Factual Background

Respondents alleged that they were employed by Symex Security Services, Inc. as security guards beginning in May 1999 and were assigned to guard the premises of Guevent Industrial Development Corporation, a client. Their tours ran Monday to Saturday from 6:00 AM to 6:00 PM, a 12-hour duty, and respondents claimed nonpayment of overtime, lack of rest day, unpaid service incentive leave pay and 13th month pay, and unlawful deductions for cash bond and firearm bond. Respondents received P198.00 per day until March 31, 2001 and P250.00 per day from April 1, 2001 to March 31, 2003. They filed a complaint for underpayment and related claims on February 25, 2003.

Events Leading to the Illegal Dismissal Claim

On March 13, 2003, Capt. Arcego Cura, Operations Manager of Symex, summoned respondents to report to the head office. On March 14, 2003 respondents were told they were being relieved from their Guevent assignment and instructed to report for reassignment on March 17, 2003. When they returned on March 17, 2003, Capt. Cura allegedly conditioned their reassignment on withdrawing their pending labor complaint, presented a sample affidavit of desistance, and told them to resign or take forced leave; respondents refused and were informed that they were dismissed. Respondents amended their LA complaint to add illegal dismissal on March 18, 2003.

Labor Arbiter Proceedings and Ruling

The Labor Arbiter dismissed respondents' claim for illegal dismissal in a Decision dated April 30, 2010 but awarded each respondent proportionate 13th month pay of P1,543.75. The Labor Arbiter found that respondents had only been relieved from their post and that relief did not automatically terminate the employment relationship, rejected the unsigned handwritten affidavit of desistance as inauthentic, and ruled that respondents failed to prove claims for overtime, holiday pay, service incentive leave pay, illegal deductions, or damages.

NLRC Proceedings and Ruling

On appeal the National Labor Relations Commission reversed the Labor Arbiter in a Decision dated December 9, 2010, holding that respondents were illegally dismissed. The NLRC found that Capt. Cura conditioned reassignment on withdrawal of the pending complaint and that petitioners failed to show a written order of reassignment or abandonment by respondents. The NLRC awarded separation pay, full backwages, underpaid wages, underpaid service incentive leave pay, underpaid 13th month pay, moral and exemplary damages of P10,000.00 each, and ten percent attorney’s fees, while dismissing other claims for lack of basis.

Court of Appeals Proceedings and Ruling

The Court of Appeals affirmed the NLRC Decision in its January 12, 2012 Decision and denied reconsideration in a Resolution dated June 27, 2012. The CA held that the NLRC did not gravely abuse its discretion in finding illegal dismissal, that Symex used its reassignment prerogative as leverage to obtain withdrawal of the labor complaint, and that petitioners failed to discharge the burden to prove payment of the money claims or to present company records proving reassignment or respondents' refusal of new posts. The CA also upheld the awards of moral and exemplary damages and attorney’s fees.

Issues Presented to the Supreme Court

The Supreme Court identified the principal issues as whether the Court of Appeals correctly held that the NLRC did not commit grave abuse of discretion in finding illegal dismissal; whether petitioners were liable for backwages, service incentive leave pay, 13th month pay, separation pay, moral and exemplary damages, and attorney’s fees; and whether Rafael Y. Arcega should be held solidarily liable with Symex for the monetary awards.

Standard for Certiorari and Grave Abuse of Discretion

The Court reiterated that certiorari lies only for grave abuse of discretion, which connotes a capricious or whimsical exercise of judgment. In labor cases grave abuse exists when findings are not supported by substantial evidence. The Court stated that it generally limits Rule 45 review to questions of law and does not re-evaluate factual findings of quasi-judicial bodies such as the NLRC, especially when those findings are affirmed by the Court of Appeals.

Supreme Court’s Factual Determination on Dismissal

The Supreme Court found that respondents had substantially proved dismissal by Capt. Cura. The Court observed that while a security agency may place guards on floating or re-assigned status in good faith, reassignment must not be used as a pretext for punishment or coercion. The Court considered respondents' sworn narration and the sample affidavit of desistance as convincing evidence that reassignment was conditioned on withdrawal of their labor complaint, and that their immediate amendment of the complaint to add illegal dismissal was inconsistent with abandonment.

Burden of Proof on Money Claims and Employer Records

The Court affirmed the NLRC and CA rulings that once an employee sets out with particularity the labor benefits allegedly unpaid, the burden shifts to the employer to prove payment. The Court noted that petitioners failed to submit company records within their control to disprove respondents' claims, thereby invoking the presumption that production of such records would be prejudicial to petitioners' cause.

