The Supreme Court granted the petition of Nino Rio Gabrillo and ruled that he was illegally dismissed by Tri-J Marketing, Inc. The Court reversed and set aside the decisions of the Court of Appeals and ordered the company to pay him backwages, separation pay in lieu of reinstatement, moral and exemplary damages, and attorney's fees.
The Case
Tri-J Marketing, Inc. (Tri-J) is a joint venture corporation owned and managed by its founder, Angel Guadalquiver (Guadalquiver), and his children. It is engaged in vehicle repair services and the sale of automotive accessories through seven branches in Cebu City, employing approximately 4,000 workers.
Gabrillo had been employed by Tri-J since 1997. During his more than 20 years of service, he received several loyalty and service awards and eventually became team leader of the tire recapping section. His duties included inspecting tires, removing worn-out treads from used tires (moldblows), and bonding fresh layers of rubber, including camelbacks, onto existing tire casings to produce recapped tires.
An audit later revealed alleged discrepancies in the inventory of camelback materials. On January 4, 2019, Gabrillo was served with a Notice to Explain concerning discrepancies in the measurements and weight of the camelbacks, and he submitted his written explanation.
According to Gabrillo, management began pressuring him to resign under threat of criminal prosecution for alleged losses amounting to approximately PHP 400,000.00. He said Guadalquiver accused him of selling the materials to customers, which he denied, noting the premises were monitored by CCTV cameras and the removal of company property required gate passes. He was allegedly presented with a prepared resignation letter and told criminal charges would be filed should he refuse.
Management initially offered him PHP 148,000.00 as separation pay, later reduced to PHP 30,000.00 as financial assistance, then a final offer of PHP 50,000.00. Gabrillo consistently denied the accusations and refused to resign. He was placed under preventive suspension. When he reported for work on February 11, 2019, he claimed he was no longer allowed to enter the workplace and was informed he had been dismissed. He then filed a complaint for illegal dismissal.
For its part, Tri-J denied having dismissed Gabrillo, maintaining that the inventory discrepancies merely prompted an administrative investigation during which he was afforded notice and an opportunity to explain.
The Issue
The Court addressed the conflicting factual findings of the labor arbiter, the National Labor Relations Commission (NLRC), and the Court of Appeals on the issue of constructive dismissal, which warranted a review of the factual records.
The Ruling
The Court found that Gabrillo was illegally dismissed. In its disposition, it held: "FOR THESE REASONS, the Petition for Review on Certiorari is GRANTED. The Decision dated February 29, 2024 and the Resolution dated February 3, 2025 of the Court of Appeals in CA-G.R. SP No. 14211 are REVERSED and SET ASIDE."
Tri-J Marketing, Inc. was ordered to pay Gabrillo full backwages computed from his constructive dismissal on February 11, 2019 until finality; separation pay in lieu of reinstatement equivalent to one month's salary for every year of service, with a fraction of at least six months considered as one whole year; moral damages of PHP 30,000.00; exemplary damages of PHP 30,000.00; and attorney's fees equivalent to 10% of the total monetary award. The monetary awards earn legal interest at 6% per annum from finality until full payment, and the case was remanded to the Labor Arbitration Branch for computation.
By the Numbers
- Employed since 1997; more than 20 years of service
- Notice to Explain served January 4, 2019
- Constructive dismissal date: February 11, 2019
- Alleged losses: approximately PHP 400,000.00
- Separation pay offers: PHP 148,000.00, PHP 30,000.00, PHP 50,000.00
- Moral damages: PHP 30,000.00
- Exemplary damages: PHP 30,000.00
- Attorney's fees: 10% of total monetary award
- Legal interest: 6% per annum from finality
- CA Decision dated February 29, 2024; Resolution dated February 3, 2025
The Court's Reasoning
The Court explained that under Article 294 of the Labor Code, an employee who is unjustly dismissed is entitled to reinstatement without loss of seniority rights and other privileges, and to full backwages. However, reinstatement was no longer feasible because the employment relationship had been irreparably strained by the prolonged dispute, the accusations of serious misconduct, and the repeated attempts to secure his resignation under threat of criminal prosecution. Separation pay in lieu of reinstatement was thus the more equitable relief.
The Court found that Tri-J's conduct was marked by bad faith. Rather than allowing the administrative investigation to run its lawful course, it repeatedly pressured Gabrillo to resign by presenting resignation offers coupled with threats that criminal charges would be filed should he refuse, transforming what it characterized as a voluntary option into a coercive ultimatum. This warranted moral and exemplary damages.
The Court also awarded attorney's fees, noting that Gabrillo was compelled to institute the action to protect his right to continued employment and recover the monetary benefits illegally withheld.
Source: Supreme Court Decision, G.R. No. 279863, penned by Associate Justice Ramon Paul L. Hernando.
This report summarizes a public Supreme Court decision and is not legal advice.