LABOR Digests 110515

1 Espina v. CA
2 Alhambra v. NLRC
3 Imasen v. Alcon
4 Baguio Central Univ v. Gallente
5 Philbag v. Philbag Union
6 Sugue v. Triumph
7 Coca-Cola v. Garcia
8 Mansion Printing v. Bitara
9 Ang v. San Joaquin
10 PNB v. Arcobillas
11
12 Golden Ace v. Talde
13 Temic v. Cantos
14
15 Funcitonal Inc v. Granfil

Espina et al. v. CA, M.Y. San, and Monde M.Y. San

Mar. 28, 2007; Chico-Nazario
Prepared by Tobie Reynes
Facts
1.

2.

3.

4.

[Dec. 27, 2000] In a conciliation proceeding

before the DOLE, the M.Y. San Workers Union and
Sales Force Union were informed of M.Y. San (MY
SAN)s intended sale of business and assets to
Monde M.Y. San (MONDE). It was agreed, inter
alia, in the same proceeding that:
a. MY SAN will pay separation pay (tax-free)
in accordance with their existing CBA plus
9 days per year of service, cash
equivalent of their vacation and sick
leaves, one half of the total union dues
for year 2001;
b. The existing unions are directly and
voluntarily recognized by MONDE;
c. SSS and PAG-IBIG loans shall be directly
remitted to the employees concerned;
and
d. MY SAN will submit a list of all employees
to MONDE for purposes of rehiring.
[Jan. 31, 2001] All employees of MY SAN received
their separation pay and cash equivalent of
vacation and sick leaves. They also signed their
respective quitclaims.
[Feb. 1, 2001] An Asset Purchase Agreement was
signed between MY SAN and MONDE.
a. The next day, MONDE commenced
operations.
b. All of MY SANs former employees who
applied and qualified for probationary
employment started working on a
contractual basis for a period of six
months.
Because petitioners were subsequently
terminated on various dates, they filed a
complaint for illegal dismissal before the NLRC.
They alleged that
a. MONDE operated with the same top
management of MY SAN running the
business;
b. The union officers, in exchange for being
hired, acceded to bust the union; and
c. The sale of MY SAN to MONDE was merely
a ploy to circumvent the provisions of the
Labor Code.

5.

6.
7.

MY SAN insisted that its employer-employee

relationship with petitioners had ceased to exist.
MONDE alleged that petitioners had no cause of
action.
The LA and NLRC both decided against petitioners
and dismissed their complaint.
The CA dismissed their appeal on procedural
grounds, i.e. failure of three petitioners to sign the
SPA for purposes of the certification of non-forum
shopping.

Issues/Held/Ratio
W/N the signatures of 25 out of the 28 employees
constituted sufficient compliance with the Rules
YES, it did.
1. Petitioners raised one common cause of action
against MY SAN and MONDE. They also share a
common interest and a common defense in the
complaint.
2. There is sufficient basis for the 25 petitioners to
speak for and in behalf of their co-petitioners to
file the petition in the CA.
W/N the closure of business by MY SAN is illegal
NO, it is valid.
1. MY SAN complied with the requirements under
Art. 283 of the Labor Code W
a. A written notice was given to the
employees and the DOLE at least a
month before the intended date of
cessation.
b. There was a bona fide cessationthe
ultimate test of validity of closure or
cessation of business.
c. There was payment amounting to at least
month pay for every year of service or
1 month pay, whichever is higher.
Petitioners even received termination pay
which was even beyond the amount
required bylaw.
2. Just as no law forces anyone to go into business,
no law can compel anybody to continue the same.
3. Closure or cessation includes both the complete
cessation of operations and the cessation of only
part of a companys business.
4. Since MY SANs closure was valid, there was no
illegal dismissal (by MY SAN) of petitioners to
speak of.
W/N the termination of employment of petitioners
by MONDE was illegal NO, it was valid.
1. Petitioners were notified of the standards they had
to meet to qualify as regular employees of MONDE
when the latter appraised them at the start of
their employment about the period of probation.
2. Two notices were sent to petitioners individually: a
notice appraising them of the particular acts or
omissions for which their dismissal was sought,
and a memorandum informing them that they
were terminated from work.
3. Petitioners were terminated prior to the expiration
of their probationary contracts (or on July 3,
2001).
a. They were terminable anytime prior to
such date.
4. It was clearly shown that MONDE acted in good
faith, as there is no dispute that petitioners had
been habitually absent, neglectful of their work,
and rendered unsatisfactory service.
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W/N the quitclaims signed by the petitioners were

invalid NO, they were valid.
1. There was no showing that petitioners were
coerced into signing the quitclaims.
2. The quitclaims were voluntarily entered into and
represented a reasonable settlement.
The CA Resolution is REVERSED with respect to the
dismissal based on non-complaince with the rules
on certification of non-forum shopping. The LA and
NLRC decisions are AFFIRMED.
Alhambra Industries v. NLRC and Danilo Rupisan
G.R. No. 106771; November 18, 1994; Bellosillo, J.
Digest prepared by Carlo Roman
I.
-

Facts
On 27 June 1987, petitioner Alhambra Industries,
Inc. (ALHAMBRA), a Filipino cigar and cigarette
manufacturing and distribution company,
employed private respondent Danilo C. RUPISAN
as salesman on a six-month probationary basis.

From 9-12 December 1989, ALHAMBRA

conducted a surprise audit of the records
of RUPISAN. He was then called to the
Head Office on 3 January 1990 where
alleged violations of company rules
purportedly committed by him were
brought to his attention.

On 8 January 1990, RUPISAN was placed

under one-month preventive suspension
for serious violations of company policies,
as reflected in the results of the surprise
audit.
RUPISAN protested his suspension, denying all
charges and exposing the threat of termination at
the 3 January 1990 meeting. He also alleges that
he had been given a clearance of all his
accountabilities, rendering the charges against
him academic.
On 8 February 1990, a day before the end of his
suspension, ALHAMBRA wrote RUPISAN to
terminate his services.
RUPISAN sued ALHAMBRA for illegal dismissal and
unpaid wages and commissions; the suit was later
amended to include charges of illegal suspension
and damages.
LA: found that the termination of RUPISAN was for
a just cause, but also found that there was a
violation of RUPISANs right to due process (for
failure of ALHAMBRA to furnish him a copy of the
audit report on which his dismissal was based).
The LA directed ALHAMBRA to pay RUPISAN
backwages, unpaid salary, separation pay in
lieu of reinstatement, and commissions.
Both parties appealed to the NLRC, which affirmed
the LA findings on lack of due process. However,
the NLRC added that RUPISAN could have
explained fully the charges against him had he
been given the chance to do so; thus,
reinstatement was ordered in lieu of
separation pay.
Hence, the present petition for certiorari in which
ALHAMBRA seeks a declaration that RUPISAN was
validly dismissed and should no longer be
reinstated. In his comment, RUPISAN also seeks
separation pay, no longer reinstatement.

II.
-

Issue/Held
W/N the NLRC finding of illegal dismissal, coupled
with the order of reinstatement, was proper. NO;
petition GRANTED, NLRC decision SET ASIDE.
Award of separation pay is deleted, RUPISAN
entitled to damages of Php10,000 for denial of
procedural due process.

III.
Ratio
The NLRC appears to have skirted the issue on the
existence of a just cause for dismissal, disposing
of the case only on the basis of absence of due
process.

This is crucial because a termination

without just cause entitles a worker
to reinstatement regardless of whether
he was accorded due process. On the
other hand, termination of a worker
for cause, even without procedural
due process, does not warrant
reinstatement, but the employer
incurs liability for damages.

Since the LA found valid ground for

dismissal, the NLRC should not have
directed reinstatement. To order
reinstatement and compel the parties to
start the procedure from step one would
be circuitous because almost invariably
that same issue of validity of the ground
of dismissal would be brought back to the
Labor Arbiter for adjudication.
However, in line with Wenphil Corporation v.
NLRC, ALHAMBRA must nevertheless be held to
account for failure to extend to RUPISAN his right
to an investigation before causing his dismissal.
The rule is explicit: the dismissal of an employee
must be for just or authorized cause and
after due process (Section 1, Rule XIV,
Implementing Regulations of the Labor Code).
In the case at bench, the decision to dismiss
RUPISAN did not state the reason for his
termination, in disregard of Sec. 6, Rule XIV, Book
V, of the Omnibus Rules. But, having been found
guilty of serious misconduct, RUPISAN cannot
demand reinstatement nor separation pay.
However, he is entitled to damages for
petitioner's non-observance of procedural due
process, which is not only required by statute but
enshrined in the Constitution. For this purpose,
the amount of P10,000.00 is considered fair,
reasonable and realistic.
On the rationale behind the right to security of
tenure1: TODAY employment is no longer just an
ordinary human activity. For most families the
main source of their livelihood, employment has
now leveled off with property rights which no
one may be deprived of without due process
of law. Termination of employment is not
anymore a mere cessation or severance of
contractual relationship but an economic
phenomenon affecting members of the
family. This explains why under the broad
principles of social justice the dismissal of
employees is adequately protected by the laws of
the state.

