G.R. No. 191281; December 5, 2012
Best Wear Garments and/or Warren Pardilla, Petitioners, vs. Adelaida B. De Lemos and Cecile M. Ocubillo, Respondents.

FACTS

Respondents De Lemos and Ocubillo were sewers hired on a piece-rate basis by petitioner Best Wear Garments. They filed complaints for illegal dismissal, alleging constructive dismissal. They claimed that in August 2003, the company’s general manager arbitrarily transferred them to different work areas and machines, which resulted in diminished earnings. They attributed the transfers to their refusal to render unpaid overtime work. De Lemos further alleged that after a second transfer, her request to return to her previous assignment was denied, and she was constrained to stop working. Ocubillo cited her excessive absences due to family illness as the pretext for her transfer, which led to unavailability of machines and lost earnings.
Petitioners denied the dismissals, asserting that respondents had numerous absences without leave (AWOL) and had instead expressed intentions to resign in early 2004 to demand separation pay, which the company had no policy to grant. They contended that the transfers were a valid management prerogative, necessary due to the nature of their subcontracting business and client specifications. They emphasized that respondents, as piece-rate workers, were paid for output, not hours worked.

ISSUE

Whether the Court of Appeals correctly reversed the NLRC and reinstated the Labor Arbiter’s finding that respondents were illegally dismissed.

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ decision, upholding the finding of illegal dismissal. The legal logic centered on the burden of proof in dismissal cases and the substantiation of a claim for constructive dismissal. In termination disputes, the employer bears the burden to prove that the dismissal was for a just or authorized cause. Petitioners failed to discharge this burden. Their claim of abandonment was untenable, as the filing of the complaints for illegal dismissal negated any intent to sever employment. The claim of resignation was also unsubstantiated.
On constructive dismissal, the Court found respondents’ allegations credible. Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by the employer renders the employee’s continued work intolerable. The arbitrary reassignments, which significantly reduced the piece-rate workers’ earning capacity, coupled with the apparent punitive motive linked to their refusal to work unpaid overtime, constituted such insensibility. The diminution in pay, though not quantified with exact figures, was a reasonable inference from the changed work conditions imposed upon them. The employer’s prerogative to transfer employees must be exercised in good faith and without detriment to the employees’ rights. Here, the transfers were unjustified and effectively forced respondents out of their employment.