Gososo vs. Leyte Lumber Yard and Hardware, Inc.

Where an employee fails to prove by substantial evidence that he was dismissed, and the employer likewise fails to prove that the employee abandoned his work, the complaint for illegal dismissal must be dismissed, but the employee is entitled to reinstatement without payment of backwages; where reinstatement has become impossible or impracticable, equity warrants an award of separation pay equivalent to one (1) month salary for every year of service, computed up to the time the employee stopped working.

Leyte Lumber Yard and Hardware, Inc. is a construction supply and hardware store; Ruben L. Yu served as its general manager, and Fernando C. Gososo was hired as a sales representative working from Mondays to Saturdays, 7:00 A.M. to 5:00 P.M., at a daily salary of P220.00. As a matter of company policy, sales representatives were barred from retrieving items or stocks from the storage area by themselves, were required to course orders through authorized checkers before release, were prohibited from leaving their designated work areas without their superior's consent, and were required to submit applications for leave days before the intended dates to allow management time to approve the application and adjust the workforce and workload.

Leyte Lumber Yard and Hardware, Inc., a construction supply and hardware store, employed Fernando C. Gososo as a sales representative under the general management of Ruben L. Yu. Gososo worked from Mondays to Saturdays, from 7:00 A.M. to 5:00 P.M., and received a daily salary of P220.00. As a matter of company policy, sales representatives were prohibited from getting items or stocks from the storage area by themselves and were required to course orders through authorized checkers before items were released; they were likewise prohibited from leaving their designated work areas without their superior's consent, and were required to submit applications for leave days before the intended dates so that management could approve the application and adjust the workforce and workload.

Gososo allegedly overstepped these boundaries on two occasions. On October 6, 2008, while on his way to the stock room to follow up on a customer's urgent order, Yu stopped him. The following day, Yu saw Gososo step out of the store to check the availability of a ball caster with a customer's specifications in the storage area. Yu then required Gososo to produce a letter of apology for the two incidents under pain of dismissal. Admitting fault, Gososo submitted a letter of apology to Yu on October 8, 2008, explaining that he was merely doing his job for the company's clients and never intended to neglect his duties or disobey company policy. Yu allegedly refused to accept the letter and instructed Gososo to add the words "I am not supposed to approach the checker" and "I promise again to ask permission from manager before I can go out." On October 9, 2008, Gososo submitted the revised letter of apology, and Yu told him to come back the next day.

When Gososo returned to work on October 11, 2008, Yu allegedly told him to sign a prepared document. Gososo declined because the document contained admissions of offenses he did not commit. Irked by the refusal, Yu allegedly informed him of his termination from work and even threw a pair of scissors at him, which missed. Aggrieved, Gososo filed a Complaint on October 13, 2008 for illegal constructive dismissal against respondents, together with claims for non-payment of salary, overtime pay, premium pay for holiday and rest day allowance, vacation and sick leave pay, separation pay, moral damages, and attorney's fees.

Respondents presented a different account. In their Position Paper, they asserted that Gososo failed to ensure the integrity of transactions and secure company stocks, and that a company security guard attested that on October 7, 2008 she saw Gososo leave his designated work area. On October 10, 2008, Gososo submitted a letter admitting his transgressions, and on the same day respondents issued him a Memorandum reminding him of the company policies he had violated and warning that further violations would merit dismissal from work; Gososo refused to acknowledge receipt of the Memorandum. Respondents confirmed that Gososo was reprimanded on October 10, 2008 for violating standard operating procedures and established company policies, and claimed that on the same date Gososo filed a leave of absence for October 11, 2008 purportedly to attend his son's graduation, in disregard of the rule requiring leave applications to be filed and approved days before the actual date of leave. According to respondents, Gososo went on an unapproved leave on October 11, 2008 and even extended his absence, prompting them to issue another Memorandum on October 13, 2008 requesting him to report back to work, failing which he would be considered to have abandoned his work. Gososo did not report back to work.

