Leonardo v. NLRC

G.R. No. 125303, 126937 (June 16, 2000)

Court upheld Fuerte's demotion; Leonardo's claim dismissed for abandonment, affirming management's rights.

Facts:

Petitioner Aurelio Fuerte was employed by Reynaldo's Marketing Corporation as a muffler specialist starting August 11, 1981. He was promoted to supervisor in 1988, receiving a daily wage of P122.00 along with a weekly supervisor's allowance of P600.00. On January 3, 1992, Fuerte was informed by the personnel manager that he would be transferred to the Sucat plant due to his failure to meet sales quotas, resulting in the withdrawal of his supervisor's allowance. Fuerte protested this transfer and subsequently filed a complaint for illegal termination.

Danilo Leonardo was hired by the same corporation on March 4, 1988, as an auto-aircon mechanic, initially earning P35.00 per day, which increased to P90.00 upon regularization. He claimed to have received a monthly allowance of P2,500.00 as his share in the profits of the auto-aircon division. On April 22, 1991, Leonardo was informed by the personnel manager that his services were no longer needed, leading him to file a complaint for illegal termination.

The case was initially heard by Labor Arbiter Jesus N. Rodriguez, Jr., and later assigned to Labor Arbiter Emerson C. Tumanon, who ruled in favor of the petitioners on December 15, 1994. The Labor Arbiter ordered the reinstatement of both Fuerte and Leonardo, along with monetary awards for back wages.

On appeal, the National Labor Relations Commission (NLRC) modified the Labor Arbiter's decision, reinstating Fuerte without back wages and dismissing Leonardo's complaint for lack of merit. The petitioners filed motions for reconsideration, which were denied.

Fuerte and Leonardo subsequently filed separate petitions for certiorari with the Supreme Court, challenging the NLRC's decision and resolution.

Legal Issues:

  1. Did the NLRC commit grave abuse of discretion in granting the appeal of Reynaldo's Marketing Corporation?
  2. Was there illegal dismissal of Aurelio Fuerte and Danilo Leonardo?
  3. Did the NLRC err in dismissing Leonardo's complaint for lack of merit?

Arguments:

Petitioners' Arguments:

  • Fuerte argued that his transfer constituted constructive dismissal and violated his security of tenure.
  • Leonardo contended that he was illegally dismissed and that the NLRC's findings were contrary to the evidence presented.

Respondent's Arguments:

  • Reynaldo's Marketing Corporation claimed that Fuerte was demoted due to his failure to meet sales quotas, which was a company policy.
  • The company asserted that Leonardo abandoned his post after being asked to explain an incident involving unauthorized work, and thus, he was not dismissed.

Court's Decision and Legal Reasoning:

The Supreme Court dismissed both petitions for lack of merit, affirming the NLRC's decision. The Court held that:

  • Fuerte's demotion was justified based on his failure to meet the sales quotas, which was a valid exercise of management prerogative. The Court noted that an employer has the right to impose productivity standards and that failure to meet these standards can lead to demotion or dismissal.
  • The Court clarified that constructive dismissal occurs when an employee is forced to resign due to unbearable working conditions, which was not the case for Fuerte, as his transfer did not involve a demotion in rank or reduction in pay.
  • Regarding Leonardo, the Court found that he had abandoned his job, as he failed to report back after being asked to explain his actions. The Court emphasized that abandonment requires a clear intention to sever the employer-employee relationship, which was evident in Leonardo's case.

The Court also reiterated that the NLRC's findings of fact are generally respected, and the standard for reviewing such findings is whether there was grave abuse of discretion, which was not present in this case.

Significant Legal Principles Established:

  1. An employer has the right to impose productivity standards and can demote or dismiss employees for failing to meet these standards, provided it is done in good faith.
  2. Constructive dismissal is defined as an involuntary resignation due to unbearable working conditions, which must involve a demotion in rank or pay.
  3. Abandonment of employment requires clear evidence of an employee's intention to sever ties with the employer, which must be supported by overt acts.