Lusabia vs. Super K Drug Corporation

Abandonment requires proof of both unjustified refusal to report for work and a deliberate intent to sever the employer-employee relationship, and mere absence — even after an unreceived return-to-work notice — does not establish abandonment, while the employer bears the burden of proving both just cause for dismissal and payment of wages. Because receipt of the notices was not established and the prompt filing of labor complaints contradicted intent to abandon, the dismissals were illegal for failure of substantive and procedural due process.

Super K Drug Corporation, owned by Kristine Y. Garcellano and Marco Y. Garcellano, operated Super K Drug Store through branches including Roxas City and New Farmers Plaza. Robe Ann B. Lusabia, Percival Contreras, Nida Acsayan, Flor Alimonsurin, Lito Denaga, Reggie Vergabera, and Sheila Marie A. Barrera were its employees, hired or transferred to the New Farmers Plaza branch on separate occasions within 2007 to 2011.

The seven petitioners worked for Super K Drug Store owned by Kristine and Marco Garcellano, having been hired or transferred to the New Farmers Plaza branch on separate dates: Alimonsurin on January 31, 2007, Acsayan on November 17, 2007, Vergabera on August 4, 2010, Contreras on August 15, 2010, Barrera on January 6, 2011, and Lusabia and Denaga transferred in March 2011 and June 2011, respectively. In January 2012 they received daily wages ranging from P350.00 to P400.00. According to petitioners, they were not given copies of pay slips but were forced to sign payrolls reflecting higher amounts than actually received, under threat of withholding salaries; they also alleged being made to shoulder losses from thefts and robberies despite pleas for a security guard, and P500.00 monthly deductions as cash bond that were released in full at year-end until 2010 when releases stopped.

In January 2012 petitioners filed a labor complaint for money claims before the NLRC-Single Entry Approach. Before conclusion of those proceedings, Lusabia was instructed to proceed to Kristine's residence where, as alleged, she was forced to withdraw the complaint on pain of dismissal; Barrera and Contreras were given the same order on another occasion. The three refused and, as alleged, were dismissed and prohibited from entering the premises under threat of trespass charges. After the second SENA hearing, Kristine met all seven petitioners and announced willingness to pay salary differentials but no overtime pay. Petitioners then sought assistance from the Trade Union Congress of the Philippines to file with the NLRC, after which, as alleged, the remaining four — Acsayan, Alimonsurin, Denaga, and Vergabera — were also dismissed. The complaint was amended to include illegal dismissal.

Respondents denied barring petitioners from work, asserting that petitioners stopped reporting on February 1, 2012 and that Return to Work Notices dated February 6, 2012 and February 27, 2012 were sent by registered mail during the SENA pendency, to which none replied and no settlement was reached. The Labor Arbiter credited the notices and signed payrolls and dismissed the case for unproven dismissal and payment in accordance with law. On appeal, the NLRC found non-receipt of the notices, suspicious failure to furnish them personally during SENA hearings held on February 3, 10, and 22, March 22 and 29, and April 17 and 24, 2012, and underpayment shown by SSS Employee Static Information, ordering reinstatement and monetary awards. The Court of Appeals restored the Labor Arbiter's dismissal, relying on disobedience to the directives, signed payrolls as best evidence, and photographs as insufficient proof of deductions.

• Illegal Dismissal and Abandonment: Petitioner argued that abandonment could not be inferred, having manifested willingness to return to work at conciliation, eventually filed an illegal dismissal suit, and never received the return-to-work notices whose sending by registered mail during conciliation was peculiar and questionable.
• Return-to-Work Notices as Afterthought: Petitioner maintained that absent proof of receipt, the notices only bolstered prevention from returning to work, respondents having failed to personally furnish them during conciliation and to prove receipt.
• Underpayment and Labor Benefits: Petitioner argued that SSS Employee Static Information deserved credence as contradicting the regularity of the payroll, corroborated by sinumpaang salaysay of former employees that signing of inaccurate payrolls was forced, entitling them to salary differentials, commuted unused service incentive leaves, 13th month pay, and reimbursement of unauthorized deductions.

