Tan Brothers Corporation of Basilan City vs. Escudero

Abandonment requires the concurrence of (1) failure to report for work without valid reason and (2) a clear intention to sever employment manifested by overt acts, with mere absence insufficient; withholding salaries and withdrawing work assignments constituting constructive dismissal entitles the employee to backwages and, where reinstatement is no longer practical, separation pay.

Tan Brothers Corporation of Basilan City is a corporation primarily engaged in the real estate business. Edna R. Escudero was hired by the corporation as bookkeeper in July 1991, placing her under its direction as to wages, work assignments, and office facilities.

In July 1991, Edna R. Escudero was hired as bookkeeper by Tan Brothers Corporation of Basilan City. According to Escudero, starting July 2003 her monthly salary of ₱2,500.00 was not paid on time. After the corporation had its office remodeled in the early part of 2004, it allegedly rented out the office space she used to occupy and ceased giving her further assignments. Constrained by her dire financial condition after her wages went unpaid, she eventually stopped reporting for work, claiming Tan Brothers had shrewdly maneuvered her illegal dismissal.

Tan Brothers, for its part, asserted Escudero was paid a daily wage of ₱155.00 and abandoned employment when she stopped reporting in July 2003. It further alleged that she took with her most of the corporation’s payrolls, vouchers and other material documents evidencing payment, and without knowledge and consent appropriated an Olivetti typewriter worth ₱15,000.00. After she refused demands for its return, Tan Brothers lodged a complaint with the barangay authorities of Seaside, Isabela City on 6 September 2004. To prove due payment, it submitted copies of remaining vouchers and payrolls from 24 December 1997 to 31 July 2000 prepared by Escudero and the result of a Department of Labor and Employment Regional Office No. 9 inspection clearing it of labor standards violations.

On 1 September 2004, Escudero filed her complaint for illegal dismissal, underpayment of wages, cost of living allowance and 13th month pay. The Labor Arbiter credited her account of withheld salaries and withdrawn services despite her presence at work, rejected abandonment, treated the typewriter matter as belonging to the regular courts, and while crediting documentary proof of payment of wages and benefits, awarded separation pay and backwages totaling ₱117,229.60 as a consequence of constructive dismissal. The NLRC affirmed in full, adding that the typewriter claim, made after institution of the labor case, was retaliatory.

• Abandonment: Petitioner argued that Escudero abandoned her employment when she unilaterally stopped reporting for work in July 2003, as shown by prolonged absence, appropriation of the corporation’s typewriter and records to get even, and filing of the complaint only on 1 September 2004, more than one year later, without a prayer for reinstatement.
• Just Cause Under Article 282: Petitioner maintained that abandonment is serious misconduct constituting just cause for termination under Article 282 of the Labor Code of the Philippines, so the awards of backwages and separation pay were bereft of legal basis.
• Grave Abuse of Discretion: Petitioner faulted the NLRC with grave abuse of discretion for not finding abandonment despite Escudero’s admission that she stopped reporting, and faulted the CA for applying the rule that filing an illegal dismissal complaint negates abandonment despite the delayed filing.

• Constructive Dismissal by Withholding Salary and Work: Respondent maintained that starting July 2003 her salary was not timely paid, and after remodeling the corporation rented out her office space and ceased giving assignments, eventually constraining her to stop reporting because of dire financial condition.
• Illegal Maneuver: Respondent claimed Tan Brothers shrewdly maneuvered her illegal dismissal by circumventing substantive and procedural due process through withholding salaries and non-utilization of her services despite her presence at work.

• Abandonment: Whether Escudero abandoned her employment so as to constitute just cause for termination.
• Effect of Delayed Complaint Without Reinstatement: Whether the filing of the illegal dismissal complaint more than one year after stopping work, praying for separation pay in lieu of reinstatement, negates abandonment.
• Constructive Dismissal: Whether Escudero was constructively dismissed by non-payment of salaries and withdrawal of office space and work assignments.
• Monetary Awards: Whether the awards of backwages and separation pay have legal basis.

