FIRST DIVISION CASE AT BAR.

— Recovery of the petitioners' money claims for

the violations of labor standard laws are not barred by the alleged
[G.R. No. 110388. September 14, 1995.] compromise agreements signed by the petitioners. Gold City has not
submitted any compromise agreement attended with the
formulations of law. All that it has are the cash vouchers, dated 17
ARTEMIO LABOR, PEDRO BONITA, JR., DELFIN July 1991, which states under the heading PARTICULARS: "To
MEDILLO, ALLAN payment of Compromise Settlement representing Salary
ROMMEL GABUT, and IRENEO VISABELLA, Differentials and Allowances as per RTWPB-XI-02." Of course, a
petitioners, vs. NATIONAL voucher purporting to represent payment of the consideration in a
LABOR RELATIONS COMMISSION, GOLD CITY compromise agreement is not the compromise agreement itself.
COMMERCIAL Since Gold City did not submit any compromise agreement, then it
COMPLEX, INC., and RUDY UY, respondents. is logical to presume that none existed for it had the burden of
proving its own assertions. Even if the petitioners did enter into a
compromise settlement with Gold City, such agreement would be
Public Attorney's Office for petitioners. valid and binding only if, per Veloso, quoting Periquet vs.
The Solicitor General for public respondent. National Labor Relations Commission, the agreement was
Rolando C. Casaway for private respondents. voluntarily entered into and represents a reasonable settlement of
the claims. In this case, as in Fuentes, the amounts purportedly
received by the petitioners were unreasonably lower than what they
SYLLABUS were legally entitled to. Furthermore, like in Pampanga, the
"compromise settlements" with the petitioners were not executed
1. LABOR AND SOCIAL LEGISLATION; NATIONAL with the assistance of the Bureau of Labor Relations or the Regional
LABOR RELATIONS COMMISSION; FACTUAL FINDINGS O ce of the DOLE pursuant to Article 227 of the Labor Code. The
THEREOF ENTITLED TO GREAT RESPECT. — While records do not disclose that the assistance of such o ce was ever
it is well-established that the ndings of facts of the NLRC are solicited. What Gold City did was merely to le with the Regional O
entitled to great respect and are generally binding on this Court, it is ce of the DOLE in Davao City the vouchers purporting to show
equally well-settled that the Court will not uphold erroneous payments of the alleged considerations of the "compromise
conclusions of the NLRC when the Court nds that the latter settlements." Such ling can by no stretch of the imagination be
committed grave abuse of discretion in reversing the decision of the considered as the requisite assistance in the execution of
labor arbiter or when the ndings of facts from which the conclusions compromise settlements. Finally, we also note that the alleged
were based were not supported by substantial evidence. LLcd
vouchers were dated 17 July 1991, or before the ling of any
complaint with the DOLE on 19 August 1991 and even before the
2. ID.; LABOR STANDARD LAWS; MONEY CLAIMS Labor Examiner submitted his ndings of violations by Gold City. If
FOR THE VIOLATION THEREOF, indeed the parties entered into such compromise agreement, then
NOT BARRED BY THE ALLEGED COMPROMISE Gold City should have submitted the vouchers to the Labor
AGREEMENT SIGNED BY EMPLOYEES;

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 Examiner to refute the petitioners' claim and put an end to the Mere coincidence? We think not. What it is, though, is evidence
controversy. cdll that lends credence to the allegation of the petitioners that they did
not abandon their employment as Gold City asserts but were
3. ID.; TERMINATION OF EMPLOYMENT;
prevented from going to work. Thus, we cannot agree with the
ABANDONMENT AS A GROUND; NLRC when it said that the petitioners "ha[d] to jump the gun
ELEMENTS. — To constitute abandonment, two elements must against the respondents in order to save their faces from their own
concur: (1) the failure to report for work or absence without valid or wrongdoings, dishonest acts" by ling the case for illegal dismissal
justi able reason, and (2) a clear intention to sever the employer- against the respondents.
employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Mere 5. ID.; ID.; LOSS OF TRUST AND CONFIDENCE AS
absence is not sufficient. A GROUND; MUST BE SUBSTANTIAL AND NOT
ARBITRARY. — A charge of dishonesty involves serious
4. ID.; ID.; ID.; EMPLOYER HAS THE BURDEN OF misconduct on the part of the employee, a breach of the trust
PROOF TO SHOW EMPLOYEE'S DELIBERATE AND reposed by the employer upon him. The rule that proof beyond
UNJUSTIFIED REFUSAL TO RESUME EMPLOYMENT. — It is reasonable doubt is not required to terminate an employee on the
the employer who has the burden of proof to show a deliberate and charge of loss of con dence and that it is su cient that there is some
unjusti ed refusal of the employee to resume his employment basis for such loss of con dence is not absolute. The right of an
without any intention of returning. Gold City failed to discharge this employer to dismiss employees on the ground that it has lost its
burden. It did not adduce any proof of some overt act of the trust and con dence in him must not be exercised arbitrarily and
petitioners that clearly and unequivocally show their intention to without just cause. For loss of trust and con dence to be a valid
abandon their posts. On the contrary, the petitioners lost no time in ground for an employee's dismissal, it must be substantial and not
ling the case for illegal dismissal against them, taking only four arbitrary, and must be founded on clearly established facts su cient
days from the time most of them were prevented from entering their to warrant the employee's separation from work.
work place on 22 August 1991 to the ling of the complaint on 26
August 1991. They cannot, by any reasoning, be said to have 6. ID.; ID.; MUST NOT ONLY BE FOR A VALID OR
abandoned their work, for as we have also previously ruled, the ling SUBSTANTIAL CAUSE BUT
by an employee of a complaint for illegal dismissal is proof enough MUST ALSO OBSERVE THE PROCEDURAL ASPECT OF DUE
of his desire to return to work, thus negating the employer's charge PROCESS. — There being no abandonment or commission of
of abandonment. Furthermore, petitioners Labor and Bonita dishonest acts by the petitioners, no just cause exists to dismiss
presented proof that during some of those days that they were them, hence, their termination by Gold City is illegal. The fact that
supposedly on AWOL (absence without o cial leave), they were Gold City sent them notices on 6 September 1991 becomes
actually on o cial leave as approved by no less than Rudy Uy irrelevant. It does not cure the illegality of their dismissal for lack of
himself. Neither Gold City nor Rudy Uy had disputed this. It may just cause. It is interesting to note, however, that in its letters of 6
further be observed that the timing of Gold City's alleged refusal to September 1991 individually addressed to the petitioners, Gold City
allow the petitioners to enter their work place is highly suspicious. sought an explanation from the petitioners on their alleged absence
It happened on 2 August 1991 or only two days after the petitioners without o cial leave or, in short, their abandonment, and warned
led their complaint for labor standards violations with the DOLE. them in the form of a reminder that such absence is a ground for

