Title
Villola vs. United Philippine Lines, Inc.
Case
G.R. No. 230047
Decision Date
Oct 9, 2019
Employee claimed illegal dismissal after being asked to resign; courts ruled voluntary resignation, denying back pay and separation pay.
illegal dismissal
failure to pay salary
resignation
A

Case Summary (G.R. No. 230047)

Procedural History and Decisions Below

The complaint for illegal dismissal and money claims was decided by Labor Arbiter Joel S. Lustria, who, in a March 27, 2015 decision, dismissed the complaint for illegal dismissal for lack of merit. The Labor Arbiter, however, awarded P60,000.00 as separation pay and P8,333.33 as pro-rata thirteenth month pay, while dismissing the remaining claims.

Villola appealed to the NLRC. In its November 27, 2015 decision, the NLRC reversed and set aside the Labor Arbiter’s ruling. It declared that Villola was illegally dismissed, ordered backwages from January 1, 2013 until finality of the decision (as stated in the dispositive portion), and awarded separation pay in lieu of reinstatement computed as one (1) month salary for every year of service, with other claims disposed of accordingly. The NLRC denied respondents’ motion for reconsideration in a January 25, 2016 resolution.

Respondents then filed a petition for certiorari with the Court of Appeals, asserting grave abuse of discretion by the NLRC. On September 16, 2016, the Court of Appeals partially granted the petition, reversed and set aside the NLRC’s decision and resolution, and entered a ruling that dismissed the illegal dismissal complaint. It ordered only proportionate thirteenth month pay with six percent (6%) interest per annum from the due date until full satisfaction, and remanded the case to the Labor Arbiter for computation. The Court of Appeals denied reconsideration in its January 31, 2017 resolution.

Factual Background: Employment, Alleged Resignation, and Subsequent Events

Villola was hired by UPL on April 1, 2010 as an IT and Communications-related managerial employee. He alleged a compensation arrangement involving a base salary and an additional monthly amount of P15,000.00, which allegedly remained unpaid until his separation. Villola also claimed that UPL’s IT functions included management of the CORE repository and that he participated in proposals and implementation work.

The critical sequence began with Villola’s assertion that on March 31, 2010 he met with Lising to discuss salary adjustments, followed by arrangements under which a larger monthly compensation would be paid, with a cumulative release at year-end. The allegations of non-payment formed part of Villola’s money claims.

As to his separation, Villola recounted that in May 2013 he discussed with UPL officers the creation and implementation of a new software system involving scanning, encoding, and indexing of UPL documents. On May 31, 2013, he received an email from UPL management instructing him to submit a written resignation letter indicating that his resignation would be effective June 1, 2013. Villola did not comply and continued reporting for work until July 2013. He also sent emails demanding payment of unpaid salaries, allowances, and professional fees.

Respondents presented a different account. They asserted that during early 2013, UPL observed Villola’s inability to implement the CORE system despite prior budget allotment, and that UPL engaged the services of HelpDesk to perform functions otherwise connected to Villola’s role. UPL tolerated Villola’s part-time engagement as a trainer for a UPL affiliate’s Anti-Piracy Awareness Program, even though the training affected his core duties.

Respondents then asserted that management, through Consunji, discussed that Villola’s position may be redundant, and that Villola agreed to a course of action where—rather than terminating him on redundancy—he would voluntarily cease his employment with UPL and render services as a consultant for a scanning project involving UPL documents to be utilized by another company, SVI. Respondents maintained that Villola was instructed to formalize his resignation by submitting a resignation letter, but that he failed to produce it despite follow-ups. They also alleged that Villola stopped reporting for work starting June 2013 and that he worked in June to July 2013 only as a trainer for a UPL affiliate within company premises. A proposal for the scanning project was submitted on June 27, 2013 under the name “DRD Technology Solutions.”

Labor Arbiter’s Findings

The Labor Arbiter found that Villola voluntarily resigned. It relied on the cessation of Villola’s reporting for work starting June 2013, the fact that he stopped receiving salaries from UPL thereafter, and the Labor Arbiter’s view that it was illogical for Villola to have remained silent while claiming he was illegally dismissed, especially considering he could have raised objections to responsible officers during his continued presence for part of June to July 2013. The Labor Arbiter further noted the period of delay before Villola filed his illegal dismissal complaint on September 30, 2014. Based on these circumstances, it concluded that Villola deliberately failed to furnish his written resignation letter in order to later substantiate his illegal dismissal claim.

