Pu-od vs. Ablaze Builders, Inc.

An employee claiming illegal dismissal must first establish by substantial evidence the fact of dismissal before the employer bears the burden of proving that the termination was for a valid or authorized cause. Where there is neither illegal dismissal by the employer nor abandonment by the employee, the remedy is reinstatement but without backwages; however, when reinstatement is no longer feasible due to strained relations, each party must bear his or her own loss, and the burden of economic loss is not rightfully shifted to the employer.

Respondent-company Ablaze Builders, Inc., headed by its president, private respondent Rolando Pampolino, is engaged in the construction business. It has been respondents' practice to hire construction workers, foreman, and other personnel on a per project basis. The petitioners were hired on different dates, positions, and daily salaries, and sometime in June 2013, respondents hired petitioners to work in its project located at Roces Avenue, Quezon City (QC Project), specifically for the finishing phase. The case involves the application of the 2011 NLRC Rules of Procedure, which mandate that a motion for reconsideration of an NLRC decision must be filed within 10 calendar days from receipt of said decision, and the Labor Code provisions on illegal dismissal and abandonment.

Petitioners Froel M. Pu-od, Bombom L. Layaona, Danilo L. Orsal, Joseph B. Flores, and Joel M. Pu-od were hired by respondent-company Ablaze Builders, Inc. on different dates, positions, and daily salaries: Froel M. Pu-od as Carpenter in June 2013 at Php370.00 daily; Joel M. Pu-od as Welder on 07/08/08 at Php370.00; Bombom L. Layaona as Mason on 07/15/08 at Php370.00; Joseph B. Flores as Helper on 07/22/13 at Php280.00; and Danilo L. Orsal as Mason on 11/19/11 at Php370.00. Sometime in June 2013, respondents hired petitioners to work in its project located at Roces Avenue, Quezon City (QC Project), specifically for the finishing phase.

On February 28, 2014, a project engineer of respondents allegedly told the petitioners that they were already terminated from their employment because there was no more work to be done, even if in reality, the phase on which they were working was not yet completed. Aggrieved by the verbal dismissal, petitioners filed a complaint for illegal dismissal against respondents before the Labor Arbiter. Petitioners admitted that they no longer chose to be reinstated due to the strained relationship of the parties. Petitioners averred that respondents unceremoniously terminated their employment without giving them an opportunity to explain their side, and maintained that they are entitled to money claims including salary differential, thirteenth month pay, service incentive leave pay, holiday pay, refund for illegal deductions, moral damages, exemplary damages, and attorney's fees.

Respondents, on the other hand, alleged that the company did not terminate petitioners' employment, but rather, this was a case of abandonment of work on the part of the petitioners. Respondents claimed that sometime in February 2014, after the resignation of its project site engineer, Engr. Romeo Calma, the petitioners stopped appearing for work, which caused delay in the turnover of the project to respondents' client. Respondents made efforts in communicating with petitioners, specifically through complainant Layaona, but to no avail. As a result, respondents were compelled to engage the services of other personnel for the completion of the QC project. Respondents further alleged that the company never heard from the petitioners again, except on the information given by Engr. Calma to the effect that petitioners had already accepted employment at another construction company. Respondents submitted the affidavits of Engr. Calma and Engr. Pedro Bacalso, Jr., who were the project site engineers at the time the petitioners were assigned to the QC project, and the engineers denied under oath that either of them informed the petitioners on February 28, 2014 of their alleged verbal dismissal. Respondents claimed that the petitioners were not underpaid, considering that during the course of their employment they were provided with transportation allowances, boarding houses, and free but limited use of electricity and water.

The Labor Arbiter rendered a decision against the petitioners, dismissing their complaint, ruling that there was no dismissal, actual or constructive, committed by respondents since the petitioners failed to substantiate their allegation of the fact of dismissal. The NLRC reversed the LA's decision and held respondents liable to pay the petitioners their backwages and separation pay. Respondents filed a Motion for Extension of Time to File Motion for Reconsideration with Substitution of Counsel, stating that they received a copy of the NLRC's decision on July 31, 2015, that they terminated the legal services of their previous lawyer and hired Malcolm Law as their new counsel, and that due to lack of material time, volume and pressure of work, they could not complete the motion within the period allowed. Subsequently, respondents filed a Motion for Reconsideration on August 20, 2015, arguing that there was no proper service of the petitioners' Memorandum of Appeal, that petitioners proffered no evidence that they were dismissed, and that petitioners are not entitled to backwages and separation pay. Both motions were denied by the NLRC, which ruled that the motion for extension was denied since substitution of counsel was not a valid ground to extend the period, and the motion for reconsideration was deemed filed out of time.

