G.R. No. 105892 January 28, 1998
LEIDEN FERNANDEZ, BRENDA GADIANO, GLORIA ADRIANO, EMELIA NEGAPATAN, JESUS TOMONGHA, ELEONOR QUIÑANOLA, ASTERIA CAMPO, FLORIDA VILLACERAN, FLORIDA TALLEDO, MARILYN LIM and JOSEPH CANONIGO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION; MARGUERITE LHUILLIER AND/OR AGENCIA CEBUANA-H. LHUILLIER, respondents.

FACTS

Petitioners were employees of private respondent Agencia Cebuana-H. Lhuillier, a sole proprietorship operated by Margueritte Lhuillier. They filed a consolidated complaint for illegal dismissal. Petitioners alleged that after they demanded salary increases and accused Lhuillier of tax evasion, they were suspected of stealing jewelry and were verbally informed not to report for work, resulting in their termination on various dates in July 1990 (and February 1990 for Marilyn Lim). Lhuillier, in her Position Paper, alleged that petitioners were not dismissed but had either resigned (in the case of Lim) or abandoned their work (the others) following investigations into various infractions, including theft and over-declaration of jewelry values. The Labor Arbiter ruled in favor of the petitioners, ordering their reinstatement with full backwages, separation pay, service incentive leave pay, moral and exemplary damages, attorney’s fees, and litigation expenses. The NLRC, on appeal, vacated the Labor Arbiter’s decision and remanded the case for further proceedings, citing the employer’s failure to attend hearings did not constitute a waiver of the right to present evidence and that the appeal bond filed was insufficient as it did not include moral damages in the computation of the “monetary award.”

ISSUE

1. Whether failure to attend hearings before the labor arbiter constitutes a waiver of the right to present evidence.
2. Whether moral damages are included in the computation of the “monetary award” for purposes of determining the amount of the appeal bond.
3. Whether there is a limit to the amount of service incentive leave pay and backwages that may be awarded to an illegally dismissed employee.

RULING

1. No. The failure of the employer (private respondent) to attend the scheduled hearings before the Labor Arbiter did not constitute a waiver of its right to present evidence. The NLRC correctly held that the Labor Arbiter should have proceeded to receive the respondent’s evidence ex parte, as provided by the rules, instead of considering the case submitted for decision based solely on the complainants’ evidence. The right to due process includes the opportunity to present one’s case and submit evidence.
2. No. Moral damages are not included in the computation of the “monetary award” for the purpose of determining the amount of the appeal bond under Article 223 of the Labor Code. The “monetary award” refers to backwages, allowances, and other benefits with pecuniary value. Moral and exemplary damages are not considered part of this award for bond computation purposes. Therefore, the NLRC erred in ruling that the appeal bond was insufficient for not including moral damages.
3. Yes. There are limits.
* Service Incentive Leave Pay: The grant of service incentive leave pay for every year of service is limited to five days. The Labor Arbiter’s award, which computed leave pay based on the total number of years of service without this limit, was erroneous.
* Backwages: Backwages in illegal dismissal cases are to be computed from the time compensation was withheld until actual reinstatement, without any qualification or deduction. The Labor Arbiter’s decision limiting backwages to “one year only” and “not exceed a period of three years” was a reversible error. The correct computation is from dismissal up to the finality of the decision.
The Supreme Court granted the petition, set aside the NLRC Resolutions, and reinstated the Labor Arbiter’s decision with modifications. The Court ordered the recomputation of service incentive leave pay (limited to five days per year of service) and full backwages (from dismissal until finality of the decision). The awards for moral and exemplary damages and attorney’s fees were affirmed.