for decision.
• Petitioners argued that they were illegally dismissed and did not abandon their employment.
• Petitioners asserted that the computation of backwages and service incentive leave pay should not be limited to three years.

• Respondent Lhuillier countered that the appeal bond was sufficient, relying on Rule VI, Section 6 of the 1990 NLRC Rules of Procedure which excludes moral and exemplary damages and attorney's fees from the computation of the appeal bond.
• Respondent Lhuillier argued that she was denied due process because the labor arbiter prematurely submitted the case for decision without giving her a second opportunity to present evidence during her turn, and that the labor arbiter released his decision despite pending motions.
• Respondent Lhuillier averred that the nine petitioners abandoned their employment to dramatize sympathy for a co-worker, while Lim and Canonigo voluntarily resigned.

• Procedural Issues: Whether the NLRC acquired jurisdiction over the appeal notwithstanding the alleged insufficiency of the appeal bond; Whether private respondents were deprived of due process of law by the labor arbiter.
• Substantive Issues: Whether petitioners were illegally dismissed; Whether the computation of the backwages, service incentive leave pay and damages was valid and correct.

• Procedural: The Court ruled that the NLRC acquired jurisdiction over the appeal. Article 223 of the Labor Code lays down the requirement of an appeal bond, while Rule VI, Section 6 of the 1990 NLRC Rules of Procedure explains how it is computed, explicitly excluding moral and exemplary damages and attorney's fees. The implementing rule is a valid contemporaneous construction of the Labor Code. Deducting the damages and attorney's fees from the total monetary award, the required bond amount was P750,182.55; the posted bond of P752,183.00 was thus sufficient. Regarding due process, the Court held that Lhuillier was not deprived thereof. The essence of due process is the opportunity to be heard. Because Lhuillier was able to file her position paper and supporting documents, which the labor arbiter considered, the requirements of due process were satisfied. Furthermore, Lhuillier failed to submit the additional affidavits she herself proposed to file, and a party cannot capitalize on the labor arbiter's failure to act on a motion when the party itself failed to comply with its own proposed deadline.
• Substantive: The Court ruled that nine petitioners were illegally dismissed. To succeed in pleading abandonment, the employer must prove the employee's intention to abandon and an overt act demonstrating such intention. The immediate filing of an illegal dismissal complaint and prayer for reinstatement is inconsistent with abandonment. Because the nine petitioners filed their complaint merely three days after their alleged abandonment, they negated any intent to abandon their employment. However, Petitioners Lim and Canonigo were not illegally dismissed; they voluntarily resigned. Lim admitted her violation and tendered an irrevocable resignation, while Canonigo tendered his resignation on the assurance of separation pay. Regarding monetary awards, the Court held that service incentive leave pay should be computed from December 16, 1975 up to actual reinstatement, not limited to three years. Article 291 of the Labor Code prescribes the period for filing actions, not the period for computing monetary claims. Full backwages must also be awarded without qualification or deduction of earnings derived elsewhere, pursuant to Article 279 of the Labor Code as amended by R.A. 6715.

• Due Process in Labor Cases — The requirements of due process are satisfied where the parties are given the opportunity to submit position papers. The holding of an adversarial trial depends on the discretion of the labor arbiter, and the parties cannot demand it as a matter of right. The essence of due process is simply an opportunity to be heard, to explain one's side, or to seek a reconsideration of the action or ruling complained of.
• Abandonment — To succeed in pleading abandonment as a valid ground for dismissal, the employer must prove (1) the intention of an employee to abandon his or her employment and (2) an overt act from which such intention may be inferred. Mere absence or failure to report for work is not sufficient; the employer must prove a deliberate and unjustified refusal of the employee to resume employment without any intention of returning. The immediate filing of a complaint for illegal dismissal and prayer for reinstatement negates the claim of abandonment.
• Full Backwages — Under Article 279 of the Labor Code, as amended by R.A. 6715, an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time compensation was withheld up to the time of actual reinstatement. "Full backwages" means exactly that, without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of illegal dismissal.

• "The requirements of due process are satisfied where the parties are given the opportunity to submit position papers."
• "To succeed in pleading abandonment as a valid ground for dismissal, the employer must prove (1) the intention of an employee to abandon his or her employment and (2) an overt act from which such intention may be inferred; i.e., the employee showed no desire to resume his work."
• "The clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the 'deduction of earnings elsewhere' rule. Thus, a closer adherence to the legislative policy behind Rep. Act No. 6715 points to 'full backwages' as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal."

• Erectors vs. NLRC, 202 SCRA 597 — Followed. The Court cited this case to uphold the rule that moral and exemplary damages are excluded from the computation of the appeal bond under the NLRC's implementing rules.
• Bustamante vs. NLRC, G.R. No. 111651 — Followed. The Court relied on this ruling to lift the three-year restriction on the amount of backwages and other allowances, establishing that full backwages must be awarded without deducting earnings derived elsewhere.
• Jackson Building Condominium Corporation vs. NLRC, 246 SCRA 329 — Followed. Cited for the proposition that the immediate filing of an illegal dismissal complaint negates the employer's claim of abandonment.

• Article 223, Labor Code — Requires the posting of a cash or surety bond equivalent to the monetary award to perfect an employer's appeal. Applied to determine that the implementing rule's exclusion of damages from the bond computation is a valid contemporaneous construction.
• Rule VI, Section 6, 1990 NLRC Rules of Procedure — Excludes moral and exemplary damages and attorney's fees from the computation of the appeal bond. Applied to uphold the sufficiency of the employer's appeal bond.
• Rule V, Section 11, 1990 NLRC Rules of Procedure — Provides the consequences of non-appearance of parties at conferences or hearings. Discussed regarding the requirement of two successive unjustified absences during the respondent's turn to present evidence, though the Court ultimately held that due process was satisfied through the position papers filed.
• Article 279, Labor Code (as amended by R.A. 6715) — Provides security of tenure, entitling an illegally dismissed employee to reinstatement and full backwages inclusive of allowances and other benefits. Applied to grant full backwages without qualification from the time of dismissal to actual reinstatement.
• Article 291, Labor Code — Prescribes a three-year period for filing money claims arising from employer-employee relations. Interpreted as a prescriptive period for filing actions, not a limitation on the period for computing monetary claims such as service incentive leave pay.
• Section 2, Rule V, Book III, Implementing Rules and Regulations of the Labor Code — Entitles every employee who has rendered at least one year of service to a yearly service incentive leave of five days with pay. Applied to grant service incentive leave pay from December 16, 1975 up to the date of actual reinstatement.

Narvasa, C.J., Romero, Melo, and Francisco, JJ.