The CA granted respondents' Petition for Certiorari, brushing aside technicalities and ruling that the NLRC is given the discretion to exercise liberality. The CA found that respondents were not motivated to unnecessarily delay the resolution of the case, and ruled that the petitioners failed to establish the fact of their dismissal and that they abandoned their employment. The CA annulled the NLRC resolutions and reinstated the Labor Arbiter's dismissal of petitioners' complaint. Their motion for reconsideration having been denied, petitioners filed the instant petition before the Supreme Court.

• Belated Filing of Motion for Reconsideration: Petitioners argued that the Court of Appeals gravely abused its discretion when it granted the respondents' Petition for Certiorari despite the belated filing of their Motion for Reconsideration of the NLRC July 24, 2015 Resolution, since the motion for reconsideration was filed out of time and the NLRC correctly denied it.

• Illegal Dismissal: Petitioners argued that the Court of Appeals gravely erred in annulling the decision of the NLRC finding the petitioners to have been illegally dismissed and, in effect, reinstating the Labor Arbiter's decision dismissing the petitioners' labor complaint.

• No Dismissal, Abandonment of Work: Respondents alleged that the company did not terminate petitioners' employment, but rather, this was a case of abandonment of work on the part of the petitioners, claiming that after the resignation of its project site engineer, Engr. Romeo Calma, the petitioners stopped appearing for work, which caused delay in the turnover of the project.

• No Proper Service of Appeal: Respondents argued in their Motion for Reconsideration that since there was no proper service of the petitioners' Memorandum of Appeal with Notice of Appeal to respondents, there was no perfected appeal, hence, the LA's decision has attained finality.

• Lack of Evidence of Dismissal: Respondents argued that the petitioners proffered no evidence that they were either dismissed from employment or that they were prevented from returning to work or otherwise deprived of any work assignment, and that the petitioners are not entitled to backwages and separation pay since they failed to prove that they were illegally dismissed.

• Procedural — Belated Motion for Reconsideration: Whether the Court of Appeals gravely abused its discretion when it granted the respondents' Petition for Certiorari despite the belated filing of their Motion for Reconsideration of the NLRC July 24, 2015 Resolution.

• Substantive — Illegal Dismissal and Abandonment: Whether the Court of Appeals gravely erred in annulling the decision of the NLRC finding the petitioners to have been illegally dismissed and, in effect, reinstating the Labor Arbiter's decision dismissing the petitioners' labor complaint.

• Procedural — Belated Motion for Reconsideration: No. The CA did not err when it gave due course to respondents' Petition for Certiorari. The 2011 NLRC Rules of Procedure mandate that a motion for reconsideration of the NLRC decision must be filed within 10 calendar days from receipt of said decision, but despite procedural lapses, fundamental consideration of substantial justice may warrant deciding a case on the merits rather than dismissing it on a technicality.

• Substantive — Illegal Dismissal and Abandonment: No. Neither illegal dismissal by the employer nor abandonment by the employees exists in this case. Petitioners failed to prove by substantial evidence the fact of their dismissal, and respondents failed to prove the two elements of abandonment. Consequently, petitioners are not entitled to backwages and separation pay.

• Procedural — Belated Motion for Reconsideration: The Court ruled that the CA committed no error when it admitted Ablaze's petition for certiorari and had jurisdiction over said petition. The Court cited Section 2, Rule I of the 2005 Revised Rules of Procedure and reiterated verbatim in the same provision of the 2011 NLRC Rules of Procedure, which provides that the rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes. The Court also cited Section 10, Rule VII of both the 2005 Revised Rules of Procedure and the 2011 NLRC Rules, which states that the rules of procedure and evidence prevailing in courts of law and equity shall not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. The Court was persuaded that the rigid rules of procedure must give way to the demands of substantial justice, especially in this case where the varying and conflicting factual deliberations of the LA, the NLRC and the CA are factored in.

