The Supreme Court’s decision in People’s Security, Inc. v. Flores clarifies the burden of proof in illegal dismissal cases, particularly when employers claim abandonment. The Court sided with the security guards, emphasizing that employers must provide substantial evidence to prove a valid dismissal, and that filing an illegal dismissal case inherently contradicts the intent to abandon employment. This ruling protects employees by ensuring employers cannot easily evade responsibility for unjust terminations.

When Silence Isn’t Golden: The Case of the Unassigned Guards

This case revolves around Julius Flores and Esteban Tapiru, former security guards of People’s Security, Inc. (PSI). After being relieved from their posts, they claimed PSI failed to provide new assignments, leading them to file an illegal dismissal complaint. PSI countered, alleging abandonment. The central legal question is whether PSI illegally dismissed Flores and Tapiru, or if they voluntarily abandoned their positions. This highlights the ongoing tension between an employer’s right to manage its workforce and an employee’s right to security of tenure.

The Supreme Court anchored its decision on the constitutional guarantee of security of tenure, stating that employees can only be terminated for just or authorized causes, following due process. As the Court emphasized,

No less than the 1987 Constitution in Section 3, Article 13 guarantees security of tenure for workers and because of this, an employee may only be terminated for just or authorized causes that must comply with the due process requirements mandated by law. Hence, employers are barred from arbitrarily removing their workers whenever and however they want. The law sets the valid grounds for termination as well as the proper procedure to take when terminating the services of an emp1oyee.

PSI argued that Flores and Tapiru were merely relieved from their assignments, not dismissed. However, the Court found this argument unconvincing, noting that PSI failed to offer them new assignments after their relief. Building on this principle, the Court reiterated that the burden of proving valid dismissal rests on the employer.

To further emphasize this point, the Court stated that,

In termination cases, the burden of proving that the dismissal of the employees was for a valid and authorized cause rests on the employer. It is incumbent upon the employer to show by substantial evidence that the dismissal of the employee was validly made and failure to discharge that duty would mean that the dismissal is not justified and therefore illegal.

The court then addressed PSI’s defense of abandonment, clarifying the stringent requirements for such a claim. For abandonment to be valid, two elements must exist: first, the employee must have failed to report for work without a valid reason; and second, the employee must have a clear intention to sever the employment relationship. The Court emphasized that this intention must be manifested by overt acts. The act of filing a complaint for illegal dismissal, the Court argued, directly contradicts any intention to abandon one’s job. In essence, one cannot claim to have been forced out of a job while simultaneously intending to leave it.

Even if there were an intention to sever the employer-employee relationship, labor laws require employers to follow due process before termination, which involves providing the employee with two written notices. First, a notice specifying the grounds for termination, giving the employee an opportunity to explain; and second, a notice of termination, indicating that after due consideration, grounds have been established to justify termination. This twin-notice requirement, the Court explained, is crucial for ensuring fairness and protecting employees from arbitrary dismissal. The absence of these notices further weakened PSI’s case.

The court also dismissed the argument regarding the delayed filing of the illegal dismissal complaint, noting that the employees acted within the prescribed four-year period under Article 1146 of the New Civil Code.

However, the Supreme Court partly reversed the Court of Appeals and absolved Nestor Racho, PSI’s President, from solidary liability. While a corporation is typically viewed as a separate legal entity, the corporate veil can be pierced to hold directors or officers personally liable under certain circumstances. As the Court has stated,

The doctrine of piercing the corporate veil applies only when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or defend crime. In the absence of malice, bad faith, or a specific provision of law making a corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities.

In this case, the Court found no evidence that Racho acted with malice or bad faith, or that he used the corporate structure to perpetrate fraud or injustice. Therefore, only PSI was held liable for the illegal dismissal of Flores and Tapiru. In the final analysis, the ruling underscores the importance of due process and the burden of proof in labor disputes, reinforcing the constitutional right to security of tenure.

FAQs

What was the key issue in this case?	The central issue was whether the security guards were illegally dismissed by their employer or if they had abandoned their jobs. The court focused on the employer’s burden of proving just cause for dismissal and adherence to due process.
What is the legal definition of abandonment in labor law?	Abandonment requires both a failure to report to work without valid reason and a clear intention to sever the employment relationship, demonstrated through overt acts. Filing a case for illegal dismissal typically negates a claim of abandonment.
What is the ‘twin-notice’ requirement in termination cases?	The twin-notice rule mandates that employers provide two written notices: one specifying the grounds for termination and giving the employee an opportunity to explain, and another formally notifying the employee of the termination decision. This ensures due process and fair treatment.
How long does an employee have to file an illegal dismissal case in the Philippines?	Under Article 1146 of the New Civil Code, an employee has four years from the date of illegal dismissal to file a complaint. This prescriptive period is based on actions involving injury to the rights of the plaintiff.
When can a corporate officer be held solidarily liable with the corporation?	A corporate officer can be held solidarily liable only if they acted with malice, bad faith, or gross negligence in directing the affairs of the corporation, or if they used the corporate structure to commit fraud or injustice. The corporate veil is pierced only in exceptional cases.
What evidence did the employer present to prove abandonment?	The employer, PSI, argued that the employees failed to report for work after being relieved from their previous assignment. However, they did not provide evidence of new assignments offered or communication regarding the alleged abandonment.
What was the final ruling of the Supreme Court in this case?	The Supreme Court affirmed the Court of Appeals’ decision finding illegal dismissal, but modified it to absolve the company president, Nestor Racho, from solidary liability. Only People’s Security, Inc. was held responsible for the monetary awards.
What is the significance of ‘security of tenure’ for employees?	Security of tenure, guaranteed by the Constitution, means that employees can only be terminated for just or authorized causes and after compliance with due process. It protects employees from arbitrary or unjust dismissals.

In conclusion, this case underscores the importance of adhering to due process and providing substantial evidence in labor disputes. It serves as a reminder to employers of their obligations to employees and reinforces the constitutional right to security of tenure. It also provides clarification on when corporate officers can be held personally liable for corporate actions.

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: People’s Security, Inc. v. Flores, G.R. No. 211312, December 05, 2016