Case Summary (G.R. No. 118506)
Key Dates and Procedural Posture
Relevant events: May 7, 1991 (joint affidavit prepared by management); May 10–13, 1991 (petitioner prevented from resuming work and filed illegal dismissal complaint on May 13, 1991). Labor Arbiter decision dismissing petitioner issued May 14, 1993. NLRC Resolution affirming the Labor Arbiter promulgated April 28, 1994. Petition for certiorari to the Supreme Court followed; Solicitor General filed a manifestation urging reversal of NLRC. The Supreme Court decision applied the 1987 Constitution as the governing charter.
Applicable Law and Legal Principles Invoked
- Employer bears burden of proving just cause for dismissal (security of tenure doctrine).
- Abandonment requires (1) lack of intention to work and (2) overt acts signifying intent not to return.
- Loss of confidence as a ground for dismissal is limited to employees occupying positions of trust and confidence (managerial personnel, custodians of money/property, cashiers, auditors) and must be genuine, not an afterthought.
- Unfair labor practice includes coercing or prejudicing employees for giving testimony or impeding concerted action; Article 248(f) of the Labor Code is relevant to such protections.
- Deductions or valuation of “facilities” (meals, lodging, utilities) from wages require proof that they are customarily furnished by the trade, voluntary written acceptance by the employee, and fair valuation (Labor Code provision cited: art. 97(f)).
- Prescription for money claims against employers follows P.D. 442 (amended) and implementing rules limiting recovery to three years from accrual.
Factual Summary
Management prepared a joint affidavit dated May 7, 1991, asserting compliance with wage and labor standards and stating no complaints against management; employees were asked to sign and swear to it. Petitioner signed but refused to go to the City Prosecutor’s Office to swear to its contents. Management allegedly then ordered petitioner to surrender keys and remove belongings and denied her leave of absence. When petitioner attempted to resume work on May 10, 1991, she was told not to report. She filed a complaint for illegal dismissal on May 13, 1991, and accompanying money claims (underpayment of wages, holiday pay, service incentive leave pay, 13th month pay, night differential, and other benefits). Private respondent initially alleged abandonment, later supplemented his defense with a loss of confidence claim and filed a criminal complaint for qualified theft on July 4, 1991.
Issue Framing
Primary contested issues were: (1) whether petitioner abandoned her employment; (2) whether loss of confidence legitimately justified dismissal; (3) whether petitioner’s dismissal constituted an unfair labor practice; (4) whether petitioner was entitled to unpaid wages and benefits given the employer’s claim of providing facilities; and (5) whether procedural due process (notice and hearing) was observed prior to dismissal.
Burden of Proof and Standards Applied
The Court reiterated that the employer carries the burden to prove just cause for termination. Where the employer fails to sustain this burden, dismissal is unjustified and statutory protections (security of tenure) are implicated. Findings of quasi-judicial bodies will be respected if supported by evidence, but will be reversed when they contradict reason, law, or established fact.
Analysis — Abandonment
Abandonment requires both an absence of intention to return and overt acts evidencing that intent. The Court found the evidence insufficient to establish abandonment: petitioner attempted to secure a leave of absence (indicating intent to return) and attempted to resume work two days later but was prevented from working by hotel personnel. Short absences of a day or two do not incontrovertibly indicate abandonment; the overt acts here point to an intention to continue employment rather than to abandon it.
Analysis — Loss of Confidence
Loss of confidence is a narrow doctrine applicable chiefly to employees in managerial positions or those routinely entrusted with custody of significant amounts of money or property. Ordinary housekeeping staff and chambermaids, who sign out linens and account for items used during shifts, do not ordinarily belong in the narrow classes to which loss of confidence properly applies. The Court emphasized the doctrine’s limited reach and stressed that loss of confidence may not be simulated to mask an otherwise illegal dismissal. In this case, the employer’s belated filing of criminal charges (filed long after petitioner complained and after she attempted to assert her rights) indicated that loss of confidence was an afterthought and therefore not a legitimate ground for dismissal.
