Facts:

Eduardo Lainez, Elizabeth Consul, and Divinagracia Chua, all masteral degree holders, served as the Dean of Business Administration, Dean of Education, and High School Principal, respectively, at Balayan Colleges. They also taught part-time at the institution. In February 1988, they requested an increase in their part-time teaching compensation from P14.00 to P20.06 per hour, which was the rate received by full-time instructors. Despite a formal written request submitted on August 29, 1988, the management did not respond adequately.

On December 1, 1988, after receiving no action on their request, the teachers informed the Administrative Committee that they would cease teaching due to the lack of response. In retaliation, the President of Balayan Colleges, Luis N. Lopez, terminated their services on December 4, 1988, citing insubordination and other charges, and placed them under preventive suspension.

The teachers submitted their explanations denying the charges and subsequently complained to the Department of Education, Culture and Sports (DECS). Following a dialogue facilitated by DECS officials, the teachers resumed their teaching roles on January 3, 1989, but were later terminated again on January 17, 1989, under similar charges.

The situation escalated, leading to mass walkouts by students and faculty, and ultimately the closure of the college department. The teachers filed complaints for illegal dismissal, back salaries, and damages before the Department of Labor and Employment. The Labor Arbiter ruled in their favor, declaring their dismissal illegal and awarding them back wages, damages, and attorney's fees.

The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision but modified it by deleting the awards for damages and attorney's fees, prompting both parties to seek reconsideration and file separate petitions before the Supreme Court.

Legal Issues:

  1. Whether the NLRC erred in awarding separation pay to the teachers despite their dismissal being for just and lawful causes.
  2. Whether the NLRC committed grave abuse of discretion in deleting the award for damages and attorney's fees in favor of the teachers.
  3. Whether the teachers' actions constituted abandonment of their positions.

Arguments:

  • For Balayan Colleges:

    • The teachers were dismissed for just causes, including insubordination and abandonment of their teaching duties.
    • The NLRC failed to recognize the forced closure of the college department, arguing that back wages should only be computed until the closure date.
    • The school contended that the teachers' refusal to submit individual position papers and their declaration to stop teaching amounted to abandonment.
  • For the Teachers:

    • The teachers argued that their actions were a legitimate protest against the school's inaction regarding their compensation request, not abandonment.
    • They contended that the NLRC's deletion of damages and attorney's fees was erroneous, as these were not raised as issues on appeal.
    • They maintained that their dismissal lacked due process, as they were not given a proper hearing or notice.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the NLRC's decision with modifications. It ruled that the teachers were illegally dismissed, as their actions did not constitute abandonment. The Court emphasized that for abandonment to be valid, there must be a clear intention to sever the employer-employee relationship, which was not present in this case. The teachers had expressed their grievances and sought redress through proper channels, indicating their intention to continue their employment.

The Court also highlighted the lack of due process in the dismissal, noting that the teachers were not afforded the opportunity to defend themselves adequately. The requirement of notice and hearing was not met, rendering the dismissal illegal.

Regarding the issue of damages, the Court reinstated the award for moral and exemplary damages, reducing the amount for moral damages to P50,000 each, while maintaining the exemplary damages at P20,000 each. The Court justified this by recognizing the humiliation and embarrassment the teachers suffered due to their abrupt termination and the manner in which it was conducted.

Significant Legal Principles Established:

  1. Illegal Dismissal: The case reinforces the principle that an employee cannot be dismissed without just cause and due process, which includes the right to a fair hearing and notice.
  2. Abandonment of Employment: The Court clarified the criteria for establishing abandonment, emphasizing the need for a clear intention to sever the employment relationship.
  3. Damages for Illegal Dismissal: The ruling affirms that employees who are wrongfully dismissed are entitled to moral and exemplary damages, reflecting the emotional and reputational harm suffered.