G.R. No. 167727; July 30, 2007
CRAYONS PROCESSING, INC., Petitioner, vs. FELIPE PULA and COURT OF APPEALS (Fifth Division), Respondents.

FACTS

Petitioner Crayons Processing, Inc. employed respondent Felipe Pula as a machine operator. In November 1999, Pula suffered a heart attack and was hospitalized. Following medical advice, he took successive leaves of absence. He was eventually certified as “fit to work” and reported back on June 13, 2000. Pula alleged that upon his return, he was not given any assignment and was instead asked to resign on June 20, 2000, with an offer of financial assistance, which he refused. He subsequently filed a complaint for illegal dismissal.
The Labor Arbiter ruled in favor of Pula, finding illegal dismissal. The National Labor Relations Commission (NLRC) reversed, holding that Pula’s illness, which kept him out for over six months, constituted a valid cause for termination under Article 284 of the Labor Code, entitling him only to separation pay. The Court of Appeals then annulled the NLRC decision and reinstated the Labor Arbiter’s ruling, prompting Crayons to elevate the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in affirming the Labor Arbiter’s finding that Pula was illegally dismissed.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The legal logic centered on the employer’s failure to substantiate its claim of a valid dismissal due to disease and its procedural lapses. For dismissal on the ground of disease under Article 284, the law requires a certification from a competent public health authority that the illness cannot be cured within six months even with proper treatment. Crayons presented no such certification. The NLRC’s conclusion that the six-month leave period itself rendered the certification unnecessary was a reversible error, as the duration of leave alone does not satisfy the stringent statutory requirement.
Furthermore, the Court upheld the appellate court’s application of procedural rules. Crayons failed to specifically deny Pula’s material allegations regarding the denial of work and the offer for resignation in its pleadings before the Labor Arbiter. Under the rules, such uncontroverted allegations are deemed admitted. The unsworn report from the company’s HR head, offered belatedly, was correctly disregarded as hearsay with no probative value. Consequently, with the cause for dismissal unproven and the acts constituting dismissal deemed admitted, the finding of illegal dismissal was sustained. Pula was entitled to reinstatement, full backwages, and other monetary awards.