G.R. No. 164860 ; February 2, 2010
HILTON HEAVY EQUIPMENT CORPORATION and PETER LIM, Petitioners, vs. ANANIAS P. DY, Respondent.

FACTS

Respondent Ananias P. Dy was employed by petitioner Hilton Heavy Equipment Corporation and assigned as the personal bodyguard of its President, Peter Lim. On April 19, 2000, within company premises and in the presence of Lim and other employees, Dy mauled a co-employee, Duke Echiverri, defied Lim’s orders to stop, and threatened to kill Echiverri. Dy also stated that he would cease working if given monetary consideration. After the incident, Dy stopped reporting to work. On May 19, 2000, Lim summoned Dy to the office, where Dy was given a check for ₱120,000 as separation pay by Wellington Lim, Peter Lim’s brother. Dy later filed a complaint for illegal dismissal. The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the complaint, ruling that Dy was not illegally dismissed but had voluntarily stopped working after receiving separation pay, and that the mauling incident constituted just cause for termination. The Court of Appeals partly granted Dy’s petition, ruling that Dy did not voluntarily resign, that there was just cause for termination (serious misconduct), but that due process was not observed. The appellate court ordered petitioners to pay backwages from the date of termination until finality of the decision, deducting the ₱120,000 received as separation pay.

ISSUE

1. Whether the Court of Appeals erred in finding that Dy did not resign from his employment.
2. Whether the Court of Appeals erred in ordering petitioners to pay Dy backwages.

RULING

1. No, the Court of Appeals did not err in finding that Dy did not resign. The Supreme Court upheld the appellate court’s finding that Dy did not voluntarily resign or abandon his work. For abandonment to exist, two elements must concur: (a) failure to report for work without valid reason, and (b) a clear intention to sever the employer-employee relationship. While Dy was absent after the mauling incident, petitioners failed to prove Dy’s clear intent to sever employment ties. Dy did not submit a resignation letter and instead filed an illegal dismissal complaint. The ₱120,000 payment was initiated by petitioners, not Dy.
2. The petition is partially meritorious regarding the award of backwages. The Supreme Court modified the appellate court’s decision. It affirmed that Dy’s mauling of a co-employee constituted serious misconduct, a just cause for termination under Article 282 of the Labor Code. However, petitioners failed to comply with the due process requirements for termination (i.e., written notice and hearing). Due process violations warrant the payment of nominal damages to vindicate the employee’s statutory right. The ₱120,000 already given to Dy was deemed sufficient to constitute nominal damages. While this amount exceeds the typical ₱30,000 nominal damages award in similar cases, the excess was treated as a voluntary gratuity allowed to be retained by Dy. Thus, petitioners were not ordered to pay additional backwages.
DISPOSITIVE PORTION:
The Supreme Court GRANTED the petition with modification. It AFFIRMED the Court of Appeals’ decision with the modification that the ₱120,000 previously given to Dy constitutes the award of nominal damages for the due process violation. The excess over the usual ₱30,000 nominal damages may be retained by Dy as a voluntary gratuity.