G.R. No. 268527 , July 29, 2024
ERIKA KARIZZA T. POLINTAN, AS SOLE PROPRIETOR OF KARIZ POLINTAN ATELIER, PETITIONER, VS. ARLENE C. MALABANAN, RESPONDENT.

FACTS

Petitioner Erika Karizza T. Polintan, sole proprietor of Kariz Polintan Atelier (a business producing custom-made wedding gowns), hired respondent Arlene C. Malabanan as a “bead worker” or “beader” on November 14, 2019. Due to government-imposed lockdowns during the pandemic, the business ceased operations on March 15, 2020. When quarantine protocols were eased, the business partly reopened on June 1, 2020, and Polintan recalled her employees back to work, except for Malabanan. Malabanan filed a complaint for constructive dismissal, money claims, and damages, claiming she was a regular employee illegally terminated without due process and paid a daily wage of PHP 500.00, below the prevailing minimum wage of PHP 537.00. Polintan contended that Malabanan was a part-time, on-call employee, not a regular one, and that her business, having less than 10 employees, was exempt from paying minimum wage; she also cited downsizing due to the pandemic. The Labor Arbiter dismissed the constructive dismissal complaint but awarded Malabanan salary differentials, pro-rated 13th-month pay, and attorney’s fees. The National Labor Relations Commission (NLRC) reversed the Labor Arbiter, ruling Malabanan was a regular employee who was constructively dismissed when not recalled within six months from her floating status as per DOLE Department Order No. 215-20, and awarded backwages, 13th-month pay, service incentive leave pay, salary differentials, moral and exemplary damages, and attorney’s fees. The Court of Appeals affirmed the NLRC’s finding of illegal dismissal but deleted the awards for moral and exemplary damages and service incentive leave pay.

ISSUE

Whether petitioner Erika Karizza T. Polintan, as sole proprietor of Kariz Polintan Atelier, illegally dismissed respondent Arlene C. Malabanan from employment.

RULING

Yes, the petitioner illegally dismissed the respondent. The Supreme Court denied the petition, affirming the CA and NLRC rulings with modification. The Court held that Malabanan was a regular employee because her work as a bead worker was necessary and desirable in the petitioner’s business of creating bridal wear, making her employment regular by operation of law under Article 295 of the Labor Code, regardless of any contrary agreement. The petitioner’s failure to recall Malabanan to work after the business resumed operations on June 1, 2020, and her placement on floating status for more than six months, constituted constructive dismissal, as it violated the good faith requirement and the six-month limit for suspension of employment during a pandemic under DOLE Department Order No. 215-20, Series of 2020. The defense of business losses due to the pandemic was unsubstantiated. The awards for salary differentials (due to payment below minimum wage, as the petitioner failed to prove exemption for having less than 10 employees), 13th-month pay, and attorney’s fees (as the respondent was compelled to litigate) were upheld. The deletion of moral and exemplary damages and service incentive leave pay by the CA was sustained.