1 Nothing in the case explicitly dealt with security of

tenure, and the above passage was not even found in
the ratio (rather, it was part of the ponencias
introduction).

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Imasen Philippine Manufacturing v. Ramonchito Alcon and

Joann Papa
G.R. No. 194884, October 22, 2014; Brion, J.
Facts:

Imasen Philippine Manufacturing is a domestic

corporation engaged in manufacturing auto-seat
recliners and slide adjusters.
Imasen hired RESPONDENTS Ramonchito Alcon
and Joann Papa as Manual Welders in 2001.
At around 12:40 AM of October 5, 2002, the
inspecting on-duty guard caught respondents
having sexual intercourse on the floor of the Tool
and Die Section of Imasens production plant,
using a carton as mattress. Respondents were
part of the 8PM-5AM shift.
On the basis of the guards written report, an
administrative investigation ensued. Respondents
denied having intercourse, as there were other
employees in the area which made it impossible
for them to do so. They alleged that they were
only sleeping.
Dec. 4, 2002 - Respondents were found guilty of
gross misconduct contrary to the existing policies,
rules and regulations of the company. They were
terminated.
Respondents filed an illegal dismissal case with
the Labor Arbiter, reiterating their version of the
story.
LA RULING Dismissal was valid; investigation
and subsequent termination were made in good
faith.
NLRC RULING Upheld LA.
CA RULING Reduced penalty to 3 months
suspension on the ground that the act complained
of did not constitute gross misconduct under Art.
282 of the Labor Code as formerly numbered.
Respondents were ordered reinstated. Imasen
raised the matter to the SC by Rule 45 petition for
review on certiorari.

Issue/Held (as stated by the SC): W/N NLRC committed

grave abuse of discretion in finding that the respondents'
act amounted to what Article 282 of the Labor Code
textually considers as serious misconduct to warrant their
dismissal.- NO
Ratio: This case involves the balancing of security of
tenure against the management prerogative.
Except as limited by special law, an employer is free to
regulate, according to his own judgment and discretion, all
aspects of employment, including the discipline, dismissal
and recall of workers. The employer is free to exercise of
the power of dismissal as management prerogative as
long as the dismissal is done reasonably, in good faith,
and in a manner not otherwise intended to defeat or
circumvent the rights of workers.
Misconduct is defined as an improper or wrong conduct. It
is a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error
in judgment.
Elements of misconduct as just cause for dismissal under
Art. 282 of the Labor Code:
1) Misconduct must be serious, i.e., of such grave and
aggravated character and not merely trivial or
unimportant.

2) Misconduct must be related to the performance of the

employee's duties showing him to be unfit to continue
working for the employer
3) Misconduct must have been performed with wrongful
intent.
Viewing the act committed by the respondents on the light
of the principles of management prerogative vs. security
of tenure, elements of misconduct, and the jurisdiction of
a rule 45 petition, SC holds that respondents did commit
misconduct under Art. 282, thus their dismissal was valid.
Sexual intercourse between two consenting adults is a
purely private matter. However, it must be done in such
manner that, by the generally accepted norms of conduct,
will not offend public decency nor disturb the generally
held or accepted social morals. Under these parameters,
sexual acts between two consenting adults do not have a
place in the work environment. By itself, sexual
intercourse inside company premises during working hours
is punishable misconduct. The findings as to this matter
are not disputed.
However, their misconduct is aggravated by the
implication of the act committed amounting to flaunting
of their disregard in a manner that could reflect adversely
on the status of ethics and morality in the company.
Respondents engaged in sexual intercourse in an area
where co-employees or other company personnel have
ready and available access. The respondents likewise
committed their act at a time when the employees were
expected to be and had, in fact, been at their respective
posts, and when they themselves were supposed to be, as
all other employees had in fact been, working.
Their infraction transgressed the bounds of socially and
morally accepted human public behavior, and at the same
time showed brazen disregard for the respect that their
employer expected of them as employees. By their
misconduct, the respondents, in effect, issued an open
invitation for others to commit the same infraction, with
like disregard for their employer's rules, for the respect
owed to their employer, and for their co-employees'
sensitivities. Taken together, these considerations reveal a
depraved disposition that the Court cannot but consider as
a valid cause for dismissal. The balancing of the two
interests as mentioned earlier must go against the
respondents.
Dispositive: Petition granted. NLRC decision reinstated.
BAGUIO CENTRAL UNIVERSITY v. IGNACIO GALLENTE
2 December 2013; Brion, J. / Digest Prepared by Hans
Santos
FACTS
GALLENTE was hired by BCU as instructor in October 1991.
He was subsequently appointed as Dean of College of Arts
and Sciences, and Dean of College of Public
Administration.
In February 2005, GALLENTE, with six others, organized
the GRC Review and Language Center. The Articles of
Incorporation indicated that GRC had a primary purpose of
conducting review classes for Board Licensure and Civil
Service examinations, and also had a secondary purpose
of conducting tutorial and proficiency training in foreign
languages. It also indicated BCU as the primary address of
GRC.
BCU President FERNANDEZ called the attention of
GALLENTE regarding his use of BCU resources in the
establishment of GRC as well as indicating BCU as the
address. BCU officers conducted grievance meetings with
GALLENTE but he tendered his resignation on 30
September 2005.
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GALLENTE filed a complaint before the LA for illegal

(constructive) dismissal, non-payment of vacation and sick
leave pay, tax refund and attorneys fees.
LA ruled for GALLENTE, ordering BCU to pay separation
pay and backwages as well as awarding money claims. It
found that while the BCU conducted grievance meetings,
BCU had already decided to terminate GALLENTEs
employment and practically coerced him to resign.
Furthermore, the ground of loss of trust and confidence
relied upon by BCU did not justify GALLENTEs dismissal
as:
(1) GALLENTE did not benefit from GRC, and the
incorporation of GRC did neither damaged
BCU nor besmirched its reputation;
(2) the claimed competition was highly
speculative;
(3) GALLENTEs position as Dean did not conflict
with his position as organizer of GRC; and
(4) BCU failed to show that the performance of
GALLENTE suffered.
NLRC ruled for BCU, finding that there was justifiable
ground for loss of confidence. FERNANDEZ had authorized
GALLENTE to conduct review classes for Civil Service
examinations but not to organize GRC, to conduct review
courses for other government-regulated examinations
(which BCU also offered), or to conduct tutorial and
proficiency training for foreign languages.
Thus, GALLENTE was guilty of conflict of interest or
disloyalty. Actual damage or loss on BCUs part was not
necessary as GALLENTE was a holder of a responsible and
sensitive position, and owed absolute fidelity to his
employers interests.
CA ruled for GALLENTE, reinstating the LA ruling. In
addition to affirming the LA findings, it noted that when
GALLENTE organized the GRC, the BCU did not yet operate
a Review Center. In any case, GRC was unable to operate
due to non-compliance with legal requisites. Furthermore,
even if GALLENTE had committed a breach, this was not
willful and intentional.
On petition for review on certiorari before the SC, BCU
argues that GALLENTE effectively competed with it and
breached its trust and confidence. There was a conflict of
interest when GRC offered thesis dissertation courses
though BCU also offered these courses and GALLENTE, as
dean, sits on the panel of oral defenses.
Further, the use of GALLENTE of BCU as principal address
of GRC and posting of advertisements inside BCU, without
BCUs permission, negate his claim of good faith. Finally,
while they did not have a Review Center when the GRC
was organized, they were already conducting review
classes for nursing examination and thesis dissertation.
GALLENTE, on the other hand, maintains that:
(1) He never offered any review course; the most
that can be attributed to his was the
advertisements he posted and handed out
and, even then, no competition took place as
GRC did not actually operate;
(2) Even if the Civil Service examination review
had pushed through there would be no
competition as BCU was not yet offering
similar courses;
(3) Though GRCs Articles of Incorporation
included programs or courses that BCU was
offering, he did not intend for the company to
offer these courses; otherwise, they would
have been included in the advertisement;
(4) These were only included in the Articles on
advice of the local SEC official; and
(5) BCU did not yet have its own Review Center
at the time of the establishment of GRC.

