In a significant labor law decision, the Supreme Court ruled that an employer’s failure to specifically deny allegations of dismissal can be construed as an admission, leading to a finding of illegal termination. This case underscores the importance of employers directly addressing claims of dismissal in labor disputes, as silence can be interpreted as acceptance of the employee’s version of events. The ruling emphasizes that employers bear the burden of proving the validity of a dismissal, but that burden is only triggered once the fact of dismissal is established or, as in this case, admitted through a lack of specific denial.

From Sizer to Silence: Did Sto. Niño Long-Zeny Consignee Illegally Terminate Noel Guinto?

The case of Noel G. Guinto v. Sto. Niño Long-Zeny Consignee, Angelo Salangsang, and Zenaida Salangsang (G.R. No. 250987, March 29, 2022) revolves around Noel Guinto’s claim of illegal dismissal from his job as a sizer at Sto. Niño Long-Zeny Consignee. Guinto alleged that he was verbally told to leave his job and received a follow-up text message confirming his termination. The central legal question is whether the employer’s failure to specifically deny these allegations constitutes an admission of dismissal, thereby shifting the burden to the employer to prove just cause.

Guinto filed a complaint for illegal dismissal, claiming he was a regular employee since 1997. He presented a certification from the owner, Angelo Salangsang, stating his employment as a warehouseman from August 1997 to the present. Guinto also submitted affidavits from coworkers and payslips to support his claim. On the other hand, the respondents denied any employer-employee relationship, arguing Guinto was a porter at the Orani Fishport and not their employee. They presented affidavits from other porters, including Guinto’s relatives, attesting that he was not an employee but a porter serving various fishpond owners.

The Labor Arbiter (LA) initially ruled in favor of Guinto, finding him to be an employee based on the certification issued by Angelo Salangsang. The LA noted that the respondents did not present other defense besides their denial that the petitioner was not their employee. The National Labor Relations Commission (NLRC), however, reversed the LA’s finding of illegal dismissal, stating that Guinto failed to provide corroborating evidence of his dismissal. Despite acknowledging Guinto’s status as a regular employee, the NLRC ordered his reinstatement without backwages, deleted the award of separation and 13th-month pay, but ordered payment of service incentive leave pay and attorney’s fees. The Court of Appeals (CA) affirmed the NLRC’s decision, leading Guinto to elevate the case to the Supreme Court.

The Supreme Court analyzed whether the CA erred in not finding grave abuse of discretion on the part of the NLRC. The Court emphasized that while it generally defers to the factual findings of labor tribunals, a review is warranted when conflicting findings exist. It reiterated that in illegal dismissal cases, the employer bears the burden of proving the validity of the dismissal, but the employee must first prove the fact of dismissal if it is disputed. The Court then pointed to Section 11, Rule 8 of the Rules of Court, which states that material averments in the complaint, other than those related to unliquidated damages, are deemed admitted if not specifically denied.

The Court then referenced the case of Fernandez v. Kalookan Slaughterhouse Incorporated to support the argument of admission by silence. The Fernandez case reiterates the idea that failing to deny that an employee was informed that he could no longer report to work is deemed an admission by the employer of illegal dismissal. In Guinto’s case, the Supreme Court found that respondents did not specifically deny Guinto’s allegations that Zenaida told him to leave and a representative sent a text message confirming he should no longer report to work. Because the respondents did not specifically deny that Zenaida and her representative, on separate occasions, told petitioner to leave and to stop going to work, the Court deemed this a tacit admission of dismissal.

Building on this principle, the Court highlighted that the NLRC had affirmed Guinto’s status as a regular employee, a ruling not challenged by the respondents before the CA. Therefore, the Court concluded that Guinto, being a regular employee, had been illegally dismissed due to the employer’s deemed admission and the absence of a just or valid cause for dismissal. Consequently, the Court ruled Guinto was entitled to full backwages under Article 294 of the Labor Code.

Concerning separation pay, the Court recognized that while reinstatement is the general rule, strained relations between the parties could warrant separation pay instead. However, the Court emphasized that the existence of strained relations must be proven, and Guinto failed to do so. Thus, his prayer for separation pay in lieu of reinstatement was denied. As for other monetary claims, the Court affirmed Guinto’s entitlement to service incentive leave pay, as the NLRC’s ruling on this matter had attained finality.

Regarding the 13th-month pay, the Court upheld the CA’s decision that the NLRC did not gravely abuse its discretion in denying this claim. Under Section 3(e) of the Rules and Regulations Implementing PD 851, those paid on a purely commission basis are exempt from 13th-month pay. The Supreme Court emphasized that a litigant cannot change a theory midstream, therefore, Guinto could not claim that he was paid on a piece-rate basis, entitling him to 13th-month pay, as he initially stated in his Complaint that he was paid on a commission basis.

Finally, the Supreme Court addressed the liability of the respondents. It determined that as the Consignee is a sole proprietorship owned by Angelo Salangsang, he is liable for the monetary awards. Furthermore, based on respondents’ own averments, Zenaida Salangsang was found solidarity liable with Angelo due to her role as a co-owner of the business. The Court also decreed that the monetary awards would accrue legal interest at 6% per annum from the finality of the decision until full satisfaction.

FAQs

What was the key issue in this case?	The key issue was whether the employer’s failure to specifically deny allegations of dismissal constitutes an admission, leading to a finding of illegal termination. This turned on the application of procedural rules regarding the denial of material averments in a complaint.
What did the Supreme Court rule regarding the employer’s silence?	The Supreme Court ruled that the employer’s failure to specifically deny the employee’s allegations of dismissal was deemed an admission of the fact of dismissal. This shifted the burden to the employer to prove just cause for the termination.
What is the significance of Section 11, Rule 8 of the Rules of Court in this case?	Section 11, Rule 8 of the Rules of Court states that material averments in a complaint are deemed admitted when not specifically denied. The Supreme Court applied this rule to the allegations of dismissal, finding that the employer’s silence constituted an admission.
Was the employee entitled to separation pay?	No, the employee was not entitled to separation pay. The Court found that while strained relations could justify separation pay in lieu of reinstatement, the employee failed to prove the existence of such strained relations.
What monetary awards was the employee entitled to?	The employee was entitled to full backwages from the time of illegal dismissal until the finality of the decision and service incentive leave pay. Additionally, the Court awarded attorney’s fees equivalent to 10% of the total amount due to the employee.
Why was the employee not awarded 13th-month pay?	The employee was not awarded 13th-month pay because he initially claimed he was paid on a commission basis. Under Presidential Decree No. 851, employees paid on a purely commission basis are exempt from receiving 13th-month pay.
Who was held liable for the monetary awards?	Angelo Salangsang, as the owner of the sole proprietorship Sto. Niño Long-Zeny Consignee, was held liable for the monetary awards. Zenaida Salangsang was also held solidarity liable due to her role as a co-owner of the business.
What interest rate applies to the monetary awards?	The monetary awards accrue legal interest at the rate of 6% per annum from the finality of the decision until fully paid. This serves as compensatory interest arising from the final judgment.

The Supreme Court’s decision in Guinto v. Sto. Niño Long-Zeny Consignee serves as a reminder to employers to address allegations of dismissal directly and specifically in labor disputes. It underscores the principle that silence can be interpreted as an admission, shifting the burden to the employer to justify the termination. This ruling reinforces the protection afforded to employees under the Labor Code and emphasizes the importance of due process in employment termination.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NOEL G. GUINTO VS. STO. NIÑO LONG-ZENY CONSIGNEE, G.R. No. 250987, March 29, 2022