Case Summary (G.R. No. 211312)
Factual Background
Flores and Tapiru had been assigned to various facilities of PLDT pursuant to a security services agreement between PSI and PLDT. On October 1, 2001, PSI’s security services agreement with PLDT was terminated. PSI recalled its security guards assigned to PLDT, including respondents.
On October 8, 2001, respondents and other PSI guards filed a complaint for illegal dismissal with the NLRC against PLDT and PSI, alleging that they were PLDT employees. The case was raffled to LA Pati. LA Pati rendered a decision on October 22, 2002 finding that the complainants were PLDT employees and were thus entitled to reinstatement to their former assignments. However, the NLRC set aside LA Pati’s ruling and found that the complainants were not PLDT employees; the CA and ultimately the Supreme Court affirmed that result.
After the PLDT case, PSI assigned respondents to other client facilities, including the warehouse of Marivic Yulo in Sta. Ana, Manila, and the Elementary Department of Trinity College in Quezon City. On January 13, 2003, respondents were relieved from their respective assignments under Special Order No. 20031010 issued on January 10, 2003 by Col. Leonardo L. Aquino, PSI’s Operations Manager.
Filing of the Illegal Dismissal Complaints and Procedural Incidents
On September 6, 2005 and September 27, 2005, respectively, Flores and Tapiru filed complaints with the NLRC Regional Arbitration Branch in Quezon City for illegal dismissal and for non-payment of service incentive leave pay and cash bond, with a prayer for separation pay, against PSI and Nestor Racho.
PSI and Racho moved to dismiss on January 16, 2006, invoking forum shopping. Respondents denied forum shopping and explained that their earlier case against PLDT and PSI was distinct because it involved their removal from assignments following the termination of the PSI–PLDT security agreement.
The LA initially dismissed on May 21, 2006, but on reconsideration, the NLRC reversed in a decision dated March 26, 2008, remanding the case for further proceedings. The LA later directed submission of position papers within an unextendible period of ten days on October 22, 2008.
In their position papers, respondents alleged that after they were relieved from their warehouse assignment in Sta. Ana on January 13, 2003, they repeatedly reported to PSI’s office for possible assignment, but PSI refused to give them any new assignment. PSI, in contrast, contended that respondents were merely relieved from their warehouse post, allegedly due to their performance evaluation indicating they were ill-suited for the assignment. PSI also claimed that while respondents vacated their post pursuant to the special order, they refused to acknowledge receipt and that, after respondents vacated their post, they failed to report for their next assignment. PSI further invoked management prerogative to transfer employees and asserted that respondents’ failure to report amounted to abandonment and thus effective resignation.
LA’s Decision: Illegal Dismissal and Rejection of Abandonment
On January 30, 2009, the LA ruled in favor of respondents. It found that respondents were illegally dismissed and ordered PSI and Racho to be jointly and severally liable to pay separation pay and backwages. The LA dismissed the abandonment defense, reasoning that the records contained no credible evidence to justify a finding of abandonment.
NLRC’s Reversal and Its Theory of Voluntary Severance of Employment
On appeal, the NLRC reversed the LA’s ruling. In a decision dated April 14, 2010, the NLRC ruled for PSI and Racho. It relied on the alleged sequence of events after respondents were relieved on January 13, 2003, stating that respondents sought employment with other security agencies. It noted that Flores contracted regular employment with Multimodal Security and Investigation Agency in May 2003, while Tapiru contracted with Pacific World Security and Investigation Agency in July 2003, as reflected in their SSS records. The NLRC also treated respondents’ filing of an illegal dismissal case only after losing their PLDT-related case in the Supreme Court, and the fact that respondents allegedly sought separation pay after three years, as proof that respondents had severed the employer-employee relationship with PSI.
The NLRC denied respondents’ motion for reconsideration in a resolution dated June 15, 2010.
CA Proceedings: Confirmation of Illegal Dismissal
Respondents then filed a petition for certiorari with the CA. On April 25, 2013, the CA reversed the NLRC. It held that PSI and Racho failed to prove abandonment, and it found the abandonment defense negated by the filing of an illegal dismissal case.
