Datu & Co. v. NLRC

G.R. No. 113162 (February 9, 1996)

Facts:

Private respondents Victor Melanio and Gregorio Florendo were employed as plumbers by the petitioner, L.T. Datu and Co., Inc., starting in June 1979. On July 19, 1991, a memorandum was issued by Ging B. Salera, a representative of the petitioner, which indicated that several workers, including Melanio and Florendo, were present at the worksite but not working. The memorandum stated that these workers were to report to the office the following day to settle their salaries and that the petitioner did not wish to see them at the project anymore. This memorandum was interpreted by the private respondents as a termination of their employment.

In response to this perceived termination, Melanio and Florendo filed a complaint with the Department of Labor and Employment (DOLE) on August 2, 1991, alleging illegal dismissal and non-payment of wages. The case was assigned to Labor Arbiter Jose G. De Veyra, who rendered a decision on February 27, 1992, ruling in favor of the private respondents. The Arbiter found that the private respondents were dismissed without just cause and ordered the petitioner to pay them separation pay and attorney's fees.

The petitioner appealed the decision to the National Labor Relations Commission (NLRC), which affirmed the Arbiter's ruling but modified it to include back wages from the time of dismissal until the Arbiter's decision. The petitioner subsequently filed a petition for certiorari with the Supreme Court, questioning the NLRC's resolution.

Legal Issues:

1. Whether the memorandum issued on July 19, 1991, constituted a valid termination of employment.
2. Whether the private respondents were regular employees or project employees.
3. Whether the private respondents were entitled to separation pay and back wages.

Arguments:

• Petitioner's Arguments:

  • The petitioner contended that the memorandum was not a dismissal letter but an inter-office directive for the workers to settle their salaries. They argued that the statement about not wanting to see the workers at the project was misinterpreted and intended to transfer them to other projects.
  • The petitioner claimed that the private respondents were project employees and not regular employees, thus not entitled to separation pay or back wages.

• Private Respondents' Arguments:

  • The private respondents argued that the memorandum clearly indicated their termination and that they were not given due process as required by law. They maintained that they had been employed for over a decade, performing necessary work for the petitioner, which established their status as regular employees.
  • They asserted their entitlement to separation pay and back wages due to the illegal nature of their dismissal.

Court's Decision and Legal Reasoning:

The Supreme Court dismissed the petition, affirming the NLRC's decision. The Court found that the memorandum indeed constituted a termination of employment. The language used in the memorandum, particularly the phrase "I would not like to see them in this project anymore," indicated a clear intent to terminate the private respondents' employment. The Court noted that if the intention was merely to transfer the workers, the memorandum should have explicitly stated so.

The Court also ruled that the private respondents were regular employees, as they had been continuously employed for over twelve years, performing work that was necessary and desirable to the petitioner's business. The Court emphasized that the determination of employment status does not depend solely on the employer's designation but on the nature of the work performed and the length of service.

Regarding the issue of separation pay and back wages, the Court held that the private respondents were entitled to these due to their illegal dismissal. The Court clarified the distinction between unpaid salaries and back wages, stating that unpaid salaries refer to compensation for services rendered before termination, while back wages refer to earnings lost after illegal dismissal. The Court ruled that the procedural lapse in not explicitly claiming back wages in the complaint did not negate the private respondents' rights under substantive law.

Significant Legal Principles Established:

1. A memorandum indicating an employer's intent to terminate an employee must be interpreted in light of its language and context, particularly when it suggests a cessation of the employer-employee relationship.
2. The status of an employee as regular or project is determined by the nature of the work performed and the duration of employment, rather than the employer's designation.
3. In labor cases, technicalities should not impede the pursuit of substantive justice, and procedural lapses may be overlooked to uphold employees' rights.