15. Victory Liner, Inc. vs. Race VOL.
519, MARCH 28, 2007 359
G.R. No. 164820. March 28, 2007.*
VICTORY LINER, INC., petitioner, vs. PABLO M. RACE, respondent.
Labor Law; Dismissals; Prescription; In illegal dismissal cases, the employee concerned is given a period of four
years from the time of his dismissal within which to institute a complaint, which period shall commence to run only upon
the accrual of a cause of action of the worker.—In illegal dismissal cases, the employee concerned is
_______________
*
THIRD DIVISION.
357
VOL. 519, MARCH 28, 2007 357
Victory Liner, Inc. vs. Race
given a period of four years from the time of his dismissal within which to institute a complaint. This is based on
Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be
brought within four years. We explained the rationale in the case of Callanta v. Carnation Philippines, Inc., 145 SCRA
268 (1986), thus: [O]ne’s employment, profession, trade or calling is a “property right,” and the wrongful interference
therewith is an actionable wrong. The right is considered to be property within the protection of a constitutional guaranty
of due process of law. Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the
action instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated
“upon an injury to the rights of the plaintiff,” as contemplated under Art. 1146 of the New Civil Code, which must be
brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of a cause of
action of the worker. It is settled that in illegal dismissal cases, the cause of action accrues from the time the employment
of the worker was unjustly terminated. Thus, the four-year prescriptive period shall be counted and computed from the
date of the employee’s dismissal up to the date of the filing of complaint for unlawful termination of employment.
Same; Same; Abandonment; Requisites.—As to the alleged abandonment of work by the respondent on 10
November 1994, it should be emphasized that two factors must be present in order to constitute an abandonment: (a)
the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-
employee relationship. The second factor is the more determinative factor and is manifested by overt acts from which it
may be deduced that the employee has no more intention to work. The intent to discontinue the employment must be
shown by clear proof that it was deliberate and unjustified. Mere absence from work does not imply abandonment.
Same; Same; Same; Neglect of Duty; Abandonment of work, or the deliberate and unjustified refusal of an
employee to resume his employment, may be a just cause for the termination of employment under paragraph (b) of
Article 282 of the Labor Code since it is a form of neglect of duty.—The Labor Code mandates that before an employer
may legally dismiss an employee from the service, the requirement of substantial and procedural due process must be
358
358 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
complied with. Under the requirement of substantial due process, the grounds for termination of employment
must be based on just or authorized causes. The following are just causes for the termination of employment under
Article 282 of the Labor Code: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c)
Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of
his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. Abandonment of work,
or the deliberate and unjustified refusal of an employee to resume his employment, may be a just cause for the
termination of employment under paragraph (b) of Article 282 of the Labor Code since it is a form of neglect of duty.
Same; Same; Due Process; Procedural Requirements for Dismissal of Employees.—It has been established
that petitioners failed to comply with the requirement of substantial due process in terminating the employment of
respondent. We will now determine whether the petitioner had complied with the procedural aspect of a lawful dismissal.
In the termination of employment, the employer must (a) give the employee a written notice specifying the ground or
grounds of termination, giving to said employee reasonable opportunity within which to explain his side; (b) conduct a
hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires,
is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and
(c) give the employee a written notice of termination indicating that upon due consideration of all circumstances, grounds
have been established to justify his termination.
Same; Same; Common Carriers; A common carrier is obliged to exercise extra-ordinary diligence in transporting
its passengers safely, and to allow to drive one who in which there is serious doubt as to whether he is physically capable
of driving a bus would undoubtedly expose to danger the lives of the passengers and the property of the company.—
Even assuming that respondent is willing to be reinstated as petitioner’s bus driver, the reinstatement is still unwarranted.
There is a serious doubt as to whether the respondent is physically capable of driving a bus based on the following
undisputed
359
Victory Liner, Inc. vs. Race
facts: (1) respondent was operated on and confined twice in two different hospitals for a fractured left leg; (2)
steel plates were attached to his fractured leg; (3) each confinement lasted for a month; (4) after his discharge from the