Separation Pay, Strained Relations, and Reinstatement

The Court held that separation pay was proper because reinstatement was no longer viable given the factual finding of strained relations, which the NLRC made and the CA sustained. The Court explained that separation pay is an acceptable alternative to

Parties and Procedural Posture

Symex Security Services, Inc. and Rafael Y. Arcega filed a petition for review on certiorari assailing the Court of Appeals Decision dated January 12, 2012 and Resolution dated June 27, 2012 in CA-G.R. SP No. 119039.
The challenged CA rulings affirmed the National Labor Relations Commission Decision dated December 9, 2010 and Resolution dated February 7, 2011 in NLRC LAC No. 042778-05 (RA-06-10).
The NLRC rulings reversed the Labor Arbiter Decision dated April 30, 2010 which had dismissed the amended complaint for illegal dismissal.
The Supreme Court denied the petition for review and affirmed the CA Decision with modification absolving Rafael Y. Arcega from solidary liability.

Key Factual Allegations

Magdalino O. Rivera, Jr. and Roberto B. Yago alleged employment as security guards of Symex Security Services, Inc. beginning in May 1999 and assignment to the premises of Guevent Industrial Development Corporation.
The respondents alleged a twelve-hour tour from Monday to Saturday, unpaid overtime, no rest days, unpaid service incentive leave and thirteenth month pay, and illegal deductions for cash and firearm bonds.
Respondents alleged salary of P198.00 per day from January 20 to March 2001 and P250.00 per day from April 2001 to March 2003.
Respondents filed a complaint for money claims on February 25, 2003 and were summoned by Capt. Arcego Cura to Symex head office on March 14, 2003 and told they were relieved and to report for reassignment on March 17, 2003.
Respondents asserted that on March 17, 2003 Capt. Cura conditioned reassignment on withdrawal of their pending labor complaint and offered a sample affidavit of desistance, and that they were told they were dismissed when they refused to withdraw the complaint.
Respondents amended their complaint on March 18, 2003 to include illegal dismissal.

Labor Arbiter Ruling

The Labor Arbiter dismissed respondents' amended complaint for illegal dismissal in a Decision dated April 30, 2010.
The Labor Arbiter awarded each respondent proportionate thirteenth month pay in the amount of P1,543.75 based on their P250 daily rate for the period January 1, 2003 to March 14, 2003.
The Labor Arbiter found that a relief order did not sever the employment relationship and discredited the unsigned sample affidavit of desistance as self-serving.
The Labor Arbiter found the respondents' pay slips showed no underpayment and ruled that respondents failed to prove overtime, holiday or service incentive leave claims or illegal deductions.
The Labor Arbiter found no qualifying circumstances to warrant an award of damages.

NLRC Ruling

The NLRC reversed and set aside the Labor Arbiter in its Decision dated December 9, 2010 and declared the complainants illegally dismissed.
The NLRC ordered payment to Magdalino O. Rivera, Jr. and Roberto B. Yago of separation pay of P133,320.00 and P145,440.00 respectively and full backwages of P1,017,522.21 each.
The NLRC awarded underpaid wages of P18,713.47 and P17,882.59, underpaid service incentive leave pay of P209.91 and P248.37, and underpaid thirteenth month pay of P1,559.46 and P1,490.22 to the two respondents respectively.
The NLRC awarded P10,000.00 each as moral damages and P10,000.00 each as exemplary damages and assessed attorney’s fees at ten percent of the total monetary award.
The NLRC found that Capt. Cura conditioned reassignment on withdrawal of the labor complaint, that petitioners failed to prove issuance of a written order of detail or that respondents abandoned their work, and that petitioners failed to discharge the burden of proof to justify termination.

Court of Appeals Ruling

The Court of Appeals in a Decision dated January 12, 2012 affirmed the NLRC findings and held that the NLRC did not commit grave abuse of discretion.
The Court of Appeals found that petitioners used their prerogative to reassign guards as leverage to procure withdrawal of the labor complaint.
The Court of Appeals sustained the NLRC award of monetary claims and held that once employees particularized unpaid labor standard benefits, the employer bore the burden of proving payment.
The Court of Appeals affirmed the awards of moral and exemplary damages and attorney’s fees and denied petitioners' motion for reconsideration.

Issues Presented

The principal issues we