The Executive Labor Arbiter found that Gososo had from the very start no intention of keeping his position and had overtly planned to leave his employment because he could no longer endure the "tyrannical management" of Yu, and concluded that Gososo could not have been dismissed or become the target of a pair of scissors thrown by Yu on October 11, 2008 simply because he was not around, having continued on his unapproved leave to attend his son's graduation. The NLRC, interpreting all the prevailing circumstances in Gososo's favor, found that Yu had terminated Gososo and that the latter took immediate steps to protest his lay-off, facts which negated any claim of abandonment. The Court of Appeals, in turn, held that Gososo's claim of illegal dismissal was supported only by his bare and self-serving allegations and that there was no evidence he was dismissed in the first place, adopting a substantial portion of the Arbiter's Decision.

• Abandonment and the Effect of Unapproved Leave: Gososo disputed the Court of Appeals' reliance on the Arbiter's conclusion that he abandoned his work on October 11, 2008, maintaining that it was incorrect to assume he persisted in not reporting for work on that date even if his leave application was not approved; he argued that his going on an unauthorized leave was not tantamount to abandonment of work.
• Fact of Dismissal: Petitioner maintained that on the morning of October 11, 2008, respondent Yu insisted that he sign a Memorandum setting out acts he did not commit, and that when he refused, Yu fired him from his post; from that point on, there was no need to follow up on the approval or non-approval of his leave application because he knew he had no job to return to. He attended his son's graduation in the late afternoon of October 11, 2008 and filed the complaint for illegal dismissal on the next working day, October 13, 2008.
• Burden of Proof on the Employer: Petitioner insisted that the appellate court should have considered his immediate filing of the illegal dismissal complaint as negating the charge of abandonment, and that respondents bore the burden of proving a deliberate and unjustified refusal on his part to resume employment without any intention of returning — a burden they failed to discharge.
• Bullying and Outright Dismissal: Petitioner argued that he reported for work on October 11, 2008 but was bullied into signing an incriminating document, and that upon his refusal to sign the same he was dismissed from work outright.

• Abandonment of Work: Respondents countered that the Arbiter and the appellate court correctly found that petitioner really abandoned his work, stressing that he could not conform to the "tyrannical management of men" by Yu, that he pushed through with his unauthorized leave of absence by not reporting for work beginning October 11, 2008, and that he never returned for work thereafter.
• Absence of Illegal Dismissal: Respondents maintained that petitioner was not illegally dismissed.

• Abandonment and Legality of Dismissal: Whether the Court of Appeals correctly determined that petitioner Gososo abandoned his work and was legally dismissed by respondents Leyte Lumber and Yu.
• Separation Pay and Money Claims: Whether petitioner is entitled to separation pay and his other money claims.

• Abandonment and Legality of Dismissal: No. The dismissal of the illegal dismissal complaint stands because petitioner failed to establish by substantial evidence the fact of dismissal, but the finding of abandonment cannot be sustained, respondents having failed to discharge their burden of proving a deliberate and unjustified refusal to resume employment.
• Separation Pay and Money Claims: Yes, in part. Although no dismissal, whether legal, illegal, or constructive, was established, the correlative finding of lack of abandonment entitles petitioner to reinstatement without payment of backwages; reinstatement being impossible, separation pay of P63,360.00 is awarded in lieu thereof, with six percent (6%) interest per annum from finality. The remaining money claims were not awarded.

