Title
Dee Jay's Inn and Cafe vs. Raneses
Case
G.R. No. 191823
Decision Date
Oct 5, 2016
A cashier claimed illegal dismissal and unpaid benefits; employer denied termination, citing employee walkout. Supreme Court ruled no substantial evidence of dismissal, awarding separation pay due to time lapse.
illegal dismissal
lack of substantial evidence
complaint

Case Summary (G.R. No. 191823)

Factual Background

Raneses filed before the Social Security System (SSS) Office a complaint against Ferraris for non-remittance of SSS contributions. She also filed before the NLRC City Arbitration Unit (CAU) XII, Cotabato City, a complaint against petitioners for underpayment or nonpayment of wages, overtime pay, holiday pay, service incentive leave pay, 13th month pay, and moral and exemplary damages, docketed as NLRC CAU Case No. RAB 12-01-00026-05. After conciliation failed, the parties submitted position papers. On September 8, 2005, Raneses filed her position paper, already including a claim for illegal dismissal.

On the merits, Raneses alleged that in January 2005 she requested Ferraris’s share as employer in the SSS contributions and requested overtime pay for the 11 hours per day she allegedly rendered. She claimed that Ferraris became infuriated and told her to seek another employment. According to her, Ferraris thereafter terminated her employment on February 5, 2005. To corroborate her allegations, Raneses submitted joint affidavits of Mercy Joy Christine Bura-ay (Mercy) and Mea Tormo (Mea).

Petitioners denied that Raneses and Moonyeen were terminated. Petitioners asserted that DJIC incurred a P400.00 shortage in its earnings for February 4, 2005. Petitioners claimed that on that same day Ferraris called Raneses and Moonyeen to a meeting. When they denied the shortage, Ferraris allegedly scolded them and required them to produce the missing P400.00. Petitioners stated that Raneses and Moonyeen walked out and did not report back to work. Petitioners submitted the affidavit of Ma. Eva Gorospe (Eva), another employee, to support their version that the employees were not terminated and that they ceased reporting to work after the February 5, 2005 incident.

Petitioners further alleged that since January 2002, Raneses had been living in Ferraris’s ancestral home for free, and Ferraris shouldered the cost of P2,500.00 for electrical connections. Petitioners also claimed they admonished Raneses repeatedly for bringing her child to work, allegedly affecting her work concentration. Petitioners added an account that Raneses requested that SSS contributions not be deducted from her salary and that she would comply with the law by paying SSS premiums herself as a self-employed person. Petitioners alleged that Raneses recorded weekly wages and SSS premium payments in a notebook that had since gone missing.

Labor Arbiter Proceedings

On February 21, 2006, the Labor Arbiter rendered a decision in favor of petitioners. The Labor Arbiter dismissed Raneses’s complaint for lack of cause of action and lack of merit, but awarded P500.00 representing a 13th month pay differential. On illegal dismissal, the Labor Arbiter held that the evidence did not show a positive or unequivocal act of termination by petitioners. It reasoned that Raneses did not controvert petitioners’ categorical denial, and that the record lacked evidence linking petitioners to an act of dismissal. The Labor Arbiter also noted a procedural defect, stating that Raneses did not aver illegal dismissal in her verified complaint and could not be allowed to prove a cause of action not pleaded in the complaint, referencing Rule V, Section 4, Par. 2 of the Rules of Procedure of the NLRC, as Amended.

The Labor Arbiter also ruled on coverage, noting that DJIC, as a registered BMBE under Republic Act No. 9178, was exempted from the coverage of the Minimum Wage Law. The only relief granted remained the 13th month pay differential.

Subsequent NLRC Consolidated Cases and Outcomes

In a related CAU case involving Moonyeen, the Labor Arbiter dismissed her complaint in a decision dated February 20, 2006 and similarly found that Moonyeen failed to show a positive or unequivocal act of termination. However, petitioners were liable for P500.00 underpayment of 13th month pay.

Raneses and Moonyeen appealed. Their appeals were docketed as NLRC CA Nos. M-009173-06 and M-009174-06 and later consolidated. On August 30, 2006, the NLRC dismissed their appeals for lack of merit and affirmed the Labor Arbiter’s decisions. The NLRC reasoned that there was no written document showing dismissal and that petitioners denied having dismissed them. Thus, it placed the burden on the employees to prove dismissal. It further held that the employees failed to establish dismissal by substantial evidence and emphasized that their support affidavits were self-serving and biased due to their interest as complainants.

