LABREL CASE DIGESTS | ART 286

1
SKM ART CRAFT CORP. v EFREN BAUCA, ET AL.
GR 171282 | NOV 27 2013

FACTS:
The 23 respondents were employed by petitioner SKM Art Craft Corporation
which is engaged in the handicraft business. On April 18, 2000, around 1:12 a.m.,
a fire occurred at the inspection and receiving/repair/packing area of petitioners
premises in Intramuros, Manila. The fire investigation report stated that the
structure and the beach rubber building were totally damaged. Also burned were
four container vans and a trailer truck. The estimated damage was P22 million.

On May 8, 2000, petitioner informed respondents that it will suspend its
operations for six months, effective May 9, 2000. On May 16, 2000, only eight
days after receiving notice of the suspension of petitioners operations, the 23
respondents (and other co-workers) filed a complaint for illegal dismissal. They
alleged that there was discrimination in choosing the workers to be laid off and
that petitioner had discovered that most of them were members of a newly-
organized union.


Petitioner denied the claim of illegal dismissal and said that Article 286

of the
Labor Code allows the bona fide suspension of a business or undertaking for a
period not exceeding six months. Petitioner claimed that the fire cost it millions
in losses and that it is impossible to resume its normal operations for a significant
period of time.

LA: respondents were illegally dismissed and ordered petitioner to reinstate
them and pay them back wages. The Labor Arbiter ruled that the fire that burned
a part of petitioners premises may validate the suspension of respondents
employment, but the suspension must not exceed six months. Since petitioner
failed to recall respondents after the lapse of six months, the Labor Arbiter held
that respondents were illegally dismissed.

NLRC: set aside the Labor Arbiters Decision and ruled that there was no illegal
dismissal.

CA: set aside the NLRC Decision and Resolution and reinstated the Labor
Arbiters Decision. The CA ruled that petitioner failed to prove that its
suspension of operations is bona fide . The CA noted that the proof of alleged
losses the list of items and materials allegedly burned was not even certified
or signed by petitioners accountant or comptroller. And even if the suspension of
operations is considered bona fide, the CA said that respondents were not
reinstated after six months.

ISSUE: Whether respondents were illegally dismissed.

HELD: While we agree with the NLRC that the suspension of petitioners
operation is valid, the Labor Arbiter and the CA are correct that respondents
were illegally dismissed since they were not recalled after six months, after the
bona fide suspension of petitioners operations.

We agree with the Labor Arbiter and the CA that respondents were already
considered illegally dismissed since petitioner failed to recall them after six
months, when its bona fide suspension of operations lapsed. We stress that under
Article 286 of the Labor Code, the employment will not be deemed terminated if
the bona fide suspension of operations does not exceed six months. But if the
suspension of operations exceeds six months, the employment will be considered
terminated.

Under Article 286 of the Labor Code, the bona fide suspension of the operation of
a business or undertaking for a period not exceeding six months shall not
terminate employment. Consequently, when the bona fide suspension of the
operation of a business or undertaking exceeds six months, then the employment
of the employee shall be deemed terminated. By the same token and applying
said rule by analogy, if the employee was forced to remain without work or
assignment for a period exceeding six months, then he is in effect constructively
dismissed.

Indeed, petitioners manifestation

dated October 2, 2001 that it is willing to admit
respondents if they return to work was belatedly made, almost one year after
petitioners suspension of operations expired in November 2000. We find that
petitioner no longer recalled, nor wanted to recall, respondents after six months.

HENCE, THE RESPONDENTS WERE ILLEGALLY DISMISSED.

