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Serious Misconduct
Maribago Resort vs. Dual, July 20, 2010
G.R. No. 180660
July 20, 2010
Facts: On January 5, 2005, a group of Japanese guests and their
companions dined at Maribago Beach Resort’s
Poolbar/Restaurant. Captain waiter Alvin Hiyas took their dinner
orders comprising of 6 sets of lamb and 6 sets of fish. As per
company procedure, Hiyas forwarded one copy of the order slip
to the kitchen and another copy to Nito Dual. Pursuant to the
order slip, fourteen (14) sets of dinner were prepared by the
chef. Hiyas and waiter Genaro Mission, Jr. served 12 set dinners
to the guests, and another 2 sets to their guides free of charge
(total of 14 sets of dinner). After consuming their dinner, the
guests paid the amount indicated in their bill and thereafter left
in a hurry. The receipt show that only P3,036.00 was remitted by
cashier Dual corresponding to 6 sets of dinner. A discrepancy
was found between the order slip and the receipt issued which
prompted petitioner Maribago to ask for an explanation from
Dual and the waiters why they should not be penalized.
Clarificatory hearings were made and it was found out that the
guests gave P10,500.00 to Mission as payment for the bill of
P10,100.00. It was discovered later that only P3,036.00 was
entered by Dual in the cash register. The rest of the payment was
missing. The original transaction receipt for P10,100.00 was
likewise missing and in its place, only a transaction receipt for
P3.036.00 was registered. Upon verification, it was also found
out that the order slip was tampered by Alcoseba to make it
appear that only six (6) set dinners were ordered. Respondent
Dual was found guilty of dishonesty for his fabricated statements
and for asking one of the waiters (Mission) to corroborate his
allegations. He was terminated for dishonesty based on his
admission that he altered the order slip.
Dual then filed a complaint for illegal dismissal. The Labor
Arbiter found that respondent’s termination was without valid
cause and ruled that respondent is entitled to separation pay.

The NLRC set aside the Labor Arbiter’s decision and dismissed
the complaint. The Court of Appeals however reversed the
decision and resolution of the NLRC. Finding no sufficient valid
cause to justify respondent’s dismissal, the Court of Appeals
ordered petitioner to pay respondent full backwages and
separation pay. Thus a petition for review under Rule 45 was
filed in the SC.
ISSUE: Whether or not respondent was illegally dismissed.
HELD: No. Petitioner’s evidence proved that respondent is guilty
of dishonesty and of stealing money entrusted to him as cashier.
Instead of reporting P10,100.00 as payment by the guests for
their dinner, respondent cashier only reported P3,036.00 as
shown by the receipt which he admitted to have issued.
Respondent’s acts constitute serious misconduct which is a just
cause for termination under the law. Theft committed by an
employee is a valid reason for his dismissal by the employer.
Although as a rule this Court leans over backwards to help
workers and employees continue with their employment or to
mitigate the penalties imposed on them, acts of dishonesty in the
handling of company property, petitioner’s income in this case,
are a different matter.

Nagkakaisang Lakas ng Mangagawa sa Keihin v. Keihin Phils
Corp., GR No. 171115, August 9, 2010
Petitioner Helen Valenzuela (Helen) was a production associate
in respondent Keihin Philippines Corporation (Keihin), a
company engaged in the production of intake manifold and
throttle body used in motor vehicles manufactured by
It is a standard operating procedure of Keihin to subject all its
employees to reasonable search before they leave the company
premises. On September 5, 2003, while Helen was about to leave
the company premises, she saw a packing tape near her work
area and placed it inside her bag because it would be useful in
her transfer of residence. When the lady guard on duty inspected
Helen’s bag, she found the packing tape inside her bag. The
guard confiscated it and submitted an incident report dated

September 5, 2003 to the Guard-in-Charge, who, in turn,
submitted a memorandum regarding the incident to the Human
Resources and Administration Department on the same date.
The following day, or on September 6, 2003, respondent
company issued a show cause notice to Helen accusing her of
violating F.2 of the company’s Code of Conduct, which says, "Any
act constituting theft or robbery, or any attempt to commit theft
or robbery, of any company property or other associate’s
property. Penalty: D (dismissal)." Helen’s supervisor, called her
to his office and directed her to explain in writing why no
disciplinary action should be taken against her.
Helen, in her explanation, admitted the offense and even
manifested that she would accept whatever penalty would be
imposed upon her. She, however, did not reckon that respondent
company would terminate her services for her admitted offense.
On September 26, 2003, Helen received a notice of disciplinary
action informing her that Keihin has decided to terminate her
services. On October 15, 2003, petitioners filed a
complaint against respondent for illegal dismissal, non-payment
of 13th month pay, with a prayer for reinstatement and payment
of full backwages, as well as moral and exemplary damages.
Petitioners alleged that Helen’s act of taking the packing tape
did not constitute serious misconduct, because the same was
done with no malicious intent. Keihin, on the other hand,
maintained that Helen was guilty of serious misconduct because
there was a deliberate act of stealing from the company.
The Labor Arbiter rendered his Decision dismissing the
complaint of illegal dismissal. He brushed aside petitioners’
argument that the penalty imposed on Helen was
disproportionate to the offense committed, and held that she
indeed committed a serious violation of the company’s policies
amounting to serious misconduct. The Labor Arbiter further
held that Keihin observed the requirements of procedural due
process in implementing the dismissal of Helen. He ruled that
the following circumstances showed that the company observed
the requirements of procedural due process: a) there was a show
cause letter informing Helen of the charge of theft and requiring
her to submit an explanation; b) there was an administrative
hearing giving her an opportunity to be heard; and c) the

the offense for which she was found guilty." In the case at bar. and (c) must show that the employee has become unfit to continue working for the employer. Whether the petition of petitioners is out rightly dismissible for not having been filed by an indispensable party in interest (procedural aspect of the case) HELD: 1. in taking the packing tape for her own personal use. the NLRC held that theft is a valid reason for Helen’s dismissal. (substantive aspect of the case) 2. 2005. Whether." For serious misconduct to justify dismissal under the law. and implies wrongful intent and not mere error in judgment." In other words. By the strength of petitioners’ admission. 20 On appeal. Rule 3 of the Rules of Court. in a Resolution dated November 2. a forbidden act. When Helen was asked to explain in writing why she took the tape. and the grounds for her dismissal. which is a just cause for her dismissal from service. Helen took the packing tape with the thought that she could use it for her own personal purposes. the CA dismissed the petition outright for not having been filed by an indispensable party in interest under Section 2. "(a) it must be serious. there was intent on her part to benefit herself when she attempted to bring home the packing tape in question. the NLRC dismissed the appeal of the petitioners and affirmed in toto the Decision of the Labor Arbiter. a dereliction of duty. (b) must relate to the performance of the employee’s duties. willful in character. Article 282 of the Labor Code enumerates the just causes for termination. ISSUE: 1. by her own admission.respondent company furnished her with notice of termination stating the facts of her dismissal. Helen committed serious misconduct. However. "Kumuha po ako ng isang packing tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong lilipatang bahay. Yes. It held that petitioners admitted in their Position Paper that Helen took the packing tape strewn on the floor near her production line within the company premises. Misconduct is defined as "the transgression of some established and definite rule of action. . she stated.

The petitioners also argue that the penalty of dismissal is too harsh and disproportionate to the offense committed since the value of the thing taken is very minimal. respondent company issued two memoranda implementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the company’s Code of Conduct. . In order to address this issue of losses. we are convinced that the case of Caltex is different from the case at hand. petitioners argue that the first notice failed to explain the charge being leveled against Helen. Petitioners cite the case of Caltex Refinery Employees Association v. National Labor Relations Commission where Arnelio M. On the other hand. Regarding the requirement of procedural due process in dismissal of employees. vandalism. All these circumstances point to the conclusion that it was not just an error of judgment on the part of Helen.It is noteworthy that prior to this incident. Helen took the packing tape and was caught during the routine inspection. After a closer study of both cases. According to the petitioners. And what further distinguishes the instant case from Caltex is that respondent company was dealing with several cases of theft. and loss of company and employees’ property when the incident involving Helen transpired. Clarete (Clarete) was found to have willfully breached the trust and confidence reposed in him by taking a bottle of lighter fluid. Although both Clarete and Helen had no prior violations. In said case. but a deliberate act of theft of company property. the notice was vague and lacked sufficient definitiveness. we refrained from imposing the supreme penalty of dismissal since the employee had no violations "in his eight years of service and the value of the lighter fluid is very minimal compared to his salary. the former had a clean record of eight years with his employer. there had been several cases of theft and vandalism involving both respondent company’s property and personal belongings of other employees. Helen was not even on her second year of service with Keihin when the incident of theft occurred. Despite these reminders.

" If there is a failure to implead an indispensable party. a company engaged in canned food manufacturing. "parties in interest without whom no final determination can be had of an action shall be joined as plaintiffs or defendants. his job included.2. It is clear that petitioners failed to include the name of the dismissed employee Helen Valenzuela in the caption of their petition for certiorari filed with the CA as well as in the body of the said petition. any judgment rendered would have no effectiveness.. but also as regards other persons who may be affected by the judgment. the CA rightly dismissed the petition based on a formal defect. 2010 FACTS: Petitioner Century Canning Corporation."32 The purpose of the rules on joinder of indispensable parties is a complete determination of all issues not only between the parties themselves. they only indicated the name of the labor union Nagkakaisang Lakas ng Manggagawa sa Keihin (NLMK-OLALIA) as the party acting on behalf of Helen. al. As a result. A decision valid on its face cannot attain real finality where there is want of indispensable parties. Instead.’ The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act. Loss of Trust and Confidence Century Canning Corp. August 8. among others. v. Under Section 7. Prior to his dismissal. 171630. as well as the coordination with the purchasing department regarding technical inquiries on needed products and services of petitioner's different departments.31 It is "precisely ‘when an indispensable party is not before the court (that) an action should be dismissed. Rule 3 of the Rules of Court. et. GR No. the preparation of the purchase requisition (PR) forms and capital expenditure (CAPEX) forms. Ramil. . employed respondent Vicente Randy Ramil in August 1993 as technical specialist. not only as to the absent parties but even to those present.

Po. The NLRC declared respondent's dismissal to be illegal and directed petitioner to reinstate respondent with full backwages and seniority rights and privileges. Consequently. on May 24. 1999. 1999. Ronquillo. moral and exemplary damages and attorney's fees against petitioner and its officers before the Labor Arbiter (LA). he received a Notice of Termination from Armando C. non-payment of overtime pay. The CAPEX form. Paz processed the paper and found that some details in the CAPEX form were left blank. on 20 May 1999. Respondent was. as appearing in the form. and endorsed it to Marivic Villanueva. due to the urgency of purchasing badly needed equipment. did not have the complete details and some required signatures. filed a Complaint for illegal dismissal. He vehemently denied any participation in the alleged forgery. Subsequently. Secretary of Executive Vice-President Ricardo T. for the latter's signature. Aggrieved by the LA's finding. respondent was asked to explain in writing the events surrounding the incident. which was immediately transmitted to the Purchasing Department. respondent appealed to the National Labor Relations Commission (NLRC). Paz then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and informed her of the questionable signature of Po. Respondent. the request for the equipment was put on hold due to Po's forged signature. She also doubted the genuineness of the signature of Po. Jr.On 3 March. per order of Technical Operations Manager Jaime Garcia. Suspecting him to have committed forgery. respondent prepared a CAPEX form for external fax modems and terminal server. respondent was ordered to make another CAPEX form. with the form apparently signed by Po. separation pay. The following day. thereafter. It found that petitioner failed to show clear and . Canizares rendered a Decision dismissing the complaint for lack of merit. however. The NLRC First Division in its Decision set aside the ruling of LA Canizares. for loss of trust and confidence. LA Potenciano S. However. respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office. suspended on 21 April 1999.