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 separation or dismissal from the company. Nothing is mentioned well as in the labor proceedings. Gold City had also refused entry to
about dishonesty or any other misconduct on the part of the the petitioners into their work place, giving rise to strained relations
petitioners. If indeed the petitioners were guilty of both between the parties which make reinstatement unacceptable to
abandonment and dishonesty or misconduct, then Gold City should them. The petitioners would then be entitled to separation pay
have put them down in black and white. The letters cum notice equivalent to at least one month's salary for every year of service in
cannot then be considered to include dishonesty or misconduct. It lieu of reinstatement in addition to their full back wages.
would be a gross violation of the petitioners' right to due process to 8. ID.; ID.; BACKWAGES; RULE IN THE
dismiss them for that cause of which they were not given notice or COMPUTATION THEREOF IN CASE OF ILLEGAL
for a charge for which they were never given an opportunity to DISMISSAL. — The Labor Arbiter, however, failed to award
defend themselves. A dismissal must not only be for a valid or backwages despite its ruling that the petitioners were illegally
substantial cause; the employer must also observe the procedural dismissed. We thus deem it proper to make such an award herein in
aspect of due process in giving the employee notice and the addition to the money claims for labor standards violations and for
opportunity to be heard and to defend himself. At the same time, the separation pay. As a rule, full backwages are computed from the
when the petitioners were dismissed by preventing them from time of the employee's illegal dismissal until his actual
entering their work place, no previous notice of any kind was given reinstatement, but since in this case, reinstatement is not possible,
to them at all. The case for illegal dismissal was led on 26 August the backwages must be computed from the time of the petitioners'
1991, or at least eleven days before the date of the notices. The illegal dismissal until the nality of our decision herein. This amount
subsequent notices cannot cure the lack of notice prior to the illegal due the petitioners for backwages, however, is subject to deductions
dismissal of the petitioners on 22 August and 24 August 1991. CDta
for any amount which the petitioners may have earned during the
7. ID.; ID.; PAYMENT OF SEPARATION PAY, period of their illegal termination. Computation of full backwages
PROPER IN LIEU OF REINSTATEMENT. — With respect to the and presentation of proof as to income earned elsewhere by the
award of separation pay, the same was properly made and is a rmed. illegally dismissed employees after their termination and before full
Ordinarily, a nding that an employee has been illegally dismissed payment is effected by Gold City should be ventilated in the
entitles him to reinstatement to his former position without loss of execution proceedings before the Labor Arbiter in accordance with
seniority rights and to the payment of back wages. But in this case, the appropriate rules of procedure of the NLRC. D E C I S I O N
the petitioners did not pray for reinstatement in the position paper
they led with the Labor Arbiter. The latter in turn ordered the
payment of separation pay in lieu of reinstatement and this is part of DAVIDE, JR., J : p

the decision that the petitioners seek to be a rmed by this Court.

Petitioners led this special civil action for certiorari seeking
That being the case, and as we have said before, if the employee
decides not to be reinstated, the employer shall pay him separation to reverse the decision of 24 September 1992 of public respondent
pay in lieu of reinstatement. This is only just and practical because National Labor Relations Commission (NLRC), Fifth Division, in
reinstatement of the petitioners will no longer be in the best interest NLRC CA No. M-000834-92 (RAB 11-08-0074291) 1 which
of both the petitioners and Gold City considering the animosity and vacated and set aside the decision of 27 March 1992 of Labor
antagonism that exists between them brought about by the ling of Arbiter Nicolas S. Sayon 2 declaring illegal the petitioners'
charges by both parties against each other in the criminal case as dismissal from their employment by private respondent Gold City

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 Commercial Complex, Inc. (hereinafter Gold City) and ordering the "payment" for the drinks of these other customers and pocket their
latter to pay separation pay and other money claims. payment. 7
The petitioners were employees of Gold City at its Eye Ball On 11 September 1991, Labor Examiner Edgardo Diaz of
Disco located at Tagum, Davao. In a complaint dated 19 August the DOLE Regional O ce No. XI submitted his report 8 to the
1991 led with the Regional O ce No. XI of the Department of Labor Regional Director wherein he con rmed the labor standards
and Employment (DOLE) in Davao City, the petitioners charged violations committed by Gold City, viz., (1) record-keeping; (2)
Gold City with violations of labor standards laws, speci cally for underpayment of minimum wage; (3) non-payment of holiday pay;
underpayment of the minimum wage, non-payment of 13th month and, (4) overtime premium. He further stated that:
pay for 1991, premiums for holidays and rest days, holiday pay, . . . complainants have personally appeared before
service incentive leave pay, night shift differential and allowance
this O ce to manifest that they have not received the
pursuant to RTWPB-XI-02. 3
amounts indicated in the Cash Vouchers submitted by the
On 26 August 1991, the petitioners also led with the NLRC management of the subject establishment on July 23,
Regional Arbitration Branch No. XI in Davao City a complaint 1991 as payment for the Compromise Settlement
against Gold City and its President, herein private respondent Rudy representing salary differentials and allowances, pursuant
Uy, for illegal dismissal and for the same violations of labor to Wage Order RTWPB-XI-02.
standards laws earlier complained of. 4 This case was docketed as
Case No. RAB-1108-00742-91. Said Labor Examiner also submitted a computation of the amounts
due the petitioners. 9 He then recommended that the case be
On 2 September 1991, one Atty. Rolando Casaway, representing Lee endorsed to the NLRC because the amounts each of them is entitled
Manuela to receive exceeded the jurisdictional limit of P5,000.00 for money
Suelto, Ellen de Guzman, Mary Grace Verano, and Percy Hangad, claims.LexLib

