Factual Background

On October 17, 2008, Lopez, Jr. asked petitioners to report to his office and terminated their employment, citing that they failed to perform satisfactorily. Lopez, Jr. ordered them to immediately turn over records in their possession to their successors. A week later, petitioners received return-to-work letters dated October 22, 2008, stating that petitioners did not report since October 20, 2008 without resigning, allegedly in violation of the employment agreements. The letters directed them to report and explain their failure to file resignation letters.

Fernandez responded through a demand letter dated November 11, 2008, claiming nonpayment of her salary for the period September 30 to October 17, 2008 and mobile phone expenses of P3,000 incurred in furtherance of Newfield business. Fernandez asserted that she had been able to hire one team leader and twelve agents in three weeks but that Newfield nonetheless found her performance unsatisfactory and instructed her to file a resignation letter. She stated she referred the matter to counsel and threatened suit if Newfield did not respond favorably. Beltran sent a similar demand letter dated November 17, 2008, with a claim for unpaid salary of P7,206.80.

When Newfield did not provide favorable action, petitioners filed on December 9, 2008 a complaint for illegal dismissal, nonpayment of salary and overtime pay, reimbursement of cell phone billing, moral and exemplary damages, and attorneys fees. In their verified position paper, petitioners narrated that Lopez, Jr. fired them on October 17, 2008, told them “YOU[RE] FIRED, x x x this is your last day and turn over the records,” and ordered immediate turnover of their records. Newfield, in its verified position paper, relied on petitioners’ fixed-term employment agreement theory and the six-month engagement guarantee, arguing that petitioners failed to comply with the agreement by not performing their tasks for the guaranteed period and by not giving the required written notice for termination.

Labor Arbiter’s Proceedings and Ruling

Before the Labor Arbiter, respondents maintained that petitioners had signed employment agreements committing them to perform for six months and to give 45 days’ written notice if they wished to terminate after the guaranteed period. They alleged that Fernandez failed to report after approximately three weeks and did not communicate despite the return-to-work letter; thus, they declared her absent without official leave (AWOL) and terminated her employment for breach of contract. They made the same claim for Beltran, asserting that she stopped reporting two weeks after being hired and similarly failed to communicate despite the return-to-work letter.

Petitioners denied that they abandoned their jobs. They insisted that Lopez, Jr. dismissed them on October 17, 2008 and that they were ordered to turn over records to successors. They also submitted, as additional evidence, the affidavit of Josette Pasm an, who stated under oath that on October 21, 2008 she called Newfield’s Timog Office to inquire about her salary, looked for Fernandez or Beltran, and was surprised that they were no longer employed at Newfield.

The Labor Arbiter ruled that petitioners’ dismissal was illegal. The dispositive portion ordered respondents to pay petitioners their salary from the time of dismissal up to the promulgation of the decision, separation pay, unpaid salaries and allowances for October 1 to 17, 2008, and ten percent (10%) of the total award as attorneys fees. The Labor Arbiter rejected respondents’ abandonment theory, explaining that petitioners had taken steps to protest their layoff by demanding their pay and by filing the complaint for illegal dismissal. It further found petitioners’ account credible that Lopez, Jr. dismissed them on October 17, 2008 and directed them to turn over records.

On the issue of back wages, the Labor Arbiter ruled in favor of petitioners without the later limitation imposed by the NLRC due to the alleged fixed-term nature of the agreement.

NLRC Review and Modification

The NLRC affirmed the Labor Arbiter’s findings and conclusion that petitioners had been illegally dismissed, grounding its affirmance on substantial evidence. It nonetheless modified the award of back wages because petitioners had allegedly signed fixed-term employment agreements. Accordingly, it limited back wages to the period contemplated in the respective contracts: for Fernandez, from September 30, 2008 to March 30, 2009, and for Beltran, from October 7, 2008 to April 7, 2009. In its Resolution dated January 25, 2011, the NLRC denied both parties’ motions for reconsideration.

CA’s Reversal on Illegal Dismissal

Respondents then filed a petition for certiorari under Rules 65 before the CA. The CA reversed the NLRC and dismissed petitioners’ illegal dismissal complaint. It concluded that petitioners abandoned their jobs and pre-terminated their six-month employment agreements. The CA reasoned that petitioners left after meeting with Lopez, Jr. on October 17, 2008 when they were advised of unsatisfactory performance. The CA held that the meeting did not establish dismissal, but rather suggested that petitioners could not accept constructive criticism and chose not to continue working. It further stated that petitioners demanded wages and mobile phone expenses for the two to three weeks they had worked instead of reporting to explain their absence. The CA added that petitioners’ alleged breach of the employment agreements exposed them to liability for liquidated damages.