Finally. and to pay respondent full backwages from the time his employment was terminated up to the time of the finality of its decision. likewise. the NLRC reversed itself and rendered a new Decision upholding LA Canizares' dismissal of his complaint. Respondent filed a motion for reconsideration. RULING: Yes. To respondent's surprise and dismay. It ordered petitioner to reinstate respondent. which was denied by the NLRC. Frustrated by this turn of events. Petitioner insists that the mere existence of a basis for believing that respondent employee has breached the trust and confidence of his employer suffices for his dismissal. remanded the case to the LA for the computation of backwages of the respondent.convincing evidence that respondent was responsible for the forgery of the signature of Po in the CAPEX form. . respondent filed a petition for certiorari with the Court of Appeals (CA). The CA. The CA rendered judgment in favor of respondent and reinstated the earlier decision of the NLRC. ISSUE: Whether or not respondent was validly dismissed. Petitioner filed a motion for reconsideration. petitioner maintains that aside from respondent's involvement in the forgery of the CAPEX form. without loss of seniority rights and privileges. this petition for review on certiorari. Hence. Petitioner's main allegation is that there are factual and legal grounds constituting substantial proof that respondent was clearly involved in the forgery of the CAPEX form. his past violations of company rules and regulations are more than sufficient grounds to justify his termination from employment.

Villanueva or any officer of the petitioner's company could have readily noticed the lack of signature. Furthermore. Respondent alleged in his position paper that after preparing the CAPEX form on 3 March 1999. while 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 and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient. as they cannot be raised for the first time at that late stage. respondent received the CAPEX form containing the signature of Po. Thus. the record of the case is bereft of evidence that would clearly establish Ramil's involvement in the forgery. he will not be permitted to change the same on appeal. administrative agency or quasi-judicial body need not be considered by a reviewing court. The next day. and could have easily attested that the form was unsigned when it was released to respondent. this does not mean that the said basis may be arbitrary and unfounded. Petitioner never controverted these allegations in the proceedings before the NLRC and the CA despite its opportunity to do so. Po. theories. because to permit him to do so would be unfair to the adverse party.However. Petitioner's belated allegations in its reply filed before this Court that Marivic Villanueva denied having seen the CAPEX form cannot be given credit. it can be correctly inferred that he is not the forger. When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below. issues and arguments not brought to the attention of the lower court. he endorsed it to Marivic Villanueva for the signature of the Executive Vice-President Ricardo T. They did not even submit any affidavit of witness or present any during the hearing to substantiate their claim against Ramil. . Had the CAPEX form been returned to respondent without Po's signature. if respondent retrieved the form on March 4. 1999 with the signature of Po. Points of law.

164640 June 13. INC. petitioner was required by private respondent Carl Wozniak (Wozniak). and she availed herself of the company car plan. On April 21.R. 1996.: FACTS: On December 1.. AUSTRIA-MARTINEZ. but proof beyond reasonable doubt is not necessary. 2008 CYNTHIA GANA. petitioner. divulging various confidential information about the business operations and transactions of Aboitiz Container which are . Aboitiz Container and Aboitiz Haullers. to explain in writing why she should not be penalized for having violated company rules on offenses against company interest.00 plus a monthly allowance of P15. It must rest on substantial grounds and not on the employer’s arbitrariness. the employee would eternally remain at the mercy of the employer. respondent company. otherwise. ABOITIZ HAULERS. On August 15. The basis for the dismissal must be clearly and convincingly established. (TDLSI). J. Inc. As marketing manager. Loss of trust and confidence. THE NATIONAL LABOR RELATIONS COMMISSION. whim. another sister company of Aboitiz Transport.The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. 1997.000.000. petitioner was transferred from TDLSI to respondent company retaining the same position as marketing manager. and CARL **WOZNIAK. Wozniak directed her to appear in an investigation to be conducted by the company and defend herself with respect to the electronic mails (emails) she sent to an official of Trans-America. G. vs. the Senior Vice-President and General Manager of Aboitiz Haulers. must be based on a willful breach of trust and founded on clearly established facts. to be a valid cause for dismissal. caprice or suspicion. 1998. petitioner received a monthly salary of P20. respondents. No. Cynthia Gana (petitioner) commenced her employment as marketing manager of Total Distribution and Logistics System.00.

her employment with respondent company has been terminated. and that as a result. HELD: HELD: NO. The LA cited private respondent's letter terminating petitioner from her employment to prove that respondent company failed to show sufficient evidence to establish the charges against petitioner. Wozniak informed petitioner that her explanations during the investigation with respect to the charges leveled against her were found to be unacceptable. through her counsel. 1999.On April 30. On June 14. 2004. 1998. the Labor Arbiter (LA) rendered a Decision finding respondent company guilty of illegally dismissing petitioner. evidence shows otherwise. On appeal. On April 24. Contrary to the conclusion of the LA. 2004. 1998. sent a letter to Wozniak denying the charges against her. the CA promulgated its presently assailed Decision dismissing the petition for certiorari and affirming the questioned Decision and Order of the NLRC. Petitioner relies on the conclusion of the LA that there is no sufficient evidence to justify petitioner's termination from employment on the ground of loss of trust and confidence. However. Petitioner then filed a petition for certiorari with the CA questioning the Decision and Order of the NLRC.detrimental to the said company. ISSUE: Whether Petitioner is illegally dismissed. Pertinent portions of the letter are as follows: . Petitioner filed a Motion for Reconsideration but it was denied by the CA in its Resolution dated July 26. it is very clear in the said letter that respondent company enumerated the facts and circumstances upon which petitioner's termination was based. In a letter dated May 22. that she was found guilty of Betrayal of Confidential Information which constitutes sufficient reason for the company to lose the high degree of trust and confidence which it reposed upon her as its manager. the NLRC set aside the Decision of the LA. Petitioner filed a Motion for Reconsideration but the same was denied by the NLRC in its Order promulgated on May 3. 2002. Petitioner then filed a Complaint for illegal dismissal with the National Labor Relations Commission (NLRC) in Quezon City. petitioner.

depot and special permit to load (spl) and the rates charge[d] by ACSI to its customers. 1998 also. 1998. 1998 and March 25.Last April 22. c) You have literally provided Transamerica information about the inefficiencies and inflexibility of the company in catering to the needs of the customer. AHI. The law. The Court finds no error in the conclusion of the CA that petitioner's intention in sending these e-mails was to inform Trans-America of the supposed inefficiency in the operations of respondent company as well as the company's poor services to its clients. 1998 that was sent to you and which you received last April 21. an investigation was conducted in order to give you the chance to present your side of matters that were contained in the letter to explain dated April 21. respondent company cannot be faulted for having lost its trust and confidence in petitioner and in refusing to retain her as its employee considering that her continued employment is patently inimical to respondent company's interest. During the said investigation. b) You sent again email message last April 16. In fact. it was established that: a) You sent email messages/reports to Leslie Leow of Transamerica last March 9. These pieces of information necessarily diminish the credibility of respondent company and besmirch its reputation. in . Carmelo Garcia regarding the company's poor services which puts the company's credibility to deliver good service in question. Carmelo Garcia because of your email messages to Transamerica. e) You declared that your loyalty is to Transamerica and not to your employer. 1998 to Leslie Leow concerning the complaints of Mr. d) The Officers of the company only learned of the complaints of Mr. Trans-America wrote Wozniak expressing its disappointment in the services that the Aboitiz companies were rendering. Hence. Petitioner does not deny having sent the subject e-mails to TransAmerica. The settled rule is that the mere existence of a basis for believing that a managerial employee has breached the trust of the employer justifies dismissal. 1998 regarding the company's internal problems with the truckers.

only acknowledgment receipts. he asked the firm Bormahueco for a quotation thereof. Inc. The quotation given by Bormahueco was found to be too high by Chueh who thus ordered him to get one from another firm.. Petitioner. Roos Industrial Construction.000. INC. Petitioner explained that the purchase of the above-stated items were urgent. CO.versus -SHING HUNG PLASTICS. asked to explain within 24 hours why.. it was found out that petitioner manipulated the price of purchased items and earned . 2002. by Memorandum. Facts: Respondent Shing Hung Plastics Co.. hence. SANTOS. Santos (petitioner) as administrative assistant whose responsibilities included purchasing equipment and supplies of the corporation. Inc. Inc.... authorizes neither oppression nor self-destruction of an employer company which itself is possessed of rights that must be entitled to recognition and respect. instead of the corporation’s then supplier Alto Chemicals. Respondents. on the instruction of Chan and Chueh. he. instead of official receipts. asked the accounting department to issue a check for the purpose. (Roos) quoted a lower rental rate of P28. Chueh ordered him to rent a forklift and crane to move a 26-ton machinery of the corporation. On March 11. and the thinner was purchased from JPN Inc. 2002. Sept. He was. because the former charged a lower price.protecting the rights of labor. On April 2. 29. Shing Hung Plastics Co. in the purchase of silkscreen and paint thinner from JPN. Santos vs.. hired Michael V. and NATIONAL LABOR RELATIONS COMMISSION. were received and recorded by the corporation’s accounting department. he was informed of the termination of his employment on account of "money involvement with suppliers like JPN and Roos etc." The corporation went on to claim as follows: Upon investigation by Chueh. Inc. hence. 2008 MICHAEL V.

moral and exemplary damages. The corporation controverted this claim. by Resolution of August 20." Issue: Whether petitioner was dismissed for just cause. at all events. the Labor Arbiter found petitioner to have been illegally dismissed. Inc. "but was forced to resign due to some irregularities" and that petitioner refused to sign the termination letter and to receive his salary and other benefits. Held: Yes.By its evidence. the corporation duly established the acts imputed to petitioner which rendered him unworthy of the trust and confidence demanded of his position . On appeal. Substantial evidence suffices. In administrative proceedings. The NLRC thus set aside the Labor Arbiter’s decision but awarded petitioner "one (1) month salary as indemnity.500 price of the corporation’s usual supplier. He advances that he is "not involved in the labor relation matter[s] in the respondent company. By Decision of January 30. and attorney’s fees. argues that respondent failed to prove its claim that he is a confidential employee. He thus ordered the corporation to reinstate petitioner and pay his full backwages. 2004.commissions therefrom. Alto Chemicals. and had not been reporting for work since April 3. the law does not require proof beyond reasonable doubt. The Court finds that the corporation had established reasonable grounds-bases of its decision finding petitioner unworthy of the trust and confidence his position demands. 2002. For the purpose of applying the provisions of the Labor Code on who may join unions of the rankand-file employees. Petitioner further claimed that JPN. that petitioner had been an employee of JPN. 2004. unpaid salary. jurisprudence defines "confidential employees" as those who "assist or act in a confidential capacity . hence. however. the National Labor Relations Commission (NLRC). Petitioner. and his unpaid salary. his tenure depended not on the trust and confidence he enjoyed from it. found petitioner’s dismissal for just cause but that due process requirements were not complied with. by presenting a document from Alto Chemicals quoting the price of thinner at P300 per gallon. Inc. sold thinner at P500 per gallon lower than the P1." Petitioner’s position fails.

