Facts:

The case involves Baltazar L. Payno as the petitioner and Orizon Trading Corporation, Orata Trading, and Flordeliza Legaspi as the respondents. Payno was employed as an electrician by Orata Trading, a single proprietorship engaged in signboard and billboard advertising, starting on October 21, 1993. He was later promoted to senior installer. On April 11, 2000, Payno was informed by the personnel manager that Orata Trading would cease operations and that Orizon Trading Corporation would take over. He inquired about his employment status and separation pay due to the closure, but was told that no separation pay would be provided since Orizon Trading was merely absorbing Orata Trading and retaining all employees without any changes in salary or rank. However, he was required to sign a new employment contract with Orizon Trading Corporation. Disturbed by this arrangement, Payno filed a complaint against Orizon Trading for separation pay on May 4, 2000, while continuing to work th...

Facts:

Employment and Promotion:
Petitioner Baltazar L. Payno was employed as an electrician by Orata Trading, a single proprietorship engaged in signboard and billboard advertising, on October 21, 1993. He was later promoted to senior installer.

Business Closure and Takeover:
On April 11, 2000, petitioner was informed by the personnel manager that Orata Trading would cease its business operations and that Orizon Trading Corporation would take over. Petitioner inquired if he would receive separation pay due to the closure but was told none would be provided since Orizon Trading Corporation was absorbing Orata Trading, maintaining its premises, and retaining all employees without any diminution in salary and rank. However, he was required to sign a new employment contract with Orizon Trading Corporation.

Filing of Complaint:
On May 4, 2000, petitioner filed a complaint against Orizon Trading for payment of separation pay due to the closure of Orata Trading. Despite this, he continued working with Orizon Trading Corporation.

Termination of Employment:
On June 3, 2000, petitioner was told not to report for work anymore unless he signed the new employment contract. Respondent Flordeliza Legaspi, the general manager, offered him P7,000 as separation pay, which he refused, deeming it insufficient. On June 5, 2000, petitioner filed an Amended Complaint, including "illegal dismissal" as another cause of action.

Dispute Over Resignation:
Respondents claimed that petitioner voluntarily resigned when he refused to sign the new contract and continued working. They argued that he was not entitled to separation pay but offered P7,000 as financial assistance.

Issue:

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Ruling:

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Ratio:

1. Burden of Proof in Dismissal Cases: In termination cases, the employer must prove the validity or non-existence of dismissal. Respondents’ claim of resignation was unsupported by evidence.
2. Resignation vs. Dismissal: Resignation requires a voluntary act and intent to relinquish employment. Petitioner’s actions, including filing a complaint for illegal dismissal, were inconsistent with resignation.
3. Separation Pay for Business Closure: Under Article 283 of the Labor Code, employees are entitled to separation pay when a business closes, unless the closure is due to serious financial losses. Respondents admitted the closure of Orata Trading but failed to justify the non-payment of separation pay.
4. Constructive Dismissal: Petitioner’s refusal to sign a new contract and subsequent barring from work constituted constructive dismissal. The offer of inadequate separation pay further demonstrated the lack of valid grounds for termination.