Tri-C General Services vs. Matuto

An employee must first establish by substantial evidence the fact of dismissal before the employer is burdened to prove that the dismissal was valid; absent such proof, the illegal dismissal claim fails. Reinstatement without backwages is proper where the employee was neither dismissed nor guilty of abandonment, under the no work, no pay principle.

Tri-C General Services, Inc. is a manpower agency engaged in the business of supplying services to all PLDT Business Offices in Laguna. Respondents Nolasco B. Matuto, Romeo E. Magno, and Elvira B. Laviña were its janitors/janitress assigned at the PLDT Business Office in Calamba City, with Magno hired on August 1, 1993, Matuto on June 5, 1995, and Laviña on February 4, 1996.

According to respondents, sometime in January 1997, they spearheaded the first complaint of several janitors against petitioner for underpayment of wages and violation of labor standards before the Department of Labor and Employment. The LA decided on September 1, 2003 in their favor and ordered petitioner to pay their underpaid salaries. Petitioner did not pay the mandated minimum wage but merely increased their salaries by 5.00 every year; respondents alleged that since then they earned petitioner's ire and experienced harassment and intimidation.

On November 3, 2004, Matuto and Laviña were barred from their work place in PLDT-Calamba, while Magno was denied entry on November 26, 2004. Respondents thus filed an illegal dismissal case against petitioner on December 15, 2004, and impleaded Carmela Quiogue, the owner of Tri-C General Services, Inc. Respondents further alleged that assuming petitioner had valid ground to terminate them, their termination was still illegal because petitioner failed to furnish them with the two notices required by law; they only received a notice informing them that their services had already been terminated effective on the same date of the notice.

Petitioner denied dismissing respondents. It claimed that sometime in October 2004, PLDT-Laguna informed it that it would implement cost-cutting measures and would discontinue, after careful assessment, the services of respondents. Petitioner said it had no other recourse but to temporarily put respondents on "floating status" upon termination of the client's contract since their work was entirely dependent on the need for janitorial services of its clients; it argued that the complaint was premature because the six-month legal period for placing an employee on floating status had not yet lapsed and that its action was a legitimate exercise of management prerogative. In its reply to respondents' position paper, petitioner insisted that respondents abandoned their posts and that its Personnel Department sent a series of letters to them from October 2004 to November 2004.

On October 14, 2004, Matuto and Laviña received similar letters from the PMI Personnel Department requesting them to report on Saturday, October 16, 2004, 8:00 AM at #45 Zorra St., San Francisco Del Monte, Quezon City, in regard to the ongoing re-shuffling or notice of transfer. Subsequent letters dated October 19, 25, and November 11, 2004 pertained to the same request for respondents to report at petitioner's main office. Petitioner warned Matuto and Laviña in a letter dated November 11, 2004 that failure to report at their office would mean that they were no longer interested in their work. When the request went unheeded, petitioner sent the final letter dated November 16, 2004 stating that they had been given ample time to report since October 16, 2004 but did not appear, that petitioner took action that they were "hereby terminating your services with this company voluntarily," and that they were deleted from the active roster of employees effective November 16, 2004.

Respondent Magno received similar letters on November 11 and 16, 2004 directing him to report to petitioner's main office. On November 22, 2004, he received a letter informing him that his failure to appear at the office left petitioner with no recourse but to delete him from its active roster of employees.

The LA considered respondents on floating status and found that the legal period during which they could be placed under floating status had not yet lapsed at the time of the filing of the complaint on December 15, 2004; the NLRC sustained that finding. The CA found no support for petitioner's allegation aside from its bare assertion that PLDT-Laguna requested discontinuance of respondents' services, and no showing that there was a lack of available posts to which respondents might be assigned after they were relieved from their last assignment.

• CA Review of NLRC Findings: Petitioner argued that the CA erred in annulling and setting aside the NLRC decision and in denying its motion for reconsideration; it posited that when the findings of fact of the LA are affirmed by the NLRC, said finding is considered final and is viewed with respect by the higher tribunals, and that judicial review of labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which labor officials' findings rest.
• Reinstatement and Monetary Awards: Petitioner argued that the CA erred in ruling that respondents were entitled to reinstatement, payment of backwages, and other monetary benefits because respondents were not illegally dismissed.
• Floating Status and Prematurity: Petitioner maintained that it did not dismiss respondents; PLDT-Laguna discontinued their services due to cost-cutting, so they were placed on floating status, and the complaint was premature because the six-month legal period had not lapsed; this was a legitimate exercise of management prerogative.
• Abandonment: Petitioner insisted that respondents abandoned their posts, as shown by its Personnel Department's series of letters from October to November 2004 and their failure to report.