recall. persons who formulate. property custodians. Enriquez had been an employee thereon for 32 years and Sia for 29 years. and effectuate management policies in the field of labor relations. i. When banking hours came to a close.e. etc. On December 27. both of whom suggested that teller Descartin fill the shortage with a loan from her family. lay-off. BPI. petitioner’s duties included purchasing supplies and equipment of the corporation. auditors. determine. those vested with the powers or prerogatives to lay down management policies and/or to hire. Teller Fregil reported the matter to Sia and Enriquez.Bacolod Singcang Branch. February 12. suspend.. BPI Feb 12. teller Geraldine Descartin (Descartin) purportedly discovered that she had a cash shortage of P36. or those who." However. Teller Descartin replied . 2008 FACTS: Enriquez and Sia were the branch manager and assistant branch manager. and [to] the second class belong cashiers. (Emphasis and underscoring supplied) As stated early on. 2008 Enriquez vs. transfer.2002. their branch experienced a heavy volume of transactions owing to the fact that it was the last banking day of the year..000. Enriquez vs. respectively of the BPI. jurisprudence teaches that: x x x [L]oss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employer’s money or property. regularly handle significant amounts of money or property. To the first class belong managerial employees. assign or discipline employees or effectively recommend such managerial actions. It was later admitted by a co-teller Fregil that the shortage was incurred because Descartin had temporarily borrowed the money that week to pay her financial obligations but intended to return the same on the first week of January.00. for the purpose of applying the Labor Code provision on loss of confidence as a just cause for the dismissal of an employee. in the normal and routine exercise of their functions.

a complaint was filed for illegal dismissal. the breach must be related to the performance of the employee’s function. Later on. it must be shown that the employee is a managerial employee. The Labor Arbiter rendered a decision that petitioners had been illegally dismissed ordering respondents to pay full backwages and moral and exemplary damages amounting to more than 7million pesos. she instead borrowed the amount from her in-laws. with the signed withdrawal slip. the basic requisite for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence or is routinely charged with the care and custody of the employer’s money or property. Also. As the amount exceeded the floor limit for tellers which would require the approval of a superior officer. nonetheless resulted in their abetting the dishonesty committed by the latter. at 5:21 p.that her family did not have the money. as reflected on the account records. Moreover. either Enriquez or Sia approved the transaction at 5:22 p. The failure of petitioners to report the cash shortage of teller Descartin.m. this act of .00 against the joint account of her parents-in-law.m. Teller Descartin thereafter left the bank to secure the signature of her mother-in-law Remedios and returned at past 7:00 p. Thus.. teller Descartin posted the unsigned withdrawal slip for the amount of P36. An investigation was made by the BPI head office and petitioners were directed to show cause to explain in writing why they should not be sanctioned for conflict of interest and breach of trust. since the term “trust and confidence” is restricted to said class of employees. There is no denying that loss of trust and confidence is a valid ground for termination of employment. petitioners were dismissed from employment on grounds of breach of trust and confidence and dishonesty. Hence. HELD: No. On appeal.m. even if done in good faith. The NLRC reversed the decision but ordered respondents to give petitioners financial assistance equivalent to one-half month’s pay for every year of service. ISSUE: Whether or not petitioners were illegally dismissed.000. Under the personnel policies of respondent bank. Hence.

Renato A. The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. Willful Disobedience Tongko vs. the fact remains that they willfully decided against reporting the shortage that occurred. it is provided that: It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. The Manufacturer’s Life Insurance Co. November 07. in either situation. No waiver. petitioners’ acts have caused respondents to have a legitimate reason to lose the trust reposed in them as senior managerial employees. withdrawal or cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right under any provision of this Agreement. Vergel De Dios was. November 7. Inc. As a result. Gregorio V. . extinguishment. (Manulife) is a domestic corporation engaged in life insurance business. Even assuming the version of petitioners as the truth. No. 2008 Manufacturers Life Insurance Co. Their participation in the cover-up of the misconduct of teller Descartin makes them unworthy of the trust and confidence demanded by their positions. Inc. (Phils. 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. 2008 G. 167622. abandonment.petitioners justifies their dismissal even on the first offense.). Tongko started his professional relationship with Manulife on July 1. its President and Chief Executive Officer.R. In the Agreement.. during the period material.

De Dios addressed a letter dated November 6. 2002 with the NLRC against Manulife for illegal dismissalIn the Complaint. In a Decision dated April 15. The NLRC's First Division. held Manulife liable for illegal dismissal. Thus. 2001 to Tongko regarding an October 18. The problem started sometime in 2001. while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test. Therefrom. in the process. Thereafter. finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no jurisdiction over the case. they earn less. Tongko filed a Complaint dated November 25. Stating that Tongko’s Region was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and. Issue: . Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of agents." Tongko was then terminated.Either of the parties hereto may likewise terminate his Agreement at any time without cause. Tongko filed this petition." And "Sales Managers are doing what the company asks them to do but. 2001 Metro North Sales Managers Meeting. In 1983. Relative thereto. and management overrides. 2004. consisting of commissions. Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. continues to remain one of the laggards in this area. 2005. Tongko's gross earnings from his work at Manulife. when Manulife instituted manpower development programs in the regional sales management level. Labor Arbiter dismissed the complaint for lack of an employer-employee relationship. In 1990. as of today. persistency income. by giving to the other party fifteen (15) days notice in writing. the CA issued the assailed Decision dated March 29. Hence. Manulife filed an appeal with the CA. As the CA found. he became a Branch Manager.

2. In the Agreement dated July 1. these requirements controlled the means and methods by which Tongko was to achieve the company's goals. which demonstrate the power of control exercised by the company over Tongko. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct. Yes In the instant case.Under this provision. 1977 executed between Tongko and Manulife. More importantly. and Manulife Financial Code of Conduct Agreement. . WON Tongko was an employee of Manulife WON Tongko was illegally dismissed. Manulife Financial Code of Conduct. with the company regulations and requirements alone. it is provided that: The Agent hereby agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the volume of new business required of Production Club membership. Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife. Held: 1. The fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. the fact that Tongko was an employee of Manulife may already be established. Thus. Manulife had the power of control over Tongko that would make him its employee. (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company. Several factors contribute to this conclusion. Certainly. an agent of Manulife must comply with three (3) requirements: (1) compliance with the regulations and requirements of the company.1. and (3) compliance with a quota of new businesses.

it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of agents. Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. leads to no other conclusion that he was an employee of Manulife. and equated the same to disobedience and neglect of duty. Manulife argued that even if Tongko is considered as its employee. as well as gross failure to reach at least minimum quota. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single iota of evidence to support its claims. 2. there is no illegal dismissal to speak of. the termination of his engagement from Manulife is highly warranted and therefore. Manulife merely cited Tongko's alleged "laggard performance. As private respondent has patently failed to perform a very fundamental duty. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative of his willful disobedience of the lawful orders of his superior." without substantiating such claim. Apropos thereto. (b). More importantly. in addition to his other administrative functions. par. his employment was validly terminated on the ground of gross and habitual neglect of duties. as well as willful disobedience of the lawful orders of Manulife. Manulife did not even point out which order or rule that Tongko disobeyed. of the Labor Code mandates in explicit terms that the burden of proving the validity of the termination of employment rests on the employer.Additionally. and that is to yield obedience to all reasonable rules. Art. Yes In its Petition for Certiorari dated January 7. 2005[26] filed before the CA. Manulife stated: In the instant case. despite the written reminder from Mr. orders and instructions of the Company. Failure to . 277. private respondent. inefficiency.

The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee. It must be reiterated that Manulife even failed to identify the specific acts by which Tongko's employment was terminated much less support the same with substantial evidence. it must be concluded that Tongko was illegally dismissed. To repeat. Thus.: FACTS: . Manulife failed to overcome such burden of proof. and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Moreover. G. Here. and. No. Manulife clearly failed to afford Tongko said notices.R. Since we have ruled that Tongko is its employee. JR.. even if other minds. J. 3 November 2008 VELASCO. illegal. SOCIAL JUSTICE SOCIETY (SJS) vs. might conceivably opine otherwise. DANGEROUS DRUGS BOARD and PHILIPPINE DRUG ENFORCEMENT AGENCY (PDEA). 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. Manulife is guilty of illegal dismissal. equally reasonable.discharge this evidential burden would necessarily mean that the dismissal was not justified. as to Manulife's failure to comply with the twin notice rule. Thus. mere conjectures cannot work to deprive employees of their means of livelihood. 157870. 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. it reasons that Tongko not being its employee is not entitled to such notices. on this ground too. however. therefore.

is put in issue. two (2) testing methods.The constitutionality of Section 36 of Republic Act No. whether domestic or overseas. subject to the provisions of Article 282 of the Labor Code and pertinent provisions of the Civil Service Law.Officers and employees of public and private offices.Authorized drug testing shall be done by any government forensic laboratories or by any of the drug testing laboratories accredited and monitored by the DOH to safeguard the quality of the test results. Any officer or employee found positive for use of dangerous drugs shall be dealt with administratively which shall be a ground for suspension or termination. shall be subjected to undergo a random drug test as contained in the company's work rules and regulations. the screening test which will determine the positive result as well as the type of drug used and the confirmatory test which will confirm a positive screening test. . The following shall be subjected to undergo drug testing: (d) Officers and employees of public and private offices. ISSUE: Whether or not paragraph (d) Sec. the challenged section reads as follows: SEC. . for purposes of reducing the risk in the workplace. 36 of RA 9165 is unconstitutional? RULING: Yes. 36. The drug testing shall employ. Authorized Drug Testing. As far as pertinent. officers and employees of public and private offices. and persons charged before the prosecutor's office with certain offenses. . otherwise known as the Comprehensive Dangerous Drugs Act of 2002. students of secondary and tertiary schools. (RA) 9165. insofar as it requires mandatory drug testing of candidates for public office. among other personalities. among others.

i. the screening test and the confirmatory test. and a degree of impingement upon such privacy has been upheld. entered into by management and the bargaining unit. which effects a search within the meaning of Sec. In this case. 36(d) of RA 9165 itself prescribes what is a narrowing ingredient by providing that the employees concerned shall be subjected to "random drug test as contained in the company's work rules and regulations for purposes of reducing the risk in the work place. reduced. Their privacy expectation in a regulated office environment is. if any. 36 of RA 9165 contains provisions specifically directed towards preventing a situation that would unduly embarrass the employees or place them under a humiliating experience.e. nobody is really singled out in advance for drug testing." The random drug testing shall be undertaken under conditions calculated to protect as much as possible the employee's privacy and dignity. doubtless to ensure as much as possible the trustworthiness of the results. 2. III of the Constitution. the office or workplace serves as the backdrop for the analysis of the privacy expectation of the employees and the reasonableness of drug testing requirement. Sec. in fine. Sec. intrudes.. The employees' privacy interest in an office is to a large extent circumscribed by the company's work policies. But the more important consideration lies in the fact that the test shall be conducted by trained professionals in access .controlled laboratories monitored by the Department of Health (DOH) to safeguard against results tampering and to ensure an accurate . Art. The goal is to discourage drug use by not telling in advance anyone when and who is to be tested.The first factor to consider in the matter of reasonableness is the nature of the privacy interest upon which the drug testing. While every officer and employee in a private establishment is under the law deemed forewarned that he or she may be a possible subject of a drug test. And as may be observed. and the inherent right of the employer to maintain discipline and efficiency in the workplace. As to the mechanics of the test. the law specifies that the procedure shall employ two testing methods. the collective bargaining agreement.

particularly against embarrassing leakages of test results.. ergo. viz. Wilfreda N. Taking into account the foregoing factors. under the limited context of the case. Petitioners. Respondents Ronaldo D. Simbol (Simbol). WILFREDA N. 1998. ESTRELLA. the reduced expectation of privacy on the part of the employees. 1993. He met Alma Dayrit. PUNO. one of them should resign pursuant to a company policy promulgated in 1995. Comia (Comia) and Lorna E. and is relatively minimal. No. and the well . . All told. New applicants will not be allowed to be hired if in case he/she has [a] relative.: 1. JOSEPHINE ONGSITCO & SEBASTIAN CHUA.e. Josephine Ongsitco is its Manager of the Personnel and Administration Department while Sebastian Chua is its Managing Director. reasonable and. also an employee of the company. Simbol was employed by the company on October 27. G. we hold that the challenged drug test requirement is. J. Prior to the marriage. under RA 9165. Respondents. is accompanied by proper safeguards. Estrella (Estrella) were all regular employees of the company. vs. whom he married on June 27. the intrusion into the employees' privacy. 2006 STAR PAPER CORPORATION. the compelling state concern likely to be met by the search. COMIA & LORNA E.R. SIMBOL. 164774 April 12. Ongsitco advised the couple that should they decide to get married. therefore.defined limits set forth in the law to properly guide authorities in the conduct of the random testing. constitutional.: FACTS: Petitioner Star Paper Corporation (the company) is a corporation engaged in trading – principally of paper products. up to [the] 3rd degree of relationship. already employed by the company.chain of custody. i. RONALDO D.