all employees of Gold City, and Joenel de Mesa, a customer of Eye

Ball Disco, wrote the Provincial Prosecutor of Davao requesting In the meanwhile, on 30 October 1991, 3rd Assistant
that a criminal action against the petitioners for theft and/or estafa Provincial Prosecutor Justino Aventurado of Davao handed down a
be instituted. 5 In support thereof, he attached to his letter the a resolution 10 dismissing the criminal complaint against the
davits of de Mesa executed on 20 August 1991 and of the others he petitioners. He found the story of the petitioners' co-employees and
represented executed on 23 August 1991 6 wherein the a ants a customer incredible and concluded thus:
attested to alleged acts committed by the petitioners during the Let it not be forgotten that the name of the game is
period from June to August 1991 which deprived Eye Ball Disco of evidence. The precious time of the court, the efforts of all
certain amounts of money. According to the a ants, the petitioners the parties shall go to naught in cases bereft of evidence.
would get the claim stubs from customers of Eye Ball Disco that This sort of offense involving money needs physical
entitle them to one free drink each, but the petitioners did not evidence not mere words of mouth of respondents' [herein
surrender these stubs to the cashier and instead made the customers
petitioners] own co-workers. Such weakness is worsened
pay for the drinks; then, later, when other customers ordered drinks,
by the fact that the complainant's [sic] witnesses who
the petitioners would surrender these stubs to the cashier as
posture protectiveness of their employer's interest spoke

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 only about the alleged irregularities several days and even work by not reporting to their place of employment beginning on 19
months after their commission. After the labor claims August (petitioners Labor and Bonita), 21 August (petitioners
were filed. Medillo and Gabut), and 22 August (petitioner Visabella) 1991. It
further alleged that as early as June 1991, the petitioners were under
If they are that loyal or protective of the investigation for the dishonest acts for which they were charged
establishment as they now appear to be, they should have with estafa and/or theft in the O ce of the Provincial Prosecutor, and
reported the irregularities a day after each offense. to preempt any action to be taken therein, the petitioners led the
"baseless and unfounded complaint" with the DOLE for the labor
WHEREFORE, nding no cause to hold standards violation and furthermore, abandoned their work to make
respondents liable for estafa, this complaint is hereby it appear that they were illegally dismissed. It also alleged that on
dismissed. September 1991, each of the petitioners was sent a notice of
The Provincial Prosecutor approved this resolution and the records possible termination due to abandonment or for absence without o
fail to disclose if Gold City had taken any action to reverse the cial leave or notice for six consecutive days, with a warning that if
resolution. no explanation is given within seven days from receipt thereof, they
will be terminated, 14 but the petitioners failed to reply to the notice
Thereafter, Case No. RAB-11-08-0042-91 pending before and did not report for work. It then concluded that the abandonment
Labor Arbiter Nicolas Sayon became the sole venue of the legal justi ed their dismissal. As for the petitioners' money claims, Gold
battle between the petitioners and Gold City. Both parties therein City contended that the petitioners were paid the minimum wage
were required to submit their respective position papers. In their and allowances, and that the computation made by the DOLE
position paper, 11 the petitioners alleged that Gold City prevented (through the Labor Examiner) did not take into account the other
Labor, Visabella, Medillo, and Gabut from entering their work bene ts given to the petitioners, viz., board and lodging, meals,
place on 22 August 1991 and Bonita on 24 August 1991; that their snacks, clothing and transportation allowance, and the fact that their
time cards were taken off the time card rack; and that they were Social Security Services (SSS) contributions and cash advances
advised to resign. They assailed the notice of termination given to were deducted from their gross pay. It further alleged that the
them by Gold City dated 6 September 1991, 12 and denied having petitioners had already "agreed to compromise settlement before the
abandoned their work for, as a matter of fact, Labor was on an DOLE, concerning money claims, as evidenced by cash vouchers 15
approved leave from 19 August to 21 August 1991 but was not duly signed" 16 by them. The petitioners submitted their Reply 17
LLcd

allowed to return to work after that date. They accused Gold City of to Gold City's position paper.
unfair labor practice for illegally dismissing them in retaliation for
their having led a complaint for labor standards violations against it. On 27 March 1992, the Labor Arbiter rendered his decision
They also denied having signed any quitclaim or compromise 18 in favor of the petitioners, the dispositive portion of which reads