(This case was submitted for settlement. Wherein respondents herein signed a
Release, Waiver and Quitclaim; the court upheld the settlement. But for the
purpose of determining whether there was illegal dismissal in the case at bar,
mention the ruling above. )


EMERITUS SECURITY AND MAINTENANCE SYSTEMS, INC., Petitioner,
vs. JANRIE C. DAILIG, Respondent.
Facts: In August 2000, petitioner hired respondent as one of its security guards.
During his employment, respondent was assigned to petitioner's various clients,
the last of which was Panasonic in Calamba, Laguna starting 16 December 2004.
On 10 December 2005, respondent was relieved from his post.
On 27 January 2006, respondent filed a complaint for underpayment of wages,
non-payment of legal and special holiday pay, premium pay for rest day and
underpayment of ECOLA before the Department of Labor and Employment,
National Capital Region. The hearing officer recommended the dismissal of the
complaint since the claims were already paid.
On 16 June 2006, respondent filed a complaint for illegal dismissal and payment
of separation pay against petitioner before the Conciliation and Mediation Center
of the NLRC. On 14 July 2006, respondent filed another complaint for illegal
dismissal, underpayment of salaries and non-payment of full backwages before
the NLRC.
Respondent claimed that on various dates in December 2005 and from January to
May 2006,
4
he went to petitioners office to follow-up his next assignment. After
more than six months since his last assignment, still respondent was not given a
new assignment. Respondent argued that if an employee is on floating status for
more than six months, such employee is deemed illegally dismissed.
Petitioner denied dismissing respondent. Petitioner admitted that it relieved
respondent from his last assignment on 10 December 2005; however, petitioner
required respondent to report to the head office within 48 hours from receipt of
the order of relief. Respondent allegedly failed to comply. Petitioner claimed that
on 27 January 2006 it sent respondent a notice to his last known address
requiring him to report to the head office within 72 hours from receipt of the said
notice. Petitioner further alleged that it had informed respondent that he had
been absent without official leave for the month of January 2006, and that his
failure to report within 72 hours from receipt of the notice would mean that he
was no longer interested to continue his employment.
Petitioner also claimed that there was no showing that respondent was
prevented from returning to his work and that it had consistently manifested its
willingness to reinstate him to his former position. In addition, the fact that there
was no termination letter sent to respondent purportedly proved that
respondent was not dismissed.
On 5 December 2007, the Labor Arbiter rendered a Decision, disposing of the
case as follows:
WHEREFORE, premises considered, complainant is hereby declared to have been
illegally dismissed.1wphi1 Petitioner appealed before the NLRC, which
dismissed the appeal for lack of merit. Petitioner moved for reconsideration,
which the NLRC denied. The NLRC, however, pointed out that the computation of
respondents award of full backwages should be reckoned from 10 June 2006 and
not 10 December 2005.
On appeal with the Court of Appeals, petitioner argued that there was
abandonment on respondents part when he refused to report for work despite
notice. Thus, there was no illegal dismissal to speak of.
The Court of Appeals affirmed the finding of the Labor Arbiter and the NLRC
that respondent was illegally dismissed by petitioner.
Issues (1) whether respondent was illegally dismissed by respondent
(2) if he was, whether respondent is entitled to separation pay, instead of
reinstatement.
The Ruling of the Court
The Court affirms the finding of illegal dismissal of the Labor Arbiter, NLRC, and
Court of Appeals. However, the Court sets aside the Court of Appeals award of
separation pay in favor of respondent, and reinstates the Labor Arbiters
reinstatement order.
On whether respondent was illegally dismissed
Petitioner admits relieving respondent from his post as security guard on 10
December 2005. There is also no dispute that respondent remained on floating
status at the time he filed his complaint for illegal dismissal on 16 June 2006. In
other words, respondent was on floating status from 10 December 2005 to 16
June 2006 or more than six months. Petitioners allegation of sending respondent
a notice sometime in January 2006, requiring him to report for work, is
unsubstantiated, and thus, self-serving.
The Court agrees with the ruling of the Labor Arbiter, NLRC and Court of Appeals
that a floating status of a security guard, such as respondent, for more than six
months constitutes constructive dismissal.
The failure of petitioner to give respondent a work assignment beyond the
reasonable six-month period makes it liable for constructive dismissal. x x x.
9

