Dee Jay’s Inn and Cafe vs. Rañeses
G.R. No. 191823. October 5, 2016


DJIC was registered under Republic Act No. 9178 or the Barangay Micro Business Enterprises Act. Petitioner Ferraris, the owner and manager of petitioner DJIC, engaged the services of respondent and a certain Moonyeen J. Bura-ay (Moonyeen) as cashier and cashier/receptionist, respectively, for a monthly salary of P3,000.00 each.

Respondent filed before the Social Security System (SSS) Office a complaint against petitioner Ferraris for non-remittance of SSS contributions. Respondent also filed before the NLRC City Arbitration Unit (CAU) XII, Cotabato City, a complaint against petitioners for underpayment/nonpayment of wages, overtime pay, holiday pay, service incentive leave pay, 13th month pay, and moral and exemplary damages.

Respondent filed her position paper, which already included a claim for illegal dismissal. Respondent averred that she asked from petitioner Ferraris the latter’s share as employer in the SSS contributions and overtime pay for the 11 hours of work respondent rendered per day at petitioner DJIC.

Petitioner Ferraris got infuriated and told respondent to seek another employment. This prompted respondent to file her complaints before the SSS Office and NLRC CAU XII. After learning of respondent’s .complaints, petitioner Ferraris terminated respondent’s employment. Respondent submitted the Joint Affidavit of Mercy Joy Christine Bura-ay (Mercy) and Mea Tormo (Mea) to corroborate her allegations. Petitioners countered that respondent and Moonyeen were not terminated from employment.

According to petitioners, DJIC incurred a shortage of P400.00 in its earnings for February 4, 2005. That same day, petitioner Ferraris called respondent and Moonyeen for a meeting but the two employees denied incurring any shortage. Petitioner Ferraris lost her temper and scolded respondent and Moonyeen, and required them to produce the missing P400.00. However, respondent and Moonyeen merely walked out and did not report back to work anymore. To support their version of events, petitioners submitted the affidavit of Ma. Eva Gorospe (Eva), another employee of petitioners.

LA Ruling:

The Labor Arbiter rendered a Decision11 m favor of petitioners, but granted respondent’s claim for 13th month pay. The Labor Arbiter did not give much credence to respondent’s charge of illegal dismissal because there was no positive or unequivocal act on the part of petitioners to support the assertion that respondent was dismissed

NLRC Ruling:

LRC issued a Resolution dated August 30, 2006, dismissing the appeals of respondent and Moonyeen for lack of merit and affirming en toto the Labor Arbiter’s Decisions dated February 20, 2006 and February 21, 2006.

Respondent filed the NLRC in a Resoluti Motion for Reconsideration which was denied by dated November 30, 2006. Respondent sought recourse from the Court of Appeals by filing a Petition for Certiorari, imputing grave abuse of discretion on the part of the NLRC.

CA Ruling:

The CA granted the petition.

On the basis that doubt should be resolved in favor of labor, the Court of Appeals held that respondent was illegally dismissed.

Petitioners and respondent filed a Motion for Reconsideration and Motion for Partial Reconsideration, respectively, which were both denied by the Court of Appeals. Thus, the petition.


  1. Whether or not claims not raised in the complaint may be raised in the position paper;
  2. Whether or not equipoise doctrine applies in this case

SC Ruling:

Claims not raised in the complaint may be raised in the position paper

Petitioners argue that the present case is governed by the 2005 NLRC Rules of Procedure, which had already supplanted the 2002 NLRC Rules of Procedure. Under the 2005 NLRC Rules of Procedure, only the causes of action that were pleaded in a complaint would be entertained.

The record shows that respondent filed her complaint sometime in January 2005 and position paper on September 8, 2005. During said period, the 2002 NLRC Rules of Procedure, as amended by NLRC Resolution No. 01-02, was still in effect. The 2005 Revised Rules of Procedure of the NLRC only took effect on January 7, 2006. Section 4, Rule V of the 2002 NLRC Rules of Procedure, as amended, provides that the parties shall not be allowed to allege facts, or present evidence to prove facts, not referred to and any cause or causes of action not included in the complaint or position papers, affidavits and other documents. Stated differently, the parties could allege and present evidence to prove any cause or causes of action included, not only in the complaint, but in the position papers as well.

Shifting of the burden of proof in Illegal dismissal case

On the substantive issue of whether or not respondent was illegally dismissed, the Court answers in the negative.

In Exodus International Construction Corporation vs. Biscocho, the Court pronounced that “[i]n illegal dismissal cases, it is incumbent upon the employees to first establish the fact of their before the burden is shifted to the employer to prove that the dismissal was legal.”

The Court reiterated in Brown Madonna Press, Inc. vs. Casas that “[i]n illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal was legal. However, to discharge this burden, the employee must first prove, by substantial evidence, that he had been dismissed from employment.”

It bears to point out that in the case at bar, the Labor Arbiter, the NLRC, and even the Court of Appeals, all consistently found that respondent was not able to present substantial evidence of her dismissal. They all rejected the joint affidavit of Mercy and Mea, submitted by respondent, for being partial and biased. It appears that Mercy and Mea executed said affidavits to return a favor as respondent testified for them in their own cases against petitioners.

Equipoise doctrine in relation to burden of evidence

The Court of Appeals only deviated from the findings of the Labor Arbiter and the NLRC by also disregarding Eva’s affidavit, submitted by petitioners to corroborate their allegations, for being insufficient to prove abandonment.

The appellate court then applied the equipoise doctrine: with all things considered equal, all doubts must be resolved in favor of labor, that is, respondent. Given the jurisprudence cited in the preceding paragraphs, the application by the Court of Appeals of the equipoise doctrine and the rule that all doubts should be resolved in favor of labor was misplaced.

Without the joint affidavit of Mercy and Mea, there only remained the bare allegation of respondent that she was dismissed by petitioners on February 5, 2005, which hardly constitute substantial evidence of her dismissal. As both the Labor Arbiter and the NLRC held, since respondent was unable to establish with substantial evidence her dismissal from employment, the burden of proof did not shift to petitioners to prove that her dismissal was for just or authorized cause.

Stating that an employee failed to report for work is not tantamount to defense of abandonment

Citing the case of Nightowl Watchman & Security Agency, Inc. vs. Lumahan, the SC held that as no dismissal was carried out in this case, any consideration of abandonment -as a defense raised by an employer in dismissal situations -was clearly misplaced. To our mind, the CA again committed a reversible error in considering that Nightowl raised abandonment as a defense.

Abandonment, as understood under our labor laws, refers to the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty that constitutes just cause for the employer to dismiss the employee. Xxx The critical point the CA missed, however, was the fact that Nightowl never raised abandonment as a defense. What Nightowl persistently argued was that Lumahan stopped reporting for work beginniilg April 22, 1999.

Course of action when the employee was not dismissed and also did not abandon his work

In a case where the employee was neither found to have been dismissed nor to have abandoned his/her work, the general course of action is for the Court to dismiss the complaint, direct the employee to return to work, and order the employer to accept the employee.

However, the Court recognized in Nightowl that when a considerable length of time had already passed rendering it impossible for the employee to return to work, the award of separation pay is proper.

Considering that more than ten (10) years had passed since respondent stopped reporting for work on February 5, 2005, up the date of this judgment, it is no longer possible and reasonable for the Court to direct respondent to return to work and order petitioners to accept her.

Under the circumstances, it is just and equitable for the Court instead to award respondent separation pay in an amount equivalent to one ( 1) month salary for every year of service, computed up to the time she stopped working, or until February 4, 2005.

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