G.R. No. 158539 January 15, 2009
Industrial & Transport Equipment, Inc. and/or Raymond Jarina, Petitioners, vs. Tomas Tugade and Cresencio Tugade, Respondents.

FACTS

Petitioner corporation is engaged in motor vehicle repair. Respondents Tomas Tugade and Cresencio Tugade were hired in 1978 and 1984, respectively, as a diesel mechanic and an officer-in-charge. On March 22, 1998, a regular customer, Mr. Faustino Cabel, brought his vehicle for repair. Despite a clear instruction from the company president not to release the vehicle unless Cabel settled his unpaid obligation dating back to 1996, respondent Cresencio Tugade released the vehicle on March 27, 1998. Consequently, on March 28, 1998, petitioners issued a memorandum suspending respondents (along with another employee) for ten working days (March 30 to April 11, 1998) for disobedience, incompetence, and gross negligence. After the suspension period, respondents did not report for work and were considered absent without leave. On April 13, 1998, petitioners issued a memorandum directing them to explain their absence. However, on April 16, 1998, respondents filed a complaint for illegal dismissal with prayer for separation pay, backwages, and damages. The Labor Arbiter dismissed the complaint for lack of merit but awarded separation pay. The NLRC reversed the Labor Arbiter, ruling that respondents were illegally dismissed and ordering payment of backwages and separation pay. The Court of Appeals affirmed the NLRC decision.

ISSUE

Whether or not respondents were illegally dismissed from employment.

RULING

No, the Supreme Court ruled that respondents were not illegally dismissed. The Court found that petitioners did not dismiss respondents but merely suspended them for ten days as a disciplinary measure for releasing a customer’s vehicle against direct orders. The memorandum issued to respondents clearly indicated a suspension, not a termination. The complaint for illegal dismissal was premature because respondents refused to report for work after their suspension period ended, despite a return-to-work memorandum from petitioners. Their failure to return constituted abandonment of their positions. Therefore, there was no illegal dismissal to justify an award of backwages. The Supreme Court modified the Court of Appeals decision. It reinstated the Labor Arbiter’s decision dismissing the illegal dismissal complaint and awarding separation pay of P56,680 each to respondents, but with a modification. Citing the Agabon doctrine, the Court additionally awarded P30,000 to each respondent as nominal damages because petitioners failed to comply with the statutory due process requirements (notices) for terminating employees on the ground of abandonment.