In denying reconsideration through its Resolution dated May 18, 2012, the CA maintained its earlier ruling.

Petitioners’ Grounds in the Rule 45 Petition

In the present Rule 45 review, petitioners argued that the CA erred in dismissing their complaint because, for a dismissal to be valid, there must be a just or authorized cause and due process must be observed. They contended that respondents terminated their employment on October 17, 2008 when Lopez, Jr. fired them and ordered turnover of records, yet they received no written notice specifying the cause of termination. Petitioners also claimed that the CA improperly reversed findings of the Labor Arbiter and NLRC regarding dismissal and abandonment.

Respondents countered that the CA had correctly found that no incident of firing occurred on October 17, 2008. Respondents insisted that Lopez, Jr. merely called petitioners to his office and advised them of unsatisfactory work performance. They also argued that petitioners refused to comply with return-to-work letters and instead demanded wages and reimbursement.

The Court’s Treatment of the Record and Reviewability

The Court recognized that petitions under Rule 45 generally raise questions of law only. It nevertheless applied recognized exceptions where findings by the Labor Arbiter, NLRC, and CA were in conflict. After review, the Court held it was constrained to reverse the CA.

Legal Basis and Reasoning: Illegal Dismissal

The Court agreed with the Labor Arbiter and NLRC that petitioners were illegally dismissed. It held that the CA erred in ruling that the October 17, 2008 meeting failed to prove dismissal. The Court found that Lopez, Jr. terminated petitioners’ employment on October 17, 2008 based on petitioners’ sworn allegations in their verified position paper that Lopez, Jr. fired them on that date, told them it was their last day, and directed them to turn over records.

The Court reviewed respondents’ verified pleadings before the Labor Arbiter and found that respondents did not deny the sworn narrative that petitioners were fired as stated. Respondents instead argued that there was no evidence showing petitioners were forced not to report for work and that petitioners abandoned their jobs. The Court also considered respondents’ silence on the October 17, 2008 firing claim in an appeal memorandum filed before the NLRC, treating that silence as an admission that fortified petitioners’ account.

In support, the Court invoked Section 32, Rule 130 of the Rules of Court, which provides that a party’s act or declaration made in the presence and within the hearing or observation of another party, who does nothing when the act is such as naturally to call for action or comment if not true, may be given in evidence against the party. The Court applied this to respondents’ failure to directly dispute petitioners’ claim of being told they were fired. It also invoked precedent such as Tegimenta Chemical Phils. v. Oco and relied on the concept that silence can constitute an admission that fortifies the employees’ narration when the circumstances call for denial.

The Court additionally noted that respondents confirmed that Lopez, Jr. met petitioners on October 17, 2008, and it expressed serious doubt over respondents’ claim, raised at later stages, that no such incident of firing took place. The Court observed that respondents did not earlier raise a denial that Lopez, Jr. met petitioners but did not fire them, and that the denial was not presented in their position paper, reply, or appeal memorandum.

The Court also considered the affidavit of Josette Pasman, which stated that when she inquired about salary on October 21, 2008 and looked for Fernandez or Beltran, she found them no longer employed at Newfield.

Legal Basis and Reasoning: Lack of Abandonment

The Court corrected the CA’s abandonment conclusion. It first clarified that the employment agreements did not create fixed-term employment for six months in the manner assumed by the CA, NLRC, and respondents. The Court held that Fernandez became entitled to a loyalty bonus of P60,000 and life insurance worth P500,000 upon reaching six months of employment, while Beltran would receive a ten percent salary and allowance increase upon reaching twelve months of employment. The “six-month guarantee” meant that petitioners guaranteed performance of their tasks for six months, and f

Petitioners Gilda C. Fernandez and Bernadette A. Beltran filed a Rule 45 petition challenging a Court of Appeals (CA) decision reversing the National Labor Relations Commission (NLRC) and dismissing their complaint for illegal dismissal.
The CA had dismissed the complaint on the theory that petitioners abandoned their jobs and effectively pre-terminated their engagement.
The Supreme Court granted the petition, reversed the CA, and reinstated the NLRC rulings with a clarification on the liability of respondent Arnold Jay Lopez, Jr.

