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EMPLOYER-EMPLOYEE RELATIONSHIP

1. "Employer" includes any person acting directly or indirectly in the interest


of an employer in relation to an employee and shall include the
government and all its branches, subdivisions and instrumentalities, all
government-owned or controlled corporations and institutions, as well as
non-profit private institutions, or organizations.

2. "Employee" includes any individual employed by an employer.

3. FOUR FOLD TEST

1. RIGHT TO HIRE
2. PAYMENT OF WAGES
3. POWER OF DISMISSAL
4. CONTROL OVER THE CONDUCT OF WORK
CASES: NOTEBOOK.
CLASSIFICATION OF EMPLOYEES
A. REGULAR VS. CASUAL EMPLOYEES
Article 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion
or termination of which has been determined at the time of the engagement of
the employee or where the work or service to be performed is seasonal in nature
and the employment is for the duration of the season. An employment shall be
deemed to be casual if it is not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue
while such activity exists.
Article 281. Probationary employment. Probationary employment shall not
exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be
terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work
after a probationary period shall be considered a regular employee.
SEASONAL
PHILIPPINE TOBACCO FLUE-CURING & REDYING CORPORATION VS NLRC
- DECEMBER 10, 1998
- Art. 283. Closure of establishment and reduction of personnel. The employer may
also terminate the employment of any employee due to the installation of labor
saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for
the purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the installation of
labor saving devices or redundancy, the worker affected thereby shall be entitled to
a separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of establishment
or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
. . . Firstly, the losses expected should be substantial and not merely de minimis in
extent. If the loss purportedly sought to be forestalled by retrenchment is clearly
shown to be insubstantial and inconsequential in character, the bonafide nature of
the retrenchment would appear to be seriously in question. Secondly, the substantial
loss apprehended must be reasonably imminent, as such imminence can be
perceived objectively and in good faith by the employer. There should, in other
words, be a certain degree of urgency for the retrenchment, which is after all a
drastic recourse with serious consequences for the livelihood of the employees
retired or otherwise laid off. Because of the consequential nature of retrenchment, it
must, thirdly, be reasonably necessary and likely to effectively prevent the expected
losses. The employer should have taken other measures prior or parallel to
retrenchment to forestall losses, i.e., cut other costs other than labor costs. An
employer who, for instance, lays off substantial numbers of workers while continuing
to dispense fat executive bonuses and perquisites or so-called "golden parachutes,"
can scarcely claim to be retrenching in good faith to avoid losses. To impart
operational meaning to the constitutional policy of providing "full protection" to labor,
the employers prerogative to bring down labor costs by retrenching must be
exercised essentially as a measure of last resort, after less drastic means e.g.,
reduction of both management and rank-and-file bonuses and salaries, going on
reduced time, improving manufacturing efficiencies, trimming of marketing and
advertising costs, etc. have been tried and found wanting.
- Lastly, but certainly not the least important, alleged losses if already realized, and
the expected imminent losses sought to be forestalled, must be proved by sufficient
and convincing evidence. The reason for requiring this quantum of proof is readily
apparent: any less exacting standard of proof would render too easy the abuse of
this ground for termination of services of employees. . . .
- Tested against the aforecited standards, we hold that herein petitioner was not able
to prove serious financial losses arising from its tobacco operations. A close
examination of its Statement of Income and Expenses and its recasted version
thereof, which were presented in support of its contention, suggests its failure to
show business losses.
- On the contrary, the Statement of Income and Expenses shows that the selling and
administrative expenses pertain not only to the tobacco business of petitioner, but
also to its corn and rental operations, and that the interest expenses pertain to all of
its business operations. In fact, the aforementioned Statement shows that there was
a net gain from operations in each year covered by the report. In other words, the
recasted financial statement effectively modified the Statement of Income and
Expenses by deducting form the tobacco operationsalone the operating costs
pertaining to all business of petitioner.
-
- Petitioner contention that the tobacco season was about to end anyway is without
merit, because the law clearly provides, without any qualification, that the employees
must be given one-month notice prior to closure. At the very least, respondent
members of the Luris group were deprived of work for the remaining days of the
1994 tobacco season. Petitioner could have easily complied with the aforesaid
requirement by sending the notices earlier. In fact, according to petitioner, the
decision to cease its tobacco operations was made as early as March 5, 1994;
hence, petitioner had plenty of time within which to send the notices.
- Second Issue:
- Lubat Group Illegally Dismissed
- Petitioner relies upon our ruling in Mercado v. NLRC
11
that the "employment [of
seasonal employees] legally ends upon completion of the . . . season," a statement
which was subsequently reiterated in Magcalas v.NLRC.
12
Thus, petitioner argues
that it was not obliged to rehire the members of the Lubat group for the 1994 season,
because their employment had been terminated at the end of the 1993 season.
Since they were not employed for the 1994 season when the Balintawak plant was
closed, it follows that petitioner has no obligation to award them separation pay due
to the said closure.
- We are not persuaded. From the facts, we are convinced that petitioner illegally
dismissed the members of the Lubat group when it refused to allow them to work
during the 1994 season.
- This Court has previously ruled in Manila Hotel Company v. CIR
13
that seasonal
workers who are called to work from time to time and are temporarily laid of during
off-season are not separated from service in said period, but are merely considered
on leave until reemployed, viz.:
- The nature of their relationship . . . is such that during off season they are
temporarily laid off but during summer season they are re-employed, or when their
services may be needed. They are not strictly speaking separated from the service
but are merely considered as on leave of absence without pay until they are re-
employed.
- From the foregoing, it follows that the employer-employee relationship between
herein petitioner and members of the Lubat group was not terminated at the end of
the 1993 season. From the end of the 1993 season until the beginning of the 1994
season, they were considered only on leave but nevertheless still in the employ of
petitioner.
- The facts in the above-mentioned cases are different from those in Mercado v.
NLRC
19
and in Magcalas v. NLRC.
20
In Mercado, although respondent constantly
availed herself of petitioners' services from year to year, it was clear from the facts
therein that they were not in her regular employ. Petitioners therein performed
different phases of agricultural work in a given year. However, during that period that
period, they were free to work for other farm owners, and in fact they did. In other
words, they worked for respondent, but were nevertheless free to contract their
services with other farm owners. The Court was thus emphatic when it ruled that
petitioners were mere project employees, who could be hired by other farm owners.
As such, their employment would naturally end upon the completion of each project
or each phase of farm work which has been contracted
PHILIPPINE FRUIT & VEGETABLE INDUSTRIES INC. VS NLRC JULY 20,
1999
The above arguments boil down to the issue of whether or not complaining members of
respondent union are regular employees of PFVII or are seasonal workers whose employment ceased
during the off-season due to the non-availability of work.
Regular and Casual Employment.- The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employers, except where the employment has been fixed for a specific
project. xxx
An employment shall be deemed to be casual if it is not covered by the preceeding
paragraph; provided, that, any employee who has rendered at least one year of service
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall
continue while such actually exists.
Under the above provision, an employment shall be deemed regular where the employee: a)
has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; or b) has rendered at least one year of service, whether such
service is continuous or broken, with respect to the activity in which he is employed.
[12]

In the case at bar, the work of complainants as seeders, operators, sorters, slicers, janitors,
drivers, truck helpers, mechanics and office personnel is without doubt necessary in the usual
business of a food processing company like petitioner PFVII.
It should be noted that complainants' employment has not been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of their
appointment or hiring.
[13]
Neither is their employment seasonal in nature. While it may be true
that some phases of petitioner company's processing operations is dependent on the supply of
fruits for a particular season, the other equally important aspects of its business, such as
manufacturing and marketing are not seasonal. The fact is that large-scale food processing
companies such as petitioner company continue to operate and do business throughout the year
even if the availability of fruits and vegetables is seasonal.
Having determined that private respondents are regular employees under the first paragraph,
we need not dwell on the question of whether or not they had rendered one year of service. This
Court has clearly stated in Mercado, Sr. vs. NLRC,
[14]
that:
The second paragraph of Article 280 demarcates as casual employees, all other
employees who do not fall under the definition of the preceding paragraph. The
proviso, in said second paragraph, deems as regular employees those casual
employees who have rendered at least one year of service regardless of the fact that
such service may be continuous or broken.
xxx Hence, the proviso is applicable only to the employees who are deemed
casuals but not to the project employees nor the regular employees treated in
paragraph one of Art. 280.
PROJECT
WILFREDO ARO VS NLRC MARCH 7, 2012
According to the CA, petitioners are project employees as found by Labor
Arbiter Ernesto Carreon in his Decision dated May 28, 1998, because they were
hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu,
which was later on affirmed by the NLRC in its January 12, 1999 decision. The
only discrepancy is the Order of the NLRC that petitioners are entitled to
backwages up to the finality of its decision, when as project employees, private
respondents are only entitled to payment of backwages until the date of the
completion of the project. In a later resolution on private respondent's motion for
reconsideration of its January 12, 1999 decision, the NLRC changed its findings by
ruling that petitioners herein were regular employees and, therefore, entitled to full
backwages, until finality of the decision, citing that petitioners repeated rehiring
over a long span of time made them regular employees.

In Hanjin Heavy Industries and Construction Co. Ltd. v. Ibaez,
[10]
this Court
extensively discussed the above distinction, thus:

x x x [T]he principal test for determining whether particular employees
are properly characterized as "project employees" as distinguished from
"regular employees" is whether or not the project employees were
assigned to carry out a "specific project or undertaking," the duration and
scope of which were specified at the time the employees were engaged
for that project.
[11]


In a number of cases,
[12]
the Court has held that the length of
service or the re-hiring of construction workers on a project-to-project
basis does not confer upon them regular employment status, since their
re-hiring is only a natural consequence of the fact that experienced
construction workers are preferred.

Applying the above disquisition, this Court agrees with the findings of the
CA that petitioners were project employees. It is not disputed that petitioners were
hired for the construction of the Cordova Reef Village Resort in Cordova,
Cebu. By the nature of the contract alone, it is clear that petitioners' employment
was to carry out a specific project. Hence, the CA did not commit grave abuse of
discretion when it affirmed the findings of the Labor Arbiter.


Therefore, being project employees, petitioners are only entitled to full
backwages, computed from the date of the termination of their employment until
the actual completion of the work. Illegally dismissed workers are entitled to the
payment of their salaries corresponding to the unexpired portion of their
employment where the employment is for a definite period.
[18]
In this case, as
found by the CA, the Cordova Reef Village Resort project had been completed in
October 1996 and private respondent herein had signified its willingness, by way
of concession to petitioners, to set the date of completion of the project as March
18, 1997; hence, the latter date should be considered as the date of completion of
the project for purposes of computing the full backwages of petitioners.
DM CONSUNJI VS ESTELITO JAMIN APRIL 18, 2012
As earlier mentioned, Jamin worked for DMCI for almost 31 years, initially
as a laborer and, for the most part, as a carpenter. Through all those years, DMCI
treated him as a project employee, so that he never obtained tenure. On the surface
and at first glance, DMCI appears to be correct. Jamin entered into a contract of
employment (actually an appointment paper to which he signified his conformity)
with DMCI either as a field worker, a temporary worker, a casual employee, or a
project employee everytime DMCI needed his services and a termination of
employment paper was served on him upon completion of every project or phase
of the project where he worked.
[35]
DMCI would then submit termination of
employment reports to the DOLE, containing the names of a number of employees
including Jamin.
[36]
The NLRC and the CA would later on say, however, that
DMCI failed to submit termination reports to the DOLE.

The CA pierced the cover of Jamins project employment contract and
declared him a regular employee who had been dismissed without cause and
without notice. To reiterate, the CAs findings were based on: (1) Jamins repeated
and successive engagements in DMCIs construction projects, and (2) Jamins
performance of activities necessary or desirable in DMCIs usual trade or business.

We agree with the CA. In Liganza v. RBL Shipyard Corporation,
[37]
the
Court held that [a]ssuming, without granting[,] that [the] petitioner was
initially hired for specific projects or undertakings, the repeated re-hiring and
continuing need for his services for over eight (8) years have undeniably made
him a regular employee. We find the Liganza ruling squarely applicable to this
case, considering that for almost 31 years, DMCI had repeatedly, continuously and
successively engaged Jamins services since he was hired on December 17, 1968
or for a total of 38 times 35 as shown by the schedule of projects submitted by
DMCI to the labor arbiter
[38]
and three more projects or engagements added by
Jamin, which he claimed DMCI intentionally did not include in its schedule so as
to make it appear that there were wide gaps in his engagements. One of the three
projects was local, the Ritz Towers,
[39]
from July 29, 1980 to June 12, 1982, while
the other two were overseas the New Istana Project in Brunei, Darussalam,
from June 23, 1982 to February 16, 1984;
[40]
and again, the New Istana Project,
from January 24, 1986 to May 25, 1986.
[41]

For not disclosing that there had been other projects where DMCI engaged
his services, Jamin accuses the company of suppressing vital evidence that
supports his contention that he rendered service in the companys construction
projects continuously and repeatedly for more than three decades. The non-
disclosure might not have constituted suppression of evidence it could just have
been overlooked by the company but the oversight is unfair to Jamin as the non-
inclusion of the three projects gives the impression that there were substantial gaps
not only of several months but years in his employment with DMCI.
To reiterate, Jamins employment history with DMCI stands out for his
continuous, repeated and successive rehiring in the companys construction
projects. In all the 38 projects where DMCI engaged Jamins services, the tasks he
performed as a carpenter were indisputably necessary and desirable in DMCIs
construction business. He might not have been a member of a work pool as DMCI
insisted that it does not maintain a work pool, but his continuous rehiring and the
nature of his work unmistakably made him a regular employee. In Maraguinot, Jr.
v. NLRC,
[43]
the Court held that once a project or work pool employeehas been:
(1) continuously, as opposed to intermittently, rehired by the same employer for
the same tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer, then the employee
must be deemed a regular employee..

MILLENNIUM ERECTORS CORPORATION VS. VIRGILIO MAGALLANES
NOV. 15, 2010
On the merits of the case, the Court finds that, indeed, respondent was a
regular, not a project employee.

Petitioners various payrolls dating as early as 2001 show that respondent
had been employed by it. As aptly observed by the appellate court, these
documents, rather than sustaining petitioners argument, only serve to support
respondents contention that he had been employed in various projects, if not for
16 years, at the very least two years prior to his dismissal.

Assuming arguendo that petitioner hired respondent initially on a per project
basis, his continued rehiring, as shown by the sample payrolls converted his status
to that of a regular employee. Following Cocomangas Beach Hotel Resort v.
Visca,
[16]
the repeated and continuing need for respondents services is sufficient
evidence of the necessity, if not indispensability, of his services to petitioner's
business and, as a regular employee, he could only be dismissed from employment
for a just or authorized cause.

Petitioner having failed to discharge its burden of proving that it terminated
the services of respondent for cause and with due process, the challenged decision
must remain.

RONILO SORREDA VS CAMVRIDGE ELECTRONICS CORP FEB. 11, 2010
In this instance, petitioner, from the period May 8, 1999 to October 8, 1999,
was clearly a per-project employee of private respondent, resulting in an employer-
employee relationship. Consequently, questions or disputes arising out of this
relationship fell under the jurisdiction of the labor arbiter.

However, based on petitioners allegations in his position paper, his cause of
action was based on an alleged second contract of employment separate and distinct
from the per-project employment contract. Thus, petitioner insisted that there was a
perfected contract of perpetual employment and that respondent was liable to pay
him damages.

While there was an employer-employee relationship between the parties
under their five-month per-project contract of employment, the present dispute is
neither rooted in the aforestated contract nor is it one inherently linked to it.
Petitioner insists on a right to be employed again in respondent company and seeks
a determination of the existence of a new and separate contract that established that
right. As such, his case is within the jurisdiction not of the labor arbiter but of the
regular courts. The NLRC and the CA were therefore correct in ruling that the
labor arbiter erroneously took cognizance of the case.
Even assuming arguendo that the labor arbiter had the jurisdiction to decide
the case, the Court cannot countenance petitioners claim that a contract of
perpetual employment was ever constituted. While the Constitution recognizes the
primacy of labor, it also recognizes the critical role of private enterprise in nation-
building and the prerogatives of management. A contract of perpetual employment
deprives management of its prerogative to decide whom to hire, fire and promote,
and renders inutile the basic precepts of labor relations. While management may
validly waive it prerogatives, such waiver should not be contrary to law, public
order, public policy, morals or good customs.
[24]
An absolute and unqualified
employment for life in the mold of petitioners concept of perpetual employment is
contrary to public policy and good customs, as it unjustly forbids the employer
from terminating the services of an employee despite the existence of a just or valid
cause. It likewise compels the employer to retain an employee despite the
attainment of the statutory retirement age, even if the employee has became a non-
performing asset or, worse, a liability to the employer.

Moreover, aside from the self-serving claim of petitioner, there was no
concrete proof to establish the existence of such agreement. Petitioner cannot
validly force respondent to enter into a permanent employment contract with him.
Such stance is contrary to the consensuality principle of contracts as well as to the
management prerogative of respondent company to choose its employees.


WILLIAM UY CONSTRUCTION CORP VS TRINIDAD MARCH 10 2010
The Courts Ruling

But the test for distinguishing a project employee from a regular
employee is whether or not he has been assigned to carry out a specific project or
undertaking, with the duration and scope of his engagement specified at the time
his service is contracted.
[5]
Here, it is not disputed that petitioner company
contracted respondent Trinidads service by specific projects with the duration of
his work clearly set out in his employment contracts.
[6]
He remained a project
employee regardless of the number of years and the various projects he worked for
the company.
[7]


Generally, length of service provides a fair yardstick for determining when
an employee initially hired on a temporary basis becomes a permanent one, entitled
to the security and benefits of regularization. But this standard will not be fair, if
applied to the construction industry, simply because construction firms cannot
guarantee work and funding for its payrolls beyond the life of each project. And
getting projects is not a matter of course. Construction companies have no control
over the decisions and resources of project proponents or owners. There is no
construction company that does not wish it has such control but the reality,
understood by construction workers, is that work depended on decisions and
developments over which construction companies have no say.
In this case, respondent Trinidads series of employments with petitioner
company were co-terminous with its projects. When its Boni Serrano-Katipunan
Interchange Project was finished in December 2004, Trinidads employment ended
with it. He was not dismissed. His employment contract simply ended with the
project for which he had signed up. His employment history belies the claim that
he continuously worked for the company. Intervals or gaps separated one contract
from another.
[9]


The CA noted that DOLE Order 19 required employers to submit a report of
termination of employees every completion of construction project. And, since
petitioner company submitted at the hearing before the Labor Arbiter only the
termination report covering respondent Trinidads last project, it failed to satisfy
such requirement.

But respondent Trinidad did not say in his complaint that he had been
illegally dismissed after each of the projects for which he had been signed up. His
complaint was essentially that he should have been rehired from the last project
since he had already acquired the status of a regular employee. Consequently,
petitioner company needed only to show the last status of Trinidads employment,
namely, that of a project employee under a contract that had ended and the
companys compliance with the reporting requirement for the termination of that
employment. Indeed, both the Labor Arbiter and the NLRC were satisfied that the
fact of petitioner companys compliance with DOLE Order 19 had been proved in
this case. WHEREFORE, the Court GRANTS the petition.

DM CONSUNJI VS ANTONIO GOBRES AUGUST 8, 2010
Respondents were found to be project employees by the Labor Arbiter, the
NLRC and the Court of Appeals. Their unanimous finding that respondents are
project employees is binding on the Court. It must also be pointed out that
respondents have not appealed from such finding by the Court of Appeals. It is
only the petitioner that appealed from the decision of the Court of Appeals.

The main issue is whether or not respondents, as project employees, are
entitled to nominal damages for lack of advance notice of their dismissal.

A project employee is defined under Article 280 of the Labor Code as one
whose employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
[19]


In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found
that respondents, as project employees, were validly terminated due to
the completion of the phases of work for which their services were engaged.
respondents, in this case, were not terminated for just cause under Article
282 of the Labor Code. Dismissal based on just causes contemplate acts or
omissions attributable to the employee.
[23]
Instead, respondents were terminated
due to the completion of the phases of work for which their services were
engaged.

As project employees, respondents termination is governed by Section 1 (c)
and Section 2 (III), Rule XXIII (Termination of Employment), Book V of the
Omnibus Rules Implementing the Labor Code.

Records show that respondents were dismissed after the expiration of their
respective project employment contracts, and due to the completion of the phases
of work respondents were engaged for. Hence, the cited provisions requirements
of due process or prior notice when an employee is dismissed for just or
authorized cause (under Articles 282 and 283 of the Labor Code) prior to the
completion of the project or phase thereof for which the employee was engaged do
not apply to this case.

Hence, prior or advance notice of termination is not part of procedural due
process if the termination is brought about by the completion of the contract or
phase thereof for which the employee was engaged. Petitioner, therefore, did not
violate any requirement of procedural due process by failing to give respondents
advance notice of their termination; thus, there is no basis for the payment of
nominal damages.

JUDY DAQUITAL V CAMUS ENGINEERING CORPORATION SEPT. 1,
2010
The issues boil down to whether the CA was correct in concluding that
petitioners were project employees and that their dismissal from employment was
legal.

We answer in the negative.
A project employee is assigned to a project which begins and ends at
determined or determinable times.
[36]
Employees who work under different project
employment contracts for several years do not automatically become regular
employees; they can remain as project employees regardless of the number of
years they work. Length of service is not a controlling factor in determining the
nature of ones employment.
[37]
Their rehiring is only a natural consequence of the
fact that experienced construction workers are preferred.
[38]
In fact, employees who
are members of a work pool from which a company draws workers for
deployment to its different projects do not become regular employees by reason of
that fact alone. The Court has consistently held that members of a work pool can
either be project employees or regular employees.
[39]


The principal test used to determine whether employees are project
employees is whether or not the employees were assigned to carry out a specific
project or undertaking, the duration or scope of which was specified at the time the
employees were engaged for that project.
[40]


Admittedly, respondents did not present the employment contracts of
petitioners except that of Dacuital. They explained that it was no longer necessary
to present the other contracts since petitioners were similarly situated. Having
presented one contract, respondents believed that they sufficiently established
petitioners status as project employees.

Even though the absence of a written contract does not by itself grant regular
status to petitioners, such a contract is evidence that petitioners were informed of
the duration and scope of their work and their status as project employees.
[41]
In
this case, where no other evidence was offered, the absence of the employment
contracts raises a serious question of whether the employees were properly
informed at the onset of their employment of their status as project employees.
[42]


While it is true that respondents presented the employment contract of
Dacuital, the contract does not show that he was informed of the nature, as well as
the duration of his employment. In fact, the duration of the project for which he
was allegedly hired was not specified in the contract.

Even if we assume that under the above provision of the contract, Dacuital
was informed of the nature of his employment and the duration of the project, that
same contract is not sufficient evidence to show that the other employees were so
informed. It is undisputed that petitioners had individual employment contracts, yet
respondents opted not to present them on the lame excuse that they were similarly
situated as Dacuital. The non-presentation of these contracts gives rise to the
presumption that the employees were not informed of the nature and duration of
their employment. It is doctrinally entrenched that in illegal dismissal cases, the
employer has the burden of proving with clear, accurate, consistent, and
convincing evidence that the dismissal was valid. Absent any other proof that the
project employees were informed of their status as such, it will be presumed that
they are regular employees.
[44]


Moreover, Department Order No. 19 (as well as the old Policy Instructions
No. 20) requires employers to submit a report of an employees termination to the
nearest public employment office everytime the employment is terminated due to
the completion of a project.
[45]
In this case, there was no evidence that there was
indeed such a report. LMCECs failure to file termination reports upon the
cessation of petitioners employment was an indication that petitioners were not
project but regular employees.
In cases involving an employees dismissal, the burden is on the employer to
prove that the dismissal was legal.
[46]
This burden was not amply discharged by
LMCEC in this case. Being regular employees, petitioners were entitled to security
of tenure, and their services may not be terminated except for causes provided by
law.
[47]


Finally, records failed to show that LMCEC afforded petitioners, as regular
employees, due process prior to their dismissal, through the twin requirements of
notice and hearing. Petitioners were not served notices informing them of the
particular acts for which their dismissal was sought. Nor were they required to give
their side regarding the charges made against them, if any. Certainly, petitioners
dismissal was not carried out in accordance with law and was, therefore, illegal.
[48]


ROSITA PANGILINAN VS GMC JULY 12, 2004
Article 280 of the Labor Code comprehends three kinds of employees: (a) regular
employees or those whose work is necessary or desirable to the usual business of the
employer; (b) project employees or those whose employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season; and, (c) casual
employees or those who are neither regular nor project employees.
40

A regular employee is one who is engaged to perform activities which are necessary and
desirable in the usual business or trade of the employer as against those which are
undertaken for a specific project or are seasonal.
41
There are two separate instances
whereby it can be determined that an employment is regular: (1) if the particular activity
performed by the employee is necessary or desirable in the usual business or trade of the
employer; and, (2) if the employee has been performing the job for at least a year.
42

An examination of the contracts entered into by the petitioners showed that their
employment was limited to a fixed period, usually five or six months, and did not go beyond
such period.
The records reveal that the stipulations in the employment contracts were knowingly and
voluntarily agreed to by the petitioners without force, duress or improper pressure, or any
circumstances that vitiated their consent. Similarly, nothing therein shows that these
contracts were used as a subterfuge by the respondent GMC to evade the provisions of
Articles 279 and 280 of the Labor Code.
The petitioners were hired as "emergency workers" and assigned as chicken dressers,
packers and helpers at the Cainta Processing Plant. The respondent GMC is a domestic
corporation engaged in the production and sale of livestock and poultry, and is a distributor
of dressed chicken. While the petitioners' employment as chicken dressers is necessary
and desirable in the usual business of the respondent, they were employed on a mere
temporary basis, since their employment was limited to a fixed period. As such, they cannot
be said to be regular employees, but are merely "contractual employees." Consequently,
there was no illegal dismissal when the petitioners' services were terminated by reason of
the expiration of their contracts.
47
Lack of notice of termination is of no consequence,
because when the contract specifies the period of its duration, it terminates on the
expiration of such period. A contract for employment for a definite period terminates by its
own term at the end of such period.
48

In sum, we rule that the appeal was filed within the ten (10)-day reglementary period.
Although the petitioners who mainly worked as chicken dressers performed work necessary
and desirable in the usual business of the respondent, they were not regular employees
therein. Consequently, the termination of their employment upon the expiry of their
respective contracts was valid.

CE CONSTRUCTION CORP VS. ISAAC CIOCO SEPT. 8, 2004
The WORKERS contend that they are regular employees of the
COMPANY, hence, entitled to reinstatement and backwages from the time of
their illegal dismissal up to the date of their actual reinstatement.
The COMPANY, on the other hand, contends that the WORKERS are its
project employees; that they were not illegally dismissed; and, that in ruling
otherwise, the CA disregarded the documentary evidence, i.e., Progress
Billing and Notice of Termination Reports, clearly showing completion of the
phases of the GTI Tower project for which the services of the WORKERS had
been engaged.
The issue of whether the WORKERS were regular or project employees of
the COMPANY is a question of fact which shall no longer be dealt with in this
petition for review, the Courts jurisdiction being limited to questions of law.
The Labor Arbiter, the NLRC, and the CA, unanimously found that the
WORKERS were project employees of the COMPANY. This finding is binding
on this Court.
We again hold that the fact that the WORKERS have been employed with
the COMPANY for several years on various projects, the longest being nine
(9) years, did not automatically make them regular employees considering
that the definition of regular employment in Article 280
[11]
of the Labor Code,
makes specific exception with respect to project employment. The re-hiring of
petitioners on a project-to-project basis did not confer upon them regular
employment status. The practice was dictated by the practical consideration
that experienced construction workers are more preferred.
[12]
It did not change
their status as project employees.
In his Decision dated April 17, 2000, the labor arbiter categorically found
that the appropriate notices to the WORKERS and the corresponding reports
were submitted by the COMPANY to the DOLE. The NLRC affirmed this
finding of fact on appeal. The rule is that factual findings of administrative
agencies, if supported by substantial evidence, are entitled to great
weight.
[14]
More importantly, Section 2
[15]
(III), Rule XXIII, Book V of
the Omnibus Rules Implementing the Labor Codeprovides that no prior
notice of termination is required if the termination is brought about by
completion of the contract or phase thereof for which the worker has been
engaged. This is because completion of the work or project automatically
terminates the employment, in which case, the employer is, under the law,
only obliged to render a report to the DOLE on the termination of the
employment.
[16]

Finally, the CA ruled that the COMPANY failed to present evidence
conclusively showing actual completion of the GTI Tower project or respective
phases thereof for which the WORKERS had been hired. Allegedly, the best
evidence of this fact is the schedule of completion of the whole or various
phases of the construction project in the COMPANYs possession.
Again, a review of the records shows that the COMPANY submitted the
needed evidence. In its motion for reconsideration of the CAs decision, the
COMPANY attached as Annexes A
[17]
and B,
[18]
Progress Billing Reports
clearly showing that the GTI Tower project was already 80.9203% and
81.3747% accomplished as of May 31, 1999 and June 30, 1999, respectively.
Specifically, the particular form, concreting and masonry works for which the
WORKERS had been hired and assigned were already completed or near
completion, as shown by Annexes A-3, A-4, and A-6 of the May Progress
Billing Report, and Annexes B-3, B-4, B-6 and B-7 of the June Progress
Billing Report. The WORKERS did not question the veracity of the evidence
presented and just insisted that they are regular employees of the COMPANY,
hence, not liable for termination on mere ground of project completion.
Considering the foregoing, we hold that the COMPANY complied with the
procedural as well as the substantive requirements of due process with
respect to the WORKERS termination, as found by the Labor Arbiter and the
NLRC. We reverse the CA.

ABESCO CONSTRUCTION AND DEVT. CORP VS RAMIREZ APRIL 10, 2006
In this petition for review under Rule 45 of the Rules of Court, petitioners raise the following
issues for resolution: (1) whether respondents were project employees or regular
employees and (2) whether respondents were illegally dismissed.
On the first issue, we rule that respondents were regular employees. However, we take
exception to the reasons cited by the LA (which both the NLRC and the CA affirmed) in
considering respondents as regular employees and not as project employees.
Contrary to the disquisitions of the LA, employees (like respondents) who work under
different project employment contracts for several years do not automatically become
regular employees; they can remain as project employees regardless of the number of
years they work.
7
Length of service is not a controlling factor in determining the nature of
one's employment.
8

Moreover, employees who are members of a "work pool" from which a company (like
petitioner corporation) draws workers for deployment to its different projects do not become
regular employees by reason of that fact alone. The Court has enunciated in some
cases
9
that members of a "work pool" can either be project employees or regular
employees.
The principal test for determining whether employees are "project employees" or "regular
employees" is whether they are assigned to carry out a specific project or undertaking, the
duration and scope of which are specified at the time they are engaged for that
project.
10
Such duration, as well as the particular work/service to be performed, is defined in
an employment agreement and is made clear to the employees at the time of hiring.
11

In this case, petitioners did not have that kind of agreement with respondents. Neither did
they inform respondents of the nature of the latter's work at the time of hiring. Hence, for
failure of petitioners to substantiate their claim that respondents were project employees,
we are constrained to declare them as regular employees.
Furthermore, petitioners cannot belatedly argue that respondents continue to be their
employees (so as to escape liability for illegal dismissal). Before the LA, petitioners
staunchly postured that respondents were only "project employees" whose employment
tenure was coterminous with the projects they were assigned to. However, before the CA,
they took a different stance by insisting that respondents continued to be their employees.
Petitioners' inconsistent and conflicting positions on their true relation with respondents
make it all the more evident that the latter were indeed their regular employees.
On the issue of illegal dismissal, we hold that petitioners failed to adhere to the "two-notice
rule" which requires that workers to be dismissed must be furnished with: (1) a notice
informing them of the particular acts for which they are being dismissed and (2) a notice
advising them of the decision to terminate the employment.
12
Respondents were never given
such notices.

ISMAEL SAMSON VS NLRC FEB 1, 1996
Hence this petition, which presents for resolution the sole issue of whether
petitioner is a project or regular employee.
Petitioner principally argues that respondent commission gravely erred in
declaring that he is merely a project employee, invoking in support thereof the
ruling enunciated in the case of Caramol vs. National Labor Relations
Commission, et al.
[4]
His being a regular employee is allegedly supported by
evidence, such as his project employment contracts with private respondent,
which show that petitioner performed the same kind of work as rigger
throughout his period of employment and that, as such, his task was
necessary and desirable to private respondents usual trade or business.
The bulk of the problem appears to hinge on the determination of whether
or not Department Order No. 19 should be given retroactive effect in order
that the notice of termination requirement may be dispensed with in this case
for a correlative ruling on the presumption of regularity of employment which
normally arises in case of non-compliance therewith. Both the petitioner and
the Solicitor General submit that said order can only have prospective
application. Private respondent believes otherwise. We find for petitioner.
When the present action for regularization was filed on November 5,
1989
[6]
and during the entire period of petitioners employment with private
respondent prior to said date, the rule in force then was Policy Instruction No.
20 which, in the fourth paragraph thereof, required the employer company to
report to the nearest Public Employment Office the fact of termination of a
project employee as a result of the completion of the project or any phase
thereof in which he is employed. Furthermore, contrary to private
respondents asseveration, Department Order No. 19, which was issued on
April 1, 1993, did not totally dispense with the notice requirement but, instead,
made provisions therefor and considered it as one of the indicators that a
worker is a project employee.
More importantly, it must be emphasized that the notice of termination
requirement has been retained by express provision of Department Order No.
19 under Section 6.1 thereof
Perforce, we agree with the labor arbiter that private respondents failure
to report the termination of petitioners services to the nearest Public
Employment Office, after completion of every project or a phase thereof to
which he is assigned, is a clear indication that petitioner was not and is not a
project employee.
The mandate in Article 281 of the Labor Code, which pertinently
prescribes that the provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of the the parties, an
employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer and that any employee who has
rendered at least one year of service, whether such service is continuous or
broken shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such actually
exists, should apply in the case of herein petitioner.
It is not disputed that petitioner had been working for private respondent
for approximately twenty-eight (28) years as of the adjudication of his plaint by
respondent NLRC, and that his project-to-project employment was renewed
several times.


