Noblejas vs. Italian Maritime Academy Phils., Inc.

An employee who performs work necessary or desirable to the employer's usual business and who continues working beyond the stipulated contractual period attains regular employment status. However, the fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss, and the employee bears the initial burden of proving the fact of dismissal by substantial evidence before the employer's burden to justify the termination arises.

Petitioner Dionarto Q. Noblejas was employed by respondent Italian Maritime Academy Phils., Inc. (IMAPI), a training center for seamen and an assessment center for determining the qualifications and competency of seamen and officers for possible promotion. Capt. Nicolo S. Terrei was IMAPI's Managing Director, Raceli B. Ferrez was his secretary, and Ma. Teresa R. Mendoza was the company's Administrative Manager. IMAPI President Procerfina SA. Terrei appointed Noblejas as training instructor/assessor on a contractual basis for three months effective May 20, 2009, with a monthly salary of ₱75,000.00 inclusive of tax.

Petitioner Dionarto Q. Noblejas was appointed by IMAPI President Procerfina SA. Terrei as training instructor/assessor on a contractual basis for three months effective May 20, 2009, with a monthly salary of ₱75,000.00 inclusive of tax. After the expiration of the three-month period, IMAPI rehired Noblejas for the same position with the same salary rate, but no written contract was drawn for his rehiring.

The absence of a written contract covering the renewal of his employment became Noblejas's major concern. On March 9, 2010, he wrote Capt. Terrei a letter requesting that a new contract be executed to reflect provisions he claimed they had agreed upon during a conversation on May 19, 2009: (1) that his monthly salary would be ₱75,000.00, tax excluded, with 50% of his SSS premium shouldered by the company; and (2) that after completion of his three-month contract, he would be given the option to choose either to be regularly employed as an instructor or to go on board a vessel with the company extending financial aid for processing pertinent documents, to be deducted from his salary. In the same letter, Noblejas intimated that he was electing to continue working as a regular instructor.

Noblejas averred that the company did not act on his letter-request, so he sought an audience with Capt. Terrei on March 16, 2010, during which an altercation ensued. He claimed that after that incident, Capt. Terrei instructed Ferrez to dismiss him, and when he asked Ferrez for a copy of his old contract, she allegedly replied, "No, you better pack up all your things now and go, you are now dismissed and you are no longer part in this office – clearly, you are terminated from this day on."

Respondents presented a different version. According to them, Noblejas got angry, hurled invectives against Ferrez, and threatened to file a case after she relayed Capt. Terrei's response to his March 9, 2010 letter — that there was no previous agreement to grant him tax refund, health insurance, and food, schooling and gasoline allowances, and that he had to render at least one year of service before the company could decide whether to accord him regular employee status. The following day, March 17, 2010, Noblejas did not report for work and instead filed the complaint. Respondents theorized that the complaint was filed on Noblejas's mistaken impression that the failure to meet his demands was tantamount to termination. They insisted he was not entitled to 13th month pay because he was hired as a consultant, and that they had already paid his sick leave pay in the aggregate amount of ₱21,075.00.

The Labor Arbiter gave credence to Noblejas's allegation that Capt. Terrei instructed Ferrez to terminate his employment, concluded that he was a regular employee entitled to proportionate 13th month pay, and awarded limited backwages and separation pay in lieu of reinstatement. The NLRC reversed, holding that there was no showing of any positive and overt act of dismissal and that Noblejas's claim was unsubstantiated; it was Noblejas who severed his employment after the company refused his demands. The Court of Appeals affirmed the NLRC, finding Noblejas a contractual employee and not illegally dismissed.

• Burden of Proof in Illegal Dismissal: Petitioner argued that in illegal dismissal cases, the burden of proving that an employee was not dismissed, or if dismissed, that the dismissal was not illegal, rests on the employer, and that respondents' failure to discharge this burden showed the dismissal was not justified.
• Effect of Filing Complaint: Petitioner averred that his act of immediately filing a complaint for illegal dismissal praying for reinstatement effectively negated any finding that he was disinterested in continuing his employment with IMAPI.
• Nature of Employment: Petitioner argued that the nature of employment is determined by the nature of activities performed, and that he attained regular employee status because he was allowed to work beyond the stipulated period and performed functions necessary or desirable in IMAPI's usual business.