settlement. They further claimed the amounts found by the Labor as follows:
Examiner as due them from Gold City for the labor standards WHEREFORE, in view of all the foregoing,
violations and prayed for full back wages and separation pay in lieu judgment is hereby rendered:
of reinstatement.
In its Position Paper, 13 Gold City asserted that the 1. Declaring the dismissal of
petitioners were not illegally terminated but had abandoned their complainants Artemio Labor, Pedro L. Bonita,
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 Jr., Ireneo Visabella, Delfin Medillo and Allan Rommel The approved application for leave of absence of
Gabut as ILLEGAL; and complainants Labor and Bonita negates the abandonment
charge of respondents. Said applications, which were duly
2. Ordering respondent Gold City approved by respondent Rudy Uy showed that
Commercial Complex, Inc. to pay the above-named complainant Labor was actually on leave from August 19
complainants, the following: to 21, 1991; while complainant Bonita, on August 20 to
Name Separation Money Claims 23, 1991. With such reality, where could the
Total abandonment of work lie?
Pay Less 20% Besides, the fact that complainants have
immediately led this complaint for illegal dismissal
against them proves that there was no intention on their
(a) Artemio Labor P5,338.00 P24,741.80 part to sever their employment with respondents. It is
P30,079.80; well-settled in our jurisprudence that "For abandonment
(b) Pedro Bonita, Jr. 5,338.00 24,741.80 to constitute a valid cause for termination of employment,
30,079.80; there must be a deliberate, unjustied refusal of the
(c) Ireneo Visabella 5,338.00 24,741.80 employee to resume his employment. This refusal must
30,079.80; be clearly shown. Mere absence is not su cient, it must be
(d) Allan Rommel Gabut 5,338.00 accompanied by overt acts unerringly pointing to the fact
24,741.80 30,079.80; that the employee does not want to work anymore"
(e) Delfin Medillo 5,338.00 18,251.41 (Flexo Manufacturing Corp. vs. NLRC, 135 SCRA 145,
23,589.41 Emphasis supplied).
Records likewise show that the issuance of notice
or in the total amount of One Hundred Forty Three of termination by respondents on September 6, 1991 was
Thousand Nine Hundred Eight Pesos and 61/100 only a mere subterfuge to shield themselves from the
(P143,908.61). sanction of the law for having violated the mandatory
SO ORDERED. requirements in the termination of employment, which
was issued long after complainants had filed this case.
We quote his ratiocinations in support thereof:
Under the Labor Code, as amended, the
After judicious scrutiny of the parties' pleadings, requirements for the lawful dismissal of an employee by
arguments, counterarguments and evidences, this Office his employer are two-fold: the substantive and the
finds for the complainants. procedural. Not only must the dismissal be for a valid or
authorized cause as provided by law (Article 279, 281,
First, on the illegal dismissal issue.
282-284, New Labor Code), but the rudimentary
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 requirements of due process — notice and hearing — Albeit respondents rebutted complainants' money
must also be observed before an employee may be claims through the submission of the latter's payslips,
dismissed. One does not su ce; without their concurrence, however, the same could not be credited in their favor,
the termination would, in the eyes of the law be illegal." being found spurious. The payslips, vis-a-vis
(Salaw vs. NLRC, G.R. No. 90786, Sept. 27, 1991). respondents, did not bear any entries such as meals,
snacks, lodging and SSS contributions (Annexes "A,"
Neither the alleged commission of acts of "B," Complainants' Reply to Respondents' Position
dishonesty by complainants would warrant the dismissal. Paper). It is very obvious that those entries are belatedly
It has no leg to stand on. There is no sufficient proof or added by respondents to lessen their actual liabilities to
evidence that tend to show that complainants were really complainants.
in cahoots with each other in misappropriating the
proceeds of the "unclaimed" free beer or softdrink due to There being no other proofs like payrolls or
the disco pub customers, except the bare allegations in the vouchers that would support their compliance of labor
a davits executed by one Joenel Mendoza and standard laws, complainants are awarded the following
respondents' cashiers. Undoubtedly, they are self-serving bene ts: representing salary differential, 13th month pay
testimonies. In fact, it is more apparent that the charges for 1991 and holiday [pay] as computed by this O ce
imputed to complainants are pure prevarication as which is now part of the records of the case, to wit:
respondents were bent to dismiss complainants in reprisal 1. Artemio Labor P30,927.24;
to the complaint they have filed with the DOLE. 2. Ireneo Visabella 30,927.24;
3. Allan Rommel Gabut 30,927.24;
Absent such two requirements, their dismissal is 4. Pedro Bonita, Jr. 30,927.24;and
thus patently illegal. Complainants were constructively 5. Delfin Medillo 22,814.27
dismissed. This O ce, however, took cognizance of the fact
Payment of separation pay is proper under the that complainants were extended free lodging, meals and
circumstances, and as alternately prayed for by the snacks. Considering that the monetary award due them
complainants, which will be computed at one-month pay was based on straight computations, we deem it equitable
for every year of service, a fraction of at least six months that a twenty (20%) percent deduction is proper to offset
being considered as one year. Thus, they are entitled [to those fringe bene ts as well as absence, tardiness and non-
the] equivalent [of] two months' salary or in the amount working days incurred during their tenure of employment.
of P5,338.00 for each of them As to the alleged receipt by complainants on the
(P102.00/12 x 314 x compromise settlement of P2,000.00 each, we nd that
2) they are not estopped from claiming the monetary
benefits due them. The Supreme Court has ruled:
—————————.
12 "The fact that petitioner received his
retirement bene ts voluntarily and executed a deed
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 of release and quitclaim does not militate against consideration; hence, they were estopped from claiming such
him. In the case of MRR Yard Crew Union vs. monetary bene ts pursuant to the rule laid down in Veloso vs.
PNR, 72 SCRA 88, We held: 'That the employee Department of Labor and Employment, 19 which abandoned the
has signed a satisfaction receipt does not result in ruling in Fuentes vs. National Labor Relations Commission 20 that
waiver, the law does not consider as valid any the Labor Arbiter relied upon.
agreement to receive less compensation than what Their motion for the reconsideration of the decision having
a worker is entitled to recover.' A deed of release been denied by the NLRC, the petitioners led this special civil
or quitclaim cannot bar any employee from action for certiorari where they alleged that the NLRC acted with
demanding bene ts to which he is legally entitled." grave abuse of discretion amounting to lack or excess of jurisdiction
(Fuentes vs. NLRC , 167 SCRA 767). when:
The rest of [the] money claim are hereby denied (A) IT ABSOLUTELY AND TOTALLY DISMISSED
for lack of factual and legal basis. THE CLAIMS OF PETITIONERS DESPITE THE
FINDINGS OF FACTS MADE BY THE LABOR
As expected, Gold City appealed the Labor Arbiter's ARBITER AND THE ADMISSION OF PRIVATE
decision to the NLRC. On 24 RESPONDENTS OF LIABILITIES AS STATED
September 1992, the NLRC promulgated the challenged decision IN THEIR POSITION PAPER.
reversing that of the Labor Arbiter's and dismissing the petitioners'
complaint. Essentially, the NLRC gave full faith and credit to the (B) IT HELD THAT PETITIONERS ABANDONED
same a davits which were submitted in the aforementioned criminal THEIR WORK DESPITE KNOWLEDGE THAT
complaint for estafa or theft led against the petitioners. THE INSTANT CASE IS ALREADY
Accordingly, it declared that the ndings of the Labor Arbiter that the INSTITUTED AND THAT THEY COMMITTED
accusations made by Gold City are mere fabrications is not ACTS OF DISHONESTY DESPITE SELF-
supported by the evidence on record. To the NLRC, the ling by the SERVING AFFIDAVITS AND DISMISSAL OF
petitioners of the complaint with the DOLE was made "to preempt THE COMPLAINT.
respondents' lawful prerogatives." It also ruled that there was
abandonment by the petitioners and that Gold City, in terminating We required the respondents to comment on the petition. aisadc

