An employee who alleges to have been dismissed from service has the burden of proof. The rule is that before resolving the legality or illegality of dismissal, the fact of dismissal must first be established.

It is axiomatic that in illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authorized cause. However, there are cases wherein the facts and the evidence do not establish prima facie that the employee was dismissed from employment.

Before the employer is obliged to prove that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. If there is no dismissal, then there can be no question as to the legality or illegality thereof.

In a case where the employee alleged that when he failed to report for work on December 24, 2014, he was verbally terminated by the company. The employee claimed that company’s representative confirmed his termination. On the other hand, the company contended that the he just stopped reporting for work after he left his work on December 23, 2014.

The employee’s bare claim of having been dismissed from employment by the company, unsubstantiated by impartial and independent evidence, is insufficient to establish such fact of dismissal.

Bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value. It must be emphasized that aside from the allegation that he was verbally terminated from his work, respondent failed to present any competent evidence showing that he was prevented from returning to his work.

The alleged representative did not issue any statement to corroborate the claimed termination of the employee. That he was refused to be given his salary covering the period from December 15, 2014 to December 22, 2014 did not at all prove the fact of his termination.

The Supreme Court (SC) ruled that it must be taken into account that salaries of employees may not be released for myriad of reasons. Termination may only be one of them. The basic rule of evidence that each party must prove his affirmative allegation, that mere allegation is not evidence. The Court must also stress that the evidence presented to show the employee’s termination from employment must be clear, positive, and convincing.

Absent any showing of an overt or positive act proving that the company had dismissed the employee, the latter’s claim of illegal dismissal cannot be sustained — as the same would be self-serving, conjectural, and of no probative value. [See Atienza vs. Saluta, June 17, 2019, G.R. No. 233413]

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However, the fact of dismissal, if disputed, must be duly proven by the complainant. In relation thereto, Section 3, Rule 1 of the 2011 NLRC Rules of Procedure provides for the suppletory application of the Rules of Court for proceedings before the LA and the NLRC.

It states that in the absence of any applicable provision in these Rules, and in order to effectuate the objectives of the  Labor Code, as amended, the pertinent provisions of the Rules of Court of the Phllippines, as amended, may, in the interest of expeditious dispensation of labor justice and whenever practicable and convenient, be applied by analogy or in a  suppletory character and effect.

Section 11, Rule 8 of the Rules of Court, in turn, provides that material averments in the complaint, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied.

Thus, in illegal dismissal cases, it follows that when the employer fails to specifically deny the complainant employee’s material averments as to the circumstances of his dismissal, the employer is  deemed to have admitted the fact of dismissal and must then discharge his burden of proving that the dismissal of the employee was valid.

In Fernandez vs. Kalookan Slaughterhouse Incorporatec [G.R. No. 225075, June 19, 2019], the Court

deemed as an admission by silence the employer’s failure to rebut petitioner employee’s allegation that on a specific date, he was informed by the employer’s personnel, who exercised control over petitioner’s means and methods, that he could no longer report for work.

Hence, in the case of Guinto vs. Sto. Niño Lang-Zeny [G.R. No. 250987. March 29, 2022], the employer did not specifically deny and rebut complainant’s allegations as to the fact of his dismissal from employment. Meanwhile, in an attempt to relieve themselves from liability, the company raised the defense that there was no employer-employee relationship between the Consignee and complainant.

In other words, the company did not specifically deny that its representative, on separate occasions, told complainant to leave and to stop going to work. Thus, the employer is deemed to have admitted complainant’s allegations as to his dismissal from work.

Under the circumstances, the Supreme Court found that the complainant, who was a regular employee of the company, had been illegally dismissed from his employment considering: first, the latter’s deemed admission of the fact of dismissal; and second, the absence of any clear showing of a just or valid cause for such dismissal.

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Loss of trust and confidence is a just cause for dismissal under Article 282(c) [now 297] of the Labor Code, which provides that an employer may terminate an employment for fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. [Distribution & Control Products, Inc. vs. Santos, July 10, 2017, G.R. No. 212616]

However, according to the Supreme Court (SC), in order for the employer to properly invoke this ground, the employer must satisfy two conditions.

First, the employer must show that the employee concerned holds a position of trust and confidence. Jurisprudence provides for two classes of positions of trust.

The first class consists of managerial employees, or those who, by the nature of their position, are entrusted with confidential and delicate matters and from whom greater fidelity to duty is correspondingly expected. The second class includes cashiers, auditors, property custodians, or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of the employer’s money or property.

