G.R. No. 96451 September 8, 1993
PEOPLE’S SECURITY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ALFREDO BERDAN, FRANCISCO R. SAYNO, and FELIZARDO Q. FUNDANO, SR., respondents.

FACTS

Private respondents Alfredo Berdan, Francisco R. Sayno, and Felizardo Q. Fundano, Sr. were employed as security guards by petitioner People’s Security, Inc. They were assigned to Meralco under a security services contract that expired on April 15, 1986. After the contract’s expiration, private respondents reported to petitioner for new assignments but were given none. They requested loans against their security bond deposits, but petitioner denied the requests, insisting they resign first to release the deposits. Due to dire financial need and lack of assignments, private respondents submitted resignation letters dated April 15 and 18, 1986. They subsequently worked for Roca Security and Investigation Agency, which took over the Meralco contract. On July 21, 1986, they filed complaints for money claims, later amended to include illegal dismissal. On October 1, 1986, petitioner issued reinstatement orders for a new PLDT contract, requiring them to report by October 5, 1986, but private respondents did not report. The Labor Arbiter initially ruled for private respondents, but the NLRC remanded the case for further proceedings. After rehearing, the Labor Arbiter found illegal dismissal, awarding separation pay, backwages, and other claims. The NLRC affirmed with modification, giving petitioner the option to reinstate or pay separation pay equivalent to one month’s salary per year of service.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in ruling that private respondents were illegally dismissed and ordering their reinstatement or payment of separation pay.

RULING

The Supreme Court affirmed the NLRC decision, subject to the modification that petitioner must pay separation pay in lieu of reinstatement. The Court held that private respondents were constructively dismissed, not having voluntarily resigned or abandoned their jobs. Their resignations were forced by circumstances, as they needed to access their bond deposits for financial survival and were not given new assignments for an unreasonable period, despite petitioner hiring new guards. The Court found the claim of abandonment untenable, as there was no clear intent to abandon, and noted the contradiction in petitioner’s arguments of both resignation and abandonment. The severed relationship between the parties made reinstatement impractical, warranting separation pay equivalent to one month’s salary for every year of service.