ISSUES-HELD-RATIO
WON GALLENTE was dismissed with substantive due
process (i.e. for just or authorized cause): YES

Loss of trust and confidence is a just cause for

dismissal under Art. 282(2) of the LC, which
provides that an employer may terminate an
employment for fraud or willful breach by the
employee of the trust reposed in him by his
employer or duly authorized representative. The
employer must satisfy two conditions.
First, the employer must show that the employee
concerned occupies a position of trust and confidence.
Jurisprudence provides for two classes of positions of trust.
o
Managerial employees, and those who
are entrusted with confidential and
delicate matters, and from whom greater
fidelity to duty is expected; and
o
Cashiers, auditors, property custodians,
or those who, in the normal and routine
exercise of their functions, regularly
handle significant amounts of the
employers money or property.
Second, the employer must establish an act justifying loss
of trust and confidence.
o
The act that betrays the employers trust
must be real, or founded on clearly
established facts; and
o
The employees breach of the trust must
be willful, or done intentionally,
knowingly and purposely, without
justifiable excuse.

Further, the Court in Lopez v. Keppel Bank Phils.

stated the guidelines for application of loss of
confidence as follows:
(1) loss of confidence should not be simulated;
(2) it should not be used as a subterfuge for
causes which are improper, illegal or
unjustified;
(3) it may not be arbitrarily asserted in the face
of overwhelming evidence to the contrary;
and
(4) it must be genuine, not a mere afterthought
to justify an earlier action taken in bad faith.

Finally, as applied to dismissal of managerial

employees, employers enjoy wider latitude of
discretion. No proof beyond reasonable doubt is
required but mere existence of basis for believing
that the employee has breached the trust of the
employer would suffice.

On the first condition, the Court found that

GALLENTE occupied a position of trust and
confidence. He was Dean of two of BCUs
departments, tasked with assisting the school
head in matters affecting general policies of the
institution, advising students in their programs of
study, approving their subject load and exercising
educational leadership among his faculty.

On the second condition, the Court noted that the

lower courts put premium on the presence or
absence of damage to BCU, with the CA also
noting the assertion of GALLENTE of good faith.
The Court disagreed with the CA, and found that
GALLENTE committed willful breach sufficient to
justify dismissal.
o
The presence or absence of damage to
BCU is beside the point. As long as the
act that breached the trust is founded on
established facts, the employers ground
is justified. BCU cannot be expected to
LABOR: Digests | 110515 | kb | 4

wait until GALLENTE has caused actual

damage before it takes steps to protect
its interest.
o
The failure of GRC to operate is likewise
immaterial. There was actual conflict of
interest when GALLENTE sought to
conduct review classes for nursing
exams, when BCU was also offering the
same.
There was also conflict in the inclusion of the other
government exams in the company Articles. If GALLENTE
had no intention of offering these courses, they should not
have been included. As is, their inclusion allowed GRC to
offer them if they had continued operation.
In any case, the failure of GRC to operate was not
voluntary on GALLENTEs part but due to legal obstacles.
o
The alleged good faith of GALLENTE was
also beside the point. The determinant
was his deliberate engagement in a
venture that would conflict with BCUs
interests. If he truly intended to help the
BCU and its students, he would have
made the necessary changes in the
prescribed curriculum.
As Dean, GALLENTE was responsible for ensuring that the
program of study was up-to-date and reflective of
scholastic requirements for their respective fields. In fact,
this program should be sufficient for students to pass the
government exams without enrolling in any review course.
Such duties would conflict with his responsibilities as
organizer of GRC, which would compel him to secure the
numerical sufficiency of the enrollees.
o
GALLENTE appropriated BCU property for
his or GRCs benefit when he used the
BCU as the GRCs corporate address and
posted GRC advertisements. Worse, his
acts represented that GRC was a BCUsponsored venture when it was not.
The Court found that these acts of GALLENTE rendered
him unworthy of BCUs trust, and upheld his dismissal,
stating:
[W]e find the BCUs termination of his employment
reasonable and appropriate, and a valid exercise of
management prerogative. An employer may not be
compelled to continue in its employ a person whose
continuance in the service would patently be inimical to its
interests.
WON GALLENTE was dismissed with procedural due
process: NO

The LA, NLRC, and CA agree that GALLENTE did

not voluntarily resign and the BCU failed to
observe due process. Such finding will not be
disturbed by the Court. Thus, the award of
P30,000 for nominal damages was proper.
Petition GRANTED. NLRC Decision REINSTATED and
GALLENTE declared dismissed for just cause though
awarded P30,000 for being dismissed without due
process.
PHILBAG v PHILBAG WORKERS UNION
G.R. No. 182486; 20 Jun 2012; BRION, J.
Digest by Miguel
I.
Facts:
This case involves two workers, Edwin Mauricio (EM) and
Zharralyn Camacho (ZC). They were dismissed by the
company supposedly due to their accruing enough
demerit points (based on their company policy) to warrant

dismissal from service. The facts imputable to them are as

follows:
EM: His assigned tasks included unwinding textile from a
bulk roll, which would be cut depending on their needs.
The cutters would take turns in unwinding the textile. On
May 24, 2004, it was EM's turn to unwind the textile-- at a
distance, his supervisor, Anneliza Reinoso, saw that EM
was not cutting the textile-- she concluded that EM was
not doing his job.
Two days later, EM received a memo directing him to show
why he should not be dismissed for violating the company
rules and regulations. The May 4 incident was considered
a case of idling, meriting 3 points. He had supposedly
incurred 9 points from a previous offense-- 12 points was
required for dismissal. In his memo, he denied the
violation, but this was not considered-- Mauricio was still
dismissed.
ZC: On Mar 3, 2004, ZC supposedly suffered from
abdominal pain and slight bleeding. She went to Clinica
Marquez for a check-up, and was advised to rest for
around 11 days. She received a medical certificate there,
which was countersigned by the company doctor. She
went on leave.
The bleeding recurred on Mar 15. She was advised to rest
for another 20 days as there may be a threatened
abortion. Three days later, ZC requested her aunt to report
her condition to the company and to present the medical
certificate for this recurrence. The company refused as
they wanted to personally see ZC. When ZC called up the
company, she notified the personnel manager of her
situation, and assured the manager that she would
present the certificate when she returned. (the company
seemed to have no issue with this)
However, the bleeding recurred again, on Apr 5. ZC was
declared fit to work only on May 11. However, when she
returned, the company directed ZC to explain why she
should not be dismissed for the times she went AWOL
(enough to accure 14 demerit points). She only said that
she was unable to have her medical certificate signed as
she was bedridden. The company did not consider this,
and dismissed her. She protested this and claimed that the
company was in bad faith, as her absences were upon the
advice of her doctor.
In the voluntary arbitrator, the company's defense was
company policy. For EM, it was his idling that led to
dismissal. For ZC, it was failure to follow the procedure in
taking a leave of absence. At any rate, the VA declared the
dismissal valid.
The Court of Appeals reversed the VA's decision It found
that in EM's case, the supervisor's report was considered
suspicious as it was dated June 28, a month after the
incident (the date was not even mentioned in the report-how could there have been an investigation?); in addition,
the supervisor did not try to resolve the issue then and
there, opting instead to just file the report. As for ZC,
though she was AWOL, her reason for being AWOL did not
amount to a deliberate disregard of company rules.
II.
III.

Issue: Whether or not EM and ZC were

illegally dismissed.
Held/Ratio: NO. No valid cause for dismissal
given the circumstances. CA decision
affirmed.
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EM: The CM was correct in holding that the report by the

supervisor was a mere afterthought and definitely
suspicious for being filed a month late and without details
on the incident, especially given that the supervisor did
not confront EM. These cast a shadow of doubt on the
evidence, which must be substantial and founded on
clearly established facts.
ZC: Though she went AWOL enough times to apparently
reach 14 demerit points, the circumstances surrounding
her absences do not justify separation from service. She
complied with the policy (medical certificate, notice),
albeit belatedly. From the facts, there does not seem to be
any reason for the company doctor to refuse to
countersign the medical certificate since it was properly
signed by ZC's physician and bears the marks of regularity
in its issuance. If there were any problems with the facts
stated, they could have been verified. At any rate, ZC's
records show that she was suffering from threatened
abortion-- a valid reason to be absent.
Equally odd is that in her previous absence, the company
acknowledged her phone call (in the Mar 22-Apr 4 AWOL).
At any rate, in illegal dismissal cases, the burden of
proof is on the employer to show that there is
substantial evidence of a just cause for termination.
Such evidence must rest on clearly-established
facts.
Sugue v. Triumph International
G.R. No. 164804; 30 January 2009; Leonardo-De Castro, J.
Digest prepared by Ron San Juan
Facts:

Sugue was hired in May 1990 as Marketing Services

Manager; Valderrama was hired in April 1993 as Direct
Sales Manager. In October 1999, Triumphs top
management began to notice a sharp decline in the
sales of the company.