2. Simbol resigned on June 20. 2000. She returned to work on December 21. Ongsitco likewise reminded them that pursuant to company policy. They stated therein that they have no money and property accountabilities in the company and that they release the latter of any claim or demand of whatever nature. Comia resigned on June 30. Respondents offer a different version of their dismissal. a co-employee. 2000. Simbol and Comia allege that they did not resign voluntarily. they were compelled to resign in view of an illegal company policy. The memorandum stated that she was being dismissed for immoral conduct. She was directed to proceed to the personnel office where one of the staff handed her a memorandum. Comia was hired by the company on February 5. However. 1994. After he got her pregnant. after submission of the explanation. got Estrella pregnant. one of them should resign to preserve the policy stated above. whom she married on June 1. 1998 pursuant to the company policy. 1999. 1997. 1999. she met an accident and was advised by the doctor at the Orthopedic Hospital to recuperate for twenty-one (21) days. In case of two of our employees (both singles [sic]. she was nonetheless dismissed by . also a co-worker. The management asked her to write an explanation. Petitioners stated that Zuñiga. Estrella was hired on July 29. she alleges that she had a relationship with co-worker Zuñiga who misrepresented himself as a married but separated man. The company allegedly could have terminated her services due to immorality but she opted to resign on December 21. She was denied entry. As to respondent Estrella. she discovered that he was not separated. The respondents each signed a Release and Confirmation Agreement. She met Luisito Zuñiga (Zuñiga). On November 30. She met Howard Comia. one male and another female) developed a friendly relationship during the course of their employment and then decided to get married. Thus. one must resign should they decide to get married. she severed her relationship with him to avoid dismissal due to the company policy. 1999 but she found out that her name was on-hold at the gate. She refused to sign the memorandum because she was on leave for twenty-one (21) days and has not been given a chance to explain. a married man.

These courts find the no-spouse employment policy invalid for failure of the employer to present any evidence of business necessity other than the general perception that spouses in the same workplace might adversely affect the business. 2001. she later submitted a letter of resignation in exchange for her thirteenth month pay. Due to her urgent need for money. an employer may not discriminate against an employee based on the identity of the employee’s spouse.the company. They also contended that they were dismissed due to their union membership. the employer must prove two factors: (1) that the employment qualification is . petitioners contend that the Court of Appeals erred in holding that: ISSUE: Whether the subject 1995 policy/regulation is violative of the constitutional rights towards marriage and the family of employees and of Article 136 of the Labor Code HELD: YES. Thus. On appeal to this Court. 2002. they rule that unless the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is no better available or acceptable policy which would better accomplish the business purpose. separation pay and attorney’s fees. This is known as the bona fide occupational qualification exception. Respondents later filed a complaint for unfair labor practice. 2002. the Commission affirmed the decision of the Labor Arbiter on January 11. Respondents filed a Motion for Reconsideration but was denied by the NLRC in a Resolution dated August 8. To justify a bona fide occupational qualification. 2004. On appeal to the NLRC. constructive dismissal. They hold that the absence of such a bona fide occupational qualification invalidates a rule denying employment to one spouse due to the current employment of the other spouse in the same office. Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of merit. They averred that the aforementioned company policy is illegal and contravenes Article 136 of the Labor Code. In its assailed Decision dated August 3. They appealed to respondent court via Petition for Certiorari. On May 31. the Court of Appeals reversed the NLRC decision.

The policy is premised on the mere fear that employees married to each other will be less efficient. who married Howard Comia. the issue as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic. Petitioners’ sole contention that "the company did not just want to have two (2) or more of its employees related between the third degree by affinity and/or consanguinity" is lame. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia. could be detrimental to its business operations. for failure of petitioners to present undisputed proof of a reasonable business necessity. Corollarily. Petitioners failed to show how the marriage of Simbol. If we uphold the questioned rule without valid justification. then a helper in the cutter-machine. Thus. As to respondent Estrella. but were asked to resign when they married a co-employee. then a Production Helper in the Selecting Department. and. We do not find a reasonable business necessity in the case at bar. (2) that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. then a Sheeting Machine Operator. the employer can create policies based on an unproven presumption of a perceived danger at the expense of an employee’s right to security of tenure. That the second paragraph was meant to give teeth to the first paragraph of the questioned rule is evidently not the valid reasonable business necessity required by the law. to Alma Dayrit. the Labor Arbiter and the NLRC based their ruling on the singular fact that her resignation letter was . respondents were hired after they were found fit for the job. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company.reasonably related to the essential operation of the job involved. then an employee of the Repacking Section. we rule that the questioned policy is an invalid exercise of management prerogative. It is significant to note that in the case at bar.

S. The contention of petitioners that Estrella was pressured to resign because she got impregnated by a married man and she could not stand being looked upon or talked about as immoral is incredulous. CRIS PINA A. Nor would she have filed a suit for illegal dismissal and pleaded for reinstatement.S. 2008] SCHOOL OF THE HOLY SPIRIT OF QUEZON CITY AND/OR SR. At first. Estrella’s dismissal is declared illegal. it is illogical for Estrella to resign and then file a complaint for illegal dismissal. she would not have gone back to work at all. the employee is compelled by personal reason(s) to dissociate himself from employment. accompanied by the act of abandonment. July 14. CORAZON P. It is done with the intention of relinquishing an office. PETITIONERS. The respondent court failed to categorically rule whether Estrella voluntarily resigned but ordered that she be reinstated along with Simbol and Comia. 2008 SECOND DIVISION [G. 165565. J.: . she did not want to sign the termination papers but she was forced to tender her resignation letter in exchange for her thirteenth month pay. TAGUIAM. 1999 but was dismissed due to her alleged immoral conduct. Estrella avers that she went back to work on December 21. TOLENTINO. If she really wanted to avoid embarrassment and humiliation. 165565.written in her own handwriting. Gross and Habitual Neglect of Duty School of the Holy Spirit of Quezon City vs.SP. We have held that in voluntary resignation. VS. DECISION QUISUMBING. July 14. Given the lack of sufficient evidence on the part of petitioners that the resignation was voluntary. Both ruled that her resignation was voluntary and thus valid.R. Thus. No. RESPONDENT. GR NO.. Taguiam.

Nevertheless. Thereafter. Petitioners issued a Notice of Administrative Charge to respondent for alleged gross negligence and required her to submit her written explanation. two of them sneaked out. Before the activity started. respondent warned the pupils who did not know how to swim to avoid the deeper area. Respondent also submitted her Affidavit of Explanation. The principal authorized the activity and allowed the pupils to use the swimming pool. while respondent was away. Chiara Mae drowned. respondent distributed the parent's/guardian's permit forms to the pupils. He also noted that the . Taguiam was the Class Adviser of Grade 5-Esmeralda of the petitioner.Facts: Respondent Corazon P. In this connection. the Labor Arbiter declared that respondent was validly terminated for gross neglect of duty. she concluded that Chiara Mae was allowed by her mother to join the activity since her mother personally brought her to the school with her packed lunch and swimsuit. wrote a letter to the grade school principal requesting permission to hold a yearend celebration at the school grounds. Respondent admitted that Chiara Mae Federico's permit form was unsigned. On March 10. Respondent went after them to verify where they were going. the class president. petitioners conducted a clarificatory hearing which respondent attended. Unfortunately. School of the Holy Spirit of Quezon City. In dismissing the complaint. while the pupils were swimming. 2000. However. Petitioners dismissed respondent on the ground of gross negligence resulting to loss of trust and confidence. He opined that Chiara Mae drowned because respondent had left the pupils without any adult supervision.

It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. the same warranted her dismissal since death resulted therefrom. respondent allowed her to join the activity because she assumed that Chiara Mae's mother has allowed her to join it by personally bringing her to the school with her packed lunch and swimsuit. it is undisputed that Chiara Mae's permit form was unsigned. however. Held: Under Article 282 of the Labor Code. which ruled in her favor. The appellate court observed that there was insufficient proof that respondent's negligence was both gross and habitual Issue: Whether respondent's dismissal on the ground of gross negligence resulting to loss of trust and confidence was valid. gross and habitual neglect of duties is a valid ground for an employer to terminate an employee. Yet.absence of adequate facilities should have alerted respondent before allowing the pupils to use the swimming pool. Our perusal of the records leads us to conclude that respondent had been grossly negligent. First . She could have requested . The purpose of a permit form is precisely to ensure that the parents have allowed their child to join the school activity involved. Gross negligence implies a want or absence of or a failure to exercise slight care or diligence. Respondent appealed to the NLRC which. or the entire absence of care. Habitual neglect implies repeated failure to perform one's duties for a period of time. Aggrieved. Respondent admitted that she was around when Chiara Mae and her mother arrived. Respondent cannot simply ignore this by resorting to assumptions. affirmed the dismissal of the complaint. depending upon the circumstances. The Labor Arbiter further concluded that although respondent's negligence was not habitual. respondent instituted a petition for certiorari before the Court of Appeals.

In view of the considerable resultant damage. was not habitual. and payment of special landing fees not to mention the soaring costs of replacing aircraft parts. In the light of the odds involved. although gross.the mother to sign the permit form before she left the school or at least called her up to obtain her conformity. She should have been mindful of the fact that with the number of pupils involved. In Philippine Airlines. however. This is not the first time that we have departed from the requirements laid down by the law that neglect of duties must be both gross and habitual. we are in agreement that the cause is sufficient to dismiss respondent. respondent should have considered that those who sneaked out could not have left the school premises since there were guards manning the gates. we ruled that Philippine Airlines (PAL) cannot be legally compelled to continue with the employment of a person admittedly guilty of gross negligence in the performance of his duties although it was his first offense. Notably. majority of the pupils were left unsupervised when she followed the two pupils who sneaked out. the possibility of law suits. But those who stayed at the pool were put at greater risk. Thus. it was respondent's responsibility as Class Adviser to supervise her class in all activities sanctioned by the school. In that case. respondent's negligence. such as adequate first aid and sufficient adult personnel. National Labor Relations Commission. it would be impossible for her by herself alone to keep an eye on each one of them. Second. we noted that a mere delay on PAL's flight schedule due to aircraft damage entails problems like hotel accommodations for its passengers. In another case. when she left them unattended by an adult. were present during their activity. she should have coordinated with the school to ensure that proper safeguards. The guards would not have allowed them to go out in their swimsuits and without any adult accompanying them. Inc. v. NLRC. Fuentes v. since respondent was the only adult present. we held that it would be unfair to compel Philippine Banking Corporation to continue employing its bank . As it turned out. re-booking.

