In Nightowl Watchman & Security Agency, Inc. v. Nestor Lumahan, the Supreme Court clarified that in illegal dismissal cases, the employee bears the initial burden of proving that a dismissal actually took place. Only when the employee successfully proves dismissal does the burden shift to the employer to prove that the dismissal was for a just or authorized cause and was carried out with due process. This decision underscores the importance of establishing the fact of dismissal before the employer is required to justify its actions, protecting employers from unfounded claims.

Was the Security Guard Dismissed or Did He Abandon His Post?

Nestor Lumahan, a security guard at Nightowl Watchman & Security Agency, Inc., filed a complaint for illegal dismissal and other labor violations. Lumahan claimed he was dismissed after returning from a leave to attend to his dying grandfather. Nightowl countered that Lumahan abandoned his post and never returned to work. The Labor Arbiter initially dismissed the illegal dismissal claim but awarded monetary benefits, while the National Labor Relations Commission (NLRC) later dismissed the entire complaint. The Court of Appeals (CA) reversed the NLRC’s decision, finding grave abuse of discretion. The Supreme Court had to determine whether the CA correctly assessed the NLRC’s decision and whether Lumahan had indeed been dismissed.

The Supreme Court emphasized that its review of the CA decision was limited to determining whether the CA correctly identified grave abuse of discretion on the part of the NLRC. This means the Court focused on whether the NLRC acted with caprice, whimsy, or in an arbitrary manner, rather than directly assessing the merits of the labor dispute. The Court reiterated the principle that in cases reaching it via a Rule 45 petition, only questions of law are entertained, unless factual review is necessary to determine grave abuse of discretion.

“In every employee dismissal case, the employer bears the burden of proving the validity of the employee’s dismissal, i.e., the existence of just or authorized cause for the dismissal and the observance of the due process requirements. The employer’s burden of proof, however, presupposes that the employee had in fact been dismissed, with the burden to prove the fact of dismissal resting on the employee. Without any dismissal action on the part of the employer, valid or otherwise, no burden to prove just or authorized cause arises.” Therefore, the employee must first present substantial evidence proving that dismissal occurred.

The Court found that the CA erred in disregarding the NLRC’s conclusion that no dismissal had occurred. The CA should have first determined whether Lumahan had been dismissed before considering Nightowl’s defense of abandonment. The Supreme Court agreed with the NLRC’s approach of evaluating whether a dismissal took place, holding that the NLRC did not commit grave abuse of discretion in concluding that Lumahan was not dismissed from work.

The Court noted that in administrative and quasi-judicial proceedings like those before the NLRC, the standard of evidence is **substantial evidence**. This means such relevant evidence as a reasonable mind might accept as adequate to justify a conclusion. The Court found that Nightowl presented sufficient documentary evidence to support its claim that Lumahan stopped reporting for work on April 22, 1999, and never returned. Lumahan, on the other hand, failed to provide supporting evidence to refute Nightowl’s claim or to prove that he continued working until May 15, 1999.

Moreover, Lumahan was inconsistent about the date of his alleged dismissal. He initially stated it was in May 1999, then amended it to June 1999, and later claimed he was told to look for another job in December 1999. This uncertainty further undermined his claim of dismissal. The Court also noted that the payroll slips, which Labor Arbiter Demaisip used to assume Lumahan worked until April 30, 1999, were actually presented by Nightowl to prove that Lumahan was not underpaid, not by Lumahan to support his claim of continued employment.

The Supreme Court also clarified that the CA erred in considering “abandonment of work” as a defense. It emphasized that Nightowl never raised abandonment as a defense; instead, it consistently argued that Lumahan stopped reporting for work. The Court distinguished between “abandonment of post” and “abandonment of work,” noting that Nightowl’s argument was that Lumahan abandoned his post at Steelwork, but they still considered him an employee whose return they awaited. The Court also explained that report-to-work notices are required only when dismissal is involved or contemplated, which was not the case here.

“Abandonment, as understood under our labor laws, refers to the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty that constitutes just cause for the employer to dismiss the employee.” The critical point was that Nightowl never raised abandonment as a defense, which made the lower courts ruling about abandonment unnecessary.

The Supreme Court, while finding no illegal dismissal, addressed the issue of separation pay. Typically, in cases where no dismissal occurs, reinstatement is the proper remedy, without backwages. However, given the extended period that had passed since Lumahan stopped working, the Court deemed reinstatement impractical. Thus, the Court awarded Lumahan separation pay equivalent to one month’s pay for every year of service, up to April 22, 1999, on equitable grounds.

FAQs

What was the key issue in this case?	The key issue was whether the employee, Nestor Lumahan, was illegally dismissed by Nightowl Watchman & Security Agency. The court needed to determine if the employee sufficiently proved that a dismissal even occurred.
Who has the burden of proof in an illegal dismissal case?	The employee has the initial burden to prove that a dismissal occurred. If the employee successfully proves dismissal, the burden then shifts to the employer to prove that the dismissal was for a just or authorized cause and with due process.
What is “substantial evidence” in NLRC cases?	Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to justify a conclusion. This standard applies in administrative and quasi-judicial proceedings like those before the NLRC.
Did the Supreme Court find Lumahan was illegally dismissed?	No, the Supreme Court found that Lumahan had not been dismissed. The Court reasoned that Lumahan failed to provide sufficient evidence to prove that he was dismissed by Nightowl.
What is the difference between “abandonment of post” and “abandonment of work” in this context?	“Abandonment of post” refers to an employee leaving their assigned duty station, while “abandonment of work” implies a deliberate and unjustified refusal to return to employment. Nightowl argued the former, not the latter.
Why did the CA’s decision get reversed?	The CA was reversed because it incorrectly found that the NLRC committed grave abuse of discretion. The Supreme Court found that the NLRC’s decision was supported by evidence and sound legal reasoning.
What is separation pay, and why was it awarded in this case?	Separation pay is a monetary benefit awarded to an employee upon separation from employment. In this case, separation pay was awarded in lieu of reinstatement due to the long period that had passed since Lumahan stopped working.
What should an employee do if they believe they have been illegally dismissed?	An employee who believes they have been illegally dismissed should gather all relevant documents, such as employment contracts, pay slips, and any communication related to their termination. They should then promptly consult with a labor lawyer to assess their legal options.

In conclusion, the Supreme Court’s decision in Nightowl Watchman & Security Agency, Inc. v. Nestor Lumahan underscores the importance of the employee first establishing that a dismissal occurred before the employer is burdened with proving the validity of that dismissal. The decision also highlights the distinction between “abandonment of post” and “abandonment of work” and clarifies the standard of evidence required in NLRC cases. This ruling provides valuable guidance for employers and employees alike in navigating illegal dismissal claims.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NIGHTOWL WATCHMAN & SECURITY AGENCY, INC. VS. NESTOR LUMAHAN, G.R. No. 212096, October 14, 2015