In 2000, in a separate case, Sugue and Valderrama

filed a complaint with the NLRC against Triumph for
payment of money claims arising from allegedly
unpaid vacation and sick leave credits, birthday leave
and 14th month pay for the period 1999-2000 (the
period of the said decline in sales). Triumph charged
as half-day to their vacation leave credit their time
attending the preliminary conference of said case.

Thereafter, the applications of both Sugue and

Valderrama for leave credits were subjected to various
conditions.
o
Sugue complained that the conditions
imposed upon her by the company before
granting her leaves (e.g. medical certificate in
the case of her applications for sick leave and
the submission of the companys marketing
plan in the case of her applications for
vacation leave) constituted harassment and
discrimination making her work unbearable
and, thus, prompting her to file a complaint
with the NLRC for constructive dismissal
against Triumph International.
o
Valderramas case is similar to that of
Sugues. The cited complaints for constructive
dismissal was premised on their argument
that they were being singled out by the
company because of their earlier filing of

money claims before the NLRC against the

company.
Issue:
1. Whether or not the conditions imposed by the
company for the granting of leave credits amounted to
discrimination or harassment, supporting the claim of
constructive dismissal. (NO)
2. Whether or not Triumph is justified in charging their
absence (due to attending the preliminary conference
in the NLRC) to their Vacation Leave (YES)
Held:
1. The conditions set by the company do not amount to
discrimination. In the grant of vacation and sick leave
privileges to an employee, the employer is given
leeway to impose conditions on the entitlement to the
same as the grant of vacation and sick leave is not a
standard of law, but a prerogative of management. It
is a mere concession or act of grace of the employer
and not a matter of right on the part of the employee.
Thus, it is well within the power and authority of an
employer to deny an employees application for leave
and the same cannot be perceived as discriminatory
or harassment. Triumph did not act with
discrimination, insensibility or disdain towards Sugue
and Valderrama, which foreclosed any choice on their
part except to forego their continued employment.
2. Triumph is justified in charging Sugue and
Valderramas half-day absence to their vacation leave
credits. It is fair and reasonable for Triumph to do so
considering that Sugue and Valderrama did not
perform work for one-half day on June 19, 2000.
The age-old rule governing the relation between labor and
capital or management and employee is that a fair days
wage for a fair days labor. If there is no work performed
by the employee there can be no wage or pay, unless of
course, the laborer was able, willing and ready to work but
was illegally locked out, dismissed or suspended. It is
hardly fair or just for an employee or laborer to fight or
litigate against his employer on the employers time.
In a case where a laborer absents himself from work
because of a strike or to attend a conference or hearing in
a case or incident between him and his employer, he
might seek reimbursement of his wages from his union
which had declared the strike or filed the case in the
industrial court. Or, in the present case, he might have his
absence from his work charged against his vacation leave.
Coca Cola v Valentina Garcia
Jan. 31, 2008; Austria-Martinez J
FACTS:

December 1, 1988: Coke hired Valentina Garcia as

Quality Control Technician on probationary
status. She was assigned at their
Tacloban plant. On June 1, 1989 she became a
regular employee. She was the most junior
among the personnel in the Quality Control
Department.

In the middle of 1989: Coke adopted some

modernization programs which resulted in
increased efficiency and production. As a result,
one employee in the Department became
redundant. Under the Collective Bargaining
Agreement (CBA) and Article 289 of the LC,
respondent, as the most junior employee of the
LABOR: Digests | 110515 | kb | 6

Department could be validly

terminated. However, instead of terminating
respondent on ground of redundancy, petitioner
decided to assign her to its Iloilo plant.
April 1990: Coke informed her that she would be
transferred to the Iloilo plant for being an excess
or redundant employee in
the Tacloban plant. Respondent refused to be
transferred.
On June 26, 1990, petitioner gave respondent
notice of her transfer to take effect on July 2,
1990. Yet, on said date, respondent reported for
work at the Tacloban plant. The security guard
refused her entry
Garcia filed a complaint for illegal dismissal.
o
Coke denied that she was illegally
dismissed an dcountered that it gave her
transfer notice on June 26, 1990, giving
her until June 30, to transfer. Coke
decided to serve her notice of dismissal
only on July 13, 1990 for abandonment of
work.
NLRC reversed the LA. It held that there was a
valid transfer since the mobility clause in
petitioner's employment contract was valid; and
because petitioner refused to be transferred, she
was considered to have abandoned her work.
CA held that abandonment of work was a just
cause to effect respondent's dismissal, it found
that the dismissal was ineffectual since it did not
comply with due process requirements, as
petitioner received only the notice of her
dismissal on the ground of abandonment, and she
was not given the initial notice of her impending
dismissal or the chance to explain her side. It held
petitioner liable for backwages based on the case
of Serrano v NLRC

ISSUES:
WON Garcia was accorded procedural due process before
her separation from work? No. She is entitled to nominal
damages in the amount of 30,000 pesos pursuant to
prevailing jurisprudence.
RATIO:

In dismissing an employee, the employer has the

burden of proving that the dismissed worker has
been served two notices: (1) the first to inform
the employee of the particular acts or
omissions for which the employer seeks his
dismissal, and (2) the second to inform the
employee of his employers decision to terminate
him. The first notice must state that the
employer seeks dismissal for the act or
omission charged against the employee;
otherwise, the notice does not comply with
the rules.

The rationale is thus enunciated in Maquiling v

Phil. Tuberculosis Society: The first notice will
afford the employee an opportunity to avail all
defenses and exhaust all remedies to refute
the allegations hurled against him for what is
at stake is his very life and limb his
employment. Otherwise, the employee may just
disregard the notice as a warning without any
disastrous consequence to be anticipated. Absent
such statement, the first notice falls short of the
requirement of due process. Ones work is
everything, thus, it is not too exacting to impose
this strict requirement on the part of the employer
before the dismissal process be validly effected.

Petitioner argues that the purpose of the notice

requirement was achieved when petitioner sent several
notices to respondent at her last known address. But the
SC is not persuaded citing the ff:
ART. 283. Miscellaneous provisions. x x x
(b) Subject to the constitutional right of workers to
security of tenure and their right to be protected against
dismissal except for a just and authorized cause and
without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a
written notice containing a statement of the causes
for termination and shall afford the latter ample
opportunity to be heard and to defend himself with the
assistance of his representative if he so desires in
accordance with company rules and regulations
promulgated pursuant to guidelines set by the Department
of Labor and Employment. x x x
Section 2, Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code provides:
Section 2. Standards of due process: requirements
of notice. In all cases of termination of employment, the
following standards of due process shall be substantially
observed:
I. For termination of employment based on just
causes as defined in Article 282 of the Code:
(a) A written notice served on the employee
specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within
which to explain his side;
(b) A hearing or conference during which the
employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to
the charge, present his evidence or rebut the evidence
presented against him; and
(c) A written notice of termination served on the
employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify
his termination. x x x

While petitioner presented the envelopes of the

alleged notices sent to respondent's last known
address, the contents thereof were not
offered in evidence. Thus, the records are
wanting of proof that respondent was
properly apprised of the charges against her
and given an opportunity to explain her
side, as petitioner maintains. Evidently, it is
clear that respondent's dismissal was
effected without the notice required by
law. Thus, petitioner failed to satisfy the
two-notice requirement.

Serrano doctrine, which awarded

full backwages to ineffectual dismissal cases
where an employee dismissed for cause was
denied due process was abandoned by the Court's
ruling in Agabon, where the Court held that if the
dismissal was for cause, the lack of statutory due
process should not nullify the dismissal, or render
it illegal or ineffectual; but the employers
violation of the employees right to statutory due
process warrants the payment of indemnity in the
form of nominal damages.