Parties and Procedural Posture

Petitioners were employees hired by respondent Newfield Staff Solutions, Inc. (Newfield), with respondent Arnold Jay Lopez, Jr. (Lopez, Jr.) acting as General Manager.
The Labor Arbiter found the dismissal illegal and ordered money awards including salary-related claims, separation pay, and attorney’s fees.
The NLRC affirmed the Labor Arbiter but modified the award by limiting back wages to the period provided in the parties’ agreements.
Respondents then sought certiorari under Rule 65 before the CA.
The CA reversed both the Labor Arbiter and the NLRC, dismissed the complaint, and denied petitioners’ theory that they were fired.
Petitioners pursued Rule 45 in the Supreme Court, arguing legal error and settled doctrinal violations.
The Supreme Court reinstated the Labor Arbiter as modified by the NLRC, and clarified that Lopez, Jr. was not solidarily liable with Newfield.

Key Factual Allegations

Newfield hired Fernandez on September 30, 2008 as Recruitment Manager with salary P50,000 and an allowance of P6,000 per month.
Under Fernandez’s employment agreement, she was to receive a loyalty bonus of P60,000 and life insurance worth P500,000 upon reaching six months of employment.
Newfield hired Beltran on October 7, 2008 as a probationary Recruitment Specialist with salary P15,000 and allowance of P2,000 per month.
Under Beltran’s contract, she was to receive a 10% salary and allowance increase upon reaching 12 months of employment with Newfield.
Both employment agreements required petitioners to guarantee performance of their tasks for six months, with liquidated damages of P45,000 for breach of that guarantee.
The agreements required 45 days’ written notice before terminating after the guaranteed period, along with surrender of equipment and a clearance process.
Petitioners were directed to turn over records immediately to their successors upon termination.
On October 17, 2008, Lopez, Jr. met petitioners and terminated their employment, stating it was their last day and ordering turnover of records.
Petitioners received return-to-work letters dated October 22, 2008 stating they did not report since October 20, 2008 without resigning.
Petitioners asserted they were fired on October 17, 2008 and responded by sending demand letters and later filing an illegal dismissal case.
Petitioners filed their complaint on December 9, 2008 for illegal dismissal, nonpayment of salary, and related money claims, plus damages and attorney’s fees.
Respondents asserted that petitioners simply no longer reported for work, became AWOL, and were terminated for breach of contract due to failure to comply with the guarantee and notice requirements.
Respondents also claimed petitioners abandoned their jobs after receiving return-to-work letters.

Contractual Character of Employment

The employment agreements included provisions on bonuses and other benefits that were conditioned on reaching specific employment milestones.
The Supreme Court held that the agreements were not fixed-term contracts for six months because the “six-month guarantee” functioned as a performance undertaking with liquidated damages consequences.
The loyalty bonus and life insurance for Fernandez accrued upon reaching six months, reinforcing that the agreement contemplated continued employment benefits rather than a determinative fixed term.
Beltran’s contract likewise contemplated later maturation benefits upon reaching 12 months, further supporting that the agreement was not a fixed-term six-month employment.
The Supreme Court characterized petitioners as probationary employees, consistent with respondents’ own acknowledgment that Beltran was hired as probationary.
The Court thus treated petitioners’ “six-month guarantee” as a contractual guarantee that petitioners could be liable for liquidated damages if breached, without transforming their employment into a fixed-term labor relationship.

Issues Presented

The principal issue was whether petitioners were illegally dismissed or whether they abandoned their jobs and effectively pre-terminated their engagement.
A subsidiary issue concerned whether respondents’ conduct and pleadings supported a conclusion that petitioners were fired on October 17, 2008.
Another issue involved whether the CA and lower tribunals correctly treated petitioners’ employment agreements as fixed-term arrangements for purposes of back wages.
The case also raised the question of whether Lopez, Jr. could be held solidarily liable with Newfield in a labor dispute.

Arguments of Petitioners

Petitioners argued that a valid dismissal required a just or authorized cause and compliance with due process.
Petitioners contended that respondents dismissed them on October 17, 2008 in a manner that did not provide written notice of the cause of termination.
Petitioners insisted that they were not AWOL, did not abandon their jobs, and instead took steps to contest their alleged termination.
Petitioners maintained that their demand letters and the filing of their illegal dismissal complaint showed no clear intention to sever the employer-employee relationship.

Arguments of Respondents

Respondents denied that the meeting on October 17, 2008 constituted a termination and claimed it was only an advice regarding petitioners’ unsatisfactory work performance.
Respondents argue