Luna vs. Allado Construction, May 30, 2011

Rodolfo Luna (Luna) filed a complaint before the Executive Labor Arbiter alleging that he was an employee of Allado Construction Co., having been a part of Allado Construction Co. construction pool of personnel. He had continuously rendered services as a warehouseman and a timekeeper in every construction project undertaken by Allado Construction Co. on November 26, 2001, he was told by one Marilou Matilano, personnel manager of Allado Construction Co., to sign several sets of "Contract of Project Employment". He refused to sign the said contracts. Because of his refusal, he was not given a reassignment or any other work. These incidents prompted him to file the complaint.
 
Allado Construction Co., on the other hand, alleged that on November 29, 2001, Luna applied for a leave of absence until December 6, 2001, which was granted. Upon expiration of his leave, Luna was advised to report to the company’s project in Kablacan, Sarangani Province. However, he refused to report to his new assignment and claimed instead that he had been dismissed illegally.
 
Finding that Luna should be deemed to have resigned, the Labor Arbiter dismissed Luna’s complaint for illegal dismissal against Allado Construction Co., but ordered the latter to pay the former the amount of ₱18,000.00 by way of financial assistance. On appeal with the National Labor Relations Commission (NLRC), Allado Construction Co., purely for the purpose of questioning the validity of the grant of financial assistance made by the Labor Arbiter.
 
Relying on jurisprudence, the Court of Appeals held that it was grave abuse of discretion for the NLRC to rule on the issue of illegal dismissal when the only issue raised to it on appeal was the propriety of the award of financial assistance. The Court of Appeals further ruled that financial assistance may not be awarded in cases of voluntary resignation.
 
Issue:
Whether or not the awarding of financial assistance is proper.

​Held:
Yes. Assuming without admitting that there was no illegal dismissal, the award of financial assistance was in accordance with existing jurisprudence pursuant to the principle of social justice. Eastern Shipping Lines, Inc v. Sedan bears certain parallelisms with the present controversy. In Eastern, the employer likewise questioned the grant of financial assistance on the ground that the employee’s refusal to report back to work, despite being duly notified of the need for his service, is tantamount to voluntary resignation. In that case, however, we ruled:
 
We are not unmindful of the rule that financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Neither are we unmindful of this Court's pronouncements in Arc-Men Food Industries Corporation v. NLRC, and Lemery Savings and Loan Bank v. NLRC, where the Court ruled that when there is no dismissal to speak of, an award of financial assistance is not in order.
 
But we must stress that this Court did allow, in several instances, the grant of financial assistance. In the words of Justice Sabino de Leon, Jr., now deceased, financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. The instant case equally calls for balancing the interests of the employer with those of the worker, if only to approximate what Justice Laurel calls justice in its secular sense.
 
There appears to be no reason why Luna, who has served Allado Construction Co. for more than eight years without committing any infraction, cannot be extended the reasonable financial assistance of ₱18,000.00 as awarded by the Labor Arbiter on equity considerations.
In some cases where there is neither a dismissal nor abandonment, we have previously held that separation pay may be awarded under appropriate circumstances.