• No Overt Act of Dismissal: Respondents submitted that they could not be adjudged guilty of illegal dismissal because there was no positive and overt act of dismissing Noblejas from employment.
• Voluntary Severance: Respondents argued that Noblejas got angry and hurled invectives after his demands were refused, and that he voluntarily stopped reporting for work and filed the complaint on a mistaken impression that the failure to meet his demands was tantamount to termination.
• Contractual Status: Respondents insisted that Noblejas was not entitled to 13th month pay because he was hired as a consultant and not as a regular employee, and that they had already paid his sick leave pay of ₱21,075.00.

• Regular Employment: Whether Noblejas was a regular employee of IMAPI.
• Illegal Dismissal: Whether Noblejas was illegally dismissed from employment.
• Monetary Claims: Whether Noblejas was entitled to his money claims, including 13th month pay and backwages.

• Regular Employment: Yes. Noblejas was a regular employee of IMAPI. Under Article 280 of the Labor Code, he was a regular employee by nature of work because his services as training instructor/assessor were necessary or desirable to IMAPI's business as a training and assessment center for seamen, and his continuing need for his services evidenced the necessity and indispensability of his work.
• Illegal Dismissal: No. There was no illegal dismissal. The fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss, and Noblejas failed to adduce substantial evidence of any such act, aside from his mere assertion.
• Monetary Claims: Partially. Noblejas was entitled to proportionate 13th month pay of ₱15,625.00 covering January 1, 2010 to March 15, 2010, and to reinstatement, but not to backwages under the principle of "no work, no pay."

• Regular Employment: The Court applied Article 280 of the Labor Code, which defines two kinds of regular employees: (1) those engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, and (2) those who have rendered at least one year of service, whether continuous or broken. Regular employees are further classified into regular employees by nature of work and regular employees by years of service. Noblejas was employed as training instructor/assessor for three months effective May 20, 2009, and after the end of that period, he was rehired for the same position and continued working until March 16, 2010. There was no dispute that his work was necessary or desirable in IMAPI's business as a training and assessment center for seamen and officers of vessels. The continuing need for his services was sufficient evidence of the necessity and indispensability of his services, and thus he had attained regular employee status at the time he ceased to report for work on March 17, 2010.

• Illegal Dismissal: The Court held that fair evidentiary rules dictate that before employers are burdened to prove that they did not commit illegal dismissal, the employee must first establish by substantial evidence the fact of his or her dismissal. While the Court acknowledged the rule that the employer bears the burden of proving that termination was for a valid or authorized cause, it is likewise incumbent upon the employee to first establish by competent evidence the fact of dismissal. The one who alleges a fact has the burden of proving it, and the proof should be clear, positive, and convincing; mere allegation is not evidence. Aside from his mere assertion, Noblejas adduced no corroborative and competent evidence to substantiate his claim of dismissal. The record was bereft of any indication that he was prevented from returning to work or deprived of any work assignment. No evidence showed that Ferrez was authorized by IMAPI to terminate employees or that Capt. Terrei instructed her to dismiss him. The Court found it odd that, instead of clarifying from Capt. Terrei what he heard from Ferrez, Noblejas immediately instituted an illegal dismissal case the day following the alleged incident and never reported back to work. The Court quoted with approval the NLRC's observation that Noblejas, being unhappy with not being granted his demands, was himself no longer interested in continuing his employment, and that respondents' refusal to grant his demands did not constitute an overt act of dismissal. The fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss, and a decision based on unsubstantiated allegation cannot stand without offending due process. Noblejas's filing of a complaint for illegal dismissal could not by itself be the sole consideration in determining whether he was illegally dismissed; all circumstances surrounding the alleged termination should be taken into account.

• Monetary Claims: The Court sustained the Labor Arbiter's grant of proportionate 13th month pay covering January 1, 2010 to March 15, 2010 in the aggregate amount of ₱15,625.00. The Court further held that respondents should accept Noblejas back and reinstate him to his former position, but there should be no payment of backwages under the principle of "no work, no pay."

• Regular Employment by Nature of Work — Under Article 280 of the Labor Code, an employee is a regular employee by nature of work when engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, regardless of length of service. The Court applied this doctrine in finding that Noblejas, as a training instructor/assessor for IMAPI, a training and assessment center for seamen, performed work necessary and desirable to the company's business, and the continuing need for his services evidenced the necessity and indispensability of his work.