PLDT VS YLAGAN
Before us, PLDT essentially maintains its stand that respondent, as a project
employee, was not dismissed from work but her employment ceased upon the
expiration of her project employment contracts with PLDT.

A project employee is assigned to carry out a specific project or undertaking
the duration and scope of which are specified at the time the employee is engaged
in the project.
[9]
A project is a job or undertaking which is distinct, separate and
identifiable from the undertakings of the company.
[10]
A project employee is
assigned to a project which begins and ends at determined or determinable
times.
[11]


Various indicators convince us that respondent was not a project employee
but a regular employee who was illegally dismissed.

First, respondent worked continuously for PLDT from November 1992 to
July 1995 without any mention of a project to which she was specifically
assigned. She was hired to perform accounting duties which were not shown as
distinct, separate and identifiable from the usual undertakings of the
company. Although essentially a telephone company, PLDT maintains its own
accounting department to which respondent was assigned.

Second, aside from its statement that respondent was hired as a project
employee for the Employment Payroll System Project which began in 1992, PLDT
did not provide evidence of the project employment contracts covering the period
from November 1992 (when respondent was hired) to July 1995. PLDT mentioned
only two contracts but these pertained to her employment period from July 1995 to
January 1996.

Third, despite the supposed expiration of respondents project employment
contract on January 2, 1996, respondent continued to work for PLDT until May 2,
1996 when respondent was required to sign up with CESI.
[12]
Respondent worked
for PLDT, under contract with CESI, until February 3, 1997. PLDT explained that
it no longer allowed respondent to report for work by then since the project was
already done. But the project was only completed in March 1997.

Most important of all, based on the records, PLDT did not report the
termination of respondents supposed project employment to the Department of
Labor and Employment as project employee. Department Order No. 19 (as well as
the old Policy Instructions No. 20) required employers to submit a report of an
employees termination to the nearest public employment office every time his
employment was terminated due to a completion of a project.
[13]
PLDTsfailure to
file termination reports was an indication that the respondent was not a project
employee but a regular employee.
[14]


PLDT asserts that even if respondent rendered continuous service for a year
or so, she could not be deemed a regular employee because the services performed
were not necessary or desirable to the usual trade or business of the company. On
this, we agree with the CA:


It is absurd to argue that services rendered by the [respondent] as
an accounting clerk to the accounting and auditing department of PLDT
in relation to its PEPS project (computerization of employees[] payroll
system) is not necessary or desirable to the companys business. There
wont be any business without any workforce xxx. Employees render
their services for a certain payment or compensation. Thus,
[respondents] job pertaining to effective payroll system is part and
parcel [of] the usual business of PLDT.


Even assuming that respondent was hired as a project employee from the
onset, we have ruled that once such an employee has been: (1) continuously, as
opposed to intermittently, re-hired by the same employer for the same tasks or
nature of tasks and (2) these tasks are vital, necessary and indispensable to the
usual business or trade of the employer, then the employee must be deemed
a regular employee.
[19]


From the foregoing, the duration (of at least one year) and necessity of
respondents employment have been established. She was therefore a regular
employee of PLDT.

BAHIA SHIPPING SERVICES BS REYNALDO CHUA APRIL 8, 2008
In the present case, petitioner has failed to establish a compelling reason for the
Court to depart from this rule. In fact, as pointed out by the CA, petitioner's claim that
respondent's tardiness was habitual lacks evidentiary support as no other documents on
record were attached to substantiate that the private respondent was forewarned for the
first and second time for any infraction or offense, work-related or not, vis--vis the
performance of his regular duties and functions.
[17]

It being settled that the dismissal of respondent was illegal, it follows that the latter is
entitled to payment of his salary for the unexpired portion of his contract, as provided
under Republic Act (R.A.) No. 8042, considering that his employment was pre-terminated
on March 9, 1997 or four months prior to the expiration of his employment contract
on July 17, 1997.

In Skippers Pacific, Inc. v. Mira,
[25]
wherein the overseas contract involved was only
for six months, the Court held that it is the first option provided under Section 10 of R.A.
No. 8042 which is applicable in that the overseas worker who was illegally dismissed is
entitled to payment of all his salaries covering the entire unexpired period of his
contract. The CA committed no error in adhering to the prevailing interpretation of
Section 10 of R.A. No. 8042.

Finally, the Court comes to the last issue on whether in the computation of
the foregoing award, respondent's guaranteed overtime pay amounting to US$197.00 per
month should be included as part of his salary. Petitioner contends that there is no factual
or legal basis for the inclusion of said amount because, after respondent's repatriation, he
could not have rendered any overtime work.
[26]


This time, petitioner's contention is well-taken.

The Court had occasion to rule on a similar issue in Stolt-Nielsen Marine Services
(Phils.), Inc. v. National Labor Relations Commission,
[27]
where the NLRC was
questioned for awarding to an illegally dismissed overseas worker fixed overtime pay
equivalent to the unexpired portion of the latter's contract. In resolving the question, the
Court, citing Cagampan v. National Labor Relations Commission,
[28]
held that although an
overseas employment contract may guarantee the right to overtime pay, entitlement to such
benefit must first be established, otherwise the same cannot be allowed.

Hence, it being improbable that respondent rendered overtime work during the
unexpired term of his contract, the inclusion of his guaranteed overtime pay into his
monthly salary as basis in the computation of his salaries for the entire unexpired period of
his contract has no factual or legal basis and the same should have been disallowed.

VIRGILIO SAPIO VS CASTRO MAY 22, 2008
Thereupon, the Labor Arbiter proceeded to grant petitioners salary differential to
the tune of P24,902.88.

The Court of Appeals did not subscribe to the common findings of the Labor
Arbiter and the NLRC. The appellate court pointed out that allegations of fraud in
the preparation of payroll sheets must be substantiated by evidence and not by
mere suspicions or conjectures
The conclusion of the Labor Arbiter that entries in the December 1995
payroll sheet could have been altered is utterly baseless. The claim that the
December 1995 payroll sheet was written in pencil and was thus rendered it prone
to alterations or erasures is clearly non sequitur. The same is true with respect to
the typewritten payroll sheets. In fact, neither the Labor Arbiter nor the NLRC
found any alteration or erasure or traces thereat, whether on the pencil-written or
typewritten payroll sheets. Indeed, the most minute examination will not reveal any
tampering. Furthermore, if there is any adverse conclusion as regards the
December 1995 payroll sheet, it must be confined only to it and cannot be applied
to the typewritten payroll sheets.

Moreover, absent any evidence to the contrary, good faith must be presumed
in this case. Entries in the payroll, being entries in the course of business, enjoy
the presumption of regularity under Rule 130, Section 43 of the Rules of
Court. Hence, while as a general rule, the burden of proving payment of monetary
claims rests on the employer,
[20]
when fraud is alleged in the preparation of the
payroll, the burden of evidence shifts to the employee and it is incumbent upon
him to adduce clear and convincing evidence in support of his
claim.
[21]
Unfortunately, petitioners bare assertions of fraud do not suffice to
overcome the disputable presumption of regularity.

While we adhere to the position of the appellate court that the tendency to
alter the entries in the payrolls was not substantiated, we cannot however subscribe
to the total deletion of the award of salary differential and attorneys fees, as it so
ruled.

The Labor Arbiter granted a salary differential of P24,902.88.
[22]



The Labor Arbiter erred in his computation. He fixed the daily wage rate
actually received by petitioner at P105.00
[23]
without taking into consideration
the P141.00 rate indicated in the typewritten payroll sheets submitted by
respondents. Moreover, the Labor Arbiter misapplied the wage orders
[24]
when he
wrongly categorized respondent as falling within the first category. Based on the
stipulated number of employees and audited financial statements,
[25]
respondents
should have been covered by the second category.

To avoid further delay in the disposition of this case which is not in
consonance with the objective of speedy justice, we have to adjudge the rightful
computation of the salary differential based on the applicable wage orders. After
all, the supporting records are complete.


The award of attorneys fees is warranted under the circumstances of this
case. Under Article 2208 of the New Civil Code, attorney's fees can be recovered
in actions for the recovery of wages of laborers and actions for indemnity under
employer's liability laws
[36]
but shall not exceed 10% of the amount awarded.
[37]

The fees may be deducted from the total amount due the winning party.

WHEREFORE, the petition is PARTIALLY GRANTED.
D. PIECE-RATE
LABOR CONGRESS OF THE PHILS. VS. NLRC MAY 21, 1998
We find for petitioners.
That petitioner employees are pakyao or piece workers does not imply that
they are not regular employees entitled to reinstatement. Private respondent
Empire Food Products, Inc. is a food and fruit processing company. In Tabas
v. California Manufacturing Co., Inc. (169 SCRA 497), this Honorable Court
held that the work of merchandisers of processed food, who coordinate with
grocery stores and other outlets for the sale of the processed food is
necessary in the day-to-day operation[s] of the company. With more reason,
the work of processed food repackers is necessary in the day-to-day
operation[s] of respondent Empire Food Products.
[10]

Petitioners are therefore entitled to reinstatement with full back wages pursuant to
Article 279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the
records disclose that taking into account the number of employees involved, the length
of time that has lapsed since their dismissal, and the perceptible resentment and enmity
between petitioners and private respondents which necessarily strained their
relationship, reinstatement would be impractical and hardly promotive of the best
interests of the parties. In lieu of reinstatement then, separation pay at the rate of one
month for every year of service, with a fraction of at least six (6) months of service
considered as one (1) year, is in order.
[13]

That being said, the amount of back wages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate workers having
been paid by the piece,
[14]
there is need to determine the varying degrees of production
and days worked by each worker. Clearly, this issue is best left to the National Labor
Relations Commission.
As to the other benefits, namely, holiday pay, premium pay, 13
th
month pay and
service incentive leave which the labor arbiter failed to rule on but which petitioners
prayed for in their complaint,
[15]
we hold that petitioners are so entitled to these
benefits. Three (3) factors lead us to conclude that petitioners, although piece-rate
workers, were regular employees of private respondents. First, as to the nature of
petitioners tasks, their job of repacking snack food was necessary or desirable in the
usual business of private respondents, who were engaged in the manufacture and
selling of such food products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on a specific project
or season; and third, the length of time
[16]
that petitioners worked for private
respondents. Thus, while petitioners mode of compensation was on a per piece
basis, the status and nature of their employment was that of regular employees.
The Rules Implementing the Labor Code exclude certain employees from receiving
benefits such as nighttime pay, holiday pay, service incentive leave
[17]
and 13th month
pay,
[18]
inter alia, field personnel and other employees whose time and performance is
unsupervised by the employer, including those who are engaged on task or contract
basis, purely commission basis, or those who are paid a fixed amount for performing
work irrespective of the time consumed in the performance thereof. Plainly, petitioners
as piece-rate workers do not fall within this group. As mentioned earlier, not only did
petitioners labor under the control of private respondents as their employer, likewise did
petitioners toil throughout the year with the fulfillment of their quota as supposed basis
for compensation. Further, in Section 8 (b), Rule IV, Book III which we quote
hereunder, piece workers are specifically mentioned as being entitled to holiday pay.
SEC. 8. Holiday pay of certain employees.-
(b) Where a covered employee is paid by results or output, such as
payment on piece work, his holiday pay shall not be less than his
average daily earnings for the last seven (7) actual working days
preceding the regular holiday: Provided, however, that in no case
shall the holiday pay be less than the applicable statutory minimum
wage rate.
In addition, the Revised Guidelines on the Implementation of the 13
th
Month Pay
Law, in view of the modifications to P.D. No. 851
[19]
by Memorandum Order No. 28,
clearly exclude the employer of piece rate workers from those exempted from paying
13
th
month pay, to wit:
2. EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d. Employers of those who are paid on purely commission,
boundary or task basis, and those who are paid a fixed amount for
performing specific work, irrespective of the time consumed in the
performance thereof, except where the workers are paid on piece-
rate basis in which case the employer shall grant the required
13th month pay to such workers. (italics supplied)
The Revised Guidelines as well as the Rules and Regulations identify those workers
who fall under the piece-rate category as those who are paid a standard amount for
every piece or unit of work produced that is more or less regularly replicated, without
regard to the time spent in producing the same.
[20]

As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I,
Book III of the Implementing Rules, workers who are paid by results including those who
are paid on piece-work, takay, pakiao, or task basis, if their output rates are in
accordance with the standards prescribed under Sec. 8, Rule VII, Book III, of these
regulations, or where such rates have been fixed by the Secretary of Labor in
accordance with the aforesaid section, are not entitled to receive overtime pay. Here,
private respondents did not allege adherence to the standards set forth in Sec. 8 nor
with the rates prescribed by the Secretary of Labor. As such, petitioners are beyond the
ambit of exempted persons and are therefore entitled to overtime pay. Once more, the
National Labor Relations Commission would be in a better position to determine the
exact amounts owed petitioners, if any.
IN VIEW WHEREOF, the instant petition is hereby GRANTED.
1. DECLARING petitioners to have been illegally dismissed by private respondents,
thus entitled to full back wages and other privileges, and separation pay in lieu of
reinstatement at the rate of one months salary for every year of service with a
fraction of six months of service considered as one year;
SO ORDERED.

LAMBO VS NLRC OCT. 26, 1999
The petition is meritorious.
First. There is no dispute that petitioners were employees of private respondents although
they were paid not on the basis of time spent on the job but according to the quantity and the
quality of work produced by them. There are two categories of employees paid by results: (1)
those whose time and performance are supervised by the employer. (Here, there is an element of
control and supervision over the manner as to how the work is to be performed. A piece-rate
worker belongs to this category especially if he performs his work in the company premises.);
and (2) those whose time and performance are unsupervised. (Here, the employers control is
over the result of the work. Workers on pakyao and takay basis belong to this group.) Both
classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in
garment factories where work is done in the company premises, while payment
on pakyao and takay basis is commonly observed in the agricultural industry, such as in sugar
plantations where the work is performed in bulk or in volumes difficult to quantify.
[4]
Petitioners
belong to the first category, i.e., supervised employees.
In determining the existence of an employer-employee relationship, the following elements
must be considered: (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employees conduct.
[5]
Of
these elements, the most important criterion is whether the employer controls or has reserved the
right to control the employee not only as to the result of the work but also as to the means and
methods by which the result is to be accomplished.
[6]

In this case, private respondents exercised control over the work of petitioners. As tailors,
petitioners worked in the companys premises from 8:00 a.m. to 7:00 p.m. daily, including
Sundays and holidays. The mere fact that they were paid on a piece-rate basis does not negate
their status as regular employees of private respondents. The term wage is broadly defined in
Art. 97 of the Labor Code as remuneration or earnings, capable of being expressed in terms of
money whether fixed or ascertained on a time, task, piece or commission basis. Payment by the
piece is just a method of compensation and does not define the essence of the relations.
[7]
Nor
does the fact that petitioners are not covered by the SSS affect the employer-employee
relationship.
Indeed, the following factors show that petitioners, although piece-rate workers, were
regular employees of private respondents: (1) within the contemplation of Art. 280 of the Labor
Code, their work as tailors was necessary or desirable in the usual business of private
respondents, which is engaged in the tailoring business; (2) petitioners worked for private
respondents throughout the year, their employment not being dependent on a specific project or
season; and, (3) petitioners worked for private respondents for more than one year.
[8]

As petitioners were illegally dismissed, they are entitled to reinstatement with
backwages. Considering that petitioners were dismissed from the service on January 17,
1989, i.e.,prior to March 21, 1989,
[18]
the Labor Arbiter correctly applied the rule in the Mercury
Drug case,
[19]
according to which the recovery of backwages should be limited to three years
without qualifications or deductions. Any award in excess of three years is null and void as to
the excess.
[20]

The Labor Arbiter correctly ordered private respondents to give separation
pay. Considerable time has lapsed since petitioners dismissal, so that reinstatement would now
be impractical and hardly in the best interest of the parties. In lieu of reinstatement, separation
pay should be awarded to petitioners at the rate of one month salary for every year of service,
with a fraction of at least six (6) months of service being considered as one (1) year.
[21]

The awards for overtime pay, holiday pay and 13th month pay are in accordance with our
finding that petitioners are regular employees, although paid on a piece-rate basis.
[22]

WHEREFORE, the decision of the National Labor Relations Commission is SET ASIDE
and another one is RENDERED ordering private respondents to pay petitioners the total amount
of One Hundred Eighty-One Thousand One Hundred Two Pesos and 40/100 (P181,102.40), as
computed above.
SO ORDERED.

MARK ROCHE INTERNATIONAL VS NLRC AUG. 31, 1999
Finally, as correctly held by the NLRC, private respondents as piece-rate employees are not
entitled to service incentive leave pay as well as holiday pay even if they are entitled to other
benefits like COLA and 13th month pay. Service incentive leave pay shall not apply to
employees whose performance is unsupervised by the employer, including those who are paid in
a fixed amount for performing work irrespective of the time consumed in the performance
thereof.
[7]

WHEREFORE, this Court finds that private respondents Eileen Rufon, Lilia Briones,
Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano, Marissa Sadili, Wilma
Patacay, Estrella Mallari, Delia Laroya and Divina Villarba were illegally dismissed - not merely
illegally constructively dismissed - by petitioners Mark Roche International and/or Eduardo
Dayot and Susan Dayot, and to this extent, the assailed Decision of public respondent National
Labor Relations Commission affirming that of the Labor Arbiter, is MODIFIED. However, it is
AFFIRMED insofar as it ordered the reinstatement of private respondents with back wages,
salary differentials and 13th month pay. The service incentive leave pay awarded by the Labor
Arbier but deleted by the National Labor Relations Commission is likewise DELETED.
SO ORDERED.

E. PROBATIONARY F
CEBU MARINE BEACH RESOT VS NLRC - OCT 23, 2003
Hence, this petition for review on certiorari.
Petitioners contend that the Appellate Court committed a serious error when it unilaterally
extended the 6-month probationary employment contracts of the respondents by awarding
them full backwages, or in lieu of their reinstatement, when it ordered payment of their
separation pay computed from the time of their dismissal up to the finality of its Decision.
The sole legal issue for our Resolution is whether respondents were illegally dismissed from
employment by petitioner company.
We hold that the Court of Appeals did not err when it ruled that respondents were illegally
dismissed from the service.
It is settled that while probationary employees do not enjoy permanent status, they are
entitled to the constitutional protection of security of tenure. Their employment may only
be terminated for just cause or when they fail to qualify as regular employees in
accordance with reasonable standards made known to them by their employer at the
time of engagement, and after due process.
5

Here, petitioners terminated respondents probationary employment on the grounds of
abandonment and failure to qualify for the positions for which they were employed.
On this point, we quote with approval the findings of the Court of Appeals, thus:
"x x x. It is undisputed that Mr. Sasaki made an utterance to the effect that private
respondents should go home and never come back to work for the company again. Such
utterance is tantamount to a dismissal. Its meaning is also clear and unmistakable no matter
which accent was used by Mr. Sasaki. Considering further that Mr. Sasaki was in charge of
the training of the private respondents, his words carry authority and conviction. Even
assuming for the sake of argument that Mr. Sasaki was never vested with the power of
dismissal, the petitioner company ratified Mr. Sasakis acts. When petitioner company sent
a strongly worded memorandum to private respondents asking them to explain why their
services should not be terminated for failure to live up to the companys expectations, it
showed intention to terminate. x x x:
"x x x
"The subsequent issuances of the memos were, as rightly interpreted by the public
respondent, merely an afterthought to escape the legal liability arising from the illegal
termination of the private respondents services. x x x:
"x x x
"The next three reasons adduced by the petitioners sought to prove the existence of a just
cause for the dismissal of private respondents, which is, abandonment. We are not
convinced. The fact that private respondents never came back to work despite the issuance
of the memoranda by the petitioner does not support the allegation of abandonment. x x x."
Indeed, we find no indication that respondents have shown by some overt acts their
intention to sever their employment in petitioner company. To constitute abandonment,
there must be clear proof of deliberate and unjustified intent to sever the employer-
employee relationship. Clearly, the operative factor is still the employers ultimate act of
putting an end to his employment.
Here, respondents did not report back for work because they were warned by petitioner
Sasaki not to return. But immediately, they filed with the Labor Arbiters Office a complaint
for illegal dismissal. It is a settled doctrine that the filing of a complaint for illegal dismissal is
inconsistent with the charge of abandonment, for an employee who takes steps to protest
his dismissal cannot by logic be said to have abandoned his work.
6

That respondents failed to qualify for their positions, suffice it to state that at the time they
were dismissed, they were still in a "trial period" or probationary period. Being in the nature
of a "trial period," the essence of a probationary period of employment fundamentally lies in
the purpose or objective sought to be attained by both the employer and the employee
during said period. While the employer observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent employment, the probationer,
on the other hand, seeks to prove to the employer that he has the qualifications to meet the
reasonable standards for permanent employment which obviously were made known to
him.
7
To reiterate, in the case at bar, far from allowing the respondents to prove that they
possessed the qualifications to meet the reasonable standards for their permanent
employment, petitioners peremptorily dismissed them from the service.
On another tack, petitioners argument that the Appellate Courts award of full backwages
and separation pay in effect unilaterally extended respondents 6-month probationary
employment is bereft of merit.
In Philippine Manpower Services, Inc. vs. NLRC,
8
we held that "absent the grounds for
termination of a probationary employee, he is entitled to continued employment even
beyond the probationary period."
On a similar note, our ruling in Lopez vs. Javier
9
is quite explicit, thus:
"x x x, probationary employees who are unjustly dismissed from work during the
probationary period shall be entitled to reinstatement and payment of full backwages and
other benefits and privileges from the time they were dismissed up to their actual
reinstatement, conformably with Article 279 of the Labor Code, as amended by Section 34
of Republic Act No. 6715, which took effect on March 21, 1989:
x x x An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement."
Verily, respondents who were unjustly dismissed from work are actually entitled to
reinstatement without loss of seniority rights and other privileges as well as to their full
backwages, inclusive of allowances, and to other benefits or their monetary
equivalent computed from the time their compensation was withheld from them up to
the time of their actual reinstatement.
10

However, the circumstances obtaining in this case do not warrant the reinstatement of
respondents. Antagonism caused a severe strain in the relationship between them and
petitioner company. A more equitable disposition, as correctly held by the NLRC, would be
an award of separation pay
11
equivalent to at least one month pay, or one month pay for
every year of service, whichever is higher,
12
in addition to their full backwages, allowances
and other benefits.1a\^/phi1.net
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals dated
November 5, 1999 and April 18, 2000 are hereby AFFIRMED WITH MODIFICATION in the
sense that, in lieu of reinstatement, respondents are awarded separation pay equivalent to
at least one month pay, or one month pay for every year of service, whichever is higher;
and their full backwages, other privileges and benefits, or their monetary equivalent during
the period of their dismissal up to their supposed actual reinstatement.
Costs against petitioners.
SO ORDERED.

RODIN ALCIRA VS NLRC - JUNE 9, 2004

Hence, this petition for review based on the following assignment of errors:
I
The Court of Appeals gravely erred, blatantly disregarded the law and established
jurisprudence, in upholding the decision of the National Labor Relations
Commission.
II
The Court of Appeals gravely erred and blatantly disregarded the law in holding that
probationary employment is employment for a definite period.
III
The Court of Appeals gravely erred in holding that an employer can be presumed to
have complied with its duty to inform the probationary employee of the standards to
make him a regular employee.
IV
The Court of Appeals gravely erred and failed to afford protection to labor in not
applying to the instant case the doctrine laid down by this Honorable Court
in Serrano vs. NLRC, et. al., G.R. No. 117040, January 27, 2000.
9

Central to the matter at hand is Article 281 of the Labor Code which provides that:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not
exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. The services of
an employee who has been engaged on a probationary basis may be terminated for
a just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of
his engagement. An employee who is allowed to work after a probationary period
shall be considered a regular employee.
The first issue we must resolve is whether petitioner was allowed to work beyond his
probationary period and was therefore already a regular employee at the time of his
alleged dismissal. We rule in the negative.
Petitioner claims that under the terms of his contract, his probationary employment
was only for five months as indicated by the remark "Please be informed that after
five months, your performance shall be evaluated and any adjustment in salary shall
depend on your work performance." The argument lacks merit. As correctly held by
the labor arbiter, the appointment contract also stated in another part thereof that
petitioners employment status was "probationary (6 mos.)." The five-month period
referred to the evaluation of his work.
10

Petitioner insists that he already attained the status of a regular employee when he was
dismissed on November 20, 1996 because, having started work on May 20, 1996, the six-
month probationary period ended on November 16, 1996. According to petitioners
computation, since Article 13 of the Civil Code provides that one month is composed of
thirty days, six months total one hundred eighty days. As the appointment provided that
petitioners status was "probationary (6 mos.)" without any specific date of termination, the
180th day fell on November 16, 1996. Thus, when he was dismissed on November 20,
1996, he was already a regular employee.
Petitioners contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et.
al.,
11
this Court dealt with the same issue of whether an employment contract from May 16,
1995 to November 15, 1995 was within or outside the six-month probationary period. We
ruled that November 15, 1995 was still within the six-month probationary period. We
reiterate our ruling in CALS Poultry Supply:
(O)ur computation of the 6-month probationary period is reckoned from the date of
appointment up to the same calendar date of the 6th month following.(italics
supplied)
In short, since the number of days in each particular month was irrelevant, petitioner was
still a probationary employee when respondent Middleby opted not to "regularize" him on
November 20, 1996.
The second issue is whether respondent Middleby informed petitioner of the standards for
"regularization" at the start of his employment.
Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code
(Department Order No. 10, Series of 1997) provides that:
x x x x x x x x x
(d) In all cases of probationary employment, the employer shall make known to the
employee the standards under which he will qualify as a regular employee at the
time of his engagement. Where no standards are made known to the employee at
that time, he shall be deemed a regular employee.
x x x x x x x x x
We hold that respondent Middleby substantially notified petitioner of the standards to
qualify as a regular employee when it apprised him, at the start of his employment,
that it would evaluate his supervisory skills after five months. In Orient Express
Placement Philippines vs. National Labor Relations Commission,
12
we ruled that an
employer failed to inform an employee of the reasonable standards for becoming a
regular employee:
Neither private respondent's Agency-Worker Agreement with ORIENT
EXPRESS nor his Employment Contract with NADRICO ever mentioned that
he must first take and pass a Crane Operator's License Examination in Saudi
Arabia before he would be allowed to even touch a crane. Neither did he
know that he would be assigned as floorman pending release of the results of
the examination or in the event that he failed; more importantly, that he
would be subjected to a performance evaluation by his superior one (1)
month after his hiring to determine whether the company was amenable
to continuing with his employment. Hence, respondent Flores could not be
faulted for precisely harboring the impression that he was hired as crane
operator for a definite period of one (1) year to commence upon his arrival at
the work-site and to terminate at the end of one (1) year. No other condition
was laid out except that he was to be on probation for three (3)
months.(emphasis supplied)
Conversely, an employer is deemed to substantially comply with the rule on notification of
standards if he apprises the employee that he will be subjected to a performance evaluation
on a particular date after his hiring. We agree with the labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was never informed by
private respondent of the standards that he must satisfy in order to be converted into
regular status. This rans (sic) counter to the agreement between the parties that
after five months of service the petitioners performance would be evaluated. It is
only but natural that the evaluation should be made vis--vis the performance
standards for the job. Private respondent Trifona Mamaradlo speaks of such
standard in her affidavit referring to the fact that petitioner did not perform well in his
assigned work and his attitude was below par compared to the companys standard
required of him.
13

The third issue for resolution is whether petitioner was illegally dismissed when respondent
Middleby opted not to renew his contract on the last day of his probationary employment.
It is settled that even if probationary employees do not enjoy permanent status, they are
accorded the constitutional protection of security of tenure. This means they may only be
terminated for just cause or when they otherwise fail to qualify as regular employees in
accordance with reasonable standards made known to them by the employer at the time of
their engagement.
14

But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission
15
that
this constitutional protection ends on the expiration of the probationary period. On that date,
the parties are free to either renew or terminate their contract of
employment. Manlimos concluded that "(t)his development has rendered moot the question
of whether there was a just cause for the dismissal of the petitioners xxx."
16
In the case at
bar, respondent Middleby exercised its option not to renew the contract when it informed
petitioner on the last day of his probationary employment that it did not intend to grant him a
regular status.
Although we can regard petitioners severance from work as dismissal, the same cannot be
deemed illegal. As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner
(1) incurred ten absences (2) was tardy several times (3) failed to wear the proper uniform
many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute
these substantiated allegations. Taking all this in its entirety, respondent Middleby was
clearly justified to end its employment relationship with petitioner.
WHEREFORE, the petition is hereby DENIED.
No costs.
SO ORDERED.

MITSUBISHI MOTORS VS. CHRYSLER PHILS LABOR UNION JUNE 29,
2004
The Present Petition
Undaunted, the MMPC, now the petitioner, filed this instant petition, alleging as follows:
A.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN REVERSING THE
3 NOVEMBER 1997 DECISION OF THE HONORABLE VA DANILO LORREDO,
AND IN FINDING THAT RESPONDENT PARAS (WAS) ILLEGALLY DISMISSED
AND ORDERING HIS REINSTATEMENT.
B.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ORDERING THE
REINSTATEMENT OF PARAS WITH FULL BACKWAGES DESPITE THE CHANGE
IN THE FINANCIAL CIRCUMSTANCES OF THE COMPANY.
C.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
THE SIX-MONTH PROBATIONARY PERIOD OF PARAS WHICH STARTED ON 27
MAY 1996 HAD EXPIRED 23 NOVEMBER 1996.
21

The petitioner asserts that the CA erred in ruling that respondent Paras was already a
regular employee when he was served the notice of termination. Citing Article 13 of the New
Civil Code, the petitioner argued that the six-month probationary period should be computed
as follows:
May 27-31 = 4 days
Jun(e) 1-30 = 1 month (30 days)
July 1-31 = 1 month (30 days)
Aug(.) 1-31 = 1 month (30 days)
Sept(.) 1-30 = 1 month (30 days)
Oct(.) 1-31 = 1 month (30 days)
Nov(.) 1-26 = 26 days
22

Hence, according to the petitioner, when the termination letter was served on November 26,
1996, Paras was still a probationary employee. Considering that he did not qualify for
regularization, his services were legally terminated. As such, the CA erred in ordering his
reinstatement and the payment of his backwages.
According to the petitioner, even assuming that respondent Paras was a regular employee
when he was dismissed, his reinstatement had already become moot and academic
because of the retrenchment program effected as a result of the business losses it had
suffered in the year 1997. Respondent Paras, who was employed only in May 27, 1996,
would have been included in the first batch of employees retrenched in February of 1998, in
accordance with the "last in first out policy" embedded in the CBA. The petitioner further
contends that Paras backwages should be computed only up to February of 1998.
In their comment on the petition, the respondents argue that the CA was correct in
concluding that the termination letter was served on respondent Paras one hundred eighty
third (183rd) day of employment with the petitioner, asserting that six (6) months is
equivalent to one hundred eighty (180) days. Since respondent Paras was employed on
May 27, 1996, the 180th day fell on November 23, 1996. Thus, respondent Paras was
already a regular employee when the termination letter was served on him. Consequently,
his dismissal should be based on the just or authorized causes provided for by the Labor
Code, and after proper notice.
The respondents, likewise, contend that the petitioner cannot raise new and
unsubstantiated allegations in its petition at bar.
The Issues
The issues for resolution are the following: (a) whether or not respondent Paras was already
a regular employee on November 26, 1996; (b) whether or not he was legally dismissed; (c)
if so, whether or not his reinstatement had been rendered moot and academic; and, (d)
whether or not his backwages should be computed only up to February of 1998.
The Courts Ruling
The petition is partially granted.
At the outset, we must stress that only errors of law are generally reviewed by this Court in
petitions for review on certiorari of CA decisions.
23
Questions of fact are not
entertained.
24
This Court is not a trier of facts and, in labor cases, this doctrine applies with
greater force. Factual questions are for labor tribunals to resolve.
25
The findings of fact of
quasi-judicial bodies like the National Labor Relations Commission (NLRC), are accorded
with respect, even finality, if supported by substantial evidence.Particularly when passed
upon and upheld by the Court of Appeals, such findings are binding and conclusive upon
the Supreme Court and will not normally be disturbed.
26

However, when the findings of the NLRC and the Court of Appeals are inconsistent with
each other, there is a need to review the records to determine which of them should be
preferred as more conformable to the evidentiary facts.
27
Considering that the CAs findings
of fact clash with those of the Voluntary Arbitrator, this Court is compelled to go over the
records of the case, as well as the submissions of the parties.
28

Regularization of Employment
Indeed, an employer, in the exercise of its management prerogative, may hire an employee
on a probationary basis in order to determine his fitness to perform work.
29
Under Article
281 of the Labor Code, the employer must inform the employee of the standards for which
his employment may be considered for regularization. Such probationary period, unless
covered by an apprenticeship agreement, shall not exceed six (6) months from the date the
employee started working. The employees services may be terminated for just cause or for
his failure to qualify as a regular employee based on reasonable standards made known to
him.
30

Respondent Paras was employed as a management trainee on a probationary basis.
During the orientation conducted on May 15, 1996, he was apprised of the standards upon
which his regularization would be based. He reported for work on May 27, 1996. As per the
companys policy, the probationary period was from three (3) months to a maximum of six
(6) months.
Applying Article 13 of the Civil Code,
31
the probationary period of six (6) months consists of
one hundred eighty (180) days.
32
This is in conformity with paragraph one, Article 13 of the
Civil Code, which provides that the months which are not designated by their names shall
be understood as consisting of thirty (30) days each. The number of months in the
probationary period, six (6), should then be multiplied by the number of days within a month,
thirty (30); hence, the period of one hundred eighty (180) days.
As clearly provided for in the last paragraph of Article 13, in computing a period, the first day
shall be excluded and the last day included. Thus, the one hundred eighty (180) days
commenced on May 27, 1996, and ended on November 23, 1996. The termination letter
dated November 25, 1996 was served on respondent Paras only at 3:00 a.m. of November
26, 1996. He was, by then, already a regular employee of the petitioner under Article 281 of
the Labor Code.
The Legality of The Dismissal
An employee cannot be dismissed except for just or authorized cause as found in the Labor
Code and after due process.
33
The following grounds would justify the dismissal of an
employee:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders
of the employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or of any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
34

