Title
Escobin vs. National Labor Relations Commission
Case
G.R. No. 118159
Decision Date
Apr 15, 1998
Security guards in Basilan placed on "floating status" were dismissed for not reporting to Manila due to financial constraints. SC ruled dismissal illegal, citing unreasonable directive and no willful disobedience or abandonment, awarding backwages and separation pay.
security guards
unjust dismissal
unreasonable directive

Case Summary (G.R. No. 206393)

Factual Background

PISI contracted the services of petitioners, security guards based in Sta. Clara, Lamitan, Basilan, to guard and protect the premises of UP-NDC Basilan Plantations, Inc., pursuant to an agreement dated May 17, 1989. Petitioners were hired on various dates, with some initially employed as early as November 19, 1984, and others later, including July 29, 1986 for Nicolas Ramones, Jr.

In 1988, certain guards were dismissed by PISI for insubordination and grave misconduct after they refused to ring a bell in the evening of May 25, 1988 while on duty. They were later reinstated through an agreement initiated by Congressman Alvin Dans.

On June 1, 1990, UP-NDC Basilan Plantations, Inc. ordered a reduction in the contracted guards from seventy (70) to sixty-seven (67). Another letter dated January 22, 1991 further advised PISI to reduce the guards from sixty-seven (67) to only ten (10), a reduction of fifty-seven (57) guards. PISI responded by issuing Office Memorandum No. 4 on February 6, 1991, placing the affected guards on reserved or floating status effective February 1, 1991, subject to being posted or assigned upon notice. PISI then issued Office Order No. 5 on February 12, 1991, deleting the names of two individuals from Office Order No. 4.

On April 8, 1991, the guards on floating status were instructed through a registered letter to report to PISI head office in Manila for posting to PISI clients within the Metro-Manila area not later than April 30, 1991. Petitioners did not reply or answer this letter. PISI thereafter sent further letters: on May 2, 1991, ordering petitioners to report and explain their failure to comply; and on May 29, 1991, reiterating its order while requiring petitioners to explain why disciplinary action should not be taken. Petitioners again failed to comply, did not send even a courtesy reply, and did not explain why they could not comply.

As a result, on June 28, 1991, PISI issued individual letters to petitioners stating that, because of their failure to respond to and comply with the letters dated April 8, May 2, and May 29, 1991, and because they failed to report to head office for posting as ordered, they were dismissed for insubordination or willful disobedience to lawful orders.

Late on July 1, 1991, petitioners wrote to PISI general manager Teodolfo Santos, stating that they had no intention to abandon their employment and no intention to defy fair, reasonable, and lawful orders. They acknowledged receipt of the April 8 and May 2 letters. During the arbitration proceedings, petitioners later justified their inability to report to Manila by claiming that they resided in Basilan, had families in Basilan, had never traveled beyond Visayas and Mindanao, and were not provided with fare money because they could not finance their travel from Basilan to Manila. They also argued that compliance would be absurd and alleged that PISI acted in bad faith, contending that they were in truth constructively dismissed.

Labor Arbiter Proceedings and Rulings

After conciliation proceedings failed, parties submitted position papers. On February 17, 1992, Labor Arbiter Rhett Julius J. Plagata ruled in petitioners’ favor. The labor arbiter determined that certain individuals, namely S/G Winifredo Obedencia and Ignacio Antonio, did not sign the complaint, and therefore their names were to be deleted as party-complainants.

On the merits, the labor arbiter evaluated PISI’s order requiring petitioners to report to head office in Manila. It held that the directive was not reasonable because petitioners were residents of Basilan and heads of families residing there; they had not been assigned beyond Visayas or Mindanao; they were not provided fare money; and they were not assured of compensation comparable to what they previously received in Basilan or of continued posting after reporting to Manila. The labor arbiter found that moving would entail substantial inconvenience for petitioners and their families. It concluded that, under these circumstances, petitioners’ refusal to report was justified and that their dismissal was illegal.

As to relief, the labor arbiter awarded petitioners backwages computed at six (6) months pay, based on their latest salary, and awarded separation pay as petitioners had chosen separation pay instead of reinstatement. It denied moral and exemplary damages for lack of factual and legal basis. It granted attorneys fees and litigation expenses of P1,000 for each complainant. It also absolved UP-NDC Basilan Plantations, Inc. from joint and several liability, reasoning that joint and several liability of an indirect employer in labor cases is limited to non-payment of labor standards benefits mandated by the Labor Code, and that the monetary awards in this case were labor relations benefits thus constituting sole liability of PISI.

