CLOSURE OF BUSINESS
North Davao Mining done
Corp. v. NLRC
National Federation of Petitioner: Bona Fide Members of the NFL
labor v. NLRC Respondent: NLRC and Private respondents Charlie
Reith and Susie Galle Reith
Dimla
FACTS:
 Petitioners are bona fide members of the
National Federation of Labor (NFL), a
legitimate labor organization duly registered
with the Department of Labor and
Employment. They were employed by
private respondents Charlie Reith and Susie
Galle Reith, general manager and owner,
respectively, of the 354-hectare Patalon
Coconut Estate located at Patalon,
Zamboanga City.
 Patalon Coconut Estate was engaged in
growing agricultural products and in raising
livestock.
 In 1988, Congress enacted into law Republic
Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law
(CARL), which mandated the compulsory
acquisition of all covered agricultural lands
for distribution to qualified farmer
beneficiaries under the so-called
Comprehensive Agrarian Reform
Programme (CARP).
 TURNING POINT: As a result of this
acquisition, private respondents shut down
the operation of the Patalon Coconut Estate
and the employment of the petitioners was
severed on July 31, 1994. Petitioners did not
receive any separation pay.
 On August 1, 1994, the cooperative took
over the estate. A certain Abelardo
Sangadan informed respondents of such
takeover via a letter which was received by
ISSUE: Whether or not the employer is liable to pay separation pay to
its affected employees.
HELD: No. The petition is bereft of merit. Article 283 of the Labor Code
does not contemplate a situation where the closure of the business
establishment is forced upon the employer and ultimately for the
benefit of the employees.
 When the Patalon Coconut Estate was closed because a
large portion of the estate was acquired by DAR pursuant to
CARP, the ownership of that large portion of the estate was
precisely transferred to PEARA and ultimately to the petitioners
as members thereof and as agrarian lot beneficiaries. Hence,
Article 283 of the Labor Code is not applicable to the case at
bench.
Petitioners contend that they are entitled to separation pay citing
Article 283 of the Labor Code which reads:jgc:chanrobles.com.ph
"ARTICLE 283. Closure of establishment and reduction of personnel. — The employer
may also terminate the employment of any employee due to the installation of labor
saving devices, redundancy, retrenchment to prevent losses or the closing or cessation
of operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent losses and in
cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to
one (1) month pay or at least one- half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered as one (1)
whole year."cralaw virtua
 It is clear that Article 283 of the Labor Code applies in cases of
closures of establishment and reduction of personnel. The
peculiar circumstances in the case at bar, however, involves
neither the closure of an establishment nor a reduction of
personnel as contemplated under the aforesaid article.
 the respondents on July 26, 1994. Being
beneficiaries of the Patalon Coconut Estate
pursuant to the CARP, the petitioners
became part-owners of the land.
 On April 25, 1995, petitioners filed individual
complaints before the Regional Arbitration
Branch (RAB) of the National Labor Relations
Commission (NLRC) in Zamboanga City,
praying for their reinstatement with full
backwages on the ground that they were
illegally dismissed. The petitioners were
represented by their labor organization, the
NFL.
 RAB: Judgment is hereby rendered
dismissing complainants’ charge for illegal
dismissal for lack of merit, but ordering
respondents thru [sic] its owner-manager or
its duly authorized representative to pay
complainants’ separation pay in view of the
latter’s cessation of operations or forced
sale, and for 13th month differential pay.
 NLRC: Respondents are not guilty of illegally
dismissing complainants. Respondents’
cessation of operation was not due to a
unilateral action on their part resulting in the
cutting off of the employment relationship
between the parties. The severance of
employer-employee relationship between
the parties came about INVOLUNTARILY, as
a result of an act of the State. Consequently,
complainants are not entitled to any
separation pay
 As earlier stated, the Patalon Coconut Estate was closed
down because a large portion of the said estate was
acquired by the DAR pursuant to the CARP. Hence, the
closure of the Patalon Coconut Estate was not effected
voluntarily by private respondents who even filed a petition to
have said estate exempted from the coverage of RA 6657.
