G.R. No. 114250 . April 5, 1995.
DOMINICO C. CONGSON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NOE BARGO, ROGER HIMENO, RAYMUNDO BADAGOS, PATRICIO SALVADOR, SR., NEHIL BARGO, JOEL MENDOZA, and EMMANUEL CALIXIHAN, respondents.

FACTS

Petitioner Dominico Congson, owner of Southern Fishing Industry, employed private respondents as regular piece-rate workers. Their work involved the complete cycle of moving tuna from boats to storage and shipment. In June 1990, citing a scarcity of tuna, Congson proposed a reduction in their piece-rate. The workers resisted this proposal. The following day, they were informed they had been replaced by new workers. When they sought a dialogue, they were told to wait for further notice, which never came. Consequently, they filed complaints for constructive dismissal and various monetary claims.
The Labor Arbiter consolidated the cases and, after proceedings where Congson argued the workers had abandoned their jobs, ruled in favor of the workers. The Arbiter found constructive dismissal, awarded separation pay and monetary claims for wage differentials, 13th month pay, and service incentive leave, but dismissed claims for overtime and holiday pay. The National Labor Relations Commission (NLRC) affirmed the decision in toto. Congson elevated the case to the Supreme Court, contesting the finding of constructive dismissal and the award of separation pay in lieu of reinstatement.

ISSUE

The primary issues were: (1) Whether private respondents were constructively dismissed; and (2) Whether the award of separation pay, instead of reinstatement, was proper.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC decision. On the first issue, the Court upheld the finding of constructive dismissal. The legal logic is that constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by an employer renders continued employment intolerable, forcing the employee to resign. Here, the act of replacing the workers immediately after their resistance to a unilateral wage reduction, coupled with the indefinite instruction to “wait for further notice,” constituted a constructive dismissal. The employer’s claim of abandonment was untenable, as the workers immediately sought a dialogue and filed their complaint shortly after being barred from work, demonstrating a desire to continue employment.
On the second issue, the Court ruled the award of separation pay in lieu of reinstatement was correct. Reinstatement is the general rule for illegally dismissed employees. However, exceptions exist, such as when reinstatement is rendered impracticable due to strained relations. The Court found such strain established by two factors: the employer’s consistent refusal to accept the workers back, and the workers’ own indication of aversion to continued employment, as evidenced by their specific filing of a claim for separation pay. Citing precedent, the Court held that when both parties show an intent to sever the employment tie, awarding separation pay promotes industrial peace. Thus, the NLRC committed no grave abuse of discretion.