The Supreme Court held that New Ever Marketing, Inc. illegally and constructively dismissed its employees, Espiritu Ylanan, Cesar Fulo, and Wilfredo Bilasa, by creating unreasonable working conditions. The court emphasized that employers must provide due process and demonstrate just cause when terminating employment, including clear evidence of abandonment if asserted. This decision affirms employees’ rights to a fair working environment and protection against arbitrary dismissal, highlighting the importance of proper notice and substantive justification in termination cases.

The Case of the Vanishing ‘Ding’: Did Unreasonable Demands Lead to Illegal Dismissal?

This case revolves around the circumstances surrounding the termination of Espiritu Ylanan, Cesar Fulo, and Wilfredo Bilasa from New Ever Marketing, Inc. The employees alleged illegal dismissal, claiming they were effectively locked out of their jobs and subjected to unreasonable demands. The employer, on the other hand, argued that the employees had abandoned their positions by failing to report to work without proper leave. The central legal question is whether the employer’s actions constituted constructive dismissal, thereby entitling the employees to reinstatement and backwages. This analysis delves into the intricacies of abandonment, constructive dismissal, and the employer’s duty to provide due process.

The facts of the case highlight a series of events that led to the filing of the illegal dismissal complaint. According to the employees, they were instructed to wait for a certain “Ding” upon reporting for work, only to find that “Ding” would arrive late or not at all, preventing them from performing their duties. They felt that this instruction made their working environment untenable. In contrast, New Ever Marketing claimed that the employees failed to report for work without filing a leave of absence and that they were sent memoranda requiring them to explain their absences, which they allegedly ignored. The Labor Arbiter initially sided with the employer, ruling that the employees had abandoned their jobs. However, the National Labor Relations Commission (NLRC) reversed this decision, finding that the employer had constructively dismissed the employees.

The Supreme Court’s analysis begins by addressing the procedural issues raised by New Ever Marketing’s petition. The Court notes that the employer initially filed a petition for certiorari with the Court of Appeals (CA), which was dismissed for non-compliance with procedural rules. Specifically, the employer failed to attach an affidavit of service and to allege material dates demonstrating the timeliness of the filing. When the CA denied the motion for reconsideration, the employer filed a second motion, which was also denied as a prohibited pleading. The Supreme Court emphasized that the correct remedy for the employer was a petition for review on certiorari under Rule 45, not a petition for certiorari under Rule 65. “The rule is that the special civil action of certiorari under Rule 65 is not, and cannot be, a substitute for a lost remedy of appeal, especially if the loss is occasioned by the petitioner’s own neglect or error in the choice of remedies.”

Turning to the substantive issues, the Supreme Court reiterates the twin requirements for a valid dismissal from employment under the Labor Code. These are (a) the dismissal must be for any of the causes provided in Article 282 of the Labor Code, and (b) the employee must be given an opportunity to be heard and defend himself. Citing Colegio de San Juan de Letran-Calamba v. Villas, the Court clarifies that two notices are required: (a) a written notice containing a statement of the cause for termination, to afford the employee an opportunity to be heard and defend himself; and (b) if the employer decides to terminate the services of the employee, a written notice must be given to the employee stating clearly the reason therefor. In this case, New Ever Marketing failed to provide sufficient evidence that it had served the employees with copies of the memoranda regarding their unauthorized absences and the subsequent decision to terminate their employment.

The Court also examined the validity of the employer’s claim that the employees had abandoned their work. To constitute abandonment, two requisites must concur: (a) the employee must have failed to report for work or must have been absent without justifiable reason; and (b) there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by overt acts. The Court found that the employees had sought permission and informed the employer of their reasons for being absent and had reported back to the employer’s office. Therefore, it could not be said that the employees had abandoned their work. The Court also notes, citing Samarca v. Arc-Men Industries, Inc., that “the filing by an employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of his desire to return to work, thus, negating the employer’s charge of abandonment.”

Moreover, the Supreme Court agreed with the NLRC’s finding that the employees had been constructively dismissed. Constructive dismissal occurs when continued employment is rendered impossible, unreasonable, or unlikely, such as when the offer of employment involves a demotion in rank and diminution of pay. Here, the employees were barred from entering the premises and made to wait for “Ding” without any justifiable reason. The Court emphasizes that the employer bears the burden of proving that the termination of employment was for a valid or authorized cause under Article 277(b) of the Labor Code. Failure to discharge this burden means that the dismissal is not justified, and the employee is entitled to reinstatement and backwages. Thus, the Supreme Court upheld the NLRC’s decision, affirming the employees’ right to reinstatement and backwages under Article 279 of the Labor Code.

FAQs

What is constructive dismissal?	Constructive dismissal happens when an employer makes working conditions so unbearable that an employee is forced to resign. It’s essentially an involuntary termination, as the employee has no reasonable choice but to leave.
What are the key elements of abandonment of work?	Abandonment requires both a failure to report for work without a valid reason and a clear intention to sever the employment relationship. The intention to abandon must be clear and deliberate, not merely implied from absence.
What is the ‘two-notice rule’ in termination cases?	The ‘two-notice rule’ requires the employer to provide a first notice informing the employee of the grounds for possible termination. A second notice must then be given if the employer decides to terminate the employee, stating the specific reasons for the dismissal.
What is the significance of filing an illegal dismissal case?	Filing a complaint for illegal dismissal is strong evidence that an employee does not intend to abandon their job. It demonstrates a clear desire to return to work, negating any claim of abandonment by the employer.
What is the burden of proof in termination cases?	The burden of proof lies with the employer to show that the termination was for a just or authorized cause. If the employer fails to prove this, the dismissal is considered illegal.
What remedies are available to an illegally dismissed employee?	An illegally dismissed employee is typically entitled to reinstatement to their former position without loss of seniority rights. They are also entitled to backwages from the time of the illegal dismissal until actual reinstatement.
How does the NLRC’s decision affect the outcome of labor disputes?	The NLRC plays a crucial role in resolving labor disputes. Its decisions can significantly alter the outcome of cases, as demonstrated by its reversal of the Labor Arbiter’s initial ruling in this case.
What is the difference between Rule 45 and Rule 65 under the Rules of Court?	Rule 45 provides for a petition for review on certiorari, used to appeal final judgments. Rule 65 covers special civil actions like certiorari, which is used when there is grave abuse of discretion amounting to lack or excess of jurisdiction.

This case underscores the importance of due process and just cause in employment termination. Employers must ensure that they comply with the Labor Code’s requirements when dismissing employees to avoid liability for illegal dismissal. The decision also highlights the employee’s right to a fair working environment, free from unreasonable demands or conditions that could lead to constructive dismissal.

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: New Ever Marketing, Inc. vs. Hon. Court of Appeals, G.R. No. 140555, July 14, 2005