second confinement, respondent was still limping heavily; (5) when respondent had reported for work to the petitioner in
January 1998, he was also limping; and (6) respondent does not have a medical certificate which guarantees that his
leg injury has already healed and that he is now physically capable of driving a bus. It should be stressed that petitioner
is a common carrier and, as such, is obliged to exercise extra-ordinary diligence in transporting its passengers safely.
To allow the respondent to drive the petitioner’s bus under such uncertain condition would, undoubtedly, expose to
danger the lives of the passengers and the property of the petitioner. This would place the petitioner in jeopardy of
violating its extra-ordinary diligence obligation and, thus, may be subjected to numerous complaints and court suits. It is
clear therefore that the reinstatement of respondent not only would be deleterious to the riding public but would also put
unreasonable burden on the business and interest of the petitioner. In this regard, it should be remembered that an
employer may not be compelled to continue to employ such persons whose continuance in the service will patently be
inimical to his interests. Based on the foregoing facts and circumstances, the reinstatement of the respondent is no
longer feasible. Thus, in lieu of reinstatement, payment to respondent of separation pay equivalent to one month pay for
every year of service is in order.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Songco, Kho and Lapesura Law Office for petitioner.
J. Oswald B. Lorenzo for respondent.
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari under Rule 45 of the Rules of Court,1 petitioner Victory Liner, Inc. seeks to set
_______________
1
Rollo, pp. 18-34.
360
360 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
aside the Decision of the Court of Appeals dated 26 April 2004 in CA-G.R. SP No. 74010,2 affirming the Decision and
Resolution of the National Labor Relations Commission (NLRC) dated 30 July 2002 and 30 August 2002, respectively,
in NLRC-CA-029327-01.3 In its Decision and Resolution, the NLRC vacated the Decision4 of Labor Arbiter Salimathar V.
Nambi (Labor Arbiter Nambi) dated 31 July 2001 in NLRC-NCR-00-09-08922-99 and ordered the petitioner to reinstate
respondent Pablo M. Race to his former position as a bus driver without loss of seniority rights and other privileges and
benefits with full backwages computed from the time of his illegal dismissal in January 1998 up to his actual
reinstatement.
Culled from the records are the following facts:
In June 1993, respondent was employed by the petitioner as a bus driver. As a requisite for his hiring, the
respondent deposited a cash bond in the amount of P10,000.00 to the petitioner. Respondent was assigned to the
Alaminos, Pangasinan-Cubao, Quezon City, route on the evening schedule.5
On the night of 24 August 1994, respondent drove his assigned bus from Alaminos, Pangasinan, destined to Cubao,
Quezon City. While traversing Moncada, Tarlac, the bus he was driving was bumped by a Dagupan-bound bus. As a
consequence thereof, respondent suffered a fractured left leg and was rushed to the Country Medical and Trauma Center
in Tarlac City where he was operated on and confined from 24 August 1994 up to 10 October 1994. One month after his
release from the said hospital, the respondent was confined again for further treatment of his fractured left leg at the
Specialist Group Hospital in Dagupan City. His confinement
_______________
2
Penned by Associate Justice Roberto A. Barrios with Associate Justices Sergio L. Pestano and Vicente Q. Roxas,
concurring; Rollo, pp. 39-48.
3
NLRC Records pp. 119-135 and 148-149.
4
Rollo, pp. 58-67.
5
Id., at p. 49.
361
VOL. 519, MARCH 28, 2007 361
Victory Liner, Inc. vs. Race
therein lasted a month. Petitioner shouldered the doctor’s professional fee and the operation, medication and hospital
expenses of the respondent in the aforestated hospitals.6
 In January 1998, the respondent, still limping heavily, went to the petitioner’s office to report for work. He was,
however, informed by the petitioner that he was considered resigned from his job. Respondent refused to accede and
insisted on having a dialogue with the petitioner’s officer named Yolanda Montes (Montes). During their meeting, Montes
told him that he was deemed to have resigned from his work and to accept a consideration of P50,000.00. Respondent
rejected the explanation and offer. Thereafter, before Christmas of 1998, he again conversed with Montes who reiterated
to him that he was regarded as resigned but raised the consideration therein to P100,000.00. Respondent rebuffed the
increased offer.7
On 30 June 1999, respondent, through his counsel, sent a letter to the petitioner demanding employment-related
money claims. There being no response from the petitioner, the respondent filed before the Labor Arbiter on 1 September
1999 a complaint for (1) unfair labor practice; (2) illegal dismissal; (3) underpayment of wages; (4) nonpayment of
overtime and holiday premium, service incentive leave pay, vacation and sick leave benefits, 13th month pay; (5)
excessive deduction of withholding tax and SSS premium; and (6) moral and exemplary damages and attorney’s fees.
This was docketed as NLRC-NCR-00-09-08922-99.8
