G.R. No. 96439 . January 27, 1992.
LEMERY SAVINGS & LOAN BANK, SERAFIN DIMAILIG, ZOSIMA HERNANDEZ and CRISPINIANO HERNANDEZ, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ALLEN R. ABUBAKAR, CENTRAL LUZON LABOR CONGRESS and RESTITUTO CASTILLO, respondents.

FACTS

Private respondent Restituto Castillo, a janitor-messenger at Lemery Savings and Loan Bank, received a strongly-worded personal letter dated January 20, 1988 from bank president Zosima Hernandez demanding he vacate the house of her sister where he resided, citing political disloyalty in local elections. Castillo then applied for and was granted a one-month leave. After his leave expired on February 26, 1988, he did not report for work. The bank’s general manager, by letter dated March 3, 1988, required Castillo to explain his absence and confirm his continued interest in his job. Castillo replied on March 6, 1988, refusing to explain and merely referencing Hernandez’s letter, stating “you know why.”
On March 9, 1988, Castillo filed a complaint for illegal dismissal, believing the letter terminated his employment. On March 14, 1988, the bank sent a memorandum stating personal differences should not interfere with work, ordering him to report for duty, and warning of disciplinary action for abandonment. The Labor Arbiter found no dismissal but, citing Castillo’s lowly position and strained relations, ordered reinstatement or separation pay if he chose not to return. The NLRC modified this, awarding financial assistance equivalent to one month’s salary per year of service based on social justice and Castillo’s mistaken belief.

ISSUE

Whether an employee who was not dismissed but refused to return to work based on a mistaken belief of constructive dismissal is entitled to separation pay or financial assistance.

RULING

The Supreme Court granted the petition, set aside the NLRC resolutions, and dismissed Castillo’s complaint. The Court upheld the concurrent finding of the Labor Arbiter and NLRC that there was no dismissal, illegal or otherwise. The letter from President Hernandez was a personal conflict over residence, unrelated to official bank functions or employment status, and did not constitute constructive dismissal. The bank actively sought his return, demonstrating no intent to terminate.
The legal logic is anchored on Article 279 of the Labor Code, which mandates reinstatement with backwages only for unjust dismissal. Since no dismissal occurred, no entitlement to reinstatement or backwages exists. The Court ruled that separation pay or financial assistance under the principle of social justice is not warranted where the employer committed no act of termination. Granting such an award for an employee’s mere misconception, despite the employer’s valid recall-to-work orders, would unjustly penalize management. The proper recourse is for Castillo to report back to work; only if overt acts of discrimination later occur at the workplace could a claim for constructive dismissal arise. The Court found no abandonment, as the bank’s offer for him to return remained open.