Fano v. Kaizen Security Agency Corp.

FIRST DIVISION

[G.R. No. 253006. June 30, 2021.]

CORNELIO FAGTANAN FANO, petitioner, vs.KAIZEN SECURITY AGENCY CORP. AND SEVERO V. CARIÑO, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJune 30, 2021which reads as follows:

"G.R. No. 253006 (Cornelio Fagtanan Fano v. Kaizen Security Agency Corp. and Severo V. Cariño). — Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the Decision 2 dated January 15, 2020 and the Resolution 3 dated July 16, 2020 of the Court of Appeals (CA) in CA-G.R. SP No. 157700. The CA affirmed the findings of the National Labor Relations Commission (NLRC) in its Decision 4 dated May 31, 2018 that petitioner Cornelio Fagtanan Fano was not illegally dismissed nor was there abandonment on his part. The NLRC reversed the Decision 5 dated December 27, 2017 of the Labor Arbiter (LA) in NLRC-NCR-Case No. 10-15860-17.

Facts of the Case

On December 5, 2005, Kaizen Security Agency Corporation (Kaizen) hired Cornelio Fagtanan Fano (Fano) as a security guard. He was assigned as a head guard at the Light Rail Manila Corporation Line 1 (LRMC Line 1), and received the monthly salary of P18,000.00. Fano works from Monday to Friday, from 1:00 p.m. to 9:00 p.m. 6 SDAaTC

In a Memorandum 7 dated May 10, 2016, Fano was suspended for 15 days for sleeping while on duty. When the period for his suspension ended, Fano received Office Order No. OO-1129-16 8 dated May 25, 2016 detailing him as head guard at LRMC Line 1 Revenue. Fano was also ordered to report to Security Detachment Commander Jorge Dominguez (Dominguez) for further instructions.

Fano claims that from May 25 to June 3, 2016, he reported to his assigned post at LRMC Line 1 but Dominguez did not entertain him. On June 26, 2016, Fano went to the main office of Kaizen where Human Resource Staff Queenie Santos (Santos) informed him that Dominguez did not accept him back due to age limit. Fano was 58 years old at that time. Thereafter, he received a memorandum 9 dated August 1, 2016 for his supposed absences without official leave (AWOL). 10

Consequently, Fano filed a complaint 11 against Kaizen for illegal dismissal. Fano claims that he was placed on floating status for more than six months reckoned from May 25, 2016. He also avers that he was discriminated due to his age. 12

Kaizen denied terminating Fano's employment and contended that there was no overt act on its part showing that it dismissed Fano. It claimed that Fano stopped reporting for work despite receipt of the return to work order. 13

In a Transmittal 14 dated May 28, 2016, Area Commander P/ENS Octavio T. Acido, Jr. informed Dominguez that Fano went on AWOL since May 26, 2016. Kaizen further alleged that it issued a Memorandum 15 on August 1, 2016 directing Fano to report at its office. Despite receipt thereof, Fano did not comply.

Kaizen further argued that Fano was never placed on floating status. In fact, he was given an assignment on May 25, 2016 as evidenced by Office Order No. OO-1129-16, 16 the receipt of which was acknowledged by Fano on even date. Kaizen also submitted an Affidavit executed by Santos stating that he never told Fano that Dominguez did not accept him due to age limit. 17

Lastly, Kaizen claimed that the instant case is already barred by res judicata when NLRC Case No. 02-01774-17 entitled "Cornelio Fagtanan Fano v. Kaizen Security Agency Corp. and Eric Respecioa" was dismissed. 18

Ruling of the Labor Arbiter

On December 27, 2017, the LA rendered a Decision 19 in favor of Fano.

First, the LA explained that the instant case is not barred by res judicata because NLRC Case No. 02-01774-17 was dismissed due to failure to prosecute when Fano failed to submit his position paper. The dismissal was without prejudice and did not dispose the case on the merits. 20

Second, the LA explained that it is unbelievable for Fano, who had been employed with Kaizen for 11 years, to just abandon his source of livelihood. The LA found that Dominguez adopted a dismissive attitude and that there was no real effort on the part of Kaizen to give Fano a posting. 21

Accordingly, the LA ordered Kaizen to reinstate Fano and allow him to work until his retirement. Kaizen was also ordered to pay Fano his backwages, service incentive leave pay, and holiday pay. 22 The dispositive portion of the decision reads:

WHEREFORE, upon above findings, judgment is rendered holding the respondents liable for illegally dismissing the complainant and for withholding his benefits. Accordingly, they are hereby ORDERED to immediately reinstate him in strict accordance with law and to pay his backwages, holiday pay, SILP and 2016 13th month pay of PHP2,281.46, plus 10% attorney's fees per attached Computation Sheet which forms an integral part hereof. acEHCD

SO ORDERED. 23 (Emphasis in the original)

Kaizen filed an appeal 24 before the NLRC.