them, complied with the procedural requirements since it gave As expected, the private respondents in their comment
notice and granted them an opportunity to explain their absences, support the NLRC and quoted the arguments adduced in their
which they did not avail of. In ruling that the petitioners were not Memorandum of Appeal filed with the NLRC. 21
illegally dismissed, the NLRC found that just cause existed, viz.,
their dishonest acts which do not require proof beyond reasonable The O ce of the Solicitor General led a Manifestation in lieu
doubt. As to the money claims, the NLRC ruled that the of a Comment 22 and prayed that the NLRC be required to le its own
compromise settlements were freely and voluntarily executed by the comment. The said O ce takes a stand adverse to the NLRC and in
petitioners and their allegation that they were tricked into signing it favor of the petitioners, and opines that Gold City was not able to
and that the P2,000.00 was not given to them deserve scant prove its charge of dishonesty. It disagrees with the NLRC's nding
that, because its evidence consisting of the a davits of its witnesses
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 "very clearly stated in detail how the complainants [petitioners National Labor Relations Commission 2 3 decided by this Court
herein] cheated the customers and the respondents as well," the more recently than Veloso wherein we rea rmed the rule that
petitioners are unworthy of their employer's trust and con dence. On quitclaims do not bar recovery by the employees of their claims
the contrary, the O ce of the Solicitor General argues that the a because such quitclaims are frowned upon as contrary to public
davits do not specify the individual participation of the petitioners policy. It also said that the petitioners are still entitled to their
in the alleged losses incurred by Gold City, and it proceeds to money claims because the alleged compromise settlement was for
examine the a davits and point out their aws. It also noted that the a an unconscionably lower amount than that awarded to them by the
davits which support the NLRC's decision were the very same a Labor Arbiter.
davits upon which the complaint led with the Provincial Prosecutor
In its own comment, 24 the NLRC sustains its challenged
was based and which was eventually dismissed for lack of evidence.
resolution and submits that the issues raised are factual and that
It added that, although it may be argued that the dismissal of the
there is no showing that the NLRC committed such abuse of
criminal case does not bar the employee's termination, the evidence,
discretion but rather, its assailed decision "is based on the records
nevertheless, does not support a conclusion that the petitioners
and ably supported by the evidences presented by the parties." As to
committed the dishonest acts complained of.
the compromise agreements, it maintained that they are valid since
The O ce of the Solicitor General also maintains that the they were freely and voluntarily executed by the parties.
petitioners did not abandon their work, again disagreeing with the
We resolved to give due course to the petition and required
ndings of the NLRC. It sounded off its doubts as to the truth of the
the parties to submit their respective memoranda. Only the
claim of dishonesty because these acts were not mentioned at all in
petitioners submitted their memorandum. 25 The NLRC and the
the notices of 6 September 1991 given to the petitioners which
private respondents manifested that their separate comments will
referred only to their alleged absences without leave. If the
serve as their memoranda.
accusations are true, contends the O ce of the Solicitor General,
Gold City could have immediately acted upon them by, for instance, We decide in favor of the petitioners.
placing the petitioners under preventive suspension or giving them The rst assigned error involves the question of whether or
the requisite notice and opportunity to be heard in the investigation not Gold City is guilty of labor standards violations. The ndings
it was allegedly conducting, but it did not do anything. The O ce of regarding this issue made by the Labor Arbiter and the NLRC are
the Solicitor General concludes that there is no basis for the charge opposed to one another. While it is well-established that the ndings
of loss of con dence. Furthermore, the immediate ling of the case of facts of the NLRC are entitled to great respect and are generally
for illegal dismissal by the petitioners negates the theory of binding on this Court, it is equally well-settled that the Court will
abandonment. not uphold erroneous conclusions of the NLRC when the Court nds
With respect to the money claims, the O that the latter committed grave abuse of discretion in reversing the
ce of the Solicitor General opines that decision of the labor arbiter or when the ndings of facts from which
the petitioners are entitled to them and their recovery is not barred the conclusions were based were not supported by substantial
by the compromise settlement. It contradicts the opinion of the evidence. 26
NLRC that the case of Veloso had abandoned the rule in Fuentes, The Labor Arbiter adopted the ndings of the Labor Examiner
citing Philippine National Construction Corporation vs. that Gold City committed violations of the labor standards laws.

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 Gold City did not contest nor protest the ndings when it was agreement, then it is logical to presume that none existed for it had
presented with a copy of the report made by the Labor Examiner. 27 the burden of proving its own assertions.
It raised its defenses only in the position paper it submitted to the
LLcd

Labor Arbiter. The unexplained delay in presenting pertinent Even if the petitioners did enter into a compromise
documents to support its defenses strengthens the assertion of the settlement with Gold City, such agreement would be valid and
petitioners that the pay slips presented by Gold City, which the binding only if, per Veloso, quoting Periquet vs. National Labor
latter claims show proper deductions that the petitioners knew of, Relations Commission, 30 the agreement was voluntarily entered
were falsi ed, and that the deductions were added only after these
into and represents a reasonable settlement of the claims. In this
had already been signed by them.
case, as in Fuentes, the amounts purportedly received by the
Recovery of the petitioners' money claims for the violations petitioners were unreasonably lower than what they were legally
of labor standard laws are not barred by the alleged compromise entitled to.
agreements signed by the petitioners. Contrary to the NLRC's
opinion, Veloso did not overturn the rule laid down in Fuentes. The Furthermore, like in Pampanga, the "compromise
said cases are not founded on similar or identical facts, thus settlements" with the petitioners were not executed with the
accounting for the difference in the rulings made therein. In fact, we assistance of the Bureau of Labor Relations or the Regional O ce of
said in Veloso that the case of Pampanga Sugar Development Co., the DOLE pursuant to Article 227 of the Labor Code. The records
do not disclose that the assistance of such o ce was ever solicited.
Inc. vs. Court of Industrial Relations 28 relied upon by the
What Gold City did was merely to le with the Regional O ce of the
petitioners therein and which enunciated the same rule later applied
DOLE in Davao City the vouchers purporting to show payments of
in Fuentes, is not applicable to Veloso because the pertinent facts
the alleged considerations of the "compromise settlements." Such
differ. Veloso did not lay down a rule totally different from what
ling can by no stretch of the imagination be considered as the
this Court had set in Pampanga or even in Fuentes and other similar requisite assistance in the execution of compromise settlements.
cases. Veloso does not even apply in this case because the
petitioners had asserted, and Gold City did not prove the contrary, Finally, we also note that the alleged vouchers were dated 17
that they initially refused to sign a document purportedly waiving July 1991, or before the ling of any complaint with the DOLE on 19
their claims but were later tricked into signing the vouchers which August 1991 and even before the Labor Examiner submitted his
turned out to be for alleged compromise settlements at P2,000.00 ndings of violations by Gold City. If indeed the parties entered into
for each of them. We are inclined to agree with the petitioners. Gold such compromise agreements, then Gold City should have
City has not submitted any compromise agreement attended with submitted the vouchers to the Labor Examiner to refute the
the formulations of law. 29 All that it has are the cash vouchers, petitioners' claim and put an end to the controversy.
cdlex

dated 17 July 1991, which states under the heading

PARTICULARS: "To payment of Compromise Settlement Having dispensed with the rst error ascribed to the NLRC,
representing Salary Differentials and Allowances as per RTWPB- the next issue to be resolved is whether the petitioners abandoned
XI-02." Of course, a voucher purporting to represent payment of the their jobs and, consequently, whether their dismissal due to
consideration in a compromise agreement is not the compromise abandonment was lawful.
agreement itself. Since Gold City did not submit any compromise