SMART entered into a joint venture agreement with NTT of Japan. January 28. Since SNMI was formed to do the sales and marketing work. she was not recommended by SMART. J. Astorga’s division. The deposit slip had already been validated prior to its loss and the amount reflected thereon is already considered as current liabilities in the bank's balance sheet.teller. 1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). a substantial amount of money was lost. and formed SMART-NTT Multimedia. Part of the reorganization was the outsourcing of the marketing and sales force. To soften the blow of the realignment. Astorga. Indeed. offered her a supervisory position in the Customer Care Department. . Thus. Astorga landed last in the performance evaluation. but she refused the offer because the position carried lower salary rank and rate. In this case. SMART then conducted a performance evaluation of CSMG personnel and those who garnered the highest ratings were favorably recommended to SNMI. we observed that although the teller's infraction was not habitual. 1998. Incorporated (SMART) on May 8. the damage went as far as claiming the life of a child. This was made known to the employees on February 27. In that case. Incorporated (SNMI).: Facts: Regina M. Redundancy Smart Communications vs. the sufficiency of the evidence as well as the resultant damage to the employer should be considered in the dismissal of the employee. thus. SMART. Astorga (Astorga) was employed by respondent Smart Communications. SMART abolished the CSMG/FSD. SNMI agreed to absorb the CSMG personnel who would be recommended by SMART. SMART launched an organizational realignment to achieve more efficient operations. nonetheless. 2008 DECISION NACHURA.

It overruled the Labor Arbiter’s ruling that SNMI is an in-house agency. effective April 3. Declaring the abolition of CSMG and the creation of SNMI to do the sales and marketing services for SMART as a valid organizational action. terminating her employment was illegal for it violated her right to security of tenure. Astorga continued reporting for work. holding that it lacked legal basis. but the NLRC denied it. The termination of her employment prompted Astorga to file a Complaint for illegal dismissal. The redundancy of Astorga’s position was the result of the abolition of CSMG and the creation of a specialized and more technically equipped SNMI. She also posited that it was illegal for an employer.Despite the abolition of the CSMG/FSD. SMART responded that there was valid termination. She claimed that abolishing CSMG and. 1998. The Labor Arbiter ordered that the dismissal of Astorga is illegal and unjust. Astorga filed a motion for reconsideration. . But on March 3. It rejected Astorga’s posturing that her non-absorption into SNMI was tainted with bad faith. the CA found that SMART failed to comply with the mandatory one-month notice prior to the intended termination. However. like SMART. On appeal the National Labor Relations Commission (NLRC) sustained Astorga’s dismissal. which is a valid and legitimate exercise of management prerogative. 1998. The CA agreed with the NLRC that the reorganization undertaken by SMART resulting in the abolition of CSMG was a legitimate exercise of management prerogative. SMART issued a memorandum advising Astorga of the termination of her employment on ground of redundancy. It argued that Astorga was dismissed by reason of redundancy. non-payment of salaries and other benefits with prayer for moral and exemplary damages against SMART and Ann Margaret V. especially if the contractor is an in-house agency. consequently. which is an authorized cause for termination of employment. to contract out services which will displace the employees. 1998. and the dismissal was effected in accordance with the requirements of the Labor Code. Astorga then went to the CA via certiorari. Astorga received it on March 16. Santiago (Santiago).

Moreover. in any well organized business enterprise. decreased volume of business. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Issue: Whether Astorga’s dismissal based on redundancy is valid? Held: The nature of redundancy as an authorized cause for dismissal is explained in the leading case of Wiltshire File Co. v. it would be surprising to find duplication of work and two (2) or more people doing the work of one person. is an exercise of business judgment on the part of the employer.. such as Astorga.Accordingly. therefore. while SMART sought partial reconsideration. Astorga filed a motion for reconsideration. of course. form SNMI and abolish CSMG/FSD simply for the sole purpose of easing out a particular employee. the CA partially granted astorga’s motion while SMART was denied. and superfluity of a position or positions may be the outcome of a number of factors. such as overhiring of workers. National Labor Relations Commission. but she refused the offer because the position . or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. for purposes of the Labor Code. Succinctly put. the CA imposed a penalty equivalent to Astorga’s one-month salary for this non-compliance. The characterization of an employee’s services as superfluous or no longer necessary and. that a violation of law or arbitrary or malicious action is not shown. It is extremely difficult to believe that SMART would enter into a joint venture agreement with NTT. Inc. The wisdom and soundness of such characterization or decision is not subject to discretionary review provided. That no other person was holding the same position that private respondent held prior to termination of his services does not show that his position had not become redundant.35 viz: x x x redundancy in an employer’s personnel force necessarily or even ordinarily refers to duplication of work. properly terminable. We believe that redundancy. Astorga never denied that SMART offered her a supervisory position in the Customer Care Department. a position is redundant where it is superfluous. Indeed.

an employer is not precluded from adopting a new policy conducive to a more economical and effective management even if it is not experiencing economic reverses. 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 x x x. In the written notice. Closure of establishment and reduction of personnel. as aptly found by the CA. However. 283. 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. In this case. If indeed SMART simply wanted to get rid of her. SMART failed to comply with the mandated one (1) month notice prior to termination. Astorga also states that the justification advanced by SMART is not true because there was no compelling economic reason for redundancy. 1998 or less than a month prior to its effectivity on April 3. 1998. the Department of Labor and Employment was notified of the redundancy program only on March 6. — The employer may also terminate the employment of any employee due to the installation of labor saving devices. But contrary to her claim.carried a lower salary rank and rate. redundancy. notwithstanding . at least a month prior to the effectivity of such termination. Likewise. it would not have offered her a position in any department in the enterprise. the employees are informed of the specific date of the termination. SMART’s assertion that Astorga cannot complain of lack of notice because the organizational realignment was made known to all the employees as early as February 1998 fails to persuade. Article 283 of the Labor Code clearly provides: Art. 1998. The record is clear that Astorga received the notice of termination only on March 16. Astorga’s actual knowledge of the reorganization cannot replace the formal and written notice required by the law. Neither does the law require that the employer should suffer financial losses before he can terminate the services of the employee on the ground of redundancy. to give them sufficient time to find other suitable employment or to make whatever arrangements are needed to cushion the impact of termination.

falsification of or inducing another . this procedural infirmity would not render the termination of Astorga’s employment illegal. This Court upheld the dismissal. Be that as it may. but held the employer liable for non-compliance with the procedural requirements. But such notice was received by Astorga barely two (2) weeks before the effective date of termination. February 29. a period very much shorter than that required by law. we found the dismissal of the employees therein valid and for authorized cause even if the employer failed to comply with the notice requirement under Article 283 of the Labor Code. sale of a voluminous quantity of damaged toys and ready-to-wear items at unreasonable prices. she remained uncertain about the status of her employment until SMART gave her formal notice of termination. 2008 G.Astorga’s knowledge of the reorganization.R. a Full Assistant Store Manager received a Memorandum issued by the Store Manager Apduhan summarizing the various reported incidents signifying unsatisfactory performance on the latter's part which include the commingling of good and damaged items. 154503 February 29. NLRC. Another Memorandum was issued which claimed that the answers given by the private respondent were all hypothetical and did not answer directly the allegations attributed to her. CA. In DAP Corporation v. and failure to submit inventory reports. 2008 FACTS: Amalia Kawada. No. Apduhan sent another Memorandum seeking from the private respondent an explanation regarding the incidents reported by Uniwide employees and security personnel for alleged irregularities committed by the private respondent such as allowing the entry of unauthorized persons inside a restricted area during non-office hours. The validity of termination can exist independently of the procedural infirmity of the dismissal. Constructive Dismissal Uniwide Sales Warehouse Club vs.

Dr. Zambrano a certificate of fitness to work. 1998. Subsequently. private respondent sought medical help from the company physician. On August 8. advising . alteration of approval slips for the purchase of damaged items and abandonment of work. 1998. 1998. Apduhan issued a Memorandum. unauthorized search and bringing out of company records. On July 27. On August 2. which the latter received on even date. private respondent answered the allegations made against her. Apduhan's assistant approached the private respondent to get the certification so that it may be photocopied. purchase of damaged home furnishing items without the approval from superior. in the medical certificate instead of private respondent's surname.employee to falsify personnel or company records. sleeping and allowing a non-employee to sleep inside the private office." the surname of the company nurse. It turned out that Dr. advising Kawada of a hearing scheduled on August 12. private respondent claims that Apduhan once again shouted at her which caused her hypertension to recur and eventually caused her to collapse. Zambrano advised her to take five days sick leave. Dr. Thereafter. Apduhan sent a letter addressed to private respondent. After private respondent left Apduhan's office. In a letter. taking advantage of buying damaged items in large quantity. Zambrano inadvertently wrote "Menia. Finding private respondent to be suffering from hypertension. private respondent claims that Apduhan shouted at her and prevented her from resuming work because she was not the person referred to in the medical certificate. Zambrano. Private respondent's head hit the edge of the table before she fell down on the ground for which she suffered contusions at the back of her head. 1998. which she presented to Apduhan the following day. due to complaints of dizziness. When she refused to give the certification. 1998 and warning her that failure to appear shall constitute as waiver and the case shall be submitted for decision based on available papers and evidence. private respondent filed a case for illegal dismissal before the Labor Arbiter (LA). private respondent was able to obtain from Dr. On August 3.

Private respondent received successive memoranda from Apduhan accusing the former of different infractions. 1998 hearing. private respondent was subjected to inhuman and antisocial treatment oppressive to labor. . as she had been absent since August 1. Kawada was thereafter terminated from her employment on the grounds of violations of Company Rules. The Labor Arbiter denied the complaint of Kawada for lack of merit while the NLRC on appeal reversed the decision of the Labor Arbiter ordering UNiwide to pay separation pay. some of which offenses complainant was informed of only a year after the alleged commission. 1998 and after she had already filed her complaint. the case was evaluated on the basis of the evidence on record. while Apduhan knew for a fact that the same could not have referred to another person but to private respondent. 1998.private respondent to report for work. ISSUE: Whether or not resondent was constructively dismissed. 1998. On September 1. 1998 after her constructive dismissal on July 31. Also. and that there was no point for private respondent to still attend the investigation set on August 12. backwages and moral and exemplary damages. the latter's defenses and the corresponding findings by Uniwide. she shall be considered to have abandoned her job. Apduhan's ill will and motive to edge private respondent out of her employ was displayed by Apduhan's stubborn refusal to allow private respondent to continue her work on the flimsy excuse that the medical certificate did not bear her correct surname. Further. and warning her that upon her failure to do so. and enumerating the pieces of evidence of the irregularities and violations of company rules committed by private respondent. Apduhan issued a Memorandum stating that since private respondent was unable to attend the scheduled August 12. the NLRC observed that private respondent was not afforded due process by petitioners because the former was not given an opportunity to a fair hearing in that the investigation was conducted after private respondent had been constructively dismissed. Abandonment of Work and loss of trust and confidence. According to the NLRC.

when there is a demotion in rank or diminution in pay or both. 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.HELD: No. the employee who is constructively dismissed may be allowed to keep on coming to work. but petitioners' compliance with the requirements of due process. Precisely. petitioners gave private respondent successive memoranda so as to give the latter an opportunity to controvert the charges against her. pertains in the first place to the employer. . or when a clear discrimination. when uncorroborated by the evidence on record. unreasonable or unlikely. In fact. cannot be given credence. the memoranda are not forms of harassment. 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. 1998 confrontation where Apduhan allegedly shouted at private respondent which caused the latter's hypertension to recur and eventually caused her to collapse cannot by itself support a finding of constructive dismissal by the NLRC and the CA. 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. It is an act amounting to dismissal but made to appear as if it were not. Case law defines constructive dismissal as a cessation of work because continued employment is rendered impossible. Clearly. The July 31. the act of Apduhan in shouting at private respondent was an isolated outburst on the part of Apduhan that did not show a clear discrimination or insensibility that would render the working condition of private respondent unbearable. Even if true. as well as the authority to determine the existence of said cause in accordance with the norms of due process. Private respondent's bare allegations of constructive dismissal. Constructive dismissal is therefore a dismissal in disguise. The right to impose disciplinary sanctions upon an employee for just and valid cause. or disdain by an employer becomes unbearable to the employee. insensibility.

