G.R. No. 153148 - Shie Jie Corp. vs. National Federation of Labor

Case Summary (G.R. No. 153148)

Factual Background

Respondents were rank-and-file fish processors employed by petitioners. On July 20, 1998, petitioners Sammy Yang and Michael Yang confronted respondents about their union activities and ordered them to go home. Petitioners issued a memorandum suspending the respondents for one week, effective July 22 to 28, 1998, except that respondent Wilfredo Toribio was suspended for two weeks, July 22 to August 4, 1998. Upon their return, respondents were served with memoranda terminating their services for alleged abandonment of work. Petitioners asserted that on July 20, 1998, thirteen rank-and-file employees staged a walkout at about 2:45 p.m., thereby interrupting operations and justifying the suspension and subsequent termination notices. Petitioners also claimed that some employees submitted resignation letters and quitclaims dated July 27, 1998.

Proceedings before the Labor Arbiter

Respondents filed a complaint for unfair labor practice, illegal dismissal, and non-payment of benefits, damages, and attorney’s fees with the Labor Arbiter, Regional Branch No. IX, Zamboanga City. The Labor Arbiter rendered a Decision on August 20, 1999. The Labor Arbiter found petitioners guilty of unfair labor practice for violating respondents’ constitutional rights to self-organization, declared the respondents illegally dismissed, and ordered petitioners to pay jointly and severally the claims and awards set forth in Annex A, totaling PHP 843,960.62. The Labor Arbiter dismissed claims for rest day pay and unpaid waiting time for lack of merit.

Proceedings before the NLRC

On appeal, the National Labor Relations Commission promulgated a Decision dated April 27, 2000 reversing the Labor Arbiter and dismissing respondents’ complaint. Respondents filed a motion for reconsideration, which the NLRC denied in a Resolution dated June 29, 2000. Respondents then filed a petition for certiorari with the Court of Appeals.

Proceedings before the Court of Appeals

The Court of Appeals, in a Decision dated November 29, 2001, granted the petition for certiorari and reversed and set aside the NLRC Decision. The Appellate Court reinstated the Labor Arbiter’s Decision with modifications ordering payment of full backwages, 13th month pay and service incentive leave subject to statutory limitations, and correction of one monetary claim. The Court of Appeals reasoned that when no clear valid and legal cause for termination is shown, the law treats the dismissal as illegal and the burden to prove validity rests on the employer, citing Art. 277, par. (b), Labor Code and prior authorities. The appellate court found the resignation letters incredible and insufficiently proven, observed that the identical wording of the resignation letters suggested they were copied, and concluded that the filing and active pursuit of illegal dismissal complaints negated any intent to relinquish employment. The court further held that abandonment requires convincing proof of intent to sever the employment relationship and that mere absence is not tantamount to abandonment. Petitioners’ motion for reconsideration before the Court of Appeals was denied in a Resolution dated April 9, 2002.

Issue Presented

The principal issue presented to the Supreme Court was whether the Court of Appeals erred in holding that petitioners failed to prove by substantial evidence that respondents voluntarily resigned and/or abandoned their work, thereby rendering the terminations illegal.

Parties’ Contentions

Petitioners maintained that respondents either voluntarily resigned or abandoned their work following an alleged walkout on July 20, 1998, and that petitioners properly suspended and thereafter terminated the employment of the affected employees. Petitioners relied on the resignation letters and termination notices as evidence. Respondents contended that petitioners unlawfully confronted and suspended them because of union activities and that any resignation or abandonment was not voluntary or proved. Respondents pointed to their immediate filing and active prosecution of illegal dismissal complaints as inconsistent with any intent to relinquish employment and invoked precedents holding that employers bear the burden to prove just cause and compliance with required procedures.

