G.R. No. 116384 February 7, 2000
Viola Cruz, petitioner, vs. National Labor Relations Commission, Norkis Distributors, Inc., Jose Ramiro A. Carpio, Jr., Wessie Quisumbing, and Elizalde Ampalayo, respondents.

FACTS

Petitioner Viola Cruz was employed as a cashier/bookkeeper by respondent Norkis Distributors, Inc. In October 1990, while preparing for a branch transfer, she collapsed and was hospitalized. She was diagnosed with serious illnesses, including cryptococcal meningitis and diabetes. She stopped reporting for work starting October 15, 1990. The company recruited a replacement two days after her collapse. On December 28, 1990, Cruz inquired about her employment status and subsequently received a termination letter dated November 2, 1990, citing her ill health as the ground for dismissal to protect company interests and avoid operational disruption.
Cruz filed a complaint for illegal dismissal. The Labor Arbiter ruled in her favor, awarding separation pay, monetary benefits, and damages. The NLRC reversed this decision, dismissing the complaint for lack of merit, except for the award of some monetary benefits. The NLRC found the dismissal justified due to Cruz’s prolonged absence and the company’s operational needs. Cruz elevated the case to the Supreme Court via certiorari, alleging grave abuse of discretion by the NLRC.

ISSUE

Whether the NLRC committed grave abuse of discretion in ruling that petitioner was not illegally dismissed.

RULING

Yes, the NLRC committed grave abuse of discretion. The Supreme Court reinstated the Labor Arbiter’s finding of illegal dismissal. The legal logic centers on the employer’s failure to comply with substantive and procedural due process requirements for dismissal based on disease under Article 284 of the Labor Code. For a dismissal due to disease to be valid, two conditions must concur: the disease must be of such nature that it cannot be cured within six months, and continued employment is prejudicial to the employee’s health or coworkers. The employer bears the burden of proof.
Here, Norkis failed to substantiate that Cruz’s illness was incurable within six months or that her continued employment posed a health risk. The termination letter itself revealed the primary motive was to protect company operations, not the employee’s health. Procedurally, the company failed to serve a written notice of termination upon Cruz as required by law; the belated receipt of the antedated letter in December 1990 was ineffective. The Supreme Court, noting the variance between the Labor Arbiter’s and NLRC’s factual findings, exercised its authority to review the evidence and found the dismissal was effected in bad faith. Consequently, the award of separation pay in lieu of reinstatement was proper. Moral and exemplary damages were also warranted due to the arbitrary and unjust manner of dismissal, though the amounts were reduced to P50,000 and P10,000, respectively.