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. The employer has the burden of proof to show the employee's deliberate and unjustified refusal to resume his employment without any intention of returning. To repeat. mere existence of a basis for believing that . well-settled is the rule that to constitute abandonment of work. insensibility or disdain which was tantamount to constructive dismissal. Thus. The Court finds that petitioners were not able to establish that private respondent deliberately refused to continue her employment without justifiable reason. Mere absence is not sufficient. private respondent filed a case for constructive dismissal against petitioners and consequently stopped reporting for work. Private respondent mistakenly believed that the successive memoranda sent to her from March 1998 to June 1998 constituted discrimination.On petitioners' claim of abandonment by private respondent. two elements must concur: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason. As a managerial employee. Private respondent occupies a managerial position. 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 or willful breach by the employee of the trust reposed on him by his employer or a duly authorized representative. 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. 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. There must be an unequivocal intent on the part of the employee to discontinue his employment. 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.

Two staff members were assigned to work with him to assist him in undertaking these functions. Job Expectations.such employee has breached the trust of his employer would suffice for his dismissal. On the pretext of retrenchment. Peñaflor claimed that he was among those who bore Syfu’s ire. left the company after a big fight between Lee and Chief Corporate Officer Nathaniel Syfu (Syfu). 177114 January 21. NATHANIEL T. Because of his close association with Lee. SYFU. President. 2010 G.R. (2) maintain the harmonious relationship between the employees and management in a role that supports organizational goals and individual aspirations. and PAUL U. Chairman BRION.. DEMOGENA. Peñaflor was hired on September 2. he designed and created the company’s Policy Manual. Penaflor vs. 1999 as probationary Human Resource Department (HRD) Manager of respondent Outdoor Clothing Manufacturing Corporation (Outdoor Clothing or the company). His woes began when the company’s Vice President for Operations. MEDYLENE M. J. Edgar Lee (Lee).. Peñaflor alleged that his department had been singled out. Peñaflor was expected to (1) secure and maintain the right quality and quantity of people needed by the company. Finance Manager. and Organizational Set-Up during this period. Personnel Handbook. No. Peñaflor claimed that his relationship with Outdoor Clothing went well during the first few months of his employment. OUTDOOR CLOTHING MANUFACTURING CORPORATION. and (3) represent the company in labor cases or proceedings. January 21. PEÑAFLOR vs. LEE. Peñaflor’s two staff members were dismissed. As HRD head. leaving him as the only member of Outdoor Clothing’s HRD and . 2010 MANOLO A. When Outdoor Clothing began undertaking its alleged downsizing program due to negative business returns. Outdoor Clothing Manufacturing Corp.

but was surprised when the company deducted six days’ salary corresponding to the time he assisted Padilla. Peñaflor then filed a complaint for illegal dismissal with the labor arbiter. carrying out all clerical.compelling him to perform all personnel-related work. In his August 15. 2001 decision. 2000 to the entire office stating that Buenaobra was the concurrent HRD and Accounting Manager. he personally went to various government offices to process the company’s papers. He tried to talk to Syfu to clarify the matter. suffered injuries in a bombing incident. After Peñaflor returned from his field work on March 13. He worked as a one-man department. and to pay him his illegally deducted salary . As he was acting on the company’s orders. but was unable to do so. he failed to submit his trip ticket. attorney’s fees. He included in his complaint a prayer for reinstatement and payment of backwages. he had no option but to resign. the company required Peñaflor to attend to her hospitalization needs. and other monetary claims. This information was confirmed by Syfu’s memorandum of March 10. claiming that he had been constructively dismissed. administrative and liaison work. According to Finance Manager Medylene Demogena (Demogena). Outdoor Clothing was consequently ordered to reinstate Peñaflor to his former or to an equivalent position. Syfu had appointed Nathaniel Buenaobra (Buenaobra) as the new HRD Manager. he had to work outside office premises to undertake this task. Peñaflor was surprised by the news. he also felt betrayed and discouraged. his officemates informed him that while he was away. He submitted a letter to Syfu declaring his irrevocable resignation from his employment with Outdoor Clothing effective at the close of office hours on March 15. illegally deducted salaries. When an Outdoor Clothing employee. damages. Peñaflor claimed that under these circumstances. 2000. the labor arbiter found that Peñaflor had been illegally dismissed. Lynn Padilla (Padilla). but Peñaflor belied this claim as a trip ticket was required only when a company vehicle was used and he did not use any company vehicle when he attended to his offpremises work. Peñaflor considered himself to be on official business. 2000.

proportionate 13th month pay. It insisted that Peñaflor had not been constructively dismissed. in the latter case making it a constructive dismissal equivalent to an illegal dismissal. This question also gives rise to the side issue of when Buenaobra’s appointment was made. A critical fact necessary in resolving this issue is whether Peñaflor filed his letter of resignation before or after the appointment of Buenaobra as the new/concurrent HRD manager. the company simply exercised its management prerogative to address the financial problems it faced. Peñaflor filed with us the present petition for review on certiorari. claiming that Peñaflor tendered his resignation on March 1. Buenaobra’s appointment was made only after Peñaflor had submitted his resignation letter. Peñaflor was not eased out from his position as HRD manager. and this was made to cover the vacancy Peñaflor’s resignation would create. the CA affirmed the NLRC’s decision. Outdoor Clothing appealed the labor arbiter’s decision with the NLRC. but to Outdoor Clothing’s downward financial spiral. In the absence of any illegal dismissal. drafted the dismissal letters of his staff members. The CA ruled that Peñaflor’s resignation was knowingly and voluntarily made. If the resignation letter was . Thus. not to the allegedly degrading and hostile treatment that he was subjected to by Syfu.for six days. 2006. moral and exemplary damages. THE ISSUE and THE COURT’S RULING The Court finds the petition meritorious. It characterized Peñaflor’s resignation as a response. Peñaflor. stating that Peñaflor failed to present sufficient evidence supporting his claim that he had been constructively dismissed.Faced with these CA actions. In a decision dated December 29. no basis existed for the monetary awards the labor arbiter granted. 2000 because he saw no future with the corporation due to its dire financial standing. attorney’s fees. in fact. The petition turns on the question of whether Peñaflor’s undisputed resignation was a voluntary or a forced one. No malice likewise was present in the company’s decision to dismiss Peñaflor’s two staff members. The NLRC apparently found Outdoor Clothing’s submitted memoranda sufficient to overturn the labor arbiter’s decision.

Peñaflor claims that he wrote and filed the letter on the same date he made his resignation effective – March 15. Thus. 15. Despite Peñaflor’s claim of having impressive intellectual and academic credentials. The circumstances and other evidence surrounding Peñaflor’s resignation support his claim that he was practically compelled to resign from the company. namely. on the other hand. 2000 memorandum accepting his appointment. which informed the office of the appointment of Buenaobra as the concurrent Head of HRD – the position that Peñaflor occupied. 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 . then factual basis exists indicating that Peñaflor had been constructively dismissed as his resignation was a response to the unacceptable appointment of another person to a position he still occupied. for some reason. allegedly sent to Penaflor. his resignation letter. Syfu’s memorandum cited Peñaflor’s intention to resign so he could devote his time to teaching. contends that the letter was submitted on March 1. the AWOL memoranda of March 6 and 11.submitted before Syfu’s appointment of Buenaobra as new HRD manager. Two other memoranda are alleged to exist.e. 2000. The question of when Peñaflor submitted his resignation letter arises because this letter – undisputably made – was undated. for which reason Syfu issued a memorandum of the same date appointing Buenaobra as the concurrent HRD manager.. i. Outdoor Clothing. The company further cites in support of its case Buenaobra’s March 3. 2000. Another piece of evidence is the Syfu memorandum of March 10. 2000. on the same day that it was submitted. was undated. Buenaobra’s appointment would then be simply intended to cover the vacancy created by Peñaflor’s resignation. little support exists for Peñaflor’s allegation that he had been forced to resign due to the prevailing abusive and hostile working environment. if the resignation letter was submitted after the appointment of Buenaobra. the parties have directly opposing claims on the matter. Several reasons arising directly from these pieces of evidence lead us to conclude that Peñaflor did indeed submit his resignation letter on March. 2000. On the other hand. 2000.

In sum. There can be no valid resignation where the act was made under compulsion or under circumstances approximating compulsion. 2000 that he was told. it is more consistent with human experience that Peñaflor indeed learned of the appointment of Buenaobra only on March 13. three of them acknowledged receipt on March 13. this memorandum properly bore signatures acknowledging receipt and dates of receipt by at least five company officials. 2000. showing that indeed it was only on that day that the appointment of Buenaobra to the HRD position was disclosed.and HRD Manager. such as when an employee’s act of handing in his resignation was a reaction to circumstances leaving him no alternative but to resign. informally at that. among them the readable signature of Demogene and one Agbayani. In our view. 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. Last but not the least. 2000 and reacted to this development through his resignation letter after realizing that he would only face hostility and frustration in his working environment. 2000. In contrast with the suspect memoranda we discussed above. the company must still prove that the employee voluntarily resigned. That Peñaflor did indeed file a letter of resignation does not help the company’s case as. This evidence is fully consistent with Peñaflor’s position that it was only in the afternoon of March 13. It explains as well why as late as March 13. other than the fact of resignation. the employer bears the burden of proving that the employee’s dismissal was for just and valid cause. Peñaflor still prepared and signed a security report. we have repeatedly given significance in abandonment and constructive dismissal cases to the employee’s reaction to the termination of his employment and have asked the question: is the complaint against the employer merely a convenient afterthought subsequent to abandonment or a voluntary resignation? We find from the records that Peñaflor sought . that Buenaobra had taken over his position. Three very basic labor law principles support this conclusion and militate against the company’s case. The first is the settled rule that in employee termination disputes. the evidence does not support the existence of voluntariness in Peñaflor’s resignation.

23 February 2007 CARPIO MORALES.: FACTS: Federito B. AND ROSARIO K. BALAIS G.almost immediate official recourse to contest his separation from service through a complaint for illegal dismissal. but was later transferred on December 1. arising from a statement of . his immediate complaints characterize him as one who deeply felt that he had been wronged. 2000.R. NATIONAL LABOR RELATIONS COMMISSION. 1995 to the Tower and Exchange Plaza of Ayala Center where he worked as a computer operator at the Console Room. PIDO v. (respondent) as a security guard. Pido (petitioner) was hired on October 1. INC. petitioner was under the operational control and supervision of the Ayala Security Force (ASF) of the Ayala Group of Companies. No. Floating Status FEDERITO B. This is not the act of one who voluntarily resigned. responsible for observing occurrences that transpire inside elevators and other areas in buildings which are recorded by surveillance cameras and relayed to monitors. Like the other guards deployed by respondent at the Ayala Center. petitioner had an altercation with Richard Alcantara (Alcantara) of the ASF.. 1995 by Cherubim Security and General Services. J. 169812. He was assigned at the Ayala Museum. On January 21. CHERUBIM SECURITY AND GENERAL SERVICES. Inc.

meal and travel allowance and night shift differential against respondent. As more than nine months had elapsed since the investigation was conducted by respondent with no categorical findings thereon made. petitioner angrily and on top of his voice questioned his authority. In its position paper. On January 23. Alcantara filed a complaint for Gross Misconduct. Balais (Rosario) who was allegedly responsible for running the day to day affairs of respondent’s business. rest day. and that immediate disciplinary action against him be taken. petitioner filed on October 23. Petitioner thus filed an information report wherein he narrated that Alcantara confronted him on January 21. 2000. and nonpayment and underpayment of salaries. 2000 a complaint for illegal constructive dismissal. on account of which he ordered the payment of separation pay . saying “pahinga muna ako [I will in the meantime take a rest]. On even date. petitioner reported for work at the Ayala Center but he was not allowed to stay in the premises. And Alcantara recommended that petitioner be relieved from his post. service incentive leave. along with its employee Rosario K. 2000 about his right to carry a firearm and afterwards tried to grab it from its holster. attorney’s fees and other money claims. it claiming that while it was still in the process of investigating the January 21. 13th month pay. 2000 incident.38 caliber revolver service firearm and duty detail order had already expired. claiming that when he directed petitioner to present his security license.” The Labor Arbiter ruled that petitioner’s suspension for more than nine months had ripened into constructive termination. resulting in a heated argument between them. it offered petitioner another assignment which he declined.Alcantara that petitioner’s security license for his . illegal suspension. respondent denied that it dismissed petitioner from the service. Petitioner likewise prayed for reinstatement and payment of full backwages. holiday pay. a Recall Order having been issued by respondent through its Operations Manager.