The basis for which respondent Paras services were terminated was his alleged
unsatisfactory rating arising from poor performance. It is a settled doctrine that the employer
has the burden of proving the lawfulness of his employees dismissal. The validity of the
charge must be clearly established in a manner consistent with due process.
35

Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for
dismissal only if it amounts to gross and habitual neglect of duties. Gross negligence has
been defined to be the want or absence of even slight care or diligence as to amount to a
reckless disregard of the safety of person or property. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them.
36
A careful perusal of the records of
this case does not show that respondent Paras was grossly negligent in the performance of
his duties.
The company policy provides the following rule in performance evaluation:
The performance rating sheet must be accomplished by the immediate supervisor,
then reviewed by the Department Head, and concurred by the Division Head. The
Personnel Manager likewise must note all submitted performance sheets.
Once the rating sheet has gone through this standard procedure, the immediate
supervisor shall discuss the results of the performance rating with the employee. The
discussion/conference may be done in the presence of the Department Head. This is
to emphasize the point that the employee is given due importance especially in
matters pertaining to his development as a person and employee.
37

In the present case, the immediate supervisor of respondent Paras gave him an average
performance rating and found him fit for regularization.
38
Thereafter, his immediate
supervisor and the department head reviewed the said rating, which was duly noted by the
personnel manager. However, in a complete turn around, the petitioner made it appear that
after the performance evaluation of respondent Paras was reviewed by the department and
division heads, it was unanimously agreed that the respondents performance rating was
unsatisfactory, making him unfit for regularization.
There is no showing that respondent Paras was informed of the basis for the volte face of
the management group tasked to review his performance rating. His immediate supervisor
even told him that he had garnered a satisfactory rating and was qualified for regularization,
only to later receive a letter notifying him that his employment was being terminated.
Considering that respondent Paras was not dismissed for a just or authorized cause, his
dismissal from employment was illegal. Furthermore, the petitioners failure to inform him of
any charges against him deprived him of due process. Clearly, the termination of his
employment based on his alleged unsatisfactory performance rating was effected merely to
cover up and "deodorize" the illegality of his dismissal.
Reinstatement and Backwages
The normal consequences of illegal dismissal are reinstatement without loss of seniority
rights and the payment of backwages computed from the time the employees
compensation was withheld from him.
39
Since respondent Paras dismissal from
employment is illegal, he is entitled tore instatement and to be paid backwages from the
time of his dismissal up to the time of his actual reinstatement.
The petitioner asserts that assuming respondent Paras was illegally dismissed, his
reinstatement had become moot and academic because of its retrenchment program which
was effected beginning February 1998. The petitioner posits that even if respondent Paras
had become a regular employee by November 26, 1996, he would have been included in
the first phase of its retrenchment program, pursuant to the "last in first out policy"
embedded in the CBA. Hence, the petitioner concludes, the payment of backwages should
be computed up to February of 1998.
The respondents, for their part, aver that the petitioner is proscribed from alleging new
circumstances and allegations of fact, particularly on financial reverses, before the Court of
Appeals and the Voluntary Arbitrator.
We do not agree with the respondents.
A cursory examination of the records shows that the petitioner could not raise its
retrenchment program as an issue before the VA, because it was implemented only in
February 1998, when the case was already in the CA. However, we note that the petitioner
did not raise the same in its comment to the petition. The petitioner asserted the matter only
in its October 20, 2000 motion for reconsideration of the decision of the CA, where it alleged
that the retrenchment program was effected to arrest the continuing business losses
resulting from the financial reverses it experienced in 1997.
Nevertheless, it is not denied that because of the petitioners losses, it retrenched seven
hundred (700) employees. Business reverses or losses are recognized by law as an
authorized cause for termination of employment. Still, it is an essential requirement that
alleged losses in business operations must be proven convincingly. Otherwise, such ground
for termination would be susceptible to abuse by scheming employers, who might be merely
feigning business losses or reverses in their business ventures to ease out
employees.
40
Retrenchment is an authorized cause for termination of employment which the
law accords an employer who is not making good in its operations in order to cut back on
expenses for salaries and wages by laying off some employees. The purpose of
retrenchment is to save a financially ailing business establishment from eventually
collapsing.
41

In this case, the petitioner submitted in the CA its financial statements for 1996, 1997 and
1998
42
as well as its application for retrenchment. In its Statements of Income and
Unappropriated Retained Earning, it was shown that in 1996, the parent company of the
petitioner had a net income of P467,744,285. In 1997, it had a net loss ofP29,253,511.
43
In
1998, its net loss, after effecting retrenchment and closing several plants, was arrested and
dropped to P8,156,585.
44
This shows that even after the retrenchment, the petitioner MMPC
still suffered net losses.
In 1996, the petitioners current assets amounted to P5,381,743,576; it increased
to P8,033,932,745
45
in 1997, while in 1998, it was reduced to P5,053,874,359.
46
This shows
that the petitioners assets acquired in 1997 diminished in 1998. The figures for Current
Liabilities are consistent with the movement of current assets for 1997 and 1998.
In 1996, the petitioner incurred current liabilities of P1,966,445,401 which increased
to P5,088,990,117
47
in 1997 and decreased to P2,880,259,811
48
in 1998. To reduce its
losses, the petitioner had to dispose of some of its current assets to cover the increased
liability incurred in 1997, and had to resort to borrowings in 1998. The continuity of losses
which started in 1997 is further illustrated in the figures on retained earnings for 1996, 1997
and 1998. In 1996, retained earnings stood at P1,838,098,175,
49
which decreased
to P994,942,628
50
in 1997 and further decreased to P592,614,548
51
in 1998.
The petitioners losses in 1997 and 1998 are not insignificant. It is beyond cavil then, that
the serious and actual business reverses suffered by the petitioner justified its resort to
retrenchment of seven hundred (700) of its employees.
The records show that the petitioner informed the Department of Labor and Employment of
its plight and intention to retrench employees as a result of the shutdown of its plants.
52
The
termination of the five hundred thirty-one (531) affected employees were made effective a
month from receipt of the termination letter mailed on February 25, 1998.
53

In accordance with the CBA between MMPC and CPLU, employees who were recently
hired were the ones retrenched. Considering that respondent Paras had just been
regularized on November 24, 1996, he would have been included among those who had
been retrenched had he not been dismissed.
The unfavorable financial conditions of the petitioner may not justify reinstatement.
However, it is not a sufficient ground to deny backwages to respondent Paras who was
illegally dismissed.
54
Considering that notices of retrenchment were mailed on February 25,
1998 and made effective one month therefrom, respondent Paras should be paid full
backwages from the date of his illegal dismissal up to March 25, 1998. Pursuant to Article
283 of the Labor Code, he should be paid separation pay equivalent to one (1) month
salary, or to at least one-half month pay for every year of service, whichever is higher, a
fraction of at least six months to be considered as one (1) year.
55

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The
September 13, 2000 Decision of the Court of Appeals in CAGR SP No. 46030 is
hereby AFFIRMED WITH MODIFICATIONS. The petitioner isORDERED to pay respondent
Nelson Paras separation pay equivalent to one (1) month, or to at least one-half (1/2) month
pay for every year of service, whichever is higher, a fraction of at least six (6) months to be
considered as one year; and to pay full backwages, computed from the time of his dismissal
up to March 25, 1998. That portion of the decision of the Court of Appeals directing the
reinstatement of the respondent Paras isDELETED.
No costs.
SO ORDERED.

DUSIT HOTEL NIKKO VS RENATO M. GATBONTON MAY 5, 2006
The appellate court granted the petition and reinstated the decision of the Labor
Arbiter. The present petition is anchored on the following grounds:
I

WHETHER OR NOT THE RESPONDENT WAS STILL A PROBATIONARY EMPLOYEE AT THE TIME OF HIS DISMISSAL;

II
WHETHER OR NOT THE RESPONDENT WAS VALIDLY DISMISSED ON THE GROUND OF FAILURE TO MEET THE STANDARDS
OF SATISFACTORY PERFORMANCE MADE KNOWN TO HIM AT THE TIME OF HIS ENGAGEMENT;
III
WHETHER OR NOT [RESPONDENT] IS ENTITLED TO REINSTATEMENT, BACKWAGES AND ATTORNEYS FEES;
IV
WHETHER OR NOT [RESPONDENT] HAS BEEN PAID HIS REMAINING SALARIES.
[9]

Essentially, we must resolve two questions: (1) Was respondent a regular
employee at the time of his dismissal? and (2) Was he validly terminated?

As in previous cases, when we find arbitrariness and disharmony in the
factual findings of the Labor Arbiter and the National Labor Relations Commission,
we review the findings of fact and if errors are found, we will not hesitate to set
aside such factual findings of these agencies.

Here, Article 281 of the Labor Code is pertinent. It provides that:
ART. 281. Probationary Employment. -- Probationary employment shall not
exceed six (6) months from the date the employee started working, unless it is covered
by an apprenticeship agreement stipulating a longer period. The services of an
employee who has been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall be
considered a regular employee.
As Article 281 clearly states, a probationary employee can be legally
terminated either: (1) for a just cause; or (2) when the employee fails to qualify
as a regular employee in accordance with the reasonable standards made known
to him by the employer at the start of the employment.
[10]
Nonetheless, the
power of the employer to terminate an employee on probation is not without
limitations. First, this power must be exercised in accordance with the specific
requirements of the contract. Second, the dissatisfaction on the part of the
employer must be real and in good faith, not feigned so as to circumvent the
contract or the law; and third, there must be no unlawful discrimination in the
dismissal. In termination cases, the burden of proving just or valid cause for
dismissing an employee rests on the employer.
[11]


Here, the petitioner did not present proof that the respondent was
evaluated from November 21, 1998 to February 21, 1999, nor that his
probationary employment was validly extended.

The petitioner alleged that at the end of the respondents three-month
probationary employment, Rauber recommended that the period be extended for
two months since respondent Gatbonton was not yet ready for regular
employment.
[12]
The petitioner presented a Personnel Action Form
[13]
containing
the recommendation. We observed, however, that this document was prepared
on March 31, 1999, the end of the 4
th
month of the respondents employment. In
fact, the recommended action was termination of probationary employment
effective April 9, 1999, and not extension of probation period.
[14]
Upon appeal to
the NLRC, the petitioner presented another Personnel Action Form
[15]
prepared
on March 2, 1999, showing that the respondents probationary employment was
extended for two months effective February 23, 1999.

The Personnel Action Form dated March 2, 1999, contained the following
remarks: subject to undergo extension of probation for two (2) months as per
attached memo. Yet, we find this document inconclusive. First, the action form
did not contain the results of the respondents evaluation. Without the
evaluation, the action form had no basis. Second, the action form spoke of an
attached memo which the petitioner identified as Raubers Memorandum,
recommending the extension of the respondents probation period for two
months. Again, the supposed Memorandum was not presented. Third, the action
form did not bear the respondents signature.

In the absence of any evaluation or valid extension, we cannot conclude
that respondent failed to meet the standards of performance set by the hotel for
a chief steward. At the expiration of the three-month period, Gatbonton had
become a regular employee. It is an elementary rule in the law on labor relations
that a probationary employee engaged to work beyond the probationary period
of six months, as provided under Article 281 of the Labor Code, or for any length
of time set forth by the employer (in this case, three months), shall be considered
a regular employee.
[16]
This is clear in the last sentence of Article 281. Any
circumvention of this provision would put to naught the States avowed
protection for labor.

Since respondent was not dismissed for a just or authorized cause, his
dismissal was illegal, and he is entitled to reinstatement without loss of
seniority rights, and other privileges as well as to full backwages, inclusive of
allowances, and to other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his
actual reinstatement.

The petitioner presented copies of Check No. 0000200953
[17]
and the
corresponding voucher
[18]
in the amount of P6,095.19, to prove that the
respondent had been paid his remaining unpaid salaries on May 26, 1999. We
have no reason to disbelieve said payment, since the respondent failed to refute
this matter before the Court of Appeals and before us.

WHEREFORE, the instant petition for review is DENIED. The Decision of the
Court of Appeals in CA-G.R. SP No. 73296, which reversed the Resolution dated
September 24, 2001 of the National Labor Relations Commission, is AFFIRMED
WITH the MODIFICATION that the order for payment of unpaid salaries
is DELETED.

SO ORDERED.

YOLANDA MERCADO VS AMA COMPUTER APRIL 13, 2010
THE PETITION

The petitioners cite the following errors in the CA decision:
[21]


1) The CA gravely erred in reversing the LA and NLRC illegal dismissal
rulings; and
2) The CA gravely erred in not ordering their reinstatement with full,
backwages.

The petitioners submit that the CA should not have disturbed the findings
of the LA and the NLRC that they were illegally dismissed; instead, the CA should
have accorded great respect, if not finality, to the findings of these specialized
bodies as these findings were supported by evidence on record. Citing our ruling
in Soriano v. National Labor Relations Commission,
[22]
the petitioners contend that
in certiorari proceedings under Rule 65 of the Rules of Court, the CA does not
assess and weigh the sufficiency of evidence upon which the Labor Arbiter and
the NLRC based their conclusions. They submit that the CA erred when it
substituted its judgment for that of the Labor Arbiter and the NLRC who were the
triers of facts who had the opportunity to review the evidence extensively.

On the merits, the petitioners argue that the applicable law on
probationary employment, as explained by the LA, is Article 281 of the Labor
Code which mandates a period of six (6) months as the maximum duration of the
probationary period unless there is a stipulation to the contrary; that the CA
should not have disturbed the LAs conclusion that the AMACC failed to support
its allegation that they did not qualify under the new guidelines adopted for the
school year 2000-2001; and that they were illegally dismissed; their employment
was terminated based on standards that were not made known to them at the
time of their engagement. On the whole, the petitioners argue that the LA and
the NLRC committed no grave abuse of discretion that the CA can validly cite.

THE CASE FOR THE RESPONDENT

In their Comment,
[23]
AMACC notes that the petitioners raised no substantial
argument in support of their petition and that the CA correctly found that the
petitioners were hired on a non-tenured basis and for a fixed or predetermined
term. AMACC stresses that the CA was correct in concluding that no actual
dismissal transpired; it simply did not renew the petitioners respective
employment contracts because of their poor performance and failure to satisfy
the schools standards.

AMACC also asserts that the petitioners knew very well that the applicable
standards would be revised and updated from time to time given the nature of
the teaching profession. The petitioners also knew at the time of their
engagement that they must comply with the schools regularization policies as
stated in the Faculty Manual. Specifically, they must obtain a passing rating on
the Performance Appraisal for Teachers (PAST) the primary instrument to
measure the performance of faculty members.

Since the petitioners were not actually dismissed, AMACC submits that the
CA correctly ruled that they are not entitled to reinstatement, full backwages and
attorneys fees.

THE COURTS RULING

We find the petition meritorious.




The CAs Review of Factual Findings
under Rule 65

We agree with the petitioners that, as a rule in certiorari proceedings under
Rule 65 of the Rules of Court, the CA does not assess and weigh each piece of
evidence introduced in the case. The CA only examines the factual findings of the
NLRC to determine whether or not the conclusions are supported by substantial
evidence whose absence points to grave abuse of discretion amounting to lack or
excess of jurisdiction.
[24]
In the recent case of Protacio v. Laya Mananghaya &
Co.,
[25]
we emphasized that:

As a general rule, in certiorari proceedings under Rule 65 of the Rules of
Court, the appellate court does not assess and weigh the sufficiency of evidence
upon which the Labor Arbiter and the NLRC based their conclusion. The query in
this proceeding is limited to the determination of whether or not the NLRC acted
without or in excess of its jurisdiction or with grave abuse of discretion in
rendering its decision. However, as an exception, the appellate court may
examine and measure the factual findings of the NLRC if the same are not
supported by substantial evidence. The Court has not hesitated to affirm the
appellate courts reversals of the decisions of labor tribunals if they are not
supported by substantial evidence. [Emphasis supplied]

As discussed below, our review of the records and of the CA decision shows
that the CA erred in recognizing that grave abuse of discretion attended the
NLRCs conclusion that the petitioners were illegally dismissed. Consistent with
this conclusion, the evidence on record show that AMACC failed to discharge its
burden of proving by substantial evidence the just cause for the non-renewal of
the petitioners contracts.

In Montoya v. Transmed Manila Corporation,
[26]
we laid down our basic
approach in the review of Rule 65 decisions of the CA in labor cases, as follows:

In a Rule 45 review, we consider the correctness of the assailed
CA decision, in contrast with the review for jurisdictional error that we
undertake under Rule 65. Furthermore, Rule 45 limits us to the review
of questions of law raised against the assailed CA decision. In ruling for
legal correctness, we have to view the CA decision in the same context
that the petition for certiorari it ruled upon was presented to it; we
have to examine the CA decision from the prism of whether it
correctly determined the presence or absence of grave abuse of
discretion in the NLRC decision before it, not on the basis of whether
the NLRC decision on the merits of the case was correct. In other
words, we have to be keenly aware that the CA undertook a Rule 65
review, not a review on appeal, of the NLRC decision challenged before
it. This is the approach that should be basic in a Rule 45 review of a CA
ruling in a labor case. In question form, the question to ask is: Did the
CA correctly determine whether the NLRC committed grave abuse of
discretion in ruling on the case?


Following this approach, our task is to determine whether the CA correctly
found that the NLRC committed grave abuse of discretion in ruling that the
petitioners were illegally dismissed.

Legal Environment in the Employment of Teachers

a. Rule on Employment on Probationary Status

A reality we have to face in the consideration of employment on
probationary status of teaching personnel is that they are not governed purely by
the Labor Code. The Labor Code is supplemented with respect to the period of
probation by special rules found in the Manual of Regulations for Private
Schools.
[27]
On the matter of probationary period, Section 92 of these regulations
provides:

Section 92. Probationary Period. Subject in all instances to
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than
three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular semesters
of satisfactory service for those in the tertiary level, and nine (9)
consecutive trimesters of satisfactory service for those in the tertiary
level where collegiate courses are offered on a trimester
basis. [Emphasis supplied]

The CA pointed this out in its decision (as the NLRC also did), and we
confirm the correctness of this conclusion. Other than on the period, the
following quoted portion of Article 281 of the Labor Code still fully applies:

x x x The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause when he fails to
qualify as a regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee. [Emphasis
supplied]


b. Fixed-period Employment

The use of employment for fixed periods during the teachers probationary
period is likewise an accepted practice in the teaching profession. We mentioned
this in passing in Magis Young Achievers Learning Center v. Adelaida P.
Manalo,
[28]
albeit a case that involved elementary, not tertiary, education, and
hence spoke of a school year rather than a semester or a trimester. We noted in
this case:

The common practice is for the employer and the teacher to
enter into a contract, effective for one school year. At the end of the
school year, the employer has the option not to renew the contract,
particularly considering the teachers performance. If the contract is
not renewed, the employment relationship terminates. If the contract
is renewed, usually for another school year, the probationary
employment continues. Again, at the end of that period, the parties
may opt to renew or not to renew the contract. If renewed, this second
renewal of the contract for another school year would then be the last
year since it would be the third school year of probationary
employment. At the end of this third year, the employer may now
decide whether to extend a permanent appointment to the employee,
primarily on the basis of the employee having met the reasonable
standards of competence and efficiency set by the employer. For the
entire duration of this three-year period, the teacher remains under
probation. Upon the expiration of his contract of employment, being
simply on probation, he cannot automatically claim security of tenure
and compel the employer to renew his employment contract. It is
when the yearly contract is renewed for the third time that Section 93
of the Manual becomes operative, and the teacher then is entitled to
regular or permanent employment status.

It is important that the contract of probationary employment
specify the period or term of its effectivity. The failure to stipulate its
precise duration could lead to the inference that the contract is binding
for the full three-year probationary period.

We have long settled the validity of a fixed-term contract in the case Brent School,
Inc. v. Zamora
[29]
that AMACC cited. Significantly, Brent happened in a school
setting. Care should be taken, however, in reading Brent in the context of this
case as Brent did not involve any probationary employment issue; it dealt purely
and simply with the validity of a fixed-term employment under the terms of the
Labor Code, then newly issued and which does not expressly contain a provision
on fixed-term employment.

c. Academic and Management Prerogative

Last but not the least factor in the academic world, is that a school enjoys
academic freedom a guarantee that enjoys protection from the Constitution no
less. Section 5(2) Article XIV of the Constitution guarantees all institutions of
higher learning academic freedom.
[30]


The institutional academic freedom includes the right of the school or
college to decide and adopt its aims and objectives, and to determine how these
objections can best be attained, free from outside coercion or interference, save
possibly when the overriding public welfare calls for some restraint. The essential
freedoms subsumed in the term academic freedom encompass the freedom of
the school or college to determine for itself: (1) who may teach; (2) who may be
taught; (3) how lessons shall be taught; and (4) who may be admitted to study.
[31]


AMACCs right to academic freedom is particularly important in the present
case, because of the new screening guidelines for AMACC faculty put in place for
the school year 2000-2001. We agree with the CA that AMACC has the inherent
right to establish high standards of competency and efficiency for its faculty
members in order to achieve and maintain academic excellence. The schools
prerogative to provide standards for its teachers and to determine whether or not
these standards have been met is in accordance with academic freedom that
gives the educational institution the right to choose who should teach.
[32]
InPea
v. National Labor Relations Commission,
[33]
we emphasized:

It is the prerogative of the school to set high standards of efficiency for
its teachers since quality education is a mandate of the Constitution.

As
long as the standards fixed are reasonable and not arbitrary, courts are
not at liberty to set them aside. Schools cannot be required to adopt
standards which barely satisfy criteria set for government recognition.

The same academic freedom grants the school the autonomy to decide for
itself the terms and conditions for hiring its teacher, subject of course to the
overarching limitations under the Labor Code. Academic freedom, too, is not the
only legal basis for AMACCs issuance of screening guidelines. The authority to
hire is likewise covered and protected by its management prerogative the right
of an employer to regulate all aspects of employment, such as hiring, the freedom
to prescribe work assignments, working methods, process to be followed,
regulation regarding transfer of employees, supervision of their work, lay-off and
discipline, and dismissal and recall of workers.
[34]
Thus, AMACC has every right to
determine for itself that it shall use fixed-term employment contracts as its
medium for hiring its teachers. It also acted within the terms of the Manual of
Regulations for Private Schools when it recognized the petitioners to be merely on
probationary status up to a maximum of nine trimesters.

The Conflict: Probationary Status
and Fixed-term Employment

The existence of the term-to-term contracts covering the petitioners
employment is not disputed, nor is it disputed that they were on probationary
status not permanent or regular status from the time they were employed on
May 25, 1998 and until the expiration of their Teaching Contracts on September
7, 2000. As the CA correctly found, their teaching stints only covered a period of
at least seven (7) consecutive trimesters or two (2) years and three (3) months of
service. This case, however, brings to the fore the essential question of which,
between the two factors affecting employment, should prevail given AMACCs
position that the teachers contracts expired and it had the right not to renew
them. In other words, should the teachers probationary status be disregarded
simply because the contracts were fixed-term?

The provision on employment on probationary status under the Labor
Code
[35]
is a primary example of the fine balancing of interests between labor and
management that the Code has institutionalized pursuant to the underlying intent
of the Constitution.
[36]


On the one hand, employment on probationary status affords management
the chance to fully scrutinize the true worth of hired personnel before the full
force of the security of tenure guarantee of the Constitution comes into
play.
[37]
Based on the standards set at the start of the probationary period,
management is given the widest opportunity during the probationary period to
reject hirees who fail to meet its own adopted but reasonable standards.
[38]
These
standards, together with the just
[39]
and authorized causes
[40]
for termination of
employment the Labor Code expressly provides, are the grounds available to
terminate the employment of a teacher on probationary status. For example, the
school may impose reasonably stricter attendance or report compliance records
on teachers on probation, and reject a probationary teacher for failing in this
regard, although the same attendance or compliance record may not be required
for a teacher already on permanent status. At the same time, the same just and
authorizes causes for dismissal under the Labor Code apply to probationary
teachers, so that they may be the first to be laid-off if the school does not have
enough students for a given semester or trimester. Termination of employment
on this basis is an authorized cause under the Labor Code.
[41]


Labor, for its part, is given the protection during the probationary period of
knowing the company standards the new hires have to meet during the
probationary period, and to be judged on the basis of these standards, aside from
the usual standards applicable to employees after they achieve permanent
status. Under the terms of the Labor Code, these standards should be made
known to the teachers on probationary status at the start of their probationary
period, or at the very least under the circumstances of the present case, at the
start of the semester or the trimester during which the probationary standards
are to be applied. Of critical importance in invoking a failure to meet the
probationary standards, is that the school should show as a matter of due
process how these standards have been applied. This is effectively the second
notice in a dismissal situation that the law requires as a due process guarantee
supporting the security of tenure provision,
[42]
and is in furtherance, too, of the
basic rule in employee dismissal that the employer carries the burden of justifying
a dismissal.
[43]
These rules ensure compliance with the limited security of tenure
guarantee the law extends to probationary employees.
[44]


When fixed-term employment is brought into play under the above
probationary period rules, the situation as in the present case may at first
blush look muddled as fixed-term employment is in itself a valid employment
mode under Philippine law and jurisprudence.
[45]
The conflict, however, is more
apparent than real when the respective nature of fixed-term employment and of
employment on probationary status are closely examined.

The fixed-term character of employment essentially refers to the
period agreed upon between the employer and the employee; employment exists
only for the duration of the term and ends on its own when the term expires. In a
sense, employment on probationary status also refers to a period because of the
technical meaning probation carries in Philippine labor law a maximum period
of six months, or in the academe, a period of three years for those engaged in
teaching jobs. Their similarity ends there, however, because of the overriding
meaning that being on probation connotes, i.e., a process of testing and
observing the character or abilities of a person who is new to a role or job.
[46]


Understood in the above sense, the essentially protective character of
probationary status for management can readily be appreciated. But this same
protective character gives rise to the countervailing but equally protective rule
that the probationary period can only last for a specific maximum period and
under reasonable, well-laid and properly communicated standards. Otherwise
stated, within the period of the probation, any employer move based on the
probationary standards and affecting the continuity of the employment must
strictly conform to the probationary rules.

Under the given facts where the school year is divided into trimesters, the
school apparently utilizes its fixed-term contracts as a convenient arrangement
dictated by the trimestral system and not because the workplace parties really
intended to limit the period of their relationship to any fixed term and to finish
this relationship at the end of that term. If we pierce the veil, so to speak, of the
parties so-called fixed-term employment contracts, what undeniably comes out
at the core is a fixed-term contract conveniently used by the school to define and
regulate its relations with its teachers during their probationary period.

To be sure, nothing is illegitimate in defining the school-teacher
relationship in this manner. The school, however, cannot forget that its system of
fixed-term contract is a system that operates during the probationary period and
for this reason is subject to the terms of Article 281 of the Labor Code. Unless this
reconciliation is made, the requirements of this Article on probationary status
would be fully negated as the school may freely choose not to renew contracts
simply because their terms have expired. The inevitable effect of course is to
wreck the scheme that the Constitution and the Labor Code established to
balance relationships between labor and management.

Given the clear constitutional and statutory intents, we cannot but
conclude that in a situation where the probationary status overlaps with a fixed-
term contract not specifically used for the fixed term it offers, Article 281 should
assume primacy and the fixed-period character of the contract must give way.
This conclusion is immeasurably strengthened by the petitioners and the
AMACCs hardly concealed expectation that the employment on probation could
lead to permanent status, and that the contracts are renewable unless the
petitioners fail to pass the schools standards.

To highlight what we mean by a fixed-term contract specifically used for the
fixed term it offers, a replacement teacher, for example, may be contracted for a
period of one year to temporarily take the place of a permanent teacher on a one-
year study leave. The expiration of the replacement teachers contracted term,
under the circumstances, leads to no probationary status implications as she was
never employed on probationary basis; her employment is for a specific purpose
with particular focus on the term and with every intent to end her teaching
relationship with the school upon expiration of this term.

If the school were to apply the probationary standards (as in fact it says it
did in the present case), these standards must not only be reasonable but must
have also been communicated to the teachers at the start of the probationary
period, or at the very least, at the start of the period when they were to be
applied. These terms, in addition to those expressly provided by the Labor Code,
would serve as the just cause for the termination of the probationary contract. As
explained above, the details of this finding of just cause must be communicated
to the affected teachers as a matter of due process.

AMACC, by its submissions, admits that it did not renew the petitioners
contracts because they failed to pass the Performance Appraisal System for
Teachers (PAST) and other requirements for regularization that the school
undertakes to maintain its high academic standards.
[47]
The evidence is unclear
on the exact terms of the standards, although the school also admits that these
were standards under the Guidelines on the Implementation of AMACC Faculty
Plantilla put in place at the start of school year 2000-2001.

While we can grant that the standards were duly communicated to the
petitioners and could be applied beginning the 1
st
trimester of the school year
2000-2001, glaring and very basic gaps in the schools evidence still exist. The
exact terms of the standards were never introduced as evidence; neither does the
evidence show how these standards were applied to the petitioners.
[48]
Without
these pieces of evidence (effectively, the finding of just cause for the non-renewal
of the petitioners contracts), we have nothing to consider and pass upon as valid
or invalid for each of the petitioners. Inevitably, the non-renewal (or effectively,
the termination of employment of employees on probationary status) lacks the
supporting finding of just cause that the law requires and, hence, is illegal.

In this light, the CA decision should be reversed. Thus, the LAs decision,
affirmed as to the results by the NLRC, should stand as the decision to be
enforced, appropriately re-computed to consider the period of appeal and review
of the case up to our level.

Given the period that has lapsed and the inevitable change of
circumstances that must have taken place in the interim in the academic world
and at AMACC, which changes inevitably affect current school operations, we
hold that - in lieu of reinstatement - the petitioners should be paid separation pay
computed on a trimestral basis from the time of separation from service up to the
end of the complete trimester preceding the finality of this Decision.
[49]
The
separation pay shall be in addition to the other awards, properly recomputed,
that the LA originally decreed.

WHEREFORE, premises considered, we hereby GRANT the petition, and,
consequently, REVERSE and SET ASIDE the Decision of the Court of Appeals
dated November 29, 2007 and its Resolution dated June 20, 2008 in CA-G.R. SP
No. 96599. The Labor Arbiters decision of March 15, 2002, subsequently affirmed
as to the results by the National Labor Relations Commission, stands and should be
enforced with appropriate re-computation to take into account the date of the
finality of this Decision.

In lieu of reinstatement, AMA Computer College-Paraaque City, Inc. is
hereby DIRECTED to pay separation pay computed on a trimestral basis from the
time of separation from service up to the end of the complete trimester preceding
the finality of this Decision. For greater certainty, the petitioners are entitled to:
(a) backwages and 13
th
month pay computed from September 7,
2000 (the date AMA Computer College-Paraaque City,
Inc. illegally dismissed the petitioners) up to the finality of this
Decision;
(b) monthly honoraria (if applicable) computed from September 7,
2000 (the time of separation from service) up to the finality of
this Decision; and
(c) separation pay on a trimestral basis from September 7, 2000 (the
time of separation from service) up to the end of the complete
trimester preceding the finality of this Decision.

The labor arbiter is hereby ORDERED to make another re-computation
according to the above directives. No costs.

SO ORDERED.
ONG AND JOHNSON VS. CA NOV. 16, 2011
Hence, the petitioners interpose the present petition before this Court
anchored on the following

GROUNDS

(1)
THE COURT OF APPEALS ERRED IN UPHOLDING THE DECISION OF THE
LABOR ARBITER AND AWARDING BACK WAGES AND OTHER
MONETARY CLAIMS IN FAVOR OF THE PRIVATE RESPONDENT.




(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT HEREIN PRIVATE
RESPONDENT BECAME A REGULAR EMPLOYEE EFFECTIVE DAY ONE OF
HER EMPLOYMENT WITH PETITIONER.

(3)
THE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE
PROBATIONARY PERIOD OF EMPLOYMENT OF PRIVATE RESPONDENT
ENDING [ON] FEBRUARY 28, 2007.
[11]


The core issue to be resolved is whether the termination of Sy, a
probationary employee, was valid or not.

The petitioners pray for the reversal of the CA decision arguing that Sy was
a probationary employee with a limited tenure of six months subject to
regularization conditioned on her satisfactory performance. They insist that they
substantially complied with the requirements of the law having apprised Sy of her
status as probationary employee. The standard, though not written, was clear
that her continued employment would depend on her over-all performance of the
assigned tasks, and that the same was made known to her since day one of her
employment. According to the petitioners, reasonable standard of employment
does not require written evaluation of Sys function. It is enough that she was
informed of her duties and that her performance was later rated below
satisfactory by the Management.

Citing Alcira v. NLRC
[12]
and Colegio San Agustin v. NLRC,
[13]
the petitioners
further argue that Sys constitutional protection to security of tenure ended on
the last day of her probationary tenure or on February 28, 2007. It is unfair to
compel regularization of an employee who was found by the Management to be
unfit for the job. As they were not under obligation to extend Sys employment,
there was no illegal dismissal, but merely an expiration of the probationary
contract. As such, she was not entitled to any benefits like separation pay or
backwages.

Sy counters that she was illegally terminated from service and insists that
the petitioners cannot invoke her failure to qualify as she was not informed of the
standards or criteria which she should have met for regular
employment. Moreover, no proof was shown as to her alleged poor work
performance. She was unceremoniously terminated to prevent her from
becoming a regular employee and be entitled to the benefits as such.

The Court finds the petition devoid of merit.

The pertinent law governing the present case is Article 281 of the Labor
Code which provides as follows:

Art. 281. Probationary employment. Probationary
employment shall not exceed six months from the date the
employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged in a probationary
basis may be terminated for a just cause or when he fails to qualify
as a regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a
probationary period shall be considered a regular
employee.(Underscoring supplied)

There is probationary employment where the employee upon his
engagement is made to undergo a trial period during which the employer
determines his fitness to qualify for regular employment based on reasonable
standards made known to him at the time of engagement.
[14]
The probationary
employment is intended to afford the employer an opportunity to observe the
fitness of a probationary employee while at work, and to ascertain whether he will
become an efficient and productive employee. While the employer observes the
fitness, propriety and efficiency of a probationer to ascertain whether he is
qualified for permanent employment, the probationer, on the other hand, seeks to
prove to the employer that he has the qualifications to meet the reasonable
standards for permanent employment. Thus, the word probationary, as used to
describe the period of employment, implies the purpose of the term or period, not
its length.
[15]


On the basis of the aforequoted provisions and definition, there is no
dispute that Sys employment with Tamsons on September 1, 2006 was
probationary in character. As a probationary employee, her employment status
was only temporary. Although a probationary or temporary employee with a
limited tenure, she was still entitled to a security of tenure.

