TOP RATE CONSTRUCTION AND GENERAL SERVICES, INC. PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) AND LOPE D. AZUCINAS, RESPONDENTS.

Top Rate Construction and General Services versus National Labor Relations Commission

The Case

This is a labor case about a janitor who was pulled out from his assigned client and told to wait for a new posting. Top Rate Construction and General Services, the manning agency, filed a petition for certiorari against the National Labor Relations Commission and its employee, Lope Azucinas, after both the Labor Arbiter and the Commission ruled that Azucinas had been constructively dismissed and awarded him separation pay. The case matters because it draws the line between a lawful floating status and a constructive dismissal, and because it reminds us that a dismissal complaint filed too early is premature.

Procedural History

Azucinas filed a complaint for illegal dismissal, service incentive leave pay, thirteenth month pay, damages, and attorney's fees before the Labor Arbiter. The Labor Arbiter ruled that Azucinas was constructively dismissed and ordered Top Rate to pay separation pay of 147,056 pesos plus 14,705.60 pesos as attorney's fees. Top Rate appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter in full and later denied reconsideration. Top Rate then went up to the Supreme Court by a petition for certiorari under Rule 65, alleging grave abuse of discretion on the part of the Commission.

Facts

Top Rate was an independent contractor providing janitorial and messengerial services to various clients. On May 19, 2010, it hired Azucinas as maintenance crew or janitor, with employment coterminous with the service agreement between Top Rate and BF Homes, running from May 19, 2010 to May 18, 2011.

On November 2, 2010, BF Homes wrote Top Rate that, on account of streamlining, it was returning Azucinas effective November 15, 2010. Having no client to reassign him to, Top Rate placed Azucinas on floating status effective November 16, 2010. On February 11, 2011, Top Rate sent him a memorandum reiterating his floating status, promising to inform him once an opening arose, and assuring him that the floating status would not exceed the six month period allowed by law.

Earlier, on January 11, 2011, or less than six months from the start of his floating status, Azucinas filed his complaint for illegal dismissal. He claimed he had been employed for more than fifteen years, from October 18, 1996 until November 15, 2010, and that his position was necessary and desirable to Top Rate's business.

Issues

• Whether or not Azucinas was constructively dismissed when he was placed on floating status and filed his complaint before six months had lapsed.
• Whether or not Azucinas is entitled to separation pay and attorney's fees.
• Whether or not Azucinas is entitled to thirteenth month pay and service incentive leave pay.

Applicable Provisions

Article 280 of the Labor Code, as amended, provides:

Any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

This is the provision the Labor Arbiter and the Commission used to treat Azucinas as a regular employee, a finding the Supreme Court did not disturb.

Ruling

On the first issue, the Court ruled that there was no constructive dismissal. Even assuming Azucinas received no assignment after November 15, 2010, his complaint filed on January 11, 2011 came less than six months into his floating status and was therefore premature. The Court stated the rule:

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.

It added that a complaint for illegal dismissal filed prior to the lapse of the six months is generally considered prematurely filed. The Court acknowledged that factual findings of the Commission, especially when they coincide with those of the Labor Arbiter, deserve respect and even finality when supported by substantial evidence, but it could not sustain those findings here.

On the second issue, because there was no illegal dismissal, separation pay was not in order. The Court listed the instances when separation pay may be awarded: installation of labor-saving devices, redundancy, retrenchment, closing or cessation of business operations, disease of an employee whose continued employment is prejudicial to himself or his co-employees, or illegal dismissal where reinstatement is no longer feasible. None applied. Attorney's fees were denied for lack of factual or legal basis.

On the third issue, the Court found that thirteenth month pay and service incentive leave pay had been duly paid, and Azucinas offered no evidence to the contrary, so these claims were denied.

Doctrine

Floating status, or off-detailing, is not dismissal. It becomes constructive dismissal only when it lasts beyond six months. A complaint for illegal dismissal filed before the six months lapse is premature. Separation pay is granted only in the instances fixed by law, and not where there is no dismissal at all. An employee's regular status under Article 280 does not by itself entitle him to separation pay absent a lawful or unlawful ground for termination.

Disposition

The Court granted the petition, annulled and set aside the Commission's resolutions, and dismissed the complaint for illegal dismissal, with the monetary awards of separation pay and attorney's fees set aside.

Remember This

Memorize the line: floating status beyond six months is constructive dismissal, and a complaint filed before then is premature. Examiners use this case to test the six month rule on off-detailing and the exclusive grounds for separation pay.