In its Position Paper dated 27 March 2000, petitioner claimed that respondent was paid strictly on commission
basis; that respondent was a mere field personnel who performed his duties and functions outside the petitioner’s
premises and whose time of work cannot be determined with rea-
_______________
6
Id., at pp. 51-52.
7
Id., at p. 52.
8
Id., at pp. 53-57.
362
362 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
sonable certainty; that petitioner, therefore, was exempted from paying the respondent overtime compensation, night
shift differential, holiday pay and service incentive leave; that notwithstanding the specific exemptions provided for in the
Labor Code, the petitioner gave the respondent benefits better than those received by the other bus drivers of the
petitioner; that during his employment, respondent was charged with and found guilty of numerous offenses which were
sufficient bases for his dismissal; that the prescriptive period for the filing of an action or claim for reinstatement and
payment of labor standard benefits is four years from the time the cause of action accrued; and that the respondent’s
cause of action against petitioner had already prescribed because when the former instituted the aforesaid complaint on
1 September 1999, more than five years had already lapsed from the accrual of his cause of action on 24 August 1994. 9
In his Reply dated 30 June 2000, respondent explained that when he stated in his complaint that he was illegally
dismissed on 24 August 1994, what he meant and referred to was the date when he was no longer in a position to drive
since he was hospitalized from 24 August 1994 up to 10 October 1994. Respondent also admitted that it was only in
January 1998 that he informed the petitioner of his intent to report back for work. 10
On 31 July 2001, Labor Arbiter Nambi rendered his Decision dismissing the complaint of respondent for lack of
merit. He stated that the prescriptive period for filing an illegal dismissal case is four years from the dismissal of the
employee concerned. Since the respondent stated in his complaint that he was dismissed from work on 24 August 1994
and he filed the complaint only on 1 September 1999, Labor Arbiter Nambi concluded that respondent’s cause of action
against petitioner had already prescribed. He also noted that
_______________
9
NLRC Records, pp. 32-49.
10
Id., at pp. 70-72.
363
VOL. 519, MARCH 28, 2007 363
Victory Liner, Inc. vs. Race
respondent committed several labor-related offenses against the petitioner which may be considered as just causes for
the termination of his employment under Article 282 of the Labor Code.
Further, Labor Arbiter Nambi opined that respondent was not a regular employee but a mere field personnel and,
therefore, not entitled to service incentive leave, holiday pay, overtime pay and 13th month pay. He also ruled that
respondent failed to present evidence showing that the latter was entitled to the abovestated money claims. The fallo of
the said decision reads:
“WHEREFORE, considering that the causes of action in this case rooted from the purported illegal dismissal of Pablo M.
Race on August 24, 1994 when he figured in a vehicular accident, or on October 10, 1994 when he was released from
the hospital, and he filed his complaint only on September 1, 1999 after a lapse of more than five (5) years, the action
has long prescribed, aside from the fact that there is absolutely no evidence that respondent Victory Liner, Inc. is guilty
of unfair labor practice and unjust dismissal, in addition to its specific exemptions from the letters of Article 82 of the
Labor Code, as amended, the complaint and money claims are hereby DISMISSED by reason of prescription and for
utter lack of merit and total absence of legal and factual basis in support thereof.” 11
Respondent appealed to the NLRC. On 30 July 2002, the NLRC promulgated its Decision reversing the decision of Labor
Arbiter Nambi. It ordered the reinstatement of the respondent to his former position without loss of seniority rights and
other privileges and benefits with full back-wages computed from the time of his illegal dismissal in January 1998 up to
his actual reinstatement. It held that the respondent’s cause of action accrued, not on 24 August 1994, but in January
1998, when the respondent reported for work but was rejected by the petitioner. Thus, the respondent’s filing of complaint
on 1 September 1999 was well-within the four-year
_______________
11
Id., at p. 97.
364
364 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
prescriptive period. It also ruled that respondent was illegally dismissed by the petitioner as the latter failed to accord him
due process. It found that the petitioner did not give the respondent a written notice apprising him of acts or omissions
being complained of and a written notice informing him of the termination of his employment. In conclusion, the NLRC
stated:
“WHEREFORE, in view of all the foregoing, respondent-appellee’s company is hereby ordered to reinstate complainant-
appellant to his former position without loss of seniority rights and other privileges and benefits with full backwages
computed from the time of his illegal dismissal on (sic) January 1988 up to his actual reinstatement. Except for this
modification, the appealed decision is hereby AFFIRMED.”12