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 To constitute abandonment, two elements must concur: (1) Equally baseless is the charge of dishonesty which Gold City
the failure to report for work or absence without valid or justi able also relies upon to justify the dismissal of the petitioners from their
reason, and (2) a clear intention to sever the employer-employee employment.
relationship, with the second element as the more determinative A charge of dishonesty involves serious misconduct on the
factor and being manifested by some overt acts. 31 Mere absence is part of the employee, a breach of the trust reposed by the employer
not su cient. 32 It is the employer who has the burden of proof to upon him. The rule that proof beyond reasonable doubt is not
show a deliberate and unjusti ed refusal of the employee to resume required to terminate an employee on the charge of loss of con
his employment without any intention of returning. 33 Gold City dence and that it is su cient that there is some basis for such loss of
failed to discharge this burden. It did not adduce any proof of some con dence is not absolute. 36 The right of an employer to dismiss
overt act of the petitioners that clearly and unequivocally show their employees on the ground that it has lost its trust and con dence in
intention to abandon their posts. On the contrary, the petitioners lost him must not be exercised arbitrarily and without just cause. 37 For
no time in ling the case for illegal dismissal against them, taking loss of trust and con dence to be a valid ground for an employee's
only four days from the time most of them were prevented from dismissal, it must be substantial and not arbitrary, and must be
entering their work place on 22 August 1991 to the ling of the founded on clearly established facts sufficient to warrant the
complaint on 26 August 1991. They cannot, by any reasoning, be employee's separation from work. 38
said to have abandoned their work, for as we have also previously
ruled, the ling by an employee of a complaint for illegal dismissal is Unfortunately for Gold City, the evidence it adduced is
proof enough of his desire to return to work, thus negating the insubstantial, inadequate, and unreliable to support a conclusion that
employer's charge of abandonment. 34 Furthermore, petitioners the petitioners are even remotely guilty of the acts they are accused
Labor and Bonita presented proof that during some of those days of committing. On this matter, we agree with the observations and
that they were supposedly on AWOL (absence without o cial leave), conclusions of the O ce of the Solicitor General which we quote
they were actually on o cial leave as approved by no less than Rudy with approval, to wit:
Uy himself. 35 Neither Gold City nor Rudy Uy had disputed this.
Indeed, an examination of the a davits would
It may further be observed that the timing of Gold City's reveal that the alleged offenses complained of and
alleged refusal to allow the petitioners to enter their work place is through which private respondent Gold City sustained
highly suspicious. It happened on 22 August 1991 or only two days losses estimated at P216,000.00 are couched in general
after the petitioners led their complaint for labor standards terms and do not speci cally mention the individual
violations with the DOLE. Mere coincidence? We think not. What it participation of each of the petitioners in the alleged
is, though, is evidence that lends credence to the allegation of the losses. For instance, in the a davit . . . of Lee Manuela
petitioners that they did not abandon their employment as Gold City Suelto, the following will be noted:
asserts but were prevented from going to work. Thus, we cannot
agree with the NLRC when it said that the petitioners "ha[d] to (i) allegedly the order slip marked "Mrs.
jump the gun against the respondents in order to save their faces Ima V" was missing but it does [not] mention who
from their own wrongdoings, dishonest acts" by filing the case for is responsible for it;
illegal dismissal against the respondents.

