G.R. No. 184618 November 19, 2014
PEAK VENTURES CORPORATION and/or EL TIGRE SECURITY and INVESTIGATION AGENCY, Petitioners, vs. HEIRS OF NESTOR B. VILLAREAL, Respondents.

FACTS

Nestor B. Villareal was hired as a security guard by Peak Ventures Corporation, owner/operator of El Tigre Security and Investigation Agency, on June 16, 1989. On May 14, 2002, he was relieved from his duty at East Greenhills Village without any apparent reason and was later informed he would no longer be given assignments due to his age (42). His repeated requests for a new posting in June and July 2002 were declined. Due to financial necessity, Villareal sought to claim his security bond deposits. Petitioners advised him to first submit a letter of resignation before the deposits would be released. Villareal submitted a resignation letter dated July 31, 2002, stating he was constrained to resign as he could no longer afford the fare to petitioners’ office and could not expect an assignment. Petitioners required him to submit another letter stating his resignation was voluntary. After submitting the new letter, his security bond deposits were released in early August 2002. On August 27, 2002, Villareal filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, declaring the dismissal illegal and ordering reinstatement, backwages, and attorney’s fees. The NLRC affirmed the decision. During the appeal, petitioners claimed they had reinstated Villareal from November 1, 2003, to March 16, 2004, after which he went on absence without leave. Villareal died on December 1, 2005. The Court of Appeals upheld the illegal dismissal finding, ruling that Villareal was constructively dismissed and that his resignation was not voluntary. The CA awarded backwages computed from July 3, 2002, until the finality of its decision, and separation pay in lieu of reinstatement due to his death, plus attorney’s fees.

ISSUE

Whether the Court of Appeals erred in: (1) finding that Villareal was illegally dismissed and did not voluntarily resign; and (2) computing the awards of backwages and separation pay.

RULING

The Supreme Court denied the petition and affirmed the CA decision with modification regarding the computation of backwages. The Court held that Villareal was constructively dismissed. His relief from duty and placement on indefinite floating status without valid cause constituted illegal dismissal. His resignation was not voluntary but was compelled by petitioners’ refusal to give him a new assignment and their conditioning the release of his bond deposits on his resignation. The Court found that petitioners failed to prove a valid cause for dismissal or to observe due process. On the awards, the Court ruled that backwages should be computed from the date of dismissal (May 14, 2002) until the date of his death (December 1, 2005), as reinstatement was rendered impossible by his death. Separation pay, in lieu of reinstatement, was correctly awarded at one month’s pay for every year of service, computed from his hiring in 1989 until his death in 2005. Attorney’s fees were also properly awarded. The Court rejected petitioners’ claim that backwages should be computed only until his alleged actual reinstatement in November 2003, noting that the reinstatement was not in compliance with a final and executory order and that Villareal’s subsequent absences did not negate the illegal dismissal.