Ruling of the National Labor Relations Commission

The NLRC granted the appeal in a Decision 25 dated May 31, 2018, to wit:

WHEREFORE, premised on all the foregoing, the Decision appealed from is hereby GRANTED.

Accordingly, the complaint for illegal dismissal is hereby DISMISSED for lack of merit.

Complainant is directed to report and return to work with the respondents for posting and reassignment within ten (10) days from receipt of this resolution.

Respondents however are directed to pay complainant proportionate 13th month pay for the year 2016 in the amount of PHP2,281.46.

All other claims are DISMISSED.

SO ORDERED. 26 (Emphasis in the original)

Ruling in favor of Kaizen, the NLRC held that there was no illegal dismissal in the case at bar. There was no overt act showing that Fano was terminated from service. The pieces of evidence presented by Kaizen, such as the notice of absences without leave and order to report for work, as well as receipt from PhilPost certifying that the letters and notices were received by Fano, are more than substantial evidence showing that Fano was not dismissed but rather he failed to report for work. In addition, there is no evidence that Fano abandoned his job. Hence, he should return to work and report to Kaizen for posting and for reassignment. 27

There being no dismissal, the award of payment of backwages, service incentive leave pay (SILP), and holiday pay, is not warranted. Kaizen was only directed to pay the amount of P2,281.46 for his 13th month pay for the year 2016. 28

Aggrieved, Fano filed a Motion for Reconsideration (MR). On July 20, 2018, the NLRC issued a Resolution 29 denying the MR for failure to find compelling justification or valid reason to modify, alter, much less reverse, its May 31, 2018 Decision. 30

Undaunted, Fano filed a Petition for Certiorari31 under Rule 65 before the CA.

Ruling of the Court of Appeals

On January 15, 2020, the CA issued a Decision 32 denying the petition for certiorari filed by Fano and affirming the decision of the NLRC, viz.:

WHEREFORE, premises considered, the instant petition is DISMISSED.

SO ORDERED. 33 (Emphasis in the original)

The appellate court ruled that Fano failed to discharge his burden of proving the fact of dismissal. 34

As correctly observed by the NLRC, nothing on record shows that Fano was indeed terminated from service. There is no overt and positive act on the part of Kaizen indicating that it terminated Fano's employment. 35 SDHTEC

The memorandum where Fano mainly based his alleged dismissal, merely contains a directive for him to report at Kaizen's office. However, instead of complying therewith, Fano immediately assumed that he was dismissed from work. Accordingly, Fano's premature belief that he was dismissed from employment is not enough to prove the fact of his alleged dismissal. 36 The CA also held that Fano's claim of constructive dismissal when he was not given a posting allegedly due to his age is uncorroborated and cannot be given credence. 37

Further, the CA agreed with the NLRC finding that Fano did not abandon his work. While Fano failed to report for work, records are bereft of any indication that it was with the intent to sever his employer-employee relationship with Kaizen. Mere absences or failure to report for work, even after notice to return, does not necessarily amount to abandonment. The proper remedy, therefore, is to reinstate the employee to his former position without the award of backwages. 38

In a Resolution 39 dated July 16, 2020, the CA likewise denied the MR filed by Fano on February 10, 2020.

Fano then filed this Petition for Review on Certiorari (Petition).

Proceedings before this Court

Petitioner's Arguments

In this Petition before the Court, Fano mainly argues that it is inconceivable for him to intentionally abandon his employment, especially since he had been working for Kaizen for more than a decade, or from December 5, 2005 to May 25, 2016. Conversely, Kaizen had compelling reasons to let go of Fano considering that he is nearing his retirement age, and would soon be eligible for retirement benefits. Hence, it would be beneficial for Kaizen to evade payment of retirement benefits by terminating Fano's employment. 40

Fano further claims that the Office Order, Proof of Transmittal, and Memorandum presented by Kaizen have no probative value for being self-serving. These documents are also inconsistent as regards Fano's posting/assignment: the Office Order states that Fano was assigned as Head Guard at LRMC Line 1, while the Memorandum dated August 1, 2016 provides that he was assigned as Head Guard of Manila Metro Rail Transit System (MRT) Line 3. 41