Mansion Printing Center v Diosdado Bitara

GR No. 168120; January 25, 2012; Perez
Digest by Mara Recto
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Guide in the Disposition of Labor Disputes: While it is true

that compassion and human consideration should guide
the disposition of cases involving termination of
employment since it affects one's source or means of
livelihood, it should not be overlooked that the benefits
accorded to labor do not include compelling an employer
to retain the services of an employee who has been shown
to be a gross liability to the employer.
FACTS

Mansion Printing Center is a single proprietorship

registered under the name of Clement Cheng
engaged in the printing of quality self-adhesive
labels, brochures, posters, stickers and packaging.
Diosdado Bitara was hired as a helper and later
promoted as driver.
Mansion Printing noted that Diosdado was
habitually tardy and absent. Mansion Printing
issued a Memorandum requiring Diosdado to
submit a written explanation why no
administrative sanction should be imposed for his
habitual tardiness. Several months later, his
attention was called again. Diosdado replied
apologizing for his tardiness.
He continued to violate attendance policies. He
came late 19 out of 47 times and was absent 19
out of 66 working days for the first quarter of year
2000. He was absent from March 11-16 without
prior notice and approval which had adverse
effect on the business
General Manager Davis Cheng (son of Clement
Cheng) issued another Memorandum Notice to
Explain why he should not be terminated.
Diosdado refused to acknowledge the receipt of
the memo. He did not give any explanation and
never reported to work. Again Davis personally
served another Memo informing him of his
termination.
Diosdado met with the management for
reconsideration for his termination. He was still
terminated. Management gave him financial
assistance of P6,110 equivalent to 1 month salary.
Management declined to give him amount equal
to 2 months salary but management declined
because he was negligent.
Diosdado filed a complaint for illegal dismissal. He
claimed he took a leave of absence due to an
urgent family problem.
LA dismissed the complaint. NLRC affirmed LA. CA
reversed the NLRC. MR denied

W/N Diosdado was illegally dismissed NO, Mansion

Printing Center complied with both substantive and
procedural due process, his termination was based on a
just or authorized cause of dismissal and was effected
after due notice and hearing
On Substantive Due Process

The basis for his termination was not only due to

his unauthorized absence from March 11-16. He
was habitually tardy and frequently absent
without notice.

2 employees belied the claim of Diosdados wife

Mary Ann that she called the office for her
husband to inform management of his absence.
o
Delia Abalos, a binder/finisher, stated she
never received a call regarding his
absence

Ritchie Distor, a messenger, stated that

he even went to Diosdados house to
require him tow ork but he found the wife
who said the husband already left the
house and she did not know where he
went

His tardiness and absences were not isolated

incidents but manifested a pattern of habituality.

The official time was clearly stated in the

Memorandum that it was from 8am-5pm but was
adjusted to 830am-530am to hopefully solve the
problem of his tardiness.

Even in the absence of written company rule

defining gross and habitual neglect of duties, his
omissions qualify as such warranting his
dismissal.

And, in the words of then Associate Justice Ma.

Alicia Austria-Martinez in Philippine Long Distance
and Telephone Company, Inc. v. Balbastro
While it is true that compassion and human
consideration should guide the disposition of cases
involving termination of employment since it affects
one's source or means of livelihood, it should not be
overlooked that the benefits accorded to labor do
not include compelling an employer to retain the
services of an employee who has been shown to be
a gross liability to the employer. The law in protecting
the rights of the employees authorizes neither oppression
nor self-destruction of the employer.54 It should be made
clear that when the law tilts the scale of justice in favor of
labor, it is but a recognition of the inherent economic
inequality between labor and management. The intent is
to balance the scale of justice; to put the two parties on
relatively equal positions. There may be cases where the
circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the
result is an injustice to the employer. Justitia nemini
neganda est (Justice is to be denied to none)
o

On Procedural Due Process

The two notice rule in dismissing an employee

was complied with

David Cheng indicated in the Notice of

Explanation and Notice of Termination that:
1. He refused to sign together with the date
of service
2. He executed an affidavit stating that as
general manager he personally served
the memos and Diosdado refused to
acknowledge receipt

Vicente Ang v. Ceferino San Joaquin and Diosdado

Fernandez
Aug. 7, 2013; Del Castillo
Prepared by Tobie Reynes
Facts
1.

2.

ANG is the proprietor of VIROSE Furniture and

Glass Supply, a wholesaler/retailer of glass
supplies and products in Pangasinan. CEFERINO
(ANGs first cousin) was hired in 1974 as a helper,
while DIOSDADO was hired in 1982 as a driver;
each had a daily salary of PHP166. They were
employed continuously without a derogatory
record.
[Aug. 24, 1999] CEFERINO and DIOSDADO
attended a court hearing relative to 41 criminal
LABOR: Digests | 110515 | kb | 8

cases filed by a former VIROSE employee against

ANG for non-remittance of SSS contributions. Both
testified against ANG.
a. After the hearing, ANG allegedly began to
treat CEFERINO and DIOSDADO with
hostility and antagonism.
3. [Aug. 28, 1999] ANGs wife, ROSA, instructed a
VIROSE salesclerk to find helpers to transfer
monobloc chairs from the VIROSE store to ROSAs
restaurant, Leng-Lengs Foodshop located beside
the store.
a. The salesclerk asked CEFERINO to help
but the latter refused, saying that he was
not an employee of Leng-Lengs but a
glass installer of VIROSE.
b. A heated argument between CEFERINO
and ROSA, her son Jonathan and the
salesclerk then ensued. It ended with
CEFERINO leaving the store shouting
invectives.
4. [Aug. 30, 1999] CEFERINO returned to the store,
only to find that ANG had torn his Daily Time
Record (DTR) to pieces that day while
DIOSDADOs DTR had been torn after the Aug. 24
hearing.
a. DIOSDADO reported for work that day
only to receive a memorandum informing
him that he had been placed on a oneweek suspension for insubordination.
5. [Aug. 31, 1999] CEFERINO and DIOSDADO filed
complaints for illegal constructive dismissal.
6. [Sept. 5, 1999] DIOSDADO confronted ANG,
demanding the latter to sign certain documents.
ANG refused. DIOSDADO, intoxicated, left
unsavory remarkds and threatened to sue Ang
[Ed.: which he did already].
7. [Sept. 8, 1999] CEFERINO received a
memorandum dated Aug. 30, 1999 placing him
under preventive suspension and ordering him to
explain in writing, within three days, why no
disciplinary action should be taken against him for
his refusal to obey the instructions to transfer the
monobloc chairs.
8. [Sept. 13, 1999] DIOSDADO received another
memorandum ordering him to report for work
after being absent for a week.
9. [Sept. 21, 1999] ANG issued a memorandum
terminating CEFERINOs employment.
10. The LA & NLRC dismissed the complaint for lack of
merit.
11. The CA reversed the NLRC decision.
Issues/Held/Ratio
W/N CEFERINO and DIOSDADO were constructively
dismissed illegally YES, they were.
1. ANG was not able to dispute CEFERINO and
DIOSDADOs claim that they were subjected to
verbal abuse and that they were assigned tasks
which were not part of their work.
a. Such claims were not far-fetched as it was
reasonable that ANG acted as such due to
CEFERINO and DIOSDADOs appearance
in the Aug. 24 hearing.
b. ANG could not be reasonably expected to
thank them for it, but he may not be
allowed to treat them oppressively either.
c. It must be emphasized that the situation
was not brought about by CEFERINO and
DIOSDADO. It is not disputed that it was

2.

3.

ANG who started the unfair and

oppressive treatment.
d. Although CEFERINO and DIOSDADOs
behavior should not be condoned, it only
characterized the extent to which their
employer-employee relationship had
degenerated.
The test of constructive dismissal is whether a
reasonable person in the employees position
would have felt compelled to give up his position
under the circumstances.
a. Constructive dismissal exists where:
i. There is a cessation of work
because continued employment
is rendered impossible,
unreasonable or unlikely (e.g. an
offer involving a demotion in
rand and a diminution in pay;
ii. There is a dismissal in disguise or
an act amounting to dismissal
but made to appear as if it weren
not;
iii. An act of clear discrimination,
insensibility, or disdain by an
employer becomes so
unbearable on the part of the
employee that it could foreclose
any choice by him except to
forego his continued
employment; or
iv. The employee involuntarily
resigns due to the harsh, hostile,
and unfavorable conditions set
by the employer.
b. By destroying the DTRs, ANG
discontinued and severed his relationship
with CEFERINO and DIOSDADO.
i. A DTR is primarily intended to
prevent damage or loss to the
employer, taking into account
the policy of no work, no pay.
ii. ANG virtually removed them from
VIROSEs payroll and erased all
vestiges of employment.
iii. It may be considered an outright
(not only symbolic) termination
of the employment relationship
between them. The last straw
that finally broke the camels
back.
CEFERINO and DIOSDADO did not abandon their
jobs.
a. It was not proven by substantial evidence
that they intended to abandon
employment, as their repeated absences
were caused by ANGs oppressive
treatment from which they simply grew
tired.
b. The immediate filing of an illegal
dismissal complaint negates the claim of
abandonment.
c. While they did not ask for reinstatement,
such omission is no valid indication that
they abandoned their employment.