The CA further ruled that petitioners failed to prove that PSI had sent respondents written notices requiring them to explain their supposed failure to report to work, as mandated by Book V, Rule XIV, Sections 2 and 5 of the Implementing Rules of the Labor Code. On February 7, 2014, the CA denied petitioners’ motion for reconsideration.
Issues Before the Supreme Court
The Supreme Court resolved two essential issues: first, whether respondents were illegally dismissed; and second, whether Racho should be held jointly and solidarily liable with PSI for the monetary awards.
Supreme Court’s Ruling: Denial of the Petition; Modification as to Racho’s Liability
The Court denied the petition. It reiterated the constitutional guarantee of security of tenure under Section 3, Article 13 of the 1987 Constitution, emphasizing that employment cannot be terminated without just or authorized cause and compliance with due process requirements mandated by law. It treated the employer’s removal of workers without legal basis as impermissible.
Illegal Dismissal: Relief from Assignment Did Not Negate Dismissal
The Court rejected petitioners’ argument that respondents were not dismissed but merely relieved from their assignments. Although Special Order No. 20031010 indicated relief from the warehouse in Sta. Ana, the Court held that this did not automatically negate respondents’ claim of illegal dismissal. The Court stressed that after respondents were relieved, PSI refused to provide any new assignments.
The Court applied the burden of proof in illegal dismissal cases, holding that it rests on the employer to prove by substantial evidence that the dismissal was for a valid and authorized cause. The Court found that PSI could not discharge that burden merely by alleging it did not dismiss respondents. It also characterized petitioners’ theory of abandonment as an inadequate route to avoid liability, absent proof of a clear, valid, and legal cause for termination.
The Court agreed with the CA that petitioners failed to prove abandonment. It reiterated that abandonment is a matter of intention and cannot lightly be inferred or presumed from equivocal acts. The Court restated the two requisites for abandonment: (one) failure to report for work or absence without valid or justifiable reason; and (two) a clear intention to sever the employer-employee relationship shown by overt acts.
Lack of Proof of the Requisite Elements
The Court was not convinced that respondents failed to report for work or were absent without valid reason. PSI did not show that new assignments were given to respondents or that respondents were informed of such assignments. On the second requisite, the Court held that respondents’ act of filing a complaint for illegal dismissal negated any intention to sever the relationship.
The Court also found it incongruous for respondents to have abandoned employment under conditions of acute unemployment and difficulty in securing livelihood. This circumstance reinforced the absence of credible proof of abandonment.
Due Process: Failure to Observe the Twin-Notice Requirement
The Court further found that PSI failed to provide due process. It held that, in termination cases, validity does not rest solely on the existence of a just or authorized cause; the termination must be executed in the manner required by law. The Court reiterated the requirement that the employer furnish the employee with two written notices: first, a notice specifying the ground for termination and providing a reasonable opportunity to explain; and second, a notice of termination indicating that upon consideration of circumstances, grounds had been established.
The Court found it undisputed that PSI sent no written notice informing respondents that they were being terminated for abandonment of work. This failure, at minimum, rendered the legality of the dismissal doubtful and therefore illegal.
Prescription Argument Rejected
The Court also rejected petitioners’ claim that respondents’ delayed filing of the illegal dismissal complaint—almost three years after the dismissal—showed intent to abandon. The Court held that the four-year prescriptive period for illegal dismissal complaints applied, based on Article 1146 of the New Civil Code, for actions based on injury to rights of the plaintiff. The prescriptive period commenced only upon accrual of the worker’s cause of action.
Given that respondents were dismissed on January 13, 2003 and they filed their complaints in September 2005, the Court held that the complaints were timely filed within the prescriptive period.
No Solidary Liability of Racho Absent Malice or Bad Faith
As to whether Racho should be held jointly and solidarily liable with PSI, the Court ruled in petitione
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Case Syllabus (G.R. No. 211312)
Parties and Procedural Posture
- People’s Security, Inc. (PSI) and Nestor Racho (Racho) filed a Petition for Review on Certiorari under Rule 45 to annul and set aside the Court of Appeals rulings in CA-G.R. SP No. 115464.
- Julius S. Flores (Flores) and Esteban S. Tapiru (Tapiru) opposed the petition and consistently maintained that they suffered illegal dismissal.