Moreover, the Certification issued by PhilPost states that the Memorandum dated August 1, 2016 was received by a certain Virginia Salonga, and not by Fano. There is also no proof that Virginia Salonga, who resides in the same address, is Fano's authorized representative. 42

Respondent's Arguments

On the other hand, through its Comment 43 filed with the Court, Kaizen maintained that all its documentary evidence are truthful and issued in the ordinary course of business. 44

First, the back to work Order was personally received by Fano as evidence by his signature and handwritten name placed on the same Office Order. Second, Kaizen's client LRMC acknowledged the Transmittal as shown by the signatures of its Security Manager and Assistant Security Manager on the same Transmittal. Third, receipt of the Memorandum dated August 1, 2016 was admitted by Fano in his Position Paper submitted before the LA. As regards the inconsistent designation of Fano's position, Kaizen claimed that they were merely clerical errors by their Human Resource department. 45

Issue

The question for the Court is whether the CA was correct in affirming the NLRC findings that: (1) Fano was not illegally dismissed; and (2) ruling that the monetary awards, such as award for backwages, SILP, and holiday pay, are not warranted.

Ruling of the Court

The Petition is partly granted.

On Illegal Dismissal

In illegal termination cases, the burden is upon the employer to prove that termination of employment was for a just cause. However, it is incumbent upon the employee to first establish the fact of their dismissal before the burden is shifted to the employer. If there is no dismissal, then there can be no question as to the legality or illegality thereof. 46 AScHCD

Here, there is no fact of dismissal.

Records show that the following were sent to and duly received by Fano:

(a) Memorandum dated May 10, 2016 suspending Fano for 15 days (May 10-24, 2016) for sleeping while on duty;

(b) Office Order No. 00-1129-16 dated May 25, 2016 assigning Fano as Head Guard at LRMC Line 1 and ordering him to report to his OIC;

(c) Memorandum dated August 1, 2016 informing Fano, detailed as Head Guard of MRT-Line 3 Security Post, that he is placed on AWOL Status effective July 25, 2016. Fano is further advised to report to the main office of Kaizen within 24 hours upon receipt of the Memorandum.

Evidently, Kaizen did not dismiss Fano nor considered him terminated when it sent the August 1, 2016 Memorandum. To be precise, the said Memorandum served two purposes: (1) to apprise Fano that he had been placed on AWOL status; and (2) to advise him to report to the main office of Kaizen within 24 hours from receipt of the Memorandum.

Fano's erroneous impression of dismissal may have been due to the phrase "dropped from the rolls" stated in the Memorandum dated August 1, 2016, to wit:

Be informed that you, detailed as Head Guard of MRT Line 3 Security Post are hereby placed on AWOL STATUS effective 25 July 2016 and dropped from rolls due to violation(s) you have committed:

xxx xxx xxx

Based on the recommendation of the Operations Group and evaluation of the undersigned, you are advised to report to KSAC Main Office within 24 hours upon receipt hereof. 47 (Underscoring supplied)

The statement that Fano is placed on AWOL Status due to his unauthorized absences qualifies the phrase "dropped from the rolls." Consequently, he was ordered to report to the main office of Kaizen. The Memorandum dated August 1, 2016, therefore, is not a notice of termination or dismissal from employment. It merely notifies Fano of his current employment status. However, there is no allegation that Fano obeyed the order to report at the Kaizen Main Office after receipt of the Memorandum, and was not allowed to enter the premises or prevented from reporting back to work. Records show that the only time Fano reported to the Kaizen Main Office was on June 26, 2016 or before the subject Memorandum was issued. Hence, Fano failed to establish by substantial evidence the fact of his dismissal from services.

Fano's claim of discrimination due to his age and constructive dismissal cannot be sustained in the absence of any evidence aside from his bare statements. On the other hand, respondents denied these claims by presenting the following documents: (1) Affidavit executed by Santos; and (2) Office Order No. 00-1129-16 dated May 25, 2016 assigning Fano as Head Guard. There is no showing that Kaizen discriminated Fano or that he was placed on floating status for more than six months.

The alleged inconsistencies as regards Fano's position/assignment were adequately explained in Santos' Affidavit. There is no evidence that the inconsistent position/assignment was done in bad faith, or with the purpose of terminating Fano from employment.

The Court, therefore, has no basis to rule that Fano was illegally dismissed by Kaizen.