• Return to Work and Abandonment: Respondent countered that petitioners were told to return to work and that notices sent by registered mail were duly received, as shown by registry receipts and return cards, with sending during conciliation showing willingness to accept petitioners back.
• Payment of Wages: Respondent argued that SSS Employee Static Information only showed remittances and not actual amounts received, while signed payrolls were the best evidence of correct payment, doubting disparity claims undisputed over one to four years of employment.
• Other Money Claims: Respondent argued that all other money claims should be denied for lack of proof that salary deductions were made.

• Abandonment and Illegal Dismissal: Whether petitioners abandoned their employment by failing to comply with return-to-work notices or were illegally dismissed without substantive and procedural due process.
• Underpayment and Labor Benefits: Whether petitioners were underpaid and entitled to salary differentials, 13th month pay, service incentive leave benefits, and release of cash bonds.
• Illegal Deductions and Attorney's Fees: Whether salary deductions for lost store items were proven as illegal deductions and whether attorney's fees were due.

• Abandonment and Illegal Dismissal: Yes to illegal dismissal. No abandonment was proven absent receipt of return-to-work orders and deliberate intent to sever employment, and twin-notice requirements were unobserved.
• Underpayment and Labor Benefits: Yes. Incomplete payrolls failed to discharge the employer's burden of proving payment, entitling petitioners to differentials under applicable wage orders, 13th month pay, service incentive leave, and unreleased cash bonds from 2010.
• Illegal Deductions and Attorney's Fees: No to deductions for lack of evidence, but Yes to attorney's fees at 10% of the monetary award for unlawful withholding of wages.

• Abandonment and Illegal Dismissal: Receipt of the February 6, 2012 notices was unproven because registry return cards lacked signatures of petitioners or authorized persons and postmaster certification, with all notices sent to one address at 87-D 7th Avenue Murphy Socorro, Cubao, QC and two envelopes marked RTS and RTS 3-26-12 without proof of resending. Failure to furnish the notices personally during SENA hearings attended by petitioners rendered them mere afterthoughts attempting to cure the absence of any prior order to return. Filing first for underpayment and benefits and later amending to include illegal dismissal after being denied entry, plus reporting after SENA appearances, negated deliberate intent to sever; mere absence, even after a notice to return, is insufficient. No notice to explain and termination notice having been given, both substantive and procedural due process failed, warranting a finding of illegal dismissal with separation pay in lieu of reinstatement due to strained relations.
• Underpayment and Labor Benefits: The employer's payrolls from May 2009-January 2011 for Roxas City and March 2007-December 2011 for New Farmers Plaza were incomplete, reflecting only Denaga for Roxas despite Denaga and Lusabia's assignment there, mostly only Acsayan and Alimonsurin for New Farmers Plaza from March 2007-March 2011, and omitting some petitioners from June-December 2011 when all seven were already at that branch. Such records, coupled with undisputed allegations of underpayment, could not establish payment pursuant to Wage Order Nos. RBVI-17, RBVI-18, NCR-15, and NCR-16. Non-payment of 13th month pay and service incentive leave was likewise unproven by the employer, and non-release of P500.00 cash bonds beginning 2010 was undisputed.
• Illegal Deductions and Attorney's Fees: The claim for salary deductions for lost items was rejected for lack of evidence, the photographs of an alleged robber not proving deductions were made. Attorney's fees at 10% were allowed pursuant to Article 111 of the Labor Code for unlawful withholding of wages.