It is settled that even if probationary employees do not enjoy permanent
status, they are accorded the constitutional protection of security of tenure. This
means they may only be terminated for a just cause or when they otherwise fail
to qualify as regular employees in accordance with reasonable standards made
known to them by the employer at the time of their engagement.
[16]
Consistently,
in Mercado v. AMA Computer College-Paranaque City, Inc.,
[17]
this Court clearly
stressed that:
Labor, for its part, is given the protection during the
probationary period of knowing the company standards the new
hires have to meet during the probationary period, and to be
judged on the basis of these standards, aside from the usual
standards applicable to employees after they achieve permanent
status. Under the terms of the Labor Code, these standards should
be made known to the [employees] on probationary status at the
start of their probationary period, or xxx during which the
probationary standards are to be applied. Of critical importance in
invoking a failure to meet the probationary standards, is that
the [employer] should show as a matter of due process how these
standards have been applied. This is effectively the second notice in
a dismissal situation that the law requires as a due process
guarantee supporting the security of tenure provision, and is in
furtherance, too, of the basic rule in employee dismissal that the
employer carries the burden of justifying a dismissal. These rules
ensure compliance with the limited security of tenure guarantee
the law extends to probationary employees.
[18]
[Emphases
supplied]

In this case, the justification given by the petitioners for Sys dismissal was
her alleged failure to qualify by the companys standard. Other than the general
allegation that said standards were made known to her at the time of her
employment, however, no evidence, documentary or otherwise, was presented
to substantiate the same. Neither was there any performance evaluation
presented to prove that indeed hers was unsatisfactory. Thus, this Court is in full
accord with the ruling of the CA when it wrote that:

Private respondents were remiss in showing that petitioner
failed to qualify as a regular employee. Except for their allegations
that she was apprised of her status as probationary and that she
would be accorded regular status once she meets their standards,
no evidence was presented of these standards and that petitioner
had been apprised of them at the time she was hired as a
probationary employee. Neither was it shown that petitioner
failed to meet such standards.

Petitioner should have been informed as to the basis of
private respondents decision not to extend her regular or
permanent employment. This case is bereft of any proof like an
evaluation or assessment report which would support private
respondents claim that she failed to comply with the standards in
order to become a regular employee.

One of the conditions before an employer can terminate a
probationary employee is dissatisfaction on the part of the
employer which must be real and in good faith, not feigned so as
to circumvent the contract or the law. In the case at bar, absent
any proof showing that the work performance of petitioner was
unsatisfactory, We cannot conclude that petitioner failed to meet
the standards of performance set by private respondents. This
absence of proof, in fact, leads Us to infer that their dissatisfaction
with her work performance was contrived so as not to regularize
her employment.
[19]


For failure of the petitioners to support their claim of unsatisfactory
performance by Sy, this Court shares the view of the CA that Sys employment
was unjustly terminated to prevent her from acquiring a regular status in
circumvention of the law on security of tenure. As the Court previously
stated, this is a common and convenient practice of unscrupulous employers to
circumvent the law on security of tenure. Security of tenure, which is a right of
paramount value guaranteed by the Constitution, should not be denied to the
workers by such a stratagem. The Court can not permit such a subterfuge, if it is
to be true to the law and social justice.
[20]


In its attempt to justify Sys dismissal, the petitioners relied heavily on the
case of Alcira v. NLRC
[21]
where the Court stressed that the constitutional
protection ends on the expiration of the probationary period when the parties are
free to either renew or terminate their contract of employment.

Indeed, the Court recognizes the employers power to terminate as an
exercise of management prerogative. The petitioners, however, must be
reminded that such right is not without limitations. In this connection, it is
well to quote the ruling of the Court in the case of Dusit Hotel Nikko v.
Gatbonton,
[22]
where it was written:

As Article 281 clearly states, a probationary employee can be
legally terminated either: (1) for a just cause; or (2) when the
employee fails to qualify as a regular employee in accordance with
the reasonable standards made known to him by the employer at
the start of the employment. Nonetheless, the power of the
employer to terminate an employee on probation is not without
limitations. First, this power must be exercised in accordance with
the specific requirements of the contract. Second, the
dissatisfaction on the part of the employer must be real and in
good faith, not feigned so as to circumvent the contract or the law;
and third, there must be no unlawful discrimination in the
dismissal. In termination cases, the burden of proving just or valid
cause for dismissing an employee rests on the
employer.
[23]
[Emphases supplied]

Here, the petitioners failed to convey to Sy the standards upon which she
should measure up to be considered for regularization and how the standards had
been applied in her case. As correctly pointed out by Sy, the dissatisfaction on
the part of the petitioners was at best self-serving and dubious as they could not
present concrete and competent evidence establishing her alleged
incompetence. Failure on the part of the petitioners to discharge the burden of
proof is indicative that the dismissal was not justified.

The law is clear that in all cases of probationary employment, the employer
shall make known to the employee the standards under which he will qualify as a
regular employee at the time of his engagement. Where no standards are made
known to the employee at that time, he shall be deemed a regular
employee.
[24]
The standards under which she would qualify as a regular employee
not having been communicated to her at the start of her probationary period, Sy
qualified as a regular employee. As held by this Court in the very recent case
of Hacienda Primera Development Corporation v. Villegas,:
[25]


In this case, petitioner Hacienda fails to specify the
reasonable standards by which respondents alleged poor
performance was evaluated, much less to prove that such
standards were made known to him at the start of his
employment.

Thus, he is deemed to have been hired from day one
as a regular employee. Due process dictates that an employee be
apprised beforehand of the condition of his employment and of
the terms of advancement therein. [Emphasis supplied]

Even on the assumption that Sy indeed failed to meet the standards set by
them and made known to the former at the time of her engagement, still, the
termination was flawed for failure to give the required notice to Sy. Section 2,
Rule I, Book VI of the Implementing Rules provides:

Section 2. Security of tenure. (a) In cases of regular
employment, the employer shall not terminate the services of an
employee except for just or authorized causes as provided by law,
and subject to the requirements of due process.

(b) The foregoing shall also apply in cases of probationary
employment; Provided however, that in such cases, termination of
employment due to failure of the employee to qualify in
accordance with the standards of the employer made known to the
former at the time of engagement may also be a ground for
termination of employment.

xxx

(d) In all cases of termination of employment, the following
standards of due process shall be substantially observed:

xxx

If the termination is brought about by the completion of a
contract or phase thereof, or by failure of an employee to meet the
standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served
the employee, within a reasonable time from the effective date of
termination. [Emphasis and Underscoring supplied]

In this case, the petitioners failed to comply with the requirement of a
written notice. Notably, Sy was merely verbally informed that her employment
would be terminated on February 28, 2007, as admitted by the
petitioners.
[26]
Considering that the petitioners failed to observe due process in
dismissing her, the dismissal had no legal sanction. It bears stressing that a
workers employment is property in the constitutional sense.
[27]





Being a regular employee whose termination was illegal, Sy is entitled to
the twin relief of reinstatement and backwages granted by the Labor Code. Article
279 provides that an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges, to
her full backwages, inclusive of allowances, and to her other benefits or their
monetary equivalent computed from the time her compensation was withheld
from her up to the time of actual reinstatement. Likewise, having been
compelled to come to court and to incur expenses to protect her rights and
interests, the award of attorneys fees is in order.
[28]


WHEREFORE, the petition is DENIED.

SO ORDERED.

III. SECURITY OF TENURE
1. SCOPE
PLDT VS TOLENTINO SEPT. 21, 2004
The petition is without merit. PLDTs basis for respondents dismissal was not enough to
defeat respondents security of tenure.
There is no dispute over the fact that respondent was a managerial employee and therefore
loss of trust and confidence was a ground for his valid dismissal. The mere existence of a
basis for the loss of trust and confidence justifies the dismissal of the employee
7
because:
[w]hen an employee accepts a promotion to a managerial position or to an office
requiring full trust and confidence, she gives up some of the rigid guaranties
available to ordinary workers. Infractions which if committed by others would be
overlooked or condoned or penalties mitigated may be visited with more severe
disciplinary action. A companys resort to acts of self-defense would be more easily
justified.
8

Proof beyond reasonable doubt is not required provided there is a valid reason for the loss
of trust and confidence, such as when the employer has a reasonable ground to believe that
the managerial employee concerned is responsible for the purported misconduct and the
nature of his participation renders him unworthy of the trust and confidence demanded by
his position.
9

However, the right of the management to dismiss must be balanced against the managerial
employees right to security of tenure which is not one of the guaranties he gives up. This
Court has consistently ruled that managerial employees enjoy security of tenure and,
although the standards for their dismissal are less stringent, the loss of trust and confidence
must be substantial and founded on clearly established facts sufficient to warrant the
managerial employees separation from the company.
10
Substantial evidence is of critical
importance and the burden rests on the employer to prove it.
11
Due to its subjective nature,
it can easily be concocted by an abusive employer and used as a subterfuge for causes
which are improper, illegal or unjustified.
12

In the case at bar, this Court agrees with the Court of Appeals that the petitioners dismissal
was not founded onclearly established facts sufficient to warrant separation from
employment. The factual findings of the court a quoon the issue of whether there was
sufficient basis for petitioner PLDT to dismiss respondent Tolentino are binding on this
Court. In the exercise of the power of review, the factual determinations of the Court of
Appeals are generally conclusive and binding on the Supreme Court.
13
And they carry even
more weight when they affirm those of the trial court or labor arbiter (in this case).
14
After a
thorough review of the records, we also came to the same factual conclusion as the Court
of Appeals. The evidence relied upon by petitioner PLDT de Riveras sworn statement
and Donatos affidavit does not, in our view, establish respondent Tolentinos complicity
in the "internal arrangement" engineered by his subordinate de Rivera. We quote the labor
arbiters incisive observation:
Undoubtedly, when respondents received the raw information regarding
complainants involvement in the anomalous transaction, there existed a plethora of
possibilities. But we do not dwell on possibilities, suspicion and speculation. We rule
based on hard facts and solid evidence. Thus, the dismissal of the complainant
cannot justifiably be sustained since the findings in this case and the investigation of
respondent Company failed to establish either complicity or culpability on the part of
complainant. While dishonesty of an employee is not to be condoned, neither should
a condemnation on that ground be tolerated based on suspicion spawned by
speculative inferences. xxx True, complainant is a possible suspect, after all it was in
his division where the said anomalous transaction emanated. However, the records
are bereft of any showing that complainant is solely or partly responsible therefore
(sic). Suspicion has never been a valid ground for the dismissal of an employee. The
employees fate cannot, in justice, be hinged upon conjectures and surmises
(quoting San Miguel Corporation v. NLRC, 18 SCRA 281). Evidently, respondents
[petitioner PLDT] miserably failed to prove that the dismissal of complainant
[respondent Tolentino] was for cause. The respondents evidence, although not
required to be of such degree as is required in criminal cases, must be substantial.
The same must clearly and convincingly establish the facts upon which loss of trust
and confidence in the employee may be made to rest (quoting Plastic Starlite
Industries Corp. v. NLRC, 171 SCRA 315).
15

To be sure, respondent Tolentino was remiss in his duties as division manager for failing to
discover the "internal arrangement" contrived by his subordinate. However, we disagree
that dismissal was the proper sanction for such negligence. It was not commensurate to the
lapse committed, especially in the light of respondents unblemished record of long and
dedicated service to the company. In Hongkong Shanghai Bank Corporation vs.
NLRC,
16
we had occasion to rule that:
The penalty imposed must be commensurate to the depravity of the malfeasance,
violation or crime being punished. A grave injustice is committed in the name of
justice when the penalty imposed is grossly disproportionate to the wrong
committed.
[D]ismissal is the most severe penalty an employer can impose on an employee. It
goes without saying that care must be taken, and due regard given to an employees
circumstances, in the application of such punishment.
Certainly, a great injustice will result if this Court upholds Tolentinos dismissal.
An employee illegally dismissed is entitled to full backwages and reinstatement pursuant to
Article 279 of the Labor Code, as amended by RA 6715:
An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of
his actual reinstatement.
Although a managerial employee, respondent should be reinstated to his former position or
its equivalent without loss of seniority rights inasmuch as the alleged strained relations
between the parties were not adequately proven by petitioner PLDT which had the burden
of doing so. In Quijano vs. Mercury Drug Corporation,
17
we ruled that strained relations are
a factual issue which must be raised before the labor arbiter for the proper reception of
evidence. In this case, petitioner PLDT only raised the issue of strained relations in its
appeal from the labor arbiters decision. Thus, no competent evidence exists in the records
to support PLDTs assertion that a peaceful working relationship with respondent Tolentino
was no longer possible. In fact, the records of the case show that PLDT, through VP
Sacdalan, gave respondent Tolentino the option to resign.
18
Such a deferential act by
management makes us doubt PLDTs claim that its relations with respondent were
"strained." The option to resign would not have been given had animosity existed between
them.
Furthermore, respondent was dismissed in December, 1995 when petitioner PLDT was still
under the Cojuangco group. PLDT has since then passed to the ownership and control of its
new owners, the First Pacific group which has absolutely nothing to do so with this
controversy. Since there are no strained relations between the new management and
respondent, reinstatement is feasible.
This ruling is in line with the earlier pronouncement of the Court in Quijano that the strained
relations doctrine should be strictly applied so as not to deprive an illegally dismissed
employee of his right to reinstatement. To quote it fully:
Well-entrenched is the rule that an illegally dismissed employee is entitled to
reinstatement as a matter of right. Over the years, however, the case law developed
that where reinstatement is not feasible, expedient or practical, as where
reinstatement would only exacerbate the tension and strained relations between the
parties, or where relationship between the employer and employee has been unduly
strained by reason of their irreconcilable differences, particularly where the illegally
dismissed employee held a managerial or key position in the company, it would be
more prudent to order payment of separation pay instead of reinstatement. Some
unscrupulous employers, however, have taken advantage of the overgrowth of this
doctrine of "strained relations" by using it as a cover to get rid of its employees and
thus defeat their right to job security.
To protect labors security of tenure, we emphasize that the doctrine of "strained
relations" should be strictly applied so as not to deprive an illegally dismissed
employee of his right to reinstatement. Every labor dispute almost always results in
"strained relations" and the phrase cannot be given an overarching interpretation,
otherwise, an unjustly dismissed employee can never be reinstated.
19

This Court is cognizant of managements right to select the people who will manage its
business as well as its right to dismiss them. However, this right cannot be abused. Its
exercise must always be tempered with compassion and understanding. As former Chief
Justice Enrique Fernando eloquently put it:
Where a penalty less severe would suffice, whatever missteps may be committed by
labor ought not to be visited with consequence so severe. It is not only because of
the laws concern for the workingmen. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those dependent on the
wage-earner. The misery and pain attendant on the loss of jobs then could be
avoided if there be acceptance of the view that under all the circumstances of a
case, the workers should not be deprived of their means of livelihood. Nor is this to
condone what has been done by them.
20

To reinstate respondent is not to condone his "misstep" since his participation in the
"internal arrangement" was not sufficiently established to warrant his dismissal from PLDT
which he served faithfully for 23 years.
The moral and exemplary damages awarded by the labor arbiter are hereby deleted since
the dismissal of respondent was not attended by bad faith or fraud. Neither did it constitute
an act oppressive to labor nor was it done in a manner contrary to morals, good customs or
public policy.
21

The Court affirms the award of attorneys fees on the basis of quantum meruit but reduces it
to 5% of the total monetary award. Considering the circumstances of this case, the award is
reasonable considering the explicit provisions of Article III of the Labor Code and Rule VIII,
Section II, Book III of the Omnibus Rules Implementing the Labor Code.
22

WHEREFORE, the petition is hereby denied. The Court of Appeals decision reinstating the
labor arbiters decision is AFFIRMED with MODIFICATION. The award of attorneys fees is
reduced to 5% of the total amount due respondent Tolentino. The award of moral and
exemplary damages is deleted for reasons already explained.
SO ORDERED.

FUJITSO COMPUTER PRODUCTS CORPORATION OF THE PHILIPPINES
VS. CA APRIL 8, 2005
The Courts Ruling
The rule is that factual findings of quasi-judicial agencies such as the
NLRC are generally accorded not only respect, but at times, even
finality.
[28]
However, when it can be shown that administrative bodies grossly
misappreciated evidence of such nature as to compel a contrary conclusion,
the Court will not hesitate to reverse its factual findings. Factual findings of
administrative agencies are not infallible and will be set aside if they fail the
test of arbitrariness.
[29]
Thus, in this case where the findings of the CA differ
from those of the Labor Arbiter and the NLRC, the Court, in the exercise of its
equity jurisdiction, may look into the records of the case and re-examine the
questioned findings. As a corollary, this Court is clothed with ample authority
to review matters, even if they are not assigned as errors in their appeal, if it
finds that their consideration is necessary to arrive at a just decision of the
case.
[30]

It is settled that to constitute a valid dismissal from employment, two
requisites must concur: (a) the dismissal must be for any of the causes
provided for in Article 282
[31]
of the Labor Code; and (b) the employee must be
afforded an opportunity to be heard and defend himself. This means that an
employer can terminate the services of an employee for just and valid causes,
which must be supported by clear and convincing evidence. It also means
that, procedurally, the employee must be given notice, with adequate
opportunity to be heard, before he is notified of his actual dismissal for
cause.
[32]

After a careful and painstaking study of the records of the case, the Court
rules that the respondents dismissal from employment was not grounded on
any of the just causes enumerated under Article 282 of the Labor Code.
The term trust and confidence is restricted to managerial
employees.
[33]
In this case, it is undisputed that respondent De Guzman, as
the Facilities Section Manager, occupied a position of responsibility, a position
imbued with trust and confidence. Among others, it was his responsibility to
see to it that the garbage and scrap materials of petitioner FCPP were
adequately managed and disposed of. Thus, respondent De Guzman was
entrusted with the duty of handling or taking care of the property of his
employer, i.e., the steel purlins which the petitioners allege the respondent
prematurely declared as scrap materials.
However, to be valid ground for dismissal, loss of trust and confidence
must be based on a willful breach of trust and founded on clearly established
facts. A breach is willful if it is done intentionally, knowingly and purposely,
without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly, or inadvertently. It must rest on substantial grounds
and not on the employers arbitrariness, whims, caprices or suspicion;
otherwise, the employee would eternally remain at the mercy of the
employer.
[34]
Loss of confidence must not be indiscriminately used as a shield
by the employer against a claim that the dismissal of an employee was
arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned
is unfit to continue working for the employer.
[35]

The Court had the occasion to reiterate in Nokom v. National Labor
Relations Commission
[36]
the guidelines for the application of the doctrine of
loss of confidence-
a. loss of confidence should not be simulated;
b. it should not be used as a subterfuge for causes which are improper, illegal or
unjustified;
c. it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
d. it must be genuine, not a mere afterthought to justify earlier action taken in bad
faith.
[37]

In the case at bar, the grounds relied upon by petitioner FCPP in
terminating the employment of respondent De Guzman are contained in the
Inter-Office Memorandum dated August 23, 1999 which effectively terminated
the latters employment:
We have carefully evaluated your case and we are convinced that you have committed
grave abuse of authority amounting to serious misconduct and willful breach of trust
and confidence.
Based on our findings, as supported by strong and competent evidences, and contrary
to your explanation per your Letter dated July 26, 1999, the following facts were
satisfactorily established:
1. That sometime in the first week of July 1999, you intimated to Mr. Roberto
Pumarez, Supervisor of Saros Trucking Services, your intention to buy from Saros
the metals which were then piled up and kept inside the Fuji Electric Philippines
compound;
2. Thereafter, you ordered the metals to be sold to Saros Trucking Services so
that you can buy them (metals) later from Saros at the price of P3.00 per kg., which
price you yourself imposed on them;
3. However, it turned out later some pieces of metals which you have earlier
declared as scraps and ordered to be sold to Saros were still to be used in the
construction of FCPPs Building B. Thus, on July 10, 1999, while Saros employees
were initially loading the metals, an Engineer of SNK Philippines, Inc., FCPPs
building contractor, stopped them. It was only later after they were prevented from
further loading the metals that you checked with the SNK personnel if the metals can
already be disposed of as scraps which prove that you have prematurely declared the
metals as scrap;
4. That through Mr. [Adrian] Camcaman, your subordinate Technician, you
instructed the personnel of Saros to deliver the metals to Sta. Rosa Baptist Church,
where you are an active Church member;
5. That, as of this date, you have not yet settled/paid your obligation to Saros.
That immediately after you were placed under preventive suspension and to support
your explanation that the transaction was between Saros and Sta. Rosa Baptist
Church, you caused, through some people representing to be members of the Baptist
Church and who are unknown to Saros, to issue a check in favor of Saros. When
this failed, another person, representing to be a member of the Baptist church and who
appeared for the first time, went to the office of Saros and tried to serve a letter
addressed to Mr. Larry Manaig, Saros Proprietor, allegedly inquiring about the total
obligation of the Baptist Church to Saros but, which was again not accepted as, in
truth and in fact, there was really no transaction between Saros and the Sta. Rosa
Baptist Church. All along, it was you and Mr. Camcaman who dealt directly with
Saros.
6. That in previous occasions, it was reported by Mr. Manaig that you solicited
from him empty drums, pails and corrugated cartons which were all part of those
scraps picked up from FCPP and you never paid any of them, a fact which you never
denied in your explanation which is tantamount to admission.
Based on the foregoing, it is our well-discerned view that the transaction was
exclusively limited between you and Saros. Except for your self-serving explanation,
you failed miserably to present direct evidence that it was the Sta. Rosa Baptist church
which bought the subject metals from Saros, as what you want us to believe. At best,
your explanation is a mere afterthought desperately concocted to exculpate yourself.
As Facilities Manager, a very sensitive and confidential position, the nature of your
work demands of you that your actions should not be tainted with any suspicion or
impropriety. However, you failed in this regard and abused your position to advance
your self-interest.
In view of the foregoing, you are hereby terminated from the service, retroactive July
24, 1999, the date you were placed under preventive suspension. Please proceed to
the Finance and Accounting Department to clear yourself from any accountability and
to claim whatever unpaid salaries and benefits which are still due you as of this date.
For your information and guidance.
[38]

Based on the foregoing, the Court finds and so holds that indeed, the
petitioners reliance on the foregoing facts to justify the dismissal of
respondent De Guzman from employment is misplaced.
First. The scrap metals, including the steel purlins, were already classified
as scrap materials and ready for disposal. No less than the written
statements of the witnesses for the petitioners confirm this. SNK Mechanical
Supervisor Nat Balayan stated that the 10-wheeler truck was about to load
scrap irons, which includes c-[purlins]. Knowing that c-[purlins] could be used
for braces of heap-filter box hangers, I immediately informed Mr. Machidori if I
would stop the hauling, to which he consented. On the other hand, SNK
Engineer Maurice Victoriano stated that when respondent De Guzman called
him and inquired whether the scrap materials at the Fuji Electric Warehouse
Area could already be disposed of, he (Victoriano) replied that everything
was [okay] for disposal considering that this is [FCPPs] scope. The report of
Machidori is particularly revealing:
I went to Fuji Electric Warehouse last July 10 (rainy day) to check [out] Warehouse
situation. I noticed that scrap materials are being carried out by a truck. I met Mr.
Adrian Fujitsu Facilities Staff and asked me that they will take out those scrap
materials. SNK Staff suggested using those scrap materials for BIF Hepa Box steel
supports. So I requested Mr. Adrian [Camcaman] to separate some materials that we
want to use and take out [the] others.
During our Construction meeting, Facilities explained that they controlled scrap and
unpacked materials for disposal. Earlier I thought that taking out those materials are
good for maintaining Fuji Electric Warehouse Area. So I requested them to take out
those unrecycled materials.
[39]

Thus, the Court agrees with the following ratiocination of the appellate
court when it denied the petitioners motion for reconsideration of its decision:
[T]his Court would like to stress, as borne out by the pleadings submitted by both
parties, that the subject scrap metal [purlins] were already in the scrap yard ready for
hauling. It was the building contractor and not petitioner Victor de Guzman who
determined whether the metals are scrap metals. Hence, the assertion of the private
respondents that petitioner Victor de Guzman prematurely declared the metal [purlins]
as scrap materials is without basis.
[40]

In fine then, the materials at the said warehouse were already considered
scrap and ready for disposal. The hauling was stopped by the SNK
employees because their superiors felt that pieces of steel purlins could still
be used in the construction of a building in the company premises. Thus,
Victoriano and Balayan, with the conformity of their superior Machidori,
requested that some pieces be left behind for the purpose.
Second. No fraud or bad faith could be attributed to respondent De
Guzman, as evinced by his readiness to disclose his participation in the
transaction between Saros and Sta. Rosa.
Third. Respondent De Guzman was never charged with qualified theft as
earlier alluded to by the petitioner FCPP in its Inter-Office Memorandum dated
August 28, 1999.
Fourth. The focal point of the cause of respondent De Guzmans
dismissal from employment is his alleged involvement in the purchase of the
steel purlins from petitioner FCPPs warehouse. Whether respondent De
Guzman was the buyer of the steel purlins or merely facilitated the sale
thereof to Sta. Rosa is of no moment. The fact is that as per the Garbage
Collection Agreement dated January 15, 1999, the scrap metals in the
premises of petitioner FCPP were regularly bought by Saros. Hence, after
such scrap materials are weighed, loaded onto a truck and carried out of the
company premises, the petitioner FCPP can no longer be considered the
owner thereof, and ceases to exercise control over such property.
[41]
Loss of
trust and confidence as a just cause for termination of employment is
premised on the fact that the employee concerned is invested with delicate
matters, such as the handling or care and protection of the property and
assets of the employer.
[42]
In this case however, Saros, as the new owner of
the scrap materials in question, including the steel purlins, was free to contract
with anyone as it wished. At most, respondent De Guzman was merely
recommending a buyer for such scrap materials, an act which could hardly be
considered as deserving of such a harsh penalty as dismissal from
employment.
What strikes the Court as odd in this case is that petitioner FCPP willingly
believed the testimony of third persons, non-employees, rather than the
account of its own employee. There has been no allegation that respondent
De Guzman had been previously found guilty of any misconduct or had
violated established company rules. Moreover, it is difficult to believe that
respondent De Guzman would jeopardize his job for something as measly as
steel purlins.
[43]

The Court thus concludes that respondent De Guzmans actuations do not
amount to willful breach of trust and confidence. It bears stressing that in
termination cases, the employer bears the onus of proving that the dismissal
was for just cause.
[44]
Indeed, a condemnation of dishonesty and disloyalty
cannot arise from suspicions spawned by speculative inferences.
[45]
Because
of its subjective nature, this Court has been very scrutinizing in cases of
dismissal based on loss of trust and confidence because the same can easily
be concocted by an abusive employer. Thus, when the breach of trust or loss
of confidence theorized upon is not borne by clearly established facts, as in
this case, such dismissal on the ground of loss of confidence cannot be
allowed.
[46]
Moreover, the fact that one is a managerial employee does not by
itself exclude him from the protection of the constitutional guarantee of
security of tenure.
[47]

The Court likewise rules that the dismissal of respondent Alvarez from
employment for gross misconduct was illegal.
The Court has had varied rulings in cases involving gross misconduct as a
ground for dismissal, depending on the circumstances of each case. In Zenco
Sales, Inc. v. National Labor Relations Commission,
[48]
the Court affirmed the
NLRC and the Labor Arbiter in finding the dismissed employee guilty of
misfeasance for his failure to closely monitor and control the sales
transactions of salesman Chua and malfeasance because he used the
respondent corporations properties, equipment and personnel in connection
with his personal business of buy and sale of used sacks. The Court ruled
that when brought within the ambit of Article 282 of the Labor Code, it
constitutes gross neglect in the performance of duty and serious misconduct
resulting to loss of trust and confidence.
[49]
In Philippine National Construction
Corporation v. NLRC,
[50]
the dismissed employees were caught in the act of
accepting a bribe in the form of cash and a dog from a motorist who was
suspected of illegally transporting dogs. The Court held that by yielding to
bribery, the said employees violated their very duty to maintain peace and
order in the North Luzon Expressway, and to ensure that all tollway rules and
regulations were followed. Such act was classified as serious misconduct
which warranted the penalty of dismissal from employment.
[51]
In another
case,
[52]
the Court considered a dismissed faculty members act of exerting
influence and pressure to change a failing grade to a passing one and the
misrepresentation that a student was his nephew as serious misconduct, and
a valid ground for dismissal.
However, in the old case of Radio Communications of the Philippines, Inc.
v. NLRC,
[53]
the Court considered the dismissed employees act of hurling
invectives at a co-employee as a minor offense. The Court therein ruled that
the termination of an employee on account of a minor misconduct is illegal
because Article 282 of the Labor Code mentions serious Misconduct as a
cause for cessation of employment.
[54]

Misconduct has been defined as improper or wrong conduct. It is the
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 of judgment.
[55]
The misconduct to be serious must be of such
grave and aggravated character and not merely trivial and unimportant. Such
misconduct, however serious, must nevertheless be in connection with the
employees work to constitute just cause for his separation
[56]
. Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must
be serious; (b) must relate to the performance of the employees duties; and
(c) must show that the employee has become unfit to continue working for the
employer.
[57]
Indeed, an employer may not be compelled to continue to employ
such person whose continuance in the service would be patently inimical to
his employers interest.
[58]

In this case, the Court finds that respondent Alvarezs act of sending an e-
mail message as an expression of sympathy for the plight of a superior can
hardly be characterized as serious misconduct as to merit the penalty of
dismissal. This can be gleaned from a perusal of the e-mail message itself, to
wit:
Question: Where is Mr. De Guzman, Facilities Manager?
Answer: He was framed-up by Saros Trucking (FCPP garbage hauler) and
[accused] of manipulating scrap metal which is not true since the church
buyer and Saros agreed for a fee of P3.00/kg. [where] Saro will profit
P0.40/kg plus hauling fee.
Question: WHY?
Answer: Mr. De Guzman was able to improve the waste management wherein
Saro have to pay close to P0.25 million pesos for June scrap alone against
Saros previous collection of around P15,000/month only.
THE PLOT IS OBVIOUS BUT IS IT JUST TO SUSPEND A GOOD MAN
LIKE MR. DE GUZMAN THAN A GARBAGE HAULER WHO
DEVILISHLY [PROFITED] FROM FCPP WITHOUT SWEAT? PLS. HELP
US
[59]

There is no showing that the sending of such e-mail message had any
bearing or relation on respondent Alvarezs competence and proficiency in his
job. To reiterate, in order to consider it a serious misconduct that would justify
dismissal under the law, the act must have been done in relation to the
performance of his duties as would show him to be unfit to continue working
for his employer.
[60]
Moreover, while allegations of a frame-up were made
against Saros, the e-mail message does not contain a single malicious
imputation or charge against petitioner FCPP, or petitioner Espinosa.
Instructive on this point is the discussion of the Court in Samson v. National
Labor Relations Commission,
[61]
viz.:
The instant case should be distinguished from the previous cases where we held that
the use of insulting and offensive language constituted gross misconduct justifying an
employees dismissal. In De la Cruz v. NLRC (177 SCRA 626 [1989]), the dismissed
employee shouted sayang and pagka-professional mo! and putang ina mo at the
company physician when the latter refused to give him a referral slip. In Autobus
Workers Union (AWU) v. NLRC (291 SCRA 219 [1998]), the dismissed employee
called his supervisor gago ka and taunted the latter by saying bakit, anong gusto
mo, tang ina mo. In these cases, the dismissed employees personally subjected their
respective superiors to the foregoing verbal abuses. The utter lack of respect for their
superiors was patent. In contrast, when petitioner was heard to have uttered the
alleged offensive words against respondent companys president and general manager,
the latter was not around.
In Asian Design and Manufacturing Corporation v. Deputy Minister of Labor (142
SCRA 79 [1986]), the dismissed employee made false and malicious statements
against the foreman (his superior) by telling his co-employees: If you dont give a
goat to the foreman you will be terminated. If you want to remain in this company,
you have to give a goat. The dismissed employee therein likewise posted a notice in
the comfort room of the company premises which read: Notice to all Sander Those
who want to remain in this company, you must give anything to your foreman.
Failure to do so will be terminated Alice 80. In Reynolds Philippine Corporation
v. Eslava (137 SCRA 259 [1985]), the dismissed employee circulated several letters to
the members of the companys board of directors calling the executive vice-president
and general manager a big fool, anti-Filipino and accusing him of
mismanagement, inefficiency, lack of planning and foresight, petty favoritism,
dictatorial policies, one-man rule, contemptuous attitude to labor, anti-Filipino
utterances and activities. In this case, the records do not show that petitioner made
any such false and malicious statements against any of his superiors.
[62]

In fine, the petitioners failed to show that the respondents acts were
sufficient to warrant their dismissal from employment, for loss of trust and
confidence on one hand for respondent De Guzman, and for gross
misconduct as against respondent Alvarez on the other. To reiterate, it has
not been shown that the respondents had been previously found guilty of any
infraction of company rules and regulations during the period of their
employment.
Under Article 279 of the Labor Code, and employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges, and to the payment of his full backwages, inclusive
of allowances, and to his other benefits or their monetary equivalent,
computed from the time his compensation was withheld from him (which, as a
rule, is from the time of his illegal dismissal) up to the time of his actual
reinstatement.
[63]
These remedies give life to the workers constitutional right
to security of tenure.
[64]

The Court is wont to reiterate that while an employer has its own interest
to protect, and pursuant thereto, it may terminate a managerial employee for a
just cause, such prerogative to dismiss or lay-off an employee must be
exercised without abuse of discretion. Its implementation should be tempered
with compassion and understanding. The employer should bear in mind that,
in the execution of the said prerogative, what is at stake is not only the
employees position, but his very livelihood.
[65]
The Constitution does not
condone wrongdoing by the employee; nevertheless, it urges a moderation of
the sanction that may be applied to him.
[66]
Where a penalty less punitive would
suffice, whatever missteps may have been committed by the worker ought not
be visited with a consequence so severe as dismissal from
employment.
[67]
Indeed, the consistent rule is that if doubts exist between the
evidence presented by the employer and the employee, the scales of justice
must be tilted in favor of the latter. The employer must affirmatively show
rationally adequate evidence that the dismissal was for justifiable cause.
[68]

WHEREFORE, the instant petition is DENIED. The assailed Decision of
the Court of Appeals in CA-G.R. SP No. 71324 and the Resolution dated May
14, 2003 are AFFIRMED. Costs against the petitioners.
SO ORDERED.