• Abandonment and Legality of Dismissal: The burden of proving a claim falls on the party alleging its affirmative, and in labor cases substantial evidence — that amount of evidence a reasonable mind might accept as adequate to support a conclusion — is the basic minimum of required proof. In illegal dismissal cases, the employee must first establish by substantial evidence the fact of dismissal before the employer is charged with the burden of proving its legality. Petitioner never proved that he was dismissed in the first place; his allegation that Yu terminated him on October 11, 2008 upon his refusal to sign a prepared document, and even threw sharp scissors at him, barely measured up to the minimum evidential requirement, and mere acts of hostility, however grave, committed by the employer towards the employee cannot on their lonesome be construed as an overt directive of dismissal from work. Assuming dismissal, petitioner still failed to demonstrate that it was constructive. Under Doctor vs. Nii Enterprises, constructive dismissal is a "dismissal in disguise" or an act amounting to dismissal but made to appear as if it were not; it exists where there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as in an offer involving demotion in rank and diminution in pay, or where continued employment has become so unbearable because of acts of clear discrimination, insensibility, or disdain by the employer that the employee has no choice but to resign — what is essentially lacking being the voluntariness of the employee's separation. Petitioner's claim that he was forced to sign a prepared incriminatory letter and then fired when he refused did not fit this definition, and no proof other than his bare allegations supported it; bare allegations deserve no legal credit for being self-serving. Even if corroborated, Yu's rebuke, while overbearing and intimidating, was reasonably incited by petitioner's violations of Leyte Lumber's company practices and could not be considered tantamount to unequivocal acts of discrimination, insensibility, or disdain as to render continued employment unbearable. The Court therefore found no working basis to declare that petitioner had been dismissed, whether legally, illegally, or constructively. At the same time, petitioner was not guilty of abandonment. Abandonment requires the concurrence of two requisites: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason, and (2) there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. Abandonment is a matter of intention and cannot lightly be presumed from equivocal acts; absence must be accompanied by overt acts pointing definitely to the fact that the employee simply does not want to work anymore, and the burden of proof to show an unjustified refusal to go back to work rests on the employer. Respondents did not discharge this burden. They merely surmised that petitioner had no intent to return to work when he allegedly went on an unapproved leave of absence on October 11, 2008, of which respondents were themselves the approving authority; no attendance sheet of any sort was submitted to substantiate the claim, and it was not shown that respondents actually denied the leave application and made the disapproval known to petitioner. There was no evidence or mention of the exact number of required days before employees could properly file their leave applications, nor was it established whether this policy had ripened into company practice; to merely state that employees must file their applications "days before" their intended dates of absence is too self-serving to be given credit, and the records failed to show with clarity whether petitioner had truly violated the rule of prior notice, especially when the leave application was not even dated. It was more curious, and misleading even, for respondents to impress upon the Court that petitioner had absented himself for a prolonged period, when it was on October 11, 2008, a Saturday, that petitioner supposedly absented himself, and it was just on October 13, 2008, the immediately succeeding Monday, that respondents declared his post to be in danger of being considered abandoned. Moreover, while respondents issued the October 13, 2008 Memorandum requiring petitioner to return to work, the records did not disclose whether petitioner was actually furnished copies of it; to claim that petitioner blatantly disregarded the return-to-work order when he was never shown to have received a copy spoke volumes of his vague intent to abandon his work and of respondents' attempt to tweak the facts in their favor. Mere absence or simple failure to report for work is not abandonment, more so if the employee was able to lodge his complaint before the labor tribunals with haste; an immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement, is inconsistent with a charge of abandonment, and employees who take steps to protest their alleged dismissal cannot be said to have abandoned their work.
• Separation Pay and Money Claims: Where the employee fails to prove the fact of his or her illegal dismissal, and the employer has also not demonstrated that the employee abandoned his or her work, the case usually ends with the employee's reinstatement without the payment of backwages. Should reinstatement be rendered impossible by strained relations of the parties, become unreasonable with the passage of time since the legal controversy, or otherwise attained impossibility or impracticability due to prevailing circumstances, equity impels the Court to award the petitioner separation pay equivalent to one-month salary for every year of service, computed up to the time he stopped working for respondents. The Court has had occasion to withhold the grant of separation pay where there was no dismissal, no abandonment, and reinstatement was no longer feasible, and in earlier cases with similar factual backgrounds it had been ruled that the parties shall bear their respective losses and are placed on equal footing; a slew of more recent and analogous cases, however, dictated the trend favoring such award of separation pay. In AIP Construction vs. Marquina, respondents were initially directed to be reinstated to their former work, but considering the length of time that had passed and the impossibility and unreasonableness of an order of reinstatement, the Court instead awarded them separation pay of one (1)-month salary for every year of service up to the time respondents stopped working; a similar directive was issued in Doctor, where the Court considered the respondent employers' own allegations that they had already reduced their workforce and that the petitioning employees had no more place in the company. In Dee Jay's Inn and Cafe vs. Raneses, it was emphasized that where the employee was neither found to have been dismissed nor to have abandoned work, the general course of action is for the tribunals to dismiss the complaint, direct the employee to return to work, and order the employer to re-accept the employee; citing Nightowl Watchman & Security Agency, Inc. vs. Lumahan, if a considerable length of time had already passed — ten years in the case of Dee Jay's Inn — and reinstatement of the dismissed employee is rendered impossible, an award of separation pay is proper in lieu of reinstatement, equivalent to one (1)-month salary per year of service up to the time the employee stopped working. Here, petitioner alleged that he had been under respondents' employ since 1991 but presented no substantiating proof; his Social Security System Employment History showed that his employment with Leyte Lumber commenced only on January 1, 1996. For want of records and evidence, the computation of separation pay was reckoned only from 1996 until the time petitioner stopped reporting for work in 2008. With six (6) workdays per week and twenty-four (24) workdays per month at a daily wage of P220.00, the monthly wage is P5,280.00; multiplied by twelve (12) years of employment from January 1996 to October 2008, the total separation pay is P63,360.00, which shall bear interest at the rate of six percent (6%) per annum from date of finality of the Decision until fully paid.

• Burden of Proof and Substantial Evidence in Illegal Dismissal Cases — The burden of proving a claim falls on the party alleging its affirmative. In labor cases, substantial evidence — that amount of evidence a reasonable mind might accept as adequate to support a conclusion — is the basic minimum of required proof. In illegal dismissal cases, the employee must first establish by substantial evidence the fact of dismissal before the employer is charged with the burden of proving its legality. The Court applied this rule to hold that Gososo's bare allegations of termination failed to establish the fact of dismissal, so the burden never shifted to respondents.
• Constructive Dismissal — Constructive dismissal is a "dismissal in disguise," or an act amounting to dismissal but made to appear as if it were not. It exists where there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as in an offer involving a demotion in rank and a diminution in pay; in some cases, even without demotion or diminution in pay, constructive dismissal may exist when continued employment has become so unbearable because of acts of clear discrimination, insensibility, or disdain by the employer that the employee has no choice but to resign. What is essentially lacking in both definitions is voluntariness in the employee's separation from employment. The Court held that Yu's rebuke, while overbearing and intimidating, was reasonably incited by petitioner's violations of company practices and did not amount to unequivocal acts of discrimination, insensibility, or disdain.
• Abandonment of Work — Abandonment requires the concurrence of two requisites: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. Abandonment is a matter of intention and cannot lightly be presumed from equivocal acts; absence must be accompanied by overt acts pointing definitely to the fact that the employee simply does not want to work anymore. The burden of proof to show an unjustified refusal to go back to work rests on the employer. Mere absence or simple failure to report for work is not abandonment, more so where the employee lodges a complaint before the labor tribunals with haste; an immediate filing of a complaint for illegal dismissal, particularly one including a prayer for reinstatement, is inconsistent with a charge of abandonment.
• Separation Pay in Lieu of Reinstatement Where Neither Dismissal Nor Abandonment Is Established — Where the employee fails to prove the fact of illegal dismissal and the employer has also not demonstrated abandonment, the case usually ends with the employee's reinstatement without payment of backwages. Should reinstatement be rendered impossible by strained relations, become unreasonable with the passage of time, or otherwise attained impossibility or impracticability, equity impels the award of separation pay equivalent to one (1) month salary for every year of service, computed up to the time the employee stopped working. The Court applied this doctrine, awarding P63,360.00 in lieu of reinstatement, with six percent (6%) interest per annum from finality.

• "Mere acts of hostility, however grave, committed by the employer towards the employee cannot on their lonesome be construed as an overt directive of dismissal from work." — This passage states the ratio for the finding that no dismissal occurred; it explains why the alleged throwing of scissors and Yu's rebuke did not, by themselves, establish termination.
• "Abandonment requires the concurrence of the following: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts." — This is the canonical formulation of the two requisites of abandonment applied in the case, and is the standard cited in subsequent labor jurisprudence.
• "Where the employee fails to prove the fact of his or her illegal dismissal, and the employer has also not demonstrated that the employee abandoned his or her work, the case usually ends with the employee's reinstatement without the payment of backwages." — This passage articulates the controlling remedy where both dismissal and abandonment fail, and serves as the premise for the award of separation pay in lieu of reinstatement.
• "An immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement, is inconsistent with a charge of abandonment." — This passage supplies the decisive reason for rejecting respondents' abandonment theory, given that Gososo filed his complaint on October 13, 2008, the next working day after the alleged incidents.

• Doctor vs. Nii Enterprises, 821 Phil. 251 (2017) — Controlling precedent supplying the definition of constructive dismissal applied by the Court; also cited as authority for awarding separation pay in lieu of reinstatement where the employer's own allegations showed the petitioning employees had no more place in the company.
• Santos vs. U-Need Supermart, Inc., G.R. No. 202737, June 6, 2019 — Cited for the rule that the employee must first establish by substantial evidence the fact of dismissal, that absence must be accompanied by overt acts showing the employee does not want to work anymore, and that the burden of proving unjustified refusal to return to work rests on the employer.
• AIP Construction vs. Marquina, G.R. No. 229225, September 11, 2019 (Notice) — Cited as the recent trend awarding separation pay of one (1) month salary for every year of service where the length of time passed rendered reinstatement impossible and unreasonable.
• Dee Jay's Inn and Cafe vs. Raneses, 796 Phil. 574 (2016) — Cited for the general course of action where the employee was neither dismissed nor found to have abandoned work: dismissal of the complaint, a directive to return to work, and an order for the employer to re-accept the employee; also cited for the ten-year period that justified separation pay in lieu of reinstatement.
• Nightowl Watchman & Security Agency, Inc. vs. Lumahan, 771 Phil. 391 (2015) — Cited in Dee Jay's Inn for the rule that where a considerable length of time has passed and reinstatement is impossible, an award of separation pay equivalent to one (1)-month salary per year of service is proper in lieu of reinstatement.
• Tan Brothers Corporation of Basilan City vs. Escudero, 713 Phil. 392 (2013) — Cited for the rule that an immediate filing of a complaint for illegal dismissal, particularly with a prayer for reinstatement, is inconsistent with a charge of abandonment.
• Cosue vs. Ferritz Integrated Development Corporation, 814 Phil. 77 (2017) — Cited for the principle that the burden of proving a claim falls on the party alleging its affirmative.
• Noblejas vs. Italian Maritime Academy Phils., Inc., 735 Phil. 713 (2014) — Cited, through Santos vs. U-Need Supermart, Inc., for the substantial-evidence standard in labor cases.
• Pu-od vs. Ablaze Builders, Inc., 820 Phil. 1239 (2017) — Cited for the rule that abandonment is a matter of intention and cannot lightly be presumed from equivocal acts.
• Josan vs. Aduna, 682 Phil. 641 (2012) — Cited, through Pu-od, for the same rule on the presumption against abandonment.
• Galang vs. Boie Takeda Chemicals, Inc., 790 Phil. 582 (2016) — Cited, through Doctor, as authority for the definition of constructive dismissal.
• HSY Marketing Ltd., Co. vs. Villastique, 793 Phil. 560 (2016); Exodus International Construction Corporation vs. Biscocho, 659 Phil. 142 (2011); Leonardo vs. National Labor Relations Commission, 389 Phil. 118 (2000) — Cited as the earlier cases in which the Court withheld separation pay where there was no dismissal, no abandonment, and reinstatement was no longer feasible, with the parties bearing their respective losses and placed on equal footing.

• Section 4(b), Rule I, Book Six, Omnibus Rules Implementing the Labor Code — Provides that a fraction of at least six (6) months shall be considered as one whole year. The Court applied this rule in reckoning petitioner's twelve (12) years of service from January 1996 to October 2008 for purposes of computing separation pay.
• Section 4, Rule 45, Rules of Court — Cited in the footnote to the case caption as the basis for dropping the Court of Appeals as party-respondent in the Petition for Review on Certiorari.

Leonen (Chairperson), Carandang, Inting, and Rosario, JJ., concurred in the Decision.