Petitioner filed a Motion for Reconsideration of the NLRC Decision alleging, among other things, that the award of
backwages to the respondent computed from January 1988 up to the promulgation of the NLRC Decision on 30 July
2002 was unlawful and unjust considering that respondent was employed only in June 1993. The NLRC, however, denied
the same for lack of merit in its Resolution dated 30 August 2002.
Petitioner assailed the NLRC Decision and Resolution, dated 30 July 2002 and 30 August 2002, respectively, via a
Petition for Certiorari to the Court of Appeals. On 26 April 2004, the Court of Appeals dismissed the Petition, and found
no grave abuse of discretion on the part of the NLRC. It ruled that the NLRC committed a simple typographical error
when it stated in the fallo that the backwages of respondent shall be computed from January 1988 instead of January
1998 because in the paragraph prior to the dispositive portion, the NLRC categorically declared that the full backwages
of the respondent was to be computed from January 1998. In addition, the NLRC has indicated in its Statement of Facts
that respondent was hired by the petitioner sometime in June
_______________
12
Id., at p. 130.
365
VOL. 519, MARCH 28, 2007 365
Victory Liner, Inc. vs. Race
1993. It also held that the respondent’s filing of complaint on 1 September 1999 was within the four-year prescriptive
period since the cause of action accrued when the respondent reported for work in January 1998 and was informed that
he was considered resigned. It ratiocinated that respondent did not abandon his work and, instead, continued to be an
employee of petitioner after he was discharged from the hospital, viz.:
“Race did not abandon his work and continued to be an employee of Victory Liner, and their contemporaneous conduct
show this. He has his pay slip covering the period of August 1-15, 1998 (p. 114, Record), he was consulting the company
physician who issued him receipts dated October 28, 1996 and July 21 1997 (p. 115, Record), and he wrote a letter
dated March 18, 1996 addressed to Gerarda Villa, Vice-President for Victory Liner, signifying his intention to be a
dispatcher or conductor due to his injured leg (p. 116, Record). Further, annexed to Victory Liner’s Consolidated
Supplemental Position Paper and Formal Offer of Evidence with Erratum is Exhibit “6-A-Race” (p. 56, Record) submitted
before the Labor Arbiter, where Race stated before the investigator that after his release from the hospital he reported
to Victory Liner twice a month. He also said that he filed for a sick leave which was approved for the maximum of 120
days. After his sick leave, he filed for disability leave, and this was also approved and ran until sometime in May 1997.” 13
It also found that the petitioner failed to comply with the requirements of due process in terminating the employment of
respondent. The decretal portion of the said decision reads:
“WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED.”14
Petitioner filed the instant petition on the following grounds:
_______________
13
Rollo, p. 45.
14
Id., at p. 47.
366
366 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED CONTRARY TO LAW AND JURISPRUDENCE WHEN
IT HELD IN THE ASSAILED DECISION THAT:
A.
THE CAUSE OF ACTION OF RESPONDENT FOR ILLEGAL DISMISSAL HAS NOT YET PRESCRIBED DESPITE
HAVING BEEN FILED AFTER FOUR (4) YEARS AND NINE (9) MONTHS FROM THE ACCRUAL OF THE ALLEGED
ACTIONABLE WRONG;
B.
RESPONDENT IS ENTITLED TO REINSTATEMENT WITH FULL BACKWAGES AND OTHER BENEFITS
CONSIDERING THAT THE TERMINATION OF HIS EMPLOYMENT BY PETITIONER WAS LEGAL AND JUSTIFIED. 15
Anent the first issue, petitioner insisted that respondent had already abandoned his work and ceased to be its employee
since November 1994; that the alleged “pay slip” for the period August 1-15, 1998 was not actually a pay slip but a mere
cash advance/monetary aid extended to the respondent as the large amount of P65,000.00 stated therein was clearly
inconsistent and disproportionate to the respondent’s low salary of P192.00 a day; that the petitioner merely
accommodated the respondent as its former employee when the latter consulted the petitioner’s physician on 28 October
1996 and 21 July 1997; that the respondent’s letter dated 18 March 1996 to the petitioner’s Vice-President Gerarda Villa
was only an application for the position of dispatcher or conductor and that such application was not granted; and that
the foregoing circumstances cannot be considered as an indication of employer-employee relationship between the
petitioner and respondent.16
Moreover, petitioner asserted that although the respondent reported for work twice a month after he was discharged
from
_______________
15
Id., at p. 25.
16
Id., at pp. 25-27.
367
VOL. 519, MARCH 28, 2007 367
Victory Liner, Inc. vs. Race
the hospital, it does not imply that the respondent was still considered as an employee at that time by the petitioner; that
it allowed the respondent to have a 120-day sick leave because the latter was a former employee; and that it granted
disability leave to the respondent since the latter was a for-mer employee and that respondent’s application for disability
leave implied an admission on the part of the respondent that he was no longer fit to work as a bus driver.17
Petitioner also asseverated that, based on the four-fold tests in determining the employer-employee relationship
