G.R. No. 173256 ; October 9, 2007
AFI INTERNATIONAL TRADING CORPORATION (ZAMBOANGA BUYING STATION) and CELEDONIO RAYMUNDO, JR., Petitioners, vs. DENNIS G. LORENZO and CECILIO S. SORSAN, Respondents.

FACTS

Petitioner AFI International Trading Corporation employed respondents Dennis Lorenzo and Cecilio Sorsan as regular monthly-paid processors. In March 1999, AFI shifted their compensation to a piece-rate basis, which respondents were told was temporary. On January 14, 2002, respondents inquired with the Department of Labor and Employment (DOLE) regarding the implications of this payment change. Upon learning of this visit, AFI’s general manager, petitioner Celedonio Raymundo, Jr., informed respondents on January 16, 2002, that they could no longer work and ordered them to leave the premises. When respondents returned on January 19, 2002, hoping to work, Raymundo prevented their entry and declared them terminated. Consequently, respondents filed a complaint for illegal dismissal.
Petitioners presented a contradictory version, asserting that respondents were dismissed for just cause and with due process. They claimed respondents abandoned their work starting January 16, 2002, without approved leave. On January 21, 2002, petitioners issued a memorandum requiring respondents to explain their unauthorized absences, which allegedly constituted gross and habitual neglect of duty. The Labor Arbiter ruled in favor of respondents, finding illegal dismissal. The NLRC reversed, holding that respondents voluntarily terminated their employment and were not entitled to backwages or separation pay. The Court of Appeals subsequently set aside the NLRC resolutions, reinstating the Labor Arbiter’s decision.

ISSUE

Whether the Court of Appeals erred in finding that respondents were illegally dismissed.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The Court reiterated the fundamental principle that in illegal dismissal cases, the burden of proof rests on the employer to establish that the dismissal was for a just or authorized cause. Petitioners failed to discharge this burden. The claim of abandonment was untenable, as the essential elements—the employee’s clear intention to sever employment and an overt act confirming that intent—were absent. Respondents’ immediate filing of a complaint on January 21, 2002, just days after the alleged abandonment, negated any intention to abandon their work.
Furthermore, the Court found that petitioners effected an actual dismissal on January 16, 2002, when respondents were ordered to leave and were later barred from entering the premises. The subsequent memorandum dated January 21, 2002, was a mere afterthought to formalize a dismissal already carried out. This act constituted a dismissal without just cause and without the requisite procedural due process. The shift to piece-rate payment did not alter respondents’ status as regular employees entitled to security of tenure. Consequently, respondents were illegally dismissed and rightfully awarded backwages and separation pay in lieu of reinstatement.