G.R. No. 209132 - Heirs of Villanueva vs. Heirs of Mendoza

Viola Cruz, employed by Norkis Distributors, Inc., was hired as a cashier/bookkeeper and later transferred from its Cagayan de Oro City branch to its Valencia, Bukidnon branch.
In recognition of her loyalty and dedication, she received a compensating salary adjustment of One Hundred Pesos (₱100.00) effective July 1, 1990.
The Valencia branch was scheduled to transfer its office in October 1990, and preparations for the move were underway when events unfolded.

On October 14, 1990, while preparing for the branch transfer, petitioner Viola Cruz suddenly collapsed during work. She was immediately rushed to Monsanto General Hospital in Valencia.
Despite her collapse, she reported for work the next day; however, on October 17, 1990, she was transferred to Capitol College General Hospital in Cagayan de Oro City for further confinement.
She remained hospitalized until October 25, 1990, after which she was moved to Maria Reyna Hospital and remained under treatment until December 5, 1990.
Her diagnosis included conditions such as "CNS Infection: TB Meningitis vs. Cryptococcal Meningitis," and later complications including Pottas Disease and Diabetes Mellitus Type II.

Starting October 15, 1990, petitioner stopped reporting for work due to her severe health condition.
On October 19, 1990, her co-employees informed respondent Norkis of her condition, leading the company to recruit Hernando Juaman as her replacement.
On December 28, 1990, petitioner sought clarification about her employment status with a letter to the company.
The reply she received was a termination letter dated November 2, 1990, which cited "health reasons" as the ground for her dismissal, emphasizing her inability to perform assigned duties due to her ill-health.

Private respondents additionally alleged that petitioner’s continued unexplained absence and purported failure to account for unaccounted company funds constituted abandonment and defalcation.
A letter purportedly sent on October 19, 1990, mentioned unaccounted cash collections and unclaimed salaries, alleging the discovery of missing funds during an audit conducted by her replacement.
Subsequent communication evidenced inconsistencies: a follow-up letter on October 24, 1990, and later, in February 1991 and January 1991, correspondence that reiterated termination due to health reasons and even hinted at future employment possibilities.
Petitioner contended that she was never notified or given an opportunity to explain any allegations regarding misappropriation, and the documents adduced by the respondents were unsubstantiated and lacked proper evidentiary support.

On March 18, 1991, petitioner filed a complaint for illegal dismissal before the Arbitration Branch of the NLRC in Cagayan De Oro City, seeking separation pay, various money claims, and damages.
The Labor Arbiter’s decision on May 28, 1993, awarded petitioner separation pay, service incentive leave pay, proportionate 13th month pay, moral damages, exemplary damages, and attorney’s fees.
Both parties appealed the decision, and on November 19, 1993, the Fifth Division of the NLRC reversed the Labor Arbiter’s award, dismissing the complaint for lack of merit but ordering a minimal payment for unpaid benefits.
Petitioner then elevated the case through a petition for certiorari under Rule 65, alleging grave abuse of discretion by the NLRC, particularly on the issues of illegal dismissal, entitlement to damages, and attorney’s fees.

Whether petitioner Viola Cruz was illegally dismissed by the private respondents.

Did her prolonged absence due to hospitalization constitute abandonment?
Was there sufficient evidence to prove an intent to sever the employer-employee relationship?

Whether petitioner is entitled to recover moral and exemplary damages and attorney’s fees.

Were the grounds for dismissal, particularly citing health reasons and alleged defalcation, legally and factually supported?
Did the respondents comply with the mandatory due process requirements, including the serving of two written notices?

Whether the NLRC and Labor Arbiter correctly applied the law regarding dismissal for health reasons and loss of trust/confidence.