• Substantive — Illegal Dismissal and Abandonment: The Court acknowledged the familiar rule in labor cases that the employer has the burden of proving that the termination was for a valid or authorized cause. However, the Court stressed that it remains incumbent upon the employees that they should first establish by competent evidence the fact of their dismissal from employment. Since an allegation is not evidence, a party alleging a critical fact must support his allegation with substantial evidence, and the evidence to prove the fact of dismissal must be clear, positive and convincing. The Court found that there was no ample evidence to establish a prima facie case that petitioners were dismissed from employment. The claim that they were told on February 28, 2014 by one of respondents' project engineers that their employment has been terminated was at best speculative, as the identity of the project engineer was not revealed, and there was no proof that respondents authorized the unnamed project engineer to notify the petitioners of their alleged dismissal. Petitioners were likewise inconsistent as to the date of their alleged employment and under what particular circumstance they were dismissed. The LA observed that petitioners stated in their complaint that the date of their respective dismissal was Froel Pu-od — "FEBRUARY 2014," Bombom Layaona "01-2014," Joel Pu-od "01-2014," Danilo Orsal "11-2003," and Joseph Flores "02-2014," whereas in their position paper, they all inconsistently alleged a single date on 2/28/2014 of having been told of their dismissal by a project engineer. The records were likewise bereft of any indication that petitioners were barred from respondents' premises or were otherwise deprived of any work assignment after the alleged verbal dismissal. On the contrary, the evidence showed that respondents tried to contact them, but its effort was to no avail, and respondents learned that petitioners were already reporting for work in another construction company.

• Abandonment: The Court found that petitioners did not abandon their employment, as erroneously claimed by the respondents. Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. It is incumbent upon the employer to prove the two elements that must concur in order for an act to constitute abandonment: First, respondents must provide evidence that petitioners failed to report for work for an unjustifiable reason; Second, respondents must prove petitioners' overt acts showing a clear intention to sever their ties with their employer, with the second element as the more determinative factor, and being manifested by some overt acts. The record showed that respondents proffered nothing beyond bare allegations to prove that petitioners had abandoned their employment. Although respondents made an effort in requiring petitioners to return to work, there was neither proof that petitioners' failure to comply with the same was for an unjustifiable reason, nor was there any proof that petitioners' absence amounted to a clear intention to sever their employment. The Court recalled that petitioners filed a complaint for illegal dismissal without opting to be reinstated, and admitting in their Rejoinder that reinstatement is no longer feasible due to strained relationship. This act of filing the complaint is inconsistent with abandonment of employment and effectively negates any suggestion that they had the intention to abandon their employment.

• Deletion of Award of Backwages and Separation Pay: The Court ruled that in cases where there is both an absence of illegal dismissal on the part of the employer and an absence of abandonment on the part of the employees, the remedy is reinstatement but without backwages. However, considering that the reinstatement was already impossible by reason of the strained relations of the parties, and the fact that petitioners already found another employment, each party must bear his or her own loss, thus placing them on equal footing. The Court cited MZR Industries, et. al. vs. Majen Colambot, which held that in a case where the employee's failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his own loss. The Court also cited John L. Borja and Aubrey L. Borja/Dong Juan vs. Randy B. Miñoza and Alaine S. Bandalan, wherein the Court deleted the award of separation pay in a factual situation analogous to the instant case. The Court concluded that considering that petitioners' cessation of employment was neither brought about by abandonment nor illegal dismissal, and their reinstatement is no longer feasible due to strained relations and because they did not opt to be reinstated, coupled with the fact that they already found employment elsewhere, the legal effect is that the burden of economic loss is not rightfully shifted to the employer; the parties must bear the burden of their own loss.

• Burden of proof in illegal dismissal cases — In cases of illegal dismissal, before the employer must bear the burden of proof to establish that the termination was for a valid or authorized cause, the employees must first prove by substantial evidence the fact of their dismissal from service. Logically, if there is no dismissal, then there can be no question as to the legality or illegality thereof. The evidence to prove the fact of dismissal must be clear, positive and convincing.

• Abandonment of employment — Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. It is incumbent upon the employer to prove the two elements that must concur in order for an act to constitute abandonment: (1) the employer must provide evidence that the employee failed to report for work for an unjustifiable reason; and (2) the employer must prove the employee's overt acts showing a clear intention to sever ties with the employer, with the second element as the more determinative factor, being manifested by some overt acts. The mere absence or failure to report for work, even after notice to return, does not necessarily amount to abandonment.

• Neither dismissal nor abandonment — In a case where the employee's failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his own loss. Where there is both an absence of illegal dismissal on the part of the employer and an absence of abandonment on the part of the employees, the remedy is reinstatement but without backwages. However, when reinstatement is no longer applicable due to strained relationship between the parties and the employee already found another employment, each party must bear his or her own loss, thus placing them on equal footing.

• Liberal construction of NLRC rules — The 2011 NLRC Rules of Procedure shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes. The rules of procedure and evidence prevailing in courts of law and equity shall not be controlling, and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.

• "However, We stress that it remains incumbent upon the employees that they should first establish by competent evidence the fact of their dismissal from employment." — This states the doctrinal rule that the employee bears the initial burden of proving the fact of dismissal before the employer's burden to prove valid cause arises.