Second, the employer must establish the existence of an act justifying the loss of trust and confidence. To be a valid cause for dismissal, the act that betrays the employer’s trust must be real, i.e., founded on clearly established facts, and the employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without justifiable excuse.

Moreover, with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient.

Stated differently, proof beyond reasonable doubt is not needed to justify the loss as long as the

employer has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of the trust and confidence demanded of his position.

Nonetheless, the right of an employer to dismiss employees on the ground of loss of trust and confidence, however, must not be exercised arbitrarily and without just cause. Unsupported by sufficient proof, loss of confidence is without basis and may not be successfully invoked as a ground for dismissal. Loss of confidence as a ground for dismissal has never been intended to afford an occasion for abuse by the employer of its prerogative, as it can easily be subject to abuse because of its subjective nature and the loss must be founded on clearly established facts sufficient to warrant the employee’s separation from work.

Thus, when the breach of trust or loss of confidence alleged is not borne by clearly established facts, as in this case, such dismissal on the cited grounds cannot be allowed.

For instance, in a charge of theft of company property, the company should be able to discharge the burden of proving that their termination of employee’s employment was for a just and valid cause. This is a question of fact and it is settled that findings of fact of quasi-judicial agencies are accorded great respect, even finality.

Where the company failed to present substantial evidence to support their allegations that the employee had, in any way, participated in the theft of the company’s stolen items and that after his preventive suspension he no longer reported for work. In other words, if the company is not able to establish the existence of an act justifying their alleged loss of trust and confidence in employee, the dismissal can be held illegal.

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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Previous offenses may be used to aggravate a subsequent infraction to justify an employee’s dismissal only if they are related to the subsequent offense upon which termination is  decreed. (Celis vs. Bank of Makati (A Savings Bank), Inc., G.R. No. 250776. June 15, 2022)

In the Celis case, the Supreme Court (SC) reckons that in 2016, the company previously found the employee liable for the following infractions: (1) improper conduct and acts of gross discourtesy or disrespect to fellow employees; and (2) personal borrowing from the bank’s clients.

On account of these infractions, the company placed Celis under a 10-day and 15-day suspension, respectively.

The SC ratiocinated that while Celis had committed two previous offenses, the Principle of Totality of Infractions cannot be utilized against her as she committed no subsequent violation of respondent’s Code of Conduct. She did not commit the subject infraction. Simply put, there is no subsequent offense which her previous infractions could aggravate.

But even assuming that Celis had committed the subject infraction, the CA still erred in applying the Principle of Totality of Infractions considering that her previous infractions and the subject offense

upon which her termination was decreed were in no way related to each other.

Instructive on this matter is the case of Sy vs. Neat, Inc., wherein the SC ruled that the Principle of Totality of Infractions cannot be used against the employee because his transgression for wearing an improper uniform was not related to his latest infractions of insubordination and purported poor performance evaluation.

Previous offenses may be used as valid justification for dismissal only if they are related to the subsequent offense upon which the basis of termination is decreed, or if they have a  bearing on the proximate offense warranting dismissal.

In the case of De Guzman vs. NLRC, the SC ruled that the Principle of Totality of Infractions applies when prior infractions are similar to the subsequent offense. In such case, the SC instructs that the previous offense that employee involved had committed on 3 July 1993 for willful refusal to perform one’s assigned work or to comply with instruction of supervisor, for which she had been administered a sufficient disciplinary sanction of six days suspension, could no longer be utilized to aggravate the present offense.

De Guzman’s previous offense was an entirely separate and distinct violation of company rules. The SC held that the correct rule is that previous infractions may be used as justification for an employee’s dismissal from work in connection with a subsequent similar offense.

For the SC, in the Celis case, the first offense of Celis, i.e., discourtesy or disrespect to fellow employees, was an offense concerning improper behavior towards co-workers. On the other hand, her second offense, i.e., personal borrowing from the   bank’s clients, was a transgression relating to conflict of interest. The subject infraction differs from the aforementioned offenses in that, the subject infraction concerns dishonesty.

Celis’ infractions not being related or similar in nature to the present charge, the CA erred in applying the Principle of Totality of Infractions against her. Indubitably, the company failed to substantially prove that her dismissal from employment was for a just cause.

All told, the SC found substantial evidence to support the finding that the company illegally dismissed Celis from employment. Thus, the CA erred in imputing grave abuse of discretion against the NLRC. The SC agreed with the labor tribunals that Celis was indeed illegally terminated from her job.

