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In Nationwide Security and Allied Services, Inc. vs. Valderama (659 Phil.

362
(2011), the Supreme Court declared that due to the grim economic consequences to
the employee of being placed on a floating status, the employer should bear the
burden of proving that there are no posts available to which the employee
temporarily out of work can be assigned.

But on appeal, the National Labor Relations Commission reversed the finding of the
Labor Arbiter that private respondents were constructively dismissed. The
Commission premised its conclusion on the prematurity of the complaint. It
ratiocinated that "complaints for illegal dismissal must necessarily be judged on
the prevailing circumstances at the time of the filing of the complaint, and not on
what has transpired at the time of the rendition of the judgment." 5 The Commission
further elucidated that "to hold otherwise would be to render nugatory the practice
of allowing security agencies to place their employees on floating status not to
exceed six months as and by way of consideration on the peculiarity of the demands
for their services."6

In the case of Exocet Security and Allied Services Corporation v. Serrano,38 the
Court ruled that the security agency was able to prove that it was in good faith
when it placed the security guard on floating status and was therefore not guilty
of illegal dismissal nor constructive dismissal. The evidence presented by the
security agency showed that the security guard's own refusal to accept a non-VIP
detail was the reason that he was not given an assignment within the six-month
period. The Court, in the subject case, ruled that it was manifestly unfair and
unacceptable to immediately declare the mere lapse of the six-month period of
floating status as a case of constructive dismissal, without looking into the
peculiar circumstances that resulted in the security guard's failure to assume
another post.39

The Court emphasized that:

[T]he security guard's right to security of tenure does not give him a vested right
to the position as would deprive the company of its prerogative to change the
assignment of, or transfer the security guard to, a station where his services
would be most beneficial to the client. Indeed, an employer has the right to
transfer or assign its employees from one office or area of operation to another,
or in pursuit of its legitimate business interest, provided there is no demotion in
rank or diminution of salary, benefits, and other privileges, and the transfer is
not motivated by discrimination or bad faith, or effected as a form of punishment
or demotion without sufficient cause. (Salvaloza v. National Labor Relations
Commission, 650 Phil. 543, 557 (2010))

A corporation is a juridical entity with a legal personality separate and distinct


from those acting for and in its behalf and, in general, from the people comprising
it.76 Thus, as a general rule, an officer may not be held liable for the
corporation's labor obligations unless he acted with evident malice and/or bad
faith in dismissing an employee.77 Section 3178 of the Corporation Code is the
governing law on personal liability of officers for the debts of the corporation.
To hold a director or officer personally liable for corporate obligations, two
requisites must concur: (1) it must be alleged in the complaint that the director
or officer assented to patently unlawful acts of the corporation or that the
officer was guilty of gross negligence or bad faith; and (2) there must be proof
that the officer acted in bad faith.79

Based on the records, respondents failed to specifically allege either in their


complaint or position paper that Arcega, as an officer of Symex, willfully and
knowingly assented to the acts of Capt. Cura, or that Arcega had been guilty of
gross negligence or bad faith in directing the affairs of the corporation. In fact,
there was no evidence at all to show Arcega's participation in the illegal
dismissal of respondents. Clearly, the twin requisites of allegation and proof of
bad faith, necessary to hold Arcega personally liable for the monetary awards to
the respondents, are lacking.

Arcega is merely one of the officers of Symex and to single him out and require him
to personally answer for the liabilities of Symex are without basis.

The Court has repeatedly emphasized that the piercing of the veil of corporate
fiction is frowned upon and can only be done if it has been clearly established
that the separate and distinct personality of the corporation is used to justify a
wrong, protect fraud, or perpetrate a deception.80 To disregard the separate
juridical personality of a corporation, the wrongdoing must be established clearly
and convincingly. It cannot be presumed.

Thus, Genpact's acts of placing respondents on "benching" or floating status, and


thereafter, terminating their employment were made in the exercise of its
management prerogative in good faith and in accordance with internal hiring
procedures.

A security guard placed on reserved or off-detail status is deemed constructively


dismissed only if the status should last more than six months. Any claim of
constructive dismissal must be established by clear and positive evidence.

The CA concluded that although the complaint for illegal dismissal was prematurely
filed because six months had not yet elapsed to warrant considering the dismissal
as constructive dismissal, the continued failure to give the respondents new
assignments during the proceedings before the Labor Arbiter that exceeded the
reasonable six-month period rendered the petitioner liable for constructive
dismissal of the respondents; that the petitioner's insistence that the respondents
had abandoned their employment was bereft of basis; and that abandonment as a just
ground for dismissal required clear, willful, deliberate and unjustified refusal on
the part of the employees to resume their employment; hence, their mere absence
from work or failure to report for work even after the notice to return was not
tantamount to abandonment.

