Graceful exit is perfectly within the discretion of employer. It is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.

Cosue vs. Ferritz Integrated Development Corporation, et al.

G.R. No. 230664, July 24, 2017


Petitioner Cosue started working for respondent Ferritz Integrated Development Corporation (FIDC) as a construction worker. He subsequently became a regular employee of FIDC, performing work as janitor/maintenance staff.

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According to Cosue, around 9 p.m. on July 10, 2014, he saw two security guards (the Officer-in-Charge and one Gomez), together with an unidentified man, on their way to the electrical room. They had a knapsack which did not look heavy. When they left the room, Cosue saw Gomez carrying the knapsack which, by this time, appeared to contain something heavy.

The next morning, Cosue borrowed the key to the electrical room and together with fellow maintenance personnel, Joel Alcallaga (Alcallaga), looked for the electrical wires that were stored therein. Unfortunately, the wires were no longer there.

Cosue was convinced that the two guards and their unidentified companion took the wires. At 1 p.m., he was summoned by Germino who verbally informed him that he was suspended on suspicion that he stole the electrical wires. Later, he was no longer allowed to work.

Thus, on October 9, 2014, he filed a Complaint against FIDC and its officers for actual illegal dismissal and underpayment of salaries, with prayer for moral and exemplary damages and attorney’s fees.

In his Position Paper, Cosue additionally made claims for underpayment of his holiday pay, 13th month pay and service incentive leave pay. He sought to recover on the alleged underpayments for the period covering “three (3) years backward from the time of the filing of (his) complaint. ”

In FIDC, et al.’s version of events, they alleged that at 7 p.m. on July 10, 2014, Alcallaga’s bag was found to contain bundled wires when it was examined by the security personnel, per routine, as he checked out from his shift. Alcallaga returned the wires to the electrical room shortly after he was interrogated by the security personnel.

The following day, Cosue and Alcallaga obtained the keys to the electrical room after misrepresenting to the key custodian that they had been ordered by the head of the FIDC electrical staff to inspect the room. Thereafter, it was discovered that the electrical wires returned by Alcallaga to the electrical room were nowhere to be found.

Following an investigation, Germino issued a memorandum of suspension to Cosue for obtaining the keys to the electrical room and entering without permission, and for leaving his post and joining Alcallaga in the electrical room.

Cosue was suspended for twenty-five (25) days, pending further investigation. Cosue returned to FIDC but was told to come back as Germino was on leave. When Cosue came back on August 27, 2014, he was able to speak to Germino and they agreed that he would voluntarily resign. However, Cosue did not file his resignation, and eventually instituted his Complaint for illegal dismissal.

FIDC, et al. argued that there was no illegal dismissal as there was an agreement between FIDC and Cosue that the latter would just resign. As Cosue reneged on this agreement and chose to be absent, he should be considered absent without leave.

As for Cosue’s money claims, FIDC averred that Cosue was entitled to receive only his latest unpaid salary, if any, and his pro rata 13th month pay. FIDC, et al., however, would later concede that there were underpayments which would have to be computed.

LA Ruling:

The LA dismissed the complaint for lack of evidence.

The LA held that other than Cosue’s general assertion that he was dismissed, no evidence was presented to support such claim. As of July 27, 2014, the date of dismissal as averred in Cosue’s Complaint, he was still serving his preventive suspension.

In fact, he was not barred from the premises or categorically informed that he was already dismissed from work. The LA stressed that the rule that the employer bears the burden of proof in illegal dismissal cases could not be applied as FIDC, et al. denied dismissing Cosue.

The LA, however, found no reason to conclude that Cosue abandoned his job, absent proof of Cosue’s clear intention to sever the employer-employee relationship. Backwages were not awarded as there was neither dismissal nor abandonment. However, finding that there was underpayment of salaries, the LA awarded salary differentials computed at PhP8,819.01.

In his partial appeal from the LA’s Decision, Cosue asked the NLRC to declare him to have been “illegally (constructively) dismissed” and entitled to full backwages from the time of illegal dismissal up to actual reinstatement. He also prayed for the payment of his service incentive leave pay, underpaid 13th month pay, holiday pay and overtime pay, his 13th month pay for 2014, moral and exemplary damages, and attorney’s fees.

NLRC Ruling:

The NLRC denied Cosue’s partial appeal and affirmed the LA’s Decision, holding that the established facts showed that Cosue was not dismissed by FIDC.

The NLRC also held that since the claims for service incentive leave, overtime pay and 13th month pay were not indicated in the Complaint nor prayed for in Cosue’s Position Paper, the LA did not gravely abuse her discretion in not awarding them.

Furthermore, the NLRC found it improper to award damages and attorney’s fees given its finding that there was no illegal dismissal.

The NLRC denied Cosue’s Motion for Reconsideration in its Resolution.

Thus, he filed a petition with the CA.

CA Ruling:

The NLRC’s Resolutions were affirmed in the assailed Decision and Resolution of the CA.

The CA found sufficient reasons to uphold FIDC, et al.’ position. It rejected Cosue’s argument that he had been constructively dismissed, holding that Cosue was merely suspended for 25 days. Such suspension, said the CA, was a valid exercise of management prerogative pending administrative investigation on the incident of theft.

Hence, the instant Petition.


Whether or not giving the employee graceful exit or face administrative investigation constitutes constructive dismissal

Whether or not when neither termination nor abandonment took place full backwages and reinstatement should be awarded

SC Ruling:

The SC denied the petition.

Cosue’s claim that he was not allowed to report for work after his suspension was unsubstantiated. Cosue has not shown by any evidence that he was barred from the premises.

Furthermore, an entry in the FIDC security logbook for August 27, 2014, which Cosue had not challenged, showed him informing security personnel that he came to FIDC because he was asked to report to the office. The rule is that evidence not objected to is deemed admitted and may be validly considered by the court in arriving at its judgment. This is true even if by its nature, the evidence is inadmissible and would have surely been rejected if it had been challenged at the proper time.

Cosue’s claim of constructive dismissal fails. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, as in this case, cannot be given credence.

Citing the case of Verdadero vs. Barney A utolines Group of Companies Transport, Inc., et. al., the Court held that constructive dismissal exists where there is cessation of work, because “continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.

In this case, the SC held that records do not show any demotion in rank or a diminution in pay made against Cosue. Neither was there any act of clear discrimination, insensibility or disdain committed by FIDC, et al. against Cosue which would justify or force him to terminate his employment from the company.

FIDC, et al.’s decision to give Cosue a graceful exit is perfectly within their discretion. It is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.

The rule is that one who alleges a fact has the burden of proving it; thus, Cosue was burdened to prove his allegation that FIDC, et al. dismissed him from his employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing.

The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the FIDC, et al. deny having dismissed the Cosue. In illegal dismissal cases, while the employer bears the burden to prove that the termination was for a valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal from service.

Other than Cosue’s bare allegation of having been dismissed, there was no evidence presented to show that his employment was indeed terminated by FIDC, et al.. In the absence of any showing of an overt or positive act proving that FIDC, et al. had dismissed Cosue, the latter’s claim of illegal dismissal cannot be sustained -as the same would be self-serving, conjectural and of no probative value.

Since there was neither dismissal nor abandonment, the SC held that the CA correctly sustained the LA and the NLRC’s decision to order Cosue’s reinstatement but without backwages, consistent with the pronouncement in Danilo Leonardo vs. National Labor Relations Commission.

The SC held further that in a case where the employee’s failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his own loss.

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