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 (ii) allegedly petitioner Visabella or If it is true that petitioners were cheating their
Arnold Veloso did not remit the amount of P60.00 employer in the manner described in the a davits of
collected by Visabella from a customer but goes private respondents' witnesses, how come that they, who
on to conclude that both of them pocketed the held the position of con dence as cashiers, tolerated the
amount; practice from June 1991 and blew the whistle only after
petitioners led a complaint of underpayment of wages in
(iii) allegedly the amount paid by a August 19, 1991? As pointed out by the investigating
customer for several bottles of beer and soft prosecutor, the a ants should have reported the
drinks to petitioner Visabella was turned over to irregularities a day after each offense.
Veloso but concludes that both of them pocketed
it; The same may be said of the a davit (Annex "A
Annex "D," Petition) of
(iv) allegedly petitioner Visabella Joenel de Mesa and the a davit of Percy Hangad (Anne
crumpled and threw away an order slip he made of Annex "D,"
out for four (4) bottles of beer and four (4) soft Petition), both of which substantiate the alleged modus
drinks after receiving payment from the said order operandi of petitioners. The alleged offenses happened in
but does not indicate if he appropriated the same; June, 1991 and they came with a clean breast of it only on
(v) allegedly petitioner Gabut admitted to August 20 and 23, 1991. Moreover, establishing the mode
a ant that he and Arnold by which petitioners allegedly cheated private respondent
Gold City does not necessarily prove their complicity.
Veloso made some money on an order slip for It is private respondents' posture that great weight
draft beer and the former would give the latter should be given to the a davit of Joenel de Mesa, a mere
part of the money, if he was inclined to do so customer whose only alleged desire is to protect the
since they were at odds at that time. The public similarly situated with him. However, de Mesa
admission, however, is hearsay and inadmissible charges only Visabella of using his (Mesa's) entrance
against petitioner Gabut. ticket stub to deprive private respondents of P60.00. The
On the other hand, the a davits of Mary Grace same could not be imputed to his co-petitioners.
Verano, Ellen de Guzman and Renato Dalugdog Although the employer's evidence is not required
(Annexes "C," "D" and "F," respectively, of Annex "D," to be of such degree as is required in criminal cases, i.e.,
Petition) are pro forma and, except for the different dates proof beyond reasonable doubt, such must be
of the incidents mentioned therein, invariably show that substantial. The same must clearly and convincingly
petitioners, on three separate occasions from June to establish the facts upon which loss of con dence in the
August, 1991, failed to remit the money collected by employer may be made to rest. (Starlite Plastic Industrial
them allegedly remitted stubs of entrance tickets which Corporation v. NLRC, 171 SCRA 315 [1989]).
entitled customers to free drinks.
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 In the instant case, private respondents have not individually addressed to the petitioners, Gold City sought an
clearly and convincingly shown by substantial evidence explanation from the petitioners on their alleged absence without o
the individual participation of each of the petitioners in cial leave or, in short, their abandonment, and warned them in the
depriving their employer of the estimated amount of form of a reminder that such absence is a ground for separation or
P216,000.00 per year. As correctly pointed out by the dismissal from the company. Nothing is mentioned about
investigating prosecutor, there was no cause to hold dishonesty or any other misconduct on the part of the petitioners. If
petitioners liable for the offense imputed to them. indeed the petitioners were guilty of both abandonment and
dishonesty or misconduct, then Gold City should have put them
It may be argued by private respondents that the down in black and white. The letters cum notice cannot then be
acquittal of an employee in a criminal case does not considered to include dishonesty or misconduct. It would be a gross
guarantee his reinstatement or that the dropping of a violation of the petitioners' right to due process to dismiss them for
criminal prosecution for an employee's alleged that cause of which they were not given notice or for a charge for
misconduct does not bar his dismissal. ( Starlite Plastic which they were never given an opportunity to defend themselves.
Industrial Corp., Supra.) A dismissal must not only be for a valid or substantial cause; the
employer must also observe the procedural aspect of due process in
Still, such an argument would fail to impress since giving the employee notice and the opportunity to be heard and to
petitioners' actual involvement or participation in the defend himself. 39
irregularities complained of have not been proven. Private At the same time, when the petitioners were dismissed by
respondents failed miserably even to establish a prima preventing them from entering their work place, no previous notice
facie case against them in the prosecutor's office and, of any kind was given to them at all. The case for illegal dismissal
precisely, because of such absence of evidence, the case was led on 26 August 1991, or at least eleven days before the date
was dismissed. What private respondents had were "mere of the notices. The subsequent notices cannot cure the lack of notice
words of mouth" and generalities which are not su cient prior to the illegal dismissal of the petitioners on 22 August and 24
to afford reasonable ground for belief that petitioners August 1991.
were responsible for the misconduct imputed to them. As for the money claims of the petitioners, the award made
In the words of the Labor Arbiter, the alleged by the Labor Arbiter must be upheld, subject to the modi cation
commission of acts of dishonesty had no leg to stand on. with respect to the addition of an award for backwages which the
They are but prevarications in reprisal to the complaint Labor Arbiter should have made but did not.
filed by petitioners with the DOLE. cda This Court, after scrutinizing the documents and evidence
before it, agrees with the ndings of the Labor Arbiter on Gold City's
There being no abandonment or commission of dishonest disclaimer of liability for the money claims and adopts them herein,
acts by the petitioners, no just cause exists to dismiss them, hence, the pertinent portions of which are as follows:
their termination by Gold City is illegal. The fact that Gold City
sent them notices on 6 September 1991 becomes irrelevant. It does Albeit respondents rebutted complainants' money
not cure the illegality of their dismissal for lack of just cause. It is claims through the submission of the latter's payslips,
interesting to note, however, that in its letters of 6 September 1991 however, the same could not be credited in their favor,
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 being found spurious. The payslips, vis-a-vis of backwages. 42 But in this case, the petitioners did not pray for
respondents, did not bear any entries such as meals, reinstatement in the position paper they led with the Labor Arbiter.
snacks, lodgings and SSS contributions (Annexes "A," 43 The latter in turn ordered the payment of separation pay in lieu of
"B," Complainants' Reply to Respondents' Position reinstatement and this is part of the decision that the petitioners seek
Paper). It is very obvious that those entries [were] to be a rmed by this Court. That being the case, and as we have said
belatedly added by respondents to lessen their actual before, if the employee decides not to be reinstated, the employer
liabilities to complainants. shall pay him separation pay in lieu of reinstatement. 44 This is only
just and practical because reinstatement of the petitioners will no
There being no other proofs like payrolls or longer be in the best interest of both the petitioners and Gold City
vouchers that would support their compliance [with] labor considering the animosity and antagonism that exists between them
standard laws, complainants are awarded the following brought about by the ling of charges by both parties against each
bene ts: representing salary differentials, 13th month pay other in the criminal as well as in the labor proceedings. 45 Gold
for 1991 and holiday [pay] as computed by this O ce City had also refused entry to the petitioners into their work place,
which is now part of the records of this case, to wit: giving rise to strained relations between the parties which make
reinstatement unacceptable to them. The petitioners would then be
1. Artemio Labor P30,927.24; entitled to separation pay equivalent to at least one month's salary
for every year of service in lieu of reinstatement in addition to their
2. Ireneo Visabella 30,927.24; full backwages.
3. Allan Rommel Gabut 30,927.24; The Labor Arbiter, however, failed to award backwages
4. Pedro Bonita, Jr. 30,927.24; and despite its ruling that the petitioners were illegally dismissed. We
5. Delfin Medillo 22,814.27 40 thus deem it proper to make such an award herein in addition to the
From the above amounts, the Labor Arbiter deducted twenty money claims for labor standards violations and for the separation
percent (20%) therefrom to represent the bene ts which the pay. As a rule, full backwages are computed from the time of the
petitioners received, such as lodging, meals and snacks, as well as employee's illegal dismissal until his actual reinstatement, but since
for absences, tardiness, and for non-working days when no work in this case, reinstatement is not possible, the backwages must be
was performed by them because, as it stated, "the monetary award computed from the time of the petitioners' illegal dismissal until the
due to them was based on straight computations." 41 Though the nality of our decision herein. 46 This amount due the petitioners for
Labor Arbiter did not explain why an arbitrary gure of 20% was backwages, however, is subject to deductions for any amount which
used to represent these deductions, since the petitioners did not raise the petitioners may have earned during the period of their illegal
this as an issue and we do not nd any reason to delete or modify it, termination. 47 Computation of full back wages and presentation of
this value for deductions from the total money claims to be awarded proof as to income earned elsewhere by the illegally dismissed
to the petitioners must stay. LLcd employees after their termination and before full payment is
With respect to the award of separation pay, the same was effected by Gold City should be ventilated in the execution
properly made and is a rmed. Ordinarily, a nding that an employee proceedings before the Labor Arbiter in accordance with the
has been illegally dismissed entitles him to reinstatement to his appropriate rules of procedure of the NLRC. 48
former position without loss of seniority rights and to the payment
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 WHEREFORE, the decision of public respondent National Footnotes
Labor Relations Commission in NLRC CA No. M-000834-92
(RAB 11-08-00742-91) is hereby SET ASIDE and the decision of 1. Annex "A" of Petition; Rollo, 18-32. Per Commissioner
the Labor Arbiter is REINSTATED, with the addition of an award Leon G. Gonzaga, Jr., with Commissioners Musib M. Buat
of full backwages to each of the petitioners from the time of their and Oscar N. Abella concurring.
illegal termination until the finality of this decision.
2. Annex "G," Id.; Id., 205-214.
LexLib