which includes the payment of wages and power to control the conduct of the employees, the respondent was no longer
its employee upon the latter’s discharge from the hospital in November 1994 because at such time, the respondent was
no longer fit to work as a bus driver and respondent did not render services to the petitioner. Thus, petitioner reasoned
that it had no more power to control the conduct of, and it no longer paid any wages to, the respondent.18
Petitioner also argued that the cause of action of respondent had accrued on 10 November 1994; that from 10
November 1994 up to November 1998, the respondent did not render any services to nor filed a case or action against
the petitioner; that the respondent’s filing of a complaint against petitioner on 1 September 1999 was clearly beyond the
four-year prescriptive period allowed by law; that if the reckoning period of the accrual of a cause of action would be the
time when the written demand was made by the respondent on the petitioner, then the four-year prescriptive period
would be interminable as it could be extended to one or more years; that this is not the spirit or intent of the law; that
otherwise there is no more need to provide the four-year prescriptive period as any complainant may simply allow the
lapse of four years and file the action thereafter and that it would be con-
_______________
17
Id., at pp. 27-28.
18
Id., at p. 28.
368
368 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
sidered as a compliance by simply making a purported demand for reinstatement after more than four years. 19
These contentions are devoid of merit.
It should be emphasized at the outset that as a rule, this Court is not a trier of facts and this applies with greater
force in labor cases. Hence, factual findings of quasi-judicial bodies like the NLRC, particularly when they coincide with
those of the Labor Arbiter and if supported by substantial evidence, are accorded respect and even finality by this Court.
But where the findings of the NLRC and the Labor Arbiter are contradictory, as in the present case, this Court may delve
into the records and examine for itself the questioned findings.20
In illegal dismissal cases, the employee concerned is given a period of four years from the time of his dismissal
within which to institute a complaint. This is based on Article 1146 of the New Civil Code which states that actions based
upon an injury to the rights of the plaintiff must be brought within four years. We explained the rationale in the case
of Callanta v. Carnation Philippines, Inc.,21 thus:
“[O]ne’s employment, profession, trade or calling is a “property right,” and the wrongful interference therewith is an
actionable wrong. The right is considered to be property within the protection of a constitutional guaranty of due process
of law. Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted
to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated “upon an injury
to the rights of the plaintiff,” as contemplated under Art. 1146 of the New Civil Code, which must be brought within four
years.”
_______________
19
Id., at pp. 28-29.
20
Tres Reyes v. Maxim’s Tea House, 446 Phil. 388, 401-402; 398 SCRA 288, 298 (2003).
21
229 Phil. 279, 288-289; 145 SCRA 268, 278-279 (1986).
369
VOL. 519, MARCH 28, 2007 369
Victory Liner, Inc. vs. Race
The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. It is
settled that in illegal dismissal cases, the cause of action accrues from the time the employment of the worker was
unjustly terminated.22 Thus, the four-year prescriptive period shall be counted and computed from the date of the
employee’s dismissal up to the date of the filing of complaint for unlawful termination of employment. 23
Proceeding therefrom, we shall now discuss and determine when the respondent’s cause of action accrued in order
to ascertain whether the same had already prescribed.
It is error to conclude that the employment of the respondent was unjustly terminated on 10 November 1994
because he was, at that time, still confined at the Specialist Group Hospital, Dagupan City, for further treatment of his
fractured left leg. He must be considered as merely on sick leave at such time. Likewise, the respondent cannot also be
deemed as illegally dismissed from work upon his release from the said hospital in December 1994 up to December
1997 since the records show that the respondent still reported for work to the petitioner and was granted sick and
disability leave by the petitioner during the same period.24
The respondent must be considered as unjustly terminated from work in January 1998 since this was the first time
he was informed by the petitioner that he was deemed resigned from his work. During that same occasion, the petitioner,
in fact, tried to convince the respondent to accept an amount of P50,000.00 as a consolation for his dismissal but the
latter rejected it.25 Thus, it was only at this time that the respondent’s cause of action accrued. Consequently, the
respondent’s
_______________
22
Ramos v. Our Lady of Peace School, 218 Phil. 708, 712; 133 SCRA 741, 745 (1984).
23
Baliwag Transit, Inc. v. Ople, G.R. No. 57642, 16 March 1989, 171 SCRA 250, 259.
24
NLRC Records, pp. 55-57.
25
Id., at p. 52.
370
370 SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