On Reinstatement Pending Appeal

Necessary in arriving at a complete and just resolution of the case is the subsequent discussion of the Court regarding reinstatement pending appeal.

As already discussed above, the Court agrees with the NLRC and the CA that there is no illegal dismissal in the case at bar. However, the LA ruled otherwise. In fact, the LA ordered for the reinstatement of Fano.

An order of reinstatement issued by the LA under Article 229 of the Labor Code is self-executory or immediately executory even pending appeal. 48 This means that the perfection of an appeal shall stay the execution of the decision of the LA except execution of the reinstatement pending appeal. 49

To implement the reinstatement aspect of the LA's decision, there are two options available to the employer, to wit:

(1) Actual reinstatement — The employee should be reinstated to his position which he occupies prior to his illegal dismissal under the same terms and conditions prevailing prior to his dismissal or separation or, if no longer available, to a substantially-equivalent position; or

(2) Payroll reinstatement — The employee should be reinstated in the payroll of the company without requiring him to report back to his work. 50

In the event that the employer disobeys the LA's reinstatement order, the employer has the following liabilities:

(1) The employer shall be liable to pay the accrued salaries of the reinstated employee as a consequence of such non-reinstatement in the amount specified in the decision; and caITAC

(2) The employer may be cited for contempt, in accordance with the 2011 NLRC Rules of Procedure, for his refusal to comply with the writ of execution ordering the reinstatement. This remedy, however, is available only after the Sheriff shall have served the writ of execution upon the employer or any other person required by law to obey the same. 51

The employer shall be liable for the accrued salaries in case of disobedience because the employee should not be left without any remedy in case the former unreasonably delays or refuses reinstatement. Furthermore, even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court or tribunal. 52 An employee may be barred from recovering his accrued salaries only when the following circumstances are both present: (1) there must be actual delay or that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer's unjustified act or omission. 53

This case of Fano and Kaizen involves the failure of the employer to satisfy the LA's immediately executory order of reinstatement. From the receipt of the Decision dated December 27, 2017 of the LA until its reversal on May 31, 2018 by the NLRC, Kaizen did not manifest in any way its intention to reinstate Fano nor did it submit any compliance report. As a matter of fact, Kaizen only offered to pay Fano's proportionate 13th month pay for the year 2016, clearly evading the order of reinstatement. Verily, there was actual delay or that the order of reinstatement pending appeal was not executed prior to its reversal. Likewise, such delay was due to the employer's unjustified act or omission since records do not show any satisfactory reason, circumstance or situation which would justify Kaizen's non-compliance with the reinstatement order. Accordingly, Fano has the right to collect the accrued salaries from the date Kaizen received the Decision of the LA ordering reinstatement.

Nevertheless, when the NLRC overturned the LA Decision, it ruled that there is no fact of dismissal in the case at bar. Such ruling was affirmed by the CA, thus, Fano was ordered to return to work. It also cannot escape the attention of the Court that Fano was 58 years old when the incident happened leading to his complaint for illegal dismissal. At that time, Fano had already served Kaizen for more than 10 years.

If reinstatement of Fano was done by his employer when the NLRC ruled that there was no illegal dismissal, Fano would have continuously worked and received his salary and all other benefits as an employee of Kaizen from the moment the LA ordered his reinstatement until the Decision of the CA in 2020. By that time, Fano had already reached 60 years old and therefore entitled to retire. Unfortunately, Fano was deprived of this opportunity when Kaizen did not comply with the reinstatement order of the LA.

Among the most important duties of employers is to give every worker what is justly due him. For the reasons explained above, Fano's accrued salaries must include the period between May 31, 2018, or the date of the Decision of the NLRC, until the date he reaches the retirement age of 60 years old. He is likewise entitled to retirement benefits provided under Article 302 of the Labor Code.

Lastly, Fano is entitled to attorney's fees equivalent to 10% of the total monetary awards following Article 2208 of the New Civil Code, which allows its recovery in actions for recovery of wages of laborers and actions for indemnity under the employer's liability laws. cDHAES

As to respondent Severo V. Cariño's (Cariño) liability for the obligations of Kaizen to Fano, the Court sees that there was no showing that Cariño, as the owner and manager of Kaizen, willingly and knowingly failed to comply with the reinstatement order of the LA. A corporation is a juridical entity with a legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. 54 To hold a director or officer personally liable for corporate obligations, two requisites must occur: (1) it must be alleged in the complaint that the director or officer assented to patently unlawful acts of the corporation or that the officer was guilty of gross negligence or bad faith; and (2) there must be proof that the officer acted in bad faith. 55

In his Petition, Fano failed to allege Cariño's participation in directing the affairs of the corporation. The twin requirements of allegation and proof of bad faith, necessary to hold Cariño personally liable for the monetary awards to Fano, are lacking.