Supreme Court Ruling

The Supreme Court denied the petition and affirmed the Court of Appeals Decision dated November 29, 2001 and Resolution dated April 9, 2002. The Court held that the petitioners failed to discharge the burden of proving that respondents voluntarily resigned or abandoned their work. The Court affirmed the principles applied by the Court of Appeals concerning the employer’s evidentiary burden and the standards for proving resignation and abandonment.

Legal Basis and Reasoning

The Court reiterated that employment has characteristics warranting constitutional protection and that the employer bears the burden of proving the validity of a dismissal, as mandated by Art. 277, par. (b), Labor Code and consistent authorities such as Quebec, Sr. vs. NLRC. The Court explained that a valid resignation must be unconditional and made with the intent to relinquish employment, and that acceptance of the resignation by the employer is necessary to make it effective, citing Reyes vs. Court of Appeals and Indophil Acrylic MFG Corporation vs. NLRC. The Court found the alleged resignation letters incredible; their identical wording reduced their probative value, and petitioners failed to prove their genuineness and due execution. The Court further held that the filing and active pursuit of illegal dismissal complaints by respondents negated any contention of voluntary resignation, relying on Molave Tours Corp

Case Syllabus (G.R. No. 153148)

Parties and Procedural Posture

Shie Jie Corporation/Seastar Ex-Im Corporation, Bien Yang, Michael Yang and Sammy Yang filed a petition for review on certiorari under Rule 45 assailing the Court of Appeals Decision and Resolution in CA-G.R. SP No. 61322.
National Federation of Labor and the named members filed a complaint for unfair labor practice, illegal dismissal and non-payment of benefits with the Labor Arbiter, Regional Branch No. IX, Zamboanga City, docketed as NLRC Case No. RAB-09-03-00105-99.
The Labor Arbiter rendered a Decision dated August 20, 1999 finding unfair labor practice and illegal dismissal and awarding the complainants PHP 843,960.62.
The National Labor Relations Commission promulgated a Decision dated April 27, 2000 reversing the Labor Arbiter and dismissing the complaint, and denied reconsideration on June 29, 2000.
The Court of Appeals rendered a Decision dated November 29, 2001 reversing the NLRC and reinstating the Labor Arbiter's Decision with modifications, and denied a motion for reconsideration on April 9, 2002.
The Supreme Court resolved the present Rule 45 petition by a Decision dated July 15, 2005 denying the petition and affirming the Court of Appeals Decision and Resolution, with costs against petitioners.

Key Factual Allegations

Respondents were employed as fish processors by the petitioners at the time of the dispute and had varying dates of hire and daily wage rates as detailed in the record.
Petitioners alleged that on July 20, 1998 thirteen rank-and-file employees staged a walk-out and abandoned their work thereby disrupting operations.
Petitioners issued a memorandum suspending the employees for one week effective July 22 to 28, 1998, except that Wilfredo Toribio was suspended for two weeks.
Petitioners served memoranda directing the suspended employees to report for work on July 27, 1998, after which six employees submitted resignation letters and quitclaims dated July 27, 1998.
Petitioners thereafter sent notices dated July 28, 1998 terminating certain employees for abandonment of work and some employees filed their complaints for illegal dismissal on or about August 13, 1998.
The resignation letters in evidence were identical in wording and were introduced by petitioners as proof of voluntary resignation.

Issues Presented

Whether the Court of Appeals erred in holding that petitioners failed to prove by substantial evidence that respondents voluntarily resigned.
Whether the Court of Appeals erred in holding that petitioners failed to prove by substantial evidence that respondents abandoned their work.
Whether the termination of employment constituted illegal dismissal and an unfair labor practice for interference with the right to self-organization.

Contentions of Petitioners

Petitioners contended that the employees engaged in a walk-out constituting abandonment of work and justified suspension and subsequent termination.
Petitioners maintained that the resignation letters executed by six employees constituted voluntary relinquishment of employment.
Petitioners asserted that proper notices of termination for abandonment were issued in accordance with company procedures.

Contentions of Respondents

Respondents contended that they were suspended and subsequently dismissed because of their union activiti