G.R. No. 112334 November 18, 1994
RAMON TOOGUE and FILIPINA YABILLO, in lieu of her late husband SAUL YABILLO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (First Division) and GENERAL RUBBER & FOOTWEAR CORPORATION, respondents.

FACTS

Petitioners Ramon Toogue and Saul Yabillo (represented by his widow Filipina Yabillo) were employees of private respondent General Rubber & Footwear Corporation, having started in 1960 and 1966 respectively, eventually becoming supervisor and assistant supervisor. From May 1984 to February 1987, a series of strikes caused serious economic dislocations for the company, forcing it to institute a rotation system. On February 12, 1987, the company advised its employees, via a memo, to “look for some temporary means of income” until operations normalized, as wages/salaries would be suspended effective February 16, 1987. Consequently, Toogue and Yabillo secured overseas employment in Yemen in November 1987, notifying the company they were applying for an indefinite leave of absence. A settlement agreement between the company and the union was reached on September 15, 1988. On December 2, 1988, the company sent a letter to all employees informing them operations had resumed and giving them seven days to report for work under threat of dismissal. The petitioners’ wives received this letter and wrote back on January 19, 1989, requesting that their husbands’ positions be held until their return, citing the company’s February 12, 1987 memo. The company did not respond. Saul Yabillo returned on December 19, 1989 but died the same day. Ramon Toogue returned in late January 1990 and was told he was considered on absence without leave (AWOL) and terminated. The petitioners filed a complaint for retirement benefits or separation pay, moral and exemplary damages, and attorney’s fees. The Labor Arbiter dismissed the complaint, finding they had abandoned their employment by failing to report when required. The NLRC affirmed this decision.

ISSUE

Whether or not petitioners Ramon Toogue and Saul Yabillo were illegally dismissed and are entitled to separation pay.

RULING

Yes. The Supreme Court reversed the resolutions of the NLRC and the decision of the Labor Arbiter. The suspension of the company’s business operations exceeded six months, which under Article 286 of the Labor Code results in the termination of employment. Therefore, Toogue and Yabillo were constructively dismissed and are entitled to separation pay pursuant to Article 283 of the Labor Code. The claim of abandonment is untenable because there was no employment to abandon after the constructive dismissal. Even assuming no constructive dismissal, the abandonment claim still fails as the petitioners were forced to seek overseas work due to the company’s inability to provide work, and the company’s December 2, 1988 letter gave an unreasonable seven-day notice mailed only to their wives, not to their known overseas workplace. The private respondent was ordered to award separation pay equivalent to one-half month pay for every year of service to Ramon Toogue and to the estate of Saul Yabillo through Filipina Yabillo.