CONDO SUITE CLUB TRAVEL VS NLRC JAN. 28, 2000
Its motion for reconsideration having been denied, petitioner filed the present petition.
It seeks to annul the decision of public respondent ordering the reinstatement of
private respondent. However, petitioner does not state the grounds relied upon for said
annulment. We note that petitioner imputes neither lack or excess of jurisdiction, nor
grave abuse of discretion, on the part of public respondent in rendering the assailed
judgment.4-1
Resort to a special civil action for certiorari under Rule 65 of the Rules of Court is
limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction
and grave abuse of discretion amounting to lack of jurisdiction.
[7]
The respondent acts
without jurisdiction if he does not have the legal power to determine the case. There is
excess of jurisdiction where the respondent, being clothed with the power to
determine the case, oversteps his authority as determined by law. And there is grave
abuse of discretion where the respondent acts in a capricious, whimsical, arbitrary or
despotic manner in the exercise of his judgment as to be said to be equivalent to lack
of jurisdiction.
[8]
Since petitioner neither assails the jurisdiction of public respondent
nor attributes grave abuse of discretion on part of the labor tribunal, this petition must
fail.
Besides, petitioner did not comply with the rule on certification against forum
shopping. The certification in this petition was improperly executed by the external
legal counsel of petitioner. For a certification of non-forum shopping must be by the
petitioner, or any of the principal parties and not by counsel unless clothed with a
special power of attorney to do so. This procedural lapse on the part of petitioner is
also a cause for the dismissal of this action.
[9]

Even if the abovementioned procedural defects were to be set aside, the petition
would still not prosper. Public respondent cannot be faulted for grave abuse of
discretion. For we find its assailed judgment supported by factual and legal bases.
In its memorandum petitioner raises the following queries:
1. Whether there were just causes to terminate the private respondent?
2. Whether the reinstatement order by the Hon. NLRC is legal and
proper?
3. Whether the award of backwages in the amount of P 26, 866.64 by the
Hon. NLRC is legal and proper?"
[10]

Simply stated, the proper issue now for resolution is whether or not public respondent
committed grave abuse of jurisdiction in modifying the decision of the labor arbiter
and in ordering the reinstatement of private respondent.
The fundamental guarantee of security of tenure dictates that no worker
shall be dismissed except for just and authorized cause provided by law,
and after due process. The just and authorized causes are enumerated
under Articles 282, 283 and 284 of the Labor Code. The due process
requirement of notice and hearing is set-out in Article 277 (b) of the said
Code.
As provided for in the Labor Code: "ART. 282. Termination by employer. An
employer may terminate an employment for any of the following causes: xxx (c)
Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative. xxx" But it must be stressed that loss of confidence as
a just cause for termination of employment is premised by the fact that an employee
concerned holds a position of trust and confidence. This situation holds where a
person is entrusted with confidence on delicate matters, such as the custody, handling,
or care and protection of the employers property. In the case of supervisory personnel
occupying positions of responsibility, this Court has repeatedly held that loss of trust
and confidence justifies termination.
[11]
4--4
Termination of an employment on this ground does not require proof beyond
reasonable doubt of the employees misconduct. It is sufficient that there is some basis
for the loss of trust or that the employer has reasonable ground to believe that the
employee is responsible for the misconduct which renders him unworthy of the trust
and confidence demanded by his position.
[12]

The Court, however, has repeatedly stressed that the right of an employer to dismiss
employees on account of loss of trust and confidence must not be exercised arbitrarily.
Just cause must be shown, so as not to render the employees constitutional right to
security of tenure nugatory. Besides, for loss of confidence to be a valid ground for
dismissal, the basis thereof must arise from particular proven facts. In other words,
this ground must be founded on facts established by the employer who must clearly
and convincingly prove by substantial evidence the facts and incidents upon which
loss of confidence in the employee may be fairly made to rest; otherwise the dismissal
will be rendered illegal.
[13]

In the instant case, petitioner failed to prove by ample evidence that private
respondent intended to defraud Mr. Hu, as herein explained. Hence, there is no basis
for petitioner to claim it lost the trust and confidence it had reposed upon private
respondent. Noteworthy are the following circumstances that favor private
respondents innocence:
First. Mariano admitted in her written statement that she was the one responsible for
entering the amount of P2,000.00 in Mr. Hus statement of account. Nowhere in her
written statement did she declare that private respondent directed her to make such
entry. Further, petitioner failed to refute Marianos declaration that the statement of
account which she gave to Mr. Hu reflected only the total charges due up to August
14, 1994, albeit he actually checked out of the hotel on August 15, 1994. This shows
that the billing reflected on August 14, 1994 statement was not yet complete as the
P2,000.00 outstanding account of Mr. Hu had yet to be incorporated
therein.4==411
Second. Landrigan, in his written statement admitted that he approached Mariano and
he demanded payment of the transportation fee due him because he was previously
hired by Mr. Hus group for two days. Private respondent had nothing to do with
Landrigans demand for such payment. Landrigan believed in good faith that Mr. Hu
actually owed him P2,000.00 when he served as driver for two days. That Landrigan
returned the amount to petitioner did not in any way prove private respondents
wrongdoing.
Furthermore, the second statutory requirement for a valid dismissal stipulates notice
and hearing. Before an employee can be dismissed, the employer must furnish the
worker with two notices: (1) notice which apprises the employee of the particular acts
or omissions for which dismissal is sought and (2) subsequent notice which informs
the employee of the employers decision to dismiss him. The twin requirements of
notice and hearing constitute essential elements of the statutory process, and neither of
these elements can be eliminated without running afoul of the procedural mandate.
[14]

In this case, the evidence on record is devoid of any indication that petitioner
complied with the requirements of due process prior to termination, as shown in the
following discussion.
First. Petitioner did not notify private respondent of the particular acts or omissions
for which he was dismissed. The incident report prepared by Mr. Padua is not the
notice contemplated by law. Such report merely narrates the complaint aired by Mr.
Hu against the front desk personnel. And, nowhere in said incident report did
petitioner pinpoint private respondent as the person responsible for overcharging. In
fact, it was only upon service of termination order that private respondent realized that
the complaint of Mr. Hu was directed at him.
Second. Private respondent was not afforded his right to be heard. The hearing affords
the employee an opportunity to answer the charge against him and to defend himself
personally or with the help of a representative before dismissal is effected. Private
respondents reply letter addressed to Mr. Padua does not satisfy the requirement of
ample opportunity to be heard. The said reply letter was written by private respondent
in his capacity as front desk supervisor in order to shed light on the events that
transpired involving Mariano and Landrigan. Private respondent was not then aware
that the complaint was directed at him. Moreover, as there was no investigation
conducted by petitioner, private respondent was not afforded an opportunity to
confront Landrigan, Mariano or Mr. Hu.4==
In sum, there is no valid and just cause in terminating the employment of private
respondent. With the finding that private respondent was illegally dismissed, he is
entitled to reinstatement without loss of seniority rights and other privileges and to his
full backwages inclusive of allowances, and to other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.
[15]

Hence, aside from reinstatement, private respondent here is entitled to full backwages.
However, the backwages awarded by public respondent was inadequate compensation
for his travail. Public respondent limited private respondents backwages from the
date of his dismissal and up to the time when petitioner allegedly offered to reinstate
private reinstatement. It explained that the failure of private respondent to work, after
the supposed offer was made, can no longer be attributed to the fault of petitioner.
This, in our view, does not suffice to provide complete relief to the painful socio-
economic dislocation of the employee and his family.
As previously stated, an employee who is unjustly dismissed is entitled to his full
backwages computed from the time his compensation was withheld from him up to
the time of his reinstatement. Mere offer to reinstate a dismissed employee, given the
circumstances in this case, is not enough. If petitioner were sincere in its intention to
reinstate private respondent, petitioner should have at the very least reinstated him in
its payroll right away. We are thus constrained to conclude that private respondent
should be paid by petitioner not only the sum of P26,866.64 awarded by the NLRC,
but the petitioner should be held liable for the entire amount of backwages due the
private respondent from the day he was illegally dismissed up to the date of his
reinstatement. Only then could observance of labor laws be promoted and social
justice upheld.
WHEREFORE, the instant petition is DISMISSED. The assailed DECISION of
NLRC is AFFIRMED with the MODIFICATION that petitioner is hereby ordered not
only to reinstate private respondent to his position but also to pay his full backwages
from the day of his illegal dismissal until his actual reinstatement. Public respondent
NLRC is hereby directed to make the computation of said full backwages including
allowances and other benefits owing to the private respondent, and inform soonest all
parties as well as this Court accordingly, within thirty days after receipt of this
decision. Costs against petitioner.
SO ORDERED.

2. CONSTRUCTIVE DISMISSAL VS ILLEGAL DISMISSAL
FERNANDO GO VS CA MAY 28, 2004
Hence, this petition for review, raising the following arguments:
The Court of Appeals committed reversible error considering that:
1. It weighed at face value the sworn statement of Antonio Roman and its annexes,
which were both presented for the first time on appeal;
2. It ruled that herein petitioner was not constructively dismissed rather he voluntarily
resigned from the respondent;
3. It held that the petitioner's witnesses are biased and therefore tainted with
prejudice against the private respondent;
4. It ruled that the resignation of the petitioner was not a result of the manipulation
and deception of the private respondent, and;
5. It held that the NLRC committed grave abuse of discretion when it misappreciated
the facts and rendered judgment contrary to established evidence.
22

The petition lacks merit.
It is a well-established rule that the jurisdiction of the Supreme Court in cases brought
before it from the Court of Appeals via Rule 45 of the 1997 Rules of Civil Procedure, as
amended, is limited to reviewing errors of law.
23
This Court is not a trier of facts. In the
exercise of its power of review, the findings of fact of the Court of Appeals are conclusive
and binding and consequently, it is not our function to analyze or weigh evidence all over
again.
24

The above rule, however, is not iron-clad. In Siguan v. Lim
25
we enumerated the instances
when the factual findings of the Court of Appeals are not deemed conclusive, to wit: (1)
when the conclusion is a finding grounded entirely on speculations, surmises or
conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3)
when there is grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of facts are conflicting; (6) when the Court
of Appeals, in making its findings went beyond the issues of the case and the same is
contrary to the admission of both the appellant and the appellee; (7) when the findings are
contrary to those of the trial court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set forth in the petition as well
as in the petitioner's main and reply brief are not disputed by the respondent; and when (10)
the findings of fact are premised on the supposed evidence and contradicted by the
evidence on record.
In the instant case, the issue is shrouded by a conflict of factual perception. We are
constrained to review the factual findings of the Court of Appeals, because the conflict falls
within the ambit of one of the recognized exceptions to the conclusiveness of its findings,
i.e., when its findings of facts contradict those of the lower court, in this case that of the
Labor Arbiter and the agency which exercised adjudicative functions over him, the NLRC.
The principal issue to be resolved in this case is whether or not the petitioner was
constructively dismissed. Petitioner claims that his separation from employment with the
respondent was a case of constructive dismissal, an allegation which the respondent
refutes with its own set of evidence pointing to the petitioner's voluntary resignation.
After a careful review of the records of this case, we find sufficient reasons to uphold
respondent's contention.
Constructive dismissal exists where there is a cessation of work because continued
employment is rendered impossible, unreasonable or unlikely.
26
It is present when an
employee's functions, which were originally supervisory in nature, were reduced, and such
reduction is not grounded on valid grounds such as genuine business necessity.
27

Petitioner contends that he felt compelled to tender his resignation on October 12, 1998
because after the discovery of anomalies perpetrated by sales people under him, he started
getting shabby treatment from the company, and that slowly, he was divested of his duties
and responsibilities as the Senior Sales and Marketing Manager of the respondent. He,
however, maintains that his resignation was involuntary.
In support of his contention, the petitioner submitted the respective affidavits of Mario
Carangan III
28
and Floriza Tuazon,
29
his former co-employees, who both alleged that
petitioner was one of the officers of respondent who was stripped of responsibilities and
duties while the investigation of the anomalies was going on.
By way of rebuttal, the respondent challenged the contents of the sworn statements for
being purely hearsay. With respect to the sworn statement of Ms. Floriza G. Tuazon,
respondent argues that Ms. Tuazon resigned even before the petitioner. Thus, she could
not be privy to the events involving petitioner which transpired after her resignation. More
specifically, the cause of petitioner's resignation on October 12, 1998 was no longer within
the competence of Ms. Tuazon.
30
The sworn statement of Mr. Mario Carangan III also
suffers from the same infirmity.
As correctly observed by the Court of Appeals:
It should be remembered that the petitioner has submitted a letter of resignation. It is thus
incumbent upon him to substantiate his claim that his resignation was not voluntary but in
truth was actually a constructive dismissal.
31

The failure of the petitioner to fully substantiate his claim that the respondent stripped him of
his duties and functions is fatal to his present petition. Except for the sworn statements
previously discussed, which we have found to be lacking in probative value, petitioner did
not present any other proof of the alleged stripping of his functions by the respondent.
Petitioner's bare allegations of constructive dismissal, when uncorroborated by the evidence
on record, cannot be given credence.
Further, respondent presented copies of its confidential sales evaluation form
32
which prove
that, contrary to the allegations of the petitioner, he was still performing his duties and
responsibilities one month prior to his resignation. This clearly negates his allegations that
he was stripped of his duties.
Apparently, petitioner fully exercised the prerogatives and the responsibilities of his office as
the Senior Sales Manager of the respondent during the time that the said functions were
supposedly removed from him. Therefore, there can be no constructive dismissal to speak
of. He who asserts must prove.
33

Moreover, after petitioner resigned, he went on leave from October 12, 1998 to November
16, 1998, the date of the effectivity of his resignation. While on leave, he worked for the
release of his clearance and the payment of his 13th month pay and leave pay benefits. In
doing so, he in fact performed all that an employee normally does after he resigns.
Petitioner has taken his theory of coerced or manipulated resignation out of the equation. If
indeed the petitioner was forced into resigning from the respondent, he would not have
sought to be cleared by the respondent and to be paid the monies due him. Resignation is
the formal pronouncement or relinquishment of an office.
34
The voluntary nature of
petitioner's acts has manifested itself clearly and belie his claim of constructive dismissal.
The totality of the evidence indubitably shows that petitioner resigned from employment
without any coercion or compulsion from respondent. His resignation was voluntary. As
such, he shall only be entitled to his 13th month pay and leave pay benefits. These,
however, have already been paid to him by respondent.
35

WHEREFORE, the petition is DENIED and the decision of the Court Appeal dated June 30,
2003 is AFFIRMED. The complaint for constructive dismissal filed by respondent Fernando
Go against petitioner is ordered DISMISSED.
SO ORDERED.
UNICORN SAFETY GLASS INC. VS. BASARTE NOV. 25, 2004
Its Motion for Reconsideration having been denied, petitioners are before us on Petition for
Review on Certiorari, raising the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE RULING
OF THE LABOR ARBITER A QUO WHICH WAS AFFIRMED BY THE NLRC
HOLDING THAT PRIVATE RESPONDENTS WERE NOT ILLEGALLY DISMISSED
FROM THEIR EMPLOYMENT.
II.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
RELEASE, WAIVER AND QUITCLAIMS EXECUTED BY PRIVATE
RESPONDENTS RODRIGO BASARTE AND JAIMELITO FLORES NULL AND
VOID.
14

The petition lacks merit.
Constructive dismissal or a constructive discharge has been defined as quitting because
continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank and a diminution in pay.
15
Constructive dismissal, however,
does not always take the form of a diminution. In several cases, we have ruled that an act of
clear discrimination, insensibility, or disdain by an employer may become so unbearable on
the part of the employee so as to foreclose any choice on his part except to resign from
such employment. This constitutes constructive dismissal.
16

In the case at bar, we agree with the Court of Appeals that petitioners' bare assertions on
the alleged reason for the rotation plan as well as its failure to refute respondents'
contention that they were targeted due to their union activities, merit the reversal of the
Labor Arbiter's decision. It was incumbent upon petitioners to prove that the rotation
scheme was a genuine business necessity and not meant to subdue the organized union.
The reasons enumerated by petitioners in their Memoranda dated March 2, 1998 were
factors too general to actually substantiate the need for the scheme. Petitioners cite the
reduction in their electric consumption as proof of an economic slump. This may be true to
an extent. But it does not, by itself, prove that the rotation scheme was the most reasonable
alternative to remedy the company's problems.
The petitioners' unbending stance on the implementation of the rotation scheme was an
indication that the rotation plan was being implemented for reasons other than business
necessity. It appears that respondents attempted on more than one occasion to have a
dialogue with petitioner Hilario Yulo to discuss the work reduction. Good faith should have
prompted Yulo to hear the side of the respondents, to come up with a scheme amenable to
both parties or attempt to convince the employees concerned that there was no other viable
option. However, petitioners ignored the letters sent by respondents, which compelled the
latter to seek redress with the Labor Arbiter.
We are mindful that every business strives to keep afloat during these times when
prevailing economic situations turns such endeavor into a near struggle. With as much
latitude as our laws would allow, the Court has always respected a company's exercise of
its prerogative to devise means to improve its operations. Thus, we have held that
management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner
of work, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline, dismissal and recall of
workers.
17
Further, management retains the prerogative, whenever exigencies of the service
so require, to change the working hours of its employees.
18

However, the exercise of management prerogative is not absolute. By its very nature,
encompassing as it could be, management prerogative must be exercised in good faith and
with due regard to the rights of laborverily, with the principles of fair play at heart and
justice in mind. While we concede that management would best know its operational needs,
the exercise of management prerogative cannot be utilized as an implement to circumvent
our laws and oppress employees. The prerogative accorded management cannot defeat the
very purpose for which our labor laws exist: to balance the conflicting interests of labor and
management, not to tilt the scale in favor of one over the other, but to guaranty that labor
and management stand on equal footing when bargaining in good faith with each other.
19

In the case at bar, the manner by which petitioners exercised their management prerogative
appears to be an underhanded circumvention of the law. Petitioners were keen on
summarily implementing the rotation plan, obviously singling out respondents who were all
union officers. The management's apparent lack of interest to hear what the respondents
had to say, created an uncertain situation where reporting for work was tantamount to an
acquiescence in an unjust situation.
Petitioners argued that they "exerted diligent and massive efforts" to make respondents
return to work, highlighting the telegrams and memoranda sent to respondents.
20
It is well
established that to constitute abandonment, two elements must concur: (1) the 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. Abandoning one's job
means the deliberate, unjustified refusal of the employee to resume his employment and the
burden of proof is on the employer to show a clear and deliberate intent on the part of the
employee to discontinue employment.
21

However, petitioners' charge of abandonment of work by respondents does not hold water
when taken in light of the complaint for constructive dismissal. We have held that a charge
of abandonment is totally inconsistent with the filing of a complaint for constructive
dismissal and with reason.
22
Respondents cannot be said to have abandoned their jobs
when precisely, the root cause of their protest is their demand to maintain their regular work
hours. What is more, respondents even prayed for reinstatement and backwages. Clearly,
these are incompatible with the proposition that respondents sought to abandon their work.
Anent the issue of the validity of the waivers and quitclaims executed by some of the
respondents, petitioners argue that while admittedly, the amounts indicated therein were not
substantial, it does not necessarily follow that these were executed under duress. Moreover,
the waivers and quitclaims were executed when the complaint for illegal dismissal was
already dismissed by the Labor Arbiter. Thus, the waivers and quitclaims were executed
under valid circumstances.
We do not agree. To be sure, the law looks with disfavor upon quitclaims and releases by
employees who are inveigled or pressured into signing them by unscrupulous employers
seeking to evade their legal responsibilities. We have clarified the standards for determining
the validity of quitclaim or waiver in the case of Periquet v. National Labor Relations
Commission,
23
to wit:
If the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must be recognized as a
valid and binding undertaking.
In the instant case, while it is true that the complaint for illegal dismissal filed by
respondents with the Labor Arbiter has been dismissed, their appeal before the NLRC was
still pending. In fact, petitioners even filed a Motion to Dismiss with the NLRC on the very
ground that the respondents, or at least most of them, have executed said "Waivers,
Releases and Quitclaims." Petitioners cannot therefore deny that it was in their interest to
have respondents execute the quitclaims.
Furthermore, the considerations received by respondents Basarte and Flores were grossly
inadequate considering the length of time that they were employed in petitioner company.
As correctly pointed out by the Court of Appeals, Basarte worked for petitioner company for
21 years, that is, from 1976 to 1998, while Flores worked from 1991 to 1998. Basarte and
Flores only received P10,000.00 and P3,000.00, respectively. In contrast, Manongsong and
Soltura, two workers who opted to settle their respective cases earlier on, both started in
1993 only, but were able to take home P16,434.00 each after executing their waivers.
Article 279 of the Labor Code provides that an employee who is unjustly dismissed from
work is entitled to reinstatement without loss of seniority rights and other privileges, and to
his full backwages, inclusive of allowances, and to the other benefits or their monetary
equivalent computed from the time of his actual reinstatement. However, if reinstatement is
no longer possible, the employer has the alternative of paying the employee his separation
pay in lieu of reinstatement.
WHEREFORE, the instant petition is DENIED, and the decision of the Court of Appeals of
October 18, 2001 in CA-G.R. SP No. 63577 is AFFIRMED in toto. Costs against petitioners.
SO ORDERED.
GLORIA ARTIAGA VS SILIMAN UNIVERSITY APRIL 16, 2009
The Court is not impressed.




While review of NLRC decisions via Certiorari should be confined to issues
of want of jurisdiction and grave abuse of discretion,
[16]
grave abuse of discretion is
committed when the board, tribunal or officer exercising judicial function fails to
consider evidence adduced by the parties,
[17]
as did the NLRC in the present
case. Moreover, where a partys contention appears to be clearly tenable, or where
the broader interest of justice and public policy so require, the error may be
corrected in a certiorari proceeding,
[18]
as again in the present case.

In reversing the Labor Arbiters decision, the NLRC upheld petitioners
version and found her to have been constructively dismissal. Petitioner presented
no evidence to substantiate her claim, however.
[19]


On the other hand, SUMCs evidence of petitioners irregular acts is
documented. And it sent petitioner a Notice of September 11, 1998 requiring her to
explain her side and placing her under preventive suspension. Petitioners above-
quoted letter-explanation cum resignation is self-explanatory.

Against the documentary evidence of respondents, petitioners claim thus
fails.



Petitioners claim that respondents pieces of evidence were fabricated, viz,

Firstly, these documents [Notice of Preventive Suspension and
Audit Report] were neither served [to] nor received by
complainant. None of the documents even bear a signature identical
to that written in her resignation letter. The signatures in Annexes
[2] [Notice of Preventive Suspension] and [3] [September 11,
1998 Audit Report] are not even identical to each other. As claimed
by respondents these two documents were supposedly received by
complainant on September 11, 1998 or before her
resignation. Strangely, the signature appearing on the left bottom of
Annex [3] was dated 9/14/98 2:00PM while the recipients
signature in Annex [2] has no date at all. Why [this] variance if the
documents were actually given to complainant on the same
day, September 11, 1998?
[20]
(Underscoring supplied)

does not persuade. Petitioners earlier-quoted explanation-resignation letter
of September 13, 1998 unquestionably shows that she received the notices referred
to, otherwise, to what matters she was explaining therein?

In fine, the Court of Appeals did not err in overturning the findings of the
NLRC.

WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals dated May 30, 2006 is AFFIRMED.

SO ORDERED.

MERCK SHARP AND DOHME AND PETER CARBONELL VS JONAR ROBLES
- NOV. 25, 2009
Hence, this petition for review on certiorari raising the following issues:

1. [WHETHER THE] COURT OF APPEALS DEPARTED FROM
THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS WHEN IT GAVE DUE COURSE TO PRIVATE
RESPONDENTS (CRISTOBALS) PETITION FOR CERTIORARI.

2. [WHETHER] THE COURT OF APPEALS GRAVELY ERRED
WHEN IT REVERSED THE NLRC DECISION.


3. [WHETHER THE] HONORABLE COURT MAY REVIEW
FACTUAL CONCLUSION[S] OF THE COURT OF APPEALS WHEN
CONTRARY TO THOSE OF THE NLRC OR THE LABOR
ARBITER.
[4]



We first dispose of the procedural issues.

The issue of whether we can review factual conclusions of the CA, when
contrary to those of the administrative tribunal, need not detain us unnecessarily.
We have long held in a number of cases that factual findings of administrative or
quasi-judicial bodies, which are deemed to have acquired expertise in matters
within their respective jurisdictions, are generally accorded not only respect but
even finality, and bind the Court when supported by substantial
evidence.
[5]
Corollary thereto is our well-entrenched holding that this Court is not a
trier of facts; this is strictly adhered to in labor cases.
[6]
However, the rule admits
of exceptions when: (1) the findings are grounded entirely on speculation, surmises
or conjectures; (2) the inference made is manifestly mistaken, absurd or
impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a
misapprehension of facts; (5) the findings of fact are conflicting; (6) in making its
findings, the Court of Appeals went beyond the issues of the case, or its findings
are contrary to the admissions of both appellant and appellee; (7) the findings are
contrary to those of the trial court; (8) the findings are conclusions without citation
of specific evidence on which they are based; (9) the facts set forth in the petition,
as well as in petitioners main and reply briefs, are not disputed by respondent;
(10) the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; and (11) the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.
[7]
In the case at bar, we gave due
course to MSDs petition as the findings of fact and the conclusions of law of the
Labor Arbiter and the NLRC differ from those of the CA.

MSD next contends that the CA gravely erred when it did not dismiss
outright respondent Cristobals petition for certiorari for the latters failure to first
file a motion for reconsideration of the NLRCs resolution.

While MSD is correct in stating that, generally, certiorari, as a special civil
action, will not lie unless a motion for reconsideration is filed before the
respondent tribunal to allow it an opportunity to correct its imputed errors,
[8]
the
rule admits of the following exceptions:

(a) where 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
relief 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 proceedings 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.
[9]



The second and fourth exceptions are applicable in this case. As
pointed out by respondent Cristobal, Jean Sarmiento, one of the
complainants in NLRC-NCR Case No. 00-12-13804-2003 before the Labor
Arbiter who was similarly situated as Cristobal and had likewise claimed
constructive dismissal by MSD, filed a motion for reconsideration which
was perfunctorily denied by the NLRC. At that moment, respondent
Cristobal was justified in directly filing a petition for certiorari with the CA
to annul the NLRC resolution. In point is Abraham v. National Labor
Relations Commission:
[10]


The rationale for the requirement of first filing a motion for
reconsideration before the filing of a petition for certiorari is that the law
intends to afford the tribunal, board, or office an opportunity to rectify
the errors and mistakes it may have lapsed into before resort to the courts
of justice can be had. In the present case, the NLRC was already given
the opportunity to review its ruling and correct itself when the
respondent filed its motion for reconsideration of the NLRCs initial
ruling in favor of petitioner. In fact, it granted the motion for
reconsideration filed by the respondent and reversed its previous ruling
and reinstated the decision of the Labor Arbiter dismissing the complaint
of the petitioner. It would be an exercise in futility to require the
petitioner to file a motion for reconsideration since the very issues raised
in the petition for certiorari, i.e. whether or not the petitioner was
constructively dismissed by the respondent and whether or not she was
entitled to her money claims, were already duly passed upon and
resolved by the NLRC. Thus the NLRC had more than one opportunity
to resolve the issues of the case and in fact reversed itself upon a
reconsideration. It is highly improbable or unlikely under the
circumstances that the Commission would reverse or set aside its
resolution granting a reconsideration.
[11]



We now come to the pivotal issue for our resolution: whether respondent
Cristobal was constructively dismissed by petitioner MSD.

MSD is adamant that the CA erred in not characterizing the work
reassignment of respondent Cristobal as falling within the ambit of management
prerogative and, thus, beyond challenge. In addition, MSD postulates that the work
reassignment of medical representatives, such as respondent Cristobal, is not only
dictated by the nature of the work, but is, more importantly, written in the
employment contract.

Once more, we agree with MSDs statement of the general rule that the work
reassignment of an employee is a management prerogative. Indeed, even the
Constitution recognizes the right of enterprises to reasonable returns on
investments, and to expansion and growth.
[12]
Yet, we are quick to point out that
the invocation of management prerogative carries the corresponding burden of
proving such contention. We reiterated as much in the recent case of Norkis
Trading Co., Inc. v. Gnilo:
[13]


Well-settled is the rule that it is the prerogative of the employer to
transfer and reassign employees for valid reasons and according to the
requirement of its business. An owner of a business enterprise is given
considerable leeway in managing his business. Our law recognizes certain
rights, collectively called management prerogative as inherent in the
management of business enterprises. We have consistently recognized and
upheld the prerogative of management to transfer an employee from one
office to another within the business establishment, provided that there is no
demotion in rank or diminution of his salary, benefits and other privileges
and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause. This
privilege is inherent in the right of employers to control and manage their
enterprises effectively.

The right of employees to security of tenure does not give them
vested rights to their positions to the extent of depriving management of its
prerogative to change their assignments or to transfer them. Managerial
prerogatives, however, are subject to limitations provided by law, collective
bargaining agreements, and general principles of fair play and justice.

The employer bears the burden of showing that the transfer is not
unreasonable, inconvenient or prejudicial to the employee; and does not
involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. Should the employer fail to overcome this burden of proof,
the employees transfer shall be tantamount to constructive dismissal.
[14]



In the case at bar, specifically in the matter of respondent Cristobals
transfer, the Labor Arbiter and the NLRC promptly dismissed Cristobals charge of
constructive dismissal. Both labor tribunals relied heavily on the stipulation in the
employment contract which reads:

9. You agree to be assigned to any work for such period as may
be determined by [MSD] whenever the operations thereof require such
assignment. It is also understood that, depending upon the operational
requirements of [MSD], you may be assigned to any location in
the Philippines. These assignments are subject to change any time
whenever necessary in the interest of [MSD].


This provision, coupled with their finding that the new assignment did not involve
a demotion in rank and/or a diminution in pay, led to the labor tribunals uniform
conclusion that Cristobal unjustly refused to comply with his new work
assignment, and was, therefore, not constructively dismissed.

In marked contrast, the CA, in ruling that Cristobal was constructively
dismissed, had this to say:

This Court, however, takes exception to the ruling of the NLRC
as regards the case of Christian. The pertinent portion of the NLRCs
ruling reads as follows:

x x x. It is undisputed that complainants
Sarmiento, Cristobal and Tomeldan were merely
transferred to their new assignments as a result of an annual
implementation of the new Territorial configuration/PHR
Assignments usually done by the Company at the start of
every year. x x x The records of the case are bereft of any
evidence showing that their resignation was an involuntary
one; and it was resorted to because their continued
employment has become impossible, unreasonable or
unlikely. It is worthy to note that said transfers affect not
only the [respondents] but some other co-employees as
well, which included three (3) other District Managers.

The facts of the case at bar show that after Christians suspension
was lifted, he was given a new assignment. Christian requested for a
transfer which was not granted. Thereafter, Christian received a new
ENTE containing the charges similar to the ones for which he was
already exonerated. Moreover, [petitioners] failed to explain why they
did not act on Christians application for sick leave and instead gave him
another ENTE. The events that thereafter transpired lead to the
conclusion that Christians continued employment with [petitioner
MSD] has become unbearable. It is settled that constructive dismissal
exists when an act of clear discrimination, insensibility or disdain on the
part of the employer has become so unbearable as to leave an employee
with no choice but to forego continued employment.

Indeed it is settled that the objection to the transfer being
grounded on solely upon the personal inconvenience or hardship that
will be caused to the employee by reason of the transfer is not a valid
reason to disobey an order of transfer. A scrutiny of the facts of the case
at bar, however, shows that the transfer of Christian reeks with bad faith
as to consider his case one of constructive dismissal. Under the law,
Christian has to be reinstated to his former position with full backwages
from the time he was dismissed up to his actual reinstatement.
[15]



We are in accord with the appellate courts ruling that respondent Cristobal
was constructively dismissed by MSD.

Time and again we have ruled that in constructive dismissal cases, the
employer has the burden of proving that the transfer of an employee is for just and
valid grounds, such as genuine business necessity.
[16]
The employer must
demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee and that the transfer does not involve a demotion in rank or a diminution
of salary and other benefits. If the employer fails to overcome this burden of proof,
the employees transfer is tantamount to unlawful constructive dismissal.

Our holding in Westmont Pharmaceuticals, Inc. v.
Samaniego
[17]
is instructive, to wit:

Westmont and Unilab failed to discharge this burden. Samaniego was
unceremoniously transferred from Isabela to Metro Manila. We hold that such
transfer is economically and emotionally burdensome on his part. He was
constrained to maintain two residences one for himself in Metro Manila, and the
other for his family inTuguegarao City, Cagayan. Worse, immediately after his
transfer to Metro Manila, he was placed on floating status and was demoted in
rank, performing functions no longer supervisory in nature.
There may also be constructive dismissal if an act of clear 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. This was what happened to Samaniego. x x x.
[18]



As with Westmont and Unilab in the cited case, MSD failed to discharge the
required burden of proof. The following circumstances negate MSDs claim that,
on the whole, the transfer of Cristobal was done in good faith and based on just and
valid grounds:

1. Although MSD was unable to prove the initial charge against
Cristobal, the threat of an investigation remained like a Damocles sword looming
over him. Eventually, Cristobals preventive suspension was lifted, and he was
reassigned subsequently to a different district. In the meantime, Cristobal was
again asked to explain a similar charge of dishonesty and acting against the interest
of MSD, likewise based on an expense report supported by a receipt from Lorna
Food Services. We note that MSD claims that it commissioned an investigation
agency to ascertain the veracity of some reports of employees fraudulent
transactions. The second charge against Cristobal was ostensibly based on an
expense report for a different date. However, this expense report was likewise
supported by a receipt issued by Lorna Food Services, which should have been
within the knowledge of MSD. And as the first charge did not stick, the second,
yet identical, charge of dishonesty--coupled with a very far reassignment--
undoubtedly, created an oppressive atmosphere for Cristobal.

