In the Philippines, an employer must demonstrate just cause and due process to legally terminate an employee. This case clarifies the distinction between illegal dismissal and abandonment of work, reinforcing the importance of procedural requirements and employee protections. It emphasizes that employers bear the burden of proving a dismissal’s legality, and that employees are entitled to reinstatement and backwages if unjustly terminated. It also reiterates that attorney’s fees are awarded to the Public Attorney’s Office (PAO) when they successfully represent clients in labor disputes.

When a File Turnover Signals Dismissal, Not Abandonment

Sheryll Cabañas filed a complaint against Abelardo G. Luzano Law Office for illegal dismissal and monetary claims. The central question was whether Cabañas abandoned her job or was illegally dismissed. The Labor Arbiter and NLRC initially ruled in favor of Cabañas, but the Court of Appeals reversed, stating she abandoned her post. The Supreme Court then reviewed the conflicting findings to determine the true nature of Cabañas’ separation from employment and ensure her rights were protected under Philippine labor law.

The Supreme Court began by establishing the standard for reviewing factual questions in labor cases. As a rule, only questions of law are reviewed in an appeal by certiorari. However, this rule is not absolute. The Supreme Court may review the facts in labor cases where the findings of the Court of Appeals and of the labor tribunals are contradictory. In this case, the factual findings of the Labor Arbiter and the NLRC differed from those of the Court of Appeals, which necessitated a review and evaluation of the evidence on record.

In illegal dismissal cases, the employer generally has the burden of proving that the dismissal was legal. To successfully prove illegal dismissal, the employee must first present substantial evidence showing they were dismissed from employment. Cabañas contended that she was terminated when Atty. Luzano asked her to resign, which she refused. On September 20, 2013, she was then asked to turn over all her files and told that it was her last day of work. According to Cabañas her salary would be deposited in her ATM account.

The court emphasized the significance of the document evidencing Cabañas’ turnover of files. Antoinette L. Castro, the Head Administrative Assistant of the Law Office, acknowledged the receipt by affixing her signature on the document. The Court explained that in employment parlance, the turnover of work by an employee signifies severance of employment. The court also highlighted that Atty. Luzano, the owner of the Law Office, had the authority to dismiss employees, and telling Cabañas that it was her last day of work constituted an overt act of dismissal.

Having established that Cabañas had indeed been dismissed, the burden shifted to the respondents to prove that such dismissal was not done illegally. Failure to provide sufficient proof would mean that the dismissal was unjustified and therefore illegal. The respondents argued that Cabañas was not dismissed, but rather she abandoned her work by not reporting to work the following Monday. For abandonment of work to fall under Article 282 (b) of the Labor Code as gross and habitual neglect of duties, there must be concurrence of two elements. First, there should be a failure of the employee to report for work without a valid or justifiable reason. Second, there should be a showing that the employee intended to sever the employer-employee relationship, which is the more determinative factor, as manifested by overt acts.

The Court of Appeals held that Cabañas abandoned her work, with the overt act being the voluntary turnover of files to Antoinette L. Castro. However, the Supreme Court disagreed with the Court of Appeals’ interpretation of the file turnover. The Court provided multiple reasons to show that the turnover was an act of dismissal, not abandonment. First, Cabañas initially stated in her Reply to respondents’ Position Paper that she was illegally terminated when she was asked to turn over her files. Second, the respondents did not initially mention the file turnover in their Position Paper, Reply, or appeal before the NLRC. It was only first mentioned in their Reply Memorandum. Third, if Cabañas wanted to abandon her job, she could have simply left without turning over her files. Finally, the filing of an illegal dismissal case is inconsistent with abandonment of work.

The Court also emphasized that terminating an employee must be done in accordance with the law. The employer must furnish the worker with two written notices: one apprising the employee of the acts for which their dismissal is sought, and another informing the employee of the employer’s decision to dismiss them. In this case, the Labor Arbiter and the NLRC correctly observed that the respondents did not issue a notice to explain and a notice of termination on the ground of abandonment. Therefore, respondents failed to comply with procedural due process.

The Court of Appeals relied on Jo v. National Labor Relations Commission, where the employee’s prayer for separation pay, not reinstatement, was used to demonstrate the employee’s intention to sever ties with the employer. However, the Supreme Court distinguished the facts of Jo v. National Labor Relations Commission from the present case. In that case, the intention to sever ties was manifested by several circumstances. These include the employee bragging about quitting, surrendering shop keys, seeking employment at another barbershop, and filing an illegal dismissal case without praying for reinstatement.

The Court held that an employee’s prayer for separation pay indicates strained relations between the parties. Under the doctrine of strained relations, separation pay is an acceptable alternative to reinstatement when the latter is no longer viable. The Court, in this case, held that the Labor Arbiter and NLRC were correct to award separation pay considering the facts of this case. The Supreme Court also affirmed the award of attorney’s fees to the PAO. R.A. No. 9406 sanctions the receipt of attorney’s fees by the PAO, to be used for the special allowances of their officials and lawyers. In Our Haus Realty Development Corporation v. Parian, the Court ruled that employees are entitled to attorney’s fees, despite availing of free legal services from the PAO.

Ultimately, the Supreme Court found that Cabañas was dismissed without just cause and without procedural due process. The decision reinforces the importance of due process in termination cases, ensuring employees are protected from arbitrary dismissal.

FAQs

What was the key issue in this case?	The key issue was whether Sheryll Cabañas was illegally dismissed from her employment, or whether she had abandoned her job. The determination hinged on the interpretation of her actions and the employer’s compliance with labor laws.
What is abandonment of work?	Abandonment of work requires two elements: failure to report for work without a valid reason, and a clear intention to sever the employer-employee relationship manifested by overt acts. Both elements must be proven by the employer to justify termination based on abandonment.
Who has the burden of proof in illegal dismissal cases?	In illegal dismissal cases, the employer has the burden of proving that the dismissal was legal. The employee must first show they were dismissed; then the employer must prove the dismissal was for just cause and followed proper procedure.
What is the significance of the file turnover in this case?	The Court had to determine if the turnover was an act of abandonment or an act showing dismissal. The Supreme Court determined it to be an overt act of dismissal, as Cabañas was told it was her last day of work, and because she was asked to turn over her files on that day.
What is procedural due process in termination cases?	Procedural due process requires the employer to provide two written notices to the employee: a notice of the specific acts or omissions for which dismissal is sought, and a subsequent notice informing the employee of the employer’s decision to dismiss. These notices must be given to the employee.
What is the doctrine of strained relations?	The doctrine of strained relations allows for the payment of separation pay as an alternative to reinstatement when the relationship between the employer and employee has become irreparably damaged. However, it should not be used recklessly and must be based on objective evidence.
Why was attorney’s fees awarded in this case?	Attorney’s fees were awarded because Sheryll Cabañas was represented by the Public Attorney’s Office (PAO). Republic Act No. 9406 allows the PAO to receive attorney’s fees, which are then used to fund special allowances for PAO officials and lawyers.
What remedies are available to an illegally dismissed employee?	An illegally dismissed employee is typically entitled to reinstatement to their former position, backwages (unpaid salary from the time of dismissal until reinstatement), and other monetary benefits. In cases where reinstatement is not feasible due to strained relations, separation pay may be awarded instead.

This case underscores the importance of adhering to due process and substantiating claims of abandonment with concrete evidence. It serves as a reminder that employers must respect employee rights and follow legal procedures when considering termination.

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: Sheryll R. Cabañas vs. Abelardo G. Luzano Law Office/Abelardo G. Luzano, G.R. No. 225803, July 02, 2018