The Labor Arbiter also reasoned that Villola’s separation was consistent with redundancy under law.

NLRC Ruling: Illegally Dismissed and Rejection of Redundancy

The NLRC reversed. It held that Villola’s supposed resignation was not supported by evidence on record because there was no written resignation letter from Villola, which the NLRC treated as the best proof of an employee’s categorical intention to sever employment. The NLRC relied on UPL’s memorandum issued on October 10, 2014 indicating that Villola was dismissed effective June 1, 2013, and it treated this as evidence that no resignation occurred.

The NLRC also rejected the redundancy theory. It ruled that redundancy was not raised by respondents as a ground for dismissal, and it found want of evidence to support a redundancy dismissal. It further treated Villola’s filing of the illegal dismissal complaint as inconsistent with an intention to abandon employment.

Court of Appeals Ruling: Voluntary Resignation

The Court of Appeals set aside the NLRC. It concluded that Villola voluntarily resigned and was therefore not dismissed. The Court of Appeals acknowledged that the record showed Villola’s continued communication with management after May 31, 2013 and that the absence of a written resignation letter could appear relevant. However, it found it “highly illogical” for UPL to request Villola’s submission of a resignation letter while simultaneously requiring his participation in the scanning project. This led it to accept respondents’ theory that there was a prior agreement that Villola would voluntarily cease employment rather than be terminated on redundancy.

The Court of Appeals gave significance to Villola’s email response to Consunji’s May 31, 2013 request, finding no objection raised to the resignation-letter demand. It also considered Villola’s long delay in filing his illegal dismissal complaint—about fifteen (15) months after separation—and treated that delay as supporting the resignation narrative.

The Court of Appeals further characterized Villola’s dealings with UPL after May 31, 2013 as being in the capacity of a consultant for the scanning work rather than as an employee. It also held that the term “dismissal” in UPL’s October 11, 2014 memorandum merely emphasized separation from service rather than establishing an illegal dismissal.

On that basis, it dismissed the illegal dismissal complaint but ordered payment of proportionate thirteenth month pay, with interest, and remanded for computation.

Issues Presented to the Court

Villola raised whether the Court of Appeals erred in reversing the NLRC’s finding of illegal dismissal; whether it erred in ruling that there was redundancy; and whether it erred in reversing and setting aside the NLRC’s awards of backwages and separation pay.

Court’s Treatment of Factual Questions under Rule 45

The Court recognized that the question whether Villola was illegally dismissed or freely and voluntarily resigned was factual. Generally, factual findings of quasi-judicial bodies are respected and are not reexamined under Rule 45. However, because the NLRC and the Court of Appeals rendered opposing factual conclusions, the Court undertook review of the factual issues to determine which findings were supported by the record.

Burden of Proof in Resignation vs. Dismissal

The Court reiterated doctrine on illegal dismissal and resignation. It held that when an employer denies dismissal and instead raises resignation as a defense, the employer bears the burden to prove that the employee voluntarily resigned. It also restated that resignation requires concurrence of intent to relinquish and an overt act of relinquishment.

The Court further emphasized that the employee alleging illegal dismissal must first establish that a dismissal occurred. Where the parties’ dispute hinged on resignation, the case turned on whether Villola resigned voluntarily or was dismissed.

Evidence of Resignation: Email Requests, Failure to Object, and Subsequent Acts

Villola contended that no resignation occurred because UPL failed to furnish him a copy of his resignation letter and because UPL’s internal memorandum informed employees that he was dismissed effective June 1, 2013. The Court rejected the challenge.

First, the Court observed that UPL requested Villola, in an email dated May 31, 2013, to furnish management with a resignation letter indicating effectivity on June 1, 2013, and it also asked for his quotation and proposal for scanning services for crewing and finance documentation. The Court noted Villola did not object to the request, nor did he inquire about the reasons for submission of the resignation letter.

Second, the Court found that UPL sent a follow-up request in an email dated June 12, 2013, and Villola still did not produce a resignation letter, but instead responded on the scanning project proposal and quotation.

Third, the Court considered that UPL stopped paying Villola’s salaries after May 31, 2013, and that Villola himself stopped reporting for

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