• Abandonment: No. Abandonment was not established, the employer having shown only absence without the required clear intent manifested by overt acts, with the burden of proof unmet.
• Effect of Delayed Complaint Without Reinstatement: No. The timing and relief prayed for did not establish abandonment, the employer retaining the burden to prove intent by substantial evidence and mere absence being insufficient.
• Constructive Dismissal: Yes. Constructive dismissal was established by deprivation of office space, withdrawal of assignments, and non-payment of salaries leaving no choice but to stop reporting.
• Monetary Awards: Yes. Backwages with separation pay in lieu of reinstatement were proper as twin reliefs for illegal termination where reinstatement was no longer practical.

• Abandonment: Abandonment is deliberate and unjustified refusal to resume employment, requiring (1) failure to report without valid reason and (2) clear intention to sever the relationship, the second being more determinative and manifested by overt acts unerringly pointing to no desire to work anymore. The burden rests on the employer, and allegation is not evidence. Confronted with Escudero’s assertion that she kept reporting despite irregular payment and stopped only after May 2004 non-payment, Tan Brothers offered only bare allegations of July 2003 abandonment. Viewed against persistence despite irregular payment, subsequent failure following non-payment was hardly evincive of intent, no return-to-work notice was even issued, and the typewriter and records accusation, reported to barangay authorities only on 6 September 2004 after the labor complaint, was unsubstantiated and, without compliance with the two-notice requirement, could not justify termination.
• Effect of Delayed Complaint Without Reinstatement: While immediate filing including a prayer for reinstatement is totally inconsistent with abandonment, the one-year interval and prayer for separation pay did not relieve Tan Brothers of proving abandonment by substantial evidence, defined as relevant evidence a reasonable mind accepts as adequate. Because abandonment turns on intention and cannot be lightly inferred from equivocal acts, mere absence, even after a return notice, does not suffice — more so where no such notice issued. Thus the delay did not convert absence into abandonment.
• Constructive Dismissal: Constructive dismissal occurs when continued employment is rendered impossible, unreasonable, or unlikely, as in demotion, diminution in pay, or unbearable discrimination, insensibility, or disdain leaving no option but to quit, tested by whether a reasonable person would have felt compelled to give up the position. The employer bears the burden of proving dismissal for just and valid cause. Deprivation of office space, denial of further assignments, and non-payment of salaries until reporting became untenable combined to satisfy that test, supporting the uniform findings below.
• Monetary Awards: Under Article 279 of the Labor Code, illegally terminated employees are entitled to reinstatement without loss of seniority and full backwages from dismissal to actual reinstatement, backwages restoring income lost by unlawful dismissal. Separation pay is proper where reinstatement is inadvisable, infeasible, or no longer practical or in the parties’ best interest, including where the employee no longer seeks reinstatement, as here. Factual findings of the Labor Arbiter and NLRC, affirmed by the CA on substantial evidence, are accorded respect and finality, review on certiorari being confined to errors of law without re-evaluation of evidence, especially as the Supreme Court is not a trier of facts.