Security guards, like other employees in the private sector, are entitled to
security of tenure. However, their situation should be differentiated from that of
other employees or workers. The employment of security guards generally depends on
their employers' contracts with clients who are third parties to the employment
relationship, and the requirements of the latter for security services and what
will be beneficial to them dictate the posting of the security guards. It is also
relevant to mention that their employers retain the management prerogative to
change their assignments and postings, and to decide to temporarily relieve them of
their assignments. In other words, their security of tenure, though it shields them
from demotions in rank or diminutions of salaries, benefits and other privileges,
does not vest them with the right to their positions or assignments that will
prevent their transfers or re-assignments (unless the transfers or re-assignments
are motivated by discrimination or bad faith, or effected as a form of punishment
or demotion without sufficient cause). Such peculiar conditions of their employment
render inevitable that some of them just have to undergo periods of reserved or
off-detail status that should not by any means equate to their dismissal. Only when
the period of their reserved or off-detail status exceeds the reasonable period of
six months without re-assignment should the affected security guards be regarded as
dismissed. (Salvaloza v. National Labor Relations Commission, G.R. No. 182086,
November 24, 2010)

As the circumstance is generally outside the control of the security agency or the
employer, the Court has ruled that when a security guard is placed on a "floating
status," he orshe does not receive any salary or financial benefit provided by law.
Pido v. National Labor Relations Commission (G.R. No. 169812, February 23, 2007)
explains why:

Verily, a floating status requires the dire exigency of the employer�s bona
fidesuspension of operation of a business or undertaking. In security services,
thishappens when the security agency�s clients which do not renew their contracts
are more than those that do and the new ones that the agency gets. Also, in
instances when contracts for security services stipulate that the client may
request the agency for the replacement of the guards assignedto it even for want of
cause, the replaced security guard may be placed on temporary "off-detail" if there
are no available posts under respondent�s existing contracts.

When a security guard is placed on a "floating status," he does not receive any
salary or financial benefit provided by law. Due to the grim economic consequences
to the employee, the employer should bear the burden of proving that there are no
posts available to which the employee temporarily out of work can be assigned."
(emphasis supplied)

The onus of proving that there is no post available to which the security guard can
be assigned rests on the employer.

In fact, even during the meeting with the Labor Arbiter, Exocet offered a position
in the general security only to be rebuffed by Serrano.28 It was as if Serrano
obliged Exocet to look for a client in need of a VIP security�the availability of
which is obviously not within Exocet�s control, and by nature, difficult to procure
as these contracts depend on the trust and confidence of the client or principal on
the security guard. As aptly found by the NLRC:

Anent the client�s action, respondentagency had no recourse but to assign


complainant to a new posting. However, complainant, having had a taste of VIP
detail and perhaps the perks that come with such kind of assignment, vaingloriously
assumed that he can only be assigned to VIP close-in posting and that he would
accept nothing less. In fact, after his relief and tardy appearance at respondent�s
office, he was offered reassignment albeit to general security services which he
refused. Respondents clearly made known to him that as of the moment no VIP detail
was vacant or sought byother clients but complainant was adamant in his refusal.
Complainant even had the nerve to assert that he just be informed if there is
already a VIP detail available for him and that he will just report for re-
assignment by then.It is also well to note that to these allegations, complainant
made no denial.29 (emphasis supplied)

Thus, it is manifestly unfair and unacceptable to immediately declare the mere


lapse of the six-month period of floating status as a case of constructive
dismissal, without lookinginto the peculiar circumstances that resulted in the
security guard�s failureto assume another post. This is especially true in the
present case where the security guard�s own refusal to accept a non-VIP detail was
the reason that he was not given an assignment within the six-month period. The
security agency, Exocet, should not then be held liable.

While respondent was a possessor in bad faith, there


is no evidence that it acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner. 46 The award of attorney's fees and litigation expenses to
petitioner is also improper. It was not forced to litigate because of the
unfounded claims of respondent.

Retrenchment is the severance of employment, through no fault of and without


prejudice to the employee, which management resorts to during the periods of
business recession, industrial depression, or seasonal fluctuations, or during
lulls caused by lack of orders, shortage of materials, conversion of the plant to a
new production program or the introduction of new methods or more efficient
machinery, or of automation. In other words, lay-off is an act of the employer of
dismissing employees because of losses in the operation, lack of work, and
considerable reduction on the volume of its business. However, a lay-off would
amount to dismissal only if it is permanent. When it is only temporary, the
employment status of the employee is not deemed terminated, but merely suspended.
(Lopez v. Irvine Construction Corp., 741 Phil. 728, 740 (2014)

IKSI should have established the bona fide suspension of its business operations or
undertaking that could legitimately lead to the temporary layoff of its employees
for a period not exceeding six (6) months, in accordance with Article 301.