SO ORDERED.
3. Rollo, 243.
Bellosillo, Kapunan, and Hermosisima, Jr., JJ., concur.
Padilla, J., see separate opinion. 4. Id., 257.
5. Id., 246.

Separate Opinion 6. Id., 248-253.

7. Rollo, 248-253.
PADILLA, J., concurring:
8. Id., 241, 244.
I concur, except with the observation that income earned
elsewhere by the employees during the period of their illegal 9. Id., 242, 245.
termination or dismissal should be deducted from their backwages.
Such income should not be deducted from backwages as the 10. Id., 46-48.
employees had to earn a living during their illegal termination from
11. Rollo, 34-48.
employment and the payment of full backwages (without deducting
such income earned elsewhere) is a part of the price the employer 12. Id., 72-76.
has to pay for his illegal dismissal of the employees.
Republic Act No. 6715 approved on 2 March 1989, clearly 13. Rollo, 49-187.
provides for the payment of full backwages to illegally dismissed 14. Id., 72-76.
employees. In Pines City Educational Center v. NLRC, (227
SCRA 655), I expressed the view that the Court has no alternative 15. Rollo, 183-187.
but to award full backwages, without deduction or quali cation, to
illegally dismissed employees, the provisions of the law against 16. Id., 63.
unjust enrichment notwithstanding. The intent of the law (R.A. No. 17. Id., 188-192.
6715) is quite clear and unequivocal in that no deductions and/or
quali cations shall be made in awards of backwages to employees 18. Id., 205-214.
illegally dismissed. dctai

19. 200 SCRA 201 [1991].

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 20. 167 SCRA 767 [1988]. Funeraria Nuestro, 160 SCRA 568 [1988]; Asphalt and
Cement Pavers, Inc.
21. Rollo, 276-299. vs. Leogardo, Jr., 162 SCRA 312 [1988].
22. Id., 304-325. 35. Rollo, 43A, 43B.
23. 215 SCRA 204 [1992]. 36. See Starlite Plastic Industrial Corp. vs. NLRC, 171 SCRA
24. Rollo, 336-344. 315 [1989], and the cases cited therein.

25. Id., 378-393. 37. Acda vs. Minister of Labor, 119 SCRA 326 [1982];
Philippine Long Distance Telephone Co.
26. Chong Guan Trading vs. NLRC, 172 SCRA 831 [1989] and vs. NLRC, 122 SCRA 601 [1983]; Starlite Plastic Industrial
the cases cited therein. See also Kapisanan ng Manggagawa Corp. vs. NLRC, supra note 36; China City Restaurant Corp.
ng Camara Shoes vs. Camara Shoes, 111 SCRA 477 vs. NLRC, 217 SCRA 443 [1993].
[1982].
38. See Pilipinas Bank vs. NLRC, 215 SCRA 750 [1992];
27. Rollo, 241, 244. The report of the Labor Examiner stated China City Restaurant Corp. NLRC, supra note 37; Jose
that the results were explained to and received by Gold City Marcelo and Carlito Sarcia vs. NLRC, G.R. No. 113458, 31
but its manager did not sign the Inspection Report and the January 1995.
Notice of Inspection Results. 39. See Rule XIV, Book V of the Implementing Rules of the
Labor Code. See also numerous previous decisions of this
28. 114 SCRA 725 [1982].
Court on the subject, e.g., Shoemart, Inc. vs. NLRC, 176
29. See Article 227, Labor Code, and the discussion below. SCRA
385 [1989]; Imperial Textile Mills, Inc. vs. NLRC, 217
30. 186 SCRA 724 [1990]. SCRA 237 [1993]; San Miguel Corporation vs. NLRC, 222
SCRA 818 [1993].
31. De Ysasi III vs. NLRC, 231 SCRA 173 [1994]. See
Bonotan vs. NLRC, 237 SCRA 717 [1994]. 40. Rollo, 212.
32. Kingsize Manufacturing Corp. vs. NLRC, 238 SCRA 349 41. Id.
[1994]; F.R.F. Enterprises, Inc. vs. NLRC, G.R. No.
105998, 21 April 1995. 42. Santos vs. NLRC, 154 SCRA 166 [1987].

33. See F.R.F. Enterprises, supra note 32. 43. Rollo, 40.

34. Santos vs. NLRC, 166 SCRA 759 [1988]; New Imus 44. Starlite Plastic Industrial Corp. vs. NLRC, supra note 36.
Lumber vs. NLRC, 221 SCRA 589 [1993]. See Flores vs. See Lagniton, Sr. vs. NLRC, 218 SCRA 456 [1993]. See
also Domingo C. Congson vs. NLRC, G.R. No. 114250, 5
April 1995.
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 45. See Tiu vs. NLRC, 215 SCRA 540 [1992]; Mapalo vs.
NLRC, 233 SCRA 266 [1994].
46. See Gaco vs. NLRC, 230 SCRA 260 [1994]; Oscar
Ledesma and Co. and Arturo Ledesma vs. NLRC (Fourth
Division) and Orlando Ondon, G.R. No. 110930, 13 July
1995.
47. Ferrer vs. NLRC, 224 SCRA 410 [1993]. See Pines City
Educational Center vs. NLRC, 227 SCRA 655 [1993].
48. Ferrer vs. NLRC, supra note 47.

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