LABREL CASE DIGESTS | ART 286
2
Further, the Court notes that the Labor Arbiter, NLRC, and Court of Appeals
unanimously found that respondent was illegally dismissed by petitioner. Factual
findings of quasi-judicial bodies like the NLRC, if supported by substantial
evidence, are accorded respect and even finality by this Court, more so when they
coincide with those of the Labor Arbiter.
10

On whether respondent is entitled to separation pay
Article 279 of the Labor Code of the Philippines mandates the reinstatement of an
illegally dismissed employee, to wit:
Security of Tenure. - x x x An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full back wages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Thus, reinstatement is the general rule, while the award of separation pay is the
exception. The circumstances warranting the grant of separation pay, in lieu of
reinstatement, are laid down by the Court in Globe-Mackay Cable and Radio
Corporation v. National Labor Relations Commission,
12
thus:
Over time, the following reasons have been advanced by the Court for denying
reinstatement under the facts of the case and the law applicable thereto; that
reinstatement can no longer be effected in view of the long passage of time (22
years of litigation) or because of the realities of the situation; or that it would be
inimical to the employers interest; or that reinstatement may no longer be
feasible; or, that it will not serve the best interests of the parties involved; or that
the company would be prejudiced by the workers continued employment; or
that it will not serve any prudent purpose as when supervening facts have
transpired which make execution on that score unjust or inequitable or, to an
increasing extent, due to the resultant atmosphere of antipathy and antagonism
or strained relations or irretrievable estrangement between the employer and
the employee.
In this case, petitioner claims that it complied with the reinstatement order of the
Labor Arbiter.1wphi1 On 23 January 2008, petitioner sent respondent a notice
informing him of the Labor Arbiters decision to reinstate him. Accordingly, in
February 2008, respondent was assigned by petitioner to Canlubang Sugar
Estate, Inc. in Canlubang, Laguna, and to various posts thereafter. At the time of
the filing of the petition, respondent was assigned by petitioner to MD Distripark
Manila, Inc. in Bian, Laguna.
Respondent admits receiving a reinstatement notice from petitioner. Thereafter,
respondent was assigned to one of petitioner's clients. However, respondent
points out that he was not reinstated by petitioner Emeritus Security and
Maintenance Systems, Inc. but was employed by another company, Emme
Security and Maintenance Systems, Inc. (Emme). Thus, according to respondent,
he was not reinstated at all.
Petitioner counters that Emeritus and Emme are sister companies with the same
Board of Directors and officers, arguing that Emeritus and Emme are in effect one
and the same corporation.
Considering petitioner's undisputed claim that Emeritus and Emme are one and
the same, there is no basis in respondent's allegation that he was not reinstated
to his previous employment. Besides, respondent assails the corporate
personalities of Emeritus and Emme only in his Comment filed before this Court.
Further, respondent did not appeal the Labor Arbiter's reinstatement order.
Contrary to the Court of Appeals' ruling, there is nothing in the records showing
any strained relations between the parties to warrant the award of separation
pay. There is neither allegation nor proof that such animosity existed between
petitioner and respondent. In fact, petitioner complied with the Labor Arbiter's
reinstatement order.
Considering that (1) petitioner reinstated respondent in compliance with the
Labor Arbiter's decision, and (2) there is no ground, particularly strained
relations between the parties, to justify the grant of separation pay, the Court of
Appeals erred in ordering the payment thereof, in lieu of reinstatement.
NIPPON HOUSING PHIL. INC., and/or TADASHI OTA, HOROSHI TAKADA,
YUSUHIRO KAWATA, MR. NOBOYUSHI and JOEL REYES vs. MAIAH ANGELA
LEYNES

Keyword: Property Manager - Floating Status

Case Doctrines:
Art. 286. When employment not deemed terminated. The bona fide suspension
of the operation of a business undertaking for a period not exceeding six (6)
months, or the fulfillment by the employee of a civic duty shall not terminate
employment. In all such cases the employer shall reinstate the employee to his
former position without loss of seniority rights if he indicates his desire to
resume his work not later than one (1) month from the resumption of operations
of his employer or from his relief from the military or civic duty.