 Unfortunately, their petition was denied by the Department of
Agrarian Reform. Since the closure was due to the act of the
government to benefit the petitioners, as members of the
Patalon Estate Agrarian Reform Association, by making them
agrarian lot beneficiaries of said estate, the petitioners are not
entitled to separation pay.
 The termination of their employment was not caused by the
private respondents. The blame, if any, for the termination of
petitioners’ employment can even be laid upon the
petitioner-employees themselves inasmuch as they formed
themselves into a cooperative, PEARA, ultimately to take over,
as agrarian lot beneficiaries, of private respondents’ landed
estate pursuant to RA 6657.
 The resulting closure of the business establishment, Patalon
Coconut Estate, when it was placed under CARP, occurred
through no fault of the private respondents.
WHEREFORE, the petition is DISMISSED. The Resolutions of the National
Labor Relations Commission dated April 24, 1996 and August 29, 1996
are hereby AFFIRMED. No costs.

EXPRESSIONS OF GRATITUDE IN A RESIGNATION LETTER NEGATE FORCED RESIGNATION

Globe Telecom, Inc. Petitioner: GLOBE TELECOM, INC. (GLOBE) Delfin ISSUE: Whether or not Globe constructively dismissed Florendo
v. Florendo-Flores Lazaro Jr. was its President and Roberto Galang its
former Director-Regional Sales. HELD: YES. Constructive dismissal exists where there is cessation of
Dimla Respondent: Joan Florendo-Flores was the Senior work because "continued employment is rendered impossible,
Account Manager for Northern Luzon. unreasonable or unlikely, as an offer involving a demotion in rank and
a diminution in pay." All these are discernible in respondent's situation.
FACTS: She was singularly edged out of employment by the unbearable or
 Joan Florendo-Flores filed with the Regional undesirable treatment she received from her immediate superior
Arbitration Branch of the National Labor Cacholo M. Santos who discriminated against her without reason
 Relations Commission (NLRC) an amended
complaint for constructive dismissal against
GLOBE, Lazaro, Galang, and Cacholo M.
Santos, her immediate superior, Luzon Head-
Regional Sales.
 In her affidavit submitted as evidence
during the arbitration proceedings,
Florendo-Flores bared that Cacholo M.
Santos never accomplished and submitted
her performance evaluation report thereby
depriving her of:
o salary increases,
o bonuses and other incentives which
other employees of the same rank
had been receiving;
o reduced her to a house-to-house
selling agent (person-to-person sales
agent or direct sales agent) of
company products ("handyphone")
despite her rank as supervisor of
company dealers and agents;
o never supported her in the sales
programs and recommendations
she presented; and, withheld all her
other benefits, i.e.,
o gasoline allowance, per diems,
representation allowance, and car
maintenance, to her extreme pain
and humiliation.
 GLOBE and its co-petitioners claimed that
after receiving her salary in the second
week of May 1998 Florendo-Flores went
AWOL (Absent Without Leave) without
signifying through letter or any other means
that she was resigning from her position.
 They also stated that she was replaced only
when her absence became indefinite and
intolerable as the marketing operations in
Northern Luzon began to suffer;
o that during the pre-trial conference
it was learned that Florendo-Flores'
complaint rested on her alleged
personal and private disagreement
Although respondent continued to have the rank of a supervisor, her
functions were reduced to a mere house-to-house sales agent or
direct sales agent. This was tantamount to a demotion. She might not
have suffered any diminution in her basic salary but petitioners did
not dispute her allegation that she was deprived of all benefits due to
another of her rank and position, benefits which she apparently used
to receive.
