G.R. No. 231038 , April 26, 2021
Remegio E. Burnea, Petitioner, vs. Security Trading Corporation, Nonpareil International Freight and Cargo Services, Inc., Far Eastern Knitting Corporation, Jose Ching, and Esperanza Ching, Respondents.

FACTS

Petitioner Remegio E. Burnea was hired in February 2005 by respondents-spouses Jose and Esperanza Ching as a construction worker for their company, Security Trading Corporation (STC). After the construction project, he worked as a stay-in security guard for STC. On March 1, 2010, he was transferred to another Ching-owned company, Far Eastern Knitting Corporation (Far Eastern), to guard its property. He was later given an Authority to Sell that property, which was eventually sold to respondent Nonpareil International Freight & Cargo Services, Inc. (Nonpareil) on November 15, 2013. After receiving his sales commission, petitioner was not paid his salary for November 1-15, 2013, and was told his services were no longer needed.
Petitioner filed a complaint before the NLRC against STC, Nonpareil, Far Eastern, and the spouses Ching for various money claims, including underpayment of salary/wages, 13th month pay, and non-payment of overtime, holiday pay, service incentive leave, and separation pay. Notably, while the complaint included a claim for separation pay, it did not expressly include a cause of action for illegal dismissal. However, in his Position Paper, petitioner specifically argued he was illegally dismissed and entitled to separation pay, among other claims.
The Labor Arbiter (LA) partially ruled in favor of petitioner, ordering STC (identified as his true employer) to pay salary differentials, holiday pay, and service incentive leave pay for a three-year prescriptive period. The LA dismissed other claims, including separation pay, ruling that separation pay is only granted in cases of illegal dismissal, and illegal dismissal was not among the causes of action listed in the complaint, citing Section 12(c) of the 2011 NLRC Rules. The NLRC and the Court of Appeals affirmed the LA’s decision.

ISSUE

Whether the Court of Appeals correctly ruled that the NLRC did not gravely abuse its discretion in: (a) denying petitioner’s money claims for 13th month pay, overtime pay, holiday premium, rest day premium, and night shift differential; and (b) not ruling on the issue of illegal dismissal and the concomitant claims for separation pay, damages, and attorney’s fees because illegal dismissal was not raised as a cause of action in his complaint.

RULING

The Supreme Court DENIED the petition and affirmed the assailed CA rulings.
1. On the money claims for 13th month pay, overtime, etc.: The labor tribunals and the CA correctly found petitioner failed to prove his entitlement to these specific claims. He did not properly allege by how much he was underpaid and for what period. The factual findings of the labor tribunals, affirmed by the CA, are binding on the Supreme Court absent any recognized exceptions.
2. On the issue of illegal dismissal and concomitant claims (separation pay, damages, attorney’s fees): The labor tribunals and the CA erred in refusing to resolve these issues on a pure technicality—that illegal dismissal was not listed as a cause of action in the complaint. The Supreme Court clarified that while Section 12(c) of the 2011 NLRC Rules states position papers shall cover only claims and causes of action stated in the complaint, this rule should not be applied rigidly. Technical rules of procedure are not binding in labor cases, and the NLRC is mandated to resolve cases based on the evidence and the parties’ position papers. Since petitioner extensively argued and substantiated his illegal dismissal in his Position Paper, and the respondents (STC and Far Eastern) failed to file their position papers and participate in the proceedings, thereby not contesting the allegation, the NLRC should have treated the illegal dismissal issue as properly raised and resolved it on the merits. The failure to include it in the formal complaint is a formal, not a jurisdictional, defect.
However, despite finding this error, the Supreme Court ultimately upheld the denial of the claims for separation pay, damages, and attorney’s fees. The Court ruled that petitioner failed to substantiate his claim of illegal dismissal with clear and convincing evidence. His mere allegation of being told his services were no longer needed after the property sale, without more, did not constitute substantial evidence of an unlawful dismissal. Consequently, with no finding of illegal dismissal, the claims for separation pay, damages, and attorney’s fees in connection therewith must also fail.