The rule is settled that "off-detailing" is not equivalent to dismissal, so long as
such status does not continue beyond a reasonable time and that it is only when
such a "floating status" lasts for more than six months that the employee may be
considered to have been constructively dismissed. A complaint for illegal
dismissal filed prior to the lapse of said six-month and/or the actual dismissal of
the employee is generally considered as prematurely filed.

FACTS: Petitioner Nippon Housing Philippines, Inc. (NHPI) ventured into
building management. Having gained the Bay Gardens Condominium Project of
the Bay Gardens Condominium Corporation (BGCC) as its first and only building
maintenance client, petitioner NHPI hired respondent Maiah Angela Leynes for
the position of Property Manager.

During the project, respondent Leynes had a misunderstanding with Engr.
Cantuba regarding the extension of the latters working hours. Because of this,
respondent Leynes instructed the security guards to bar Engr. Cantuba from
entry into the Project.

However, Hiroshi Takada, NHPIs Vice President attributed the incident as
"simple personal differences" and directed respondent Leynes to allow Engr.
Cantuba to report back for work.

Disappointed with the foregoing management decision, respondent Leynes
submitted to NHPIs President a letter asking for an emergency leave of absence
for the supposed purpose of coordinating with her lawyer regarding her
resignation letter.

While petitioner NHPI offered the Property Manager position to Engr. Carlos Jose
as a consequence respondent Leynes signification of her intention to resign,
respondent Leynes sent another letter to NHPI's HR Head on the same day,
expressing her intention to return to work and to call off her planned resignation.

Having subsequently reported back for work and resumed performance of her
assigned functions, respondent Leynes was constrained to send out a written
protest upon being informed that a substitute has already been hired for her
position.

Respondent Leynes was further served by NHPIs Senior Manager and Janitorial
Manager, with a letter from NHPI's HR Head, relieving her from her position and
directing her to report to NHPIs main office while she was on floating status.

Claiming that her being relieved from her position without just cause and
replacement by one Carlos Jose amounted to an illegal dismissal from
employment, respondent Leynes filed a complaint for illegal dismissal.

Petitioner NHPI and its officers, on the other hand, asserted that the
managements exercise of the prerogative to put an employee on floating status
for a period not exceeding six months was justified in view of her threatened
resignation from her position and BGCCs request for her replacement.

The Labor Arbiter found that petitioner NHPIs act of putting respondent Leynes
on floating status was equivalent to termination from employment without just
cause and compliance with the twin requirements of notice and hearing. It also
found that NHPIs officers acted with bad faith in effecting Leynes termination.

The NLRC was reversed the labor arbiter's decision. NLRC ruled that petitioner
NHPIs placement of Leynes on floating status was necessitated by the clients
contractually guaranteed right to request for her relief.

The CA, however, reversed the NLRC's decision. It held that absent any showing
that there was a bona fide suspension of petitioner NHPIs business operations,
respondent Leynes relief from her position even though requested by the client
was tantamount to a constructive dismissal. It further held that the bad faith of
petitioner NHPI and its officers is evident from the hiring of Engr. Jose as
respondent Leynes replacement prior to her being relieved from her position.

Petitioners argue that the CA erred in finding that respondent Leynes was
constructively dismissed when she was placed on floating status. Petitioners
claim that she was validly placed on floating status pursuant to Article 286 of the
Labor Code of the Philippines.

ISSUES: Whether or not petitioners' decision to place respondent Leynes on
floating status is tantamount to constructive dismissal.