- The petition assailed the Court of Appeals Decision dated April 25, 2013 and the Court of Appeals Resolution dated February 7, 2014.
- The Court of Appeals reversed the NLRC Decision dated April 14, 2010 and its Resolution dated June 15, 2010.
- The NLRC had earlier reversed the Labor Arbiter (LA) Decision dated January 30, 2009, which found illegal dismissal and awarded monetary benefits.
Key Factual Allegations
- Flores and Tapiru had been security guards employed by PSI and were assigned to facilities of the Philippine Long Distance Telephone Company (PLDT) under a security services agreement between PSI and PLDT.
- On October 1, 2001, PSI’s security services agreement with PLDT was terminated, and PSI recalled its security guards assigned to PLDT, including the respondents.
- On October 8, 2001, the respondents, together with other security guards, filed a complaint for illegal dismissal with the NLRC against PLDT and PSI, asserting that they were PLDT employees.
- The case was assigned to Labor Arbiter Felipe Pati (LA Pati) for resolution, and LA Pati initially ruled that the respondents were PLDT employees entitled to reinstatement.
- The NLRC set aside LA Pati’s ruling and held that the complainants were not PLDT employees, a conclusion later affirmed by the Court.
- After the PLDT-employee dispute, PSI reassigned the respondents to other client facilities, including the warehouse of Marivic Yulo in Sta. Ana, Manila, and the Trinity College Elementary Department in Quezon City.
- On January 13, 2003, the respondents were relieved from their respective assignments pursuant to Special Order No. 20031010 dated January 10, 2003 issued by PSI Operations Manager Col. Leonardo L. Aquino.
- On September 6, 2005 and September 27, 2005, respectively, Flores and Tapiru filed complaints for illegal dismissal and claims for non-payment of service incentive leave pay and cash bond, with prayer for separation pay, against PSI and its President Racho.
- The respondents asserted that after they were relieved from their assignment, they repeatedly reported to PSI’s office but PSI refused to provide new assignments.
- PSI claimed that the respondents were only relieved from their warehouse assignment and that the relief was based on their performance evaluation showing they were ill-suited for that assignment.
- PSI also alleged that although the respondents vacated their post pursuant to the special order, the respondents refused to acknowledge receipt, and that thereafter the respondents no longer reported for their next assignment.
- PSI invoked management prerogative to transfer employees based on business needs, and it asserted that the respondents had abandoned and effectively resigned due to their failure to report and refusal to receive assignment notices.
Prior NLRC Proceedings
- On January 16, 2006, PSI and Racho filed a Motion to Dismiss the illegal dismissal complaints on the ground of forum shopping.
- The respondents denied forum shopping and emphasized that their earlier PLDT-PSI case involved their removal from assignments due to termination of the PLDT security agreement, and thus involved a separate controversy.
- On May 21, 2006, the LA dismissed the respondents’ complaints for forum shopping, but the NLRC later reversed this dismissal in its Decision dated March 26, 2008 and remanded the case for further proceedings.
- On October 22, 2008, the LA required the parties to submit their respective position papers within an unextendible period of ten (10) days.
- In their position paper submissions, the respondents maintained that PSI refused to reassign them after they were relieved.
- PSI reiterated that the respondents’ relief was based on evaluation and that the respondents did not report for their next assignment.
- On January 30, 2009, the LA rendered a Decision finding the respondents illegally dismissed and ordered PSI and Racho jointly and severally liable to pay separation pay and backwages.
- The LA rejected the defense of abandonment, ruling that the records lacked credible evidence to support the finding.
- On appeal, the NLRC reversed the LA and ruled in favor of PSI, relying on the respondents’ subsequent employment with other security agencies and their delay in filing the illegal dismissal complaint.
- The NLRC’s reasoning emphasized that the respondents allegedly sought work with other agencies even before the six-month floating period lapsed and allegedly filed an illegal dismissal case only after losing the PLDT-employee litigation.
- The NLRC denied the respondents’ reconsideration in Resolution dated June 15, 2010.
- The respondents then sought review via certiorari before the Court of Appeals, which ultimately reinstated the respondents’ position of illegal dismissal.
Issues for Resolution
- The Court addressed whether the respondents were illegally dismissed from their employment by PSI.
- The Court also resolved whether Racho should be held jointly and solidarily