The NLRC also considered that the investigation conducted by Ferraris on February 4, 2005 regarding shortages could not be treated as dismissal, and that the employees’ failure to report was an act they bore consequences for. It rejected the claims for overtime pay, holiday pay, and service incentive leave pay for failure of proof and for lack of coverage under Article 95 of the Labor Code, while sustaining the 13th month pay award.

On November 30, 2006, the NLRC denied Raneses’s motion for reconsideration.

Court of Appeals’ Ruling (Illegal Dismissal Found; Remand for Computation)

Raneses sought relief from the Court of Appeals via a petition for certiorari, imputing grave abuse of discretion to the NLRC. In its Decision dated April 29, 2009, the Court of Appeals granted the petition. It held that the NLRC’s affirmance of the Labor Arbiter’s abandonment conclusion did not appear substantially proved and was repugnant to law and jurisprudence. The Court of Appeals emphasized that dismissal and abandonment each require specific factual and legal components. It held that the Labor Arbiter relied on an alleged misquotation of De Paul/King Philip Customs Tailor, et al. vs. NLRC and that the Labor Arbiter’s rule on shifting of the burden was incongruous with the prevailing jurisprudence requiring two elements for abandonment: absence without valid justification and a clear intention to sever the employer-employee relationship, with the second element to be evidenced by overt acts.

The Court of Appeals found that the joint affidavits of Mercy and Mea were tainted with bias and could not credibly and substantially prove dismissal. However, it also ruled that Eva’s affidavit did not establish abandonment because mere failure to report back to work, as supported by that affidavit, fell short of substantial evidence required to prove abandonment.

Applying the principle that doubts in labor controversies should be resolved in favor of the worker, the Court of Appeals concluded that the employer failed to prove abandonment and, as a corollary, failed to discharge the burden necessary to justify termination. It ruled that Raneses was in fact terminated on February 5, 2005 and that the termination was illegal and in patent violation of procedural due process requirements due to the failure to prove abandonment and the lack of just cause.

The Court of Appeals ordered reinstatement without loss of seniority rights or, if reinstatement was no longer feasible, payment of separation pay plus full backwages inclusive of allowances and other benefits, computed from February 5, 2005 up to actual reinstatement. It otherwise maintained the Labor Arbiter’s award of P500.00 for the 13th month pay differential. It set aside the NLRC resolutions and remanded the case for proper computation of monetary awards. Petitioners’ motion for reconsideration was denied in the Court of Appeals’ Resolution dated February 8, 2010.

Petitioners’ Assignment of Errors Before the Supreme Court

Petitioners came to the Supreme Court by Rule 45 review. They assigned errors imputing that (1) the Court of Appeals erred in giving cognizance to a cause of action allegedly belatedly included in the position paper and not originally pleaded in the complaint; and (2) the Court of Appeals erred in finding grave abuse of discretion because it allegedly ignored established jurisprudence and relied on alleged lack of factual proof.

Petitioners argued that the 2005 NLRC Rules of Procedure governed, and that under those rules only causes of action pleaded in the complaint could be entertained. They also insisted that Raneses was not dismissed, but merely stopped reporting after being scolded on February 4, 2005 regarding a P400.00 shortage. Petitioners stressed they never asserted abandonment because they claimed there was no dismissal.

Supreme Court’s Treatment of Procedural Issue on Pleading

The Supreme Court first addressed the procedural contention. It observed that Raneses filed her complaint sometime in January 2005 and filed her position paper on September 8, 2005. During that period, the 2002 NLRC Rules of Procedure, as amended by NLRC Resolution No. 01-02, were still in effect. The 2005 Revised Rules of Procedure took effect on January 7, 2006.

Under Section 4, Rule V of the 2002 NLRC Rules of Procedure, as amended, the Labor Arbiter required the submission of verified position papers covering only claims and causes of action raised in the complaint. It also stated that parties would not be allowed to allege facts or present evidence to prove facts not referred to and causes of action not included in the complaint or position papers after submission of the position papers. The Supreme Court acknowledged jurisprudence under Tegimenta Chemical Phils. v. Buensalida and Our Haus Realty Development Corporation v. Parian that the complaint alone does not finally determine the cause of action and that a claim not raised in a pro forma complaint may still be raised in the position paper, provided it is discussed and evaluated with the complaint.

The Supreme Court recognized that Raneses could not have included illegal dismissal in her complaint because the alleged dismissal occurred on February 5, 2005 while the complaint was filed in January 2005. However, because she later alleged and argued illegal dismissal in her September 8, 2005 position paper, the Labor Arbiter could still take cognizance of it. Thus, the Supreme Court did not accept t

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