RULING: No. Article 286 of the Labor Code (When employment not deemed
terminated) states that the bona fide suspension of the operation of a business
undertaking for a period not exceeding six (6) months, or the fulfillment by the
employee of a civic duty shall not terminate employment. In all such cases the
employer shall reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not later than one
(1) month from the resumption of operations of his employer or from his relief
from the military or civic duty.

Futhermore, the rule is settled that "off-detailing" is not equivalent to dismissal,
so long as such status does not continue beyond a reasonable time and that it is
only when such a "floating status" lasts for more than six months that the
employee may be considered to have been constructively dismissed. A complaint
LABREL CASE DIGESTS | ART 286
3
for illegal dismissal filed prior to the lapse of said six-month and/or the actual
dismissal of the employee is generally considered as prematurely filed.

In the case at bar, in view of the sensitive nature of respondent
Leynes position and the critical stage of the Projects business development,
petitioner NHPI was constrained to relay the situation to BGCC which, in turn,
requested the immediate adoption of remedial measures from Takada, including
the appointment of a new Property Manager for the Project. Upon BGCCs
recommendation, petitioner NHPI consequently hired Engr. Jose as respondent
Leynes replacement. Far from being the indication of bad faith the CA construed
the same to be, these factual antecedents suggest that petitioner NHPIs
immediate hiring of Engr. Jose as the new Property Manager for the Project was
brought about by respondent Leynes own rash announcement of her intention to
resign from her position. Although she subsequently changed her mind and sent
Reyes a letter announcing the reconsideration of her planned resignation and her
intention to return to work, respondent Leynes evidently had only herself to
blame for precipitately setting in motion the events which led to petitioner
NHPIs hiring of her own replacement.

The record, moreover, shows that petitioner NHPI simply placed respondent
Leynes on floating status "until such time that another project could be secured"
for her. Traditionally invoked by security agencies when guards are temporarily
sidelined from duty while waiting to be transferred or assigned to a new post or
client, Article 286 of the Labor Code has been applied to other industries when, as
a consequence of the bona fide suspension of the operation of a business or
undertaking, an employer is constrained to put employees on floating status for a
period not exceeding six months. In brushing aside petitioner NHPI's reliance on
said provision to justify the act of putting respondent Leynes on floating status,
the CA ruled that no evidence was adduced to show that there was a bona fide
suspension of petitioner NHPIs business. What said court clearly overlooked,
however, is the fact that petitioner NHPI had belatedly ventured into building
management and, with BGCC as its only client in said undertaking, had no other
Property Manager position available to respondent Leynes.

Finally, the record shows that respondent Leynes filed the complaint for actual
illegal dismissal from which the case originated on 22 February 2002 or
immediately upon being placed on floating status as a consequence of petitioner
NHPIs hiring of a new Property Manager for the Project. Thus, there was no
constructive dismissal and that her complaint was prematurely filed.


MAYON HOTEL & RESTAURANT, PACITA O. PO and/or JOSEFA PO LAM vs.
ROLANDO ADANA, CHONA BUMALAY, ROGER BURCE, EDUARDO
ALAMARES, AMADO ALAMARES, EDGARDO TORREFRANCA,
LOURDES CAMIGLA, TEODORO LAURENARIA, WENEFREDO
LOVERES, LUIS GUADES, AMADO MACANDOG, PATERNO LLARENA,
GREGORIO NICERIO, JOSE ATRACTIVO, MIGUEL TORREFRANCA, and
SANTOS BROOLA
G.R. No. 157634. May 16, 2005

CASE DOCTRINE:
In termination disputes, the burden of proof is always on the employer to prove
that the dismissal was for a just or authorized cause. Where there is no showing
of a clear, valid and legal cause for termination of employment, the law considers
the case a matter of illegal dismissal. If doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be tilted
in favor of the latter the employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause.

