G.R. No. 110930 - Oscar Ledesma and Co. vs. National Labor Relations Commission

Private respondent was employed as a security guard by petitioner company in 1984 at Hacienda Teresa, located in Barangay Alicante, E.B. Magalona, Negros Occidental.
The hacienda is covered by the Comprehensive Agrarian Reform Program (CARP), which later played a role in the events surrounding the case.
The management of the hacienda was under petitioner Arturo Ledesma, indicating internal company control over personnel decisions.

On February 8, 1992, a team from the Department of Agrarian Reform visited the hacienda to explain the workers’ options under CARP – namely, actual land distribution and stock distribution.
Subsequent to the meeting, a polarization emerged:

Private respondent actively campaigned for the actual land distribution plan.
Petitioners, representing company management, campaigned for the stock distribution plan.

February 9, 1992 – Private respondent led a walkout after the petitioner company insisted that workers at Hacienda Balaring be allowed to vote in the referendum.
February 10, 1992 – Private respondent was prevented from reporting for work by the hacienda administrator, Ceferino Nunez, and was instructed to wait for instructions from petitioner Arturo Ledesma.
February 18, 1992 – Petitioner Ledesma informed private respondent that his services were no longer needed, citing his perceived loyalty to the workers rather than to company management.

On February 27, 1992, private respondent filed a complaint with the Regional Arbitration Branch No. VI in Bacolod City, alleging illegal dismissal, underpayment of wages, and non-payment of service incentive leave and night shift differential.
November 3, 1992 – The Labor Arbiter ruled:

Private respondent was not dismissed but was instead given a new assignment.
His refusal to report for work in the new assignment was characterized as abandonment.
The change of designation from security guard to laborer was justified on the grounds that he had breached the trust and confidence expected by the employer.
Claims for overtime pay and nighttime premium were denied, while claims for service incentive leave and a salary differential were partially granted.

On appeal, the NLRC reversed the Labor Arbiter’s decision and declared that private respondent was illegally dismissed.
Key determinations by NLRC:

Petitioners failed to overcome the evidence supporting the claim of illegal dismissal, particularly due to petitioner Ledesma's failure to submit an affidavit refuting the respondent’s claim.
The allegation that the respondent was merely reassigned in good faith was dismissed because the transfer from the role of security guard to that of a laborer effectively constituted a demotion.
There was a recognized diminution in salary since the compensation system for security guards differed markedly from that of laborers, who were paid on a daily or piece-work basis and were not engaged year-round.

Based on the strained relations between the parties, NLRC, in lieu of reinstatement, ordered:

Petitioners elevated the case through a petition for certiorari under Rule 65 of the Revised Rules of Court.
The petition sought to set aside the NLRC Fourth Division decision and its Resolution dated June 14, 1993, particularly contesting the denial of a motion for reconsideration.

Whether the NLRC committed grave abuse of discretion in declaring that private respondent was illegally dismissed.

The petitioners questioned whether the NLRC misapplied the standards regarding employment transfers and demotion.

Whether the NLRC erred in awarding back wages equivalent to three years of service.

The appropriateness of the back wages calculation and the period over which such wages were to be paid was contested.