It eludes belief that petitioners were entirely in the dark as the salary
increases were granted to all employees across-the-board but
respondent was the only one left receiving a P19,100.00 per month
basic salary while the rest received a basic salary of almost P35,000.00
per month.18 It is highly improbable that the exclusion of respondent
had escaped petitioners' notice. The absence of an evaluation report
from Santos should have been noted by petitioners and looked into
for proper action to have been made. If a salary increase was
unwarranted, then it should have been sufficiently explained by
petitioners to respondent.
It remains uncontroverted that respondent had inquired from
petitioners the reason why her other benefits had been withheld and
sought clarification for her undeserved treatment but petitioner
company and Santos remained mum.
Thus, contrary to the observation of the NLRC, the dispute was not a
mere private spat between respondent Florendo-Flores and her
immediate superior Santos. Granting that this was the case, it had
exceeded the periphery of simple personal affairs that overflowed
into the realm of respondent's employment.
DOCTRINE: The unauthorized absence of respondent should not lead
to the drastic conclusion that she had chosen to abandon her work.
To constitute abandonment, there must be: (a) failure to report for
work or absence without valid or justifiable reason; and, (b) a clear
intention, as manifested by some overt act, to sever the employer-
employee relationship,23 requisites that are negated by the
immediate filing by respondent Florendo-Flores of a complaint for
constructive dismissal against petitioners. A charge of abandonment
is totally inconsistent with the immediate filing of a complaint for
illegal dismissal; more so, when it includes a prayer for reinstatement.
 with her immediate superior
Cacholo M. Santos;
o that there was no official act from
GLOBE or from other officers of the
company, including respondents
Lazaro and Galang, which called for
Florendo-Flores' termination,
diminution in rank, seniority and
benefits, or would imply, even
remotely, any of the same; and,
o that Florendo-Flores filed the
complaint without going through the
grievance process of GLOBE's
Human Resources Department and
without informing its officers of her
problems with Cacholo M. Santos.
 LA: Labor Arbiter Monroe C. Tabingan
declared Florendo-Flores to have been
illegally dismissed and ordered petitioners
to reinstate her without loss of seniority rights
and full benefits; and to pay full back
wages, inclusive of basic pay, allowances
and bonuses as prayed for in the complaint
 However, the Labor Arbiter set aside the
claim of abandonment as the company
failed to send the requisite notice to
Florendo-Flores, hence, there was no
adherence to procedural due process.
o Although he recognized that the
problem brewed and eventually
boiled over due to the acts of
Cacholo M. Santos, GLOBE's former
Head of Regional Sales, Luzon Area,
the Labor Arbiter found the
company negligent in monitoring all
its key personnel, and thus assessed
against it exemplary damages at the
same time deleting actual and
moral damages.
 NLRC: Petitioners appealed the decision to
the NLRC which modified the judgment of
the Labor Arbiter. The NLRC ruled that
petitioners did not dismiss Florendo-Flores
The reduction of respondent's functions which were originally
supervisory in nature to a mere house-to-house sales agent or direct
sales agent constitutes a demotion in rank.
 For this act of illegal dismissal, she deserves no less than full
back wages starting from the time she had been illegally
dismissed until her actual reinstatement to her former position
without loss of seniority rights and other benefits - earned,
accrued and demandable. She shall continue to enjoy her
benefits, privileges and incentives including the use of the
company car and "handyphone."
In constructive dismissal, the employer has the burden of proving that
the transfer and demotion of an employee are for just and valid
grounds such as genuine business necessity.
 The employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee.
 It must not involve a demotion in rank or a diminution of salary
and other benefits.
 If the employer cannot overcome this burden of proof, the
employee's demotion shall be tantamount to unlawful
constructive dismissal.
RUNDOWN OF AWARDS
It should be noted that the award of back wages in the instant case is
justified upon the finding of illegal dismissal, and not under the
principle of "act of grace" for past services rendered. There are
occasions when the Court exercises liberality in granting financial
awards to employees, but even then they contemplate only the
award of separation pay and/or financial assistance, and only as a
measure of social justice when the circumstances of the case so
warrant, such as instances of valid dismissal for causes other than
serious misconduct or those reflecting on the employees' moral
character.