equivalent to one month salary of P8. The appellate court sustained the findings of the Labor Arbiter and the NLRC that while a security guard. given respondent’s willingness to assign petitioner to another post which he declined. may be lawfully placed on a “floating status. The NLRC modified the decision of the Labor Arbiter. like petitioner. or the fulfillment of the employee of a military or civic duty shall not terminate employment. viz: ART. . otherwise the security agency could be liable for constructive dismissal under Article 286 of the Labor Code. Petitioner’s motion for reconsideration having been denied by the NLRC by Resolution. In all such cases.” the same should continue only for six months.000. the NLRC denied petitioner’s claim for backwages. . While it found that petitioner was indeed constructively dismissed.The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months. 286. 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. On the same ground. The appellate court upheld the NLRC decision and accordingly dismissed petitioner’s appeal. found that there was insufficient evidence to support petitioner’s assertion that he was entitled to his money claims. It merely ordered his reinstatement. maintaining that his suspension for more than nine months amounted to constructive dismissal to entitle him to separation pay and backwages. he filed a petition for certiorari with the Court of Appeals. it set aside the award of separation pay. The Arbiter.000 for every year of service. or for the total amount of P32. When employment not deemed terminated. however. Both parties appealed to the National Labor Relations Commission (NLRC).

The paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work. a floating status requires the dire exigency of the employer's bona fide suspension of operation of a business or undertaking. there is no termination of employment but only a temporary displacement of employees. In security services. RULING: The Supreme Court finds that. indeed. petitioner was constructively dismissed. resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. Also. the temporary "off-detail" of guards takes place when the security agency's clients decide not to renew their contracts with the security agency. albeit the displacement should not exceed six (6) months. .ISSUE: Whether or not petitioner’s nine-month suspension is tantamount to constructive dismissal. In security services. Verily. the replaced security guard may be placed on temporary “off-detail” if there are no available posts under respondent’s existing contracts. In such a case. in instances when 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. but not on the grounds advanced by the appellate court. this happens when the security agency’s clients which do not renew their contracts are more than those that do and the new ones that the agency gets. Article 286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a period not exceeding six (6) months. which echoed those of the NLRC and the Labor Arbiter.

When a security guard is placed on a “floating status,” he does
not receive any salary or financial benefit provided by law. Due to
the grim economic consequences to the employee, the employer
should bear the burden of proving that there are no posts
available to which the employee temporarily out of work can be
assigned. This, respondent failed to discharge.
As per the Recall Order, it can be gathered that respondent
intended to put petitioner under preventive suspension for an
indefinite period of time pending the investigation of the
complaint against him. The allowable period of suspension in
such a case is not six months but only 30 days, following Sections
8 and 9 of Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code (Implementing Rules). Hence, in
the event the employer chooses to extend the period of
suspension, he is required to pay the wages and other benefits
due the worker and the worker is not bound to reimburse the
amount paid to him during the extended period of suspension
even if, after the completion of the hearing or investigation, the
employer decides to dismiss him.
Respondent did not inform petitioner that it was extending its
investigation, nor did it pay him his wages and other benefits
after the lapse of the 30-day period of suspension. Neither did
respondent issue an order lifting petitioner’s suspension, or any
official assignment, memorandum or detail order for him to
assume his post or another post. Respondent merely chose to
dawdle with the investigation, in absolute disregard of
petitioner’s welfare.
At the time petitioner filed the complaint for illegal suspension
and/or constructive dismissal on October 23, 2000, petitioner
had already been placed under preventive suspension for nine
months. To date, there is no showing or information that, if at
all, respondent still intends to conclude its investigation.
This Court thus rules that petitioner’s prolonged suspension,
owing to respondent’s neglect to conclude the investigation, had
ripened to constructive dismissal.

Kimberly Clark Phils. Inc. vs. Dimayuga, September 18, 2009
Magdadaro vs. PNB, July 17, 2009
G.R. No. 166198
July 17, 2009
Marcelino A. Magdadaro (petitioner) was employed by Philippine
National Bank (respondent) since 8 January 1968. On 21
September 1998, petitioner filed his application for early
retirement under respondent’s Special Separation Incentive
Program (SSIP). Petitioner was then holding the position of
Senior Assistant Manager of respondent’s Branch Operations
and Consumer Finance Division for the Visayas. Petitioner stated
in his application that 31 December 1999 was his preferred
effective date of retirement.
Respondent approved petitioner’s application for early
retirement but made it effective on 31 December 1998. Petitioner
protested the acceleration of his retirement. He received, under
protest, his retirement and separation benefits amounting to
P908,950.44. On 18 October 1999, petitioner filed a complaint
for illegal dismissal and payment of moral, exemplary and actual
damages against respondent before the Regional Arbitration
Branch No. VII of the National Labor Relations Commission
(NLRC), Cebu City.
The Ruling of the Labor Arbiter and the NLRC
In a Decision dated 3 August 2000, the Labor Arbiter ruled that
respondent had the discretion and prerogative to set the
effective date of retirement under the SSIP. The Labor Arbiter
ruled that respondent’s insistence on the date of effectivity of
petitioner’s retirement was not tantamount to illegal dismissal.
The Labor Arbiter ruled that there was no dismissal to speak of
because petitioner voluntarily availed of the SSIP. Still, the Labor
Arbiter granted petitioner’s preferred date of retirement and
awarded him additional retirement benefits.
Both petitioner and respondent appealed from the Labor

Arbiter’s Decision.
In its 4 March 2003 Decision, the NLRC affirmed the Labor
Arbiter’s Decision. However, the NLRC considered petitioner’s
retirement on 31 December 1998 as tantamount to illegal
dismissal. The NLRC ruled that while it recognized respondent’s
prerogative to change petitioner’s retirement date, management
prerogative should be exercised with prudence and without
Petitioner and respondent filed their respective motions for
reconsideration. In its 24 July 2003 Resolution, the NLRC denied
both motions for reconsideration for lack of merit.
Respondent filed a petition for certiorari before the Court of
The Ruling of the Court of Appeals
The Court of Appeals granted the petition. The Court of Appeals
ruled that the NLRC acted with grave abuse of discretion in
affirming the decision of the Labor Arbiter, while at the same
time finding that petitioner’s retirement was tantamount to
illegal dismissal.
The Court of Appeals held that petitioner voluntarily applied for
the SSIP. The Court of Appeals ruled that petitioner could not
claim to have been illegally dismissed just because the date of
effectivity of his retirement did not conform to his preferred
retirement date.
Petitioner filed a motion for reconsideration. In its 6 December
2004 Resolution, the Court of Appeals denied the motion.
The Issue
The only issue in this case is whether petitioner was illegally
dismissed from employment.
The Ruling of this Court
The petition has no merit.
Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee
whereby the latter, after reaching a certain age, agrees to sever
his or her employment with the former. Retirement is provided
for under Article 287 of the Labor Code, as amended by Republic
Act No. 7641, or is determined by an existing agreement
between the employer and the employee.
In this case, respondent offered the SSIP to overhaul the bank

vs. Employees who wished to avail of the SSIP were required to accomplish a form for availment of separation benefits under the SSIP and to submit the accomplished form to the Personnel Administration and Industrial Relations Division (PAIRD) for approval. August 9. No. He only questioned the approval of his retirement on a date earlier than his preferred retirement date. Severino Santos Transit. More importantly. . 2010 G. The Labor Arbiter ruled that petitioner was not illegally dismissed from the service.structure and to allow it to effectively compete with local peer and foreign banks. The NLRC ruled that it could not imagine how petitioner’s continued employment until 31 December 1999 would impair the delivery of bank services and attribute bad faith on respondent when it accelerated petitioner’s retirement. SSIP was not compulsory on employees. Petitioner. Serrano vs. (Emphasis supplied) It is clear that it is within respondent’s prerogative to set the date of effectivity of retirement and it may not be necessarily what is stated in the application. He accomplished the application form and submitted it to the PAIRD. as well as in setting the effectivity dates for separation within the implementation period of the Plan. Petitioner voluntarily availed of the SSIP.R.SEVERINO SANTOS TRANSIT and/or SEVERINO SANTOS. 2010 RODOLFO J. Whether petitioner’s early retirement within the SSIP period will improve or impair the delivery of bank services is a business decision properly within the exercise of management prerogative. 187698 August 9. SERRANO. Even the NLRC ruled that petitioner could no longer withdraw his application for early retirement under the SSIP. However. Respondents.1avvphi1 We do not agree. the NLRC ruled that respondent could not accelerate the petitioner’s retirement date. Management shall have the discretion and prerogative in approving the applications filed under the Plan. the SSIP provides: 7.

5 days per year of service to include the cash equivalent of the 5-day service incentive leave (SIL) and 1/12 of the 13th month pay which the company did not. computed by the company at 15 days per year of service. As thus correctly ruled by the Labor Arbiter.45 which he received. The Labor Arbiter ruled in favor of Serrano.FACTS: Petitioner Rodolfo Serrano has been an employee of Severino Santos Transit for 14 years. it was likewise decisively made clear that "the law expanded the concept of "one-half month salary" from the usual one-month salary divided by two." (under protest) after his signature. In the same Labor Advisory on Retirement Pay Law.277. in any event. Even if petitioner as bus conductor was paid on commission basis then. 7641. The company maintained. Petitioner soon after filed a complaint before the Labor Arbiter. petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. its computation was correct since petitioner was not entitled to the 5-day SIL and pro-rated 13th month pay for. as a bus conductor. petitioner’s retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th month pay.P. Admittedly. However. the National Labor Relations Commission (NLRC) to which respondents appealed reversed the Labor Arbiter’s ruling and dismissed petitioner’s complaint. his retirement pay should have been computed at 22. ISSUE: Whether or not petitioner is entitled to the computation of retirement pay as given by RA 7641 HELD: Yes. he was paid on commission basis. alleging that the company erred in its computation since under Republic Act No. Petitioner applied for optional retirement from the company whose representative advised him that he must first sign the already prepared Quitclaim before his retirement pay could be released. otherwise known as the Retirement Pay Law.A. that the Quitclaim signed by petitioner barred his claim and. As petitioner’s request to first go over the computation of his retirement pay was denied. indicating his protest to the amount of P75. . he signed the Quitclaim on which he wrote "U. 7641 and its implementing rules. he falls within the coverage of R. however.

however. A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. In practice. the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty. of applying the law on SIL. They retain only those sums in excess of the "boundary" or fee they pay to the owners or operators of the vehicles. they are paid specific amount for rendering specific service or performing specific work. According to the Implementing Rules.For purposes. employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave. unless. taxi drivers do not receive fixed wages. As a general rule. they fall under the classification of field personnel. Service Incentive Leave shall not apply to employees classified as "field personnel. purely commission basis. [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative. as well as on retirement. are paid a certain percentage of the bus’ earnings for the day." applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow. hence. the Court notes that there is a difference between drivers paid under the "boundary system" and conductors who are paid on commission basis." Said phrase should be related with "field personnel.7 Conductors. If . it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable certainty." The phrase "other employees whose performance is unsupervised by the employer" must not be understood as a separate classification of employees to which service incentive leave shall not be granted. on the other hand." The same is true with respect to the phrase "those who are engaged on task or contract basis. Rather. Hence.

high academic qualifications and research background. No. Because of AMACC’s action on the salary increases. while petitioner Tonog was engaged as an Assistant Professor 2. MERCADO. and FELIX A. TONOG vs. Lachica and Alba. employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. On the other hand. One of AMACC’s biggest schools in the country is its branch at Parañaque City. CHARITO S. AMA Computer College. hence AMACC did not give them any salary increase. 2010 G. The petitioners were faculty members who started teaching at AMACC on May 25. LACHICA. BRION. Under the new screening guidelines. DE LEON. petitioners De Leon. The petitioner Mercado was engaged as a Professor 3. set forth in its Guidelines on the Implementation of AMACC Faculty Plantilla..: Facts: AMACC is an educational institution engaged in computerbased education in the country. JR. Probationary Status of Fixed Term Employees Mercado vs. AMACC implemented new faculty screening guidelines..April 13. 183572. teachers were to be hired or maintained based on extensive teaching experience. DIANA R. INC. The performance standards under the new screening guidelines were also used to determine the present faculty members’ entitlement to salary increases. J. April 13. For the school year 2000-2001. the petitioners filed a complaint with the Arbitration Branch of the . potential. capability. The petitioners failed to obtain a passing rating based on the performance standards. ALBA. were all engaged as Instructor 1. The petitioners executed individual Teacher’s Contracts for each of the trimesters that they were engaged to teach. 2010 YOLANDA M.required to be at specific places at specific times. MARGARITO M.R. 1998. Jr. AMA COMPUTER COLLEGE-PARAÑAQUE CITY.