• Abandonment of employment — Abandonment is the deliberate and unjustified refusal to resume employment and constitutes neglect of duty as just cause under paragraph (b) of Article 282 of the Labor Code. It requires concurrence of failure to report without valid reason and clear intent to sever the relationship, the latter being determinative and manifested by overt acts; absence alone, even after a return notice, does not suffice.
• Burden of proof in abandonment; substantial evidence — The employer bears the burden of proving deliberate refusal without intent to return. Allegation is not evidence; the alleging party must adduce substantial evidence, meaning relevant evidence a reasonable mind accepts as adequate to support a conclusion.
• Intention as essence of abandonment — Abandonment is a matter of intention and cannot be lightly inferred or legally presumed from equivocal acts; it must be accompanied by overt acts unerringly showing the employee simply does not want to work anymore.
• Immediate complaint as inconsistent with abandonment — The immediate filing of an illegal dismissal complaint, more so with a prayer for reinstatement, is totally inconsistent with abandonment, though delay alone does not supply the employer’s missing proof of intent.
• Constructive dismissal — Constructive dismissal occurs when cessation of work results because continued employment is rendered impossible, unreasonable, or unlikely, such as demotion, diminution in pay, or clear discrimination, insensibility, or disdain making continued work unbearable. The test is whether a reasonable person in the employee’s position would have felt compelled to give up the position.
• Due process: two-notice requirement for just-cause termination — To terminate for just cause the employer must give (a) written notice stating the cause to afford opportunity to be heard with assistance of a representative, and (b) written notice of the dismissal decision stating the reason; the requirement is a matter of due process, not mere technicality, and unsubstantiated accusation is not synonymous with guilt.
• Reliefs for illegal dismissal; separation pay in lieu of reinstatement — Under Article 279 of the Labor Code, illegally dismissed employees are entitled to reinstatement without loss of seniority and full backwages from dismissal to reinstatement, backwages restoring lost income. Separation pay may be awarded where reinstatement is inadvisable, infeasible, impractical, or not in the parties’ best interest, or the employee opts not to be reinstated.
• Appellate deference to labor tribunals — In Rule 45 review, examination is generally confined to errors of law; whether abandonment or illegal dismissal occurred is factual, best left to quasi-judicial agencies with expertise. Factual findings of the Labor Arbiter and NLRC, especially when affirmed by the CA and supported by substantial evidence, are accorded respect, finality, and binding effect, consistent with the rule that the Supreme Court is not a trier of facts.

• "abandonment is the deliberate and unjustified refusal of an employee to resume his employment." — States the canonical definition of abandonment used to frame the two-element test and burden of proof.
• "To constitute abandonment, however, there must be a clear and deliberate intent to discontinue one's employment without any intention of returning." — Articulates the controlling intent requirement that mere absence cannot satisfy.
• "Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit." — Provides the doctrinal definition applied to the withdrawal of salary, office, and assignments.
• "The test is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances." — States the objective test for constructive dismissal applied to Escudero’s cessation of reporting.

• Columbus Philippine Bus Corp. vs. NLRC, 417 Phil. 81, 100 (2001) — Cited for the two elements of abandonment, with clear intent manifested by overt acts as the more determinative factor.
• Chavez vs. NLRC, 489 Phil. 444, 460 (2005) — Cited for the rule that immediate filing of an illegal dismissal complaint, especially with prayer for reinstatement, is inconsistent with abandonment.
• New Ever Marketing, Inc. vs. Court of Appeals, 501 Phil. 575, 586 (2005) — Cited for the rule that mere absence or failure to report, even after a return notice, is insufficient to establish abandonment.
• De Paul/King Philip Customs Tailor vs. NLRC, 364 Phil. 91, 102 (1999) — Cited for the rule that allegation is not evidence and a party alleging a critical fact must support it with substantial evidence.
• Mantle Trading Services, Inc. vs. NLRC, G.R. No. 166705, 28 July 2009, 594 SCRA 180, 190-191 — Cited for the two-notice requirement to terminate for just cause.
• Philippine Veterans Bank vs. National Labor Relations Commission, G.R. No. 188882, 30 March 2010, 617 SCRA 204, 213 — Cited for the reasonable-person test of constructive dismissal.
• Velasco vs. National Labor Relations Commission, 525 Phil. 749, 754 (2006) — Cited to support separation pay where reinstatement is no longer practical or in the parties’ best interest.

• Paragraph (b), Article 282, Labor Code of the Philippines — Invoked by the employer as just cause based on alleged abandonment as neglect of duty/serious misconduct; held inapplicable because clear intent to sever employment by overt acts was not proven.
• Article 279, Labor Code of the Philippines, as amended — Basis for the twin reliefs of reinstatement without loss of seniority and full backwages from illegal dismissal to actual reinstatement; applied to sustain backwages and separation pay in lieu of reinstatement for constructive dismissal.

Carpio, (Chairperson), Brion, Del Castillo, and Perlas-Bernabe, JJ., concur.