NLRC Appellate Ruling

On appeal, the NLRC reversed the labor arbiter’s decision. In its September 22, 1993 resolution, the NLRC held that PISI had no choice but to place petitioners and other guards on floating status because of the lack of clients for immediate reassignment. It reasoned that the instruction to report to Manila was issued because PISI knew it could only place the guards on reserve status for six months.

The NLRC considered petitioners’ refusal to comply with the order to report to Manila and their lack of timely compliance with the directives to explain their inability to do so as the proximate cause of dismissal. The NLRC stated that petitioners’ objections were raised only during the arbitral proceedings and did not mitigate the alleged insubordination. It further found that due process was observed since PISI gave petitioners ample time to explain why no disciplinary measure should be taken, but petitioners still refused to comply.

The NLRC also treated petitioners’ conduct as not only insubordination but also as abandonment, concluding that petitioners were not entitled to backwages, separation pay, or reinstatement. It denied reconsideration on December 16, 1993 for lack of merit.

The Parties’ Contentions

Petitioners anchored their certiorari petition on the claim that the NLRC committed grave abuse of discretion. They raised assignments of error questioning (1) the NLRC’s finding of willful disobedience, (2) its ruling that petitioners abandoned work, (3) its reversal of the labor arbiter’s finding that petitioners were illegally dismissed, (4) its denial of back wages, separation pay, damages, and attorneys fees, and (5) its denial of reconsideration. Petitioners also asserted that the instruction to report to Manila was inconvenient, unreasonable, and prejudicial.

The solicitor general maintained that petitioners’ conduct amounted to clear insubordination constituting willful disobedience to lawful orders connected to their work. It argued that PISI had repeatedly notified petitioners for three consecutive times to report to the head office for posting, but petitioners refused to receive the letters and failed to comply. Petitioners countered that they lacked transportation funds, were not assured of continued work, were not furnished copies of Office Memorandum No. 4 placing them on floating status, and were unable to leave their families in Basilan. They further contended that the dismissal, framed as abandonment, was actually a constructive dismissal.

Issues Before the Court

The Court treated due process as undisputed and narrowed the controversy to whether petitioners were dismissed for valid and just cause, and whether they were entitled to separation pay, back wages, and damages. It also assessed whether the NLRC’s alternative theories—willful disobedience and abandonment—were supported by the required legal standards.

Legal Basis and Reasoning

The Court reiterated established doctrine on termination for willful disobedience and abandonment. As a just and valid cause for dismissal, willful disobedience requires: (1) violation of a rule, order or instruction that is reasonable and lawful; (2) knowledge by the employee; and (3) connection with the duties the employee was engaged to discharge. Abandonment, by contrast, requires: (1) a deliberate and unjustified refusal to resume work, and (2) lack of any intention to return.

On willful disobedience, the Court held that the NLRC and the solicitor general failed to establish the requisites for a just cause dismissal. Although petitioners did not report to Manila and did not respond to PISI’s letters, the Court emphasized that not every refusal is dismissal-worthy. It examined whether the employer’s directive to report to Manila was reasonable and lawful under the circumstances.

The Court found that the order failed the standard of reasonableness for four principal reasons. First, it was grossly inconvenient for petitioners, who were residents and heads of families in Basilan, to commute to Manila. The Court drew support from Yuco Chemical Industries, Inc. vs. Ministry of Labor and Employment, which treated transfer to Manila for workers in comparable conditions as grossly inconvenient. The distance from Basilan to Manila was much greater than that from Tarlac, and the transfer would necessarily separate petitioners from their families.

Second, petitioners were not provided funds for transportation and living expenses. The Court noted that petitioners’ earnings were limited to P1,500 to P2,500 a month before placement on reserve status and that after that they remained jobless, which made travel to Manila impracticable without assistance. The Court also recognized that living arrangements in Manila would require additional expense borne by petitioners.

Third, the Court rejected the justification that PISI sent transportation money, observing that the recipients identified were not parties in the case and that the transportation allowance was allegedly given only after petitioners were already terminated. The letter purport

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