Petition is DENIED.
Philippine National Bank v. Mary Sheila Arcobillas
G.R. No. 179648; August 7, 2013; Del Castillo, J.
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Digest prepared by Carlo Roman

I.
-

Facts
On May 15, 1998, the PNB Foreign Currency
Denomination-Savings Account (FCD-S/A) No.
305703555-1 of Avelina Nomad-Spoor was
credited with US$138.00. However, instead of
posting its peso equivalent of P5,517.10,
Mary Sheila ARCOBILLAS, the assigned
administrative teller at PNB Bacolod-Lacson
branch, erroneously posted US$5,517.10,
resulting in an overcredit of US$5,379.10. Said
amount was later withdrawn by Nomad-Spoor on
May 29, 1998 and June 8, 1998 to the damage of
PNB in the amount of P214,641.23.

The misposting was discovered only

about seven months later. After
investigation by PNB, ARCOBILLAS was
administratively charged with neglect of
duty.
In her Affidavit, ARCOBILLAS admitted her
mistake, apologized for it, and stated that she did
not benefit from the unintentional misposting. She
honestly believed that the amount posted was
correct, and further explained that the heavy
workload that day (a Friday coinciding with payroll
day, coupled with intermittent power
interruptions) brought on a severe headache
which greatly affected her work performance.

Nonetheless, PNB found ARCOBILLAS

guilty of gross neglect of duty, meting
upon her the penalty of forced resignation
with benefits, effectively immediately
upon her receipt thereof.

Upon denial of her plea for

reconsideration, ARCOBILLAS filed a
complaint for illegal dismissal with money
claims against PNB, PNBs Senior
Manager Reynald A. Rey and Senior VP
Rosaurco C. Macalagay.
The LA found no sufficient evidence to establish
gross and habitual negligence and directed the
reinstatement of ARCOBILLAS. It also noted that
ARCOBILLAS garnered consistent performance
ratings of Very Satisfactory despite a similar
infraction of previous misposting, and even during
the pendency of the subject administrative
charge. The LA found that the misposting was
committed without malice or bad faith.

The LA also pointed out that the resulting

damage could not be solely attributed to
Arcobillas. The Bank Accountant, Financial
Management Specialist, and those
comprising the branch accounting unit
failed to observe the banks internal
control measures of validating and
verifying the banks daily transactions.
Had they done so, the said misposting
could have been discovered at the
earliest opportunity.
On August 31, 2004, the NLRC affirmed with the
modification that ARCOBILLAS was not entirely
faultless and free from any penalty it thus
pronounced ARCOBILLAS, as well as those other
employees who were remiss in validating/verifying
the banks transactions, equally liable for PNBs
financial losses.
Relevant to topic: PNB received a copy of the said
Decision on October 14, 2004. Without filing a

II.
1.

2.

Motion for Reconsideration, PNB filed a Motion

for Extension of Time to File Petition for Certiorari
until December 23, 2004. On said date, PNB filed
its Petition for Certiorari before the CA.
Subsequently on May 25, 2005, the NLRC issued
an Entry of Final Judgment declaring its
August 31, 2004 Decision final and
executory as of October 19, 2004.
Despite the non-filing of a MR with the NLRC, the
CA took cognizance of PNBs Petition for
Certiorari; it nevertheless dismissed the same,
affirming the NLRC decision with the modification
that PNB itself should shoulder 40% of the loss,
with ARCOBILLAS to pay the remaining 60%.
PNB filed a MR while ARCOBILLAS filed a Motion
for Partial Reconsideration; both were denied.
Hence, the present petition for review on
certiorari.
Issues
TOPICAL ISSUE: W/N PNBs failure to file a MR
with the NLRC before filing its Petition for
Certiorari with the CA is a fatal infirmity. YES; the
final and executor NLRC decision stands.
W/N there was sufficient basis to hold
ARCOBILLAS administratively liable for gross
neglect of duty. NO.

III.
Ratio
1. It is a well-established rule that a Motion for
Reconsideration is an indispensable
condition before an aggrieved party can
resort to the special civil action for
certiorari.

The rationale for the rule is that the law

intends to afford the NLRC an
opportunity to rectify such errors or
mistakes it may have committed
before resort to courts of justice can be
had.

Of course, the rule is not absolute, and

jurisprudence has laid down exceptions 2

2 "(a) [W]here the order is a patent nullity, as

where the court a quo has no jurisdiction; (b)
where the questions raised in the certiorari
proceedings have been duly raised and passed
upon by the lower court, or are the same as those
raised and passed upon in the lower court; (c)
where there is an urgent necessity for the
resolution of the question and any further delay
would prejudice the interests of the Government
or of the petitioner or the subject matter of the
action is perishable; (d) where, under the
circumstances, a Motion for Reconsideration
would be useless; (e) where petitioner was
deprived of due process and there is extreme
urgency for relief; (f) where, in a criminal case,
relief from an order of arrest is urgent and the
granting of such relied by the trial court is
improbable; (g) where the proceedings in the
lower court are a nullity for lack of due process;
(h) where the proceeding was ex parte or in
which the petitioner had no opportunity to object;
and, (i) where the issue raised is one purely of
law or where public interest is involved.

LABOR: Digests | 110515 | kb | 10

2.

IV.

when the filing of a petition for certiorari

is proper notwithstanding failure to file a
MR.

Here, however, PNB did not at all

allege to which of the abovementioned exceptions this case
falls. Neither did it present any
plausible justification for
dispensing with the requirement
of a prior MR before the NLRC.
Despite this, the CA still took cognizance
of PNBs Petition for Certiorari and
ignored this significant flaw. It bears to
stress that the filing of a MR is not a
mere technicality of procedure, but a
jurisdictional and mandatory
requirement that must be strictly
complied with. PNBs failure to file a MR
with the NLRC is a fatal infirmity, and the
CA erred in entertaining the petition filed
before it. All proceedings before the
CA and its assailed decision is null
and void; the final and executory
decision of the NLRC stands.

There was no sufficient basis to hold Arcobillas

administratively liable for gross and habitual
neglect of duty.

Even assuming the CA could validly

entertain PNBs petition, there is no
sufficient reason to overturn the NLRC
decision.

To warrant removal from service,

negligence should be gross and habitual.
Although it was her second time to
commit misposting (i.e., the first
misposting was in 1995 while the second
misposting was committed in 1998),
Arcobillass act cannot be considered as
gross as to warrant her termination from
employment. Gross neglect of duty
"denotes a flagrant and culpable refusal
or unwillingness of a person to perform a
duty." The misposting here was not
deliberately done; rather, it was a case of
simple neglect brought about by
carelessness, satisfactorily explained to
be the effect of ARCOBILLASs heavy
workload and consequent headache.

The NLRC is justified in allocating the loss

suffered by the PNB among those
employees who proved to be negligent in
their respective duties, as the damage
here was caused to PNB itself and not to
its clients (compare with cases used by
CA as basis for 60/40 partition). Monetary
awards adjudged in said decision are also
final.

However, since these other

employees were not made
parties to this case, this decision
is enforceable only with respect
to ARCOBILLAS.
Held

(Abraham v. NLRC)

The CA decision is VACATED and SET ASIDE. The

final and executor decision of the NLRC stands.

GOLDEN ACE BUILDERS; ARNOLD AZUL (ownermanager) v. JOSE TALDE

5 May 2010; Carpio-Morales, J. / Digest Prepared by Hans
Santos
FACTS
TALDE was hired as carpenter by GOLDEN ACE in 1990. In
February 1999, AZUL stopped giving work assignments to
TALDE, alleging unavailability of construction projects.
TALDE filed for illegal dismissal. LA ruled for TALDE,
ordering REINSTATEMENT and backwages of P144,382.23
as well as P3,236.37 as premium pay for rest days, SIL and
13th month pay.
Pending appeal with the NLRC, GOLDEN ACE advised
TALDE to report for work. The latter, however, filed a
Manifestation that there was animosity and actual threats
to his life and his familys safety. Hence, he opted for
SEPARATION PAY. GOLDEN ACE denied such allegations.
NLRC eventually denied the appeal, holding that TALDE
was a regular employee, and not a project employee. CA
affirmed.
The matter of satisfaction of judgment was referred to the
Fiscal Examiner of the NLRC who recomputed the amount
due at P562,804.69. This was approved by the LA, which
issued a writ of execution.
GOLDEN ACE filed an MR with the NLRC, alleging that the
amount was exorbitant. It was argued that since TALDE
refused to return to work during the pendency of the
appeal, he should be considered as having abandoned his
work. Hence, the computation should not include the
period beyond 15 May 2001, when TALDE filed his earlier
Manifestation. NLRC granted, stating that since TALDE did
not appeal the Decision granting reinstatement, not
separation pay, and he refused to return to work, he can
only recover backwages up to 20 May, the date when he
was supposed to return to work.
CA reversed the NLRC Resolution, holding that TALDE was
entitled to both separation pay and backwages, in view of
the strained relations between the parties. It computed
the award to TALDE at P608,564.69, computing 15 years
of BACKWAGES and SEPARATION PAY for 8 years.
Hence, the present petition for review on certiorari.
ISSUES-HELD-RATIO
WON TALDE was entitled to both SEPARATION PAY
and BACKWAGES: YES

The Court stated the payment of backwages is

different from the award of separation pay.
SEPARATION PAY is granted when REINSTATEMENT
is no longer advisable because of strained
relations, while BACKWAGES represents
compensation that should have been earned by
the employee were it not for the unjust dismissal.
The basis of the former is the entire length of
service, while that for the latter is the period
when the employee was prevented from working.