The LA ruled that Article 281 of the Labor Code on probationary employment applied to the case. . that AMACC did not specify who among the petitioners failed to pass the PAST and who among them did not comply with the other requirements of regularization. their contract would no longer be renewed. Their contracts were not renewed for the following term because they failed to pass the Performance Appraisal System for Teachers (PAST) while others failed to comply with the other requirements for regularization. promotions or increase in salary. or increase in salary. informing them that with the expiration of their contract to teach. On September 7. 2000. according to AMACC. the petitioners individually received a memorandum from AMACC. nonpayment of overtime and overload compensation. Labor Arbiter declared in his decision that the petitioners had been illegally dismissed. their dismissal was ineffectual. the petitioners claimed that their dismissal was illegal because it was made in retaliation for their complaint for monetary benefits and discriminatory practices against AMACC. The petitioners amended their labor arbitration complaint to include the charge of illegal dismissal against AMACC. that AMACC allowed the petitioners to teach for the first semester of school year 2000-2001. hence. This move. On March 15. was justified since the school has to maintain its high academic standards. and ordered AMACC to reinstate them to their former positions without loss of seniority rights and to pay them full backwages. attorney’s fees and 13th month pay. 2000. and for discriminatory practices. for underpayment of wages. through Human Resources Supervisor Mary Grace Beronia.NLRC on July 25. promotion. The petitioners also contended that AMACC failed to give them adequate notice. 2002. AMACC contended in response that the petitioners worked under a contracted term under a non-tenured appointment and were still within the three-year probationary period for teachers. and that the petitioners’ dismissal could not be sustained on the basis of AMACC’s “vague and general allegations” without substantial factual basis. In their Position Paper. 13 th month pay.

HELD: We find the petition meritorious. In a decision issued on November 29. backwages. observed that the applicable law is Section 92 of the Manual of Regulations for Private Schools (which mandates a probationary period of nine consecutive trimesters of satisfactory service for academic personnel in the tertiary level where collegiate courses are offered on a trimester basis). ISSUE: 1) WON CA gravely erred in not ordering their reinstatement with full. The CA ruled that under the Manual for Regulations for Private Schools. a teaching personnel in a private educational institution (1) must be a full time teacher. however.The CA noted that the petitioners had not completed three (3) consecutive years of service (i. the NLRC in a Resolution dated July 18. We mentioned this in passing in Magis . The NLRC. 2007. their teaching stints only covered a period of two (2) years and three (3) months when AMACC decided not to renew their contracts on September 7. (2) must have rendered three consecutive years of service. not Article 281 of the Labor Code (which prescribes a probationary period of six months) as the LA ruled. and (3) such service must be satisfactory before he or she can acquire permanent status. 2000. the CA granted AMACC’s petition for certiorari and dismissed the petitioners’ complaint for illegal dismissal.e. Rule on Employment on Probationary Status Fixed-period Employment The use of employment for fixed periods during the teachers’ probationary period is likewise an accepted practice in the teaching profession. 2005 denied AMACC’s appeal for lack of merit and affirmed in toto the LA’s ruling. The NLRC ruled that the new screening guidelines for the school year 2000-20001 cannot be imposed on the petitioners and their employment contracts since the new guidelines were not imposed when the petitioners were first employed in 1998. six regular semesters or nine consecutive trimesters of satisfactory service) and were still within their probationary period.On appeal.

It is when the yearly contract is renewed for the third time that Section 93 of the Manual becomes operative. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period. the parties may opt to renew or not to renew the contract. If the contract is not renewed. Upon the expiration of his contract of employment. Adelaida P. Manalo. effective for one school year. If renewed. Again. At the end of this third year. It is important that the contract of probationary employment specify the period or term of its effectivity. he cannot automatically claim security of tenure and compel the employer to renew his employment contract. albeit a case that involved elementary. usually for another school year. because of the new screening . and the teacher then is entitled to regular or permanent employment status. particularly considering the teacher’s performance. We noted in this case: The common practice is for the employer and the teacher to enter into a contract. the employment relationship terminates. 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 that period. not tertiary. being simply on probation. education.Young Achievers’ Learning Center v. If the contract is renewed. the probationary employment continues. and hence spoke of a school year rather than a semester or a trimester. the employer has the option not to renew the contract. Academic and Management Prerogative AMACC’s right to academic freedom is particularly important in the present case. At the end of the school year. the teacher remains under probation. primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. the employer may now decide whether to extend a permanent appointment to the employee. c. For the entire duration of this three-year period.

2000. is not the only legal basis for AMACC’s issuance of screening guidelines. Academic freedom. however. 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. their teaching stints only covered a period of at least seven (7) consecutive trimesters or two (2) years and three (3) months of service. 1998 and until the expiration of their Teaching Contracts on September 7. too.guidelines for AMACC faculty put in place for the school year 2000-2001. 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. lay-off and discipline. between the two factors affecting employment. AMACC has every right to determine for itself that it shall use fixed-term employment contracts as its medium for hiring its teachers. As the CA correctly found. and dismissal and recall of workers. The same academic freedom grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher. working methods. Thus. The authority to hire is likewise covered and protected by its management prerogative – the right of an employer to regulate all aspects of employment. brings to the fore the essential question of which. should prevail given AMACC’s position that the teachers contracts expired and it had the right not to renew . supervision of their work. The Conflict: Probationary Status and Fixed-term Employment The existence of the term-to-term contracts covering the petitioners’ employment is not disputed. regulation regarding transfer of employees. the freedom to prescribe work assignments. such as hiring. subject of course to the overarching limitations under the Labor Code. The school’s 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. process to be followed. nor is it disputed that they were on probationary status – not permanent or regular status – from the time they were employed on May 25. This case.

is that the school should show – as a matter of due process – how these standards have been applied. At the same time. 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. These standards. management is given the widest opportunity during the probationary period to reject hirees who fail to meet its own adopted but reasonable standards. the school may impose reasonably stricter attendance or report compliance records on teachers on probation.them. is given the protection during the probationary period of knowing the company standards the new hires have to meet during the probationary period. Of critical importance in invoking a failure to meet the probationary standards. for its part. aside from the usual standards applicable to employees after they achieve permanent status. Based on the standards set at the start of the probationary period. Under the terms of the Labor Code. or at the very least under the circumstances of the present case. together with the just and authorized causes for termination of employment the Labor Code expressly provides. these standards should be made known to the teachers on probationary status at the start of their probationary period. and reject a probationary teacher for failing in this regard. and to be judged on the basis of these standards. the same just and authorizes causes for dismissal under the Labor Code apply to probationary teachers. Labor. For example. although the same attendance or compliance record may not be required for a teacher already on permanent status. are the grounds available to terminate the employment of a teacher on probationary status. This is effectively the second . In other words. Termination of employment on this basis is an authorized cause under the Labor Code. at the start of the semester or the trimester during which the probationary standards are to be applied. 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. should the teachers’ probationary status be disregarded simply because the contracts were fixed-term? On the one hand.

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. These rules ensure compliance with the limited security of tenure guarantee the law extends to probationary employees.e. In a sense. The conflict. too. the essentially protective character of probationary status for management can readily be appreciated. however. . Otherwise stated. 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. Their similarity ends there. When fixed-term employment is brought into play under the above probationary period rules. The fixed-term character of employment essentially refers to the period agreed upon between the employer and the employee. however. Understood in the above sense.. is more apparent than real when the respective nature of fixed-term employment and of employment on probationary status is closely examined. 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. because of the overriding meaning that being “on probation” connotes. or in the academe. and is in furtherance. employment exists only for the duration of the term and ends on its own when the term expires. within the period of the probation. a period of three years for those engaged in teaching jobs. a process of testing and observing the character or abilities of a person who is new to a role or job.notice in a dismissal situation that the law requires as a due process guarantee supporting the security of tenure provision. i. any employer move based on the probationary standards and affecting the continuity of the employment must strictly conform to the probationary rules. of the basic rule in employee dismissal that the employer carries the burden of justifying a dismissal. well-laid and properly communicated standards.

Unless this reconciliation is made. Article 281 should assume primacy and the fixed-period character of the contract must give way. a replacement teacher. and that the contracts are renewable unless the petitioners fail to pass the school’s standards. This conclusion is immeasurably strengthened by the petitioners’ and the AMACC’s hardly concealed expectation that the employment on probation could lead to permanent status. of the parties’ so-called fixed-term employment contracts. To be sure. The school. To highlight what we mean by a fixed-term contract specifically used for the fixed term it offers. 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. 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.Under the given facts where the school year is divided into trimesters. for example. 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. however. If we pierce the veil. 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 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. may be contracted for a period of one year to temporarily take the place of a permanent . nothing is illegitimate in defining the schoolteacher relationship in this manner. 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. so to speak.

The exact terms of the standards were never introduced as evidence. the CA decision should be reversed.teacher on a one-year study leave. Inevitably. . Without these pieces of evidence (effectively. the finding of just cause for the non-renewal of the petitioners’ contracts). under the circumstances. the termination of employment of employees on probationary status) lacks the supporting finding of just cause that the law requires and. these standards must not only be reasonable but must have also been communicated to the teachers at the start of the probationary period. As explained above. appropriately re-computed to consider the period of appeal and review of the case up to our level. at the start of the period when they were to be applied. In this light. we have nothing to consider and pass upon as valid or invalid for each of the petitioners. the details of this finding of just cause must be communicated to the affected teachers as a matter of due process. neither does the evidence show how these standards were applied to the petitioners. or at the very least. Thus. These terms. glaring and very basic gaps in the school’s evidence still exist. leads to no probationary status implications as she was never employed on probationary basis. affirmed as to the results by the NLRC. hence. is illegal. would serve as the just cause for the termination of the probationary contract. in addition to those expressly provided by the Labor Code. The expiration of the replacement teacher’s contracted term. the LA’s decision. If the school were to apply the probationary standards (as in fact it says it did in the present case). should stand as the decision to be enforced. the non-renewal (or effectively. While we can grant that the standards were duly communicated to the petitioners and could be applied beginning the 1st trimester of the school year 2000-2001. 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.

in lieu of reinstatement . The separation pay shall be in addition to the other awards. that the LA originally decreed. which changes inevitably affect current school operations. we hold that . .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.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. properly recomputed.