Analysis — Unfair Labor Practice
The Court found coercion and interference with employees’ rights to seek better terms and conditions through concerted action. Management’s act of compelling employees to sign an affidavit asserting compliance with labor standards, and penalizing those who refused, amounted to restraint and coercion. Termination (or coercion to sign) to prevent employees from contesting labor standards or to discourage participation in concerted action falls within the ambit of unfair labor practices, analogous to the prohibition in Article 248(f) against prejudicing an employee for giving or being about to give testimony under the Labor Code.
Analysis — Monetary Claims and Facilities Deductions
The Labor Arbiter accepted the employer’s contention that meals, lodging, electricity and water constituted facilities that offset wage deficiencies, relying on an undated summary prepared by the employer’s accountant. The Supreme Court reversed that approach: before such facilities can be deducted or credited against wages, the employer must establish (1) that the facilities are customarily furnished by the trade, (2) that the employee voluntarily accepted them in writing, and (3) that they were valued at fair and reasonable amounts. The private respondent failed to produce company policy showing these facilities were part of wage arrangements, failed to produce written employee authorizations, and did not substantiate valuations. The employer’s claim of lost records due to an earthquake did not excuse failure to obtain certified copies from government sources. Moreover, for hotel workers the items provided were more properly characterized as supplements required by the employer for operational convenience, not facilities deductible from wages. Consequently the Court found petitioner entitled to deficiency wages and related benefits for the appropriate period.
Prescription and Time Bars
The Court applied the three-year prescriptive period under P.D. 442 (as amended) and its implementing rules to the money claims. Claims accruing more than three years prior to the filing of the complaint were barred. Specifically, claims covering the period October 1987 up to the filing on May 13, 1988 were held to be prescribed where applicable under the three-year rule.
Due Process and Procedural Requirements for Dismissal
The Court reiterated statutory procedural requirements: an employee sought to be dismissed must receive two written notices (
...continue readingCase Syllabus (G.R. No. 118506)
Case Citation and Court
- Reported as 338 Phil. 386, First Division, G.R. No. 118506, decision promulgated April 18, 1997.
- Petition for certiorari under Rule 65 of the Rules of Court challenging a resolution of the National Labor Relations Commission (NLRC) dated in the source alternatively as April 28, 1994 and April 24, 1994.
Parties
- Petitioner: Norma Mabeza (employee), originally employed by private respondent at the Belfront Hotel and later assigned to Hotel Supreme in Baguio City.
- Private respondent/employer: Peter L. Ng, owner/operator of Hotel Supreme (No. 416 Magsaysay Ave., Baguio City).
- Public respondent: National Labor Relations Commission (NLRC).
- Solicitor General: filed a manifestation in support of petitioner and urging the Court to set aside the NLRC resolution.
Material Facts (as alleged and on record)
- Around the first week of May 1991, Hotel Supreme management asked petitioner and co-employees to sign an instrument (a Joint Affidavit) attesting to the hotel's compliance with minimum wage and other labor standards.
- The Joint Affidavit, dated May 7, 1991, was prepared by management and contained among other recitals: the employees were paid accordingly, treated well, executing the affidavit voluntarily, and it was intended to dispute an alleged report of a Department of Labor and Employment (DOLE) Labor Inspector’s inspection conducted on February 2, 1991.
- Petitioner signed the affidavit but refused to go to the City Prosecutor’s Office to swear to its contents as instructed by management. Despite her refusal to be sworn, the affidavit was submitted that same day to the DOLE Cordillera Regional Office.
- After she refused to proceed to the City Prosecutor’s Office, petitioner avers that hotel management ordered her to turn over the keys to her living quarters and to remove her belongings from hotel premises, and that she was strongly chided for her refusal.
- Petitioner unsuccessfully attempted to file a leave of absence which management denied. On May 10, 1991, when she tried to return to work, the hotel cashier told her not to report and to continue with her unofficial leave. Three days later, on May 13, 1991, petitioner filed a complaint for illegal dismissal before the Arbitration Branch of the NLRC—CAR, Baguio City, docketed as NLRC Case No. RAB-CAR-05-0198-91.
- In her complaint, petitioner alleged illegal dismissal and alleged underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night differential, and other benefits.
- Private respondent initially answered that petitioner “surreptitiously left (her job) without notice to the management” and that she abandoned her work; he denied money claims on the ground that alleged benefits were furnished as facilities rather than cash payments; he relied on the May 7, 1991 affidavit to show employees had no problems with management.