2. Cristobals request for reassignment was not acted upon and was,
ultimately, denied. In fact, no business reason whatsoever was stated in the
electronic mail to justify the necessity of transferring Cristobal. Curiously, the list
of district assignments in 2003 and 2004 submitted by MSD in evidence clearly
shows that only Cristobal was reassigned, and to a station infinitely distant from
where he lived. To make matters worse, upon denial of the request for transfer,
Cristobal was ordered to report for work in the new assignment the very next day.
This clearly demonstrates an insensitivity to the welfare of Cristobal and his family
given that he lives in Marikina and was now required to report immediately for
work in the Baguio and San Fernando areas.

3. Lastly, MSD did not give any reason why Cristobals request for a
five-day sick leave was denied.

WHEREFORE, premises considered, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. SP No. 94265 is AFFIRMED.
Petitioner Merck Sharp and Dohme (Philippines) is ordered
to REINSTATE respondent Christian Aldrin S. Cristobal and to pay him full
backwages. No costs.



SO ORDERED.
MANOLO A PENAFLOR VS OUTDOOR CLOTHING MANUFACTURING
CORPORATION APRIL 13, 2010
THE ISSUE and THE COURTS RULING

The Court finds the petition meritorious.

A preliminary contentious issue is Outdoor Clothings argument that we
should dismiss the petition outright because it raises questions of facts, not the
legal questions that should be raised in a Rule 45 petition.
[16]


We see no merit in this argument as the rule that a Rule 45 petition deals
only with legal issues is not an absolute rule; it admits of exceptions. In the labor
law setting, we wade into factual issues when conflict of factual findings exists
among the labor arbiter, the NLRC, and the CA. This is the exact situation that
obtains in the present case since the labor arbiter found facts supporting the
conclusion that there had been constructive dismissal, while the NLRCs and the
CAs factual findings contradicted the labor arbiters findings.
[17]
Under this
situation, the conflicting factual findings below are not binding on us, and we
retain the authority to pass on the evidence presented and draw conclusions
therefrom.
[18]


The petition turns on the question of whether Peaflors undisputed
resignation was a voluntary or a forced one, in the latter case making it a
constructive dismissal equivalent to an illegal dismissal. A critical fact necessary in
resolving this issue is whether Peaflor filed his letter of resignation before or
after the appointment of Buenaobra as the new/concurrent HRD manager. This
question also gives rise to the side issue of when Buenaobras appointment was
made. If the resignation letter was submitted before Syfus appointment of
Buenaobra as new HRD manager, little support exists for Peaflors allegation that
he had been forced to resign due to the prevailing abusive and hostile working
environment. Buenaobras appointment would then be simply intended to cover
the vacancy created by Peaflors resignation. On the other hand, if the resignation
letter was submitted after the appointment of Buenaobra, then factual basis exists
indicating that Peaflor had been constructively dismissed as his resignation was a
response to the unacceptable appointment of another person to a position he still
occupied.

The question of when Peaflor submitted his resignation letter arises because
this letter undisputably made was undated. Despite Peaflors claim of having
impressive intellectual and academic credentials,
[19]
his resignation letter, for some
reason, was undated. Thus, the parties have directly opposing claims on the
matter. Peaflor claims that he wrote and filed the letter on the same date he made
his resignation effective March 15, 2000. Outdoor Clothing, on the other hand,
contends that the letter was submitted on March 1, 2000, for which reason Syfu
issued a memorandum of the same date appointing Buenaobra as the concurrent
HRD manager; Syfus memorandum cited Peaflors intention to resign so he
could devote his time to teaching. The company further cites in support of its case
Buenaobras March 3, 2000 memorandum accepting his appointment. Another
piece of evidence is the Syfu memorandum of March 10, 2000, which informed the
office of the appointment of Buenaobra as the concurrent Head of HRD the
position that Peaflor occupied. Two other memoranda are alleged to exist,
namely, the AWOL memoranda of March 6 and 11, 2000, allegedly sent to
Penaflor.

Several reasons arising directly from these pieces of evidence lead us to
conclude that Peaflor did indeed submit his resignation letter on March, 15,
2000, i.e., on the same day that it was submitted.

First, we regard the Syfu memorandum of March 1, 2000 and the
memorandum of Buenaobra of March 3, 2000 accepting the position of HRD Head
to be highly suspect. In our view, these memoranda, while dated, do not constitute
conclusive evidence of their dates of preparation and
communication. Surprisingly, Peaflor was never informed about these
memoranda when they directly concerned him, particularly the turnover of
responsibilities to Buenaobra if indeed Peaflor had resigned on March 1,
2000 and a smooth turnover to Buenaobra was intended. Even the recipients of
these communications do not appear to have signed for and dated their receipt. The
AWOL memoranda, to be sure, should have been presented with proof of service if
they were to have any binding effect on Peaflor.

Second,we find it surprising that these pieces of evidence pointing to
a March 1, 2000 resignation specifically, Syfus March 1, 2000 memorandum to
Buenaobra about Penaflors resignation and Buenaobras own acknowledgment
and acceptance were only presented to the NLRC on appeal, not before the labor
arbiter. The matter was not even mentioned in the companys position paper filed
with the labor arbiter.
[20]
While the presentation of evidence at the NLRC level
on appeal is not unheard of in labor cases,
[21]
still sufficient explanation must be
adduced to explain why this irregular practice should be allowed. In the present
case, Outdoor Clothing totally failed to explain the reason for its omission. This
failure, to us, is significant, as these were the clinching pieces of evidence that
allowed the NLRC to justify the reversal of the labor arbiters decision.

Third, the circumstances and other evidence surrounding Peaflors
resignation support his claim that he was practically compelled to resign from the
company.

Foremost among these is the memorandum of March 10, 2000 signed by
Syfu informing the whole office (To: All concerned) about the designation of
Buenaobra as concurrent Accounting and HRD Manager. In contrast with the
suspect memoranda we discussed above, this memorandum properly bore
signatures acknowledging receipt and dates of receipt by at least five company
officials, among them the readable signature of Demogene and one Agbayani;
three of them acknowledged receipt on March 13, 2000, showing that indeed it was
only on that day that the appointment of Buenaobra to the HRD position was
disclosed. This evidence is fully consistent with Peaflors position that it was
only in the afternoon of March 13, 2000 that he was told, informally at that, that
Buenaobra had taken over his position. It explains as well why as late as March
13, 2000, Peaflor still prepared and signed a security report,
[22]
and is fully
consistent with his position that on that day he was still working on the excuse
letter of certain sales personnel of the company.
[23]


We note that the company only belatedly questioned the motivation that
Peaflor cited for his discriminatory treatment, i.e., that he was caught in the bitter
fight between Syfu and Lee, then Vice President for Operations, that led the latter
to leave the company.
[24]
After Lee left, Peaflor alleged that those identified with
Lee were singled out for adverse treatment, citing in this regard the downsizing of
HRD that occurred on or about this time and which resulted in his one-man HRD
operation. We say this downsizing was only alleged as the company totally
failed despite Penaflors claim of discriminatory practice to adduce evidence
showing that there had indeed been a legitimate downsizing. Other than its bare
claim that it was facing severe financial problems, Outdoor Clothing never
presented any evidence to prove both the reasons for its alleged downsizing and the
fact of such downsizing. No evidence was ever offered to rebut Peaflors claim
that his staff members were dismissed to make his life as HRD Head difficult. To
be sure, Peaflors participation in the termination of his staff members
employment cannot be used against him, as the termination of employment was a
management decision that Peaflor, at his level, could not have effectively
contested without putting his own job on the line.

Peaflors own service with the company deserves close scrutiny. He
started working for the company on September 2, 1999 so that by March 1, 2000,
his probationary period would have ended and he would have become a regular
employee. We find it highly unlikely that Peaflor would resign on March 1, 2000
and would then simply leave given his undisputed record of having successfully
worked within his probationary period on the companys Policy Manual, Personnel
Handbook, Job Expectations, and Organizational Set-up. It does not appear sound
and logical to us that an employee would tender his resignation on the very same
day he was entitled by law to be considered a regular employee, especially when a
downsizing was taking place and he could have availed of its benefits if he would
be separated from the service as a regular employee. It was strange, too, that he
would submit his resignation on March 1, 2000 and keep completely quiet about
this development until its effective date on March 15, 2000. In the usual course,
the turnover alone of responsibilities and work loads to the successor in a small
company would have prevented the matter from being completely under wraps for
10 days before any announcement was ever made. That Peaflor was caught by
surprise by the turnover of his post to Buenaobra is in fact indicated by the
companys own evidence that Peaflor still submitted a security report on March
13, 2000. On the whole, Peaflors record with the company is not that of a
company official who would simply and voluntarily tender a precipitate
resignation on the excuse that he would devote his time to teaching a lame
excuse at best considering that March is the month the semester usually ends and is
two or three months away from the start of another school year.

In our view, it is more consistent with human experience that Peaflor
indeed learned of the appointment of Buenaobra only on March 13, 2000 and
reacted to this development through his resignation letter after realizing that he
would only face hostility and frustration in his working environment. Three very
basic labor law principles support this conclusion and militate against the
companys case.

The first is the settled rule that in employee termination disputes, the
employer bears the burden of proving that the employees dismissal was for just
and valid cause.
[25]
That Peaflor did indeed file a letter of resignation does not
help the companys case as, other than the fact of resignation, the company must
still prove that the employee voluntarily resigned.
[26]
There can be no valid
resignation where the act was made under compulsion or under circumstances
approximating compulsion, such as when an employees act of handing in his
resignation was a reaction to circumstances leaving him no alternative but to
resign.
[27]
In sum, the evidence does not support the existence of voluntariness in
Peaflors resignation.

Another basic principle is that expressed in Article 4 of the Labor Code
that all doubts in the interpretation and implementation of the Labor Code should
be interpreted in favor of the workingman. This principle has been extended by
jurisprudence to cover doubts in the evidence presented by the employer and the
employee.
[28]
As shown above, Peaflor has, at very least, shown serious doubts
about the merits of the companys case, particularly in the appreciation of the
clinching evidence on which the NLRC and CA decisions were based. In such
contest of evidence, the cited Article 4 compels us to rule in Peaflors
favor. Thus, we find that Peaflor was constructively dismissed given the hostile
and discriminatory working environment he found himself in, particularly
evidenced by the escalating acts of unfairness against him that culminated in the
appointment of another HRD manager without any prior notice to him. Where no
less than the companys chief corporate officer was against him, Peaflor had no
alternative but to resign from his employment.
[29]


Last but not the least, we have repeatedly given significance in
abandonment and constructive dismissal cases to the employees reaction to the
termination of his employment and have asked the question: is the complaint
against the employer merely a convenient afterthought subsequent to an
abandonment or a voluntary resignation? We find from the records that Peaflor
sought almost immediate official recourse to contest his separation from service
through a complaint for illegal dismissal.
[30]
This is not the act of one who
voluntarily resigned; his immediate complaints characterize him as one who deeply
felt that he had been wronged.

WHEREFORE, we GRANT the petitioners petition for review
on certiorari, and REVERSE the decision and resolution of the Court of Appeals
in CA-G.R. SP No. 87865 promulgated on December 29, 2006 and March 14,
2007, respectively. We REINSTATE the decision of the labor arbiter
dated August 15, 2001, with the MODIFICATION that, due to the strained
relations between the parties, respondents are additionally ordered to pay
separation pay equivalent to the petitioners one months salary.

Costs against the respondents.

SO ORDERED.

COCA-COLA BOTTLERS PHILIPPINES VS ANGEL DEL VILLAR OCT. 6,
2010
In this Petition for Review, the Company raises three grounds for consideration of this
Court:
A. THE HONORABLE COURT OF APPEALS GAVE DUE COURSE TO THE PETITION
DESPITE THE FACT THAT IT WAS CLEARLY FILED BEYOND THE REGLEMENTARY
PERIOD PRESCRIBED BY LAW.
B. THE HONORABLE COURT OF APPEALS GAVE DUE COURSE TO THE [Court of
Appeals] PETITION DESPITE THE FACT THAT [Del Villar] FAILED TO ESTABLISH THAT
THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF
DISCRETION IN RENDERING THE 26 FEBRUARY 1999 DECISION AND 26 APRIL 1999
RESOLUTION.
C. THE HONORABLE COURT OF APPEALS EFFECTIVELY DIRECTED [Del Villars]
REINSTATEMENT TO HIS FORMER JOB LEVEL DESPITE ITS IMPOSSIBILITY SINCE
HE HAD ALREADY BEEN VALIDLY SEPARATED FROM SERVICE.
18

The Company avers that the Court of Appeals erred in giving due course to Del Villars
Petition for Certiorari in CA-G.R. SP No. 53815 as the said remedy was filed out of time.
Rule 65, Section 4 of the Rules of Court, as amended by Supreme Court Circular No. 39-98
on September 1, 1998, provided:
Sec. 4. Where and when petition to be filed. The petition may be filed not later than sixty
(60) days from notice of the judgment, order or resolution sought to be assailed in the
Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation,
board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial
area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether
or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of
its jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, and unless
otherwise provided by law or these Rules, the petition shall be filed in and cognizable only
by the Court of Appeals.
If the petitioner had filed a motion for new trial or reconsideration in due time after notice of
said judgment, order or resolution, the period herein fixed shall be interrupted. If the motion
is denied, the aggrieved party may file the petition within the remaining period, but which
shall not be less than five (5) days in any event, reckoned from notice of such denial. No
extension of time to file the petition shall be granted except for the most compelling reason
and in no case to exceed fifteen (15) days. (Emphases ours.)
The Company points out that Del Villar received a copy of the NLRC Decision dated
February 26, 1999 on March 17, 1999. Twelve days later, on March 29, 1999, Del Villar filed
a Motion for Reconsideration, thus, interrupting the 60-day reglementary period for filing a
petition for certiorari. The NLRC denied Del Villars Motion for Reconsideration in a
Resolution dated April 26, 1999, a copy of which Del Villar received on May 21, 1999. From
May 21, 1999, Del Villar only had 48 days more, or until July 8, 1999, within which to file his
petition for certiorari; but he only did so 60 days later, on July 20, 1999. Clearly, Del Villars
Petition for Certiorari in CA-G.R. SP No. 53815 was filed 12 days late and way beyond the
reglementary period as provided under the Rules of Court.
We do not agree.
While CA-G.R. SP No. 53815 was pending before the Court of Appeals, Section 4 of Rule
65 of the Rules of Court was amended anew by Supreme Court Circular No. 56-2000,
which took effect on September 1, 2000, to read:
Sec. 4. When and where petition filed. The petition shall be filed not later than sixty (60)
days from notice of the judgment, order or resolution. In case a motion for reconsideration
or new trial is timely filed, whether such motion is required or not, the sixty (60) day period
shall be counted from notice of the denial of the said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a
lower court or of a corporation, board, officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also
be filed in the Court of Appeals whether or not the same is in the aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the
acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these
rules, the petition shall be filed in and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for compelling reason and in
no case exceeding fifteen (15) days. (Emphases ours.)
It is clear that under Supreme Court Circular No. 56-2000, in case a motion for
reconsideration of the judgment, order, or resolution sought to be assailed has been filed,
the 60-day period to file a petition for certiorari shall be computed from notice of the denial
of such motion.
The crucial question now is whether Supreme Court Circular No. 56-2000 should be applied
retroactively to Del Villars Petition in CA-G.R. SP No. 53815.
We answer affirmatively. As we explained in Perez v. Hermano
19
:
Under this amendment, the 60-day period within which to file the petition starts to run from
receipt of notice of the denial of the motion for reconsideration, if one is filed.
In Narzoles v. National Labor Relations Commission [G.R. No. 141959, 29 September
2000, 341 SCRA 533-538], we described this latest amendment as curative in nature as it
remedied the confusion brought about by Circular No. 39-98 because, "historically, i.e.,
even before the 1997 revision to the Rules of Civil Procedure, a party had a fresh period
from receipt of the order denying the motion for reconsideration to file a petition
for certiorari." Curative statutes, which are enacted to cure defects in a prior law or to
validate legal proceedings which would otherwise be void for want of conformity with certain
legal requirements, by their very essence, are retroactive and, being a procedural rule, we
held in Sps. Ma. Carmen and Victor Javellana v. Hon. Presiding Judge Benito Legarda(G.R.
No. 139067, 23 November 2004] that "procedural laws are construed to be applicable to
actions pending and undetermined at the time of their passage, and are deemed retroactive
in that sense and to that extent."
20

In the instant case, Del Villar filed a Motion for Reconsideration of the NLRC Decision dated
February 26, 1999. Del Villar received a copy of the NLRC Resolution dated April 26, 1999,
denying his Motion for Reconsideration, on May 21, 1999. As already settled by
jurisprudence, Del Villar had a fresh period of 60 days from May 21, 1999 within which to
file his Petition for Certiorari before the Court of Appeals. Keeping in mind the rule that in
computing a period, the first day shall be excluded and the last day included,
21
exactly 60
days had elapsed from May 21, 1999 when Del Villar filed his Petition with the appellate
court on July 20, 1999. Hence, without a doubt, Del Villars Petition for Certiorari in CA-G.R.
SP No. 53815 was seasonably filed.
We now turn our attention to the merits of the case.
The Company asserts that the Court of Appeals should not have issued a writ of certiorari in
Del Villars favor as there was no grave abuse of discretion on the part of the NLRC in
finding that Del Villar was not demoted and that the Company had not acted in bad faith or
with malice.
The issue of whether the Company, in transferring Del Villar from the position of
Transportation Services Manager to Staff Assistant to the Corporate Purchasing and
Materials Control Manager, validly exercised its management prerogative or committed
constructive dismissal, is a factual matter. It is a settled rule that factual findings of labor
officials, who are deemed to have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but even finality. Moreover, in a
petition for review on certiorari under Rule 45 of the Rules of Court, the Supreme Court
reviews only errors of law and not errors of facts. However, where there is divergence in the
findings and conclusions of the NLRC, on the one hand, from those of the Labor Arbiter and
the Court of Appeals, on the other, the Court is constrained to examine the evidence,
22
to
determine which findings and conclusion are more conformable with the evidentiary facts.
Hence, in the instant Petition, we embark on addressing not only the legal, but the factual
issues as well.
Jurisprudence recognizes the exercise of management prerogative. For this reason, courts
often decline to interfere in legitimate business decisions of employers. In fact, labor laws
discourage interference in employers judgment concerning the conduct of their business.
23

In the pursuit of its legitimate business interest, management has the prerogative to transfer
or assign employees from one office or area of operation to another provided there is no
demotion in rank or diminution of salary, benefits, and other privileges; and the action is not
motivated by discrimination, made in bad faith, or effected as a form of punishment or
demotion without sufficient cause. The right of employees to security of tenure does not
give them vested rights to their positions to the extent of depriving management of its
prerogative to change their assignments or to transfer them.
24

Managerial prerogatives, however, are subject to limitations provided by law, collective
bargaining agreements, and general principles of fair play and justice.
25
In the case of Blue
Dairy Corporation v. National Labor Relations Commission,
26
we described in more detail
the limitations on the right of management to transfer employees:
But, like other rights, there are limits thereto. The managerial prerogative to transfer
personnel must be exercised without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the right should not be confused with the manner in
which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worker. In particular, the employer must be able to show that the
transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve
a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the
employer fail to overcome this burden of proof, the employees transfer shall be tantamount
to constructive dismissal, which has been defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as an offer involving a
demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act
of clear discrimination, insensibility or disdain by an employer has become so unbearable to
the employee leaving him with no option but to forego with his continued employment.
27

In the case at bar, there is no dispute that Del Villar was transferred by the Company from
the position of Transportation Services Manager to the position of Staff Assistant to the
Corporate Purchasing and Materials Control Manager. The burden thus falls upon the
Company to prove that Del Villars transfer was not tantamount to constructive dismissal.
After a careful scrutiny of the records, we agree with the Labor Arbiter and the Court of
Appeals that the Company failed to discharge this burden of proof.
The Company and its officials attempt to justify the transfer of Del Villar by alleging his
unsatisfactory performance as Transportation Services Manager. In its Petition, the
Company disclosed that:
4.1. As Transportation Services Manager, [Del Villar] displayed an utterly woeful
performance. He was unable to submit basic data as to type and brand of vehicles with
highest/lowest maintenance cost as requested. [Del Villar] could not even update the
records of his office. He never complied with his commitments on submission of reports and
his claims of the availability of such reports were never substantiated.
4.2. [Del Villar] could not work with minimum or no supervision. His activities needed to be
closely and constantly monitored by his superiors. [Del Villar] lacked initiative and had to be
constantly reminded of what to do. The work he performed and/or submitted, more often
than not, had to be redone. In his Performance and Potential Evaluation Sheet for 1995,
[Del Villar] merited a mediocre grade of 2 in a scale of one (1) to five (5), the latter number
being the highest grade. Copies of the Affidavit of Edgardo I. San Juan ["San Juan"], the
Companys then Business Logistic Director, and respondents Performance and Potential
Evaluation Sheet for 1995 are attached as Annexes "B" and "C", respectively.
28

San Juan averred in his Affidavit that Del Villar was inept and incompetent as
Transportation Services Manager; and was even more unqualified to take over the new
position of Transportation and Refrigeration Services Manager, which involved additional
functions related to Refrigeration. It was for this reason that Del Villar was transferred to the
position of Staff Assistant to the Corporate Purchasing and Materials Control Manager.
In his Counter-Affidavit submitted before the NLRC, Pineda, the Corporate Purchasing and
Materials Control Manager, claimed that:
3. As his evaluation would show, Mr. del Villar was not a well-motivated employee. He could
not perform his job well and promptly with minimum or no supervision and follow-up from his
superiors. He repeatedly failed to observe the deadlines which I set for the submission of
his reports and often procrastinates. His work product likewise suffered from accuracy and
thoroughness. Despite several admonitions and guidance from me as his immediate
superior, he simply refused to change his work attitude.
29

We are unconvinced. The dismal performance evaluations of Del Villar were prepared by
San Juan and Pineda after Del Villar already implicated his two superiors in his Report
dated January 4, 1996 in an alleged fraudulent scheme against the Company. More
importantly, we give weight to the following instances establishing that Del Villar was not
merely transferred from the position of Transportation Services Manager to the position of
Staff Assistant to the Corporate Purchasing and Materials Control Manager; he was
evidently demoted.
A transfer is a movement from one position to another which is of equivalent rank, level or
salary, without break in service. Promotion, on the other hand, is the advancement from one
position to another with an increase in duties and responsibilities as authorized by law, and
usually accompanied by an increase in salary. Conversely, demotion involves a situation
where an employee is relegated to a subordinate or less important position constituting a
reduction to a lower grade or rank, with a corresponding decrease in duties and
responsibilities, and usually accompanied by a decrease in salary.
30

First, as the Court of Appeals observed, Del Villars demotion is readily apparent in
his new designation. Formerly, he was the Transportation Services Manager; then
he was made a Staff Assistant a subordinate to another manager, particularly,
the Corporate Purchasing and Materials Control Manager.
Second, the two posts are not of the same weight in terms of duties and
responsibilities. Del Villars position as Transportation Services Manager involved a
high degree of responsibility, he being in charge of preparing the budget for all of the
vehicles of the Company nationwide. As Staff Assistant of the Corporate Purchasing
and Materials Control Manager, Del Villar contended that he was not assigned any
meaningful work at all. The Company utterly failed to rebut Del Villars contention. It
did not even present, at the very least, the job description of such a Staff Assistant.
The change in the nature of work resulted in a degrading work condition and
reduction of duties and responsibility constitute a demotion in rank. In Globe
Telecom, Inc. v. Florendo-Flores,
31
we found that there was a demotion in rank even
when the respondent therein continued to enjoy the rank of a supervisor, but her
function was reduced to a mere house-to-house or direct sales agent.
Third, while Del Villars transfer did not result in the reduction of his salary, there was
a diminution in his benefits. The Company admits that as Staff Assistant of the
Corporate Purchasing and Materials Control Manager, Del Villar could no longer
enjoy the use of a company car, gasoline allowance, and annual foreign travel,
which Del Villar previously enjoyed as Transportation Services Manager.
Fourth, it was not bad enough that Del Villar was demoted, but he was even placed
by the Company under the control and supervision of Pineda as the latters Staff
Assistant. To recall, Pineda was one of the Company officials who Del Villar accused
of defrauding the Company in his Report dated January 4, 1996. It is not too difficult
to imagine that the working relations between Del Villar, the accuser, and Pineda,
the accused, had been strained and hostile. The situation would be more oppressive
for Del Villar because of his subordinate position vis--vis Pineda.
Fifth, all the foregoing caused Del Villar inconvenience and prejudice, so unbearable
for him that he was constrained to seek remedy from the NLRC. The Labor Arbiter
was correct in his observation that had Del Villar resigned immediately after his
"transfer," he could be said to have been constructively dismissed. There is
constructive dismissal when there is a demotion in rank and/or diminution in pay; or
when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee.
32

Eventually, however, the Company actually terminated Del Villars services effective
May 31, 1998, as his position was no longer necessary or was considered redundant
due to the reorganization of the Business Logistic Directorate.
Redundancy is one of the authorized causes for the dismissal of an employee. It is
governed by Article 283 of the Labor Code, which reads:
ART. 283. Closure of establishment and reduction of personnel. The employer may
also terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and the
Department of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to at least his
one (1) month pay or to at least one (1) month pay for every year of service, whichever is
higher. In case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or to at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
Redundancy, for purposes of the Labor Code, exists where the services of an employee are
in excess of what is reasonably demanded by the actual requirements of the enterprise.
Succinctly put, a position is redundant where it is superfluous, and superfluity of a position
or positions may be the outcome of a number of factors, such as overhiring of workers,
decreased volume of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise.
33

The determination that the employee's services are no longer necessary or sustainable and,
therefore, properly terminable for being redundant is an exercise of business judgment of
the employer. The wisdom or soundness of this judgment is not subject to discretionary
review of the Labor Arbiter and the NLRC, provided there is no violation of law and no
showing that it was prompted by an arbitrary or malicious act. In other words, it is not
enough for a company to merely declare that it has become overmanned. It must produce
adequate proof of such redundancy to justify the dismissal of the affected employees.
34

We mentioned in Panlilio v. National Labor Relations Commission
35
that an employer may
proffer "new staffing pattern, feasibility studies/proposal, on the viability of the newly created
positions, job description and the approval by the management of the restructuring" as
evidence of redundancy. We further explained in AMA Computer College Inc. v.
Garcia
36
what constitutes substantial evidence of redundancy:
ACC attempted to establish its streamlining program by presenting its new table of
organization. ACC also submitted a certification by its Human Resources Supervisor, Ma.
Jazmin Reginaldo, that the functions and duties of many rank and file employees, including
the positions of Garcia and Balla as Library Aide and Guidance Assistant, respectively, are
now being performed by the supervisory employees. These, however, do not satisfy the
requirement of substantial evidence that a reasonable mind might accept as adequate to
support a conclusion. As they are, they are grossly inadequate and mainly self-serving.
More compelling evidence would have been a comparison of the old and new staffing
patterns, a description of the abolished and newly created positions, and proof of the set
business targets and failure to attain the same which necessitated the reorganization or
streamlining.
37
(Emphases ours.)
In this case, other than its own bare and self-serving allegation that Del Villars position as
Staff Assistant of Corporate Purchasing and Materials Control Manager had already
become redundant, no other evidence was presented by the Company. Neither did the
Company present proof that it had complied with the procedural requirement in Article 283
of prior notice to the Department of Labor and Employment (DOLE) of the termination of Del
Villars employment due to redundancy one month prior to May 31, 1998. The notice to the
DOLE would have afforded the labor department the opportunity to look into and verify
whether there is truth as to the claim of the Company that Del Villars position had become
redundant "with the implementation of new distribution systems, utilization of improved
operational processes, and functional reorganization" of the Company. Compliance with the
required notices would have also established that the Company abolished Del Villars
position in good faith.
38

Del Villars poor employee performance is irrelevant as regards the issue on
redundancy.1avvphi 1 Redundancy arises because there is no more need for the employees
position in relation to the whole business organization, and not because the employee
unsatisfactorily performed the duties and responsibilities required by his position.
39

There being no authorized cause for the termination of Del Villars employment, then he
was illegally dismissed.
An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and
reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In
awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the
amount to be awarded shall be equivalent to one month salary for every year of
service.
40
Under Republic Act No. 6715, employees who are illegally dismissed are entitled
to full backwages, inclusive of allowances and other benefits or their monetary equivalent,
computed from the time their actual compensation was withheld from them up to the time of
their actual reinstatement but if reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality of the decision. We note
that Del Villars reinstatement is no longer possible because the position he previously
occupied no longer exists, per San Juans Affidavit dated October 15, 1998.
41
Also, Del
Villar had already received his separation pay sometime in October 1998.
42

Because of his unjustified dismissal, we likewise award in Del Villars favor moral and
exemplary damages. Award of moral and exemplary damages for an illegally dismissed
employee is proper where the employee had been harrassed and arbitrarily terminated by
the employer. Moral damages may be awarded to compensate one for diverse injuries such
as mental anguish, besmirched reputation, wounded feelings, and social humiliation
occasioned by the employers unreasonable dismissal of the employee. We have
consistently accorded the working class a right to recover damages for unjust dismissals
tainted with bad faith; where the motive of the employer in dismissing the employee is far
from noble. The award of such damages is based not on the Labor Code but on Article 220
of the Civil Code.
43
These damages, however, are not intended to enrich the illegally
dismissed employee, such that, after deliberations, we find the amount of P100,000.00 for
moral damages andP50,000.00 for exemplary damages sufficient to assuage the sufferings
experienced by Del Villar and by way of example or correction for the public good.
WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The
Decision dated October 30, 2003 and Resolution dated March 29, 2004 of the Court of
Appeals in CA-G.R. SP No. 53815 are herebyAFFIRMED with the
following MODIFICATIONS: 1) the amount of backwages shall be computed from the date
of Del Villars illegal dismissal until the finality of this judgment; and 2) the amount of moral
and exemplary damages are reduced to P100,000.00 and P50,000.00, respectively. For this
purpose, the case is hereby REMANDED to the Labor Arbiter for the computation of the
amounts due Angel U. del Villar.
SO ORDERED.

BEBINA G. SALVALOZA VS NLRC NOV. 24, 2010
In the Resolution dated March 13, 2008, the CA denied the motion for
reconsideration. Hence, this petition, raising the following issues

I

WHETHER THE HONORABLE COURT OF APPEALS
COMMITTED MANIFEST ERROR IN HOLDING THAT
PETITIONER WAS NOT ILLEGALLY DISMISSED, THUS,
TOTALLY DISREGARDING THE EVIDENCE ON RECORD, IN
VIOLATION OF THE LABOR CODE[,] AS AMENDED[,] AND THE
REVISED RULES OF EVIDENCE.

II

THE DECISION OF THE HONORABLE COURT OF APPEALS IS
PREMISED ON A GRAVE MISAPPREHENSION OF FACT, WHEN
IT HELD THAT THE RESPONDENT SECURITY AGENCY
DIRECTED IN WRITING THE PETITIONER TO RENEW HIS
SECURITY GUARD LICENSE AND THAT THE LATTER FAILED
TO COMPLY DESPITE CONSTANT REMINDERS TO DO
SO. SAID ALLEGED FACTS ARE MERE CONCLUSIONS
MANIFESTLY NOT IN ACCORD WITH THE EVIDENCE ON
RECORD.
[24]



The petition filed on behalf of Gregorio alleges that, in termination cases,
the burden of proving just cause for dismissing an employee is on the employer. It
contends that Gulf Pacific and Quizon failed to discharge this burden when they
claimed that Gregorios employment was severed for his failure to renew his
security guard license, for his alleged inefficiency at work, and for his submission
of a spurious security guard license.

It is further argued that the Memorandum dated August 2, 2001, requiring
Gregorio to complete the requirements in his 201 file does not suffice as proof that
he was directed to renew his security guard license, as nowhere in the said
document can be found an express statement to that effect. It is claimed that, as a
matter of practice, it was Gulf Pacific that renews the licenses of its security
guards, and then deducts the cost from their salaries. Gregorio was allegedly
misled with respect to his lack of license when he was placed on floating status
for an indefinite period of time. According to the petition, all the documents for
Gregorios 201 file, i.e., clearances and certifications, were already in the
possession of Gulf Pacific, and it could have been easy for the latter to just renew
his license. It is claimed that the alleged lack of a license was just a ploy to
terminate him from employment. With respect to Gregorios salaries, it is alleged
that there were no other evidence submitted by Gulf Pacific and Quizon, except for
the payroll sheets, which, although Gregorio signed, did not reflect the amounts
actually received by him.

It is settled that, in labor cases, the employer has the burden of proving that
the employee was not dismissed, or, if dismissed, that the dismissal was not
illegal. Failure to discharge this burden would be tantamount to an unjustified and
illegal dismissal.
[25]

The relevant provisions of Republic Act (R.A.) No. 5487 (The Private
Security Agency Law)
[26]
stipulate

Section 6. License Necessary. No person shall engage in the
business of, or act either as a private detective, or detective agency; and
either engage in the occupation, calling or employment of watchman or
in the business of watchmans agency without first having obtained the
necessary permit from the Chief, Philippine
Constabulary
[27]
which permit as
approved is prerequisite in obtaining a license or license
certificate: x x x.

x x x x

Section 9. Employees Need Not be Licensed. Every person
operating, managing, directing or conducting a licensed private detective
or watchmen agency shall also be considered a licensed private
detective, or watchman and no person shall be employed or used in a
private detective work unless he be a licensed private detective or
watchman: Provided, That nothing in this section shall be construed as
requiring detective license for persons employed solely for clerical or
manual work.
[28]


From the foregoing provisions, it is clear that a license is required before one
can act or work as a security guard.

On this note, contrary to the posture of Gregorio, we hold that a security
guard has the personal responsibility to obtain his license. Notwithstanding the
practice of some security agencies to procure the licenses of their security guards
for a fee, it remains the personal obligation of a security guard to ensure that he or
she has a valid and subsisting license to be qualified and available for an
assignment. Thus, when Gregorio was given the Memorandum dated August 2,
2001, directing him to complete his 201 file requirements, it meant that he had to
submit each and every document to show his qualifications to work as a security
guard, most important of which is his security guard license. Thus, his excuse that
he was not informed that he already had an expired license and had to renew the
same cannot be sustained. He should have known when his license was to
expire. When he received the Memorandum, Gregorio did not even bother to
verify what requirement he was supposed to complete or submit, whether it was
indeed the license and/or some other document. Neither was it shown that he ever
complied with this directive.

