G.R. No. 127086 - Arc-Men Food Industries Corp. vs. National Labor Relations Commission

Petitioners: Arc-Men Food Industries Corporation (AMFIC) and Arcadio P. Mendoza.
Respondents: A group of employees, including Nicolas Famor, Jr. and others.
AMFIC is engaged in producing banana chips and operates a processing plant in Davao, Philippines.
On January 15, 1992, 47 employees filed a complaint with the Department of Labor and Employment (DOLE) alleging violations of Labor Standards Law.
Employees claimed they were barred from work to avoid interviews by DOLE representatives and were pressured to sign waivers to withdraw their complaints.
Of the original complainants, 21 signed waivers, while 26 employees (the private respondents) felt constructively dismissed.

AMFIC contended that the employees were not dismissed but that the plant was temporarily shut down due to a lack of raw materials and necessary repairs.
The company claimed that the employees were not allowed to work because there was no work available, not due to any threats or coercion.
AMFIC asserted that when operations resumed on February 21, 1992, the employees failed to report for work despite receiving formal notices.

On September 30, 1992, the Executive Labor Arbiter ruled that there was no basis for the claim of illegal or constructive dismissal.
The Arbiter found that the temporary shutdown was permissible under the Labor Code and that the employees' failure to report for work was not the company's fault.
The Arbiter ordered AMFIC to pay a total of P21,050.11 to 23 complainants for service incentive leave pay, holiday pay, and 13th month pay, while dismissing other claims for lack of merit.

The private respondents appealed to the National Labor Relations Commission (NLRC), which found merit in the appeal regarding the issue of constructive dismissal.
The NLRC affirmed the Labor Arbiter's finding of no constructive dismissal but disagreed with the conclusion that the employees had lost interest in their jobs.
The NLRC ordered the reinstatement of the complainants without backwages, urging them to report for work within 15 days, or else their failure would be interpreted as abandonment.

AMFIC filed a motion for reconsideration, challenging the NLRC's order for reinstatement without backwages.
The NLRC modified its earlier resolution, directing AMFIC to pay the complainants their respective separation benefits instead of reinstatement.

AMFIC filed a petition for certiorari, alleging that the NLRC committed grave abuse of discretion in its resolutions.
The petitioners argued that the NLRC's conclusions were speculative and lacked a legal basis, especially since both the Labor Arbiter and NLRC found no constructive dismissal.

The Supreme Court noted that the factual findings of quasi-judicial agencies like the NLRC are generally respected unless manifestly erroneous.
The Court found that the NLRC's conclusion to award separation pay was not supported by the findings that there was no constructive dismissal.
The Court emphasized that separation pay is only warranted under specific conditions outlined in the Labor...continue reading