Quoting Macasero v. Southern Industrial Gases

Phils., the Court stated:
Thus, an illegally dismissed employee is entitled to
two reliefs: backwages and reinstatement. The two
reliefs provided are separate and distinct. In instances
where reinstatement is no longer feasible because of
strained relations between the employee and the
employer, separation pay is granted. In effect, an
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illegally dismissed employee is entitled to either

reinstatement, if viable, or separation pay if
reinstatement is no longer viable, and backwages.
(Emphasis supplied.)
The normal consequences are REINSTATEMENT
without loss of seniority, and BACKWAGES from
time compensation was withheld until
reinstatement. It is when REINSTATEMENT is not viable
that SEPARATION PAY in addition to BACKWAGES is
allowed.

Under the doctrine of strained relations,

SEPARATION PAY is considered an acceptable
alternative to REINSTATEMENT, when the latter is
no longer desirable. Such payment liberates the
employee from a highly oppressive work
environment while also releasing the employer
from the unpalatable obligation of maintaining in
its employ a worker it can no longer trust.
Strained relations must be demonstrated as a fact, and
adequately supported by substantial evidence.

The findings of the LA, affirmed by the CA, that

there was actual animosity between GOLDEN ACE
and TALDE, are binding on the Court. Thus, TALDE
is entitled to BACKWAGES and SEPARATION PAY
because of strained relations.
BACKWAGES should be computed from February 1999,
when TALDE was dismissed, until 30 June 2005, when
TALDE was deemed separated upon finding that his
REINSTATEMENT was impossible. SEPARATION PAY should
consider not just 8 years (1990 February 1999) but 15
years (1990 June 2005).
Petition DENIED. Amount of SEPARATION PAY due TALDE is
P85,800.

TEMIC AUTOMOTIVE V. RENATO CANTOS

September 29, 2014 | Brion, J. | Joan
FACTS:

2009: Renato M. Cantos filed a complaint for

illegal dismissal against Temic Automotive (based
in Taguig City and its General Manager (GM),
Martin Wadewitz.

Employment history:
o
1993: Started as Special Projects Office of
the Materials Dept
o
1998: appointed Purchasing & ImportExport Manager of Logistics Dept
o
2007: appointed Warehouse and ImportExport Manager, the last position he held
before he was allegedly dismissed
illegally.

Temic is a member firm of Continental

Corporation, a multi- national company (head
office in Germany), with over sixty facilities
worldwide, engaged in vehicle safety applications,
comfort and powertrain, as well as in the
networking of active and passive driving systems.

2008: A team from the head office audited Temic

and allegedly discovered several irregularities,
particularly with respect to Temics purchasing
transactions supposedly attended by "fraudulent
activities." Some purchase orders were ensured to
go to some suppliers, thereby systematically
avoiding a competitive tender process. Temic
believed the irregularities could only have
happened with the participation of personnel in
the Purchasing and Manufacturing departments.

Cantos, as former Purchasing Manager, "was likely

involved in said transactions."
Temic issued a Show Cause and Preventive
Suspension Notice to Cantos, requiring him to
explain in writing several infractions during his
stint as Purchasing Manager. He was charged
principally with having violated Temics
procedures on purchases, particularly the
Purchase Activities in System, Application,
Products in Data Processing and the NonProduction/Indirect Material Purchasing
Procedures.
Allegedly, Cantos failed to meet the required
number of purchase quotations.
Cantos would claim that from 2005 to early 2008,
he was tasked to also serve the Purchasing
Department of CTEPI (without additional
compensation), a sister firm of Temic located in
Calamba, Laguna and that it was in relation with
his work in CTEPI that his dismissal was chiefly
based. The purchasing procedures are essentially
the same for CTEPI and for Temic, except that in
CTEPIs case, the signature of the GM is not
required for the Process Deviation Temporary
Authority (PDTA).
Cantos allegedly allowed the proliferation of
deviations from the established procedures and
resorted instead to the PDTAs favoring suppliers
Globaltech Automation, Inc. (Globaltech) and
Maxtronix, Inc. (Maxtronix).
Additionally, Cantos was charged with the: (1)
disappearance of optional items supposed to be
part of purchase orders; (2) engagement of
customs brokers Airfreight 2100 and Diversified
Cargo without contracts; (3) unauthorized
engagement of personnel of the two customs
brokers to work for Temic; and (4) failure to
consolidate deliveries from the same point of
origin, resulting in higher costs for the company.
Dec 2008: Cantos asked for copies of documents
he considered necessary for his reply to the showcause notice, but he was given only copies of the
POs. He was advised that the other documents
were "irrelevant" or "can be presented at the
proper time if deemed necessary by the
company."
Cantos explanation:
o
1. There are three instances when a
deviation from the quotation requirement
is allowed: (a) when skeleton agreements
or global contracts are available; (b)
when "accredited suppliers/vendors are
approved;" or (c) when there is an
immediate need for the item to be
purchased. The POs in question which
number only twelve (12), out of more
than thirty thousand (30,000) processed
during his tenure, were all covered by
duly accomplished PDTAs.
o
He was not to blame for the missing
optional items because he handled only
the purchasing aspect o fthe transactions.
The items were delivered to Temics
Receiving Section. He never received
information on missing deliveries.
o
The contracts with Airfreight 2100 and
Diversified Cargo were just awaiting the
signatures of the customs brokers. Said
contracts were upon the initiative of
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Temic management who had been

dealing with the two customs brokers
even before he became head of the
Imports-Exports Department.
o
The hiring of the personnel of the two
customs brokers was at the behest of his
superiors in order to respond to Temics
need for additional manpower without
incurring the costs usually entailed for
regular employees.
o
The non-consolidation of shipments
coming from the same point of origin
happens only when the other shipments
are under DDU or DDP terms or when the
delivery charges are for the account of
the suppliers. During his tour of duty,he
significantly lowered shipment costs by
reducing evening shipments, thus
avoiding special customs fees for night or
backdoor releases.
o
During the admin investigation, Cantos
believed he was able to establish his
compliance with Temics procurement
procedures. Cantos explained that
sometime in 2008, Temics former foreign
expatriate GM, Eynollah Rahideh (GM
Rahideh), was audited due to a conflict of
interest incident involving the planned
purchase of a FUJI NXT machine from
Japan for 30M. The purchase was
cancelled and transferred to a European
firm, FUJI-Germany, where his son
worked. GM Rahideh suspected Navarro
and Balita to have given the information
to the head office in Germany about the
incident. Since then he had never been in
good terms with GM Rahideh.
o
In October 2008, flowers for the dead
were sent to Temics Purchasing Manager,
Gemma Ignacio (Ignacio) who had taken
over Cantos position as Purchasing
Manager. Navarro and Balita were
suspected to be behind the sending of
the flowers. Ignacio allegedly tried to get
back at the two, but she was pre-empted
by their resignation. She thus trained her
attention on Cantos whose position as
Wimpex Manager she coveted.
o
The new foreign expatriate GM,
Wadewitz, took the cudgels for Ignacio
who had assumed the position of Wimpex
Manager. Wadewitz wanted Cantos to
provide the company information about
the "fraudulent activities" of Navarro and
Balita, but since Cantos had no
knowledge of their activities, he could not
tell Temic anything.
Temic issued a notice of termination of
Employment to Cantos, with immediate effect, on
grounds of loss of trust and confidence.
LA dismissed the complaint for lack of merit.
Cantos, a managerial employee, had lost the trust
and confidence of his employer for the various
infractions he committed as company Purchasing
Manager.
NLRC affirmed. MR denied.
On appeal to CA, CA granted the petition. It
reversed the NLRC rulings and declared that
Cantos had been illegally dismissed. It found no

valid cause for his dismissal and he was not

accorded due process. However, absolved
Wadewitz from liability for Cantos dismissal as no
malice or bad faith on his part was "sufficiently
proven."
ISSUE: Whether or not CA was correct in ruling that LA
committed grave abuse of discretion (YES)
RATIO:

SC finds no substantial evidence in the records

in support of the LA ruling.

