Abandonment And Illegal Dismissal
The Supreme Court has once again underscored oft-neglected basic Labor Law principles such as the sanctity of conciliation proceedings, the circumstances pointing to abandonment, and the doctrine of strained relations and when it is allowed as an exception to the rule that reinstatement is the consequence of illegal dismissal.
In Pentagon Steel Corporation v. CA. et al., Perfecto Balogo was an employee for 23 years of Pentagon Steel Corporation. Without prior notice, he took a leave from work. Allegedly, Pentagon sent him two written notices asking him to explain his absence, but no response was heard from Balogo. Thus, Pentagon considered him on AWOL.
After a month however, Balogo filed before the Labor Arbiter a complaint for underpayment and nonpayment of salaries and wages, overtime pay, holiday pay, service incentive leave, 13th month pay,separation pay and ECOLA. According to him he failed to report for work because he contracted flu. After ten days of absence, he went back to work bringing with him a medical certificate, but Pentagon refused to take him back.
During the conciliation proceedings, Pentagon insisted that it was Balogo who refused to work and demanded for separation pay to which Pentagon did not agree. Thereafter, Balogo amended his complaint to include his claim for illegal dismissal.
The Labor Arbiter dismissed the illegal dismissal charge but directed the payment of SIL and 13th month pay. On appeal, the NLRC ruled that Balogo was illegally dismissed. This ruling was affirmed by the CA which held that there was constructive dismissal when Pentagon refused to accept Balogo back to work. The CA however disagreed with the “strained relations” findings of the NLRC and ordered the reinstatement of Balogo.
In its Petition for Review, Pentagon imputes grave abuse of discretion on the CA for basing its decision on the proceedings that transpired when the parties were negotiating for a compromise settlement during the conciliation proceedings and in ruling that there was illegal dismissal and that Balogo should be reinstated.
The Supreme Court did not find merit in Pentagon’s Petition. While the High Court agreed with Pentagon that statements or agreements made during conciliation proceedings are privileged and cannot be used as evidence, it still finds enough evidence to rule that Balogo was illegally dismissed and that he must be reinstated.
Art 233 of the Labor Code states that “information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them.”
According to the court, “the reasons behind the exclusion are two-fold: First, since the law favors the settlement of controversies out of court, a person is entitled to ‘buy his or her peace’ without danger of being prejudiced in case his or her efforts fail; hence, any communication made toward that end will be regarded as privileged. Indeed, if every offer to buy peace could be used as evidence against a person who presents it, many settlements would be prevented and unnecessary litigation would result, since no prudent person would dare offer or entertain a compromise if his or her compromise position could be exploited as a confession of weakness.
“Second, offers for compromise are irrelevant because they are not intended as admissions by the parties making them. A true offer of compromise does not, in legal contemplation, involve an admission on the part of a defendant that he or she is legally liable, or on the part of a plaintiff, that his or her claim is groundless or even doubtful, since it is made with a view to avoid controversy and save the expense of litigation. It is the distinguishing mark of an offer of compromise that it is made tentatively, hypothetically, and in contemplation of mutual concessions.”
Moreover, in ruling that evidence supports the claim for illegal dismissal, the Supreme Court disregarded the theory of abandonment advanced by Pentagon. Said the court, abandonment is a matter of opinion that cannot be lightly presumed from equivocal acts. Two elements must concur to constitute abandonment: failure to report for work without valid reason, and clear intent, manifested through overt acts, to sever the employer-employee relationship.
In this case, the Supreme Court ruled that Balogo’s reason for absence, which is his illness, is a justifiable reason. Also, there was no clear intention on his part to sever his employment with Pentagon considering that he showed willingness to return to work and his complaint before the Labor arbiter for illegal dismissal clearly negates any intention to abandon work. Thus, Pentagon’s refusal to take Balogo back to work constitutes constructive dismissal.
Finally, the Supreme Court affirmed the CA and ruled that Balogo is entitled to reinstatement and not separation pay. The circumstances of the case do not allow an exception to the rule that reinstatement is the consequence of illegal dismissal. The court did not find enough evidentiary support that strained relations existed between the parties as “the conflict, if any, occasioned by the respondent’s filing of an illegal dismissal case, does not merit the severance of the employer-employee relationship between the parties.”
The court further explained that “payment of separation pay in lieu of respondent’s reinstatement will work injustice to the latter when considered with his long and devoted years in the petitioner’s service. Separation pay may take in to account the respondent’s past years of service, but will deprive the respondent of compensation for the future productive years that his security of tenure protects.” (Atty. Myra Jennifer D. Jaud-Fetizanan)