filing of complaint for illegal dismissal on 1 September 1999 was well within the four-year prescriptive period.
It is also significant to note that from 10 November 1994 up to December 1997, the petitioner never formally
informed the respondent of the fact of his dismissal either through a written notice or hearing. Indeed, it cannot be
gainfully said that respondent was unlawfully dismissed on 10 November 1994 and that the cause of action accrued on
that date.
As to the alleged abandonment of work by the respondent on 10 November 1994, it should be emphasized that
two factors must be present in order to constitute an abandonment: (a) the failure to report for work or absence without
valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship. The second factor is the
more determinative factor and is manifested by overt acts from which it may be deduced that the employee has no more
intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and
unjustified. Mere absence from work does not imply abandonment.26
It is apparent that respondent did not abandon his work. His absence from work for a long period of time was
obviously due to the fact that he was still recuperating from two operations on his fractured leg. Petitioner knew this very
well. In fact, petitioner shouldered the respondent’s medication and hospital expenses during the latter’s confinement
and operation in two hospitals.27 Moreover, when the respondent was able to walk, although limping heavily, he still
reported for work to the petitioner and was granted sick and disability leave.28 Clearly then, respondent did not abandon
his job on 10 November 1994.
_______________ with. Under the requirement of substantial due process, the grounds for termination of employment must be based on
just or authorized causes. The following are just causes for the termination of employment under Article 282 of the Labor
26 Code:
Agabon v. National Labor Relations Commission, G.R. No. 158693, 17 November 2004, 442 SCRA 573, 605-
606.
27
Baliwag Transit, Inc. v. National Labor Relations Commission, supra note 23. 1. “(a)Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
28
Ramos v. Our Lady of Peace School, supra note 22. representative in connection with his work;
371 2. (b)Gross and habitual neglect by the employee of his duties;
3. (c)Fraud or willful breach by the employee of the trust re-posed in him by his employer or duly authorized
VOL. 519, MARCH 28, 2007 371 representative;
4. (d)Commission of a crime or offense by the employee against the person of his employer or any immediate
Victory Liner, Inc. vs. Race member of his family or his duly authorized representative; and
In the same vein, the employer-employee relationship between the petitioner and respondent cannot be deemed to have 5. (e)Other causes analogous to the foregoing.”
been extinguished on 10 November 1994. It should be borne in mind that there are four tests in determining the existence
of employer-employee relationship: (1) the manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. The so-called Abandonment of work, or the deliberate and unjustified refusal of an employee to resume his employment, may be a just
“control test” is commonly regarded as the most crucial and determinative indicator of the presence or absence of an cause for the termination of employment under paragraph (b) of Article 282 of the Labor Code since it is a form of neglect
employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for of duty.
whom the services are performed reserves the right to control not only the end achieved, but also the manner and means As earlier discussed, the petitioner insisted that respondent had already abandoned his work on 10 November 1994
to be used in reaching that end.29 and, thus, the latter’s employment was deemed terminated as of such date. We, however, found that there was no
Applying the aforecited tests, the employer-employee relationship between petitioner and respondent continued abandonment of work on the part of the respondent. Petitioner also alleged that respondent was guilty of insubordination
even after the latter’s discharge from the hospital in December 1994 up to 1997. Respondent had reported for work to as well as gross and habitual neglect in the performance of his duties for reckless driving and for being involved in several
the petitioner after his release from the hospital in December 1994. Subsequently, respondent was also granted a 120- vehicular accidents.34 The records, nonetheless, failed to show that the said charges were proven and that respondent
day sick leave and disability leave by the petitioner.30 Respondent also availed himself of the services of the petitioner’s was duly informed and heard with regard to the accusations. Since the petitioner, as an employer, is burdened to prove
physician on two occasions after his release from the hospital in December 1994. 31 just cause for terminating the employment of respondent with clear and
On the other hand, the petitioner failed to establish the fact that the respondent ceased to be its employee on 10
November 1994. Except for its flimsy reason that the sick leave, disability leave and physician consultations were given
to the respondent as mere accommodations for a former employee, the petitioner did not present any evidence showing _______________
that its
34
NLRC Records, pp. 32-49.
_______________ 374