• "Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts." — This defines the standard for abandonment, emphasizing that it requires proof of intent and cannot be presumed from mere absence.

• "Verily, in a case where the employee's failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his own loss." — This articulates the controlling principle for cases where neither illegal dismissal nor abandonment is established, forming the basis for deleting the awards of backwages and separation pay.

• "The operative act is still the employees' ultimate act of putting an end to their employment, which is totally missing in this case." — This emphasizes that abandonment requires an overt act by the employee demonstrating intent to sever the employment relationship, which was absent in this case.

• MZR Industries, et. al. vs. Majen Colambot, 716 Phil. 617 (2013) — Controlling precedent cited for the rule that where there is neither dismissal nor abandonment, the remedy is reinstatement without backwages, and where reinstatement is no longer applicable due to strained relations, each party must bear his or her own loss.

• John L. Borja and Aubrey L. Borja/Dong Juan vs. Randy B. Miñoza and Alaine S. Bandalan, G.R. No. 218384, July 3, 2017 — Followed as a case with analogous facts where the Court deleted the award of separation pay because respondents were not dismissed and did not abandon their jobs.

• PLDT vs. Berbano, Jr., 621 Phil. 76 (2009) — Cited for the rule that a motion for reconsideration of the NLRC decision must be filed before the remedy of a petition for certiorari may be availed of, but that despite procedural lapses, fundamental consideration of substantial justice may warrant deciding a case on the merits.

• Alberto J. Raza vs. Daikoku Electronics Phils., Inc. and Mamoru Ono, 765 Phil. 61 (2015) — Cited for the proposition that the NLRC is not restricted by the technical rules of procedure and is allowed to be liberal in the application of its rules in hearing and deciding labor cases.

• Tri-C General Services vs. Nolasco B. Matuto, et al., 770 Phil. 251 (2015) — Cited for the familiar rule in labor cases that the employer has the burden of proving that the termination was for a valid or authorized cause.

• Dionarto Q. Noblejas vs. Italian Maritime Academy, Phils., Inc., 735 Phil. 713 (2014) — Cited for the rule that it remains incumbent upon the employees to first establish by competent evidence the fact of their dismissal from employment.

• Tan Brothers Corp. of Basilan City vs. Edna R. Escudero, 713 Phil. 392 (2013) — Cited for the elementary rule that a party alleging a critical fact must support his allegation with substantial evidence.

• Exodus Int.'l. Construction Corp., et. al., vs. Guillermo Biscocho, et. al., 659 Phil. 142 (2011) — Cited for the rule that the evidence to prove the fact of dismissal must be clear, positive and convincing.

• JOSAN, et. al., vs. Aduna, 682 Phil. 641 (2012) — Cited for the doctrine that abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts.

• Protective Maximum Security Agency, Inc. vs. Celso E. Fuentes, 753 Phil. 482 (2015) — Cited for the two elements that must concur for abandonment to constitute: failure to report for work for an unjustifiable reason, and overt acts showing a clear intention to sever ties with the employer.

• Ruben C. Jordan vs. Grandeur Security & Services, Inc., 736 Phil. 676 (2014) — Cited for the rule that the mere absence or failure to report for work, even after notice to return, does not necessarily amount to abandonment, and that filing a complaint for illegal dismissal is inconsistent with abandonment.

• Negros Slashers, Inc., et. al., vs. Alvin L. Teng, 682 Phil. 593 (2012) — Cited for the prevailing trend to accord party litigants the amplest opportunity for the proper and just determination of their causes, free from the constraints of needless technicalities.

• Section 2, Rule I, 2011 NLRC Rules of Procedure — Provides that the rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes. Applied to justify the CA's admission of respondents' petition for certiorari despite the belated filing of the motion for reconsideration.

• Section 10, Rule VII, 2011 NLRC Rules of Procedure — Provides that the rules of procedure and evidence prevailing in courts of law and equity shall not be controlling, and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. Applied to support the liberal construction of procedural rules in labor cases.

• Sections 14 and 15, Rule VII, 2011 NLRC Rules of Procedure — Section 14 provides that decisions, resolutions or orders of the Commission shall become final and executory after ten (10) calendar days from receipt thereof. Section 15 provides that a motion for reconsideration must be filed within ten (10) calendar days from receipt of the decision, resolution or order. These provisions establish the reglementary period for filing motions for reconsideration, which respondents failed to observe.

• Sereno, C.J. (Chairperson) — Concurred.
• Leonardo-De Castro, J. — Concurred.
• Del Castillo, J. — Concurred.
• Jardeleza, J. — Concurred.

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