• Illegal Dismissal: Respondents averred that they were illegally dismissed when Matuto and Laviña were barred from their work place in PLDT-Calamba on November 3, 2004 and Magno was denied entry on November 26, 2004.
• Prior Labor Complaint and Harassment: Respondents alleged that after they spearheaded the January 1997 complaint for underpayment of wages and violation of labor standards, and after the LA ruled in their favor on September 1, 2003, petitioner did not pay the mandated minimum wage but merely increased their salaries by 5.00 every year; they experienced harassment and intimidation.
• Due Process Notices: Respondents alleged that even assuming petitioner had a valid ground to terminate them, their termination was illegal because petitioner failed to furnish them with the two notices required by law; they only received a notice informing them that their services had already been terminated effective on the same date of the notice.

• Fact of Dismissal: Whether respondents established by substantial evidence the fact of their dismissal from employment.
• Burden of Proof: Whether the employer bears the burden of proving a valid dismissal when it denies dismissing the employees and the employees fail to prove dismissal.
• Abandonment: Whether respondents abandoned their employment.
• Reinstatement and Monetary Awards: Whether respondents are entitled to reinstatement, full backwages, allowances, other benefits, and attorney's fees.

• Fact of Dismissal: No. Respondents failed to adduce corroborative and competent evidence of dismissal; their claim was self-serving, conjectural, and of no probative value.
• Burden of Proof: No, not on these facts. The employer's burden to prove a valid dismissal arises only after the employee first establishes the fact of dismissal by substantial evidence; where the employer denies dismissal and the employee fails to prove it, no burden shifts.
• Abandonment: No. The SC agreed with the LA and NLRC that respondents were not guilty of abandonment.
• Reinstatement and Monetary Awards: Reinstatement is proper, but without backwages, allowances, other benefits, or attorney's fees. Under no work, no pay, each party bears its own loss where the failure to work was neither abandonment nor termination.

• Fact of Dismissal: The SC applied the fair evidentiary rule that before the employer is burdened to prove that it did not commit illegal dismissal, the employee must first establish by substantial evidence the fact of dismissal. It stressed that an allegation is not evidence and that the evidence to prove dismissal must be clear, positive, and convincing. Here, aside from their mere assertion and joint affidavit, respondents failed to adduce corroborative and competent evidence; they did not even present the alleged notice of termination. The records were devoid of any indication that they were barred from petitioner's premises or deprived of any work assignment after the discontinuance of their work in PLDT-Calamba, and there was no showing that they reported or tried to report to petitioner's office and requested another work assignment. Petitioner's evidence, by contrast, showed that respondents were repeatedly summoned to report to its main office and did not show up despite several notices. Thus, no overt or positive act proved that petitioner dismissed respondents; their claim was self-serving, conjectural, and of no probative value.
• Burden of Proof: The SC acknowledged the rule that the employer has the burden of proving that termination was for a valid or authorized cause, but held that the employee must first establish by competent evidence the fact of dismissal. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application where the employer denied having dismissed the employees. Since respondents failed to establish a prima facie case of dismissal, no burden shifted to petitioner to prove the legality of a dismissal.
• Abandonment: The SC agreed with the LA and NLRC that respondents were not guilty of abandonment.
• Reinstatement and Monetary Awards: Article 279 of the Labor Code entitles an employee dismissed without just cause and without due process to backwages and reinstatement or separation pay, but the SC found no illegal dismissal. On attorney's fees, Article 111 of the Labor Code allows attorney's fees in cases of unlawful withholding of wages, and RTG Construction, Inc. vs. Facto held that in actions for recovery of wages or where an employee was forced to litigate, attorney's fees are justifiable under Article 111, Section 8, Rule VIII, Book III of the Implementing Rules, and paragraph 7, Article 2208 of the Civil Code, without need of showing malice or bad faith, provided lawful wages were not paid. Here, however, respondents were not illegally dismissed and their wages were not withheld without valid and legal basis, so they were not entitled to attorney's fees. Under the principle of no work, no pay, there should be no payment of backwages because respondents' failure to work was occasioned neither by abandonment nor by termination; the burden of economic loss is not rightfully shifted to the employer, and each party must bear its own loss. Absent any showing of strained relations, the order of reinstatement stands; the doctrine of strained relations is not applied indiscriminately, especially when the employee has not indicated an aversion to returning to work or does not occupy a position of trust and confidence in or has no say in the operation of the employer's business. There was no evidence that respondents disliked returning to their former posts or that they occupied a position of trust and confidence.