• Burden of Proof in Illegal Dismissal Cases — Before the employer is burdened to prove that dismissal was for a valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal. The one who alleges a fact has the burden of proving it, and the proof should be clear, positive, and convincing; mere allegation is not evidence. The Court applied this doctrine in holding that Noblejas failed to discharge his initial burden, as he adduced no corroborative evidence of dismissal aside from his own assertion.

• Positive and Overt Acts Requirement — The fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss. The Court applied this doctrine in finding that respondents' refusal to grant Noblejas's demands did not constitute an overt act of dismissal, and that no evidence showed Ferrez was authorized to terminate employees or was instructed to dismiss him.

• No Work, No Pay Principle — An employee who does not render service is not entitled to wages. The Court applied this principle in denying backwages to Noblejas, who ceased reporting for work after March 16, 2010, notwithstanding his reinstatement.

• "Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal dismissal, it is incumbent upon the employee to first establish by substantial evidence the fact of his or her dismissal." — This passage articulates the Court's allocation of the initial burden of proof in illegal dismissal cases, requiring the employee to first prove the fact of dismissal before the employer's burden arises.

• "Let it be underscored that the fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss." — This statement defines the evidentiary standard for establishing dismissal, requiring positive and overt acts rather than mere inference or allegation.

• "Respondents' refusal to grant complainant's demands does not constitute an overt act of dismissal. On the contrary, it is rather the apparent disinterest of complainant to continue his employment with respondent company that may be considered a covert act that severed his employment when the latter did not grant the litany of his demands." — The Court quoted with approval the NLRC's observation that refusal to grant demands is not an overt act of dismissal, and that the employee's own disinterest in continuing employment may be what severed the employment relationship.

• Philips Semiconductors (Phils.), Inc. vs. Fadriquela, 471 Phil. 355, 369 (2004) — Cited as authority for the definition of the two kinds of regular employees under Article 280 of the Labor Code.
• San Miguel Corporation vs. Teodosio, G.R. No. 163033, October 2, 2009, 602 SCRA 197, 211 — Cited for the classification of regular employees into regular employees by nature of work and regular employees by years of service.
• Rowell Industrial Corporation vs. Court of Appeals, 546 Phil. 516, 526 (2007) — Cited for the definition of regular employees by nature of work and by years of service.
• Ledesma, Jr. vs. National Labor Relations Commission, 562 Phil. 939, 951 (2007) — Cited for the rule that the employee must first establish by substantial evidence the fact of dismissal before the employer's burden arises.
• Basay vs. Hacienda Consolacion, G.R. No. 175532, April 19, 2010, 618 SCRA 422, 430 — Cited for the rule that it is incumbent upon employees to first establish by competent evidence the fact of their dismissal.
• Machica vs. Roosevelt Services Center, Inc. and/or Dizon, 523 Phil. 199, 209-210 (2006) — Cited for the rule that the one who alleges a fact has the burden of proving it, and the proof should be clear, positive, and convincing.
• General Milling Corporation – Independent Labor Union vs. General Milling Corporation, G.R. No. 183122, June 15, 2011, 652 SCRA 235, 258 — Cited for the rule that mere allegation is not evidence.
• Cañedo vs. Kampilan Security and Detective Agency, Inc., G.R. No. 179326, July 31, 2013 — Cited for the rule that the fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss.
• Macasero vs. Southern Industrial Gases Philippines and/or Lindsay, 579 Phil. 494, 499 (2009) — Cited for the rule that a decision based on unsubstantiated allegation cannot stand without offending due process.
• Verdadero vs. Barney Autolines Group of Companies Transport, Inc., G.R. No. 195428, August 29, 2012, 679 SCRA 545 — Cited for the principle of "no work, no pay" in denying backwages.

• Article 280, Labor Code — Defines the two kinds of regular employees: (1) those engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, and (2) those who have rendered at least one year of service, whether continuous or broken. The Court applied this provision in determining that Noblejas was a regular employee by nature of work.
• Section 13, Article VIII, 1987 Constitution — Referenced in the certification of the Chief Justice attesting that the conclusions in the decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

• Presbitero J. Velasco, Jr. (Chairperson)
• Diosdado M. Peralta
• Martin S. Villarama, Jr. (Designated Acting Member per Special Order No. 1691 dated May 22, 2014)
• Marvic Mario Victor F. Leonen