It is also observed that the date of the Memorandum reminding Gregorio to
complete his 201 file requirements preceded the time when he was placed on
floating status on August 30, 2001. The Memorandum indicated that, if on
August 20, 2001, Gregorio had not yet completed his requirements, he would be
relieved from his then assigned post at Anfran Realty. Per his service record, he
was relieved from the said post on August 29, 2001, and he started to be on
floating status on August 30, 2001.

However, it is likewise noted that the records of this case do not show when
Gregorios security guard license actually expired. Notwithstanding the admission
of Gregorio that his license expired, although insisting that it was Gulf Pacifics
practice to renew the licenses of its security guards for a fee, Gulf Pacific failed to
specifically show when the legal impossibility of posting Gregorio for an
assignment due to the latters lack of a valid license commenced. Even the PNP
Certification dated June 13, 2002 proffered by Gulf Pacific and Quizon does not
conclusively show such fact. At most, it only proves that, as of that date, Gregorio
was not included in the master list of registered security guards. Thus, the validity
of Gulf Pacifics contention that it was legally impossible for it to assign Gregorio
due to lack of a license may only be reckoned from that date.

We are mindful of the fact that, in cases involving security guards, most
contracts for security services stipulate that the client may request the replacement
of the guards assigned to it. A relief and transfer order in itself does not sever the
employment relationship between a security guard and the agency. It is true that a
security guard has the right to security of tenure, but this 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.
[29]


Temporary off-detail or floating status is the period of time when
security guards are in between assignments or when they are made to wait after
being relieved from a previous post until they are transferred to a new one. It takes
place when the security agencys clients decide not to renew their contracts with
the agency, resulting in a situation where the available posts under its existing
contracts are less than the number of guards in its roster. It also happens in
instances where contracts for security services stipulate that the client may request
the agency for the replacement of the guards assigned to it even for want of cause,
such that the replaced security guard may be placed on temporary off-detail if
there are no available posts under the agencys existing contracts. During such
time, the security guard does not receive any salary or any financial assistance
provided by law. It does not constitute a dismissal, as the assignments primarily
depend on the contracts entered into by the security agencies with third parties, so
long as such status does not continue beyond a reasonable time. When such a
floating status lasts for more than six (6) months, the employee may be
considered to have been constructively dismissed.
[30]


There is constructive dismissal if an act of clear discrimination, insensibility,
or disdain by an employer becomes so unbearable on the part of the employee that
it would foreclose any choice except to forego continued employment. It exists
when there is cessation of work because continued employment is rendered
impossible, unreasonable, or unlikely, as an offer involving a demotion in rank and
a diminution in pay.
[31]


Based on the foregoing circumstances and the applicable law and
jurisprudence, we now address the question of whether Gregorio was
constructively dismissed by Gulf Pacific. We answer in the affirmative.

It should be pointed out that, per his service record, Gregorio was thrice put
on floating status by Gulf Pacific: (1) from October 22, 1996 to April 13, 1997,
or a total of 174 days, or six (6) days less than six (6) months; (2) from July 14,
1999 to May 2, 2001, or a total of almost 22 months; and (3) indefinitely, starting
from August 30, 2001.

Of the three instances when Gregorio was temporarily off-detailed, we
find that the last two already ripened into constructive dismissal. While we
acknowledge that Gregorios service record shows that his performance as a
security guard was below par, we join the LA in his finding that Gulf Pacific never
issued any memo citing him for the alleged repeated errors, inefficiency, and poor
performance while on duty, and instead continued to assign him to various
posts. This amounts to condonation by Gulf Pacific of whatever infractions
Gregorio may have committed. Even assuming the reasons behind Gregorios
being relieved as indicated in his service record to be true, it was incumbent upon
Gulf Pacific to be vigilant in its compliance with labor laws. Although we
understand that it could have been difficult for Gulf Pacific to post Gregorio given
his age, about 50 years old, and his service record, still the agency should not have
allowed him to wait indefinitely for an assignment if its clients were in truth less
likely to accept him. If, indeed, Gregorio was undesirable as an employee, Gulf
Pacific could just have dismissed him for cause. The unreasonable lengths of time
that Gregorio was not posted inevitably resulted in his being constructively
dismissed from employment.

However, with respect to Gregorios off-detail starting from August 30,
2001, we hold that it should only be counted up to June 13, 2002, and not up to the
promulgation of the decision of the LA, considering that, on that date, it was
legally impossible for Gulf Pacific to deploy him for lack of a valid security guard
license.

With respect to the alleged underpayment of wages and benefits, suffice it to
state that Gulf Pacific was able to rebut this claim through its payroll sheets
correspondingly signed by Gregorio. As the payroll sheets provide a convincing
proof of payment of his salaries and other benefits during his tours of duty as a
security guard, the burden of proof was shifted to Gregorio to prove otherwise, but
only with respect to those salaries and benefits indicated in the said payroll sheets.

On the LAs ruling ordering Gregorios reinstatement, we differ. Gregorios
position paper did not pray for reinstatement, but only sought payment of money
claims. Likewise, we consider the strained relations between the parties which
make reinstatement impracticable.
[32]
What is more, even during the time of the
LAs decision, reinstatement was no longer legally feasible since Gregorio was
past the age qualification for a security guard license, taking into account his three
(3) different birthdates, as appearing in his service record. Section 5
[33]
of R.A.
5487, enumerating the qualifications for a security guard, provides, among others,
that the person should not be less than 21 nor over 50 years of age. And as
previously mentioned, as early as June 13, 2002, Gregorio was no longer in
possession of a valid license. Thus, separation pay should be paid instead of
reinstatement.

Finally, private respondent Quizon, manager of Gulf Pacific, should be
excepted from paying Gregorios money entitlements inasmuch as Gregorios
employer, Gulf Pacific, is a corporation with a separate and distinct legal
personality.
[34]


This case should therefore be remanded to the LA for the proper
computation of the judgment award in favor of Gregorio.

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed
Decision dated September 28, 2007 and the Resolution dated March 13, 2008 of
the Court of Appeals in CA G.R. SP No. 96101 are REVERSED and SET
ASIDE. The decision of the Labor Arbiter dated June 30, 2004
isREINSTATED with the MODIFICATION that the deceased Gregorio
Salvaloza, as represented by his wife Bebina G. Salvaloza, be awarded separation
pay in lieu of reinstatement, and that his backwages and other monetary benefits be
computed only up to June 13, 2002.

This case is remanded to the Labor Arbiter for the proper computation of the
judgment award in favor of Gregorio within thirty (30) days from receipt
hereof. Costs against Gulf Pacific Security Agency, Inc.

SO ORDERED.

MARIO DIMAGAN VS DACWORKS UNITED NOV. 8, 2011
Aggrieved, petitioner moved
14
for reconsideration of the CA Decision, but it was
denied in the Resolution
15
dated January 22, 2010 for lack of merit. Hence, the instant
recourse on the following grounds, to wit:

(A)

THE COURT OF APPEALS HAS FAILED IN ITS DUTY TO
DETERMINE THAT RESPONDENTS HAVE FAILED TO COMPLY
WITH THE REQUIREMENTS ON THE APPROPRIATE SWORN
CERTIFICATION ON FORUM-SHOPPING TO BE SUBMITTED
TOGETHER WITH THE PETITION FOR CERTIORARI,
THAT WOULD CALL FOR THE EXERCISE BY THIS HONORABLE
SUPREME COURT OF ITS POWER OF SUPERVISION.


(B)

THE COURT OF APPEALS HAS FAILED IN ITS DUTY TO
DETERMINE THAT RESPONDENTS HAVE VIOLATED THE
CERTIFICATION ON NON-FORUM SHOPPING, BY REFUSING AND
FAILING TO DISCLOSE THE PENDING INVESTIGATION BEING
CONDUCTED BY THE NLRC ON THE RESPONDENTS'
MANIPULATION OF THE MAILING OF THEIR MOTION FOR
RECONSIDERATION BELOW, THAT WOULD CALL FOR THE
EXERCISE BY THIS HONORABLE SUPREME COURT OF ITS
POWER OF SUPERVISION.


(C)

THE COURT OF APPEALS GRAVELY ERRED IN DECLARING
THAT PETITIONER WAS NOT ILLEGALLY DISMISSED, DESPITE
THE EXISTENCE OF EVIDENCE INDICATING THE
CONSTRUCTIVE DISMISSAL BY REASON OF CLEAR
DISCRIMINATION, INSENSIBILITY OR DISDAIN COMMITTED BY
THE EMPLOYER AGAINST THE PETITIONER.
16



Before delving into the merits of the instant case, the Court shall first resolve
petitioner's claim that respondents are guilty of forum shopping having failed to
comply with the required form of the certification, as prescribed
17
by the Rules of
Court, and to disclose the pendency of an investigation being conducted by the NLRC
with regard to the allegation of manipulation and/or tampering in the mailing of
respondents' motion for reconsideration.


The Court is not convinced.


Forum shopping exists when a party repetitively avails himself of several judicial
remedies in different courts, simultaneously or successively, all substantially
founded on the same transactions and the same essential facts and circumstances,
and all raising substantially the same issues either pending in, or already resolved
adversely by, some other court.
18



The elements of forum shopping are: (1) identity of parties, or at least such parties
as represent the same interests in both actions; (2) identity of rights asserted and
reliefs prayed for, the relief being founded on the same set of facts; and (3) the
identity of the two preceding particulars, such that any judgment rendered in the
other action will, regardless of which party is successful, amount to res judicata in
the action under consideration.
19



There was no confluence of the foregoing elements in the instant case. Records show
that when respondents filed their petition for certiorari before the CA, their motion for
reconsideration before the NLRC had already been resolved on the merits, and the
only incident left for the NLRC to adjudicate was the alleged mail tampering of
respondents. The pendency of such investigation, however, is merely incidental, such
that its resolution will not amount to res judicata in the petition for certiorari before
the CA. Be that as it may, the Court examined the certification on forum
shopping
20
attached to respondents' petition for certiorari before the CA, and found the
same to have substantially complied with the requirements under the rules.


On the merits, the Court finds petitioner's arguments meritorious.


At the outset, it must be pointed out that the main issue in this case involves a
question of fact. It is an established rule that the jurisdiction of the Supreme Court in
cases brought before it from the CA via Rule 45 of the 1997 Rules of Civil Procedure
is generally limited to reviewing errors of law. This Court is not a trier of facts. In the
exercise of its power of review, the findings of fact of the CA are conclusive and
binding and consequently, it is not our function to analyze or weigh evidence all over
again.
21

This rule, however, is not ironclad. One of the recognized exceptions is when there is
a divergence between the findings of facts of the NLRC and that of the CA,
22
as in this
case. There is, therefore, a need to review the records to determine which of them
should be preferred as more conformable to evidentiary facts.
23


After a judicious scrutiny of the records, the allegations of petitioner and the defenses
raised by respondents, the Court cannot sustain the finding of the CA that petitioner
was not illegally or constructively dismissed.


Constructive dismissal is defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a
diminution of pay.
24

The test of constructive dismissal is whether a reasonable person
in the employee's position would have felt compelled to give up his position under the
circumstances. It is an act amounting to dismissal but is made to appear as if it were
not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes
and resolves this situation in favor of employees in order to protect their rights and
interests from the coercive acts of the employer.
25



As held in the case of Coca-Cola Bottlers Philippines, Inc. vs. Del Villar,
26
the burden
falls upon the company to prove that the employee's assignment from one position to
another was not tantamount to constructive dismissal. In the case at bar, respondents
failed to discharge said burden. In fact, respondents never even disputedthat petitioner
was relegated from the position of OIC to supervisor and, subsequently, to an ordinary
technician. Clearly, the reduction in petitioner's responsibilities and duties,
particularly from supervisor to ordinary technician, constituted a demotion in
rank tantamount to constructive dismissal.


Thus, contrary to the position of the CA, it is of no consequence that petitioner failed
to substantiate his allegation that Loida Aquino, an employee of respondent company,
informed him that he will be working as an ordinary technician, and that when he
openly voiced out his concern regarding the transfer, he was told not to report for
work anymore. As with all the other allegations made by petitioner, respondents never
disputed or rebutted this fact.


Similarly, We cannot concur with the finding of the CA that it was petitioner who
abandoned his employment by failing to report for work or having gone AWOL.

Abandonment is the deliberate and unjustified refusal of an employee to resume
his employment.
27
To constitute abandonment of work, two elements must concur:
(1) the employee must have failed to report for work or must have been absent
without valid or justifiable reason; and (2) there must have been a clear intention
on the part of the employee to sever the employer-employee relationship
manifested by some overt act.
28
The employer bears the burden of proof to show
the deliberate and unjustified refusal of the employee to resume his employment
without any intention of returning.
29


In the case of Hodieng Concrete Products, Inc. v. Emilia
30
, citing Samarca v. Arc-
Men Industries, Inc.
31
, the Court has ruled thus:

x x x. Absence must be accompanied by overt acts unerringly pointing to the fact
that the employee simply does not want to work anymore. And the burden of
proof to show that there was unjustified refusal to go back to work rests on the
employer.

x x x

Abandonment is a matter of intention and cannot lightly be presumed from certain
equivocal acts. To constitute abandonment, there must be clear proof of deliberate
and unjustified intent to sever the employer-employee relationship. Clearly, the
operative act is still the employees ultimate act of putting an end to his
employment.

Settled is the rule that mere absence or failure to report for work is not
tantamount to abandonment of work. x x x. (Emphasis supplied)


In this case, petitioner's failure to report for work was caused by the unwarranted
demotion in rank that was imposed upon him by respondents, not by any intention
to sever employment ties with them. And his filing of the instant complaint for
illegal dismissal indubitably negates the allegation of abandonment. Had petitioner
intended to forsake his job, then he would not have found it necessary to institute
this case against respondents.

In sum, the CA committed reversible error when it held that petitioner was not
illegally or constructively dismissed. With respect to the investigation being
conducted by the NLRC regarding the alleged tampering and/or manipulation of
the mailing of respondents' motion for reconsideration filed before it, the Court no
longer finds it necessary to pass upon the same.


WHEREFORE, the instant petition is GRANTED. The assailed Decision and
Resolution of the CA are SET ASIDE. The Resolutions of the NLRC affirming the
Decision of the Labor Arbiter are REINSTATED. Petitioner is entitled to
reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benefits computed from the
time his compensation was withheld from him or on April 4, 2003, up to the time of
his actual reinstatement, in accordance with Article 279
32
of the Labor Code.

SO ORDERED.

NIPPON HOUSING PHIL. INC VS. MAIAH ANGELA LEYNES AUG. 3, 2011
The Courts Ruling

We find the petition impressed with merit.

Petitioners argue that the CA erred in finding that Leynes was constructively
dismissed when she was placed on floating status prior to her termination from
employment on the ground of redundancy. Maintaining that the employees right
to security of tenure does not give him a vested right thereto as would deprive the
employer of its prerogative to change his assignment or transfer him to where he
will be most useful, petitioners call our attention to the supposed fact that Leynes
was unacceptable to BGCC which had a contractually guaranteed right to ask for
her relief. Rather than outrightly terminating Leynes employment as a
consequence of her threats to resign from her position, moreover, petitioners claim
that she was validly placed on floating status pursuant to Article 286 of the Labor
Code of the Philippines which provides as follows:

Art. 286. When employment not deemed terminated. The bona
fide suspension of the operation of a business undertaking for a period
not exceeding six (6) months, or the fulfillment by the employee of a
civic duty shall not terminate employment. In all such cases the
employer shall reinstate the employee to his former position without loss
of seniority rights if he indicates his desire to resume his work not later
than one (1) month from the resumption of operations of his employer or
from his relief from the military or civic duty.


Although the CA correctly found that the record is bereft of any showing that
Leynes was unacceptable to BGCC, the evidence the parties adduced a quoclearly
indicates that petitioners were not in bad faith when they placed the former under
floating status. Disgruntled by NHPIs countermanding of her decision to bar Engr.
Cantuba from the Project, Leynes twice signified her intention to resign from her
position to Ota on 12 February 2002. Upon receiving the copy of the memorandum
issued for Engr. Cantubas return to work, Leynes inscribed thereon the following
handwritten note addressed to Ota, Good Morning! Im sorry but I would like to
report to you my plan of resigning as your Prop. Manager. Thank You.
[27]
In her
application letter for an immediate emergency leave,
[28]
Leynes also distinctly
expressed her dissatisfaction over NHPIs resolution of her dispute with Engr.
Cantuba and announced her plan of coordinating with her lawyer regarding her
resignation letter, to wit:

This is in line with the Management decision re: Return to work order of
Mr. Honesto Cantuba at Bay Gardens. I would like to express my
deepest disappointed (sic) for having received this kind of decision from
Nippon Housing Philippines, Inc.

Mr. Ota, I have been working with NHPI, as your Building Property
Manager, for almost a year now. I had exerted all my effort to set-up the
Property Management, experienced each and every pain and sacrifice[d]
everything before we were able to get the Bay Gardens project. Mr.
Hiro Matsumoto, Hiroshi Takada and Yasuhiro Kawata had witnessed
these things.

Given your decision, I am respecting this. The most painful thing for me
is that the management did not value my effort for what I have done to
the Company.

I am therefore submitting my letter for emergency leave of absence
starting today, while I am still coordinating with my Lawyer re: my
resignation letter.

Thank you for your support.
[29]


In view of the sensitive nature of Leynes position and the critical stage of
the Projects business development, NHPI was constrained to relay the situation to
BGCC which, in turn, requested the immediate adoption of remedial measures
from Takada, including the appointment of a new Property Manager for the
Project. Upon BGCCs recommendation,
[30]
NHPI consequently hired Engr. Jose
on 13 February 2002 as Leynes replacement.
[31]
Far from being the indication of
bad faith the CA construed the same to be, these factual antecedents suggest that
NHPIs immediate hiring of Engr. Jose as the new Property Manager for the
Project was brought about by Leynes own rash announcement of her intention to
resign from her position. Although she subsequently changed her mind and sent
Reyes a letter by telefax on 13 February 2002 announcing the reconsideration of
her planned resignation and her intention to return to work on 15 February
2002,
[32]
Leynes evidently had only herself to blame for precipitately setting in
motion the events which led to NHPIs hiring of her own replacement.

Acting on Leynes 20 February 2002 letter protesting against the hiring of
her replacement and reiterating her lack of intention to resign from her
position,
[33]
the record, moreover, shows that NHPI simply placed her on floating
status until such time that another project could be secured for
her.
[34]
Traditionally invoked by security agencies when guards are temporarily
sidelined from duty while waiting to be transferred or assigned to a new post or
client,
[35]
Article 286 of the Labor Code has been applied to other industries when,
as a consequence of the bona fide suspension of the operation of a business or
undertaking, an employer is constrained to put employees on floating status for a
period not exceeding six months.
[36]
In brushing aside respondents reliance on
said provision to justify the act of putting Leynes on floating status, the CA ruled
that no evidence was adduced to show that there was a bona fidesuspension of
NHPIs business. What said court clearly overlooked, however, is the fact that
NHPI had belatedly ventured into building management and, with BGCC as its
only client in said undertaking, had no other Property Manager position available
to Leynes.

Considering that even labor laws discourage intrusion in the employers
judgment concerning the conduct of their business, courts often decline to interfere
in their legitimate business decisions,
[37]
absent showing of illegality, bad faith or
arbitrariness. Indeed, the right of employees to security of tenure does not give
them vested rights to their positions to the extent of depriving management of its
prerogative to change their assignments or to transfer them.
[38]
The record shows
that Leynes filed the complaint for actual illegal dismissal from which the case
originated on 22 February 2002 or immediately upon being placed on floating
status as a consequence of NHPIs hiring of a new Property Manager for the
Project. The rule is settled, however, that "off-detailing" is not equivalent to
dismissal, so long as such status does not continue beyond a reasonable time and
that it is only when such a "floating status" lasts for more than six months that the
employee may be considered to have been constructively dismissed.
[39]
A
complaint for illegal dismissal filed prior to the lapse of said six-month and/or the
actual dismissal of the employee is generally considered as prematurely filed.
[40]


Viewed in the light of the foregoing factual antecedents, we find that the CA
reversibly erred in holding petitioners liable for constructively dismissing Leynes
from her employment. There is said to be constructive dismissal when an act of
clear discrimination, insensitivity or disdain on the part of the employer has
become so unbearable as to leave an employee with no choice but to forego
continued employment.
[41]
Constructive dismissal exists where there is cessation
of work because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in
pay.
[42]
Stated otherwise, it is a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not.
[43]
In constructive dismissal cases,
the employer is, concededly, charged with the burden of proving that its conduct
and action or the transfer of an employee are for valid and legitimate grounds such
as genuine business necessity.
[44]
To our mind, respondents have more than amply
discharged this burden with proof of the circumstances surrounding Engr. Carlos
employment as Property Manager for the Project and the consequent unavailability
of a similar position for Leynes.

With no other client aside from BGCC for the building management side of
its business, we find that NHPI was acting well within its prerogatives when it
eventually terminated Leynes services on the ground of redundancy. One of the
recognized authorized causes for the termination of employment, redundancy
exists when the service capability of the workforce is in excess of what is
reasonably needed to meet the demands of the business enterprise.
[45]
A redundant
position is one rendered superfluous by any number of factors, such as overhiring
of workers, decreased volume of business, dropping of a particular product line
previously manufactured by the company or phasing out of service activity priorly
undertaken by the business.
[46]
It has been held that the exercise of business
judgment to characterize an employees service as no longer necessary or
sustainable is not subject to discretionary review where, as here, it is exercised
there is no showing of violation of the law or arbitrariness or malice on the part of
the employer.
[47]
An employer has no legal obligation to keep more employees
than are necessary for the operation of its business.
[48]


Considering that Leynes was terminated from service upon an authorized
cause, we find that the CA likewise erred in faulting NHPI for supposedly failing
to notify said employee of the particular act or omission leveled against her and the
ground/s for which she was dismissed from employment. Where dismissal,
however, is for an authorized cause like redundancy, the employer is, instead,
required to serve a written notice of termination on the worker concerned and the
DOLE, at least one month from the intended date thereof.
[49]
Here, NHPI
specifically made Leynes termination from service effective 22 August 2002, but
only informed said employee of the same on 8 August 2002
[50]
and filed with the
DOLE the required Establishment Termination Report only on 16 August
2002.
[51]
For its failure to comply strictly with the 30-day minimum requirement
for said notice and effectively violating Leynes right to due process, NHPI should
be held liable to pay nominal damages in the sum of P50,000.00. The penalty
should understandably be stiffer because the dismissal process was initiated by the
employer's exercise of its management prerogative.
[52]


Having been validly terminated on the ground of redundancy, Leynes is
entitled to separation pay equivalent to one month salary for every year of service
but not to the backwages adjudicated in her favor by the Labor Arbiter.
[53]
Hired
by NHPI on 26 March 2001 and terminated effective 22 August 2002, Leynes is
entitled to a separation pay in the sum of P40,000.00, in addition to her last pay
which, taking into consideration her proportionate 13
th
month pay, tax refund and
SILP, was computed by NHPI at P28,188.16.
[54]
For lack of showing of bad faith,
malice or arbitrariness on the part of NHPI, there is, however, no justifiable ground
for an award of moral and exemplary damages.
[55]
For lack of factual or legal
bases, we find no cause to award attorneys fees in favor of Leynes. In the absence
of the same showing insofar as NHPIs corporate officers are concerned, neither is
there cause to hold them jointly and severally liable for the above-discussed
monetary awards.

WHEREFORE, premises considered, the petition is GRANTED and the
assailed 23 November 2006 Decision is, accordingly, REVERSED and SET
ASIDE. In lieu thereof, another is entered ordering NHPI to pay Leynes the
following sums: (a) P40,000.00 as separation pay; (b) P28,188.16 representing her
unpaid wages, proportionate 13
th
month pay, tax refund and SILP; and
(c) P50,000.00 by way of nominal damages.


SO ORDERED.

3. PREVENTIVE SUSPENSION ( BOOK V, RULE 14, SECTION 3 &4)

1. GROUNDS
2. DURATION
3. EXTENSION
Sections 3 and 4, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code,
Termination of Employment, provide:
Sec. 3. Preventive suspension. The employer may place the worker
concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his
co-workers.
Sec. 4 Period of suspension. No preventive suspension shall last longer than 30
days. The employer shall thereafter reinstate the worker in his former or in a
substantially equivalent position of the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and
other benefits due to the worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer decides, after
completion of the hearing, to dismiss the worker

*****if suspended on july 1, resum on july 31.
*****preventive suspension distinguished from suspension as a form of penalty.
When after findings suspension cannot be validly extended.
JRS BUSINESS CORP VS. NLRC JULY 17, 1995
Also presented as an issue was petitioner's directive to private respondent of October 12,
1988 to go on leave without pay to pave the way for the investigation of the charges against
him.
Sections 3 and 4, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code,
Termination of Employment, provide:
Sec. 3. Preventive suspension. The employer may place the worker
concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his
co-workers.
Sec. 4 Period of suspension. No preventive suspension shall last longer than
30 days. The employer shall thereafter reinstate the worker in his former or in
a substantially equivalent position of the employer may extend the period of
suspension provided that during the period of extension, he pays the wages
and other benefits due to the worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during the extension if the
employer decides, after completion of the hearing, to dismiss the worker.
Petitioner having violated the maximum 30-day preventive suspension under Section 4,
Rule XIV, Book of the Omnibus Rules Implementing the Labor Code, a sanction is imposed
on him in consonance with our ruling in Great Pacific Life Assurance Corporation v. National
Labor Relations Commission, 187 SCRA 694 (1990). Petitioner must indemnify private
respondent in the amount of One Thousand Pesos (P1,000.00).

GANDARA SUPPLY VS NLRC DEC. 29, 1998
After a careful study, and a thorough examination of the pleadings and supporting
documents, it appears decisively clear that private respondent Silvestre Germano was illegally
dismissed. While a prolonged absence without leave may constitute as a just cause of dismissal,
its illegality stems from the non-observance of due process. Applying the WenPhil Doctrine by
analogy, where dismissal was not preceded by the twin requirement of notice and hearing, the
legality of the dismissal in question, is under heavy clouds and therefore illegal. While it cannot
be deduced unerringly from the records on hand that private respondent was really dismissed,
there is no clear indication that the latter was to be reinstated. In fact, since the inception of the
case, what petitioner merely endeavored was to compromise for a measly sum of P5,000.00, and
no mention of taking respondent back to his job was ever offered as part of the deal to end the
controversy.
No preventive suspension shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker to his former or substantially equivalent position or the
employer may extend the period of suspension provided that during the period of
extension, he pays the wages and other benefits due to the worker. In such case, the
worker shall not be bound to reimburse the amount paid to him during the extension if
the employer decides after completion of the hearing to dismiss the worker.
[5]

In this case, the supposed suspension was expected to last for more than the period allowed
by law, thus making the suspension constitutive of an illegal dismissal. Therefore, the Labor
Arbiters contention is upheld by the Court.

ATLAS FERTILIAER CORP VS. NLRC JUNE 17, 1997
Preventive suspension is a disciplinary measure for the protection of the
company's property pending investigation of any alleged malfeasance or
misfeasance committed by the employee.
[15]
Section 3, Rule XIV, Book V of the
Omnibus Rules Implementing the Labor Code provides:
Sec. 3. Preventive Suspension. The employer may place the worker concerned
under preventive suspension if his continued employment poses a serious threat to the
life or property of the employer or of his co-workers.
Nothing in this rule requires that the report upon which the preventive
suspension was based should make a specific finding that the
employee's continued employment poses an imminent threat to the property
of the employer. It is enough that such fact can be gleaned from the
circumstances of the case.
In the present case, the audit showed that the transactions entered into by
the private respondents were tainted with irregularities. Considering such
irregularities and the undisputed fact that the purchases made by the
respondent employees amounted to approximately P600 million annually,
there can be no shred of doubt that the respondents' continuance in the
service would pose a serious threat to the property of petitioner AFC. As
feared by the petitioners, the respondent employees were in "a position to
cause substantial prejudice to petitioners arising from their misconduct, such
as their continuous disregard of the purchasing policies resulting in the
unauthorized delivery of goods in the absence of the required purchase
orders, confirmation of other questionable transactions and the opportunity to
change and manipulate records to suit their personal objectives."
[18]

In a nutshell, the private respondents' preventive suspension was
necessary for the protection of petitioner AFC's assets and operations
pending investigation of the alleged irregularities committed by them.
The private respondents capitalize on the fact that they were given access
to company records, which, according to them, was an indication that their
presence did not pose a threat to petitioner AFC's property. They seem to be
unmindful of the fact that such privilege was accorded them to enable them to
explain the charges against them. Besides, the exercise of such privilege was
under the supervision of the company's audit personnel.
We now come to the second and third assigned errors, which boil down to
the issue of whether the petitioners' loss of trust and confidence in the private
respondents was founded on facts established by substantial evidence. The
Labor Arbiter resolved this issue in the affirmative.
Deeply embedded in our jurisprudence is the rule that the findings of facts
of quasi-judicial bodies like the NLRC are accorded great respect and, at
times, even finality. There are, however, exceptions, among which is when
there is a conflict between the factual findings of the NLRC and the Labor
Arbiter.
[19]
We are more in accord with the findings of the Labor Arbiter.
The basic premise for dismissal on the ground of loss of confidence is that
the employee concerned holds a position of trust and confidence.
[20]
In the
instant case, the private respondents are purchasers of materials and supplies
needed for petitioner AFC's operations. Concededly, the transactions they
entered into involved a gargantuan amount of money, i.e., more or less P600
million annually. Their Job Identification requires "integrity and
confidentiality."
[21]
Hence, there can be no denying that the respondents'
position is vested with a high degree of trust and confidence.
As a general rule, employers are allowed a wider latitude of discretion in
terminating the services of employees who perform functions which by their
nature require the employers' full trust and confidence.
[22]
Mere existence of
basis for believing that the employee has breached the trust of the employer is
sufficient and does not require proof beyond reasonable doubt.
[23]
Thus, when
an employee has been guilty of breach of trust or his employer has ample
reason to distrust him, a labor tribunal cannot deny the employer the authority
to dismiss him.
[24]
This brings us to the issue of whether the petitioners' loss of
trust and confidence in the respondent employees rested on some basis.
While there was a Draft Purchasing Manual at the time the respondent
employees entered into the questioned transactions, the same was apparently
not approved yet. Nevertheless, the private respondents admit that
canvassing or bidding was part of the purchasing procedure handed down by
their predecessors in the procurement of materials and supplies. Yet, most of
the transactions entered into by the respondent employees from September
1991 to February 1992 lacked canvass or bidding. They tried to justify such
lack by claiming that some of the transactions were emergency in nature. But,
the records reveal that only a very few of the requisitions were marked urgent.
These irregular acts, which have been proved by substantial evidence,
constitute reasonable basis for the petitioners to loss their trust and
confidence in the respondent employees.
Premises considered, we find that the private respondents are indeed unfit
to continue working for the petitioner AFC. We agree with the Labor Arbiter
that it would be an act of oppression to compel the petitioners to retain the
respondent employees.
CHONA TORRES VS NLRC APRIL 12, 2000
Execution is the final stage of litigation, the end of the suit. It can not be
frustrated except for serious reasons demanded by justice and equity.
[16]
In this
jurisdiction, the rule is that when a judgment becomes final and executory, it is
the ministerial duty of the court to issue a writ of execution to enforce the
judgment. A writ of execution may however be refused on equitable grounds
as when there was a change in the situation of the parties that would make
execution inequitable or when certain circumstances, which transpired after
judgment became final, rendered execution of judgment unjust.
[17]
The fact that
the decision has become final does not preclude a modification or an
alteration thereof because even with the finality of judgment, when its
execution becomes impossible or unjust, it may be modified or altered to
harmonize the same with justice and the facts.
[18]

The respondent agency's contention that there has been a change in the
situation of the parties making execution inequitable because petitioner
accepted employment from another agency without resigning from it is
patently without merit. In the recent ruling of the Court, we said that the rule
enunciated in Pines City
[19]
no longer controls. Now, the rule is that back wages
awarded to an illegally dismissed employee shall not be diminished or
reduced by the earnings derived by him elsewhere during the period of his
illegal dismissal.
[20]

In this particular case, the decision is final and, in fact, the amount of P
105,396.00 representing the sum total of the salary differentials and back
wages awarded to petitioner has been garnished from the account of
respondent agency with the Philippine National Bank (PNB) with no opposition
or resistance and it is the ministerial duty of the Labor Arbiter to release the
money to petitioner.
JOSE P ARTIFICIO VS NLRC JULY 26, 2010
Artificio maintains that he was illegally suspended since his preventive
suspension was for an indefinite period and was imposed without investigation. He
also argues that he was illegally dismissed because the charges against him were
couched in general and broad terms. Further, he was not given any notice
requiring him to explain his side.

Respondents counter that Artificio was not dismissed but merely placed
under preventive suspension pending investigation of the charges against him.

As succinctly stated above, preventive suspension is justified where the
employees continued employment poses a serious and imminent threat to the life
or property of the employer or of the employees co-workers. Without this kind of
threat, preventive suspension is not proper.
[19]


In this case, Artificios preventive suspension was justified since he was
employed as a security guard tasked precisely to safeguard respondents client. His
continued presence in respondents or its clients premises poses a serious threat to
respondents, its employees and client in light of the serious allegation of conduct
unbecoming a security guard such as abandonment of post during night shift duty,
light threats and irregularities in the observance of proper relieving time.

As already mentioned, after Artificio was placed under preventive
suspension on 29 July 2002, he forthwith, or on 5 August 2002, filed a complaint
for illegal dismissal and illegal suspension. From that date until the present, he has
insisted on his submission that he was illegally dismissed and that he is not seeking
reinstatement as in fact right from the start, his prayer was for separation
pay. Having determined that the imposition on Artificio of preventive suspension
was proper and that such suspension did not amount to illegal dismissal, we see no
basis for the grant of backwages.

Nonetheless, given the attendant circumstances in this case, namely, that
Artificio had been working with the company for a period of sixteen (16) years and
without any previous derogatory record, the ends of social and compassionate
justice would be served if Artificio be given some equitable relief in the form of
separation pay.
[22]


Artificio is entitled to separation pay considering that while reinstatement is
an option, Artificio himself has never, at anytime after the notice of preventive
suspension intended to remain in the employ of private respondents.