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In the case of Italkarat 18, Inc. vs. Gerasmio, G.R. No. 221411, September 28, 2020, the Supreme Court (SC) ruled that the complainant therein, Juraldine, failed to prove that a contract exists between him and the Company.

The SC held that in our jurisdiction, a contract is defined in Article 1305 of the Civil Code as a meeting of the minds. This means that a contract may exist in any mode, whether written or not. In this case, however, Juraldine utterly failed to show that he has a perfected contract with the Company regarding his separation pay.

To prove that the Company owed him separation pay, Juraldine primarily relied on his resignation letter and the subsequent demand letter written by his lawyer.

The CA incorrectly appreciated the resignation letter as one demanding for separation pay. The contents of the said resignation letter would reveal that Juraldine merely believed that he was entitled to separation pay and was not even demanding for a certain amount. In short, his resignation was irrevocable and is patently unconditional.

Juraldine, while he believed to be entitled to separation pay, never intended to revoke his resignation. In fact, as already mentioned, the supposed separation pay does not appear to be the primary reason why Juraldine tendered his resignation as the totality of circumstances would show that he was already intending to resign and work abroad even before San Pedro allegedly talked with him and even before the Company’s supposed announcement made sometime in the last quarter of the year 2008 to retrench some workers.

Likewise, the subsequent demand letter appears to be the result of Juraldine’s disappointment when the

amount reflected in the check he received did not match his expectations, which were purely based on his own belief to what he was entitled to, and is a mere afterthought.

It must be reiterated that he who asserts a fact must prove such fact through evidence. In this case, Juraldine merely presented his bare and self-serving allegations, which were actually belied by the totality of evidence on record. He did not even present anything that would evince that there was a contract between him and the Company regarding his separation pay.

Juraldine did not prove that there exists a Company practice wherein resignees were given separation pay.

Aside from contract, Juraldine alternatively argued that it was a company practice to give resignees separation pay. To prove his allegations, Juraldine relied on affidavits of two former employees of the Company. The Company, on the other hand, also presented affidavits of its own, accompanied with the final payslips of former employees who have resigned.

We have ruled that a company’s practice of paying separation pay to resignees must be proven to exist as this is an exception to the general rule that employees who voluntarily resign are not entitled to separation pay.

In this case, we agree with the NLRC’s findings that there was no company practice. The evidence would show that the affidavits presented by Juraldine were made by former employees who were not in the same department or job position as him.

The SC ruled that while it cannot hastily conclude that the affiants are perjuring themselves (it may be possible that they were indeed given separation pay), these affidavits are not sufficient in proving that the Company gives separation pay as a matter of practice especially given the evidence presented by the Company, which paints a different picture.

The SC was inclined to give more weight to the Company’s affidavits as these were accompanied by the final payslips of former employees who have resigned, especially considering that at the time of resignation of one of these former employees, Gaylord Nebril, occupied the same job position as Juraldine when the latter resigned, which is maintenance director. This is compared to the job positions of Accountant and worker at the Lacquering and Wax Department held by Ms. Clarita A. Pangandayon and Ms. Evelyn A. Abella, respectively.

In conclusion, considering that there was no dismissal involved in this case as Juraldine voluntarily resigned from work, his claims arising from his complaint for illegal dismissal must be denied. This includes his claim for separation pay as he failed to prove his entitlement thereto, either via contract or company practice.

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Nonetheless, when the floating status lasts for more than six (6) months, the employee may be considered to have been constructively dismissed.

The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker.

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In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because

continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay.

Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.

Being piece-rate workers assigned to individual sew- ing machines, employees’ earnings depended on the quality and quantity of finished products. That their work output might have been affected by the change in their specific work assignments does not necessarily imply that any resulting reduction in pay is tantamount to constructive dismissal. Workers under piece-rate employment have no fixed salaries and their compensation is computed on the basis of accomplished tasks.

In the case of Suldao vs. Cimech System Construction, Inc., while the employee’s transfer was valid, the manner by which the employer unjustifiably prevented him from returning to work on several occasions runs counter to the claim of good faith on the part of the corporation.

By reporting for work, the employee manifested his willing- ness to comply with the regulations of the corporation and his desire to continue working for the latter. However, he was barred from entering the premises without any explanation.

This is a clear manifestation of disdain and insensibility on the part of an employer towards a particular employee and a veritable hallmark of constructive dismissal.

Thus, the Court held that while the decision to transfer employees to other areas of its operations forms part of the well-recognized prerogatives of management, it must be stressed, however, that the managerial prerogative to transfer personnel must not be exercised with grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker.

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