KEYWORDS:
temporary lay-off; 16 employees terminated

FACTS:
Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as
employees in its business in Legaspi City. Its operation was suspended on March
31, 1997 due to the expiration and non-renewal of the lease contract for the
space it rented. While waiting for the completion of the construction of its new
site, MHR continued its operation in another site with 9 of the 16
employees. When the new site constructed and MHR resumed its business
operation, none of the 16 employees was recalled to work.
MHR alleged business losses as the reason for not reinstating the
respondents. On various dates, respondents filed complaints for underpayment
of wages, money claims and illegal dismissal.

LA Rendered a Joint Decision in favor of the employees. The Labor Arbiter
awarded substantially all of respondents money claims, and held that
respondents Loveres, Macandog and Llarena were entitled to separation pay,
while respondents Guades, Nicerio and Alamares were entitled to their
retirement pay. The Labor Arbiter also held that based on the evidence
presented, Josefa Po Lam is the owner/proprietor of Mayon Hotel & Restaurant
and the proper respondent in these cases.

NLRC On appeal to the NLRC, the decision of the Labor Arbiter was reversed, and
all the complaints were dismissed.
Respondents filed a motion for reconsideration with the NLRC and when this was
denied.

CA On petition for certiorari with the CA. CA reversed the NLRC decision and the
employers filed MR which was denied, hence the case before the SC.

ISSUES:
1. Whether or not respondents were illegally dismissed by petitioner;
2. Whether or not respondents are entitled to their money claims due to
underpayment of wages, and nonpayment of holiday pay, rest day premium, SILP,
COLA, overtime pay, and night shift differential pay.





HELD:
1. Illegal Dismissal: claim for separation pay
Since April 1997 until the time the Labor Arbiter rendered its decision in July
2000, or more than three (3) years after the supposed temporary lay-off, the
employment of all the respondents with petitioner had ceased, notwithstanding
that the new premises had been completed and the same resumed its
operation. This is clearly dismissal or the permanent severance or complete
separation of the worker from the service on the initiative of the employer
regardless of the reasons therefor.

Article 286 of the Labor Code is clear there is
termination of employment when an otherwise bona
fide suspension of work exceeds six (6) months. The
cessation of employment for more than six months was
patent and the employer has the burden of proving that
the termination was for a just or authorized cause.

While we recognize the right of the employer to terminate the services of an
employee for a just or authorized cause, the dismissal of employees must be
made within the parameters of law and pursuant to the tenets of fair play. And in
termination disputes, the burden of proof is always on the employer to prove that
the dismissal was for a just or authorized cause. Where there is no showing of a
clear, valid and legal cause for termination of employment, the law considers the
case a matter of illegal dismissal.
If doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter the employer
must affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause. It is a time-honored rule that in controversies between a laborer
and his master, doubts reasonably arising from the evidence, or in the
interpretation of agreements and writing should be resolved in the formers
favor. The policy is to extend the doctrine to a greater number of employees who
can avail of the benefits under the law, which is in consonance with the avowed
policy of the State to give maximum aid and protection of labor.

2. Money claims

The Supreme Court reinstated the award of monetary claims granted by the
Labor Arbiter.
The cost of meals and snacks purportedly provided to respondents cannot be
deducted as part of respondents minimum wage. As stated in the Labor Arbiters
decision.

Even granting that meals and snacks were provided and indeed constituted
facilities, such facilities could not be deducted without compliance with certain
legal requirements. As stated in Mabeza v. NLRC, the employer simply cannot
deduct the value from the employees wages without satisfying the following: (a)
proof that such facilities are customarily furnished by the trade; (b) the provision
of deductible facilities is voluntarily accepted in writing by the employee; and (c)
the facilities are charged at fair and reasonable value. The law is clear that mere
availment is not sufficient to allow deductions from employees wages.

As for petitioners repeated invocation of serious business losses, suffice to say
that this is not a defense to payment of labor standard benefits. The employer
cannot exempt himself from liability to pay minimum wages because of poor
financial condition of the company. The payment of minimum wages is not
dependent on the employers ability to pay. #DIOLA