ALMA A. VILLAGO AND KAREN MAY C. FALLEGA, PETITIONERS, VS. AMERICAN SHOE MARKETING/ EDWARD ONG, PRIVATE RESPONDENT NATIONAL LABOR RELATIONS COMMISSION, SEVENTH DIVISION, CEBU CI…

Villago versus American Shoe Marketing

The Case

This is a labor case about two sales employees, Alma Villago and Karen May Fallega, who sued their employer, American Shoe Marketing, a shoe store in Bacolod City owned and managed by Edward Ong. The employees claimed they were illegally dismissed when the store stopped rehiring them after their contracts expired, while the employer claimed they simply abandoned their jobs. The case matters because it shows how the Supreme Court treats a defense of abandonment, who carries the burden of proof in an illegal dismissal case, and when the Court may look behind the factual findings of the National Labor Relations Commission.

Procedural History

The employees filed a complaint for illegal dismissal, regularization, unpaid money claims, and attorney's fees before the Labor Arbiter of the National Labor Relations Commission in Bacolod City. The Labor Arbiter ruled in their favor, declaring them regular employees who were illegally dismissed and awarding backwages, separation pay, thirteenth month pay, service incentive leave pay, and attorney's fees. The employer appealed to the National Labor Relations Commission, Fourth Division, in Cebu City, which reversed the finding of dismissal and held that the employees had voluntarily and informally terminated their employment, although it kept the award of thirteenth month pay and service incentive leave. One Commissioner dissented and voted to affirm the Labor Arbiter. The employees moved for reconsideration, which was denied, so they filed a petition for certiorari before the Supreme Court, and the Court granted it.

Facts

American Shoe Marketing sells shoes, bags, slippers, and other footwear, and employs about fifteen salesmen, stockmen, and store personnel. Alma Villago was hired in 2002 under a series of contracts with expiry dates. Karen May Fallega began working in December 2010, also under a contract with an expiry date. On August 11, 2011, both were told that their contracts had expired and that they could no longer report for work.

Earlier, on July 26, 2011, the Department of Labor and Employment in Bacolod City conducted a routine inspection of the store and found several violations, including underpayment of wages, thirteenth month pay, holiday pay, service incentive leave pay, and overtime pay, and non-coverage in social security and related benefits. The affected workers, including the two petitioners, later filed a letter complaint, and a settlement was reached with the employer.

The employees then filed their complaint for illegal dismissal. The employer answered that they had abandoned their work in January 2012 and submitted affidavits of two senior co-workers saying they had tried to locate the employees because their services were needed. The Labor Arbiter found for the employees, but the National Labor Relations Commission reversed and found voluntary abandonment, prompting this petition.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in disregarding material facts that would justify a different conclusion.
• Whether or not the factual findings of the Labor Arbiter and the dissenting opinion of the Commissioner are supported by the proven facts of the case.

Applicable Provisions

Article 279 of the Labor Code provides:

An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to his full backwages, inclusive of allowance and to other applicable benefits or their monetary equivalent computed from the time the compensation was withheld up to the time of actual reinstatement.

This is the provision that fixes the relief once the Court finds that the dismissal was illegal.

Ruling

On the first issue, the Court held that the National Labor Relations Commission acted with grave abuse of discretion because its decision was not supported by substantial evidence. The Court explained that in certiorari proceedings it does not ordinarily weigh evidence, but it may examine the factual findings of the Commission when they are not supported by substantial evidence, and it did so here.

On the second issue, the Court ruled that the employees were illegally dismissed and that abandonment was not proven. The burden of proof lies on the employer to show a valid cause for dismissal, and the employer presented no evidence of any just or authorized cause, nor any notice or hearing. On abandonment, the Court required two elements: failure to report for work without valid reason, and a clear intention to sever the employment relationship, the second being the more determinative and shown by overt acts. The Court held that a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, and that the employer never wrote to the employees requiring them to explain their absence or to return to work. The Court found it hard to believe that the employees would abandon their only means of livelihood, and it agreed with the Labor Arbiter that there was no abandonment.

Having found illegal dismissal, the Court applied Article 279, but in recognition of the strained relations between the parties, it held the employer liable for separation pay instead of reinstatement.

Doctrine

In illegal dismissal cases, the burden of proof rests on the employer to show that the dismissal was for a valid cause. Abandonment requires two elements: failure to report for work without valid or justifiable reason, and a clear intention to sever the employment relationship, the second being the more determinative and shown by overt acts. A charge of abandonment is inconsistent with the immediate filing of a complaint for illegal dismissal, which is proof of the desire to return to work. An employee unjustly dismissed is entitled under Article 279 to reinstatement, full backwages, and other benefits, or to separation pay where strained relations make reinstatement impractical.

Disposition

The petition was granted; the decision of the National Labor Relations Commission was set aside, and the decision of the Labor Arbiter finding illegal dismissal and awarding backwages and separation pay was reinstated.

Remember This

The line to memorize is that a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal. Examiners use this case to test the two elements of abandonment and the rule that the employer bears the burden of proving a valid dismissal.