BLUE SKY TRADING COMPANY VS ARLENE BLAS MARCH 7, 2012
LOSS OF CONFIDENCE
It is immaterial that Arlene and Joseph were not among those who were
entrapped attempting to sell an ultrasound probe to a police operative. The
nature of their tasks at Blue Sky and the fact of loss of the intensifying screens
dictated Arlene and Joseph's liabilities. Arlene's daily work routine involved (a)
receiving and releasing of stocks; and (b) preparing stock cards
for purposes of checking and monitoring the items in the warehouse. On the
other hand, Joseph carried and moved stocks in and out of the warehouse. The six
intensifying screens were discovered missing while Arlene, Joseph, Helario, Jayde
and Wilfredo were supposedly performing their tasks, hence, the logical inference
that they conspired to commit the theft or at least, knowingly allowed it to
happen. Had the employees exercised due or even ordinary diligence to protect
company property, no loss would have been incurred. Further, the defense
interposed by Arlene in her written explanation that she was not employed by
Blue Sky as a security guard, showed her utter lack of concern for the company's
welfare, which rendered her undeserving of an employer's trust and confidence.
Substantial evidence of actual breach by
an employee is required from an employer
to be able to justify the former's dismissal
from service on the basis of an alleged
participation in theft of company property.
However, in the case at bar, Blue Sky had
failed to discharge the burden of proof
imposed upon It.
We note that the petitioners essentially raise the sole question of whether
they had proven by substantial evidence the charges of theft against Arlene and
Joseph which led to the latter's termination from service on the ground of loss of
trust and confidence.

We rule in the negative.
In the case at bar, we agree with the petitioners that mere substantial
evidence and not proof beyond reasonable doubt is required to justify the
dismissal from service of an employee charged with theft of company property.
However, we find no error in the CA's findings that the petitioners had not
adequately proven by substantial evidence that Arlene and Joseph indeed
participated or cooperated in the commission of theft relative to the six missing
intensifying screens so as to justify the latter's termination from employment on
the ground of loss of trust and confidence.
During the entrapment operation conducted by police operatives, Jayde and
Helario were caught attempting to sell an ultrasound probe allegedly belonging to
Blue Sky. Thereafter, Jayde, Helario and Wilfredo withdrew their complaints for
illegal dismissal against the company. Arlene and Joseph, however, pursued their
claims. Nonetheless, Blue Sky construed the result of the entrapment operation
to mean that there was a conspiracy among the five employees to commit theft
of company property.
Only the following had been established without dispute: (a) the fact of loss
of the six intensifying screens; (b) an entrapment operation was successfully
conducted by the police operatives who caught Jayde and Helario in the act of
attempting to sell an ultrasound probe which allegedly belonged to Blue Sky; and
(c) Jayde, Helario and Wilfredo filed their affidavits of desistance to withdraw
their complaints for illegal dismissal against Blue Sky while Arlene and Joseph
pursued their complaints.
While we empathize with Blue Sky's loss and understand that its actions
were merely motivated by its intent to protect the interests of the company, no
blanket authority to terminate all employees whom it merely suspects as involved
in the commission of theft resides in its favor.

Blue Sky committed no impropriety in
imposing preventive suspension against
Arlene and Joseph pending investigation of
the theft allegedly committed against the
company
We, however, find no merit in the challenge made by Arlene and Joseph
against the legality of the preventive suspension imposed by Blue Sky upon them
pending the investigation of the alleged theft.
In Arlene and Joseph's case, Blue Sky issued to them notices to explain on
February 3, 2005. They submitted their written explanation the day after and they
were dismissed from service on February 5, 2005. While we do not agree with
Blue Sky's subsequent decision to terminate them from service, we find no
impropriety in its act of imposing preventive suspension upon the respondents
since the period did not exceed the maximum imposed by law and there was a
valid purpose for the same.
In lieu of reinstatement, Arlene and Joseph are entitled to an award of
separation pay.
Arlene and Joseph are entitled to the
payment of ECOLA, but not to 13
th
month,
service incentive leave and overtime pay.
Anent the respondents' claim for overtime pay, we find no ample basis to
grant it as they had not offered any proof to show that they in fact rendered such
service.
IV- TERMINATION OF EMPLOYMENT
A. REQUISITES FOR A VALID DISMISSAL
SECT. 1 ART. II OF THE 1987 CONSTITUTION
ART. 277 LCP

BOOK SIX
POST EMPLOYMENT
Title I
TERMINATION OF EMPLOYMENT
Article 278. Coverage. The provisions of this Title shall apply to all
establishments or undertakings, whether for profit or not.
Article 279. Security of tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. (As amended by
Section 34, Republic Act No. 6715, March 21, 1989)
Article 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
Article 281. Probationary employment. Probationary employment shall not
exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be
terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work
after a probationary period shall be considered a regular employee.
Article 282. Termination by employer. An employer may terminate an
employment for any of the following causes:
Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
Gross and habitual neglect by the employee of his duties;
Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
Other causes analogous to the foregoing.
Article 283. Closure of establishment and reduction of personnel. The employer
may also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and Employment at least
one (1) month before the intended date thereof. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
Article 284. Disease as ground for termination. An employer may terminate the
services of an employee who has been found to be suffering from any disease
and whose continued employment is prohibited by law or is prejudicial to his
health as well as to the health of his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1) month salary or to one-half (1/2)
month salary for every year of service, whichever is greater, a fraction of at least
six (6) months being considered as one (1) whole year.
Article 285. Termination by employee.
An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month in
advance. The employer upon whom no such notice was served may hold the
employee liable for damages.
An employee may put an end to the relationship without serving any notice on
the employer for any of the following just causes:
Serious insult by the employer or his representative on the honor and person of
the employee;
Inhuman and unbearable treatment accorded the employee by the employer or
his representative;
Commission of a crime or offense by the employer or his representative against
the person of the employee or any of the immediate members of his family; and
Other causes analogous to any of the foregoing.
Article 286. When employment not deemed terminated. The bona-fide
suspension of the operation of a business or undertaking for a period not
exceeding six (6) months, or the fulfillment by the employee of a military or civic
duty shall not terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one (1) month from the
resumption of operations of his employer or from his relief from the military or
civic duty.

A. SUBSTANTIAL EVIDENCE
Preliminarily, the Labor Code provides that an employer may terminate the
services of an employee for just cause and this must be supported
by substantial evidence.
[17]
The settled rule in administrative and quasi-
judicial proceedings is that proof beyond reasonable doubt is not required in
determining the legality of an employers dismissal of an employee, and not
even a preponderance of evidence is necessary as substantial evidence
is considered sufficient. (SALVADOR VS PHILIPPINE MINING SERVICES
CORP)
*****Substancial evidence defined by rules of court
****Procedural, on how to terminate:
1. Just cause
2. Due process
Opportunity to explain
notice

SALVADOR VS PHILIPPINE MINING SERVICES CORP
Preliminarily, the Labor Code provides that an employer may terminate the
services of an employee for just cause and this must be supported
by substantial evidence.
[17]
The settled rule in administrative and quasi-
judicial proceedings is that proof beyond reasonable doubt is not required in
determining the legality of an employers dismissal of an employee, and not
even a preponderance of evidence is necessary as substantial evidence
is considered sufficient.
[18]
Substantial evidence is more than a mere scintilla
of evidence or relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable,
might conceivably opine otherwise.
[19]
Thus, substantial evidence is the least
demanding in the hierarchy of evidence.
In the case at bar, our evaluation of the evidence of both parties
indubitably shows that petitioners dismissal for loss of trust and confidence
was duly supported by substantial evidence.
First. At the time Sawa saw petitioner hauling fine ore from the stockpile,
Sawa had no idea yet that pilferage was being committed by petitioner
Upon the other hand, a number of disturbing circumstances disproved
petitioners version of the incident and substantially proved his act of pilferage.
We reiterate that proof beyond reasonable doubt of the employees
misconduct or dishonesty is not required to justify loss of confidence. It is
sufficient that there is substantial basis for the loss of trust.
[21]
In the case at
bar, respondent has proved by substantial evidence the charge of pilferage
against petitioner.
Finally, petitioner argues that assuming there was evidence to support the
charges against him, his dismissal from service is unwarranted, harsh and
grossly disproportionate to his act, considering his long years of service with
the company.
To be sure, length of service is taken into consideration in imposing the
penalty to be meted an erring employee. However, the case at bar involves
dishonesty and pilferage by petitioner which resulted in respondents loss of
confidence in him. Unlike other just causes for dismissal, trust in an
employee, once lost is difficult, if not impossible, to regain. Moreover,
petitioner was not an ordinary rank-and-file employee. He occupied a high
position of responsibility. As foreman and shift boss, he had over-all control of
the care, supervision and operations of respondents entire plant

SEVILLANA VS IT INTL CORP VS NLRC- APRIL 16, 2001
As regards the issue of petitioner's dismissal from employment, petitioner claims
that he was illegally dismissed; that respondent I.T. failed to substantiate its claim
that petitioner was repatriated because he (petitioner) was found to have
hypertension; and that respondent I.T. has the burden of proving that petitioner was
legally dismissed.
Thus, it is clear that petitioner was illegally dismissed by private respondent Samir
Maddah.
[22]

Time and again we have ruled that where there is no showing of a clear, valid and
legal cause for termination of employment, the law considers the case a matter of
illegal dismissal. The burden is on the employer to prove that the termination of
employment was for a valid and legal cause. For an employee's dismissal to be valid,
(a) the dismissal must be for a valid cause and (b) the employee must be afforded due
process.
[23]

A review of the record shows that neither of the two (2) conditions precedent were
shown to have been complied with by the private respondents. All that private
respondent I.T.did was to rely on its claim that petitioner was repatriated by its
foreign principal, respondent Samir Maddah, due to hypertension with nary an
evidence to support it. In all termination cases, strict compliance by the employer
with the demands of both procedural and substantive due process is a condition sine
qua non for the same to be declared valid.
[24]
Under Section 8, Rule I, Book VI of the
Rules and Regulations implementing the Labor Code, for a disease to be a valid
ground for the dismissal of the employee, the continued employment of such
employee is prohibited by law or prejudicial to his health or the health of his co-
employees, there must be a certification by a competent public health authority that
the disease is of such nature or at such a stage that it cannot be cured within a period
of six (6) months, even with proper medical treatment.
The defense of complainant's medical problems (alleged hypertension of complainant)
interposed by respondents to justify the dismissal of the former is totally bereft of
merit. The said defense of respondents is not only uncorroborated by documentary
evidence but is also not a just or valid cause for termination of one's
employment. While an employer (respondents in this case) may validly terminate the
services of an employee who has been found to be suffering from any disease, it is
authorized only if his continued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co-employees (Art. 284, Labor Code). This is
not present in the instant case, for there is no finding from a medical practitioner
certifying that complainant is really hypertensive."
[25]

Since the burden of proving the validity of the dismissal of the employee rests on
the employer, the latter should likewise bear the burden of showing that the requisites
for a valid dismissal due to a disease have been complied with. In the absence of the
required certification by a competent public health authority, this Court has ruled
against the validity of the employees dismissal.
[26]

"As a general rule, one who pleads payment has the burden of proving it. Even where
the plaintiff must allege non-payment, the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment. The
debtor has the burden of showing with legal certainty that the obligation has been
discharged by payment."

MILLARES VS PLDT MAY 6, 2005
The fundamental issue here is whether respondent company was able to
prove by substantial evidence that petitioner is liable for gross misconduct by
demanding from Celestina Ignacio a service fee of P3,800.00 for the
installation of a telephone line. The issue raised is factual. It is basic that the
findings of fact by the Court of Appeals, when supported by substantial
evidence, are conclusive and binding upon the parties and are not reviewable
by this Court, unless the case falls under any of the exceptions to the rule,
such as when the findings by the Appellate Court are not supported by
evidence.
[3]
This exception is being relied upon by petitioner.
Here, we find there is substantial evidence to support the findings of the
Court of Appeals that petitioners dismissal from the service is valid. Well-
entrenched is the rule that substantial proof is sufficient as basis for the
imposition of any disciplinary action upon the employee. The standard of
substantial evidence is satisfied where the employer, as in this case, has
reasonable ground to believe that the employee is responsible for the
misconduct and his participation therein renders him unworthy of trust
and confidence demanded by his position.
[4]
That petitioner violated
respondent PLDTs rules and regulations and committed serious misconduct
in the performance of his duties, have been proved by Celestina Ignacio.
Respondent thus lost its trust and confidence in petitioner. Under Article 282
of the Labor Code, as amended, these are just causes for dismissing him from
the service.
Retractions are frowned upon by the courts. A retraction of a testimony is
exceedingly unreliable, for there is always the probability that it may later on
be repudiated. Courts look with disfavor upon retractions, because they can
easily be obtained from witnesses through intimidation or for monetary
consideration. A retraction does not necessarily negate an earlier
declaration.
[5]

Finally, there is no cogent reason why we should not accord deference
and finality to the Appellate Courts finding that petitioner was accorded his
right to due process. In Santos vs. San Miguel Corporation,
[6]
we reiterated the
well-entrenched rule that (p)rocedural due process requires the employer to
give the employee two notices. First is the notice apprising him of the
particular acts or omissions for which his dismissal is sought. Second is the
subsequent notice informing him of the employers decision to dismiss him. In
the case at bar, respondent company sent petitioner the required notices.
Clearly, he was not deprived of his right to due process.

PHILTREAD TIRE & RUBBER CORP. VS ALBERTO VICENTE NOV. 10, 2004
Here, there is neither direct nor documentary evidence to prove that
respondent was involved in extortion. In fact, a careful perusal of the minutes
of the investigation reveals that Avis did not categorically state that he was
pressured by respondent to overprice his service fee.
As gleaned from the above minutes, it is not clear that respondent
urged or forced Avis to increase his service fee by P1,000.00 and to give
the amount to him (respondent). In fact, Avis is not certain whether
respondent was really serious when he allegedly told him (Avis) to
increase his service fee toP4,800.00. We thus hold that petitioner failed to
prove its charge by substantial evidence. Substantial evidence is that amount
of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.
[6]

The Appellate Court did not err in concluding that there is no valid cause in
terminating respondents employment. The well-established rule is that the
findings of fact of the Court of Appeals, particularly where they are in absolute
agreement with that of the NLRC, as in this case, are accorded not only great
respect but even finality and are deemed binding upon this Court.
[7]

Verily, respondent who was illegally dismissed from work is entitled to
reinstatement without loss of seniority rights, full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his
actual reinstatement.
[8]

However, the circumstances obtaining in this case do not warrant the
reinstatement of respondent. Aside from the fact that antagonism caused a
severe strain in the parties employer-employee relationship, petitioner
company has completely ceased its tire manufacturing and marketing
operations effective November 11, 1994, as evidenced by its Notice of
Indefinite Suspension of Manufacturing Operations dated November 10,
1994
[9]
to the Security and Exchange Commission and its Application for
Business Retirement dated February 22, 1996
[10]
filed with the Business
Permits & Licensing Office of the City of Muntinlupa. Thus, a more equitable
disposition would be an award of separation pay equivalent to at least one
month pay, or one month pay for every year of service, whichever is higher,
(with a fraction of at least six (6) months being considered as one (1) whole
year),
[11]
in addition to his full backwages, allowances and other benefits.
[12]


B. DUE PROCESS (NOTICE REQUIREMENT)
Although the dismissal was for a cause, the employer therein was required to
observe the standard of due process for termination of employment based on just
causes under Article 282 of the Labor Code, which procedural due process
requirements are enumerated in Section 2, Rule 1, Book VI
[21]
of the Omnibus
Rules Implementing the Labor Code.
[22]
(DM CONSUNJI VS ANTONIO GOBRES)
*****How notice is made? ****king of kings case
*****can employee wave the right of due process? Yes ..technolift case
As stated by the CA, the petitioner had failed to show that it had complied
with the two-notice requirement: (a) a written notice containing a statement of
the cause for the termination to afford the employee ample opportunity to be
heard and defend himself with the assistance of his representative, if he so
desires; (b) if the employer decides to terminate the services of the employee,
the employer must notify him in writing of the decision to dismiss him, stating
clearly the reason therefor.
[15]
(shoppes manila vs nlrc)


SHOPPES MANILA INC. VS. NLRC JAN 14, 2004
We agree with the CA that the petitioner did not have a vested right to a
formal hearing simply and merely because LA Tumanong granted its motion
and set the case for hearing. Pursuant to Section 5, Rule V of the New Rules
of Procedure of the NLRC,
[10]
the labor arbiter has the authority to determine
whether or not there is a necessity to conduct formal hearings in cases
brought before him for adjudication. The holding of a formal hearing or trial is
discretionary with the labor arbiter and is something that the parties cannot
demand as a matter of right. It is entirely within his authority to decide a labor
case before him, based on the position papers and supporting documents of
the parties, without a trial or formal hearing.
[11]
The requirements of due
process are satisfied when the parties are given the opportunity to submit
position papers wherein they are supposed to attach all the documents that
would prove their claim in case it be decided that no hearing should be
conducted or was necessary.
[12]

The order of LA Tumanong granting the petitioners motion for a hearing of
the case was not conclusive and binding on LA Cuyuca who had the
discretion either to hear the case before deciding it, or to forego with the
hearing if, in her view, there was no longer a need therefor as the case could
be resolved on its merits based on the records.
Similarly, we affirm the finding of the CA that the private respondent was
illegally dismissed. In order to effect a valid dismissal, the law requires that
(a) there be just and valid cause as provided under Article 282 of the Labor
Code;
[13]
and (b) the employee be afforded an opportunity to be heard and to
defend himself.
[14]

As stated by the CA, the petitioner had failed to show that it had complied
with the two-notice requirement: (a) a written notice containing a statement of
the cause for the termination to afford the employee ample opportunity to be
heard and defend himself with the assistance of his representative, if he so
desires; (b) if the employer decides to terminate the services of the employee,
the employer must notify him in writing of the decision to dismiss him, stating
clearly the reason therefor.
[15]


VALIAO VS CA - JULY 30, 2004
DISMISSAL FOR JUST CAUSE
Petitioner claims that his outright dismissal from employment was not valid
and too harsh and that he was not dismissed from employment because of
tardiness or absences but because he was among those apprehended in a
raid. Also, he was not accorded due process because although his wife
received the show cause notice, he did not have the proper mind to reply as
he was in jail and was psychologically disturbed.
Considering the submissions of the parties as well as the records before
us, we find the petition without merit. Petitioners dismissal from employment
is valid and justified.
For an employees dismissal to be valid, (a) the dismissal must be for a
valid cause and (b) the employee must be afforded due process.
[7]

Serious misconduct and habitual neglect of duties are among the just
causes for terminating an employee under the Labor Code of the
Philippines. Gross negligence connotes want of care in the performance of
ones duties. Habitual neglect implies repeated failure to perform ones duties
for a period of time, depending upon the circumstances.
[8]
The Labor Arbiters
findings that petitioners habitual absenteeism and tardiness constitute gross
and habitual neglect of duties that justified his termination of employment are
sufficiently supported by evidence on record. Petitioners repeated acts of
absences without leave and his frequent tardiness reflect his indifferent
attitude to and lack of motivation in his work. More importantly, his repeated
and habitual infractions, committed despite several warnings, constitute gross
misconduct unexpected from an employee of petitioners stature. This Court
has held that habitual absenteeism without leave constitute gross negligence
and is sufficient to justify termination of an employee.
[9]

Indeed, even without the arrest incident, WNC had more than enough
basis for terminating petitioner from employment. It bears stressing that
petitioners absences and tardiness were not isolated incidents but manifested
a pattern of habituality
DUE PROCESS
Still, petitioner claims that he was not afforded due process so that his
dismissal from employment should be declared invalid. This contention
deserves scant consideration. The Court of Appeals held that the records
reveal that petitioner was afforded the twin requirements of notice and hearing
and was likewise given the opportunity to defend himself before the
investigating committee.
In this case, petitioner was asked to explain his several absences and
tardiness on many occasions. A notice to explain was sent to him regarding the
arrest incident wherein he was able to reply. An investigation committee was
formed by WNC to investigate the arrest incident and the absences and
tardiness of petitioner. It must be emphasized that proceedings of the committee
were duly recorded, and petitioner actively participated therein by answering the
various questions interposed by the panel members. Finally, a notice of his
termination was sent to petitioner, although he claims to have received it late as
he was in jail. It is an undeniable fact, however, that his wife had actually
received the notice in his house earlier, even before petitioners termination and
this matter was later communicated to him.
At any rate, petitioner was given enough opportunity to be heard, and his
dismissal was based on valid grounds. The essence of due process is simply
an opportunity to be heard, or as applied to administrative proceedings, an
opportunity to explain ones side or an opportunity to seek a reconsideration of
the action or ruling complained of. A formal or trial-type hearing is not at all
times and in all instances essential, as the due process requirements are
satisfied where the parties are afforded fair and reasonable opportunity to
explain their side of the controversy at hand. What is frowned upon is the
absolute lack of notice and hearing.
[17]

PREVENTIVE SUSPENSION
Finally, the Labor Arbiter found that petitioner is entitled to salary
differentials for the period of his preventive suspension, as there is no
sufficient basis shown to justify his preventive suspension. During the
pendency of the investigation, the employer may place the worker concerned
under preventive suspension if his continued employment poses a serious
and imminent threat to life or property of the employer or of his co-
workers.
[18]
But in this case, there is no indication that petitioner posed a
serious threat to the life and property of the employer or his co-
employees. Neither was it shown that he was in such a position to unduly
influence the outcome of the investigation. Hence, his preventive suspension
could not be justified, and the payment of his salary differentials is in order.
However, the award of attorneys fees to him cannot be sustained, in view
of our findings that petitioner was validly dismissed from employment.

KING OF KINGS TRANSPORT VS SANTIAGO MAMAC JUNE 29, 2007

Non-compliance with the Due Process Requirements

Due process under the Labor Code involves two aspects: first, substantive
the valid and authorized causes of termination of employment under the Labor
Code; and second, proceduralthe manner of dismissal
To clarify, the following should be considered in terminating the services of
employees:

(1) The first written notice to be served on the employees should contain
the specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period. Reasonable opportunity under the Omnibus Rules means
every kind of assistance that management must accord to the employees to enable
them to prepare adequately for their defense.
[15]
This should be construed as a
period of at least five (5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them, consult a union
official or lawyer, gather data and evidence, and decide on the defenses they will
raise against the complaint. Moreover, in order to enable the employees to
intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the
charge against the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which company rules, if
any, are violated and/or which among the grounds under Art. 282 (288) is being
charged against the employees.

(2) After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be given the
opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented
against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice. Moreover, this conference
or hearing could be used by the parties as an opportunity to come to an amicable
settlement.

(3) After determining that termination of employment is justified, the
employers shall serve the employees a written notice of termination indicating
that: (1) all circumstances involving the charge against the employees have been
considered; and (2) grounds have been established to justify the severance of their
employment.

In the instant case, KKTI admits that it had failed to provide respondent with
a charge sheet.
[16]
However, it maintains that it had substantially complied with
the rules, claiming that respondent would not have issued a written explanation
had he not been informed of the charges against him.
[17]


We are not convinced.

First, respondent was not issued a written notice charging him of
committing an infraction. The law is clear on the matter. A verbal appraisal of the
charges against an employee does not comply with the first notice requirement.

Second, even assuming that petitioner KKTI was able to furnish respondent
an Irregularity Report notifying him of his offense, such would not comply with
the requirements of the law. We observe from the irregularity reports against
respondent for his other offenses that such contained merely a general description
of the charges against him. The reports did not even state a company rule or policy
that the employee had allegedly violated. Likewise, there is no mention of any of
the grounds for termination of employment under Art. 282 of the Labor Code.
Thus, KKTIs standard charge sheet is not sufficient notice to the employee.

Third, no hearing was conducted. Regardless of respondents written
explanation, a hearing was still necessary in order for him to clarify and present
evidence in support of his defense. Moreover, respondent made the letter merely
to explain the circumstances relating to the irregularity in his October 28,
2001Conductors Trip Report. He was unaware that a dismissal proceeding was
already being effected. Thus, he was surprised to receive the November 26,
2001termination letter indicating as grounds, not only his October 28,
2001 infraction, but also his previous infractions.

Sanction for Non-compliance with Due Process Requirements

As stated earlier, after a finding that petitioners failed to comply with the
due process requirements, the CA awarded full backwages in favor of respondent
in accordance with the doctrine in Serrano v. NLRC.
[20]
However, the doctrine
in Serrano had already been abandoned in Agabon v. NLRC by ruling that if the
dismissal is done without due process, the employer should indemnify the
employee with nominal damages.
[21]


Thus, for non-compliance with the due process requirements in the
termination of respondents employment, petitioner KKTI is sanctioned to pay
respondent the amount of thirty thousand pesos (PhP 30,000) as damages.

Thirteenth (13th)-Month Pay

Petitioner KKTI maintains that respondent was paid on purely commission
basis; thus, the latter is not entitled to receive the 13th-month pay
benefit. However, applying the ruling in Philippine Agricultural Commercial and
Industrial Workers Union v. NLRC,
[23]
the CA held that respondent is entitled to
the said benefit.
It was erroneous for the CA to apply the case of Philippine Agricultural
Commercial and Industrial Workers Union. Notably in the said case, it was
established that the drivers and conductors praying for 13th- month pay were not
paid purely on commission. Instead, they were receiving a commission in
addition to a fixed or guaranteed wage or salary. Thus, the Court held that bus
drivers and conductors who are paid a fixed or guaranteed minimum wage in case
their commission be less than the statutory minimum, and commissions only in
case where they are over and above the statutory minimum, are entitled to a 13th-
month pay equivalent to one-twelfth of their total earnings during the calendar
year.

On the other hand, in his Complaint,
[24]
respondent admitted that he was paid
on commission only. Moreover, this fact is supported by his pay slips
[25]
which
indicated the varying amount of commissions he was receiving each trip. Thus, he
was excluded from receiving the 13th-month pay benefit.

UNIWIDE SALES WAREHOUSE CLUB VS. NLRC FEB. 29, 2008
In the present case, private respondent claims that from the months of February to June
1998, she had been subjected to constant harassment, ridicule and inhumane treatment by
Apduhan, with the hope that the latter can get the private respondent to resign.
47
The
harassment allegedly came in the form of successive memoranda which private respondent
would receive almost every week, enumerating a litany of offenses and maligning her
reputation and spreading rumors among the employees that private respondent shall be
dismissed soon.
48
The last straw of the imputed harassment was the July 31, 1998 incident
wherein private respondent's life was put in danger when she lost consciousness due to
hypertension as a result of Apduhan's alleged hostility and shouting.
49

The Court finds that private respondent's allegation of harassment is a specious statement
which contains nothing but empty imputation of a fact that could hardly be given any
evidentiary weight by this Court.
50
Private respondent's bare allegations of constructive
dismissal, when uncorroborated by the evidence on record, cannot be given credence.
51

The sending of several memoranda addressed to a managerial or supervisory employee
concerning various violations of company rules and regulations, committed on different
occasions, are not unusual. The alleged February to June 1998 series of memoranda given
by petitioners to private respondent asking the latter to explain the alleged irregular acts
should not be construed as a form of harassment but merely an exercise of management's
prerogative to discipline its employFees.
Self-serving and unsubstantiated declarations are insufficient to establish a case before
quasi-judicial bodies. Well-entrenched is the rule that the quantum of evidence required to
establish a fact in quasi-judicial bodies is substantial evidence. Substantial evidence is such
amount of relevant evidence which a reasonable mind might accept as adequate to support
a conclusion, even if other equally reasonable minds might opine otherwise.
54

ABANDONMENT
Private respondent's failure to report for work despite the August 8, 1998 letter sent by
Apduhan to private respondent advising the latter to report for work is not sufficient to
constitute abandonment. It is a settled rule that failure to report for work after a notice to
return to work has been served does not necessarily constitute abandonment.
56

Private respondent mistakenly believed that the successive memoranda sent to her from
March 1998 to June 1998 constituted discrimination, insensibility or disdain which was
tantamount to constructive dismissal. Thus, private respondent filed a case for constructive
dismissal against petitioners and consequently stopped reporting for work.
The Court finds that petitioners were not able to establish that private respondent
deliberately refused to continue her employment without justifiable reason. To repeat, the
Court will not make a drastic conclusion that private respondent chose to abandon her work
on the basis of her mistaken belief that she had been constructively dismissed by Uniwide.
Nonetheless, the Court agrees with the findings of the LA that the termination of private
respondent was grounded on the existence of just cause under Article 282 (c) of the Labor
Code
59
or willful breach by the employee of the trust reposed on him by his employer or a
duly authorized representative.
60

Private respondent occupies a managerial position. As a managerial employee, mere
existence of a basis for believing that such employee has breached the trust of his employer
would suffice for his dismissal.
61

The irregularities and offenses committed by private respondent, corroborated by the
various pieces of evidence supporting such charges, i.e. records, reports and testimonies of
Uniwide employees,
67
in the mind of the Court, constitute substantial evidence that private
respondent is in fact responsible for the alleged charges.
DUE PROCESS
The Memorandum dated August 2, 1998
73
completely demolishes such claims. It shows on
its face that private respondent received the Memorandum on August 2, 1998, a day before
she filed the complaint for illegal dismissal against petitioners; and that private respondent
was notified that the hearing was scheduled on August 12, 1998 and explicitly warned her
that her failure to appear thereat shall mean a waiver to be heard, and the case shall then
be submitted for decision based on available papers and evidence.
In reality, private respondent, as found earlier was not terminated on July 31, 1998. There
was no constructive dismissal. Again, the successive memoranda presented by private
respondent and the alleged July 31, 1998 shouting incident are not sufficient to establish
her claim of harassment.
However, as to the September 1, 1998 Memorandum where the private complainant was
dismissed for loss of trust and confidence, the Court finds the notice of the scheduled
August 12, 1998 hearing sufficient compliance with the due process requirement.
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, a fair and reasonable opportunity to explain one's side.
74
It is
not the denial of the right to be heard but denial of the opportunity to be heard that
constitutes violation of due process of law.
75
In the instant case, private respondent was
again notified of the August 12, 1998 hearing through a letter
76
dated August 8, 1998 which
was received by private respondent herself.
77
Clearly, private respondent was given an
opportunity to be heard. However, private respondent chose not to attend the scheduled
hearing because of her mistaken belief that she had already been constructively dismissed.
ROLANDO PLACIDO AND EDGARDO CARAGAY VS NLRC SEPT. 18, 2009

As did the NLRC and the Court of Appeals,
[19]
the Court finds that as the
cables bore the PLDT marking, the presumption is that PLDT owned them. The
burden of evidence thus lay on petitioners to prove that they acquired the cables
lawfully. This they failed to discharge.

And as also did the NLRC and the Court of Appeals, the Court finds that
petitioners were not denied due process.

The abovequoted provision of Section 2(d) should not be taken to mean,
however, that holding an actual hearing or conference is a condition sine qua non for
compliance with the due process requirement in case of termination of
employment. For the test for the fair procedure guaranteed under the above-quoted
Article 277(b) of the Labor Code is not whether there has been a formal pretermination
confrontation between the employer and the employee.

The essence of due process is simply an opportunity to be heard or, as applied to
administrative proceedings, an opportunity to explain one's side or an opportunity to
seek a reconsideration of the action or ruling complained of. What the law prohibits
is absolute absence of the opportunity to be heard, hence, a party cannot feign denial
of due process where he had been afforded the opportunity to present his side. A
formal or trial type hearing is not at all times and in all instances essential to
In the present case, petitioners were, among other things, given several written
invitations to submit themselves to PLDTs Investigation Unit to explain their side, but
they failed to heed the. Petitioners were thus afforded the opportunity to confront
those witnesses and present evidence in their behalf, but they failed to do so.

TECHNOLEIGHT PHILIPPINES CORPORATION VS. NLRC APRIL 13, 2010
THE RULING OF THE COURT



The record of the case, however, gives us a different picture. Contrary to
the CAs perception, we find a work-connection in Amular's and Ducays assault
on Mendoza. As the CA itself noted,
[32]
the underlying reason why Amular and
Ducay confronted Mendoza was to question him about his report to De Leon
Technols PCD assistant supervisor regarding the duos questionable work
behavior. The motivation behind the confrontation, as we see it, was rooted on
workplace dynamics as Mendoza, Amular and Ducay interacted with one another
in the performance of their duties.
Amular and Ducay point to Mendoza as the proximate cause of the fight
because he challenged them to a one-on-one (isa-isa lang) bout.
[38]
Looking back
at the reason why Amular and Ducay were at the mall in the first place, this
attributed causation hardly makes sense. To reiterate, they were purposely there to
confront Mendoza about their work-related problem. They waited for him at the
place where they expected him to be. When Mendoza appeared, they accosted him
and put into motion the entire sorry incident.

Under these circumstances, Amular undoubtedly committed a misconduct or
exhibited improper behavior that constituted a valid cause for his dismissal under
the law
[39]
and jurisprudential standards.
[40]


Thus, Amular was not illegally dismissed; he was dismissed for cause.

The Due Process Issue

We disagree with these conclusions. The notice of preventive
suspension/notice of discharge served on Amular and Ducay required them to
explain within forty-eight (48) hours why no disciplinary action should be taken
against them for their involvement in the mauling incident. On June 8, 2002,
Technol management sent Amular a memorandum informing him of an
administrative hearing on June 14, 2002 at 10:00 a.m., regarding the charges
against him.
[50]
A day before the administrative hearing or on June 13, 2002,
Amular filed the complaint for illegal suspension/dismissal
[51]
and did not appear
at the administrative hearing. On July 4, 2002, the company sent Amular a notice
of dismissal.
[52]


What we see in the records belie Amulars claim of denial of procedural due
process. He chose not to present his side at the administrative hearing. In fact, he
avoided the investigation into the charges against him by filing his illegal dismissal
complaint ahead of the scheduled investigation. Under these facts, he was given
the opportunity to be heard and he cannot now come to us protesting that he was
denied this opportunity. To belabor a point the Court has repeatedly made in
employee dismissal cases, the essence of due process is simply an opportunity to
be heard; it is the denial of this opportunity that constitutes violation of due process
of law.
[53]