First. The POs Temic offered in evidence to prove

the principal charge against Cantos pertained to
its sister company CTEPI, most of which, except
for two POs, were made in 2005 and 2006 as
listed in the show-cause notice. In the face of
Cantos submission that the two entities are
separate and distinct from each other, it is
puzzling that Temic did not bother to explain why
it proceeded against Cantos based on purchase
transactions entered into by CTEPI and not by
itself; it did not also explain the precise
relationship between it and CTEPI with respect to
the POs in question. The reason for this, we
believe, was Temics undue haste to dismiss
Cantos, such that it did not even check on the
documentary support for the charges it laid
against him. Under Temic rules, the GM approves
and signs the PDTA; it is not a requirement under
CTEPI rules. There is no basis therefore for making
Cantos accountable for the absence of the GMs
signature for CTEPIs PDTAs.
o
Also, Temic faulted Cantos for belatedly
presenting to the LA the purchasing
procedures of Temic and CTEPI to prove
his point, which the labor official rejected
for not having been raised during the
company investigation. This is rather
unfortunate considering that the NLRC
and the LAs are mandated by law to "use
every and all reasonable means to
ascertain the facts in each case speedily
and objectively and without regard to
technicalities of law orprocedure; all in
the interest of due process." LA Reyno
overlooked the fact that Cantos requested
Temic for copies of documents which he
considered vital to his defense.

Second. Nowhere in the records is there evidence

that directly pointed to Cantos as having
deliberately violated the company procedures for
the procurement of services and materials by
allowing the proliferationof PDTAs.
o
Other than the fact that Cantos was the
Purchasing Manager at the time and was
a signatory to the PDTAs in question, we
find no other indication of his
involvement in the execution of the
subject PDTAs. There is no evidence on
record that it was Cantos who caused the
execution of the subject PDTAs or that he
did it for his personal gain or in collusion
with Navarro and Balita of CTEPIs
Manufacturing Department who were
suspected to be involved in fraudulent
purchase transactions discovered by
the audit team from Germany in favor
of certain suppliers.
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Further, there were others who

participated in the execution of the PDTAs
Purchasing Officer Campos, Controlling
Manager Aranilla and Cantos superior
Isaac yet they were never investigated
for their involvement in the supposed
violation of the companys purchasing
procedures and meted a similar dismissal
o
Thus, the overwhelming evidence that
Cantos was validly dismissed does not
exist. This purported overwhelming
evidence consists largely of
generalizations, suppositions and bare
conclusions of Cantos direct involvement
or participation in the alleged anomalous
execution of PDTAs for eleven (11) Pos.
Third. Temics contention that Cantos made an
admission of guilt during the administrative
investigation likewise has no evidentiary support.
The supposed "admission" could have sealed the
companys case against him had it backed up its
claim with what transpired during the
investigation. It could have been done by simply
presenting the minutes of the investigation. No
such investigation minutes were ever presented,
only an attendance sheet. This was a serious
lapse on Temics part since in her affidavit, Ignacio
(a member of the investigating committee and
who succeeded Cantos as purchasing manager)
deposed that Cantos admitted that he violated
the companys purchasing procedures. In the
absence of the minutes, we can understand why
the CA dismissed Ignacios affidavit as nothing but
"barefaced allegations."
o

DISPOSITION: Petition DENIED.

Functional Inc. v Samuel Granfil
November 16, 2011; Perez J
FACTS:

Sometime in 1992, Sammy Granfil was hired as

key operator by Functional, Inc. (FI), a corp.
engaged in the business of sale and rental of
photocopying machines. As Key Operator, Granfil
was tasked to operate the photocopying machine
rented by the National Bookstore (NBS) at its SM
Megamall Branch.

30 July 2002: Granfil attended to a customer by

the name of Cosme Cavaldeja (Cavaldeja) who,
together with his wife, asked to have their flyers
photocopied.

Bonnel Dechavez, the security guard assigned at

said establishment, saw Cavaldeja handing money
to Granfil after the transaction was finished.
Dechavez submitted an incident report to NBS
Branch Manager Lucy Genegaban to wit:
o
I checked one customer and asked if he
already paid for his xeroxed items and he
said yes. Upon asking for a receipt, he
pointed to Sammy the Xerox operator to
whom he gave payment, instead of
paying to the cashier. Sammy came and
it was only then that he brought the
customer to the counter 09 for payment
of the amount of the Xeroxed items
is P250

3 September 2002:Granfil filed a complaint

against FI, its President, Romeo Bautista

(Bautista), its Marketing Manager, Freddie Tenorio

(Tenorio), its Office Supervisor, Julius Ballesteros
(Ballesteros), and its Area Supervisor, Joel Dizon
(Dizon), for illegal dismissal, unpaid 13th month
pay, moral and exemplary damages and
attorneys fees. He alleged that the money which
Dechavez saw him receive from Cavaldeja was
a P200 tip; that payment for the materials was,
however, already paid per batch by Cavaldejas
wife who, by that time, had already left the
premises; and, that rather than listening to his
explanation and simply verifying the meter of the
photocopy machine as well as the paper allotted
to it, Dechavez submitted his incident report

Granfil further asseverated that, with said incident

report having been telefaxed to FIs head office,
he was asked to report thereat in the morning of
31 July 2002; that instead of allowing him to
explain, however, Ballesteros peremptorily
ordered his termination from employment; that
wishing to explain his side, he sought out Dizon
who merely ignored and tersely advised him,
Magpahinga ka na lang; that refused entry
when he tried to report for work on 1 August
2002, he subsequently sought out Cavaldeja
whose corroboration of his version of the incident
also fell on deaf ears

FI and its corporate officers, in turn, averred that:

for the good of all concerned, FI informed Granfil
that he was going to be transferred to a different
assignment, without demotion in rank or
diminution of his salaries, benefits and other
privileges; that required to report to FIs main
office to act as emergency reliever to other Key
Operators while waiting for his new assignment,
Granfil misconstrued his transfer as a punishment
for his guilt and refused to heed said directive
which was within the managements prerogative
to issue; that an employees right to security of
tenure does not give him such vested right to his
position as would deprive his employer of its
prerogative to change his assignment or transfer
him where he will be most useful; and, that aside
from being guilty of insubordination, Granfil
clearly abandoned his employment rather than
illegally dismissed

LA rendered a decision discounting Granfils illegal

dismissal in view of his failure to prove with
substantial evidence overt acts of termination on
the part of FI

NLRC affirmed the LA, but the CA reversed the

decision of the NLRC, holding: FI failed to prove
Granfils abandonment
ISSUE: WON Granfil is illegally dimissed? Yes. The burden
of proof is upon the employer to show just or authorized
cause of dismissal.
RATIO:

in illegal dismissal cases the burden of proof is

upon the employer to show that the
employees termination from service is for a
just and valid cause. The employers case
succeeds or fails on the strength of its
evidence and not the weakness of that
adduced by the employee, in keeping with the
principle that the scales of justice should be tilted
in favor of the latter in case of doubt in the
evidence presented by them

the quantum of proof is substantial

evidence which is understood as such relevant
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evidence as a reasonable mind might accept as

adequate to support a conclusion, even if other
equally reasonable minds might conceivably opine
otherwise. Failure of the employer to
discharge the foregoing onus would mean
that the dismissal is not justified and
therefore illegal.
FI adduced no evidence to prove Granfils
supposed abandonment beyond submitting copies
of NBS 31 July 2002 request for said employees
transferand its 1 August 2002 written
acquiescence thereto. While these documents
may have buttressed the claim that Granfil was
indeed recalled from his assignment, however, we
find that the CA correctly discounted their
probative value insofar as FIs theory of
abandonment is concerned.
Being a matter of intention, abandonment
cannot be inferred or presumed from
equivocal acts. As a just and valid ground for
dismissal, it requires the deliberate, unjustified
refusal of the employee to resume his
employment, without any intention of returning.
Two elements must concur: (1) failure to report
for work or absence without valid or justifiable

reason, and (2) a clear intention to sever the

employer-employee relationship, with the second
element as the more determinative factor and
being manifested by some overt acts. The
burden of proving abandonment is once
again upon the employer who, whether
pleading the same as a ground for
dismissing an employee or as a mere
defense, additionally has the legal duty to
observe due process. Settled is the rule that mere
absence or failure to report to work is not
tantamount to abandonment of work.
Bautista, Tenorio, Ballesteros and Dizon did not
even execute sworn statements to refute the
overt acts of dismissal imputed against them, the
record is wholly bereft of any showing that FI
required Granfil to report to its main office or, for
that matter, to explain his supposed unauthorized
absences
In vigorously pursuing his action against FI before
the Labor Arbiter, the NLRC and the CA, Granfil
clearly manifested that he has no intention of
relinquishing his employment.

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