• Burden of Proof in Illegal Dismissal — The employee must first establish by substantial evidence the fact of dismissal; only then does the employer bear the burden of proving that the dismissal was for a valid or authorized cause. The SC applied this rule because respondents merely asserted dismissal without corroborative or competent evidence.
• Substantial Evidence — The evidence to prove dismissal must be clear, positive, and convincing; an allegation is not evidence, and a self-serving affidavit without corroboration has no probative value. The SC found respondents' claim self-serving, conjectural, and unsupported.
• No Work, No Pay — Where the employee's failure to work was occasioned neither by abandonment nor by termination, the burden of economic loss is not shifted to the employer; each party bears its own loss. The SC ordered reinstatement but no backwages.
• Strained Relations Doctrine — The doctrine is not applied indiscriminately to bar reinstatement, especially where the employee has not shown aversion to returning or does not occupy a position of trust and confidence. The SC found no evidence of strained relations, so reinstatement stood.
• Attorney's Fees in Labor Cases — In actions for recovery of wages or where an employee is forced to litigate, attorney's fees are justifiable under Article 111 of the Labor Code, Section 8, Rule VIII, Book III of the Implementing Rules, and paragraph 7, Article 2208 of the Civil Code, without need of malice or bad faith, provided lawful wages were not paid. The SC denied fees because there was no illegal dismissal and no unlawful withholding of wages.

• "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 states the threshold rule on which the SC reversed the CA and dismissed the illegal dismissal claim.
• "As an allegation is not evidence, it is elementary that a party alleging a critical fact must support his allegation with substantial evidence." — This defines why respondents' bare assertion and joint affidavit could not establish dismissal.
• "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 is the basis for ordering reinstatement without backwages.
• "The doctrine of strained relations is not applied indiscriminately as to bar reinstatement, especially when the employee has not indicated an aversion to returning to work or does not occupy a position of trust and confidence in or has no say in the operation of the employer’s business." — This explains why reinstatement remained proper despite the litigation.

• Noblejas vs. Italian Maritime Academy Phils., Inc., G.R. No. 207888, June 9, 2014, 725 SCRA 570 — Followed; cited for the rule that the employee must first establish the fact of dismissal and for the no work, no pay principle.
• Tan Brothers Corporation of Basilan City vs. Escudero, G.R. No. 188711, July 8, 2013, 700 SCRA 583 — Followed; cited for the rule that an allegation is not evidence.
• Exodus International Construction Corporation vs. Biscocho, 659 Phil. 142 (2011) — Followed; cited for the requirement that evidence of dismissal be clear, positive, and convincing.
• MZR Industries vs. Colambot, G.R. No. 179001, August 28, 2013, 704 SCRA 150 — Followed; cited for the no work, no pay principle and the allocation of economic loss.
• RTG Construction, Inc. vs. Facto, 623 Phil. 511 (2009) — Followed; cited for the award of attorney's fees under Article 111 of the Labor Code.
• Leopard Security and Investigation Agency vs. Quitoy, G.R. No. 186344, February 20, 2013, 691 SCRA 440 — Followed; cited for the rule that the strained relations doctrine is not applied indiscriminately.
• Diamond Taxi vs. Llamas, Jr., G.R. No. 190724, March 12, 2014, 719 SCRA 10 — Followed; cited for the scope of review under Rule 45 and the CA's review of NLRC decisions.
• Acebedo Optical vs. NLRC, 554 Phil. 524 (2007) — Followed; cited for the CA's power to evaluate the materiality and significance of evidence in labor certiorari.

• Article 279, Labor Code — Security of tenure; an employee unjustly dismissed is entitled to reinstatement without loss of seniority rights and full backwages. The SC cited it but held respondents were not illegally dismissed, so no backwages were awarded; reinstatement without backwages was ordered.
• Article 111, Labor Code — Attorney's fees in cases of unlawful withholding of wages. The SC held it did not apply because respondents were not illegally dismissed and their wages were not withheld without valid and legal basis.
• Section 8, Rule VIII, Book III, Implementing Rules of the Labor Code — Cited in the attorney's fees discussion as part of the basis for fees in actions for recovery of wages; not applied because no unlawful withholding was shown.
• Paragraph 7, Article 2208, Civil Code — Cited as basis for attorney's fees in actions for recovery of wages; not applied because no unlawful withholding was shown.
• Rule 45, Rules of Court — The petition for review on certiorari; the SC reviewed the legal errors of the CA.
• Rule 65, Rules of Court — The CA petition for certiorari; the CA reviewed the NLRC decision for grave abuse of discretion.