The award of attorney's fees is an exception, rather than the general rule. the
award of attorney's fees is warranted only in cases where the plaintiff was
compelled to litigate or incur expenses to protect his interest due to the act or
omission of the defendant.

The Concept of Attorney's Fees in


Labor Cases

Essentially, there are two commonly accepted concepts of attorney's fees - the
ordinary and extraordinary. On the one hand, in its ordinary concept, an attorney's
fee is the reasonable compensation paid by the client to his lawyer in exchange for
the legal services rendered by the latter. The compensation is paid for the cost
and/or results of the legal services, as agreed upon by the parties or as may be
assessed by the courts. On the other hand, as an extraordinary concept, an
attorney's fee is deemed an indemnity for damages ordered by the court to be paid
by the losing party to the winning party. In labor cases, attorney's fees partake
of the nature of an extraordinary award granted to the victorious party as an
indemnity for damages. As a general rule, it is payable to the client, not to his
counsel, unless the former agreed to give the amount to the latter as an addition
to, or part of the counsel's compensation.35

Notably, Article 111 of the Labor Code sanctions the award of attorney's foes in
cases of the unlawful withholding of wages, wherein the culpable party may be
assessed attorney's fees equivalent to ten percent (10%) of the amount of wages
recovered.36 The amount of attorney's fees shall not exceed ten percent (10%) of
the total monetary award, and the fees may be deducted from the amount due the
winning party.37

In addition, Article 2208 of the Civil Code allows the award of attorney's fees in
the following instances, to wit:

ART. 2208. In the absence of stipulation, attorney's fees and expenses of


litigation, other than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the


plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy
the plaintiffs plainly valid, just and demandable claim;
(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;

(8) In actions for indemnity under workmen's compensation and employer's liability
laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.
(Emphasis Ours)

To recapitulate, both the Labor Code and the Civil Code provide that attorney's
fees may be recovered in the following instances, namely, (i) in cases involving
the unlawful withholding of wages;38 (ii) where the defendant's act or omission has
compelled the plaintiff to litigate with third persons or the plaintiff incurred
expenses to protect his interest;39 (iii) in actions for the recovery of wages of
household helpers, laborers and skilled workers;40 (iv) in actions for indemnity
under workmen's compensation and employer's liability laws;41 and (v) in cases
where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.42

In a catena of cases, the Court awarded attorney's fees in favor of illegally


dismissed employees who were compelled to file an action for the recovery of their
lawful wages, which were withheld by the employer without any valid and legal
basis.43 A plain showing that the lawful wages were not paid without justification
was sufficient to warrant an award of attorney's fees.44

Moreover, "Article III is an exception to the declared policy of strict


construction in the award of attorney's fees."45 In fact, the general rule that
attorney's fees may only be awarded upon proof of bad faith takes a different turn
when it comes to labor cases. The established rule in labor law is that the
withholding of wages need not be coupled with malice or bad faith to warrant the
grant of attorney's fees under Article III of the Labor Code.46 All that is
required is that the lawful wages were not paid without justification, thereby
compelling the employee to litigate.47

Thus, based on the foregoing laws and jurisprudence, it becomes all too apparent
that Alva, whose wages and monetary benefits were unlawfully withheld, is indeed
entitled to an award of attorney's fees.

Relevant to the award of moral damages, not every employee who is illegally
dismissed or suspended isentitled to damages. Settled is the rule that moral
damages are recoverable only where the dismissal or suspension of the employee was
attended by bad faith or fraud, or constituted an act oppressive to labor, or was
done in a manner contrary to morals, good customs or public policy. Bad faith does
not simply mean negligence or bad judgment. It involves a state of mind dominated
by ill will or motive. It implies a conscious and intentional design to do a
wrongful act for a dishonest purpose orsome moral obliquity. The person claiming
moral damages must prove the existence of bad faith by clear and convincing
evidence for the law always presumes good faith.

Respondents are not entitled to attorney�s fees


Attorney�s fees "represent the reasonable compensation [a client pays his or her
lawyer] [for legal service rendered]."80 The award of attorney�s fees is the
exception rather than the rule. (Lui Enterprises, Inc. v. Zuellig Pharma
Corporation, G.R. No. 193494, March 12, 2014)

That respondents were "constrained to engage the services of counsel to prosecute


their claims"85 is not enough justification since "no premium should be placed on
the right to litigate."(Lui Enterprises, Inc. v. Zuellig Pharma Corporation, G.R.
No. 193494, March 12, 2014)