374 SUPREME COURT REPORTS ANNOTATED

29
Abante, Jr. v. Lamadrid Bearing and Parts Corp., G.R. No. 159890, 28 May 2004, 430 SCRA 368, 379.
30
Agabon v. National Labor Relations Commission, supra note 26. Victory Liner, Inc. vs. Race
31
NLRC Records, p. 115. convincing evidence, and that petitioner failed to discharge this burden, we hold that respondent was dismissed without
372 just cause by the petitioner.
It has been established that petitioners failed to comply with the requirement of substantial due process in
372 SUPREME COURT REPORTS ANNOTATED terminating the employment of respondent. We will now determine whether the petitioner had complied with the
procedural aspect of a lawful dismissal.
Victory Liner, Inc. vs. Race In the termination of employment, the employer must (a) give the employee a written notice specifying the ground
employer-employee relationship with the respondent was extinguished on 10 November 1994. or grounds of termination, giving to said employee reasonable opportunity within which to explain his side; (b) conduct a
Evidently, these circumstances clearly manifest that petitioner exercised control over the respondent and that the hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires,
latter was still under the employment of the petitioner even after December 1994. is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and
Given the foregoing considerations, petitioner’s assertion that the respondent’s cause of action accrued on 10 (c) give the employee a written notice of termination indicating that upon due consideration of all circumstances, grounds
November 1994 must fail. have been established to justify his termination.35
Apropos the second issue, petitioner contended that the order for the reinstatement of the respondent as bus driver Petitioner miserably failed to comply with the foregoing requirements. There was nothing in the records which
was unconstitutional for being tantamount to involuntary servitude; that when the respondent filed his complaint for illegal evinces that petitioner had sent a written notice to the respondent informing him of the ground or grounds of his
dismissal, the latter no longer desired to be reinstated to his former position as bus driver; that the respondent’s termination or the reason why he was deemed resigned. It does not also appear that the petitioner held a hearing or
unwillingness to be reinstated as bus driver was also evident from his letter to the petitioner where the respondent conference where the respondent was given the opportunity to answer the charges of abandonment, insubordination
manifested his intention to be hired as a dispatcher or conductor; and that to reinstate the respondent as bus driver and habitual neglect of duty against him. Neither did the petitioner send a written notice to the respondent informing the
despite the fact that it is against his will is involuntary servitude.32 latter that his service is terminated after considering all the circumstances.
Petitioner also argued that the order for the reinstatement was contrary to law; that as a common carrier, it is obliged In view of the fact that the petitioner neglected to observe the substantial and procedural due process in terminating
under the law to observe extra-ordinary diligence in the conduct of its business; that it will violate such obligation if it will the
reinstate the respondent as bus driver; that to allow the respondent to drive a bus, despite the fact that the latter sustained
a fractured left leg and was still limping, would imperil the lives of the passengers and the property of the petitioner; and
that the award of backwages to the respondent was unjustified.33 _______________
The Labor Code mandates that before an employer may legally dismiss an employee from the service, the
requirement of substantial and procedural due process must be complied 35
Id., at p. 607; Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code.
375
_______________
VOL. 519, MARCH 28, 2007 375
32
Rollo, pp. 31-32. Victory Liner, Inc. vs. Race
33
Id., at pp. 32-34. employment of respondent, we rule that the latter was illegally dismissed from work by the petitioner.
373 Consequently, the respondent is entitled to reinstatement without loss of seniority rights, full backwages, inclusive
of allowances, and other benefits or their monetary equivalent computed from the time his compensation was withheld
VOL. 519, MARCH 28, 2007 373 from him up to the time of his actual reinstatement as provided for under Article 279 of the Labor Code.
It appears, however, that respondent was not seeking reinstatement. In his complaint for illegal dismissal against
Victory Liner, Inc. vs. Race petitioner, respondent stated:
 RELIEF