Consistent with the pronouncement of the Court in Nacar v. Gallery Frames, 56 interest at the rate of 6% per annum is hereby imposed on the total monetary award. In addition, since the reinstatement order of the LA is immediately executory pending appeal, interest for the accrued salaries shall be reckoned from December 27, 2017, or the date of the Decision of the LA.

WHEREFORE, premises considered, the Petition for Review on Certiorari is PARTLY GRANTED. The Decision dated January 15, 2020 of the Court of Appeals in CA-G.R. SP No. 157700 is AFFIRMED with MODIFICATION.

Respondent Severo V. Cariño is absolved from any personal liability to petitioner Cornelio Fagtanan Fano.

Respondent Kaizen Security Agency Corporation is ORDERED to pay petitioner Cornelio Fagtanan Fano the following:

(1) Proportionate 13th month pay for the year 2016 in the amount of P2,281.46;

(2) Accrued salaries computed from the respondents' receipt of the Decision dated December 27, 2017 of the Labor Arbiter until petitioner Cornelio Fagtanan Fano reaches the age of sixty (60) years old.

(3) Retirement benefits in accordance with Article 302 of the Labor Code of the Philippines; and

(4) Attorney's fees equivalent to ten percent (10%) of the total monetary award.

The total monetary award shall be subject to interest rate of six percent (6%) per annum from the finality of this Resolution until full payment.

The Labor Arbiter is hereby ORDERED to make a recomputation of the total monetary benefits awarded and due to petitioner in accordance with this Resolution.

SO ORDERED." cTDaEH

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

by:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 11-30.

2. Penned by Associate Justice Germano Francisco D. Legaspi, with the concurrence of Associate Justices Manuel M. Barrios and Walter S. Ong; id. at 39-46.

3.Id. at 48-49.

4. Penned by Commissioner Pablo C. Espiritu, Jr., with the concurrence of Presiding Commissioner Alex A. Lopez and Commissioner Cecilio Alejandro C. Villanueva; id. at 92-97.

5. Penned by Benedict G. Kato; id. at 236-240.

6.Id. at 93.

7.Id. at 149.

8.Id. at 154.

9.Id. at 157.

10.Id. at 93.

11.Id. at 107-108.

12.Id. at 110-119.

13.Id. at 135-141.

14.Id. at 155.

15.Id. at 157.

16.Id. at 154.

17.Id. at 135-141.

18.Id.

19.Supra note 5.

20.Rollo, pp. 237-239.

21.Id. at 239-240.

22.Id. at 240.

23.Id.

24.Id. at 243-256.

25.Supra note 4.

26.Rollo, pp. 96-97.

27.Id. at 96.

28.Id.

29.Id. at 99-100.

30.Id.

31.Id. at 60-85.

32.Supra note 2.

33.Rollo, p. 46.

34.Id. at 44.

35.Id.

36.Id.

37.Id.

38.Id. at 45-46.

39.Supra note 3.

40.Rollo, p. 23.

41.Id. at 23-24.

42.Id. at 26-27.

43.Id. at 289-298.

44.Id. at 291.

45.Id.

46.MZR Industries v. Colambot, 716 Phil. 617, 624 (2013).

47.Id. at 157.

48. Article 229 of the Labor Code, as amended by Section 12 of Republic Act No. 6715.

49. Section 3, Rule XI of the 2011 NLRC Rules of Procedure.

50.Islriz Trading/Lu v. Capada, 656 Phil. 9, 24 (2011).

51. Paragraph 1, Section 12, Rule XI of the 2011 NLRC Rules of Procedure, as renumbered by NLRC En Banc Resolution No. 11-12, Series of 2012.

52.Islriz Trading/Lu v. Capada, supra note 50 at 23.

53.Bergonio, Jr. v. South East Asian Airlines, 733 Phil. 347, 360-361 (2014).

54.The Coffee Bean and Tea Leaf Phils., Inc. v. Arenas, 755 Phil. 882, 891 (2015).

55.Heirs of Fuy v. International Exchange Bank, 703 Phil. 477, 486 (2013).

56. 716 Phil. 267 (2013).