- Eleven months after the original complaint, private respondent filed a supplemental answer raising loss of confidence as a ground for dismissal and filed a criminal complaint for qualified theft against petitioner with the Baguio City prosecutor’s office on July 4, 1991, accusing petitioner of stealing a blanket, a bedsheet, a thermos, and two towels.
- Labor Arbiter Felipe P. Pati rendered a decision on May 14, 1993 dismissing petitioner’s complaint on the ground of loss of confidence, finding evidence that petitioner “carted away or stole” items and noting a fiscal’s office resolution finding prima facie evidence for qualified theft.
- NLRC promulgated a resolution (dated in the record as April 28, 1994 and also referenced as April 24, 1994 in the judgment) affirming the Labor Arbiter’s decision and substantially incorporating his findings.
- Petitioner then filed the present special civil action for certiorari raising specific grounds attacking the NLRC resolution.
Procedural History
- Administrative/labor proceedings: Complaint for illegal dismissal and money claims filed May 13, 1991 before the Labor Arbiter; Labor Arbiter decision dated May 14, 1993 dismissed complaint for loss of confidence.
- NLRC: Resolution dated April 1994 (date appears in source as both April 24 and April 28, 1994) affirmed the Labor Arbiter’s decision.
- Supreme Court: Petition for certiorari under Rule 65 filed by petitioner challenging NLRC resolution; Solicitor General filed a manifestation supporting petitioner.
Petitioner’s Alleged Errors and Grounds for Certiorari (as pleaded)
- NLRC committed a patent and palpable error amounting to grave abuse of discretion by:
- Adopting a false and afterthought ground of “loss of confidence” used by the employer to justify dismissal.
- Adopting the Labor Arbiter’s finding of no underpayment based on Exhibit “8,” an undated summary of computation allegedly prepared by respondent’s external accountant, asserted to be inadmissible to prove payment of wages and benefits.
- Failing to consider evidence that, when considered, constituted an unfair labor practice by the respondent-employer.
Solicitor General’s Position (as recorded)
- The Solicitor General rejected private respondent’s principal claims and defenses and urged the Court to set aside the NLRC resolution.
- The Solicitor General’s manifestation pointed out facts and circumstances inconsistent with the employer’s abandonment and loss of confidence claims, including:
- Petitioner’s absence should not be construed as abandonment because she was told by the cashier not to report and because she later attempted to return to work.
- Private respondent did not confront petitioner about alleged theft before dismissing her, and there was a 52-day delay before filing criminal charges, suggesting manipulation to build a case after the fact.
- The Solicitor General likened the employer’s act of compelling employees to sign an affidavit to the conduct envisaged in paragraph (f) of Article 248 of the Labor Code, which makes it an unfair labor practice to dismiss, discharge or otherwise prejudice an employee for having given or being about to give testimony under the Labor Code.
Issues Presented (framed from the source)
- Whether NLRC committed grave abuse of discretion by affirming dismissal on the ground of loss of confidence which petitioner alleges is a false and afterthought ground.
- Whether NLRC erred in accepting Exhibit “8” (an undated computation) as evidence to prove payment of wages and benefits.
- Whether the conduct of the private respondent constituted an unfair labor practice for (a) compelling employees to sign a management-prepared affidavit and (b) dismissing petitioner for refusing to so cooperate.
- Whether petitioner was validly dismissed for abandonment.
- Whether petitioner is entitled to monetary reliefs alleged (deficiency wages, service incentive leave pay, night differential, 13th month pay, separation pay, full backwages, and other benefits).
- Whether procedural due process requirements (notice and hearing) prior to dismissal were observed.
Governing Legal Principles Reiterated by the Court (as stated in the source)
- Burden of proof in termination cases:
- Employer bears the burden of proving that dismissal is for just cause; failure means dismissal is not justified and employee is entitled to reinstatement (citing Polymedic General Hospital vs. NLRC and Molave Tours Corporation vs. NLRC).
- Abandonment:
- Requires concurrence of two things: (1) lack of intention to work, and (2) overt acts signifying intention not to work (citing Dagupan Bus Co., Inc. vs. NLRC; Asphalt and Cement Pavers, Inc. vs. Leogardo, Jr.; Flexo Manufacturing Corporation vs. NLRC).
- Mere absence of one or two days is ordinarily ins