Complainant/s pray/s for the following:

Reinstatement: No More.36
Respondent also sent to the petitioner a letter applying for the position of a dispatcher or conductor. 37 In the said letter,
the respondent explained that since he cannot drive anymore due to his leg injury, he was willing to be hired as a
dispatcher or conductor. The abovestated facts obviously show that respondent was unwilling to be reinstated as a bus
driver.
Even assuming that respondent is willing to be reinstated as petitioner’s bus driver, the reinstatement is still
unwarranted. There is a serious doubt as to whether the respondent is physically capable of driving a bus based on the
following undisputed facts: (1) respondent was operated on and confined twice in two different hospitals for a fractured
left leg; (2) steel plates were attached to his fractured leg;38 (3) each confinement lasted for a month; (4) after his
discharge from the second confinement, respondent was still limping heavily;

_______________

36
Id., at p. 3.
37
Id., at p. 116.
38
Id., at p. 55.
376

376 SUPREME COURT REPORTS ANNOTATED

Victory Liner, Inc. vs. Race

(5) when respondent had reported for work to the petitioner in January 1998, he was also limping;39 and (6) respondent
does not have a medical certificate which guarantees that his leg injury has already healed and that he is now physically
capable of driving a bus.
It should be stressed that petitioner is a common carrier and, as such, is obliged to exercise extra-ordinary diligence
in transporting its passengers safely.40 To allow the respondent to drive the petitioner’s bus under such uncertain
condition would, undoubtedly, expose to danger the lives of the passengers and the property of the petitioner. This would
place the petitioner in jeopardy of violating its extra-ordinary diligence obligation and, thus, may be subjected to numerous
complaints and court suits. It is clear therefore that the reinstatement of respondent not only would be deleterious to the
riding public but would also put unreasonable burden on the business and interest of the petitioner. In this regard, it
should be remembered that an employer may not be compelled to continue to employ such persons whose continuance
in the service will patently be inimical to his interests.41
Based on the foregoing facts and circumstances, the reinstatement of the respondent is no longer feasible. Thus,
in lieu of reinstatement, payment to respondent of separation pay equivalent to one month pay for every year of service
is in order.42
WHEREFORE, the petition is PARTLY GRANTED insofar as it prays for the non-reinstatement of respondent. The
Deci-

_______________

39
Rollo, p. 71.
40
New Civil Code, Article 1733: ART. 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case. (Italics supplied.)
41
NLRC Records, p. 607.
42
Electruck Asia v. Meris, G.R. No. 147031, 27 July 2004, 435 SCRA 310, 321-322.
377

VOL. 519, MARCH 28, 2007 377

Victory Liner, Inc. vs. Race

sion of the Court of Appeals dated 26 April 2004 in CA-G.R. SP No. 74010, is hereby AFFIRMED with the following
MODIFICATIONS: Petitioner is ordered to pay the respondent, in lieu of reinstatement, separation pay of ONE (1)
MONTH PAY for every year of service, and full backwages inclusive of allowances and other benefits or their monetary
equivalent from 1 January 1998 up to the finality of this Decision. No costs.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez, Callejo, Sr. and Nachura, JJ., concur.
Petition partly granted, judgment affirmed with modifications.
Notes.—Abandonment is the deliberate and unjustified refusal of an employee to resume his employment—it is a
form of neglect of duty, hence a just cause for termination of employment by an employer. (Nueva Ecija Electric
Cooperative [NEECO] II vs. National Labor Relations Commission, 461 SCRA 169 [2005])
The employer has the burden of proof to show the employee’s deliberate and unjustified refusal to resume his
employment without any intention of returning. (Northwest Tourism Corp. vs. Court of Appeals, 461 SCRA 298 [2005])

——o0o——