Italkarat 18, Inc. vs. Juraldine N. Gerasmio

An employee who alleges illegal dismissal bears the burden of proving the fact of dismissal by substantial evidence, and where the employer denies dismissal and presents a resignation letter, the employee must prove with clear, positive, and convincing evidence that the resignation was not voluntary but was actually a case of constructive dismissal. The burden shifts to the employer to prove the validity of the dismissal only after the fact of dismissal has been established; if there is no dismissal, there can be no question as to its legality or illegality.

Juraldine N. Gerasmio was an employee of Italkarat 18, Inc., a company engaged in manufacturing. He was hired as maintenance personnel on December 1, 1989, and was later designated as Maintenance Head and Tool and Die Maker. The employment relationship was governed by the Labor Code of the Philippines, particularly provisions on termination of employment, separation pay, and the modes of judicial review of labor cases. The case arose in the context of the statutory scheme where appeals from the National Labor Relations Commission to the Supreme Court were eliminated, making the special civil action for certiorari under Rule 65 the proper vehicle for judicial review of NLRC decisions before the Court of Appeals.

Juraldine N. Gerasmio was hired by Italkarat 18, Inc. as maintenance personnel on December 1, 1989, and was later designated as Maintenance Head and Tool and Die Maker. On January 13, 2009, Gerasmio filed a complaint for illegal dismissal, reinstatement, backwages, separation pay, declaration of the quitclaim and release as null and void, 13th month pay, litigation expenses, damages, and attorney's fees against the Company.

Gerasmio alleged that during and prior to the last quarter of 2008, the Company had repeatedly informed its employees of its proposed retrenchment program because it was suffering from serious business losses. He claimed that Noel San Pedro, the then Officer-In-Charge/Manager of the Company, informed him sometime in November 2008 that the Company was planning to retrench a substantial number of workers in the Maintenance and Tool and Die Section, and that if he opted to retire early, he would be given P170,000.00. San Pedro allegedly cautioned Gerasmio that if he did not accept the offer to retire early, the Company would eventually retrench or terminate him, in which case he might not receive anything. In light of this, Gerasmio executed and signed a resignation letter and quitclaim on November 20, 2008. He was told to return on November 25, 2008 to get his check worth P170,000.00, but was later informed by San Pedro that he would receive only P26,901.34. Through his lawyer, Gerasmio sent a demand letter dated November 25, 2008 demanding the P170,000.00 allegedly promised earlier. When the Company did not respond, he filed the complaint for illegal dismissal.

The Company, on the other hand, alleged that Gerasmio voluntarily resigned from his job. It admitted hiring him as maintenance personnel on December 1, 1989, but claimed that during the last year of his employment, Gerasmio took leaves of absence to process his papers for a possible seaman's job. The Company stated that on October 20, 2008, Gerasmio tendered his resignation and demanded payment of his separation pay on account of his long years of service. On November 6, 2008 and November 20, 2008, he executed and signed a waiver and quitclaim showing the computation of his receivables. He signed the voucher and received the check representing his last pay. He then sent a demand letter through his lawyer on November 28, 2008, for payment of P170,000.00 in addition to the amount already received, which the Company refused for lack of basis in law and in fact.

The Labor Arbiter ruled that Gerasmio was unlawfully dismissed, finding that he was forced to resign because of San Pedro's misrepresentation that he would be paid P170,000.00 as separation pay, and noting that in his quitclaim, Gerasmio still asserted his entitlement to whatever benefits may be due him. The NLRC reversed, finding that Gerasmio voluntarily resigned, noting that the resignation happened on October 20, 2008 while the alleged promise of San Pedro was made on November 20, 2008, or one month after, and that the quitclaim was valid and executed for a reasonable consideration. The Court of Appeals reversed the NLRC, finding that Gerasmio's resignation was not unconditional since he was demanding payment for his separation pay in accordance with the alleged company practice, and that the quitclaim would not bar Gerasmio's demand since he clearly stated therein that he was executing the quitclaim because he was in need of money.

• Finality of NLRC Decision: The Company argued that the CA should have dismissed Gerasmio's Petition for Certiorari because the NLRC Decision had already become final and executory, and an Entry of Judgment was already issued by the NLRC.
• Unconditional Resignation: The Company argued that the CA erred in ruling that the resignation letter was not unconditional and that it was conditioned on the payment of separation pay in accordance with company policy, which was not supported by evidence.
• Lack of Evidence of Promise: The Company argued that the CA erred in ruling that San Pedro promised Gerasmio a separation pay equivalent to fifteen days' salary for every year of service, which was not supported by any evidence.
• No Entitlement to Separation Pay: The Company argued that the CA erred in ruling that Gerasmio is entitled to separation pay despite the claim not being supported by evidence and the ruling being contrary to law.

• Questions of Fact: Gerasmio argued that the Company's petition should be dismissed for raising questions of fact and not law, since the Supreme Court is not a trier of facts.
• Constructive Dismissal: Gerasmio maintained that he was misled by the Company into resigning and that he was actually retrenched, and that the quitclaim was executed because he was in need of money.
• Company Practice: Gerasmio argued that it was a company practice to give resignees separation pay, relying on affidavits of two former employees of the Company.

• Jurisdiction over Final NLRC Decisions: Whether the Court of Appeals committed error when it did not dismiss the petition for certiorari despite the NLRC Decision having become final and executory.
• Voluntariness of Resignation: Whether the Court of Appeals committed error when it ruled that the resignation letter was not unconditional and that it was conditioned on the payment of separation pay in accordance with company policy.
• Alleged Promise of Separation Pay: Whether the Court of Appeals committed error when it ruled that San Pedro promised Gerasmio a separation pay equivalent to fifteen days' salary for every year of service.
• Entitlement to Separation Pay: Whether the Court of Appeals committed error when it ruled that Gerasmio is entitled to separation pay despite the claim not being supported by evidence.

• Jurisdiction over Final NLRC Decisions: No. The CA committed no error in taking cognizance of the petition for certiorari. The final and executory nature of NLRC decisions is precisely what makes a special civil action of certiorari applicable, since appeals from the NLRC to the Supreme Court were eliminated, and the petition was filed within the 60-day reglementary period under Rule 65.
• Voluntariness of Resignation: No. The CA erred in ruling that the resignation was conditional. Gerasmio failed to prove the fact of dismissal, whether actual or constructive, and the resignation letter and quitclaim bearing his signature stand as evidence of voluntary resignation.
• Alleged Promise of Separation Pay: No. The CA erred in ruling that San Pedro promised separation pay. Gerasmio's allegations of coercion and intimidation were uncorroborated and self-serving, and he failed to prove with particularity the alleged acts that led him to resign.
• Entitlement to Separation Pay: No. The CA erred in awarding separation pay. As a general rule, the law does not require employers to pay resigned employees separation pay unless there is a contract or company practice to that effect, and Gerasmio failed to prove either.

• Jurisdiction over Final NLRC Decisions: The Court explained that jurisprudence is replete with rulings that final and executory NLRC decisions may be subject of a petition for certiorari. Citing St. Martin Funeral Home vs. National Labor Relations Commission, the Court noted that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC. The Court further cited Panuncillo vs. CAP Philippines, Inc. for the proposition that even if the NLRC decision has become final and executory, the adverse party is not precluded from availing of the remedy of certiorari under Rule 65. The doctrine of immutability of judgment is not violated when a party elevates a matter to the CA. Since the petition for certiorari was filed within the 60-day reglementary period, the CA acted in accordance with the law.

• Voluntariness of Resignation: The Court held that in illegal dismissal cases, while the burden of proof is on the employer in proving the validity of dismissal, the fact of dismissal, if disputed, must be duly proven by the complainant. Citing Machica vs. Roosevelt Services Center, Inc., the Court stated that one who alleges a fact has the burden of proving it, and the evidence to prove this fact must be clear, positive, and convincing. The Court also cited Galang vs. Boie Takeda Chemicals Inc. for the proposition that the employee has the burden to prove first the fact of dismissal by substantial evidence, and only then does the burden shift to the employer. Applying these principles, the Court found that Gerasmio failed to prove the fact of dismissal, relying primarily on uncorroborated and self-serving allegations, especially considering the existence of a resignation letter and quitclaim both bearing his signature. Citing Gemina, Jr. vs. Bankwise, Inc., the Court held that bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence. Citing Gan vs. Galderma Philippines, Inc., the Court held that where the employee submits a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal, and that it is a product of coercion or intimidation. The Court observed that the evidence on record showed that Gerasmio had already intended to resign in 2008, even earlier than October, as he requested multiple leaves usually for processing of his papers for work abroad.

• Alleged Promise of Separation Pay: The Court found that Gerasmio failed to prove with particularity the alleged acts of coercion and intimidation which led him to resign. The Court noted that the NLRC found that San Pedro could not have persuaded Gerasmio to resign since the resignation happened on October 20, 2008 while the alleged promise of San Pedro was made on November 20, 2008, or one month after. The Court held that it is not enough for Gerasmio to allege that he was threatened and thereafter misled to resign; he must prove with particularity the alleged acts of coercion and intimidation.

• Entitlement to Separation Pay: The Court held that as a general rule, the law does not require employers to pay employees that have resigned any separation pay, unless there is a contract that provides otherwise or there exists a company practice of giving separation pay to resignees. The Court found that Gerasmio failed to prove that a contract exists between him and the Company regarding separation pay, as defined in Article 1305 of the Civil Code as a meeting of the minds. The resignation letter merely showed that Gerasmio believed he was entitled to separation pay but was not demanding a certain amount, and his resignation was irrevocable and patently unconditional. The subsequent demand letter was a mere afterthought resulting from disappointment when the amount reflected in the check did not match his expectations. Regarding company practice, the Court agreed with the NLRC's findings that there was no company practice, as the affidavits presented by Gerasmio were made by former employees who were not in the same department or job position as him. The Court gave more weight to the Company's affidavits as these were accompanied by final payslips of former employees who have resigned, including one who occupied the same job position as Gerasmio.

• Burden of Proof in Illegal Dismissal Cases — In illegal dismissal cases, the employer bears the burden of proving the validity of dismissal; however, the fact of dismissal, if disputed, must first be proven by the complainant. The employee has the burden to prove first the fact of dismissal by substantial evidence, and only when dismissal is established does the burden shift to the employer to prove that the dismissal was for just and/or authorized cause. The logic is simple — if there is no dismissal, there can be no question as to its legality or illegality. The Court applied this doctrine in finding that Gerasmio failed to prove the fact of dismissal, given the existence of a resignation letter and quitclaim bearing his signature.

• Constructive Dismissal — An act, to be considered as amounting to constructive dismissal, must be a display of utter discrimination or insensibility on the part of the employer so intense that it becomes unbearable for the employee to continue with his employment. Where the employee submits a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal, and that it is a product of coercion or intimidation. The Court applied this doctrine in finding that Gerasmio's bare allegations of being threatened and misled were insufficient to establish constructive dismissal.

• Separation Pay for Voluntary Resignees — As a general rule, the law does not require employers to pay employees that have resigned any separation pay, unless there is a contract that provides otherwise or there exists a company practice of giving separation pay to resignees. A company's practice of paying separation pay to resignees must be proven to exist as this is an exception to the general rule. The Court applied this doctrine in denying Gerasmio's claim for separation pay, as he failed to prove either a contract or a company practice.

• Certiorari as Remedy Against Final NLRC Decisions — The final and executory nature of NLRC decisions is precisely what makes a special civil action of certiorari applicable to such decisions, considering that appeals from the NLRC to the Supreme Court were eliminated. Even if the NLRC decision has become final and executory, the adverse party is not precluded from assailing it via Petition for Certiorari under Rule 65 before the Court of Appeals and then to the Supreme Court via a Petition for Review under Rule 45. The doctrine of immutability of judgment is not violated when a party elevates a matter to the CA.

• "The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners." — This passage from Machica v. Roosevelt Services Center, Inc. establishes the foundational rule on burden of proof in illegal dismissal cases where the employer denies dismissal, and was the controlling principle in the Court's analysis.

• "It is true that in constructive dismissal cases, the employer is charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. However, it is likewise true that in constructive dismissal cases, the employee has the burden to prove first the fact of dismissal by substantial evidence. Only then when the dismissal is established that the burden shifts to the employer to prove that the dismissal was for just and/or authorized cause. The logic is simple — if there is no dismissal, there can be no question as to its legality or illegality." — This passage from Galang v. Boie Takeda Chemicals Inc. articulates the sequential burden-shifting framework in constructive dismissal cases, which the Court applied to require Gerasmio to first prove the fact of dismissal.

• "It is a well-settled rule, however, that before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence." — This passage from Philippine Rural Reconstruction Movement (PRRM) v. Pulgar, as cited in Gemina, Jr. v. Bankwise, Inc., underscores the requirement of substantial evidence to establish constructive dismissal, which Gerasmio failed to provide.

• "Since Gan submitted a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal; that it is a product of coercion or intimidation. He has to prove his allegations with particularity." — This passage from Gan v. Galderma Philippines, Inc. sets the standard of proof required of an employee who submits a resignation letter but later claims constructive dismissal, which the Court applied to Gerasmio's case.

• St. Martin Funeral Home vs. National Labor Relations Commission, 356 Phil. 811 (1998) — Controlling precedent establishing that the special civil action of certiorari is the proper vehicle for judicial review of decisions of the NLRC, and that the Court of Appeals can review the factual findings or legal conclusions of the NLRC. The Court relied on this case to uphold the CA's jurisdiction over the petition for certiorari despite the finality of the NLRC Decision.

• Panuncillo vs. CAP Philippines, Inc., 544 Phil. 256 (2007) — Followed for the proposition that even if the NLRC decision has become final and executory, the adverse party is not precluded from assailing it via Petition for Certiorari under Rule 65 before the Court of Appeals and then to the Supreme Court via a Petition for Review under Rule 45.

• Machica vs. Roosevelt Services Center, Inc., 523 Phil. 199 (2006) — Followed for the rule that one who alleges a fact has the burden of proving it, and that the employer bears the burden of proof in illegal dismissal cases only when the employer admits the dismissal but claims it was for valid cause.

• Galang vs. Boie Takeda Chemicals Inc., 790 Phil. 582 (2016) — Followed for the proposition that in constructive dismissal cases, the employee has the burden to prove first the fact of dismissal by substantial evidence before the burden shifts to the employer.

• Gemina, Jr. vs. Bankwise, Inc., 720 Phil. 358 (2013) — Followed for the rule that bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence, and that an act amounts to constructive dismissal only when it displays utter discrimination or insensibility so intense that it becomes unbearable for the employee to continue employment.

• Gan vs. Galderma Philippines, Inc., 701 Phil. 612 (2013) — Followed for the rule that where the employee submits a resignation letter, he must prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal, and that it is a product of coercion or intimidation.

• Travelaire Tours Corporation vs. National Labor Relations Commission, 355 Phil. 932 (1998) — Followed for the rule that a company's practice of paying separation pay to resignees must be proven to exist as an exception to the general rule that employees who voluntarily resign are not entitled to separation pay.

• Univac Development, Inc. vs. Soriano, 711 Phil. 516 (2013) — Cited for the proposition that the doctrine of immutability of judgment is not violated when a party elevates a matter to the CA.

• Article 223, Labor Code — The provision governing the finality of NLRC decisions, which become final and executory after the lapse of ten calendar days from receipt thereof by the parties. The Court noted that this finality is precisely what makes the special civil action of certiorari applicable to NLRC decisions.

• Article 1305, Civil Code — Defines a contract as a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. The Court applied this provision in finding that Gerasmio failed to prove the existence of a contract regarding separation pay.

• Rule 45, Rules of Court — The procedural rule governing Petitions for Review on Certiorari to the Supreme Court, under which the Company filed its petition.

• Rule 65, Rules of Court — The procedural rule governing the special civil action for certiorari, which the Court held to be the proper vehicle for judicial review of NLRC decisions before the Court of Appeals, with a 60-day reglementary period.

Perlas-Bernabe, Senior Associate Justice (Chairperson), and Inting, J., concurred. Delos Santos, J., was on official leave. Baltazar-Padilla, J., was on leave.

N/A — No dissenting opinions were noted in the provided case text.