• Burden of proof in dismissal cases — The employer bears the burden of proving that dismissal was for a just or authorized cause. Applied to reject abandonment where the employer failed to prove receipt of return-to-work notices and compliance with twin-notice requirements.
• Abandonment; two requisites — Abandonment requires (a) unjustified refusal to report for work and (b) deliberate intent to sever the employer-employee relationship, proven through overt acts viewed as a whole clearly showing discontinuance of employment; mere absence, even after a notice to return, is insufficient, and immediate filing of a labor complaint is inconsistent with abandonment. Applied to find no abandonment where grievances motivated the complaint, petitioners appeared at conciliation and reported thereafter, and intent to sever was absent.
• Burden of proof of payment of wages — The burden to prove payment rests on the employer because personnel files, payrolls, records, and remittances are in its custody and control. Applied to hold incomplete payrolls insufficient against claims of underpayment and non-payment of 13th month pay and service incentive leave.
• Separation pay in lieu of reinstatement — Where reinstatement would no longer serve any prudent purpose in view of strained relations, separation pay at one-month salary for every year of service, with a fraction of at least six months counted as one year, is awarded with full backwages. Applied to grant separation pay as prayed for by petitioners.
• Attorney's fees in wage cases — Attorney's fees at 10% of the monetary award are due pursuant to Article 111 of the Labor Code for unlawful withholding of wages. Applied to award fees on the differentials, benefits, and other sums due.

• "It is settled that the employer bears the burden of proving that the employee's dismissal is for a just or authorized cause." — States the controlling burden that framed rejection of the abandonment defense.
• "To prove abandonment, the employer must show that the employee unjustifiably refused to report for work and that the employee deliberately intended to sever the employer-employee relationship." — Gives the canonical two-part test for abandonment applied to the return-to-work and intent issues.
• "Mere absence from work, even after a notice to return, is insufficient to prove abandonment." — Supplies the rule negating abandonment from non-reporting alone, especially where receipt was unproven.
• "it is settled that the burden to prove payment rests on the employer because all pertinent personnel files, payrolls, records, remittances and other similar documents are in the custody and control of the employer." — Anchors the ruling that incomplete payrolls could not defeat claims of underpayment and unpaid benefits.

• Distribution & Control Products, Inc. vs. Santos, 813 Phil. 423 (2017) — Cited as authority for the employer's burden to prove just or authorized cause for dismissal.
• Charlie Hubilla vs. Hay Marketing Ltd. Co., 823 Phil. 358, 385-386 (2018) — Cited for the two requisites of abandonment.
• Demex Rattancraft, Inc. vs. Leron, 820 Phil. 693, 703 (2017) — Cited for proving intent to sever through overt acts viewed as a whole.
• Claudia's Kitchen, Inc. vs. Tanguin, 811 Phil. 784, 796 (2017) — Cited for the rule that mere absence even after notice to return does not prove abandonment.
• Minsola vs. New City Builders, Inc., 824 Phil. 866, 879 (2018) — Cited for the employer's burden to prove payment of salaries.
• Rivera vs. Genesis Transport Services, Inc., 765 Phil. 544, 561 (2015) — Cited for computation of separation pay at one month per year of service.

• Article 113, Labor Code of the Philippines — Prohibits wage deductions except for insurance with consent, union check-off, or authority of law or Secretary of Labor regulations; invoked for alleged deductions for lost items and cash bonds, with only the undisputed unreleased cash bonds ordered reimbursed.
• Article 279 [renumbered as Article 294], Labor Code of the Philippines — Governs security of tenure and reliefs for illegal dismissal; basis for holding petitioners illegally dismissed and entitled to reinstatement/backwages, modified to separation pay.
• Article 111, Labor Code of the Philippines — Authorizes attorney's fees at 10% for unlawful withholding of wages; basis for the fee award.
• Wage Order No. RBVI-17, Wage Order No. RBVI-18, Wage Order No. NCR-15, Wage Order No. NCR-16 — Identified as applicable wage orders for computing salary differentials for the Roxas and NCR assignments.

Leonen, J. (Chairperson), Gesmundo, J., Zalameda, J., and Gaerlan, J., concur.