An award of actual and moral damages is not proper as the dismissal
is not shown to be attended by bad faith, or was oppressive to labor,
or done in a manner contrary to morals, good customs or public
policy.
Exemplary damages are likewise not proper as these are imposed
only if moral, temperate, liquidated or compensatory damages are
awarded.
 but that the latter actually abandoned her
employment because of a disagreement
with her immediate superior which she
failed to bring to the attention of GLOBE and
its officers, particularly petitioners Lazaro
and Galang.
o However, the NLRC declared that if
only as an act of grace for the
latter's past services with the
company, GLOBE, Lazaro and
Galang should be held accountable
for the back wages of Florendo-
Flores
 In their petition before the appellate
court, GLOBE, Lazaro and Galang averred
that the NLRC committed grave abuse of
discretion amounting to lack or excess of
jurisdiction when it ordered them to pay
Florendo-Flores full back wages and
damages despite its express finding that
they did not cause the dismissal of Florendo-
Flores as the latter had actually abandoned
her employment on account of her
personal differences with her superior.
 CA: the Court of Appeals found that
Florendo-Flores was constructively dismissed
and that payment of back wages and
damages was in order.
 On 21 June 2001 GLOBE, Lazaro and
Galang filed a motion for reconsideration
but the motion was denied in the appellate
court's Resolution of 19 September 2001.
CONSTRUCTIVE DISMISSAL
Verdadero v. Barney Petitioner:
Autolines Group of Respondent:
Companies Transport
FACTS:
Intia 
DISCREPANCY IN THE DECISION: (I’M NOT SURE IF SHE’LL ASK THIS, BUT
THIS IS A SMALL REMEDIAL LAW PART OF THE CASE )
Glaring however is the discrepancy between the text of the decision of the appellate
court which declares that respondent Florendo-Flores "was unlawfully constructively
dismissed" from employment, and its dispositive portion which declares that "the
assailed judgment is affirmed." It should be noted that the "assailed judgment" referred
to the NLRC Decision which declared that respondent was not illegally dismissed but
that she abandoned her employment.
Even in the award of back wages and exemplary damages the two (2) decisions are
at odds: The award of back wages made by the NLRC was a gratuity or an act of
grace from petitioners while the award made by the Court of Appeals could be
assumed to be anchored on its finding of illegal dismissal. How should the inconsistency
be reconciled?
Where there is conflict between the dispositive portion of the decision and the body
thereof, the dispositive portion controls irrespective of what appears in the body. While
the body of the decision, order or resolution might create some ambiguity in the
manner the court's reasoning preponderates, it is the dispositive portion thereof that
finally invests rights upon the parties, sets conditions for the exercise of those rights, and
imposes the corresponding duties or obligations.
Hence, for the Court of Appeals to have affirmed the assailed judgment is to adopt
and uphold the NLRC finding of abandonment and its award of full back wages to
respondent as an "act of grace" from petitioners.
WHEREFORE, the judgment appealed from is MODIFIED. The Decision of the
Court of Appeals of 25 May 2001 in CA-G.R. SP No. 60284 affirming the
Decision of the National Labor Relations Commission of 28 January 2000
declaring that respondent Joan Florendo-Flores had abandoned her work is
SET ASIDE. Petitioners Globe Telecom, Inc., Delfin Lazaro, Jr., and Roberto
Galang are ordered to pay respondent Joan Florendo-Flores full back wages
from the time she was constructively dismissed on 15 May 1998 until the date
of her effective reinstatement, without qualification or deduction.
Accordingly, petitioners are ordered to cause the immediate reinstatement
of respondent to her former position, without loss of seniority rights and other
benefits. No pronouncement as to costs.
ISSUE:
HELD: