G.R. No. 109609, May 08, 1996
1
SEGUNDINO ROYO, GERMAN ROYO AND CIPRIANO ROYO,
PETITIONERS, VS. THE HON. NATIONAL LABOR RELATIONS
COMMISSION, SECOND DIVISION, STANDARD ALCOHOL, INC.,
AND RAMON CHUANICO, RESPONDENTS.
DECISION
MENDOZA, J.:
Petitioners are relatives who were employed at the Standard Alcohol Inc.
Segundino Royo was hired on October 1, 1978 as truck driver. His brother
German Royo had been a caretaker of private respondent's compound since
August 21, 1960, while his son, Cipriano Royo, was hired as a repacker and
handyman on September 8, 1971.
On February 28, 1990, at around 9:00 a.m., while Mario Alvarez, another
employee of the company, was loading cargoes on a company truck, he was
called into the office by German Royo. As soon as Alvarez got in, Segundino
Royo grabbed him by the right arm and pulled him to a chair. He was accused
of reporting petitioners to the management for theft of company property.
When he answered that it was true and that many people knew of the
anomalies committed by them, he was slapped by Segundino Royo. As
Alvarez tried to get up from his seat, German Royo boxed him on the face.
The brothers then took turns boxing and kicking him on various parts of his
body until Alvarez collapsed and fell on the floor. Mario Alvarez tried to run
outside but he was stopped by Cipriano Royo who tried to hit him with a piece
of wood. Only the timely intervention of Reynaldo Bemales saved Alvarez
from further punishment. Alvarez was treated at the Valenzuela Medical
Hospital. A medical certificate was issued to him.
In the afternoon of February 28, 1990, private respondents issued a
memorandum suspending petitioners and prohibiting them from entering the
company premises.[1] The memorandum stated:
MEMO NO.
Effective March 1, 1990 the following persons, namely SEGUNDINO
ROYO, GERMAN ROYO AND CIPRIANO ROYO are suspended and
absolutely prohibited from entering the company premises for the following
reasons:
1. Commission of a crime in company premises;
2. Dishonesty and disorderly conduct; and
3. Stealing company property.
BY ORDER OF MANAGEMENT
(Sgd.) ATTY. WILLY CHUANICO
On March 2, 1990, criminal charges were filed by Mario Alvarez against
petitioner with the Office of the Provincial Prosecutor of Malolos, Bulacan
which eventually filed an information in the Municipal Trial Court of
Valenzuela, Metro Manila, charging petitioners with slight physical injuries.
In turn, petitioners filed on March 5, 1990 a complaint for illegal suspension
and violation of P.D. No. 851 and for payment of service incentive leave
against private respondents. On April 10, 1990, more than 30 days having
elapsed without their being allowed to return to work, petitioners charged
private respondents with illegal dismissal.
It appears that, on the same day on which petitioners filed their complaint in
the labor office, private respondents notified petitioners that an investigation
of the mauling incident would be conducted on March 6, 1990. Petitioners
were asked to come and take part in the inquiry. The notice to petitioners
stated: On January 16, 1992, the Labor Arbiter rendered a decision,[2] finding private
respondents guilty of illegal dismissal. The dispositive portion of his decision
March 5, 1990 reads:
Messrs. WHEREFORE, respondent Standard Alcohol is hereby ordered to pay
SEGUNDINO ROYO complainants Segundino Royo, German Royo and Cipriano Royo their
GERMAN ROYO separation pay equivalent to one (1) month for every year of service, as well
CIPRIANO ROYO as their incentive leave pay for three (3) years and proportionate 13th month
Fernando Road, Valenzuela pay for 1990, computed as follows:
Metro Manila
1. SEGUNDINO ROYO:
S i r s:
a) Separation pay
In connection with that incident last February 28 inside the company
compound involving the three of you and Mario Alvarez, wherein you 10/1/78 - 2/28/90 = 11 years
allegedly laid hands on the latter and inflicted physical injuries on him, please P100.00 x 26 x 11 = P28,600.00
come to a conference and investigation thereof to be held on Tuesday, March
6, 1990, at 3:30 in the afternoon, at the STALCO office, San Fernando Road, b) Service Incentive Leave
Valenzuela, Metro Manila, whereat the three of you may confront said Mario
Alvarez and present your side of said incident. Bring your witnesses, if you 1987 - P59.69 x 5 days = P288.45
have any. 1988 - P76.92 x 5 days = 384.60
1989 - P80.46 x 5 days = 442.30 1,115.35
Please cooperate with the company in this matter so that it will be able to
solve and settle said incident in fairness to all concerned. c) 1990 Proportionate 13th month pay

Very truly yours, P100.00 x 26 days x 1.93/12 = 418.1 P30,133.51

WILLY U. CHUANICO 2. GERMAN ROYO

a) Separation pay
But petitioners did not attend the investigation. Accordingly they were 8/21/60 - 2/28/90 = 29 years
dismissed by the company. P2,650.00/mo. x 29 mos. = P76,850.00
 private respondents manifestation that petitioners had been dismissed only for
b) Service Incentive Leave "unruly behavior and disorderly conduct inside the office, not dishonesty."[3]

1987 - P69.23 x 5 days = P346.15 With respect to this charge, the Labor Arbiter held that petitioners' misconduct
1988 - P84.61 x 5 days = 423.05 was not so serious as to constitute a valid cause for termination of
1989 - P96.15 x 5 days = 480.76 1,249.96 employment, because the charge was only a case for slight physical injuries.[4]
The Labor Arbiter likewise ruled that the indefinite suspension of petitioners
c) 1990 Proportionate 13th month pay was a "virtual dismissal" which the company had imposed without due
process and that the subsequent notice of investigation was a mere
P2,650.00 x 1.93/12 = 426.21 78,526.17 afterthought to cover up the lack of a previous hearing. In lieu of
reinstatement and backwages, the Labor Arbiter ordered private respondents
3. CIPRIANO ROYO instead to pay petitioners separation pay in view of his finding that the
relationship between the parties had been severely strained.
a) Separation pay
Private respondents appealed, maintaining that petitioners had committed
9/8/71 - 2/28/90 = 11 years serious misconduct "in audaciously perpetrating [a] dastardly act right inside
P90.00 x 26 days = P25,740.00 their offices, during office hours and in the very presence of other employees";
that petitioners had to be immediately suspended to secure the company's
b) Service Incentive Leave Pay warehouse, because of highly inflammable products kept there; that it was
never private respondents' intention to indefinitely suspend, much less
1987 - P46.15 x 5 days = P230.75 dismiss, petitioners without due process; that in their anxiety and haste,
1988 - P57.69 x 5 days = 288.45 private respondents overlooked to fix the period of suspension but they
1989 - P69.23 x 5 days = 346.15 865.35 subsequently corrected their mistake by giving notice of investigation to
petitioners on March 5, 1990 but petitioners did not attend. Private
c) 1990 Proportionate 13th month pay respondents argued that even assuming that there was no good faith attempt
on their part to conduct an investigation, they could only be held liable for
P90.00 x 26 days x 1.93/12 = P 376.35 6,981.70 damages in a sum of not more than Pl,000, there being just cause for the
dismissal of petitioners.
TOTAL P135,641.38
The NLRC found private respondents' appeal to be meritorious. It held that in
inflicting physical injuries on Mario Alvarez on February 28, 1990, petitioners
Although three grounds were cited in private respondents Memo No. 1, committed serious misconduct, warranting their dismissal under Art. 282(a) of
initially suspending petitioners the Labor Arbiter considered only the first the Labor Code.
ground (i. e., "commission of a crime in company premises") in view of

With respect to the allegation that petitioners were denied due process, the
NLRC found otherwise, because the fact is that they were given notice of the
investigation to be held on March 6, 1990 but they stayed away from it.
Accordingly, the NLRC modified the Labor Arbiter's decision by deleting the
award of separation pay but retaining the award of service incentive leave pay
and proportionate 13th month pay. The dispositive portion of its decision,
dated November 27, 1992, reads:
WHEREFORE, premises considered, the appealed decision is hereby
MODIFIED in the sense that the award for separation pay is hereby deleted
for lack of basis but the award for service incentive leave and proportionate
13th month is hereby retained.
Hence, this petition.
First. Petitioners argue that for all intents and purpose they were dismissed on
March 1, 1990 because they were suspended indefinitely and "absolutely
prohibited from entering the company premises." They contend that their
dismissal was without just cause (1) because there was no evidence to support
the charge of theft against them except the self-serving affidavits of Mario
Alvarez and Reynaldo Bernales and (2) because their conviction was only of
slight physical injuries, for which they already suffered the commensurate
penalty.
On the other hand, the Solicitor General, in behalf of the NLRC, contends that
petitioners were not dismissed but only suspended in the beginning as this is
clearly stated in Memo No. 1 of the company and as shown by the fact that
private respondents set an investigation on March 6, 1990, although
petitioners refused to participate in it.
We agree with this view of the Solicitor General. Although the notice of
suspension did not fix the period of suspension of petitioners, the fact is that
five days after the suspension order was issued, the company set the
investigation on March 6, 1990 of the incident. Petitioners were asked to come
and cooperate with the company in its effort to determine responsibility for
the mauling incident of February 28, 1990. But petitioners snubbed the
investigation. They now justify their action claiming that the investigation was
to be held inside the company premises from which they had been previously
barred.
It was petulance for petitioners to refuse to come simply because they had
been previously suspended and prevented from getting into the company. By
asking petitioners to attend the investigation, it was clear that the company
had lifted the ban on them. As private respondents explained, on February 28,
1990, when the incident took place, their immediate concern was to secure the
company premises because a large quantity of inflammable products was
stored therein. Hence, if petitioners were not heard in their defense, it was
because they spurned the opportunity given to them by the company, invoking
instead all sorts of pretext to justify their absence.
Nonetheless, we think that private respondents should have given petitioners
notice of their dismissal. As it is, because no such notice was given, the
suspension of petitioners became indefinite, exceeding the 30-day limit
imposed in Book V, Rule XIV, 3-4 of the Omnibus Rules Implementing the
Labor Code which provide:
3. Preventive suspension. The employer may place the worker concerned
under preventive suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his co-workers.
4. Period of suspension. No preventive suspension shall last longer than 30
days. The employer shall thereafter reinstate the worker in his former or in a
substantially equivalent position or the employer may extend the period of
suspension provided that during the period of extension he pays the wages and
other benefits due to the worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer SO ORDERED.
decides, after completion of the hearing, to dismiss the worker.

For the violation of this rule, private respondents must indemnify each of
petitioners in the amount of P1,000.00, in accordance with our rulings.[5]

Second. We hold that there was a just and valid cause for the dismissal of
petitioners.

There is no question that they beat up Mario Alvarez, inflicting on him

physical injuries, for which they were convicted of slight physical injuries by
the Municipal Trial Court. The matter cannot be treated lightly. We agree with
the NLRC that petitioners committed serious misconduct within the meaning
of Art. 282(a) of the Labor Code, providing for the dismissal of employees.
The mauling incident was notjust a private matter which had no effect on the
interests of the company. The fact is that petitioners mauled Alvarez because
the latter had reported them to the management for alleged anomalies
committed against the company.

Even if it was a purely private quarrel between petitioners and Alvarez, the
fact is that, as a result of what they had done, they disturbed the peace in the
company and committed a breach of its discipline. We have held in several
cases[6], 153 SCRA 244 (1987); Haverton Shipping. Ltd.v. NLRC, 135 SCRA
685 (1985).6 that fighting within the premises of a company is ajust cause for
terminating one's employment.

WHEREFORE, the decision of the National Labor Relations Commission

dated November 27, 1992, denying petitioners separation pay but awarding to
them service incentive leave pay and 13th month pay is AFFIRMED, with
the MODIFICATION that private respondents are ORDERED to indemnify
each of petitioners in the amount of P1,000.00
G.R. NO. 170811, April 24, 2007
SUPREME STEEL PIPE CORPORATION AND REGAN SY,
PETITIONERS, VS. ROGELIO BARDAJE, RESPONDENT.
DECISION
CALLEJO, SR., J.:
This a petition for review of the Decision[1] of the Court of Appeals (CA) in
CA-G.R. SP No. 81775, which reversed the July 10, 2003 Decision[2] of the
National Labor Relations Commission (NLRC) in NLRC NCR CA No.
028936-01 and reinstated the April 30, 2001 Decision[3] of the Labor Arbiter in
NCR Case No. 00-09-09800-99.
The Antecedents
Petitioner Supreme Steel Pipe Corporation (SSPC), a domestic corporation
primarily engaged in the business of manufacturing steel pipes, employed
respondent Rogelio Bardaje as a warehouseman on March 14, 1994. SSPC
employees were required to wear a uniform (a yellow t-shirt with a logo and
the marking "Supreme") while at work.
On August 19, 1999, respondent reported for work at 6:45 a.m. It was a
common practice among warehousemen to wear long-sleeved shirts over their
uniforms to serve as protection from heat and dust while working, and on this
day, respondent had on a green long-sleeved shirt over his uniform.
Momentarily, security guard Christopher Barrios called him in a loud voice,
and arrogantly ordered him to remove and turn-over to him (Barrios) the long-
sleeved shirt. Insulted and feeling singled-out from the other warehousemen
who were also wearing long-sleeved shirts over their uniforms, respondent
replied: "Ano ba ang gusto mo, hubarin ko o magsuntukan na lang tayo sa
labas?" A heated exchange of words ensued, but the brewing scuffle between
the two was averted by a co-employee from the Production Division, Albert A.
Bation. A security guard, Ricky Narciso, was able to keep the parties apart.
Barrios reported the incident to the SSPC management.
The next day, respondent received a Memorandum from petitioner SSPC
stating that pending the investigation for his alleged violation of the company
rule prohibiting "inciting a fight, harassing, coercing, intimidating and/or
threatening co-workers," he was being meted a 30-day preventive suspension
beginning August 23, 1999.[4] He was also required to submit his
Answer/Comment to the incident, to which he readily complied.
When respondent reported back to work a month after, he was served with a
Notice dated September 8, 1999, terminating his employment effective
September 23, 1999. Petitioner SSPC had taken into account the August 19,
1999 incident as well as respondent's "previous infractions of company rules."
Petitioner SSPC declared that respondent's continued employment would pose
serious and imminent threat to the lives of his co-workers and to the property
of the corporation and its employees. In part, the notice stated:
Upon thorough investigation of your case, and the incident, there surfaced on
records similar acts which you had committed on the following instances: 1.)
August 06, 1997, you were charged with Coercing, Intimidating and/or
Threatening your co-worker and challenged to a fight against the Production
Supervisor Engr. Benny Lloren[;] 2.) August 07, 1997, Inciting a fight inside
the Company premises against Engr. Benny Lloren; 3.) October 09, 1997,
damage to Company Vehicle thru Reckless Imprudence using Company
equipment without proper permission and authority; 4.) August 15, 1998,
inflicting injury against a Company Overseer Mr. Lim; 5.) May 24, 1999, at
6:30 P.M., more or less, Inciting a Fight against your co-employee Ariel
Burton.
With the aforecited incident/instances [it] would clearly manifest that your
continued employment with this Company [poses] a serious and imminent
threat to the life or property of the employer or of your co-workers, but
through your pleadings for forgiveness with the above incidents, the Company
being considerate enough[,] you were given a second chance.

At this instance, applying the above-stated Rule to the [facts] obtaining in this
most recent case, [it] would inevitably result in the [finding] that dismissal is
proper. Your continued employment would pose a serious and imminent threat
to the life or property of the Company or any of its workers.
Taking into account all the circumstances surrounding this case, the acts
which you have showed considering your unruly temper on August 19, 1999,
in the presence of the Personnel Officer inside the Personnel Office [which]
was deliberately done to embolden yourself in a fight against another person[,]
you would have been punished of (sic) outright dismissal.
Examination of the circumstances surrounding your quarrel with the Guard
shows [that] a serious or [substantial] danger has been posed by the quarrel to
the well-being of your co-employees, and your behavior threatened to cause
substantial prejudice for the business of the Company.[5]
Alleging that his dismissal from service was illegal, respondent filed a
Complaint on September 29, 1999 against petitioner and its President, Regan
Sy. The complaint contained the following prayer:
WHEREFORE, complainant prays that the Honorable Labor Arbiter render a
decision:
1. declaring the dismissal of Bardaje illegal;
2. ordering Bardaje to be reinstated without loss of seniority rights and
with full backwages;
3. ordering respondents to pay Bardaje TWENTY-FIVE THOUSAND
PESOS (P25,000.00) by way of moral damages;
4. ordering respondents to pay Bardaje TWENTY-THOUSAND PESOS
(P20,000.00) by way of exemplary damages;
5. ordering respondents to pay Bardaje an amount equivalent to ten
percent (10%) of his total money claims;
6. declaring respondent Regan Sy to be held solidarily liable to
complainant for damages.
Other just and equitable reliefs are likewise prayed for.[6]
In their Position Paper, petitioners SSPC and Sy posited that for threatening
Barrios and challenging him to a fight after being "politely advised" to remove
the long-sleeved shirt and wear the uniform, respondent committed serious
misconduct. Petitioners submitted in evidence the handwritten statements of
Albert Bation and the three (3) security guards, Ricky Narciso, Ben Montoya,
as well as that of Christopher Barrios.
Petitioner SSPC reiterated that the August 19, 1999 incident was not an
isolated case; on prior occasions, the complainant had shown his violent
temper and tendency to breach company rules and regulations given the
slightest provocation, but in all the previous offenses, the complainant was
just given a "kid's gloves treatment." The August 19 incident was, however,
different since respondent was challenging not only the security guards but
petitioner SSPC as well. Petitioner insisted that Barrios was only performing
his job, and that respondent should have complied with the lawful and
reasonable instructions on wearing of proper uniform instead of arrogantly
displaying his "perceived superiority." They insisted that respondent was
afforded procedural due process he was duly informed of the charges
against him, and in fact submitted his explanation thereto. Moreover, his
termination was based on the evidence presented.[7]
On April 30, 2001, the Labor Arbiter rendered judgment and held that Bardaje
was illegally dismissed. The fallo of the decision reads:
WHEREFORE, premises considered, judgment is entered FINDING the
respondents to have illegally dismissed complainant thus, ORDERING them
to reinstate him to his previous position without loss [of] seniority rights and
other privileges and to pay him full backwages, inclusive of 13th-month-pay
benefits and 5-day SILP/year, computed from date of dismissal on 23 August
1999 up to the time of his actual reinstatement, less 3 months salary as penalty
for his infraction as shown in the attached computation sheet by the
Computation & Research Unit-this Office.
As the reinstatement aspect is immediately executory even pending appeal by
the employer, respondents are to admit back to work complainant under the
same terms and conditions prevailing prior to his dismissal or at its option,
merely reinstated in the payroll.
All other claims of complainant are dismissed for lack of merit.
SO ORDERED. [8]
The Labor Arbiter declared that respondents failed to substantiate their claim
that the complainant committed serious misconduct. According to the Labor
Arbiter, as between the handwritten account of Montoya and complainant's
version that he only wore his long-sleeved shirt when he was about to work
(not at the time he punched in his daily time record) and was shouted at, the
narration of the complainant is more worthy of belief; the guard could not be
expected to testify against his own employer. According to the Labor Arbiter,
the respondent's alleged past misdemeanors should not be considered and Narciso, the incident was not a mere exchange of words or simple
since no investigations were conducted thereon.
However, the Labor Arbiter ruled, even if respondent was not guilty of serious
misconduct, that he was not entirely blameless. He could have easily called
the attention of his superiors to the guard's arrogant attitude. Thus, the penalty
of suspension for three (3) months without pay was proper.[9]
Petitioners appealed the case before the NLRC, alleging that petitioner SSPC
had the management prerogative to dismiss employees as a measure of self-
protection. It was claimed that the handwritten statements of Montoya and
Narciso substantially corroborated the allegations of Barrios; considering
petitioner's violent tendencies in previous incidents, he was more capable of
provoking the fight. It further claimed that the past offenses of respondent
were investigated, but for humanitarian reasons, no disciplinary actions were
imposed. They insisted that the Labor Arbiter should have conducted trial on
the merits since the resolution of the issues in the case basically revolve on the
credibility of witnesses. It further alleged that, applying the doctrine of
separate corporate entity in labor cases, petitioner Sy should not be held liable
in his personal capacity.[10]
Meantime, petitioner SSPC opted to reinstate respondent in its payroll
effective August 23, 2001, the date he actually reported back to work.[11]
However, starting June 2002, petitioner refused to pay respondent's salary.
Consequently, on March 26, 2003 (while petitioners' appeal in the NLRC was
pending), respondent filed a Manifestation and Motion praying that
respondent SSPC or any of its representatives be immediately ordered to pay
his salary from June 2002 up to the present.[12]
Without ruling on the motion, the NLRC rendered its July 10, 2003 Decision
reversing the Decision of the Labor Arbiter, and ordering the dismissal of the
complaint.[13]
The NLRC declared that, based on the written statements of Bation, Montoya
altercation; respondent was "raring for a fight" when accosted for not properly
wearing the company uniform. Moreover, his propensity to incite trouble was
evident from the other incidents involving him and Engr. Benny Lloren, Ape
Lim and Ariel Burton. Hence, the August 19, 1999 incident, taken together
with respondents previous infractions, justified the imposition of the
ultimate penalty of dismissal.[14]
Respondent seasonably filed his appeal before the CA.[15] The appellate court
rendered judgment on October 14, 2004 reversing the decision of the NLRC
and reinstating the decision of the Labor Arbiter. The fallo of the decision
reads:
WHEREFORE, the present petition for certiorari is GRANTED. The
assailed decision and resolution of the public respondent National Labor
Relations Commission is ANNULLED and SET ASIDE; and the 30 April
2001 decision of Labor Arbiter Renaldo O. Hernandez is REINSTATED.
Private respondent Supreme Steel Pipe Corporation is further ordered to pay
the salaries of petitioner Rogelio Bardaje from June 2002, onwards.
SO ORDERED.[16]
The CA agreed with the Labor Arbiter and the NLRC that respondent was
guilty of misconduct, since he openly acknowledged that he was engaged in a
war of words that could have resulted in a fistfight with Barrios. The CA,
however, found that the penalty of dismissal was not warranted, and that it
was too harsh and evidently disproportionate to the act committed. The NLRC
patently erred and gravely abused its discretion when it declared that the
dismissal was justified due to the previous "infractions" committed by
respondent, as there was no evidence that respondent was culpable therefor.
Even assuming that these were actually committed, the CA ruled that
petitioner SSPC could no longer utilize the infractions since they had been
admittedly condoned for humanitarian considerations.[17]
Petitioners filed a motion for reconsideration, which was eventually denied on
December 15, 2005;[18] hence, this petition.
The petition has no merit.
In this jurisdiction, we have consistently defined misconduct as an improper
or wrong conduct, a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, implies
wrongful intent and not mere error of judgment.[19] To be a just cause for
termination under Article 282 of the Labor Code of the Philippines,[20] the
misconduct must be serious,[21] that is, it must be of such grave and aggravated
character and not merely trivial or unimportant.[22] However serious, such
misconduct must nevertheless be in connection with the employee's work;[23]
the act complained of must be related to the performance of the employee's
duties showing him to be unfit to continue working for the employer.[24] Thus,
for misconduct or improper behavior to be a just cause for dismissal, (a) it
must be serious; (b) it must relate to the performance of the employee's duties;
and, (c) it must show that the employee has become unfit to continue working
for the employer.[25]
These guideposts were not complied with in the instant case. Although we
have recognized that fighting within company premises may constitute serious
misconduct,[26] we have also held that not every fight within company
premises in which an employee is involved would automatically warrant
dismissal from service.[27] Thus, in Sanyo Travel Corporation v. National
Labor Relations Commission,[28] Oania v. National Labor Relations
Commission,[29] and Foodmine, Inc. (Kentucky Fried Chicken) v. National
Labor Relations Commission,[30] where the employees were dismissed for their
alleged involvement in a fight, it was ruled that the employer must prove by
substantial evidence the accusation of serious misconduct, and that in failing
to discharge the burden, the employee is deemed to have been illegally
dismissed.
Respondent's actuations during the August 19, 1999 incident were not entirely
baseless. To begin with, it is certain that the verbal tussle between him and
Barrios did not start due to the alleged "violent temper and tendency to violate
company rules and regulations" of respondent; the incident was primarily due
to Barrios' provoking attitude. Other than the self-serving allegation of
petitioner SSPC that Barrios "politely advised" respondent to remove his
green long-sleeved shirt and to wear the company-issued uniform, no
competent and credible evidence was shown to support the claim. In fact, even
the handwritten statements of the three security guards, including that of
Barrios himself, did not dwell on the manner by which petitioner was
instructed. On the other hand, petitioner's narrations, as corroborated by the
duly notarized affidavit of fellow warehouseman Jury Lobitania,[31] revealed
how insulting and arrogant Barrios was. This, aside from petitioner's feeling
that he was being singled out from other warehousemen, who were similarly-
clothed while on duty, sufficiently explained why he challenged Barrios to a
fight.
We agree with the Labor Arbiter's conclusion that respondent's misconduct on
August 19, 1999 does not warrant the imposition of the ultimate sanction of
dismissal. Undeniably, the altercation between respondent and Barrios was
nipped in the bud by the timely intervention of other employees. The
momentary work stoppage did not pose a threat to the safety or peace of mind
of the workers. Neither did such disorderly behavior cause substantial
prejudice to the business of respondent SSPC.[32]
Time and again, we have held that it is cruel and unjust to impose the drastic
penalty of dismissal if not commensurate to the gravity of the misdeed. The
reason, as this Court first enunciated in Almira v. B.F. Goodrich Philippines,
Inc.,[33] is not too difficult to understand
xxx [W]here a penalty less punitive would suffice, whatever missteps may be
committed by labor ought not to be visited with a consequence so severe. It is
not only because of the law's concern for the workingman. There is, in
addition, his family to consider. Unemployment brings untold hardships and
sorrows on those dependent on the wage-earner. The misery and pain
attendant on the loss of jobs then could be avoided if there be acceptance of
the view that under all circumstances of this case, petitioners should not be
deprived of their means of livelihood. Nor is this to condone what had been
done by them For all this while, since private respondent considered them
separated from the service, they had not been paid. From the strictly juridical
standpoint, it cannot be too strongly stressed, to follow Davis in his masterly
work, Discretionary Justice, that where a decision may be made to rest [on]
informed judgment rather than rigid rules, all the equities of the case must be
accorded their due weight. Finally, labor law determinations, to quote from
Bultmann, should be not only secundum rationem but also secundum
caritatem.[34]
The alleged previous altercations with Engr. Benny Lloren, Ape Lim and Ariel
Burton should not be considered in the resolution of the case. Aside from
having been satisfactorily explained by respondent,[35] they were not
substantially proven and had long been pardoned by petitioner SSPC. On this
point, we agree with the following findings of the CA:
We thoroughly examined the records before us and found no substantial
evidence to prove petitioner's alleged culpability for the above enumerated
infractions.
With respect to the infraction alleged to have been committed on the 6th and 7th
of August 1997, we find that the Sworn Statement executed by Engr. Benny
Lloren is inadequate to prove that petitioner indeed, incited said Lloren to a
fight. Not only is the said sworn statement uncorroborated, it is worthy to note
that it (sworn statement) was executed years after the occurrence of the said
incidents, which purportedly took place on the 6th and 7th of August 1997. The
sworn statement of Engr. Benny Lloren was executed on 07 January 2000.
As regards the infraction supposedly committed on 15 August 1998, while the
petitioner impliedly admitted that he inflicted physical injuries on the person
of Ape Lim, Supreme's overseer, by claiming that such physical injuries were
merely inflicted in self-defense, his (petitioner) assertion was, notably, not
refuted by the private respondents.
Anent the incident that purportedly happened on 24 May 1999, we give more
credence to petitioner's contention that he did not challenge Ariel Burton to a
fight. Petitioner's contention was corroborated by Julius Constantino who
executed a Sinumpaang Salaysay, where said Julius Constantino categorically
stated that the petitioner did not challenge Ariel Burton to a fight.
On the other hand, other than the uncorroborated statements of Ariel Burton in incidents brought before it;[40] otherwise, the law would readily be
his Sinumpaang Salaysay, that the petitioner challenged him to a fight, private circumvented, causing untold hardships to the dismissed employee.
respondents presented no other competent evidence to prove petitioner's
alleged culpability. IN LIGHT OF ALL THE FOREGOING, the instant petition is DENIED
for lack of merit. The Decision and Resolution of the Court of Appeals in CA-
Moreover, even assuming, gratia argumentis, that the aforementioned G.R. SP No. 81775, which reinstated the April 30, 2001 Decision of the Labor
infractions were actually committed by the petitioner, still, private Arbiter, are hereby AFFIRMED. No costs.
respondents, and for that matter, the public respondent National Labor
Relations Commission, can no longer utilize said previous infractions of the SO ORDERED
petitioner as a justification for his dismissal from work inasmuch as said
infractions have been admittedly condoned by the private respondents
supposedly for humanitarian considerations. (Citations Omitted)[36]
It appears that respondent impleaded SSPC President Regan Sy only because
he is an officer/agent of the company. However, petitioner Sy cannot be held
solidarily liable with petitioner SSPC for the termination of respondent's
employment, since there is no showing that the dismissal was attended with
malice or bad faith.[37]

One final note: for some unexplainable reason, the NLRC failed to act on
petitioner's Manifestation and Motion praying that petitioner SSPC or any of
its representatives be immediately ordered to pay his withheld salary
beginning June 2002 up to the pendency of the case with the Commission. It
did not even mention the fact of its filing in its Decision. While this may no
longer adversely affect respondents cause, the Court cannot let this pass.
Under Article 223 of the Labor Code,[38] an award or order of reinstatement is
self-executory.[39] The reinstatement aspect of the Labor Arbiter's decision,
albeit under appeal, is immediately enforceable. Thus, when petitioner SSPC
opted for respondent's payroll reinstatement, it should have paid his salary
during the period of appeal before the NLRC. In this case, the Commission's
failure, or refusal, to timely act on the matter is a serious oversight for which it
should be admonished. While it is incumbent upon the party to take an active
role in his case and not adopt a wait-and-see attitude, the NLRC as an
adjudicating body has the corresponding obligation to act promptly on all
G.R. No. 125548, September 25, 1998
SOLVIC INDUSTRIAL CORP. AND ANTONIO C. TAM,
PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION
AND DIOSDADO LAUZ, RESPONDENTS.
DECISION
PANGANIBAN, J.:
Except for the most serious causes affecting the business of the employer, our
labor laws frown upon the penalty of dismissal. Where a penalty less punitive
would suffice, an employee should not be sanctioned with a consequence so
severe.
The Case
Before us is a petition for certiorari under Rule 65 of the Rules of Court,
assailing the Resolutions in National Labor Relations Commission[1] (NLRC)
Case No. 00-03-02583-94, issued by the NLRC on April 30, 1996; May 29,
1996; and June 17, 1996.
At the arbitration branch of the NLRC in the National Capital Region,
Diosdado Lauz filed on March 22, 1994, a complaint for illegal dismissal and
monetary claim for service incentive leave pay against petitioner. On
November 29, 1995, Labor Arbiter Alex Arcadio Lopez dismissed the
complaint.
On appeal, Respondent Commission set aside the Decision of the labor arbiter.
In its assailed April 30, 1996 Resolution, NLRC ruled:[2]
"PREMISES CONSIDERED, the appeal is hereby granted and the Decision
of the Labor Arbiter dated 29 November 1995 is hereby SET ASIDE. In lieu
thereof, a new Order is hereby entered directing Solvic Industrial Corporation
for [sic] the immediate reinstatement of the complainant to his former or
equivalent position without loss of seniority right but without backwages."
Respondent Commission denied the Motion for Reconsideration in its May
29, 1996 Resolution:[3]
"WHEREFORE, the instant Motion for Reconsideration is hereby denied for
lack of merit. No further Motion of similar nature shall be entertained."
Notwithstanding the above Resolution, petitioner filed a Second Supplemental
Motion for Reconsideration with Leave to File and Admit the Same. The
NLRC, in its third assailed Resolution dated June 17, 1996, ruled:[4]
"WHEREFORE, in view of the foregoing, the instant motion is hereby merely
NOTED. Let the instant case be dropped from the calendar of this
Commission."
Attributing grave abuse of discretion to the NLRC, petitioner has now
elevated the matter to this Court.[5]
The Facts
Adopting the labor arbiters summary, Respondent NLRC relates the factual
background of this case as follows:
"Complainant in his position paper alleged the following:
"He started employment with respondent sometime in 1977. He occupied the
position as extruder operator. In the course of his employment, he performed
his utmost best, and in fact has never been suspended or reprimanded. On 17
January 1994, sans cause or due process, he was arbitrarily terminated from
service. Additionally, complainant alleged that he was not paid his service
leave pay.
"Respondent on the other hand, averred that:
"Complainant who was hired in 1977 was actually terminated for cause on 17
January 1994. That the termination of complainant arose from the incident
that transpired on 17 January 1994 at about 7:00 p.m. On said occasion,
complainant upon seeing Foreman Carlos Aberin confronted him and
thereafter struck him in the shoulder beside the neck with a bladed weapon in
the process, inflicting bodily injury on him. That several days after said
incident, complainant did not report for work, hence, was issued a
memorandum of preventive suspension dated 19 January 1994, received by
him on 22 January 1994. Correspondingly, Mr. Aberin executed an affidavit
and submitted a medical certificate.
"Complainant on the other hand, submitted his letter of explanation dated 24
January 1994 denying complicity in the acts imputed to him. Thereafter, a
series of administrative investigation was conducted on 5, 12 and 19 February
1994, where complainant refused to give any further statement or explanation.
Subsequently, he was served his letter of termination dated 21 February 1994,
which however, he refused to receive. Relatedly, in a meeting/conference held
with the union officers by Carlos Aberin and Diosdado Lauz on 26 February
1994, complainant admitted to attempting to take the life of Mr. Aberin and
apologized for the same.
"In reply, complainant countered that he never struck Mr. Aberin with a bladed
weapon, and that the incident [was] not job related, hence cannot serve as
basis for termination.
"Respondents, on the other hand in reply, argued that:
"Contrary to his allegation, he was given his day in court as [an] investigation
was conducted. Moreover, complainant in the course of his meeting with Mr.
Aberin [and] with the union officers, admitted that he assaulted the latter and
even apologized in exchange for the withdrawal of the criminal case filed
against him."
The Ruling of the NLRC
Respondent Commission found that the wrong imputed to the private
respondent did not merit the penalty of dismissal. Thus, ordering his
reinstatement, but omitting the award of back wages, it ruled:
"We are not full in accord with the above-findings of the [l]abor [a]rbiter.
While we do not condone the action taken by the complainant against his
foreman, to our mind, the imposition of the supreme penalty of dismissal is
not commensurate [with] the gravity of the offense he committed.
"Records show that the injury inflicted by the complainant was not that
serious as pictured by the respondent, coupled with the fact that the incident
occurred outside the work premises and did not in any way disrupt the
operations in the company. Besides, the mere fact that the complainant has
been in the faithful service of the company for the past twenty (20) long years
untainted with any derogatory record, are factors that must be considered in
his favor. Besides, the complainant and his supervisor had already patched up
their differences that led to the withdrawal of the criminal case instituted by
the latter against the former.
"The claim for the payment of service incentive leave pay must be denied for
failure of the complainant to particularize the grounds for his entitlement
thereto. Likewise, moral damages cannot be awarded for lack of factual or
legal basis."
Assignment of Error
In its Memorandum, petitioner raises a single issue:
"Whether or not the NLRC committed grave abuse of discretion in granting
the appeal of the private respondent for reinstatement, but without backwages,
finding that the penalty of dismissal was not commensurate [with] the gravity
of the offense committed by the private respondent."[6]
In fine, petitioner questions only the propriety of private respondents
reinstatement. The parties submit no other issue.
The Courts Ruling
The appeal is devoid of merit.
Sole Issue: Reinstatement
Assailing the NLRC, petitioner contends that reinstatement is not proper
because the mere act of hacking someone with a bolo, albeit with the blunt
side, is a serious offense which merits the penalty of dismissal. Petitioner
further avers that the incident was work-related, because it arose out of private
respondents ill feelings towards his victim, the company foreman, who had
chastised him for allegedly sleeping while on duty. Petitioner admits that the
incident took place outside the work premises, but maintains that it happened
just opposite the entrance gate of the company building.
Petitioners arguments are not persuasive. Fighting within work premises may
be deemed a valid ground for the dismissal of an employee. Such act
adversely affects the employers interests for it distracts employees, disrupts
operations and creates a hostile work atmosphere.[7] The facts of this case,
however, do not justify the dismissal of private respondent. As found by
Respondent NLRC, the infraction was committed outside the work premises
and did not lead to any disruption of work or any hostile environment in the
work premises.
It is axiomatic that factual findings of agencies exercising quasi-judicial
functions, such as the NLRC, are accorded not only respect but even finality,
when these findings are supported by substantial evidence.[8] A careful review
of the records of this case reveals that there is no cogent reason to overturn or
modify the findings of Respondent Commission.
We agree with the NLRC that the acts of private respondent are not so serious
as to warrant the extreme penalty of dismissal. Private respondent was
accused of hitting the victim once with the blunt side of a bolo. Private
respondent could have attacked him with the blade of the weapon, and he
could have struck him several times. But he did not, thus negating any intent
on his part to inflict fatal injuries. In fact, the victim merely sustained a minor
abrasion and has since forgiven and reconciled with the private respondent. If
the party most aggrieved -- namely, the foreman -- has already forgiven the
private respondent, then petitioner cannot be more harsh and condemning than
the victim. Besides, no criminal or civil action has been instituted against
private respondent. Furthermore, in his twenty years of service in the
company, he has not been charged with any similar misconduct.
Arguing that the length of private respondents service cannot atone for his
serious misconduct, petitioner invokes Villeno v. NLRC,[9] in which the Court
held that "considerations of first offense and length of service are
overshadowed by the seriousness of the offense." Villeno, however, is not
applicable. In that case, the employee disconnected the steering line cable of
the ship, thereby needlessly delaying its departure. The Court recognized the
gravity of the work-related misconduct, for the concomitant delay affected the
business and the reputation of the shipping company and exposed it to
lawsuits for breach of contract. In the present case, private respondents
offense was not as serious as that in Villeno. Its consequences did not directly
affect the business of petitioner or the atmosphere in the work premises.
Verily, we do not condone the action of the private respondent. We believe,
however, that the NLRC did not commit grave abuse of discretion in ruling
that the penalty of dismissal was too harsh and not commensurate with the
said offense. "Where a penalty less punitive would suffice, whatever missteps
may be committed by labor ought not to be visited with a consequence so
severe."[10]
Be it remembered that in an action for certiorari, the petitioner must prove not
merely reversible error, but grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the public respondent. "By grave abuse of
discretion is meant capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It
must be grave abuse of discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and
must be so patent and so gross as to amount to an evasion of a positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law."[11] In this case, petitioner failed to show grave abuse of
discretion on the part of Respondent Commission.

In so ruling, we reiterate that an employers power to discipline its workers

must be exercised with caution, lest it erode the constitutional guarantee of
security of tenure.[12] This is especially true when the penalty being imposed is
dismissal, which leads to severance of employment ties and the economic
dislocation of the employee. Because of the serious implications of this
penalty, "our Labor Code decrees that an employee cannot be dismissed,
except for the most serious causes. The overly concern of our laws for the
welfare of employees is in accord with the social justice philosophy of our
Constitution."[13]

In sum, we believe Respondent Commission did not gravely abuse its

discretion in holding that private respondent should be reinstated, but not
awarded back wages. Its Decision finds basis in Manila Electric Co. v.
NLRC[14] in which the Court allowed a similar relief.

WHEREFORE, the petition is DISMISSED and the impugned Resolutions

of Public Respondent NLRC are hereby AFFIRMED. No costs.

SO ORDERED.
G.R. No. 125548, September 25, 1998
SOLVIC INDUSTRIAL CORP. AND ANTONIO C. TAM,
PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION
AND DIOSDADO LAUZ, RESPONDENTS.
DECISION
PANGANIBAN, J.:
Except for the most serious causes affecting the business of the employer, our
labor laws frown upon the penalty of dismissal. Where a penalty less punitive
would suffice, an employee should not be sanctioned with a consequence so
severe.
The Case
Before us is a petition for certiorari under Rule 65 of the Rules of Court,
assailing the Resolutions in National Labor Relations Commission[1] (NLRC)
Case No. 00-03-02583-94, issued by the NLRC on April 30, 1996; May 29,
1996; and June 17, 1996.
At the arbitration branch of the NLRC in the National Capital Region,
Diosdado Lauz filed on March 22, 1994, a complaint for illegal dismissal and
monetary claim for service incentive leave pay against petitioner. On
November 29, 1995, Labor Arbiter Alex Arcadio Lopez dismissed the
complaint.
On appeal, Respondent Commission set aside the Decision of the labor arbiter.
In its assailed April 30, 1996 Resolution, NLRC ruled:[2]
"PREMISES CONSIDERED, the appeal is hereby granted and the Decision
of the Labor Arbiter dated 29 November 1995 is hereby SET ASIDE. In lieu
thereof, a new Order is hereby entered directing Solvic Industrial Corporation
for [sic] the immediate reinstatement of the complainant to his former or
equivalent position without loss of seniority right but without backwages."
Respondent Commission denied the Motion for Reconsideration in its May
29, 1996 Resolution:[3]
"WHEREFORE, the instant Motion for Reconsideration is hereby denied for
lack of merit. No further Motion of similar nature shall be entertained."
Notwithstanding the above Resolution, petitioner filed a Second Supplemental
Motion for Reconsideration with Leave to File and Admit the Same. The
NLRC, in its third assailed Resolution dated June 17, 1996, ruled:[4]
"WHEREFORE, in view of the foregoing, the instant motion is hereby merely
NOTED. Let the instant case be dropped from the calendar of this
Commission."
Attributing grave abuse of discretion to the NLRC, petitioner has now
elevated the matter to this Court.[5]
The Facts
Adopting the labor arbiters summary, Respondent NLRC relates the factual
background of this case as follows:
"Complainant in his position paper alleged the following:
"He started employment with respondent sometime in 1977. He occupied the
position as extruder operator. In the course of his employment, he performed
his utmost best, and in fact has never been suspended or reprimanded. On 17
January 1994, sans cause or due process, he was arbitrarily terminated from
service. Additionally, complainant alleged that he was not paid his service
leave pay.
"Respondent on the other hand, averred that:
"Complainant who was hired in 1977 was actually terminated for cause on 17
January 1994. That the termination of complainant arose from the incident
that transpired on 17 January 1994 at about 7:00 p.m. On said occasion,
complainant upon seeing Foreman Carlos Aberin confronted him and
thereafter struck him in the shoulder beside the neck with a bladed weapon in
the process, inflicting bodily injury on him. That several days after said
incident, complainant did not report for work, hence, was issued a
memorandum of preventive suspension dated 19 January 1994, received by
him on 22 January 1994. Correspondingly, Mr. Aberin executed an affidavit
and submitted a medical certificate.
"Complainant on the other hand, submitted his letter of explanation dated 24
January 1994 denying complicity in the acts imputed to him. Thereafter, a
series of administrative investigation was conducted on 5, 12 and 19 February
1994, where complainant refused to give any further statement or explanation.
Subsequently, he was served his letter of termination dated 21 February 1994,
which however, he refused to receive. Relatedly, in a meeting/conference held
with the union officers by Carlos Aberin and Diosdado Lauz on 26 February
1994, complainant admitted to attempting to take the life of Mr. Aberin and
apologized for the same.
"In reply, complainant countered that he never struck Mr. Aberin with a bladed
weapon, and that the incident [was] not job related, hence cannot serve as
basis for termination.
"Respondents, on the other hand in reply, argued that:
"Contrary to his allegation, he was given his day in court as [an] investigation
was conducted. Moreover, complainant in the course of his meeting with Mr.
Aberin [and] with the union officers, admitted that he assaulted the latter and
even apologized in exchange for the withdrawal of the criminal case filed
against him."
The Ruling of the NLRC
Respondent Commission found that the wrong imputed to the private
respondent did not merit the penalty of dismissal. Thus, ordering his
reinstatement, but omitting the award of back wages, it ruled:
"We are not full in accord with the above-findings of the [l]abor [a]rbiter.
While we do not condone the action taken by the complainant against his
foreman, to our mind, the imposition of the supreme penalty of dismissal is
not commensurate [with] the gravity of the offense he committed.
"Records show that the injury inflicted by the complainant was not that
serious as pictured by the respondent, coupled with the fact that the incident
occurred outside the work premises and did not in any way disrupt the
operations in the company. Besides, the mere fact that the complainant has
been in the faithful service of the company for the past twenty (20) long years
untainted with any derogatory record, are factors that must be considered in
his favor. Besides, the complainant and his supervisor had already patched up
their differences that led to the withdrawal of the criminal case instituted by
the latter against the former.
"The claim for the payment of service incentive leave pay must be denied for
failure of the complainant to particularize the grounds for his entitlement
thereto. Likewise, moral damages cannot be awarded for lack of factual or
legal basis."
Assignment of Error
In its Memorandum, petitioner raises a single issue:
"Whether or not the NLRC committed grave abuse of discretion in granting
the appeal of the private respondent for reinstatement, but without backwages,
finding that the penalty of dismissal was not commensurate [with] the gravity
of the offense committed by the private respondent."[6]
In fine, petitioner questions only the propriety of private respondents
reinstatement. The parties submit no other issue.
The Courts Ruling
The appeal is devoid of merit.
Sole Issue: Reinstatement
Assailing the NLRC, petitioner contends that reinstatement is not proper
because the mere act of hacking someone with a bolo, albeit with the blunt
side, is a serious offense which merits the penalty of dismissal. Petitioner
further avers that the incident was work-related, because it arose out of private
respondents ill feelings towards his victim, the company foreman, who had
chastised him for allegedly sleeping while on duty. Petitioner admits that the
incident took place outside the work premises, but maintains that it happened
just opposite the entrance gate of the company building.
Petitioners arguments are not persuasive. Fighting within work premises may
be deemed a valid ground for the dismissal of an employee. Such act
adversely affects the employers interests for it distracts employees, disrupts
operations and creates a hostile work atmosphere.[7] The facts of this case,
however, do not justify the dismissal of private respondent. As found by
Respondent NLRC, the infraction was committed outside the work premises
and did not lead to any disruption of work or any hostile environment in the
work premises.
It is axiomatic that factual findings of agencies exercising quasi-judicial
functions, such as the NLRC, are accorded not only respect but even finality,
when these findings are supported by substantial evidence.[8] A careful review
of the records of this case reveals that there is no cogent reason to overturn or
modify the findings of Respondent Commission.
We agree with the NLRC that the acts of private respondent are not so serious
as to warrant the extreme penalty of dismissal. Private respondent was
accused of hitting the victim once with the blunt side of a bolo. Private
respondent could have attacked him with the blade of the weapon, and he
could have struck him several times. But he did not, thus negating any intent
on his part to inflict fatal injuries. In fact, the victim merely sustained a minor
abrasion and has since forgiven and reconciled with the private respondent. If
the party most aggrieved -- namely, the foreman -- has already forgiven the
private respondent, then petitioner cannot be more harsh and condemning than
the victim. Besides, no criminal or civil action has been instituted against
private respondent. Furthermore, in his twenty years of service in the
company, he has not been charged with any similar misconduct.
Arguing that the length of private respondents service cannot atone for his
serious misconduct, petitioner invokes Villeno v. NLRC,[9] in which the Court
held that "considerations of first offense and length of service are
overshadowed by the seriousness of the offense." Villeno, however, is not
applicable. In that case, the employee disconnected the steering line cable of
the ship, thereby needlessly delaying its departure. The Court recognized the
gravity of the work-related misconduct, for the concomitant delay affected the
business and the reputation of the shipping company and exposed it to
lawsuits for breach of contract. In the present case, private respondents
offense was not as serious as that in Villeno. Its consequences did not directly
affect the business of petitioner or the atmosphere in the work premises.
Verily, we do not condone the action of the private respondent. We believe,
however, that the NLRC did not commit grave abuse of discretion in ruling
that the penalty of dismissal was too harsh and not commensurate with the
said offense. "Where a penalty less punitive would suffice, whatever missteps
may be committed by labor ought not to be visited with a consequence so
severe."[10]
Be it remembered that in an action for certiorari, the petitioner must prove not
merely reversible error, but grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the public respondent. "By grave abuse of
discretion is meant capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It
must be grave abuse of discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and
must be so patent and so gross as to amount to an evasion of a positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law."[11] In this case, petitioner failed to show grave abuse of
discretion on the part of Respondent Commission.

In so ruling, we reiterate that an employers power to discipline its workers

must be exercised with caution, lest it erode the constitutional guarantee of
security of tenure.[12] This is especially true when the penalty being imposed is
dismissal, which leads to severance of employment ties and the economic
dislocation of the employee. Because of the serious implications of this
penalty, "our Labor Code decrees that an employee cannot be dismissed,
except for the most serious causes. The overly concern of our laws for the
welfare of employees is in accord with the social justice philosophy of our
Constitution."[13]

In sum, we believe Respondent Commission did not gravely abuse its

discretion in holding that private respondent should be reinstated, but not
awarded back wages. Its Decision finds basis in Manila Electric Co. v.
NLRC[14] in which the Court allowed a similar relief.

WHEREFORE, the petition is DISMISSED and the impugned Resolutions

of Public Respondent NLRC are hereby AFFIRMED. No costs.

SO ORDERED.
G.R. No. 212054, March 11, 2015
ST. LUKES MEDICAL CENTER, INC., PETITIONER, VS. MARIA
THERESA V. SANCHEZ, RESPONDENT.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari[1] are the Decision[2] dated
November 21, 2013 and the Resolution[3] dated April 4, 2014 of the Court of
Appeals (CA) in CA-G.R. SP No. 129108 which affirmed the Decision[4] dated
November 19, 2012 and the Resolution[5] dated January 14, 2013 of the
National Labor Relations Commission (NLRC) in NLRC LAC No. 06-
001858-12, declaring the dismissal of respondent Maria Theresa V. Sanchez
(Sanchez) illegal.
The Facts
On June 29, 2009, Sanchez was hired by petitioner St. Lukes Medical Center,
Inc. (SLMC) as a Staff Nurse, and was eventually assigned at SLMC, Quezon
Citys Pediatric Unit until her termination on July 6, 2011 for her purported
violation of SLMCs Code of Discipline, particularly Section 1, Rule 1 on
Acts of Dishonesty, i.e., Robbery, Theft, Pilferage, and Misappropriation of
Funds. [6]
Records reveal that at the end of her shift on May 29, 2011, Sanchez passed
through the SLMC Centralization Entrance/Exit where she was subjected to
the standard inspection procedure by the security personnel. In the course
thereof, the Security Guard on-duty, Jaime Manzanade (SG Manzanade),
noticed a pouch in her bag and asked her to open the same.[7] When opened,
said pouch contained the following assortment of medical stocks which were
subsequently confiscated: (a) Syringe 10cl [4 pieces]; (b) Syringe 5cl [3
pieces]; (c) Syringe 3cl [3 pieces]; (d) Micropore [1 piece]; (e) Cotton Balls [1
pack]; (f) Neoflon g26 [1 piece]; (g) Venofix 25 [2 pieces]; and (h) Gloves [4
pieces] (questioned items).[8] Sanchez asked SG Manzanade if she could just
return the pouch inside the treatment room; however, she was not allowed to
do so.[9] Instead, she was brought to the SLMC In-House Security Department
(IHSD) where she was directed to write an Incident Report explaining why
she had the questioned items in her possession.[10] She complied[11] with the
directive and also submitted an undated handwritten letter of apology[12]
(handwritten letter) which reads as follows:
To In-House Security,
I am very sorry for bringing things from [SLMC] inside my bag. Pasensya na
po. Taos-puso po akong humihingi ng tawad sa aking pagkakasala, Alam ko
po na ako ay nagkamali. Hindi ko po dapat dinala yung mga gamit sa
hospital. Hindi ko po alam kung [paano] ako magsisimulang humingi ng
patawad. Kahit alam kong bawal ay nagawa kong makapag uwi ng gamit.
Marami pang gamit dahil sa naipon po. Paisa-isa nagagawa kong makakuha
pag nakakalimutan kong isoli. Hindi ko na po naiwan sa nurse station dahil
naisip kong magagamit ko rin po pag minsang nagkakaubusan ng stocks at
talagang may kailangan.
Humihingi po ako ng tawad sa aking ginawa. Isinakripisyo ko ang hindi
pagiging toxic sa pagkuha ng gamit para sa bagay na alam kong mali.
Inaamin ko na akoy naging madamot, pasuway at makasalanan. Inuna ko
ang comfort ko keysa gumawa ng tama. Manikluhod po akong humihingi ng
tawad.
Sorry po. Sorry po. Sorry po talaga.[13]
In a memorandum[14] of even date, the IHSD, Customer Affairs Division,
through Duty Officer Hernani R. Janayon, apprised SLMC of the incident,
highlighting that Sanchez expressly admitted that she intentionally brought out
the questioned items.
An initial investigation was also conducted by the SLMC Division of
Nursing[15] which thereafter served Sanchez a notice to explain.[16]
On May 31, 2011, Sanchez submitted an Incident Report Addendum[17] (May
31, 2011 letter), explaining that the questioned items came from the
medication drawers of patients who had already been discharged, and, as
similarly practiced by the other staff members, she started saving these items
as excess stocks in her pouch, along with other basic items that she uses
during her shift.[18] She then put the pouch inside the lowest drawer of the
bedside table in the treatment room for use in immediate procedures in case
replenishment of stocks gets delayed. However, on the day of the incident, she
failed to return the pouch inside the medication drawer upon getting her tri-
colored pen and calculator and, instead, placed it inside her bag. Eventually,
she forgot about the same as she got caught up in work, until it was noticed by
the guard on duty on her way out of SMLCs premises.
Consequently, Sanchez was placed under preventive suspension effective June
3, 2011 until the conclusion of the investigation by SLMCs Employee and
Labor Relations Department (ELRD)[19] which, thereafter, required her to
explain why she should not be terminated from service for acts of
dishonesty due to her possession of the questioned items in violation of
Section 1, Rule I of the SLMC Code of Discipline.[20] In response, she
submitted a letter[21] dated June 13, 2011, which merely reiterated her claims
in her previous May 31, 2011 letter. She likewise requested for a case
conference,[22] which SLMC granted.[23] After hearing her side, SLMC, on July
4, 2011, informed Sanchez of its decision to terminate her employment
effective closing hours of July 6, 2011. [24] This prompted her to file a
complaint for illegal dismissal before the NLRC, docketed as NLRC NCR
Case No. 07-11042-11.
In her position paper,[25] Sanchez maintained her innocence, claiming that she
had no intention of bringing outside the SLMCs premises the questioned
items since she merely inadvertently left the pouch containing them in her bag
as she got caught up in work that day. She further asserted that she could not
be found guilty of pilferage since the questioned items found in her possession
were neither SLMCs nor its employees property. She also stressed the fact
that SLMC did not file any criminal charges against her. Anent her supposed
admission in her handwritten letter, she claimed that she was unassisted by
counsel when she executed the same and, thus, was inadmissible for being
unconstitutional.[26]
For its part,[27] SLMC contended that Sanchez was validly dismissed for just
cause as she had committed theft in violation of Section 1,[28] Rule I of the
SLMC Code of Discipline,[29] which punishes acts of dishonesty, i.e., robbery,
theft, pilferage, and misappropriation of funds, with termination from service.
The LA Ruling
In a Decision[30] dated May 27, 2012, the Labor Arbiter (LA) ruled that
Sanchez was validly dismissed[31] for intentionally taking the property of
SLMCs clients for her own personal benefit,[32] which constitutes an act of
dishonesty as provided under SLMCs Code of Discipline.
According to the LA, Sanchezs act of theft was evinced by her attempt to
bring the questioned items that did not belong to her out of SLMCs premises;
this was found to be analogous to serious misconduct which is a just cause to
dismiss her.[33] The fact that the items she took were neither SLMCs nor her
co-employees property was not found by the LA to be material since the
SLMC Code of Discipline clearly provides that acts of dishonesty committed
to SLMC, its doctors, its employees, as well as its customers, are punishable
by a penalty of termination from service.[34] To this, the LA opined that [i]t is
rather illogical to distinguish the persons with whom the [said] acts may be
committed as SLMC is also answerable to the properties of its patients.[35]
Moreover, the LA observed that Sanchez was aware of SLMCs strict policy
regarding the taking of hospital/medical items as evidenced by her
handwritten letter,[36] but nonetheless committed the said misconduct. Finally,
the LA pointed out that SLMCs non-filing of a criminal case against Sanchez
did not preclude a determination of her serious misconduct, considering that
the filing of a criminal case is entirely separate and distinct from the
determination of just cause for termination of employment.[37]
Aggrieved, Sanchez appealed[38] to the NLRC.
The NLRC Ruling
In a Decision[39] dated November 19, 2012, the NLRC reversed and set aside
the LA ruling, and held that Sanchez was illegally dismissed.
The NLRC declared that the alleged violation of Sanchez was a unique case,
considering that keeping excess hospital stocks or hoarding was an admitted
practice amongst nurses in the Pediatric Unit which had been tolerated by
SLMC management for a long time.[40] The NLRC held that while Sanchez
expressed remorse for her misconduct in her handwritten letter, she
manifested that she only hoarded the questioned items for future use in case
their medical supplies are depleted, and not for her personal benefit.[41] It
further held that SLMC failed to establish that Sanchez was motivated by ill-
will when she brought out the questioned items, noting: (a) the testimony of
SG Manzanade during the conference before the ELRD of Sanchezs
demeanor when she was apprehended, i.e., [d]i naman siya masyado
nataranta,[42] and her consequent offer to return the pouch;[43] and (b) that the
said pouch was not hidden underneath the bag.[44] Finally, the NLRC
concluded that the punishment of dismissal was too harsh and the one (1)
month preventive suspension already imposed on and served by Sanchez was
the appropriate penalty.[45] Accordingly, the NLRC ordered her reinstatement,
and the payment of backwages, other benefits, and attorneys fees.[46]
Unconvinced, SLMC moved for reconsideration[47] which was, however,
denied in a Resolution[48] dated January 14, 2013. Thus, it filed a petition for
certiorari[49] before the CA.
The CA Ruling
In a Decision[50] dated November 21, 2013, the CA upheld the NLRC, ruling
that the latter did not gravely abuse its discretion in finding that Sanchez was
illegally dismissed.
It ruled that Sanchezs offense did not qualify as serious misconduct, given
that: (a) the questioned items found in her possession were not SLMC
property since said items were paid for by discharged patients, thus
discounting any material or economic damage on SLMCs part; (b) the
retention of excess medical supplies was an admitted practice amongst nurses
in the Pediatric Unit which was tolerated by SLMC; (c) it was illogical for
Sanchez to leave the pouch in her bag since she would be subjected to a
routine inspection; (d) Sanchezs lack of intention to bring out the pouch was
manifested by her composed demeanor upon apprehension and offer to return
the pouch to the treatment room; and (e) had SLMC honestly believed that
Sanchez committed theft or pilferage, it should have filed the appropriate
criminal case, but failed to do so.[51] Moreover, while the CA recognized that
SLMC had the management prerogative to discipline its erring employees, it,
however, declared that such right must be exercised humanely. As such,
SLMC should only impose penalties commensurate with the degree of
infraction. Considering that there was no indication that Sanchezs actions
were perpetrated for self-interest or for an unlawful objective, the penalty of
dismissal imposed on her was grossly oppressive and disproportionate to her
offense.[52]
Dissatisfied, SLMC sought for reconsideration,[53] but was denied in a
Resolution[54] dated April 4, 2014, hence, this petition.
The Issue Before the Court
The core issue to be resolved is whether or not Sanchez was illegally
dismissed by SLMC.
The Courts Ruling
The petition is meritorious.
The right of an employer to regulate all aspects of employment, aptly called
management prerogative, gives employers the freedom to regulate,
according to their discretion and best judgment, all aspects of employment,
including work assignment, working methods, processes to be followed,
working regulations, transfer of employees, work supervision, lay-off of
workers and the discipline, dismissal and recall of workers.[55] In this light,
courts often decline to interfere in legitimate business decisions of employers.
In fact, labor laws discourage interference in employers judgment concerning
the conduct of their business.[56]
Among the employers management prerogatives is the right to prescribe
reasonable rules and regulations necessary or proper for the conduct of its
business or concern, to provide certain disciplinary measures to implement
said rules and to assure that the same would be complied with. At the same
time, the employee has the corollary duty to obey all reasonable rules, orders,
and instructions of the employer; and willful or intentional disobedience
thereto, as a general rule, justifies termination of the contract of service and
the dismissal of the employee.[57] Article 296 (formerly Article 282) of the
Labor Code provides:[58]
Article 296. Termination by Employer. - An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or his representative in connection with his
work;
xxxx
Note that for an employee to be validly dismissed on this ground, the
employers orders, regulations, or instructions must be: (1) reasonable and
lawful, (2) sufficiently known to the employee, and (3) in connection with
the duties which the employee has been engaged to discharge.[59]
Tested against the foregoing, the Court finds that Sanchez was validly
dismissed by SLMC for her willful disregard and disobedience of Section 1,
Rule I of the SLMC Code of Discipline, which reasonably punishes acts of
dishonesty, i.e., theft, pilferage of hospital or co-employee property, x x x or
its attempt in any form or manner from the hospital, co-employees, doctors,
visitors, [and] customers (external and internal) with termination from
employment.[60] Such act is obviously connected with Sanchezs work, who, as
a staff nurse, is tasked with the proper stewardship of medical supplies.
Significantly, records show that Sanchez made a categorical admission[61] in
her handwritten letter[62] i.e., [k]ahit alam kong bawal ay nagawa kong
[makapag-uwi] ng gamit[63] that despite her knowledge of its express
prohibition under the SLMC Code of Discipline, she still knowingly brought
out the subject medical items with her. It is apt to clarify that SLMC cannot be
faulted in construing the taking of the questioned items as an act of dishonesty
(particularly, as theft, pilferage, or its attempt in any form or manner)
considering that the intent to gain may be reasonably presumed from the
furtive taking of useful property appertaining to another.[64] Note that Section
1, Rule 1 of the SLMC Code of Discipline is further supplemented by the
company policy requiring the turn-over of excess medical supplies/items for
proper handling[65] and providing a restriction on taking and bringing such
items out of the SLMC premises without the proper authorization or pass
from the official concerned,[66] which Sanchez was equally aware thereof.[67]
Nevertheless, Sanchez failed to turn-over the questioned items and, instead,
hoarded them, as purportedly practiced by the other staff members in the
Pediatric Unit. As it is clear that the company policies subject of this case are
reasonable and lawful, sufficiently known to the employee, and evidently
connected with the latters work, the Court concludes that SLMC dismissed
Sanchez for a just cause. which, in turn, means that the CA erred when it affirmed the same. In
consequence, the grant of the present petition is warranted.
On a related point, the Court observes that there lies no competent basis to
support the common observation of the NLRC and the CA that the retention of WHEREFORE, the petition is GRANTED. The Decision dated November
excess medical supplies was a tolerated practice among the nurses at the 21, 2013 and the Resolution dated April 4, 2014 of the Court of Appeals in
Pediatric Unit. While there were previous incidents of hoarding, it appears CA-G.R. SP No. 129108 are REVERSED and SET ASIDE. The Labor
that such acts were in similar fashion furtively made and the items secretly Arbiters Decision dated May 27, 2012 in NLRC Case No. NCR 07-11042-11
kept, as any excess items found in the concerned nurses possession would finding respondent Maria Theresa V. Sanchez to have been validly dismissed
have to be confiscated.[68] Hence, the fact that no one was caught and/or by petitioner St. Lukes Medical Center, Inc. is hereby REINSTATED.
sanctioned for transgressing the prohibition therefor does not mean that the so-
called hoarding practice was tolerated by SLMC. Besides, whatever maybe SO ORDERED.
the justification behind the violation of the company rules regarding excess
medical supplies is immaterial since it has been established that an infraction
was deliberately committed.[69] Doubtless, the deliberate disregard or
disobedience of rules by the employee cannot be countenanced as it may
encourage him or her to do even worse and will render a mockery of the rules
of discipline that employees are required to observe.[70]

Finally, the Court finds it inconsequential that SLMC has not suffered any
actual damage. While damage aggravates the charge, its absence does not
mitigate nor negate the employees liability.[71] Neither is SLMCs non-filing
of the appropriate criminal charges relevant to this analysis. An employees
guilt or innocence in a criminal case is not determinative of the existence of a
just or authorized cause for his or her dismissal.[72] It is well-settled that
conviction in a criminal case is not necessary to find just cause for termination
of employment,[73] as in this case. Criminal and labor cases involving an
employee arising from the same infraction are separate and distinct
proceedings which should not arrest any judgment from one to the other.

As it stands, the Court thus holds that the dismissal of Sanchez was for a just
cause, supported by substantial evidence, and is therefore in order. By
declaring otherwise, bereft of any substantial bases, the NLRC issued a
patently and grossly erroneous ruling tantamount to grave abuse of discretion,
G.R. No. 171115, August 09, 2010
NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN (NLMK-
OLALIA-KMU) AND HELEN VALENZUELA, PETITIONERS, VS.
KEIHIN PHILIPPINES CORPORATION, RESPONDENT.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari[1] assails the November 2, 2005
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 91718
dismissing outright the petition for certiorari filed by the petitioners, as well
as its January 6, 2006 Resolution[3] denying petitioners' Motion for
Reconsideration.
Factual Antecedents
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 Honda.
It is a standard operating procedure of Keihin to subject all its employees to
reasonable search before they leave the company premises.[4] 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[5] dated September 5, 2003 to the Guard-in-
Charge, who, in turn, submitted a memorandum[6] 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[7] 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)."[8] Paul Cupon, 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,[9] 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.[10]
On September 26, 2003, Helen received a notice[11] of disciplinary action
informing her that Keihin has decided to terminate her services.
On October 15, 2003, petitioners filed a complaint[12] 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.[13] They believed that the tape was not of great value and of
no further use to respondent company since it was already half used. Although
Helen admitted that she took the packing tape, petitioners claimed that her
punishment was disproportionate to her infraction.
Keihin, on the other hand, maintained that Helen was guilty of serious
misconduct because there was a deliberate act of stealing from the company.
Respondent company also claimed that motive and value of the thing stolen
are irrelevant in this case.
Ruling of the Labor Arbiter
On July 30, 2004, the Labor Arbiter[14] rendered his Decision[15] dismissing the
complaint of illegal dismissal. He brushed aside petitioners' argument that the
penalty imposed on Helen was disproportionate to the offense committed,[16]
and held that she indeed committed a serious violation of the company's
policies amounting to serious misconduct,[17] a just cause for terminating an
employee under Article 282 of the Labor Code. The Labor Arbiter likewise
upheld the right of the company to terminate Helen on the ground of loss of
confidence or breach of trust.[18]
The Labor Arbiter further held that Keihin observed the requirements of
procedural due process in implementing the dismissal of Helen.[19] 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 respondent company furnished her with notice of
termination stating the facts of her dismissal, the offense for which she was
found guilty, and the grounds for her dismissal.[20]
Ruling of the National Labor Relations Commission (NLRC)
On appeal, the NLRC dismissed the appeal of the petitioners and affirmed in
toto the Decision of the Labor Arbiter. 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.[21] By the strength of
petitioners' admission, the NLRC held that theft is a valid reason for Helen's
dismissal.[22]
As to the issue of due process, the pertinent portion of the Decision[23] of the
NLRC reads:
Complainant's dismissal too, was with due process. Procedural due process
only requires employers to furnish their errant employees written notices
stating the particular acts or omissions constituting the grounds for their
dismissal and to hear their side of the story (Mendoza vs. NLRC, 310 SCRA
846 [1999]). Complainant's claim that the show-cause letter did not pass the
stringent requirement of the law is belied by her admission in her position
paper that Mr. Cupon furnished her a "form," simultaneously asking her why
she did such an act and x x x that Mr. Cupon directed her to submit a written
explanation on the matter, which she complied with. By Complainant's own
admission then, it is clear that she was furnished a written notice informing
her of the particular act constituting the ground for her dismissal and that x x x
her side of the story [was heard]. Evidently then, Complainant was afforded
due process prior to her dismissal.
The dispositive portion of the Decision of the NLRC reads:
WHEREFORE, premises considered, Complainant's appeal is DISMISSED
for lack of merit. The Labor Arbiter's assailed Decision in the above-entitled
case is hereby AFFIRMED in toto.
SO ORDERED.[24]
Ruling of the Court of Appeals
After having their Motion for Reconsideration[25] denied[26] by the NLRC, the
petitioner union, the Nagkakaisang Lakas ng Manggagawa sa Keihin, filed a
Petition for Certiorari with the CA praying that the Decision of the NLRC be
set aside. However, in a Resolution[27] dated November 2, 2005, the CA
dismissed the petition outright for not having been filed by an indispensable
party in interest under Section 2, Rule 3 of the Rules of Court.
SEC 2. Parties in interest. - A real party in interest is the party who stands to
be benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit. Unless otherwise authorized by law or these Rules, every
action must be prosecuted or defended in the name of the real party in interest.
Petitioners filed a Motion for Reconsideration[28] but it was denied by the CA
in its Resolution[29] of January 6, 2006.
Hence, petitioners filed the present petition for review on certiorari under
Rule 45, asking the Court to reverse the Resolutions of the CA and enter a
new one declaring Helen's dismissal unjustified. They anchor their petition on
the following grounds:
I.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN
HOLDING THAT THE PETITION FOR CERTIORARI FILED BY THE
UNION AND MS. HELEN VALENZUELA WAS NOT FILED BY AN
INDISPENSABLE PARTY.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN FAILING
TO DECIDE THE CASE ON THE MERITS DESPITE SHOWING THAT
THE PETITION FOR CERTIORARI WAS VERIFIED BY THE UNION
PRESIDENT AND MS. HELEN VALENZUELA.
III.
THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THAT
SERIOUS MISCONDUCT UNDER EXISTING LAW AND
JURISPRUDENCE CANNOT BE ATTRIBUTED TO HEREIN
PETITIONER HELEN VALENZUELA BECAUSE THE DECISION OF
THE NLRC IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.[30]
Our Ruling
We affirm the ruling of the CA.
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. Instead, 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. As a result, the CA
rightly dismissed the petition based on a formal defect.
Under Section 7, Rule 3 of the Rules of Court, "parties in interest without
whom no final determination can be had of an action shall be joined as
plaintiffs or defendants." If there is a failure to implead an indispensable
party, any judgment rendered would have no effectiveness.[31] It is "precisely
`when an indispensable party is not before the court (that) an action should be
dismissed.' The absence of an indispensable party renders all subsequent
actions of the court null and void for want of authority to act, not only as to
the absent parties but even to those present."[32] The purpose of the rules on
joinder of indispensable parties is a complete determination of all issues not
only between the parties themselves, but also as regards other persons who
may be affected by the judgment. A decision valid on its face cannot attain
real finality where there is want of indispensable parties.
At any rate, we are aware that it is the policy of courts to encourage full
adjudication of the merits of an appeal. Dismissal of appeals purely on
technical grounds, especially an appeal by a worker who was terminated and
whose livelihood depends on the speedy disposition of her case, is frowned
upon. Thus, while we affirm the CA's dismissal of the petition for certiorari,
we shall still discuss the substantive aspect of the case and go into the merits.
The petitioners argue that serious misconduct under existing law and
jurisprudence could not be attributed to Helen because she was not motivated
by malicious intent. According to petitioners, during the routine inspection
and even before the guard opened Helen's bag, she readily admitted that the
bag contained a packing tape. Petitioners claim that the mental attitude of
Helen negates depravity, willful or wrongful intent and, thus, she cannot be
held guilty of serious misconduct. Rather, it was a mere error of judgment on
the part of Helen. Furthermore, it was Helen's honest belief that the tape she
took was of no use or value and that she did not hide the same.
Thus, the issue boils down to whether, in taking the packing tape for her own
personal use, Helen committed serious misconduct, which is a just cause for
her dismissal from service.
Article 282 of the Labor Code enumerates the just causes for termination. It
provides:
ARTICLE 282. Termination by employer. - An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
Misconduct is defined as "the transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment."[33] For serious
misconduct to justify dismissal under the law, "(a) it must be serious, (b) must
relate to the performance of the employee's duties; and (c) must show that the
employee has become unfit to continue working for the employer."[34]
In the case at bar, Helen took the packing tape with the thought that she could
use it for her own personal purposes. When Helen was asked to explain in
writing why she took the tape, she stated, "Kumuha po ako ng isang packing
tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong lilipatang
bahay."[35] In other words, by her own admission, there was intent on her part
to benefit herself when she attempted to bring home the packing tape in
question.
It is noteworthy that prior to this incident, there had been several cases of theft
and vandalism involving both respondent company's property and personal
belongings of other employees. In order to address this issue of losses,
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. Despite these reminders,
Helen took the packing tape and was caught during the routine inspection. All
these circumstances point to the conclusion that it was not just an error of
judgment on the part of Helen, but a deliberate act of theft of company
property.
In the case of Firestone Tire and Rubber Company of the Philippines v.
Lariosa[36] involving an employee who was caught by the security guards of
the company during a routine inspection with possession of company property,
we held that:
There is no gainsaying that theft committed by an employee constitutes 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 are a different matter.[37]

We hold that Helen is guilty of serious misconduct in her act of taking the
packing tape.
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. Petitioners cite the case of Caltex Refinery Employees
Association v. National Labor Relations Commission[38] where Arnelio M.
Clarete (Clarete) was found to have willfully breached the trust and
confidence reposed in him by taking a bottle of lighter fluid. In said case, 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 x x x is very minimal compared to his salary x x x."[39]
After a closer study of both cases, we are convinced that the case of Caltex is
different from the case at hand. Although both Clarete and Helen had no prior
violations, the former had a clean record of eight years with his employer. On
the other hand, Helen was not even on her second year of service with Keihin
when the incident of theft occurred. And what further distinguishes the instant
case from Caltex is that respondent company was dealing with several cases
of theft, vandalism, and loss of company and employees' property when the
incident involving Helen transpired.
Regarding the requirement of procedural due process in dismissal of
employees, petitioners argue that the first notice failed to explain the charge
being leveled against Helen. According to the petitioners, the notice was
vague and lacked sufficient definitiveness.
The show-cause notice states:
Please explain in writing within 48 hours upon receipt hereof, why you have
committed an offense against company property specifically F.2 of the
company's Code of Conduct: "Any act constituting theft or robbery, or any
attempt to commit theft or robbery, of any company property or other
associate's property."[40]
We reject petitioners' claim that respondent company failed to observe the
requirements of procedural due process. "In the dismissal of employees, it has
been consistently held that the twin requirements of notice and hearing are
essential elements of due process. The employer must furnish the employee
with two written notices before termination of employment can be legally
effected: (a) a notice apprising the employee of the particular acts or
omissions for which his dismissal is sought, and (b) a subsequent notice
informing the employee of the employer's decision to dismiss him."[41]
In this case, respondent company furnished Helen a show-cause notice dated
September 6, 2003 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."[42] We find that such notice sufficiently informed Helen of the
charge of theft of company property against her. We are convinced that such
notice satisfies the due process requirement to apprise the employee of the
particular acts or omissions for which dismissal is sought.
With regard to the requirement of a hearing, the essence of due process lies in
an opportunity to be heard. Such opportunity was afforded the petitioner
when she was asked to explain her side of the story. In Metropolitan Bank and
Trust Company v. Barrientos,[43] we held that, "the essence of due process lies
simply in an opportunity to be heard, and not that an actual hearing should
always and indispensably be held." Similarly in Philippine Pasay Chung Hua
Academy v. Edpan,[44] we held that, "[e]ven if no hearing or conference was
conducted, the requirement of due process had been met since he was
accorded a chance to explain his side of the controversy."
WHEREFORE, the Petition is DENIED. The Resolutions dated November
2, 2005 and January 6, 2006 of the Court of Appeals in CA-G.R. SP No.
91718 are AFFIRMED.

SO ORDERED.
G.R. No. 102993, July 14, 1995
CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA) AND
ARNELIO M. CLARETE, PETITIONERS, VS. NATIONAL LABOR
RELATIONS COMMISSION (THIRD DIVISION), CALTEX
PHILIPPINES, INC. AND/OR EDGARDO C. CATAQUIS,
RESPONDENTS.
DECISION
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to
reverse the Resolution dated August 30, 1991 of the National Labor Relations
Commission (NLRC) in NLRC Case No. L-000063 and its Resolution dated
October 15, 1991 denying the motion for reconsideration of the decision.
I requiring him to explain in writing why he should not be subjected to
Petitioner Arnelio M. Clarete was hired by respondent Caltex Philippines, Inc.
(Caltex) as Mechanic C on November 3, 1981. He was later promoted to the
position of Mechanic B and assigned to the Mechanical/Metal Grades Section
of respondent Caltex's refinery in San Pascual, Batangas.
According to Clarete, at about 4:00 P.M. on April 13, 1989, on his way to the
refinery's main gate after completing a day's work at the Maintenance Area IV,
he saw on a pile of rubbish a bottle of lighter fluid, which mechanics use to
remove grease from their hands. He picked up the bottle and placed it in the
basket attached to the handlebar of his bicycle with the intention of asking the
security guard at the gate to allow him to bring it home.
Upon reaching the gate, he took the bottle of lighter fluid from the basket,
punched out his time card at the bundy clock and then asked Juan de Villa, the
security guard on duty, permission to take home the bottle. Replying that he
was not authorized to grant the permission sought, de Villa referred Clarete to
Dominador Castillo, the security supervisor. When so approached, however,
Castillo told Clarete to leave the bottle in his office. Clarete complied and left
for home.
Respondent Caltex gave a different version of the incident: On said date, de
Villa noticed a black bag which Clarete did not submit for inspection. When
requested by de Villa to open the same for inspection, Clarete retorted that it
was not necessary to inspect the bag as it contained only dirty clothes.
Unconvinced, de Villa opened the bag and found a one-liter sample bottle
filled with lighter fluid surreptitiously hidden inside in the sleeves of Clarete's
working clothes, which, in turn, were covered by other clothes. When asked if
he had a gate pass to bring the bottle out of the premises, Clarete replied that
he did not secure a gate pass as the lighter fluid was for his personal use.
On April 18, 1989, Clarete received a letter from his immediate supervisor,
disciplinary action for violation of company rules and regulations. In his
written explanation of April 20, 1989, Clarete stated: (1) that he had no
intention of bringing the bottle of lighter fluid out of the company premises
without the guard's permission; (2) that he did seek permission but was
denied; and (3) that he left the bottle behind with the guard when told to do so.
On August 16, 1989, Clarete was charged with the crime of theft before the
Municipal Trial Court of San Pascual, Batangas (Criminal Case No. 3331).
On October 19, 1989, he received a letter from Antonio Z. Palad, Section
Head, Mechanical/Metal Section, requiring him to explain why his services
should not be terminated for cause in view of Criminal Case No. 3331 and his
violation of the "policy on disciplinary action per G.M. Circular No. 484 of
August 28, 1974, specifically '(f) Removing or attempting to remove
Company property from the Refinery without authorization'" (Rollo, p. 58).
In reply, Clarete requested time to consult his lawyer, which request
respondent Caltex granted on November 14, 1989. Clarete was given up to
November 30, 1989 to submit his explanation. However, instead of
submitting a written explanation, petitioner served a letter on Palad,
requesting a formal investigation of the allegations against him, at the same
time, invoking his right to be represented by the Union and his legal counsel.
The request was granted and a hearing was scheduled on January 5, 1990.
Said hearing, as well as a subsequent one, was however deferred upon the
request of Clarete.
Believing that Clarete has been given enough time to consult his lawyer and to
prepare his explanation, a final meeting was scheduled on February 27, 1990.
At the said meeting, Clarete, through counsel, requested a formal trial-type
investigation of the case. A letter reiterating that request was addressed by
Clarete's counsel to Palad on March 12, 1990. In his letter dated April 26,
1990, Palad denied the request on the ground that a trial-type hearing and
confrontation of witnesses were not applicable to the company's
administrative fact-finding investigation. Clarete was then given only up to
May 4, 1990 to submit his written explanation. He finally did so on May 3,
1990.
In the meantime, on April 19, 1990, a decision was rendered in Criminal Case
No. 3331, acquitting Clarete of the crime charged based on the insufficiency
of the evidence to establish his guilt beyond reasonable doubt.
On August 20, 1990, Clarete was informed that his services were being
terminated effective August 24, 1990 for "serious misconduct and loss of trust
and confidence resulting from your having violated a lawful order of the
Company, i.e., GM Circular No. 484 of 8-28-74 which gave notice that the
Company considers 'removing or attempting to remove Company property
from the Refinery without authorization' to be sufficiently serious that the
erring employee be dismissed" (Rollo, p. 63). Clarete was placed under
preventive suspension with pay upon notice up to the termination of his
services on August 24, 1990.
On August 27, 1990, Clarete filed a complaint for illegal dismissal against
private respondents Caltex and/or Edgardo C. Cataquio, in his capacity as
Vice President of the Company with the Regional Arbitration Branch IV of the
National Labor Relations Commission. On January 15, 1991, Labor Arbiter
Joaquin A. Tanodra rendered a decision, finding Clarete neither culpable of
theft nor of violating GM Circular No. 484 of August 28, 1974 as "his purpose
in going to security guard de Villa was precisely to ask the latter's permission
to bring out the lighter fluid from the Refinery Compound" (Rollo, p. 27). He,
therefore, directed the reinstatement of Clarete with full back wages which
then totaled P40,081.60, without loss of seniority rights and other privileges.
On appeal by private respondents, NLRC rendered judgment on August 20,
1991, vacating the decision of the Labor Arbiter and entering a new one
dismissing the complaint for lack of merit. NLRC gave credence to the
version of respondent Caltex of the incident. It found no reason to doubt the
veracity of the narration of the security guard, who was simply doing his job
of protecting the property of private respondent and who was not shown to
hold a personal grudge or ill motive to testify falsely against Clarete.
Nonetheless, NLRC awarded Clarete financial assistance equivalent to one
month salary for every year of service in the amount of P76,752.00.
Both parties moved for reconsideration - Clarete, on the ground that his
dismissal was without valid cause as there was no violation of company rules,
and private respondents on the ground that Clarete was not entitled to the
award of financial assistance pursuant to the ruling in Philippine Long
Distance Telephone Company v. National Labor Relations Commission, 164
SCRA 671 (1988).
Hence, this petition filed by Clarete and The Caltex Refinery Employees
Association, the exclusive bargaining representative of all rank and file
employees of respondent Caltex.
II

Petitioners contend that NLRC acted with grave abuse of discretion calling for
the exercise of this Court's corrective power. They maintain that Clarete's
version of the incident is more in accord with logic and common experience.
They further allege that loss of confidence, to be a valid ground for dismissal,
must be based on just and duly substantiated causes. Since Clarete's position
as mechanic is not one of trust and does not involve the production,
safekeeping or even the handling of lighter fluid, his act of picking up the
bottle of lighter fluid with the intention of asking permission to bring it home,
cannot serve as basis for loss of confidence.
Respondent Caltex, on the other hand, asserts that G.M. Circular No. 484 was
issued pursuant to its management prerogative to prescribe rules and
regulations necessary for the conduct of its business and specifically to put a
stop to rampant pilferages of company property by its employees, which has
resulted not only in substantial losses in its operations but also in the
perceptible breakdown in employee discipline. The findings of fact of NLRC,
which are supported by evidence on record, show that petitioner Clarete
attempted to remove a bottle of lighter fluid owned by respondent Caltex from
the company premises; therefore, Clarete committed not only a serious
misconduct but also a willful breach of trust and confidence reposed upon him
in the performance of his duties. The loss of trust and confidence is not
precluded by the fact that Clarete's position does not require the safekeeping
or handling a lighter fluid. If this were the rule, an employee may then help
himself to his employer's property without fear of disciplinary action as long
as the property taken was not entrusted to his care or is not related to his
function.
III
The prerogative of employers to regulate all aspects of employment subject to
the limitation of special laws is recognized. A valid exercise of management
prerogative encompasses hiring, work assignments, working methods, time,
place and manner of work, tools to be used, procedure to be followed,
supervision of workers, working regulations, transfer of employees, discipline,
dismissal and recall of workers (San Miguel Corporation v. Ubaldo, 218
SCRA 293 [1993]). This prerogative must, however, be exercised in good
faith for the advancement of the employer's interest and not for the purpose of
defeating the rights of the employees granted by law or contract (Garcia v.
Manila Times, 224 SCRA 399 [1993]). There are restrictions to guide the
employers in the exercise of management prerogatives, particularly the right
to discipline or dismiss employees, for both the Constitution and the law
guarantee employees' security of tenure. Thus, employees may be dismissed
only in the manner provided by law (Radio Communications of the Phil., Inc.
v. National Labor Relations Commission, 223 SCRA 656 [1993]). The right
of the employer must not be exercised arbitrarily and without just cause.
Otherwise, the constitutional mandate of security of tenure of the workers
would be rendered nugatory (China City Restaurant Corporation v. National
Labor Relations Commission, 217 SCRA 443 [1993]).
We concur in NLRC's conclusion that the version of respondent Caltex of the
incident under consideration is more credible. As correctly pointed out by
NLRC, there is no reason to doubt the veracity of the Report of Security
Guard Juan de Villa dated April 14, 1989 and his Sinumpaang Salaysay dated
April 21, 1989 as "he simply did what he was primarily tasked to do -- to
protect the company property and to apprehend misdeeds committed thereat
neither ill motive nor personal grudge against complainant-appellee
(Clarete) was attributed to him to falsely testify against the former" (Rollo, p.
36). Undoubtedly, the lighter fluid is a property of private respondent and to
take the same out of its premises without the corresponding gate pass is a
violation of company rules on theft and pilferage of company property.
But while Clarete may be guilty of violation of company rules, we find the
penalty of dismissal imposed upon him by respondent Caltex too harsh and
unreasonable. As enunciated in Radio Communications of the Philippines,
Inc. v. National Labor Relations Commission, supra, "such a penalty (of
dismissal) must be commensurate with the act, conduct or omission imputed
to the employee and imposed in connection with the employer's disciplinary
authority" (at p. 667). Even when there exist some rules agreed upon between
the employer and employee on the subject of dismissal, we have ruled in
Gelmart Industries Phils., Inc. v. National Labor Relations Commission, 176
SCRA 295 (1989), that the same cannot preclude the State from inquiring on
whether its rigid application would work too harshly on the employee.
Of the same mind is the Solicitor General who, invoking Gelmart Industries,
prayed in his Manifestation, in lieu of Comment, that the assailed decision of
NLRC be set aside and reinstatement of petitioner Clarete be ordered.
Indeed, considering that Clarete has no previous record in his eight years of
service; that the value of the lighter fluid, placed at P8.00, is very minimal
compared to his salary of P325.00 a day; that after his dismissal, he has
undergone mental torture; that respondent Caltex did not lose anything as the
bottle of lighter fluid was retrieved on time; and that there was no showing
that Clarete's retention in the service would work undue prejudice to the
viability of employer's operations or is patently inimical to its interest, we
hold that the penalty of dismissal imposed on Clarete is unduly harsh and
grossly disproportionate to the reason for terminating his employment.
Hence, we find that the preventive suspension imposed upon private
respondent is a sufficient penalty for the misdemeanor committed by
petitioner (Gelmart Industries Phils., Inc. v. National Labor Relations
Commission, supra).
Since the dismissal took place on August 24, 1990, or after the passage of
R.A. No. 6715, Clarete is entitled to reinstatement without loss of seniority
rights and other privileges and his full back wages inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual
reinstatement (Maranaw Hotels and Resorts Corporation v. Court of Appeals,
215 SCRA 501 [1992]). As in the case of Pines City v. National Labor
Relations Commission, 224 SCRA 110 (1993) and Pines City Educational
Center v. National Labor Relations Commission, 227 SCRA 655 (1993), the
Court stated that in ascertaining the total amount of back wages payable to
them, we go back to the rule prior to the Mercury Drugrule that the total
amount derived from employment elsewhere by the employee from the date of
dismissal up to the date of reinstatement, if any, should be deducted therefrom
(ItogonSuyoc Mines, Inc. v. Sangilo-Itogon Workers' Union, et al., 24 SCRA
873 [1968]). Inasmuch as petitioner received pay during his preventive
suspension, the same must also be deducted from the monetary awards to be
received by him.
WHEREFORE, the Resolution of National Labor Relations Commission
dated August 30, 1991 is REVERSED and SET ASIDE. Respondent Caltex
Phil., Inc. is ORDERED to reinstate petitioner Clarete to his former position
of Mechanic B without loss of seniority rights and to pay him his full back
wages inclusive of allowances, and other benefits or their monetary equivalent
pursuant to Art. 279 of the Labor Code, as amended by Section 34 of R.A. No.
6715, computed from the time his compensation was withheld from him up to
the time of his actual reinstatement deducting therefrom the amount received
by petitioner during his preventive suspension and any income earned
elsewhere during the period of dismissal if any. No pronouncement as to
costs.
SO ORDERED.
G.R. NO. 166152, October 04, 2005
VILLAMOR GOLF CLUB, BRIGADIER GENERAL FILAMER J.
ARTAJO, AFP (RET.), COLONEL RUBEN C. ESTEPA, LIEUTENANT
COLONEL JULIUS A. MAGNO, AND LIEUTENANT MILAGROS A.
AGUILLON, JOINTLY REPRESENTED BY MAJOR GENERAL
ROBERTO I. SABULARSE, AFP (RET.), PETITIONERS, VS.
RODOLFO F. PEHID, RESPONDENT.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari of the Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 77654 reversing the decision of the
National Labor Relations Commission (NLRC) in NLRC NCR Case No. CA-
031296-02 and affirming the Labor Arbiter's decision.
On September 20, 1975, Rodolfo F. Pehid was employed by the Villamor Golf
Club (VGC) as an attendant in the men's locker room, and, thereafter, he
became the Supervisor-in-Charge. His subordinates included Juanito Superal,
Jr., Patricio Parilla, Ricardo Mendoza, Cesar Velasquez, Vicente Casabon,
Pepito Buenaventura and Carlito Modelo.
On May 1, 1998, the afore-named employees agreed to establish a common
fund from the tips they received from the customers, guests and members of
the club for their mutual needs and benefits. Each member was to contribute
the amount of P100.00 daily. By October 31, 1998, the contributions of the
employees had reached the aggregate amount of P17,990.00 based on the
logbook maintained in the locker room. This agreement, however, was not
known to the VGC management.
An audit of the Locker Room Section of the golf club was conducted on
February 7, 1999. On February 19, 1999, an additional Audit Report[2] was
submitted by Ludy Capuyan, the audit clerk, to the Administrative Department
of the club stating, among others, that based on the information relayed to her,
there was an undeclared and unrecorded aggregate amount of P17,990.00 for
the fund during the period of May 1998 to October 1998. Further, not one in
the said section admitted custody of such amount and there was no record that
the money had been distributed among those employed in the locker room. In
said report, Capuyan recommended that an investigation be conducted to
determine the whereabouts of said amount and who was accountable therefor.
In the meantime, an administrative complaint was filed by Juanito Superal, Jr.,
Patricio Parilla, Ricardo Mendoza, Cesar Velasquez, and Vicente Casabon
charging Pehid with misappropriating the P17,990.00.
An investigation of the matter was conducted by the Head of the Security
Department, who then submitted a Report dated May 10, 1999 with the
following recommendations:
10. Mr. Rodolfo Pehid should produce the common fund amounting allegedly
to P17,990.00.
11. If unable to produce the money, a case of Swindling (ESTAFA) be filed
against him by the locker room employees.
12. Separation from the service if found guilty of the charge by an
administrative body convened by the VGC.[3]
The Legal Officer of the VGC made a similar recommendation. In a Letter[4]
dated May 19, 1999, Col. Ruben Estepa, the Head of the Administrative
Department, directed Pehid to submit his explanation on the said complaint
and the reason why he should not be dismissed from the club for violation of
VGC Rules of Conduct No. IV-E(d).
On May 31, 1999, a certain Mil Raymundo, a VGC member, filed a letter-
complaint against Pehid for misappropriating P3,000.00 from the common
fund. On the same day, Pehid submitted his verified Explanation[5] to Col.
Estepa denying the charges against him and alleging that it was Pepito
Buenaventura who had custody of the fund. He also alleged that the charges
filed against him stemmed from his strict management of the men's locker
room and that his co-employees wanted to install Carlito Modelo as the
person-in-charge in his stead. Pehid demanded that a formal investigation of
the matter be conducted.
After the requisite formal investigation by the Administrative Board of
Inquiry, Pehid received Office Order No. 11-99 from the General Manager of
the club informing him that his employment was terminated effective July 1,
1999. Based on its findings, Pehid committed gross misconduct in the
performance of his duties in violation of Paragraph IV-E(d) of the VGC Rules
and Regulations.[6] He was also informed that he committed acts of dishonesty
which caused and tend to cause prejudice to the club for misappropriating the
common fund of P17,990.00 for his personal benefit.[7]
Pehid filed a complaint for illegal dismissal, unfair labor practice, separation
pay/retirement benefits, damages and attorney's fees against petitioners VGC
and/or Brig. Gen. Filamer Artajo (Ret. AFP), Col. Ruben Estepa, Lt. Milagros
Aguillon, and the VGC Administrative Board of Inquiry.
Pehid averred that he was dismissed without just cause and due process of
law; that there was no basis or evidence to show that he had custody of the
common fund which was used for his own benefit; that he incurred the ire of
his superiors for testifying in support of Asterio Tansiongco, a former Director
of Personnel who was dismissed by VGC; and that one of Tansiongco's
accusers was Dario Velasquez, the brother of Cesar Velasquez, one of the
locker boys who complained against him.
In their Position Paper,[8] the petitioners alleged that when confronted with the
letter-complaint against him, Pehid admitted that his accountability arose from
the proceeds of the sale of the golf club and golf shares entrusted to him,
which he used for his personal needs without the knowledge of the persons
concerned.
On February 28, 2002, the Labor Arbiter rendered judgment in favor of Pehid.
[9]
The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered finding the dismissal of the
complainant from his employment as illegal and concomitantly respondent[s]
are ordered to pay complainant full backwages and separation pay in lieu of
reinstatement in the amounts of P299,000.00 and P239,200.00, respectively.
Respondents are further ordered to pay complainant 10% attorney's fees based
on the total judgment award.
The complaint for moral and exemplary damages are hereby dismissed for
lack of merit.
SO ORDERED.[10]
The Labor Arbiter ruled that Pehid was dismissed from his employment
without any just cause. He declared that there was no formal official
publication among the members of the locker room personnel designating
Pehid as the custodian of the fund. Worse, the witnesses who testified against
Pehid failed to prove that he was the custodian of the said mutual fund since
they only concluded the same by the mere fact that he was the officer-in-
charge of the locker room. Moreover, the Labor Arbiter declared that the acts
attributed to Pehid were not committed in connection with his work as officer-
in-charge of the locker room.[11]
The petitioners appealed the decision to the NLRC. They averred that there
was substantial evidence on record that the complainant was the custodian of
the fund. The matter of keeping in custody the token tips necessarily involved
trust and confidence among the personnel of the locker room. Pehid's custody
of the fund was intertwined with his duties as the officer-in-charge; hence,
there was justification for his dismissal from employment for loss of
confidence.
On December 6, 2002, the NLRC set aside and reversed the decision of the
Labor Arbiter.[12] The NLRC declared that Pehid was lawfully dismissed from
his employment for loss of trust and confidence on account of his
misappropriation of the funds in his custody. The NLRC ruled that such
misappropriation constituted serious misconduct meriting dismissal from his
employment.[13] Pehid filed a motion for the reconsideration of the decision,
which the NLRC denied on April 2, 2003.[14]
Pehid then filed with the CA a petition for certiorari under Rule 65 of the
Rules of Civil Procedure, assailing the decision and resolution of the NLRC.
The respondent maintained that no evidence was adduced to prove that he was
the custodian of the fund. He insisted that the fund subject matter of the
complaint came from the voluntary contributions of the locker room personnel
to be used for their own benefit in times of need, and had no connection
whatsoever with his work as personnel in the locker room. If there was any
misappropriation of the said fund, the same could not in any way prejudice the
club.
On February 11, 2004, the CA rendered a Decision[15] granting the petition. It
reversed and set aside the decision of the NLRC and reinstated the decision of
the Labor Arbiter. The CA declared that Paragraph IV-E(a) and (d) of the VGC
Rules expressly provide that the funds referred to therein are funds of the club
and that the P17,990.00 did not form part of such fund but belonged to the
locker room personnel. The CA also declared that the management of the
VGC had no personal knowledge about the funds and, in fact, had not
sanctioned its existence. Moreover, VGC was not prejudiced by the loss of the
fund.
The petitioners filed a motion for reconsideration of the decision but the CA
denied the same on November 22, 2004,[16] hence, the present petition.
The petitioners raise the following issues:
1. Whether or not the process/proceeding undertaken by the Villamor
Golf Club and the VGC [Administrative] Board of Inquiry is legally
and factually sustainable?
2. Whether or not the Decision of the Honorable Court of Appeals is
contrary to law and jurisprudence and therefore reversible?
3. Whether or not the incident of the case shall, likewise, fall within the
provision of Article 282 paragraph (e) of the Labor Code?[17]
The petitioners insist that there is substantial evidence on record that the
respondent was the custodian of fund belonging to the members of the locker
room and that his misappropriation of the same constituted gross misconduct.
They insist that it is an act of manifest dishonesty within the context of
Paragraph IV-E(d) of the Rules of Conduct of the club, in relation to Article
282(e)[18] of the Labor Code of the Philippines, tending to prejudice the VGC.
The petitioners further insist that, based on the substantial evidence on record,
the respondent misappropriated the fund as his co-employees in the locker
room even positively identified him as the custodian thereof.
The petitioners aver that the respondent's failure to account for and distribute
the common fund which the locker personnel had established for their mutual
aid and benefit is a manifest dishonesty falling within the scope of the proviso
"(d.) All other acts of dishonesty which cause or tend to cause prejudice to
Villamor Golf Club." The petitioners claim that this conduct caused prejudice
to VGC's smooth operation and performance of services to its clientele.
According to the petitioners, the bare fact that the membership in the club is
exclusive makes such members the employers of VGC employees, including
the respondent. Personnel who manage the daily affairs and activities of the
club, like the respondent, are imbued with a high level of trust and confidence.
Moreover, the respondent was expected to observe the diligence required in
the maintenance of order, camaraderie, trust and confidence within the
confines of his assignment. Hence, the termination of his employment for
failure to deliver the cash entrusted to him as the head of the club's locker
room personnel and the custodian of the collective tips was a valid cause.
The petition is denied for lack of merit.

Paragraph IV-E(a) and (d) of the VGC Rules and Regulation cited by the
petitioners reads:
E. Dishonesty
1. The following shall constitute violation of this section.
a) Misappropriation or malversation of Club funds.
...
d) All other acts of dishonesty which cause or tend to cause prejudice to
Villamor Golf Club.[19]
The CA ruled that the petitioners cannot rely on the afore-quoted rule, thus:
Suffice it to state, that public respondent NLRC had overlooked and
misapplied certain facts and circumstances of substance, which, if properly
appreciated, would affect the disposition of the case. Foremost, contrary to the
finding of respondent NLRC, VGC does not only cater its golf services to its
club members who are purely officers of the Armed Forces of the
Philippines.
This is belied by no less than the allegations contained in the respondents'
REPLY TO THE POSITION PAPER OF THE COMPLAINANT xxx, the
membership of VGC is categorized as follows: a) Service member; b) Special
members; c) Associate member; and d) Honorary member. It is noteworthy to
emphasize that under the categories of special member, honorary member and
partly an associate member, they are not officers of the Armed Forces of the
Philippines. In fact, even golfers who are not within the category of the
memberships specified above, could make use of the course and the facilities
of the club as long as they pay the necessary fees. Secondly, the golfers, be
they members of the respondent VGC or simply walk-in paying golfers are
not the employers of the personnel of respondent VGC; and lastly, in no
uncertain terms that the personnel of respondent VGC are members of the
Club.
Prescinding therefrom, there is no doubt in our minds that the funds alleged to
have been embezzled by the petitioner, belonged to the personnel of
respondent VGC and not to respondent VGC. In fact, the latter had not
sanctioned the purpose upon which the said funds were established. Along this
line, We adhere to the Labor Arbiter's disquisition ratiocinated in this wise:
xxx xxx xxx.
In the case at bench, the voluntary contribution by the locker personnel
amongst themselves to a mutual fund for their own personal benefit in times
of need is not in any way connected with the work of the locker boys and the
complainant. If ever there was misappropriation or loss of the said mutual
fund, the respondent will not and cannot be in any way "tend or cause to
prejudice the club." Such mutual fund is a separate transaction among the
employees and is not in any way connected with the employee's work. Thus, if
a co-employee "A" owes employee "B" P100,000.00 and the former absconds
with the money, the employer cannot terminate the employment of employee
"A" for dishonesty and/or serious misconduct since the same was not
committed in connection with the employee's work.[20]
The ruling of the CA is correct. Under the afore-quoted VGC rule, the
dishonesty of an employee to be a valid cause for dismissal must relate to or
involve the misappropriation or malversation of the club funds, or cause or
tend to cause prejudice to VGC. The substantial evidence on record indicates
that the P17,990.00, which was accumulated from a portion of the tips given
by the golfers from May 1998 to October 1998 and was allegedly
misappropriated by the respondent as the purported custodian thereof, did not
belong to VGC but to the forced savings of its locker room personnel. The
truth is, the separate affidavits of Pepito Buenaventura,[21] Juanito Superal, Jr.,
[22]
Ricardo Mendoza,[23] Cesar Velasquez,[24] and Vicente Casabon,[25] as well
as the allegations in the petitioners' Position Paper,[26] show that even the VGC
management did not know about the mutual fund or sanctioned its existence.
Hence, the claim that the petitioners' interest was prejudiced has no factual
basis.
Company policies and regulations are, unless shown to be grossly oppressive
or contrary to law, generally valid and binding and must be complied with by
the parties unless finally revised or amended, unilaterally or preferably
through negotiation.[27] However, while an employee may be validly dismissed
for violation of a reasonable rule or regulation adopted for the conduct of the
company's business,[28] an act allegedly in breach thereof must clearly and
convincingly fall within the express intendment of such order.
Neither may the petitioners rely on Article 282 of the Labor Code. As the CA
succinctly ruled:
Clearly, based on the grounds of termination provided under Article 282 of the
Labor Code and the VGC Rules and Regulations, the common denominator
thereof to constitute gross misconduct as a ground for a valid termination of
the employee, is that - it is committed in connection with the latter's work or
employment. In the instant case, as previously pointed out, the alleged
petitioner's misappropriation or malversation was committed, assuming it to
be true, against the common funds of the Locker Room personnel, which did
not belong nor sanctioned by respondent VGC. A fortiori, respondent VGC
was not prejudiced or damaged by the loss or misappropriation thereof.
Undoubtedly, the parties who were prejudiced or damaged by the alleged
embezzlement, were locker room personnel, who may ventilate any proper
civil or criminal action to whomsoever responsible therefor. Applying the
principle in statutory construction of ejusdem generis, i.e., "where general
words follow an enumeration of persons or things, by words of a particular
and specific meaning, such general words are not to be construed in their
widest extent, but are to be held as applying only to persons or things of the
same kind or class as those specifically mentioned" (United Residents of
Dominican Hill, Inc. vs. Commission on Settlement of Land Problems, 352
SCRA 782). Elementary is the rule that when laws or rules are clear, it is
incumbent upon the judge to apply them regardless of personal belief or
predilections - when the law is unambiguous and unequivocal, application not
interpretation thereof is imperative (De Guzman vs. Sison, 355 SCRA 69).
"Serious misconduct" as a valid cause for the dismissal of an employee is
defined as improper or wrong conduct; the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment. To be
serious within the meaning and intendment of the law, the misconduct must be
of such grave and aggravated character and not merely trivial or unimportant.
[29]
However serious such misconduct, it must, nevertheless, be in connection
with the employee's work to constitute just cause for his separation. The act
complained of must be related to the performance of the employee's duties
such as would show him to be unfit to continue working for the employer.[30]
IN LIGHT OF ALL THE FOREGOING, the instant petition is DENIED
for lack of merit. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 77654 are AFFIRMED. Costs against the
petitioners.
SO ORDERED.
G.R. No. 124617, April 28, 2000
PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION
AND/OR FRANCIS CHUA, PETITIONERS, VS. NATIONAL LABOR
RELATIONS COMMISSION AND ROSALINDA C. CORTEZ,
RESPONDENTS.

DECISION
BELLOSILLO, J.:
This petition seeks to set aside the Decision of 15 February 1996 and the
Resolution of 28 March 1996 of public respondent National Labor Relations
Commission in NLRC NCR CA No. 009753-95 (NLRC NCR Case No. 00-
12-08759-94) which modified the decision of the Labor Arbiter finding
petitioners not guilty of illegal dismissal.
Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a
corporation duly organized and existing under Philippine laws, petitioner
Francis Chua is its President while private respondent Rosalinda C. Cortez
was a company nurse[1] of petitioner corporation until her termination on 7
November 1994.
On 5 October 1994 a memorandum was issued by Ms. Myrna Palomares,
Personnel Manager of petitioner corporation, addressed to private respondent
Rosalinda C. Cortez requiring her to explain within forty-eight (48) hours why
no disciplinary action should be taken against her (a) for throwing a stapler at
Plant Manager William Chua, her superior, and uttering invectives against him
on 2 August 1994; (b) for losing the amount of P1,488.00 entrusted to her by
Plant Manager Chua to be given to Mr. Fang of the CLMC Department on 23
August 1994; and, (c) for asking a co-employee to punch-in her time card thus
making it appear that she was in the office in the morning of 6 September
1994 when in fact she was not. The memorandum however was refused by
private respondent although it was read to her and discussed with her by a co-
employee. She did not also submit the required explanation, so that while her
case was pending investigation the company placed her under preventive
suspension for thirty (30) days effective 9 October 1994 to 7 November 1994.
On 20 October 1994, while Cortez was still under preventive suspension,
another memorandum was issued by petitioner corporation giving her seventy-
two (72) hours to explain why no disciplinary action should be taken against
her for allegedly failing to process the ATM applications of her nine (9) co-
employees with the Allied Banking Corporation. On 21 October 1994 private
respondent also refused to receive the second memorandum although it was
read to her by a co-employee. A copy of the memorandum was also sent by
the Personnel Manager to private respondent at her last known address by
registered mail.
Meanwhile, private respondent submitted a written explanation with respect to
the loss of the P1,488.00 and the punching-in of her time card by a co-
employee.
On 3 November 1994 a third memorandum was issued to private respondent,
this time informing her of her termination from the service effective 7
November 1994 on grounds of gross and habitual neglect of duties, serious
misconduct and fraud or willful breach of trust.[2]
On 6 December 1994 private respondent filed with the Labor Arbiter a
complaint for illegal dismissal, non-payment of annual service incentive leave
pay, 13th month pay and damages against PAAUC and its president Francis
Chua.[3]
On 10 July 1995 the Labor Arbiter rendered a decision holding the termination
of Cortez as valid and legal, at the same time dismissing her claim for
damages for lack of merit.[4]
On appeal to the NLRC, public respondent reversed on 15 February 1996 the
decision of the Labor Arbiter and found petitioner corporation guilty of illegal
dismissal of private respondent Cortez. The NLRC ordered petitioner PAAUC
to reinstate respondent Cortez to her former position with back wages
computed from the time of dismissal up to her actual reinstatement.[5]
On 11 March 1996 petitioners moved for reconsideration. On 28 March 1996
the motion was denied;[6] hence, this petition for certiorari challenging the
NLRC Decision and Resolution.
The crux of the controversy may be narrowed down to two (2) main issues:
whether the NLRC gravely abused its discretion in holding as illegal the
dismissal of private respondent, and whether she is entitled to damages in the
event that the illegality of her dismissal is sustained.
The Labor Code as amended provides specific grounds by which an employer
may validly terminate the services of an employee,[7] which grounds should be
strictly construed since a persons employment constitutes "property" under
the context of the constitutional protection that "no person shall be deprived of
life, liberty or property without due process of law" and, as such, the burden
of proving that there exists a valid ground for termination of employment rests
upon the employer.[8] Likewise, in light of the employee's right to security of
tenure, where a penalty less punitive than dismissal will suffice, whatever
missteps may have been committed by labor ought not to be visited with a
consequence so severe.[9]
A perusal of the termination letter indicates that private respondent was
discharged from employment for "serious misconduct, gross and habitual
neglect of duties and fraud or willful breach of trust." Specifically -justice
1. On August 2, 1994, you committed acts constituting gross disrespect to
your superior Mr. William Chua, the Plant Manager.
2. On August 23, 1994, the Plant Manager entrusted you the amount of
P1,488.00 to be sent to CLMC for Mr. Fang but the money was allegedly lost
in your possession and was not recovered.
3. On September 6, 1994, you caused someone else to punch-in your time card
to show that you were at work when in fact you were doing a personal errand
for Richard Tan. As per time card you were in at 8:02 A.M. but you only
arrived at 12:35 P.M.
4. On July 28, 1994, you received an amount of P900.00 from Miss Lucy Lao
to open an ATM card of nine (9) employees. On September 24, 1994, one of
the employees complained by the name of Tirso Aquino about the status of his
ATM Card and upon query from the bank it was found out that no application
and no deposit for said person has been made. Likewise, it was found out that
you did not open the ATM Card and deposit the P800.00 for the 8 other
employees. It turned out that said deposit was made after a month later.[10]
As to the first charge, respondent Cortez claims that as early as her first year
of employment her Plant Manager, William Chua, already manifested a
special liking for her, so much so that she was receiving special treatment
from him who would oftentimes invite her "for a date," which she would as
often refuse. On many occasions, he would make sexual advances - touching
her hands, putting his arms around her shoulders, running his fingers on her
arms and telling her she looked beautiful. The special treatment and sexual
advances continued during her employment for four (4) years but she never
reciprocated his flirtations, until finally, she noticed that his attitude towards
her changed. He made her understand that if she would not give in to his
sexual advances he would cause her termination from the service; and he
made good his threat when he started harassing her. She just found out one
day that her table which was equipped with telephone and intercom units and
containing her personal belongings was transferred without her knowledge to
a place with neither telephone nor intercom, for which reason, an argument
ensued when she confronted William Chua resulting in her being charged with
gross disrespect.[11]
Respondent Cortez explains, as regards the second charge, that the money
entrusted to her for transmittal was not lost; instead, she gave it to the
company personnel in-charge for proper transmittal as evidenced by a receipt
duly signed by the latter.[12]
With respect to the third imputation, private respondent admits that she asked
someone to punch-in her time card because at that time she was doing an
errand for one of the company's officers, Richard Tan, and that was with the
permission of William Chua. She maintains that she did it in good faith
believing that she was anyway only accommodating the request of a company
executive and done for the benefit of the company with the acquiescence of
her boss, William Chua. Besides, the practice was apparently tolerated as the
employees were not getting any reprimand for doing so.[13]
As to the fourth charge regarding her alleged failure to process the ATM cards
of her co-employees, private respondent claims that she has no knowledge
thereof and therefore denies it. After all, she was employed as a company
nurse and not to process ATM cards for her co-employees.
The Supreme Court, in a litany of decisions on serious misconduct warranting
dismissal of an employee, has ruled that for misconduct or improper behavior
to be a just cause for dismissal (a) it must be serious; (b) must relate to the
performance of the employees duties; and, (c) must show that the employee
has become unfit to continue working for the employer.[14] The act of private
respondent in throwing a stapler and uttering abusive language upon the
person of the plant manager may be considered, from a lay man's perspective,
as a serious misconduct. However, in order to consider it a serious misconduct
that would justify dismissal under the law, it must have been done in relation
to the performance of her duties as would show her to be unfit to continue
working for her employer. The acts complained of, under the circumstances
they were done, did not in any way pertain to her duties as a nurse. Her
employment identification card discloses the nature of her employment as a
nurse and no other.[15] Also, the memorandum informing her that she was
being preventively suspended pending investigation of her case was addressed
to her as a nurse.[16]
As regards the third alleged infraction, i.e., the act of private respondent in
asking a co-employee to punch-in her time card, although a violation of
company rules, likewise does not constitute serious misconduct. Firstly, it was
done by her in good faith considering that she was asked by an officer to
perform a task outside the office, which was for the benefit of the company,
with the consent of the plant manager. Secondly, it was her first time to
commit such infraction during her five (5)-year service in the company.
Finally, the company did not lose anything by reason thereof as the offense
was immediately known and corrected.
On alleged infraction No. 4, as may be gleaned from and admitted in the
memorandum of petitioners to private respondent dated 20 October 1994[17]
and the notice of termination dated 3 November 1994, the money entrusted to
her was in fact deposited in the respective accounts of the employees
concerned, although belatedly. We agree with the submission of the Solicitor
General that -
The mere delay/failure to open an ATM account for nine employees is not
sufficient, by itself, to support a conclusion that Rosalinda is guilty of gross
and habitual neglect of duties. First, petitioner did not show that opening an
ATM is one of her primary duties as company nurse. Second, petitioner failed
to show that Rosalinda intentionally, knowingly, and purposely delayed the
opening of ATM accounts for petitioners employees. It is of common
knowledge that a bank imposes upon an applicant certain requirements before
an ATM account can be opened, i.e. properly filled up application forms,
identification cards, minimum deposit etc. In the instant case, petitioner did
not prove that the delay was caused by Rosalindas neglect or willful act
(emphasis supplied).[18]
Gross negligence implies a want or absence of or failure to exercise slight care
or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them.[19] The negligence, to
warrant removal from service, should not merely be gross but also habitual.
Likewise, the ground "willful breach by the employee of the trust reposed in
him by his employer" must be founded on facts established by the employer
who must clearly and convincingly prove by substantial evidence the facts and
incidents upon which loss of confidence in the employee may fairly be made
to rest.[20] All these requirements prescribed by law and jurisprudence are
wanting in the case at bar.
On the issue of moral and exemplary damages, the NLRC ruled that private
respondent was not entitled to recover such damages for her failure to prove
that petitioner corporation had been motivated by malice or bad faith or that it
acted in a wanton, oppressive or malevolent manner in terminating her
services. In disbelieving the explanation proffered by private respondent that
the transfer of her table was the response of a spurned lothario, public
respondent quoted the Labor Arbiter -
Complainants assertion that the cause of the altercation between her and the
Plant Manager where she threw a stapler to him and uttered invectives against
him was her refusal to submit to his advances to her which started from her
early days of employment and lasted for almost four years, is hardly
believable. For indeed, if there was such harassment, why was there no
complaints (sic) from her during that period? Why did she stay there for so
long? Besides, it could not have taken that period for the Plant Manager to
react. This assertion of the complainant deserves no credence at all.[21]
Public respondent in thus concluding appears baffled why it took private
respondent more than four (4) years to expose William Chua's alleged sexual
harassment. It reasons out that it would have been more prepared to support
her position if her act of throwing the stapler and uttering invectives on
William Chua were her immediate reaction to his amorous overtures. In that
case, according to public respondent, she would have been justified for such
outburst because she would have been merely protecting her womanhood, her
person and her rights.
We are not persuaded. The gravamen of the offense in sexual harassment is
not the violation of the employee's sexuality but the abuse of power by the
employer. Any employee, male or female, may rightfully cry "foul" provided
the claim is well substantiated. Strictly speaking, there is no time period
within which he or she is expected to complain through the proper channels.
The time to do so may vary depending upon the needs, circumstances, and
more importantly, the emotional threshold of the employee.
Private respondent admittedly allowed four (4) years to pass before finally
coming out with her employer's sexual impositions. Not many women,
especially in this country, are made of the stuff that can endure the agony and
trauma of a public, even corporate, scandal. If petitioner corporation had not
issued the third memorandum that terminated the services of private
respondent, we could only speculate how much longer she would keep her
silence. Moreover, few persons are privileged indeed to transfer from one
employer to another. The dearth of quality employment has become a daily
"monster" roaming the streets that one may not be expected to give up one's
employment easily but to hang on to it, so to speak, by all tolerable means.
Perhaps, to private respondent's mind, for as long as she could outwit her
employer's ploys she would continue on her job and consider them as mere
occupational hazards. This uneasiness in her place of work thrived in an
atmosphere of tolerance for four (4) years, and one could only imagine the
prevailing anxiety and resentment, if not bitterness, that beset her all that time.
But William Chua faced reality soon enough. Since he had no place in private
respondent's heart, so must she have no place in his office. So, he provoked
her, harassed her, and finally dislodged her; and for finally venting her pent-up
anger for years, he "found" the perfect reason to terminate her.
In determining entitlement to moral and exemplary damages, we restate the
bases therefor. In moral damages, it suffices to prove that the claimant has
suffered anxiety, sleepless nights, besmirched reputation and social
humiliation by reason of the act complained of.[22] Exemplary damages, on the
other hand, are granted in addition to, inter alia, moral damages "by way of
example or correction for the public good"[23] if the employer "acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner."[24]
Anxiety was gradual in private respondent's five (5)-year employment. It
began when her plant manager showed an obvious partiality for her which
went out of hand when he started to make it clear that he would terminate her
services if she would not give in to his sexual advances. Sexual harassment is
an imposition of misplaced "superiority" which is enough to dampen an
employee's spirit in her capacity for advancement. It affects her sense of
judgment; it changes her life. If for this alone private respondent should be
adequately compensated. Thus, for the anxiety, the seen and unseen hurt that
she suffered, petitioners should also be made to pay her moral damages, plus
exemplary damages, for the oppressive manner with which petitioners effected
her dismissal from the service, and to serve as a forewarning to lecherous
officers and employers who take undue advantage of their ascendancy over
their employees.

All told, the penalty of dismissal is too excessive and not proportionate to the
alleged infractions committed considering that it does not appear that private
respondent was an incorrigible offender or that she inflicted serious damage to
the company, nor would her continuance in the service be patently inimical to
her employers interest.[25] Even the suspension imposed upon her while her
case was pending investigation appears to be unjustified and uncalled for.

WHEREFORE, the Decision of public respondent National Labor Relations

Commssion finding the dismissal of private respondent Rosalinda C. Cortez to
be without just cause and ordering petitioners Philippine Aeolus Automotive
United Corporation and/or Francis Chua to pay her back wages computed
from the time of her dismissal, which should be full back wages, is
AFFIRMED. However, in view of the strained relations between the adverse
parties, instead of reinstatement ordered by public respondent, petitioners
should pay private respondent separation pay equivalent to one (1) month
salary for every year of service until finality of this judgment. In addition,
petitioners are ordered to pay private respondent P25,000.00 for moral
damages and P10,000.00 for exemplary damages. Costs against petitioners. G.R. No. 152329, April 22, 2003
SO ORDERED ALEJANDRO ROQUERO, PETITIONER, VS. PHILIPPINE
AIRLINES, INC., RESPONDENT.
DECISION
PUNO, J.:
Brought up on this Petition for Review is the decision of the Court of Appeals
dismissing Alejandro Roquero as an employee of the respondent Philippine
Airlines, Inc.
Roquero, along with Rene Pabayo, were ground equipment mechanics of
respondent Philippine Airlines, Inc. (PAL for brevity). From the evidence on
record, it appears that Roquero and Pabayo were caught red-handed
possessing and using Methampethamine Hydrochloride or shabu in a raid
conducted by PAL security officers and NARCOM personnel.
The two alleged that they did not voluntarily indulge in the said act but were
instigated by a certain Jojie Alipato who was introduced to them by Joseph
Ocul, Manager of the Airport Maintenance Division of PAL. Pabayo alleged
that Alipato often bragged about the drugs he could smuggle inside the
company premises and invited other employees to take the prohibited drugs.
Alipato was unsuccessful, until one day, he was able to persuade Pabayo to
join him in taking the drugs. They met Roquero along the way and he agreed
to join them. Inside the company premises, they locked the door and Alipato
lost no time in preparing the drugs to be used. When they started the
procedure of taking the drugs, armed men entered the room, arrested Roquero
and Pabayo and seized the drugs and the paraphernalia used.[1] Roquero and
Pabayo were subjected to a physical examination where the results showed
that they were positive of drugs. They were also brought to the security office
of PAL where they executed written confessions without the benefit of
counsel.[2]
On March 30, 1994, Roquero and Pabayo received a notice of administrative
charge[3] for violating the PAL Code of Discipline. They were required to
answer the charges and were placed under preventive suspension.
Roquero and Pabayo, in their reply to notice of administrative charge,[4]
assailed their arrest and asserted that they were instigated by PAL to take the
drugs. They argued that Alipato was not really a trainee of PAL but was placed
in the premises to instigate the commission of the crime. They based their
argument on the fact that Alipato was not arrested. Moreover, Alipato has no
record of employment with PAL.
In a Memorandum dated July 14, 1994, Roquero and Pabayo were dismissed
by PAL.[5] Thus, they filed a case for illegal dismissal.[6]
In the Labor Arbiters decision, the dismissal of Roquero and Pabayo was
upheld. The Labor Arbiter found both parties at fault PAL for applying
means to entice the complainants into committing the infraction and the
complainants for giving in to the temptation and eventually indulging in the
prohibited activity. Nonetheless, the Labor Arbiter awarded separation pay and
attorneys fees to the complainants.[7]
While the case was on appeal with the National Labor Relations Commission
(NLRC), the complainants were acquitted by the Regional Trial Court (RTC)
Branch 114, Pasay City, in the criminal case which charged them with
conspiracy for possession and use of a regulated drug in violation of Section
16, Article III of Republic Act 6425, on the ground of instigation.
The NLRC ruled in favor of complainants as it likewise found PAL guilty of
instigation. It ordered reinstatement to their former positions but without
backwages.[8] Complainants did not appeal from the decision but filed a
motion for a writ of execution of the order of reinstatement. The Labor Arbiter
granted the motion but PAL refused to execute the said order on the ground
that they have filed a Petition for Review before this Court.[9] In accordance
with the case of St. Martin Funeral Home vs. NLRC and Bienvenido Aricayos,
[10]
PALs petition was referred to the Court of Appeals.[11]
During the pendency of the case with the Court of Appeals, PAL and Pabayo
filed a Motion to Withdraw/Dismiss the case with respect to Pabayo, after they
voluntarily entered into a compromise agreement.[12] The motion was granted
in a Resolution promulgated by the Former Thirteenth Division of the Court
of Appeals on January 29, 2002.[13]
The Court of Appeals later reversed the decision of the NLRC and reinstated
the decision of the Labor Arbiter insofar as it upheld the dismissal of Roquero.
However, it denied the award of separation pay and attorneys fees to Roquero
on the ground that one who has been validly dismissed is not entitled to those
benefits.[14]
The motion for reconsideration by Roquero was denied. In this Petition for
Review on Certiorari under Rule 45, he raises the following issues:
1. Whether or not the instigated employee shall be solely responsible for
an action arising from the instigation perpetrated by the employer;
2. Can the executory nature of the decision, more so the reinstatement
aspect of a labor tribunals order be halted by a petition having been
filed in higher courts without any restraining order or preliminary
injunction having been ordered in the meantime?
3. Would the employer who refused to reinstate an employee despite a
writ duly issued be held liable to pay the salary of the subject
employee from the time that he was ordered reinstated up to the time
that the reversed decision was handed down?[15]
I notice of the employers decision to dismiss him.[19] Both were given by
There is no question that petitioner Roquero is guilty of serious misconduct
for possessing and using shabu. He violated Chapter 2, Article VII, section 4
of the PAL Code of Discipline which states:
Any employee who, while on company premises or on duty, takes or is under
the influence of prohibited or controlled drugs, or hallucinogenic substances
or narcotics shall be dismissed.[16]
Serious misconduct is defined as the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment.[17] For
serious misconduct to warrant the dismissal of an employee, it (1) must be
serious; (2) must relate to the performance of the employees duty; and (3)
must show that the employee has become unfit to continue working for the
employer.[18]
It is of public knowledge that drugs can damage the mental faculties of the
user. Roquero was tasked with the repair and maintenance of PALs airplanes.
He cannot discharge that duty if he is a drug user. His failure to do his job can
mean great loss of lives and properties. Hence, even if he was instigated to
take drugs he has no right to be reinstated to his position. He took the drugs
fully knowing that he was on duty and more so that it is prohibited by
company rules. Instigation is only a defense against criminal liability. It
cannot be used as a shield against dismissal from employment especially when
the position involves the safety of human lives.
Petitioner cannot complain he was denied procedural due process. PAL
complied with the twin-notice requirement before dismissing the petitioner.
The twin-notice rule requires (1) the notice which apprises the employee of
the particular acts or omissions for which his dismissal is being sought along
with the opportunity for the employee to air his side, and (2) the subsequent
respondent PAL.
II
Article 223 (3rd paragraph) of the Labor Code,[20] as amended by Section 12
of Republic Act No. 6715,[21] and Section 2 of the NLRC Interim Rules on
Appeals under RA No. 6715, Amending the Labor Code,[22] provide that an
order of reinstatement by the Labor Arbiter is immediately executory even
pending appeal. The rationale of the law has been explained in Aris (Phil.)
Inc. vs. NLRC:[23]
In authorizing execution pending appeal of the reinstatement aspect of a
decision of the Labor Arbiter reinstating a dismissed or separated employee,
the law itself has laid down a compassionate policy which, once more, vivifies
and enhances the provisions of the 1987 Constitution on labor and the
working man.
xxx xxx xxx
These duties and responsibilities of the State are imposed not so much to
express sympathy for the workingman as to forcefully and meaningfully
underscore labor as a primary social and economic force, which the
Constitution also expressly affirms with equal intensity. Labor is an
indispensable partner for the nations progress and stability.
xxx xxx xxx
x x x In short, with respect to decisions reinstating employees, the law itself
has determined a sufficiently overwhelming reason for its execution pending
appeal.
xxx xxx xxx
x x x Then, by and pursuant to the same power (police power), the State may
authorize an immediate implementation, pending appeal, of a decision
reinstating a dismissed or separated employee since that saving act is designed
to stop, although temporarily since the appeal may be decided in favor of the
appellant, a continuing threat or danger to the survival or even the life of the
dismissed or separated employee and his family.
The order of reinstatement is immediately executory. The unjustified refusal
of the employer to reinstate a dismissed employee entitles him to payment of
his salaries effective from the time the employer failed to reinstate him despite
the issuance of a writ of execution.[24] Unless there is a restraining order
issued, it is ministerial upon the Labor Arbiter to implement the order of
reinstatement. In the case at bar, no restraining order was granted. Thus, it was
mandatory on PAL to actually reinstate Roquero or reinstate him in the
payroll. Having failed to do so, PAL must pay Roquero the salary he is
entitled to, as if he was reinstated, from the time of the decision of the NLRC
until the finality of the decision of this Court.
We reiterate the rule that technicalities have no room in labor cases where the
Rules of Court are applied only in a suppletory manner and only to effectuate
the objectives of the Labor Code and not to defeat them.[25] Hence, even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher
court. On the other hand, if the employee has been reinstated during the appeal
period and such reinstatement order is reversed with finality, the employee is
not required to reimburse whatever salary he received for he is entitled to
such, more so if he actually rendered services during the period.
IN VIEW WHEREOF, the dismissal of petitioner Roquero is AFFIRMED,
but respondent PAL is ordered to pay the wages to which Roquero is entitled
from the time the reinstatement order was issued until the finality of this
decision.
SO ORDERED.
G.R. No. 194813, April 25, 2012
KAKAMPI AND ITS MEMBERS, VICTOR PANUELOS, ET AL.,
REPRESENTED BY DAVID DAYALO, KAKAMPI VICE PRESIDENT
AND ATTORNEY-IN-FACT, PETITIONER, VS. KINGSPOINT
EXPRESS AND LOGISTIC AND/OR MARY ANN CO,
RESPONDENTS.
DECISION
REYES, J.:
This is a petition for review under Rule 45 of the Rules of Court of the
Amended Decision[1] dated March 16, 2010 and Resolution[2] dated December
16, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 106591.
Victor Pauelos (Pauelos), Bobby Dacara (Dacara), Alson Dizon (Dizon),
Saldy Dimabayao (Dimabayao), Fernando Lupangco, Jr. (Lupangco), Sandy
Pazi (Pazi), Camilo Tabarangao, Jr. (Tabarangao), Eduardo Hizole (Hizole)
and Reginald Carillo (Carillo) were the former drivers of Kingspoint Express
and Logistic (Kingspoint Express), a sole proprietorship registered in the
name of Mary Ann Co (Co) and engaged in the business of transport of goods.
They were dismissed from service on January 20, 2006 on the grounds of
serious misconduct, dishonesty, loss of trust and confidence and commission
of acts inimical to the interest of Kingspoint Express.
Prior thereto, Kingspoint Express issued separate notices to explain to the
individual petitioners on January 16, 2006, uniformly stating that:
RE: CHARGES OF DISHONESTY
SERIOUS MISCONDUCT &
LOSS OF CONFIDENCE
Dear Mr. Dacara:
You are hereby formally charged with DISHONESTY, SERIOUS
MISCONDUCT, LOSS OF CONFIDENCE, and acts inimical to the company,
by filing with the National Labor Relations Commission (NLRC) false,
malicious, and fabricated cases against the company. Further, your refusal to
undergo drug testing is unwarranted and against company policy.
Please submit your answer or explanation to the foregoing charges within
forty-eight (48) hours [from] receipt hereof. Your failure to do so would mean
that you waive your right to submit your answer.
You may likewise opt for a formal investigation with the assistance of
counsel, or proceed with the investigation as you may choose.
In the meantime, you are place[d] under preventive suspension for thirty (30)
days effective on January 16, 2006. You are physically barred from company
premises while the preventive suspension exists[.][3]
The individual petitioners failed to submit their written explanation within the
stated period. Subsequently, Kingspoint Express issued to them separate yet
uniformly worded notices on January 20, 2006, informing them of their
dismissal. Kingspoint Express expressed its decision in this wise:
On January 16, 2006, you were formally charged with DISHONESTY,
SERIOUS MISCONDUCT and LOSS OF CONFIDENCE and ACTS
INIMICAL TO THE COMPANY based on the following acts:
1. FABRICATION OF BASELESS MONEY CLAIMS against the company;
2. MISLEADING FELLOW CO-WORKERS to sign the MALICIOUS
COMPLAINT FOR MONEY CLAIMS against the company;
3. REFUSAL TO UNDERGO THE COMPANYS GENERAL DRUG
TEST[;]
4. EXTORTING MONEY FROM CO-WORKERS TO FUND ACTIVITIES
THAT THEY WERE NEVER FULLY INFORMED OF;
You were given two (2) days to respond to these charges, but you failed to do
[so].[4]
In addition to the foregoing, Dacara was dismissed for consummating his
sexual relations with one of Cos household helpers inside Cos residence thus
impregnating her.[5]
A complaint for illegal dismissal was subsequently filed, alleging that the
charges against them were fabricated and that their dismissal was prompted by
Kingspoint Express aversion to their union activities.
In a Decision[6] dated April 23, 2007, Labor Arbiter Cresencio G. Ramos, Jr.
(LA Ramos) found Dacara, Lupangco, Pazi, Tabarangao, Hizole and Carillo
illegally dismissed. On the other hand, the complaint was dismissed insofar as
Panuelos, Dizon and Dimabayao are concerned as they were deemed not to
have filed their position papers. While the allegation of anti-unionism as the
primordial motivation for the dismissal is considered unfounded, the
respondents failed to prove that the dismissal was for a just cause. The
pertinent portion of the decision reads:
From a perusal and examination of the pieces of evidence adduced by the
respondents in support of their defense, this Office finds the same as not being
sufficient and substantial to establish the charges of serious misconduct and
breach of trust. Consider the following:
On the complainants alleged refusal to undergo the companys general drug
testing, the same is explicitly nothing but an unsubstantiated allegation,
therefore, undeserving of judicial and quasi-judicial cognizance.
On the alleged act of the complainants in extorting money from co-workers to
fund activities that they were not fully informed of as well as the alleged
misleading of co-workers to sign malicious money claims against the
company, it is to be noticed that respondents support or evidence thereto are
the joint affidavit of drivers and helpers as well as that of one Ronie Dizon.
On said pieces of evidence, this Office could not give much probative or
evidentiary value and weight thereto as said sworn statements may definitely
not be said to have genuinely emanated from the affiants (sic) drivers and
helpers. To be precise, the joint-affidavit of the drivers and helpers (annex
B, respondents position paper) obviously was tailor-made, so to speak, to
conform with the respondents position or defense in the instant case. Said
joint-affidavit in fact is couched in english, thus, tremendously lowering the
probability that the statements therein really came from the hearts and souls
of the lowly-educated drivers and helpers.
On the breach of trust allegedly committed by Bobby Dacara with respect to
the alleged act of repeatedly sneaking in the household of respondent Mary
Ann Co and thereafter impregnating one of the latters househelps, the same is
nothing but an unsubstantiated allegation and therefore, undeserving of
judicial and quasi-judicial cognizance. Jurisprudence definitely is explicit on
this point that an affirmative allegation made by a party must duly be proven
to merit acceptance (People vs. Calayca, 301 SCRA 192).[7]
On appeal, the National Labor Relations Commission (NLRC) affirmed LA
Ramos Decision dated April 23, 2007 in its Resolution[8] dated April 30, 2008,
thus:
In the case at bar, We are persuaded to agree with the findings of the Labor
Arbiter that the pieces of evidence adduced by the respondents in support of
their defense x x x not being sufficient and substantial to establish the charges
of serious misconduct and breach of trust (Records, p. 96).[9]
In addition, the NLRC ruled that the respondents failed to comply with the
procedural requirements of due process. Specifically:
It is also observed that much is to be desired insofar as the observance of the
procedural due process aspect is concerned. Firstly, there was no compliance
with the due process requirement of the law considering that the uniformly
worded first notice, all dated January 16, 2006, sent by respondents-appellants
to the complainants-appellees, did not apprise them of the particular acts or
omission for which their dismissal were sought. As clearly shown by the said
individual notices, each of the complainants-appellees was merely informed
that he or she is formally charged with DISHONESTY, SERIOUS
MISCONDUCT, LOSS OF CONFIDENCE and acts inimical to the
Company x x x without specifying the particular or specific acts or omissions
constituting the grounds for their dismissal.
The purpose of the first notice is to sufficiently apprise the employee of the
acts complained of and to enable the employee to prepare his defense. In this
case, though, the said first notice did not identify the particular acts or
omissions committed by each of the complainants-appellees. The extent of
their knowledge and participation in the generally described charges were not
specified in the said first notice, hence, the complainants-appellee could not be
expected to intelligently and adequately prepare their defense. The first notice
should neither be pro-forma nor vague; that it should set out clearly what each
of the employees is being held liable for. They should be given ample
opportunity to be heard and not mere opportunity. Ample opportunity means
that each of the complainants-appellees should be specifically informed of the
charges in order to give each of them, an opportunity to refute such
accusations. Since, the said first notices are inadequate, their dismissal could
not be in accordance with due process x x x.
Secondly, there was no just or authorized cause for the respondents-appellants
to terminate the complainants-appellees services. It is observed that the
Notices of Termination, all dated January 20, 2006, merely mentioned the
ground relied upon, to wit:
xxxx
Placing side by side the first (1st) notices and the Notice of Termination, We
can easily notice the wide disparity between them. In the first (1st) notices,
the alleged charges leveled against each of complainants-appellees were
couched in general terms, such as: DISHONESTY, SERIOUS
MISCONDUCT, LOSS OF CONFIDENCE and ACTS INIMICAL TO THE
COMPANY, such that the complainants-appellees could not be expected to
prepare their responsive pleadings; while the uniformly worded Notices of
Termination, as earlier quoted, the charges leveled against of (sic) them are
more specific.[10]
Respondents moved for reconsideration and in a Decision[11] dated July 17,
2008, the NLRC reversed itself and declared the individual petitioners legally
dismissed:
Respondent company is an entity engaged in the delivery of goods called
door-to-door business. As such, respondents are in custody of goods and
moneys belonging to customers. Thus, respondents want to ensure that their
drivers are drug-free and honest. It is undeniable that persons taking
prohibited drugs tend to commit criminal activities when they are high, as
most of them are out of their minds. Complainants are drivers and are on the
road most of the time. Thus, they must see to it that they do not cause damage
to other motor vehicles and pedestrians.
Likewise, when delivering goods and money, it is not impossible that they
could commit acts inimical to the respondents interest, like failure to deliver
the money or goods to the right person or do a hold-up me scenario.
Thus, to guarantee complainants-drivers safety and effective performance of
their assigned tasks, respondents ordered complainants to undergo drug
testing. However, they refused to follow the directive. Neither did they give a
clear explanation for their refusal to the respondents. This shows
complainants wrongful attitude to defy the reasonable orders which
undoubtedly pertain to their duties as drivers of the respondents. Such act is
tantamount to willful disobedience of a lawful order, a valid ground for
dismissal under the Labor Code, as amended.
Furthermore, employees who are not complainants in this case, in a sworn
statement attested to the fact that complainants tricked them to sign papers
which turned out to be a complaint for money claims. They also accused them
of abusing their trust in order to achieve their selfish motives. Complainants
even convinced them to shell out part of their salaries without authorization
and consent, as panggatos para sa papeles, transportasyon ng abugado but
said money was used for the Unions purposes. Worse, complainants even
threatened them to file criminal charges against them if they did not follow the
complainants evil plans. x x x
In their Rejoinder, respondents also mentioned about the loss of cargoes to be
delivered to Pampanga and Nueva Ecija. Complainants failed to refute the
allegations nor comment on the matter. This led to respondents loss of trust
and confidence reposed in them. Considering that the drivers have in their
possession money and goods to be delivered, the continuance of their
employment depends on the trust and confidence in them. Undeniably, trust,
once lost is hard to regain.
xxxx
We disagree.
On January 16, 2006, respondents sent each of the complainants a letter
stating the infractions committed by them. They directed them to explain the
said infractions with a warning that failure to do so would mean waiver of
their right to submit their answer. They further advised them to opt for a
formal investigation with assistance of the counsel, or proceed with the
investigation you may choose.
However, complainants failed to answer. Neither did they do any act to
dispute the charges. They remained silent on the infractions which a person
would not normally do if he is not guilty of the said charges. If they were
really innocent, immediately, even without any notice, they should have
reacted and did everything to dispute the charges. But they failed, despite the
notice to explain. This would lead to the conclusion that they were guilty of
the charges imputed against them. As a consequence thereof, the complainants
are considered to have waived their right to defend themselves.[12]
Petitioners moved for reconsideration but the same was denied in a
Resolution[13] dated September 30, 2008.
Subsequently, the petitioners filed a petition for certiorari with the CA. In a
Decision[14] dated July 17, 2009, the CA reversed and set aside the NLRC
Decision dated July 17, 2008 and Resolution dated September 30, 2008. Thus:
Initially, this Court must determine whether the petitioners violated the
Company Policies as would warrant their dismissal from the service.
However, a painstaking review of the records of this case negate[s] a finding
of such culpability on the part of the petitioners.
The charges of dishonesty, serious misconduct and loss of confidence against
the petitioners are nothing more than bare allegations as neither the show
cause orders nor the termination letters specify in clear and unmistakable
manner, the specific acts committed by the petitioners as would amount to
dishonesty, serious misconduct or loss of confidence. Neither of these notices
even contain any averments as to how and when the alleged infractions were
committed by the petitioners.
xxx
In this case, respondent company had not been able to identify an act of
dishonesty, serious misconduct or any illicit act, which the petitioners may
have committed in connection with their work, except the allegation that
petitioners filed false, malicious, and fabricated cases against the company
which, under the Labor Code, is not a valid ground for termination of
employment. There is even no mention of any company policy or rule violated
by any of the petitioners to warrant their dismissal. The charges are clearly
unfounded.
xxxx
The superficial compliance with two notices and a hearing in this case cannot
be considered valid where the notices to explain where issued four (4) days
before the petitioners were terminated. The termination was obviously
hurriedly effected, as the respondent failed to give the petitioners the avenue
to contradict the charges against them either by submission of their answer or
by the conduct of an actual investigation in order to give spirit to the
requirement of due process. Petitioners were thus robbed of their rights to
explain their side, to present evidence and rebut what was presented against
them, rights ensured by the proper observance of procedural due process.[15]
Respondents promptly filed a motion for reconsideration. Similar to the
NLRC, the CA reversed itself and retracted its earlier finding that the
individual petitioners were illegally dismissed. In its Amended Decision[16]
dated March 16, 2010, the CA concluded that the two (2) notices issued by
Kingspoint Express complied with the requirements of the law:
In the assailed Decision, We conceded that all the petitioners were actually
furnished with a letter dated 16 January 2006. In each letter, petitioners were
individually charged with dishonesty, serious misconduct, loss of confidence
for performing acts inimical to the company by filing with the NLRC false,
malicious and fabricated cases against the company and their refusal to
undergo drug testing. They were directed to submit an answer or explanation
within forty-eight (48) hours and were even given the option to avail of a
formal investigation with the assistance of counsel. They were further advised
that failure to submit said answer/explanation would mean waiver on their
part. Thus, when they failed to submit an explanation/Answer, and failed to
inform their employer that they wanted a formal investigation on the matter,
their employer was constrained to serve upon them on 20 January 2006, or
four (4) days later, separate notices of termination stating the offenses they
committed, viz.:
xxxx
Show-cause letters/memoranda create a burden on the employees to explain
their innocence. In turn, it is from such explanation that the employer will be
obliged to prove his case in an investigation. Since the petitioners did not
explain, much less invoke their right to investigation, it follows that they are
deemed to have waived their rights under Art. 277(b) of the Labor Code.
Technically, the law on evidence considers them to have admitted the charges
against them. With such admission, the employer is discharged from the need
to prove the offenses charged. It is well-settled that in any forum, whether
judicial or administrative, a party need not prove what is admitted.[17]
(Citations omitted)
The CA also held that the individual petitioners performed acts, which
constitute serious misconduct:
The assailed Decision admits what constitutes serious misconduct.
Here, except for Bobby Dacara, each of the three petitioners conceded the
existence of the following bases for their dismissal: (1) complainants refusal
to undergo mandatory drug-testing; (2) creating disharmony and distrust
among the workers and misleading them to go against the employer; and (3)
losing cargo with a value of P250,000.00 entrusted to respondent
company for door-to-door delivery.
Verily, each of the aforestated grounds independently constitute[s] serious
misconduct. Each of them were (sic) committed in relation to petitioners
work. And again, the commission of said infractions constitutes a ground to
dismiss under Art. 282(a) of the Code. The Court, therefore, gravely erred
when it held that no serious misconduct was committed by petitioners in this
case.
On the other hand, in the case of Bobby Dacara, records show that he
committed breach of trust and confidence by sneaking into the house of
private respondent Co and engaging one of Cos helpers in repeated sexual
congress leading to her pregnancy. As held in Santos, Jr. vs. NLRC, such
behavior amounts to immorality which is a case of serious misconduct; a just
cause to dismiss an employee.[18] (Citation omitted)
Petitioners moved for reconsideration but this was denied by the CA in its
Resolution[19] dated December 16, 2010.
The lone issue for the disposition of this Court is the validity of the individual
petitioners dismissal.
It is fundamental that in order to validly dismiss an employee, the employer is
required to observe both substantive and procedural due process the
termination of employment must be based on a just or authorized cause and
the dismissal must be effected after due notice and hearing.[20]
As to whether Kingspoint Express complied with the substantive requirements
of due process, this Court agrees with the CA that the concerned employees
refusal to submit themselves to drug test is a just cause for their dismissal.
An employer may terminate an employment on the ground of serious
misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work. Willful
disobedience requires the concurrence of two elements: (1) the employee's
assailed conduct must have been willful, that is, characterized by a wrongful
and perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee, and must pertain to the duties which he
had been engaged to discharge. Both elements are present in this case.
As to the first element, that at no point did the dismissed employees deny
Kingspoint Express claim that they refused to comply with the directive for
them to submit to a drug test or, at the very least, explain their refusal gives
rise to the impression that their non-compliance is deliberate. The utter lack of
reason or justification for their insubordination indicates that it was prompted
by mere obstinacy, hence, willful and warranting of dismissal.
It involves little difficulty to accuse Kingspoint Express of anti-unionism and
allege that this was what motivated the dismissal of the petitioners, but the
duty to prove such an accusation is altogether different. That the petitioners
failed at the level of substantiation only goes to show that their claim of unfair
labor practice is a mere subterfuge for their willful disobedience.
As to the second element, no belabored and extensive discussion is necessary
to recognize the relevance of the subject order in the performance of their
functions as drivers of Kingspoint Express. As the NLRC correctly pointed
out, drivers are indispensable to Kingspoint Express primary business of
rendering door-to-door delivery services. It is common knowledge that the use
of dangerous drugs has adverse effects on driving abilities that may render the
dismissed employees incapable of performing their duties to Kingspoint
Express and acting against its interests, in addition to the threat they pose to
the public.
The existence of a single just cause is enough to order their dismissal and it is
now inconsequential if the other charges against them do not merit their
dismissal from service. It is therefore unnecessary to discuss whether the other
acts enumerated in the notices of termination issued by Kingspoint Express
may be considered as any of the just causes.
Nonetheless, while Kingspoint Express had reason to sever their employment
relations, this Court finds its supposed observance of the requirements of
procedural due process pretentious. While Kingspoint Express required the
dismissed employees to explain their refusal to submit to a drug test, the two
(2) days afforded to them to do so cannot qualify as reasonable opportunity,
which the Court construed in King of Kings Transport, Inc. v. Mamac[21] as a
period of at least five (5) calendar days from receipt of the notice.

Thus, even if Kingspoint Express defective attempt to comply with

procedural due process does not negate the existence of a just cause for their
dismissal, Kingspoint Express is still liable to indemnify the dismissed
employees, with the exception of Panuelos, Dizon and Dimabayao, who did
not appeal the dismissal of their complaints, with nominal damages in the
amount of P30,000.00.

WHEREFORE, premises considered, the Decision dated March 16, 2010 and
Resolution dated December 16, 2010 of the Court of Appeals are
AFFIRMED with MODIFICATION in that respondent Kingspoint Express
and Logistic is hereby held liable for the payment of nominal damage, in the
amount of P30,000.00 each to petitioners Bobby Dacara, Fernando Lupangco,
Jr., Sandy Pazi, Camilo Tabarangao, Jr., Eduardo Hizole and Reginaldo
Carillo, for non-observance of procedural due process required in terminating
employment.

SO ORDERED.

G.R. No. 181490, April 23, 2014

MIRANT (PHILIPPINES) CORPORATION AND EDGARDO A.
BAUTISTA, PETITIONERS, VS. JOSELITO A. CARO, RESPONDENT.

DECISION
VILLARAMA, JR., J.:
At bar is a petition[1] under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the Decision[2] and Resolution[3] of the Court of Appeals
(CA) dated June 26, 2007 and January 11, 2008, respectively, which reversed
and set aside the Decision[4] of the National Labor Relations Commission
(NLRC) in NLRC NCR CA No. 046551-05 (NCR-00-03-02511-05). The
NLRC decision vacated and set aside the Decision[5] of the Labor Arbiter
which found that respondent Joselito A. Caro (Caro) was illegally dismissed
by petitioner Mirant (Philippines) Corporation (Mirant).
Petitioner corporation is organized and operating under and by virtue of the
laws of the Republic of the Philippines. It is a holding company that owns
shares in project companies such as Mirant Sual Corporation and Mirant
Pagbilao Corporation (Mirant Pagbilao) which operate and maintain power
stations located in Sual, Pangasinan and Pagbilao, Quezon, respectively.
Petitioner corporation and its related companies maintain around 2,000
employees detailed in its main office and other sites. Petitioner corporation
had changed its name to CEPA Operations in 1996 and to Southern Company
in 2001. In 2002, Southern Company was sold to petitioner Mirant whose
corporate parent is an Atlanta-based power producer in the United States of
America.[6] Petitioner corporation is now known as Team Energy Corporation.
[7]
Petitioner Edgardo A. Bautista (Bautista) was the President of petitioner
corporation when respondent was terminated from employment.[8]
Respondent was hired by Mirant Pagbilao on January 3, 1994 as its Logistics
Officer. In 2002, when Southern Company was sold to Mirant, respondent
was already a Supervisor of the Logistics and Purchasing Department of
petitioner. At the time of the severance of his employment, respondent was
the Procurement Supervisor of Mirant Pagbilao assigned at petitioner
corporations corporate office. As Procurement Supervisor, his main task was
to serve as the link between the Materials Management Department of
petitioner corporation and its staff, and the suppliers and service contractors in
order to ensure that procurement is carried out in conformity with set policies,
procedures and practices. In addition, respondent was put incharge of ensuring
the timely, economical, safe and expeditious delivery of materials at the right
quality and quantity to petitioner corporations plant. Respondent was also
responsible for guiding and overseeing the welfare and training needs of the
staff of the Materials Management Department. Due to the nature of
respondents functions, petitioner corporation considers his position as
confidential.[9]
The antecedent facts follow:
Respondent filed a complaint[10] for illegal dismissal and money claims for 13th
and 14th month pay, bonuses and other benefits, as well as the payment of
moral and exemplary damages and attorneys fees. Respondent posits the
following allegations in his Position Paper:[11]
On January 3, 1994, respondent was hired by petitioner corporation as its
Logistics Officer and was assigned at petitioner corporations corporate office
in Pasay City. At the time of the filing of the complaint, respondent was
already a Supervisor at the Logistics and Purchasing Department with a
monthly salary of P39,815.00.
On November 3, 2004, petitioner corporation conducted a random drug test
where respondent was randomly chosen among its employees who would be
tested for illegal drug use. Through an Intracompany Correspondence,[12] these
employees were informed that they were selected for random drug testing to
be conducted on the same day that they received the correspondence.
Respondent was duly notified that he was scheduled to be tested after lunch on
that day. His receipt of the notice was evidenced by his signature on the
correspondence.
Respondent avers that at around 11:30 a.m. of the same day, he received a
phone call from his wifes colleague who informed him that a bombing
incident occurred near his wifes work station in Tel Aviv, Israel where his
wife was then working as a caregiver. Respondent attached to his Position
Paper a Press Release[13] of the Department of Foreign Affairs (DFA) in
Manila to prove the occurrence of the bombing incident and a letter[14] from
the colleague of his wife who allegedly gave him a phone call from Tel Aviv.
Respondent claims that after the said phone call, he proceeded to the Israeli
Embassy to confirm the news on the alleged bombing incident. Respondent
further claims that before he left the office on the day of the random drug test,
he first informed the secretary of his Department, Irene Torres (Torres), at
around 12:30 p.m. that he will give preferential attention to the emergency
phone call that he just received. He also told Torres that he would be back at
the office as soon as he has resolved his predicament. Respondent recounts
that he tried to contact his wife by phone but he could not reach her. He then
had to go to the Israeli Embassy to confirm the bombing incident. However,
he was told by Eveth Salvador (Salvador), a lobby attendant at the Israeli
Embassy, that he could not be allowed entry due to security reasons.
On that same day, at around 6:15 p.m., respondent returned to petitioner
corporations office. When he was finally able to charge his cellphone at the
office, he received a text message from Tina Cecilia (Cecilia), a member of
the Drug Watch Committee that conducted the drug test, informing him to
participate in the said drug test. He immediately called up Cecilia to explain
the reasons for his failure to submit himself to the random drug test that day.
He also proposed that he would submit to a drug test the following day at his
own expense. Respondent never heard from Cecilia again.
On November 8, 2004, respondent received a Show Cause Notice[15] from
petitioner corporation through Jaime Dulot (Dulot), his immediate supervisor,
requiring him to explain in writing why he should not be charged with
unjustified refusal to submit to random drug testing. Respondent submitted
his written explanation[16] on November 11, 2004. Petitioner corporation
further required respondent on December 14, 2004 to submit additional pieces
of supporting documents to prove that respondent was at the Israeli Embassy
in the afternoon of November 3, 2004 and that the said bombing incident
actually occurred. Respondent requested for a hearing to explain that he could
not submit proof that he was indeed present at the Israeli Embassy during the
said day because he was not allegedly allowed entry by the embassy due to
security reasons. On January 3, 2005, respondent submitted the required
additional supporting documents.[17]
On January 13, 2005, petitioner corporations Investigating Panel issued an
Investigating Report[18] finding respondent guilty of unjustified refusal to
submit to random drug testing and recommended a penalty of four working
weeks suspension without pay, instead of termination, due to the presence of
mitigating circumstances. In the same Report, the Investigating Panel also
recommended that petitioner corporation should review its policy on random
drug testing, especially of the ambiguities cast by the term unjustified
refusal.
On January 19, 2005, petitioner corporations Asst. Vice President for Material
Management Department, George K. Lamela, Jr. (Lamela), recommended[19]
that respondent be terminated from employment instead of merely being
suspended. Lamela argued that even if respondent did not outrightly refuse to
take the random drug test, he avoided the same. Lamela averred that
avoidance was synonymous with refusal.
On February 14, 2005, respondent received a letter[20] from petitioner
corporations Vice President for Operations, Tommy J. Sliman (Sliman),
terminating him on the same date. Respondent filed a Motion to Appeal[21] his
termination on February 23, 2005. The motion was denied by petitioner
corporation on March 1, 2005.

It is the contention of respondent that he was illegally dismissed by petitioner
corporation due to the latters non-compliance with the twin requirements of
notice and hearing. He asserts that while there was a notice charging him of
unjustified refusal to submit to random drug testing, there was no notice of
hearing and petitioner corporations investigation was not the equivalent of the
hearing required under the law which should have accorded respondent the
opportunity to be heard.
Respondent further asserts that he was illegally dismissed due to the following
circumstances:
1. He signed the notice that he was randomly selected as a participant to
the company drug testing;
2. Even the Investigating Panel was at a loss in interpreting the charge
because it believed that the term refusal was ambiguous, and
therefore such doubt must be construed in his favor; and
3. He agreed to take the drug test the following day at his own expense,
which he says was clearly not an indication of evasion from the drug
test.
Petitioner corporation counters with the following allegations:
On November 3, 2004, a random drug test was conducted on petitioner
corporations employees at its Corporate Office at the CTC Bldg. in Roxas
Blvd., Pasay City. The random drug test was conducted pursuant to Republic
Act No. 9165, otherwise known as the Comprehensive Dangerous Drugs Act
of 2002. Respondent was randomly selected among petitioners employees
to undergo the said drug test which was to be carried out by Drug Check
Philippines, Inc.[22]
When respondent failed to appear at the scheduled drug test, Cecilia prepared
an incident report addressed to Dulot, the Logistics Manager of the Materials
Management Department.[23] Since it was stated under petitioner corporations
Mirant Drugs Policy Employee Handbook to terminate an employee for
unjustified refusal to submit to a random drug test for the first offense,
Dulot sent respondent a Show Cause Notice[24] dated November 8, 2004,
requiring him to explain why no disciplinary action should be imposed for his
failure to take the random drug test. Respondent, in a letter dated November
11, 2004, explained that he attended to an emergency call from his wifes
colleague and apologized for the inconvenience he had caused. He offered to
submit to a drug test the next day even at his expense.[25] Finding respondents
explanation unsatisfactory, petitioner corporation formed a panel to investigate
and recommend the penalty to be imposed on respondent.[26] The Investigating
Panel found respondents explanations as to his whereabouts on that day to be
inconsistent, and recommended that he be suspended for four weeks without
pay. The Investigating Panel took into account that respondent did not directly
refuse to be subjected to the drug test and that he had been serving the
company for ten years without any record of violation of its policies. The
Investigating Panel further recommended that the Mirant Drug Policy be
reviewed to clearly define the phrase unjustified refusal to submit to random
drug testing.[27] Petitioner corporations Vice-President for Operations,
Sliman, however disagreed with the Investigating Panels recommendations
and terminated the services of respondent in accordance with the subject drug
policy. Sliman likewise stated that respondents violation of the policy
amounted to willful breach of trust and loss of confidence.[28]
A cursory examination of the pleadings of petitioner corporation would show
that it concurs with the narration of facts of respondent on material events
from the time that Cecilia sent an electronic mail at about 9:23 a.m. on
November 3, 2004 to all employees of petitioner corporation assigned at its
Corporate Office advising them of the details of the drug test up to the time
of respondents missing his schedule to take the drug test. Petitioner
corporation and respondents point of disagreement, however, is whether
respondents proffered reasons for not being able to take the drug test on the
scheduled day constituted valid defenses that would have taken his failure to
undergo the drug test out of the category of unjustified refusal. Petitioner
corporation argues that respondents omission amounted to unjustified
refusal to submit to the random drug test as he could not proffer a
satisfactory explanation why he failed to submit to the drug test:
1. Petitioner corporation is not convinced that there was indeed such a
phone call at noon of November 3, 2004 as respondent could not even
tell who called him up.
2. Respondent could not even tell if he received the call via the landline
telephone service at petitioner corporations office or at his mobile
phone.
3. Petitioner corporation was also of the opinion that granting there was
such a phone call, there was no compelling reason for respondent to
act on it at the expense of his scheduled drug testing. Petitioner
corporation principally pointed out that the call merely stated that a
bomb exploded near his wifes work station without stating that his
wife was affected. Hence, it found no point in confirming it with
extraordinary haste and forego the drug test which would have taken
only a few minutes to accomplish. If at all, respondent should have
undergone the drug testing first before proceeding to confirm the news
so as to leave his mind free from this obligation.
4. Petitioner corporation maintained that respondent could have easily
asked permission from the Drug Watch Committee that he was leaving
the office since the place where the activity was conducted was very
close to his work station.[29]
To the mind of petitioners, they are not liable for illegal dismissal because all
of these circumstances prove that respondent really eluded the random drug
test and was therefore validly terminated for cause after being properly
accorded with due process. Petitioners further argue that they have already
fully settled the claim of respondent as evidenced by a Quitclaim which he
duly executed. Lastly, petitioners maintain that they are not guilty of unfair
labor practice as respondents dismissal was not intended to curtail his right to
self-organization; that respondent is not entitled to the payment of his 13th and
14th month bonuses and other incentives as he failed to show that he is entitled
to these amounts according to company policy; that respondent is not entitled
to reinstatement, payment of full back wages, moral and exemplary damages
and attorneys fees due to his termination for cause.
In a decision dated August 31, 2005, Labor Arbiter Aliman D. Mangandog
found respondent to have been illegally dismissed. The Labor Arbiter also
found that the quitclaim purportedly executed by respondent was not a bona
fide quitclaim which effectively discharged petitioners of all the claims of
respondent in the case at bar. If at all, the Labor Arbiter considered the
execution of the quitclaim as a clear attempt on the part of petitioners to
mislead its office into thinking that respondent no longer had any cause of
action against petitioner corporation. The decision stated, viz.:
WHEREFORE, premises considered, this Office finds respondents GUILTY
of illegal dismissal, and hereby ordered to jointly and severally reinstate
complainant back to his former position without loss on seniority rights and
benefits and to pay him his backwages and other benefits from the date he was
illegally dismissed up to the time he is actually reinstated, partially computed
as of this date in the amount of P258,797.50 (P39,815.00 x 6.5 mos.) plus his
13th and 14th month pay in the amount of P43,132.91 or in the total amount
of P301,930.41. Respondents are also ordered to pay complainant the amount
of P3,000,000.00 as and by way of moral and exemplary damages, and to pay
complainant the amount equivalent to ten percent (10%) of the total awards as
and by way of attorneys fees.
SO ORDERED.[30]
The Labor Arbiter stated that while petitioner corporation observed the proper
procedure in the termination of an employee for a purported authorized cause,
such just cause did not exist in the case at bar. The decision did not agree with
the conclusions reached by petitioner corporations own Investigating Panel
that while respondent did not refuse to submit to the questioned drug test and
merely avoided it on the designated day, avoidance and refusal are one
and the same. It also held that the terms avoidance and refusal are
separate and distinct and that the two words are not even synonymous with
each other.[31] The Labor Arbiter considered as more tenable the stance of
respondent that his omission merely resulted to a failure to submit to the
said drug test and not an unjustified refusal. Even if respondents
omission is to be considered as refusal, the Labor Arbiter opined that it was
not tantamount to unjustified refusal which constitutes as just cause for his
termination. Finally, the Labor Arbiter found that respondent was entitled to
moral and exemplary damages and attorneys fees.
On appeal to the NLRC, petitioners alleged that the decision of the Labor
Arbiter was rendered with grave abuse of discretion for being contrary to law,
rules and established jurisprudence, and contained serious errors in the
findings of facts which, if not corrected, would cause grave and irreparable
damage or injury to petitioners. The NLRC, giving weight and emphasis to
the inconsistencies in respondents explanations, considered his omission as
unjustified refusal in violation of petitioner corporations drug policy. Thus,
in a decision dated May 31, 2006, the NLRC ruled, viz.:
x x x [Respondent] was duly notified as shown by copy of the notice x x x
which he signed to acknowledge receipt thereof on the said date. [Respondent]
did not refute [petitioner corporations] allegation that he was also personally
reminded of said drug test on the same day by Ms. Cecilia of [petitioner
corporations] drug watch committee. However, [respondent] was nowhere to
be found at [petitioner corporations] premises at the time when he was
supposed to be tested. Due to his failure to take part in the random drug test,
an incident report x x x was prepared by the Drug Cause Notice x x x to
explain in writing why no disciplinary action should be taken against him for
his unjustified refusal to submit to random drug test, a type D offense
punishable with termination. Pursuant to said directive, [respondent]
submitted an explanation x x x on 11 November 2004, pertinent portions of
which read:
I was scheduled for drug test after lunch that day of November 3, 2004 as
confirmed with Tina Cecilia. I was having my lunch when a colleague of my
wife abroad called up informing me that there was something wrong [that]
happened in their neighborhood, where a bomb exploded near her
workstation. Immediately, I [left] the office to confirm said information but at
around 12:30 P.M. that day, I informed MS. IRENE TORRES, our Department
Secretary[,] that I would be attending to this emergency call. Did even
[inform] her that Ill try to be back as soon as possible but unfortunately, I was
able to return at 6:15 P.M. I didnt know that Tina was the one calling me on
my cell that day. Did only receive her message after I charged my cell at the
office that night. I was able to call back Tina Cecilia later [that] night if its
possible to have it (drug test) the next day.
My apology [for] any inconvenience to the Drug Watch Committee, that I
forgot everything that day including my scheduled drug test due to confusion
of what had happened. It [was] not my intention not to undergo nor refuse to
have a drug test knowing well that its a company policy and its mandated by
law.
In the course of the investigation, [respondent] was requested to present proof
pertaining to the alleged call he received on 3 November 2004 from a
colleague of his wife regarding the bomb explosion in Tel Aviv, his presence
at the Israel Embassy also on 3 November 2004. [Respondent], thereafter,
submitted a facsimile which he allegedly received from his wife's colleague
confirming that she called and informed him of the bombing incident.
However, a perusal of said facsimile x x x reveals that the same cannot be
given any probative value because, as correctly observed by [petitioners], it
can barely be read and upon inquiry with PLDT, the international area code of
Israel which is 00972 should appear on the face of the facsimile if indeed said
facsimile originated from Israel. [Respondent] also could not present proof of
his presence at the Israel Embassy on said time and date. He instead provided
the name of a certain Ms. Eveth Salvador of said embassy who could certify
that he was present thereat. Accordingly, Mr. Bailon, a member of the
investigation panel, verified with Ms. Salvador who told him that she is only
the telephone operator of the Israel Embassy and that she was not in a position
to validate [respondents] presence at the Embassy. Mr. Bailon was then
referred to a certain Ms. Aimee Zandueta, also of said embassy, who
confirmed that based on their records, [respondent] did not visit the embassy
nor was he attended to by any member of said embassy on 3 November 2004.
Ms. Zandueta further informed Mr. Bailon that no bombing occurred in Tel
Aviv on 3 November 2004 and that the only reported incident of such nature
occurred on 1 November 2004. A letter x x x to this effect was written by
Consul Ziva Samech of the Embassy of Israel. A press release x x x of the
Department of Foreign Affairs confirm[ed] that the bombing occurred on 1
November 2004.
In his explanation, the [respondent] stated that the reason why he had to leave
the office on 3 November 2004 was to verify an information at the Israel
Embassy of the alleged bombing incident on the same day. However,
[petitioners] in their position paper alleged that Ms. Torres of [petitioner]
company received a text message from him at around 12:47 p.m. informing
her that he will try to be back since he had a lot of things to do and asking her
if there was a signatory on that day. [Respondent] did not deny sending said
text messages to Ms. Torres in his reply and rejoinder x x x. He actually
confirmed that he was involved in the CIIS registration with all companies
that was involved with [petitioner] company and worked on the registration of
[petitioner] companys vehicles with TRO.
It is also herein noted that [respondent] had initially reported to Ms. Torres
that it was his mother in law who informed him about the problem concerning
his wife. However, in his written explanation x x x, the [respondent] stated
that it was a friend of his wife, whom he could not even identify, who
informed him of the alleged bombing incident in Tel Aviv, Israel.
[Respondent] also did not deny receiving a cellphone call from Ms. Cecilia
that day. He merely stated that he did not know that it was Ms. Cecilia calling
him up in a cellphone and it was only after he charged his cellphone at the
office that night that he received her message. In effect, [respondent] asserted
that his cellphone battery was running low or drained. [Petitioners] were able
to refute [these] averments of [respondent] when they presented [respondents]
Smart Billing Statement x x x showing that he was able to make a cellphone
call at 5:29 p.m. to [petitioner corporations] supplier, Mutico for a duration of
two (2) minutes.[32]
Given the foregoing facts, the NLRC stated that the offer of respondent to
submit to another drug test the following day, even at his expense, cannot
operate to free him from liability. The NLRC opined that taking the drug test
on the day following the scheduled random drug test would affect both the
integrity and the accuracy of the specimen which was supposed to be taken
from a randomly selected employee who was notified of his/her selection on
the same day that the drug test was to be administered. The NLRC further
asserted that a drug test, conducted many hours or a day after the employee
was notified, would compromise its results because the employee may have
possibly taken remedial measures to metabolize or eradicate whatever drugs
s/he may have ingested prior to the drug test.
The NLRC further stated that these circumstances have clearly established the
falsity of respondents claims and found no justifiable reason for respondent to
refuse to submit to the petitioner corporations random drug test. While the
NLRC acknowledged that it was petitioner corporations own Investigating
Panel that considered respondents failure to take the required drug test as
mere avoidance and not unjustified refusal, it concluded that such finding
was merely recommendatory to guide top management on what action to take.
The NLRC also found that petitioner corporations denial of respondents
motion to reconsider his termination was in order. Petitioner corporations
reasons for such denial are quoted in the NLRC decision, viz.:
Your appeal is anchored on your claim that you responded to an emergency
call from someone abroad informing you that a bomb exploded near the work
station of your wife making you unable to undergo the scheduled drug testing.
This claim is groundless taking into account the following:
We are not convinced that there was indeed that call which you claim to have
received noon of November 3, 2004. On the contrary, our belief is based on
the fact that you could not tell who called you up or how the call got to you.
If you forgot to ask the name of the person who called you up, surely you
would have known how the call came to you. You said you were having lunch
at the third floor of the CTC building when you received the call. There were
only two means of communication available to you then: the land line
telephone service in your office and your mobile phone. If your claim were
(sic) not fabricated, you would be able to tell which of these two was used.
Granting that you indeed received that alleged call, from your own account,
there was no compelling reason for you to act on it at the expense of your
scheduled drug testing. The call, as it were, merely stated that something
wrong happened (sic) in their neighborhood, where a bomb exploded near her
workstation. Nothing was said if your wife was affected. There is no point in
confirming it with extraordinary haste and forego the drug test which would
have taken only a few minutes to accomplish. If at all, you should have
undergone the drug testing first before proceeding to confirm the news so as to
leave your mind free from this obligation.
Additionally, if it was indeed necessary that you skip the scheduled drug
testing to verify that call, why did you not ask permission from the Drug
Watch [C]ommittee that you were leaving? The place where the activity was
being conducted was very close to your workstation. It was absolutely within
your reach to inform any of its members that you were attending to an
emergency call. Why did you not do so?
All this undisputedly proves that you merely eluded the drug testing. Your
claim that you did not refuse to be screened carries no value. Your act was a
negation of your words.[33]
The NLRC found that respondent was not only validly dismissed for cause
he was also properly accorded his constitutional right to due process as shown
by the following succession of events:
1. On November 8, 2004, respondent was given a show-cause notice
requiring him to explain in writing within three days why no
disciplinary action should be taken against him for violation of
company policy on unjustified refusal to submit to random drug testing
a type D offense which results in termination.
2. Respondent submitted his explanation on November 11, 2004.
3. On December 9, 2004, respondent was given a notice of
investigation[34] informing him of a meeting on December 13, 2004 at
9:00 a.m. In this meeting, respondent was allowed to explain his side,
present his evidences and witnesses, and confront the witnesses
presented against him.
4. On February 14, 2005, respondent was served a letter of termination
which clearly stated the reasons therefor.[35]
The NLRC, notwithstanding its finding that respondent was dismissed for
cause and with due process, granted financial assistance to respondent on
equitable grounds. It invoked the past decisions of this Court which allowed
the award of financial assistance due to factors such as long years of service or
the Courts concern and compassion towards labor where the infraction was
not so serious. Thus, considering respondents 10 years of service with
petitioner corporation without any record of violation of company policies, the
NLRC ordered petitioner corporation to pay respondent financial assistance
equivalent to one-half (1/2) month pay for every year of service in the amount
of One Hundred Ninety-Nine Thousand Seventy-Five Pesos (P199,075.00).
The NLRC decision states thus:
WHEREFORE, the decision dated 31 August 2005 is VACATED and SET
ASIDE. The instant complaint is dismissed for lack of merit. However,
respondent Mirant [Philippines] Corp. is ordered to pay complainant financial
assistance in the amount of one hundred ninety-nine thousand seventy five
pesos (P199,075.00).
SO ORDERED.[36]
Respondent filed a motion for reconsideration,[37] while petitioners filed a
motion for partial reconsideration[38] of the NLRC decision. In a Resolution[39]
dated June 30, 2006, the NLRC denied both motions.
In a petition for certiorari before the CA, respondent raised the following
issues: whether the NLRC acted without or in excess of its jurisdiction, or
with grave abuse of discretion amounting to lack or excess of its jurisdiction
when it construed that the terms failure, avoidance, refusal and However, despite having violated the company policy, the panel recommends
unjustified refusal have similar meanings; reversed the factual findings of
the Labor Arbiter; and held that respondent deliberately breached petitioners
Anti-Drugs Policy.[40] Respondent further argued before the appellate court
that his failure to submit himself to the random drug test was justified because
he merely responded to an emergency call regarding his wifes safety in Tel
Aviv, and that such failure cannot be considered synonymous with
avoidance or refusal so as to mean unjustified refusal in order to be
meted the penalty of termination.[41]
The CA disagreed with the NLRC and ruled that it was immaterial whether
respondent failed, refused, or avoided being tested. To the appellate court, the
singular fact material to this case was that respondent did not get himself
tested in clear disobedience of company instructions and policy. Despite such
disobedience, however, the appellate court considered the penalty of dismissal
to be too harsh to be imposed on respondent, viz.:
x x x While it is a management prerogative to terminate its erring employee
for willful disobedience, the Supreme Court has recognized that such penalty
is too harsh depending on the circumstances of each case. There must be
reasonable proportionality between, on the one hand, the willful disobedience
by the employee and, on the other hand, the penalty imposed therefor x x x.
In this case, [petitioner corporations] own investigating panel has revealed
that the penalty of dismissal is too harsh to impose on [respondent],
considering that this was the first time in his 10-year employment that the
latter violated its company policies. The investigating panel even suggested
that a review be had of the company policy on the term unjustified refusal to
clearly define what constitutes a violation thereof. The recommendation of the
investigating panel is partially reproduced as follows:
VII. Recommendation
4 working weeks suspension without pay (twice the company policys
maximum of 2 working weeks suspension) instead of termination due to the
following mitigating circumstances.
1. Mr. Joselito A. Caro did not directly refuse to be subjected to the random
drug test scheduled on November 3, 2004.
2. In the case of Mr. Joselito A. Caro, the two conditions for termination
(Unjustified and Refusal) were not fully met as he expressly agreed to
undergo drug test.
3. Mr. Joselito A. Caro voluntarily offered himself to undergo drug test the
following day at his own expense.
Doubling the maximum of 2 weeks suspension to 4 weeks is indicative of the
gravity of the offense committed. The panel believes that although mitigating
factors partially offset reasons for termination, the 2 weeks maximum
suspension is too lenient penalty for such an offense.
The Panel also took into consideration that Mr. Joselito A. Caro has served the
company for ten (10) years without any record of violation of the company
policies.
xxxx
The Panel also recommends that Management review the Mirant Drug Policy
specifically Unjustified [R]efusal to submit to random drug testing. The
Panel believes that the term refusal casts certain ambiguities and should be
clearly defined.[42]
The CA however found that award of moral and exemplary damages is
without basis due to lack of bad faith on the part of the petitioner corporation
which merely acted within its management prerogative. In its assailed
Decision dated June 26, 2007, the CA ruled, viz.:
IN VIEW OF ALL THE FOREGOING, the instant petition is GRANTED.
The assailed Decision dated May 31, 2006 and Resolution dated June 30,
2006 rendered by the National Labor Relations Commission (NLRC) in
NLRC NCR CA No. 046551-05 (NCR-00-03-02511-05) are REVERSED
and SET ASIDE. The Labor Arbiters Decision dated August 31, 2005 is
hereby REINSTATED with MODIFICATION by omitting the award of
moral and exemplary damages as well as attorneys fees, and that the
petitioners salary equivalent to four (4) working weeks at the time he was
terminated be deducted from his backwages. No cost.
SO ORDERED.[43]
Petitioner moved for reconsideration. In its assailed Resolution dated January
11, 2008, the CA denied petitioners motion for reconsideration for lack of
merit. It ruled that the arguments in the motion for reconsideration were
already raised in their past pleadings.
In this instant Petition, petitioners raise the following grounds:
I. The Court of Appeals committed reversible error when it failed to
consider that:
A. The Petition for Certiorari filed by respondent Caro should
have been summarily dismissed considering that it lacked the
requisite verification and certification against forum shopping
required by the Rules of Court; or
B. At the very least, the said Petition for Certiorari filed by
respondent Caro should have been considered moot since
respondent Caro had already previously executed a quitclaim
discharging the petitionerS from all his monetary claims.
II. The Court of Appeals committed reversible error and decided
questions of substance in a way not in accordance with law and
applicable decisions of the Honorable Court, considering that:
A. The Court of Appeals reversed the Decision dated 31 May
2006 of the NLRC on the ground that there was grave abuse of
discretion amounting to lack or excess of jurisdiction
notwithstanding the fact that it affirmed the NLRCs findings
that respondent Caro deliberately disobeyed petitioner Mirants
Anti-Drugs Policy.
B. The penalty of termination should have been sustained by the
Court of Appeals given its positive finding that respondent
 Caro deliberately and willfully disobeyed petitioner Mirants
Anti-Drugs Policy.
C. In invalidating respondent Caros dismissal, the Court of
Appeals substituted with its own discretion a clear management
prerogative belonging only to petitioner Mirant in the instant
case.
D. The willful and deliberate violation of petitioner Mirants Anti-
Drugs Policy aggravated respondent Caros wrongful conduct
which justified his termination.
E. In invalidating respondent Caros dismissal, the Court of
Appeals, in effect, belittled the importance and seriousness of
petitioner Mirants Anti-Drugs Policy and consequently
hampered the effective implementation of the same.
F. The existence of other grounds for Caros dismissal, such as
willful disobedience and [loss] of trust and confidence, justified
his termination from employment.
III. Nonetheless, the award of financial assistance in favor of respondent
Caro is not warranted considering that respondent Caros willful and
deliberate refusal to subject himself to petitioner Mirants drug test and
his subsequent efforts to conceal the same shows his depraved moral
character.
IV. The Court of Appeals grievously erred when it held petitioner Bautista
personally liable for [respondent] Caros unfounded claims considering
that, aside from respondent Caros dismissal being lawful, petitioner
Bautista merely acted within the scope of his functions in good faith.[44]
We shall first rule on the issue raised by petitioners that the petition for
certiorari filed by respondent with the CA should have been summarily
dismissed as it lacked the requisite verification and certification against forum
shopping under Sections 4 and 5, Rule 7 of the Rules, viz.:
SEC. 4. Verification. Except when otherwise specifically required by law or
rule, pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and
that the allegations therein are true and correct of his knowledge and belief.
A pleading required to be verified which contains a verification based on
information and belief, or upon knowledge, information and belief, or
lacks a proper verification, shall be treated as an unsigned pleading.
SEC. 5. Certification against forum shopping. The plaintiff or principal
party shall certify under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such other action
or claim is pending therein; (b) if there is such other pending action or claim, a
complete statement of the present status thereof; and (c) if he should thereafter
learn that the same or similar action or claim has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein his
aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by
mere amendment of the complaint or other initiatory pleading but shall be
cause for the dismissal of the case without prejudice, unless otherwise
provided, upon motion and after hearing. The submission of a false
certification or noncompliance with any of the undertakings therein shall
constitute indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be
ground for summary dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative sanctions.
It is the contention of petitioners that due to respondents failure to subscribe
the Verification and Certification of Non-Forum Shopping before a Notary
Public, the said verification and certification cannot be considered to have
been made under oath. Accordingly, such omission is fatal to the entire
petition for not being properly verified and certified. The CA therefore erred
when it did not dismiss the petition.
This jurisdiction has adopted in the field of labor protection a liberal stance
towards the construction of the rules of procedure in order to serve the ends of
substantial justice. This liberal construction in labor law emanates from the
mandate that the workingmans welfare should be the primordial and
paramount consideration.[45] Thus, if the rules of procedure will stunt courts
from fulfilling this mandate, the rules of procedure shall be relaxed if the
circumstances of a case warrant the exercise of such liberality. If we sustain
the argument of petitioners in the case at bar that the petition for certiorari
should have been dismissed outright by the CA, the NLRC decision would
have reached finality and respondent would have lost his remedy and denied
his right to be protected against illegal dismissal under the Labor Code, as
amended.
It is beyond debate that petitioner corporations enforcement of its Anti-Drugs
Policy is an exercise of its management prerogative. It is also a conceded fact
that respondent failed to take the random drug test as scheduled, and under
the said company policy, such failure metes the penalty of termination for the
first offense. A plain, simple and literal application of the said policy to the
omission of respondent would have warranted his outright dismissal from
employment if the facts were that simple in the case at bar. Beyond debate
the facts of this case are not and this disables the Court from permitting a
straight application of an otherwise prima facie straightforward rule if the
ends of substantial justice have to be served.
It is the crux of petitioners argument that respondents omission amounted to
unjust refusal because he could not sufficiently support with convincing
proof and evidence his defenses for failing to take the random drug test. For
petitioners, the inconsistencies in respondents explanations likewise operated
to cast doubt on his real reasons and motives for not submitting to the random
drug test on schedule. In recognition of these inconsistencies and the lack of
convincing proof from the point of view of petitioners, the NLRC reversed the
decision of the Labor Arbiter. The CA found the ruling of the Labor Arbiter to
be more in accord with the facts, law and existing jurisprudence.
We agree with the disposition of the appellate court that there was illegal
dismissal in the case at bar.
While the adoption and enforcement by petitioner corporation of its Anti-
Drugs Policy is recognized as a valid exercise of its management prerogative
as an employer, such exercise is not absolute and unbridled. Managerial
prerogatives are subject to limitations provided by law, collective bargaining
agreements, and the general principles of fair play and justice.[46] In the
exercise of its management prerogative, an employer must therefore ensure
that the policies, rules and regulations on work-related activities of the
employees must always be fair and reasonable and the corresponding
penalties, when prescribed, commensurate to the offense involved and to the
degree of the infraction.[47] The Anti-Drugs Policy of Mirant fell short of these
requirements.
Petitioner corporations subject Anti-Drugs Policy fell short of being fair and
reasonable.
First. The policy was not clear on what constitutes unjustified refusal when
the subject drug policy prescribed that an employees unjustified refusal to
submit to a random drug test shall be punishable by the penalty of termination
for the first offense. To be sure, the term unjustified refusal could not
possibly cover all forms of refusal as the employees resistance, to be
punishable by termination, must be unjustified. To the mind of the Court, it
is on this area where petitioner corporation had fallen short of making it clear
to its employees as well as to management as to what types of acts would
fall under the purview of unjustified refusal. Even petitioner corporations
own Investigating Panel recognized this ambiguity, viz.:
The Panel also recommends that Management review the Mirant Drug Policy
specifically Unjustified [R]efusal to submit to random drug testing. The
Panel believes that the term refusal casts certain ambiguities and should be
clearly defined.[48]
The fact that petitioner corporations own Investigating Panel and its Vice
President for Operations, Sliman, differed in their recommendations regarding
respondents case are first-hand proof that there, indeed, is ambiguity in the
interpretation and application of the subject drug policy. The fact that
petitioner corporations own personnel had to dissect the intended meaning of
unjustified refusal is further proof that it is not clear on what context the
term unjustified refusal applies to. It is therefore not a surprise that the
Labor Arbiter, the NLRC and the CA have perceived the term unjustified
refusal on different prisms due to the lack of parameters as to what comes
under its purview. To be sure, the fact that the courts and entities involved in
this case had to engage in semantics and come up with different
constructions is yet another glaring proof that the subject policy is not clear
creating doubt that respondents dismissal was a result of petitioner
corporations valid exercise of its management prerogative.
It is not a mere jurisprudential principle, but an enshrined provision of law,
that all doubts shall be resolved in favor of labor. Thus, in Article 4 of the
Labor Code, as amended, [a]ll doubts in the implementation and
interpretation of the provisions of [the Labor] Code, including its
implementing rules and regulations, shall be resolved in favor of labor. In
Article 1702 of the New Civil Code, a similar provision states that [i]n case
of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer. Applying these
provisions of law to the circumstances in the case at bar, it is not fair for this
Court to allow an ambiguous policy to prejudice the rights of an employee
against illegal dismissal. To hold otherwise and sustain the stance of
petitioner corporation would be to adopt an interpretation that goes against the
very grain of labor protection in this jurisdiction. As correctly stated by the
Labor Arbiter, when a conflicting interest of labor and capital are weighed on
the scales of social justice, the heavier influence of the latter must be counter-
balanced by the sympathy and compassion the law must accord the
underprivileged worker.[49]
Second. The penalty of termination imposed by petitioner corporation upon
respondent fell short of being reasonable. Company policies and regulations
are generally valid and binding between the employer and the employee
unless shown to be grossly oppressive or contrary to law[50] as in the case at
bar. Recognizing the ambiguity in the subject policy, the CA was more
inclined to adopt the recommendation of petitioner corporations own
Investigating Panel over that of Sliman and the NLRC. The appellate court
succinctly but incisively pointed out, viz.:
x x x We find, as correctly pointed out by the investigating panel, that the
[petitioner corporations] Anti-Drug Policy is excessive in terminating an
employee for his unjustified refusal to subject himself to the random drug
test on first offense, without clearly defining what amounts to an
unjustified refusal.
Thus, We find that the recommended four (4) working weeks suspension
without pay as the reasonable penalty to be imposed on [respondent] for his
disobedience. x x x[51] (Additional emphasis supplied.)
To be sure, the unreasonableness of the penalty of termination as imposed in
this case is further highlighted by a fact admitted by petitioner corporation
itself: that for the ten-year period that respondent had been employed by
petitioner corporation, he did not have any record of a violation of its
company policies.
As to the other issue relentlessly being raised by petitioner corporation that
respondents petition for certiorari before the CA should have been considered
moot as respondent had already previously executed a quitclaim discharging
petitioner corporation from all his monetary claims, we cannot agree.
Quitclaims executed by laborers are ineffective to bar claims for the full
measure of their legal rights,[52] especially in this case where the evidence on
record shows that the amount stated in the quitclaim exactly corresponds to
the amount claimed as unpaid wages by respondent under Annex A[53] of his
Reply[54] filed with the Labor Arbiter. Prima facie, this creates a false
impression that respondents claims have already been settled by petitioner
corporation discharging the latter from all of respondents monetary claims.
In truth and in fact, however, the amount paid under the subject quitclaim
represented the salaries of respondent that remained unpaid at the time of his
termination not the amounts being claimed in the case at bar.
We believe that this issue was extensively discussed by both the Labor Arbiter
and the CA and we find no reversible error on the disposition of this issue,
viz.:
A review of the records show that the alluded quitclaim, which was undated
and not even notarized although signed by the petitioner, was for the amount
of P59,630.05. The said quitclaim was attached as Annex 26 in the
[petitioners] Position Paper filed before the Labor Arbiter. As fully explained
by [respondent] in his Reply filed with the Labor Arbiter, the amount stated
therein was his last pay due to him when he was terminated, not the amount
representing his legitimate claims in this labor suit x x x. To bolster his
defense, [respondent] submitted the pay form issued to him by the [petitioner
corporation], showing his net pay at P59,630.05 exactly the amount stated in
the quitclaim x x x. Then, too, as stated on the quitclaim itself, the intention
of the waiver executed by the [respondent] was to release [petitioner
corporation] from any liability only on the said amount representing
[respondents] full and final payment of [his] last salary/separation pay x x
x. It did not in any way waive [respondents] right to pursue his legitimate
claims regarding his dismissal in a labor suit. Thus, We gave no credence to
[petitioners] private defense that alleged quitclaim rendered the instant
petition moot.[55]
Finally, the petition avers that petitioner Bautista should not be held
personally liable for respondents dismissal as he acted in good faith and
within the scope of his official functions as then president of petitioner
corporation. We agree with petitioners. Both decisions of the Labor Arbiter
and the CA did not discuss the basis of the personal liability of petitioner
Bautista, and yet the dispositive portion of the decision of the Labor Arbiter
which was affirmed by the appellate court held him jointly and severally
liable with petitioner corporation, viz.:
WHEREFORE, premises considered, this Office finds respondents GUILTY
of illegal dismissal, and hereby ordered to jointly and severally reinstate
complainant back to his former position without loss on seniority rights and
benefits and to pay him his backwages and other benefits from the date he was
illegally dismissed up to the time he is actually reinstated, partially computed
as of this date in the amount of P258,797.50 (P39,815.00 x 6.5 mos.) plus his
13th and 14th month pay in the amount of P43,132.91 or in the total amount
of P301,930.41. Respondents are also ordered to pay complainant the amount
of P3,000,000.00 as and by way of moral and exemplary damages, and to pay
complainant the amount equivalent to ten percent (10%) of the total awards as
and by way of attorneys fees.
SO ORDERED.[56] (Emphasis supplied.)
A corporation has a personality separate and distinct from its officers and
board of directors who may only be held personally liable for damages if it is
proven that they acted with malice or bad faith in the dismissal of an
employee.[57] Absent any evidence on record that petitioner Bautista acted
maliciously or in bad faith in effecting the termination of respondent, plus the
apparent lack of allegation in the pleadings of respondent that petitioner
Bautista acted in such manner, the doctrine of corporate fiction dictates that
only petitioner corporation should be held liable for the illegal dismissal of
respondent.

WHEREFORE, the petition for review on certiorari is DENIED. The

assailed Decision dated June 26, 2007 and the Resolution dated January 11,
2008 in CA-G.R. SP No. 96153 are AFFIRMED with the MODIFICATION
that only petitioner corporation is found GUILTY of the illegal dismissal of
respondent Joselito A. Caro. Petitioner Edgardo A. Bautista is not held
personally liable as then President of petitioner corporation at the time of the
illegal dismissal.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 172589, August 08, 2010

JEFFREY NACAGUE, PETITIONER, VS. SULPICIO LINES, INC.,
RESPONDENT.

DECISION
CARPIO, J.:
The Case
This is a petition for review[1] of the 23 January 2006 Decision[2] and 19 April
2006 Resolution[3] of the Court of Appeals in CA-G.R. CEB SP No. 01065. In
its 23 January 2006 Decision, the Court of Appeals dismissed the petition for
certiorari filed by petitioner Jeffrey Nacague (Nacague) and affirmed the 21
March 2005 Decision[4] and 31 May 2005 Resolution[5] of the National Labor
Relations Commission (NLRC) in NLRC Case No. V-000481-04. In its 19
April 2006 Resolution, the Court of Appeals denied Nacague's motion for
reconsideration.
The Facts
On 15 June 1995, respondent Sulpicio Lines, Inc. (Sulpicio Lines) hired
Nacague as "hepe de viaje" or the representative of Sulpicio Lines on board its
vessel M/V Princess of the World (the ship).
On 25 January 2003, Sulpicio Lines received an anonymous letter reporting
the use of illegal drugs on board the ship.[6] On 14 February 2003, Ceasar T.
Chico, a housekeeper on the ship, submitted a report regarding the drug
paraphernalia found inside the Mopalla[7] Suite Room and the threat on his life
made by Nacague and Chief Mate Reynaldo Doroon after he found the drug
paraphernalia.[8]
On 15 February 2003, Sulpicio Lines sent a notice of investigation to Nacague
informing him of the charges against him for use of illegal drugs and
threatening a co-employee.[9]
When the ship docked in the port of Manila on 18 February 2003, some crew
members of the ship, together with Nacague, were subjected to a random drug
test. They were taken to S.M. Lazo Medical Clinic (S.M. Lazo Clinic) and
were required to submit urine samples. The result of the random drug test
revealed that Nacague was positive for methamphetamine hydrochloride or
shabu.[10]
On 20 February 2003, Sulpicio Lines subjected Nacague to a formal
investigation. Nacague denied using illegal drugs.[11]
On 23 February 2003, Nacague went to Chong Hua Hospital in Cebu City to
undergo a voluntary drug test. The drug test with Chong Hua Hospital yielded
a negative result. [12] Nacague submitted this test result to Sulpicio Lines.
However, on 7 March 2003, Sulpicio Lines sent a memorandum to Nacague
terminating him from the service. The memorandum reads:
After a careful consideration of your case with the evidence available,
including your explanation, and with the positive drug test result, management
finds you culpable of grave misconduct and loss of trust and confidence.
In view thereof, the company is constrained to terminate your employment
effective today, March 7, 2003.[13]
Feeling aggrieved, Nacague filed a complaint for illegal suspension, illegal
dismissal and for reinstatement with backwages.
On 12 November 2003, Labor Arbiter Ernesto F. Carreon rendered a decision
in favor of Nacague and declared that Sulpicio Lines illegally dismissed
Nacague. [14] The dispositive portion of the Labor Arbiter's 12 November
2003 Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering
the respondent Sulpicio Lines, Inc. to pay complainant Jeffrey Nacague the
following:
1. Separation pay P75,600.00
2. Backwages P77,415.00
Total P153,015.00
The other claims are dismissed for lack of merit.
SO ORDERED.[15]
According to the Labor Arbiter, the termination of employment of employees
found positive for using illegal drugs should not be exercised indiscriminately
and thoughtlessly. The Labor Arbiter agreed with Nacague that the drug test
result from S.M. Lazo Clinic was questionable because the clinic is not
accredited by the Dangerous Drug Board and not under its supervision. The
Labor Arbiter gave more weight to the drug test performed by Chong Hua
Hospital because it was accredited by the Dangerous Drug Board. The Labor
Arbiter said that doubts must be resolved in favor of the employee. The Labor
Arbiter also ruled that reinstatement is no longer viable due to the strained
relations between Nacague and Sulpicio Lines and, thus, awarded separation
pay to Nacague.
Dissatisfied with the Labor Arbiter's Decision, Sulpicio Lines appealed to the
NLRC. In its 21 March 2005 Decision, the NLRC reversed the Labor
Arbiter's decision and dismissed Nacague's complaint for lack of merit.
According to the NLRC, since Nacague, who was performing a task involving
trust and confidence, was found positive for using illegal drugs, he was guilty
of serious misconduct and loss of trust and confidence. The NLRC added that
Sulpicio Lines' Code of Conduct[16] specified that the penalty for the use and
illegal possession of prohibited drugs is dismissal. The NLRC also said that
there is a presumption that S.M. Lazo Clinic is an accredited drug testing
center and that it was incumbent upon Nacague to show otherwise.
Nacague filed a motion for reconsideration. In its 31 May 2005 Resolution,
the NLRC denied Nacague's motion.
Nacague filed a petition for certiorari with the Court of Appeals. Nacague
alleged that the NLRC gravely abused its discretion when it declared that
Sulpicio Lines validly terminated his employment.
The Ruling of the Court of Appeals
According to the Court of Appeals, Sulpicio Lines complied with both the
procedural and substantive requirements of the law when it terminated the
employment of Nacague. The Court of Appeals said that the positive result of
the S.M. Lazo Clinic drug test was the main basis of Sulpicio Lines in
terminating Nacague's employment. The Court of Appeals declared that the
evidence presented by Sulpicio Lines was sufficient to justify the conclusion
that Nacague committed serious misconduct and a breach of trust and
confidence warranting his dismissal from employment. The Court of Appeals
agreed with the NLRC that Nacague failed to prove his allegation that S.M.
Lazo Clinic lacks accreditation. On the procedural requirements, the Court of
Appeals found that Sulpicio Lines complied with the twin-notice requirements
and conducted a formal hearing.
Nacague filed a motion for reconsideration. In its 19 April 2006 Resolution,
the Court of Appeals denied the motion.
Hence, this petition.
The Issue
Nacague raises the sole issue of whether the Court of Appeals erred in ruling
that his termination from employment was valid.
The Ruling of the Court
The petition is meritorious.

Nacague maintains that the S.M. Lazo Clinic drug test was not credible
because Sulpicio Lines failed to show that S.M. Lazo Clinic is an authorized
drug testing center. Nacague also alleges that the urine samples were gathered
carelessly without proper labels to identify their owners and that S.M. Lazo
Clinic did not ask Nacague if he was taking any medication that might alter
the results of the drug test. [17]Nacague adds that Republic Act No. 9165[18]
(R.A. No. 9165) and the Department of Labor and Employment Order No. 53-
03[19] (Department Order No. 53-03) require two drug tests -- a screening test
and a confirmatory test. Nacague maintains that, since only a screening test
was conducted, he was illegally dismissed based on an incomplete drug test.
Nacague argues that Sulpicio Lines failed to discharge its burden of proving
that the termination of his employment was legal.
On the other hand, Sulpicio Lines questions the belated attempt of Nacague to
question the credibility of S.M. Lazo Clinic. Sulpicio Lines also argues that
since Nacague knew that the residue of the drug would no longer be detectable
in his body after five days, Nacague underwent another drug test with the
Chong Hua Hospital. Sulpicio Lines insists that the most accurate drug test is
the random drug test conducted by S.M. Lazo Clinic and that the test with
Chong Hua Hospital was a "planned" test.
Under Article 279[20] of the Labor Code, an employer may terminate the
services of an employee for just causes[21] or for authorized causes.[22]
Furthermore, under Article 277(b)[23] of the Labor Code, the employer must
send the employee who is about to be terminated, a written notice stating the
causes for termination and must give the employee the opportunity to be heard
and to defend himself. Thus, to constitute valid dismissal from employment,
two requisites must concur: (1) the dismissal must be for a just or authorized
cause; and (2) the employee must be afforded an opportunity to be heard and
to defend himself.[24]
Contrary to Sulpicio Lines' allegation, Nacague was already questioning the
credibility of S.M. Lazo Clinic as early as the proceedings before the Labor
Arbiter. In fact, the Labor Arbiter declared that the S.M. Lazo Clinic drug test
result was doubtful since it is not under the supervision of the Dangerous Drug
Board.[25]
The NLRC and the Court of Appeals ruled that Sulpicio Lines validly
terminated Nacague's employment because he was found guilty of using
illegal drugs which constitutes serious misconduct and loss of trust and
confidence. However, we find that Sulpicio Lines failed to clearly show that
Nacague was guilty of using illegal drugs. We agree with the Labor Arbiter
that the lack of accreditation of S.M. Lazo Clinic made its drug test results
doubtful.
Section 36 of R.A. No. 9165 provides that drug tests shall be performed only
by authorized drug testing centers. Moreover, Section 36 also prescribes that
drug testing shall consist of both the screening test and the confirmatory test.
Section 36 of R.A. No. 9165 reads:
SEC. 36. Authorized Drug Testing. 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 test results. The DOH shall take steps in setting the price of the
drug test with DOH accredited drug testing centers to further reduce the cost
of such drug test. The drug testing shall employ, among others, two (2) testing
methods, 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. x x x (Emphasis supplied)
Department Order No. 53-03 further provides:
Drug Testing Program for Officers and Employees
iii. Drug testing shall conform with the procedures as prescribed by the
Department of Health (DOH) (www.doh.gov.ph). Only drug testing centers
accredited by the DOH shall be utilized. A list of accredited centers may be feasible due to strained relations between Nacague and Sulpicio Lines and that
accessed through the OSHC website (www.oshc.dole.gov.ph). Nacague should instead be granted separation pay.

iv. Drug testing shall consist of both the screening test and the WHEREFORE, we GRANT the petition. We SET ASIDE the 23 January
confirmatory test; the latter to be carried out should the screening test 2006 Decision and the 19 April 2006 Resolution of the Court of Appeals in
turn positive. The employee concerned must be informed of the test results CA-G.R. CEB SP No. 01065. We REINSTATE the 12 November 2003
whether positive or negative. (Emphasis supplied) Decision of the Labor Arbiter.

SO ORDERED.
In Social Justice Society v. Dangerous Drugs Board,[26] we explained:
As to the mechanics of the test, the law specifies that the procedure shall
employ two testing methods, i.e., the screening test and the confirmatory test,
doubtless to ensure as much as possible the trustworthiness of the results. But
the more important consideration lies in the fact that the tests 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 chain of custody.[27]

The law is clear that drug tests shall be performed only by authorized drug
testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo
Clinic is an accredited drug testing center. Sulpicio Lines did not even deny
Nacague's allegation that S.M. Lazo Clinic was not accredited. Also, only a
screening test was conducted to determine if Nacague was guilty of using
illegal drugs. Sulpicio Lines did not confirm the positive result of the
screening test with a confirmatory test. Sulpicio Lines failed to indubitably
prove that Nacague was guilty of using illegal drugs amounting to serious JOSE S. SANTOS, JR., PETITIONER, VS. NATIONAL LABOR
misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly RELATIONS COMMISSION, HAGONOY INSTITUTE INC., ITS
show that it had a valid and legal cause for terminating Nacague's DIRECTRESS, MARTA B. ZUNIGA AND PRINCIPAL B. BANAG,
employment. When the alleged valid cause for the termination of employment RESPONDENT.
is not clearly proven, as in this case, the law considers the matter a case of
illegal dismissal. DECISION
ROMERO, J.:
We agree with the Labor Arbiter that Nacague's reinstatement is no longer
It is to state the obvious that schools, next only to the home, wield a weighty
influence upon the students, especially during the latters formative years, for
it instills in them the values and mores which shall prepare them to discharge
their rightful responsibilities as mature individuals in society. At the vanguard
in nurturing their growth are the teachers who are directly charged with
rearing and educating them. As such, a teacher serves as a role model for his
students. Corollarily, he must not bring the teaching profession into public
disrespect or disgrace.[1] For failure to live up to the exacting moral standards
demanded by his profession, petitioner Jose Santos was dismissed from his
employment on the ground of immorality. We uphold his dismissal.
The following facts are hereunder narrated.
Petitioner, a married man, was employed as a teacher by the private
respondent Hagonoy Institute Inc. from June 1980 until his dismissal on June
1, 1991. Likewise working as a teacher for the private respondent was Mrs.
Arlene T. Martin, also married. In the course of their employment, the couple
fell in love. Thereafter, rumors regarding the couples relationship spread,
especially among the faculty members and school officials.
Concerned about the rumors, on November 3, 1990, the private respondent
advised Mrs. Martin to take a leave of absence which she ignored, as she
continued to report for work. Consequently, on November 9, 1990, she was
barred from reporting for work and was not allowed to enter the private
respondents premises, effectively dismissing her from her employment.
In view of her termination from the service, on November 13, 1990, Mrs.
Martin filed a case for illegal dismissal before the NLRC Regional Arbitration
Branch No. III, San Fernando, Pampanga[2] against the private respondent.
After the parties had submitted their respective evidence and position paper,
Labor Arbiter Ariel Santos rendered a decision dismissing the complaint, the
dispositive part of which states:
WHEREFORE, the complaint filed by the complainant Arlene Martin is
hereby DISMISSED for utter lack of merit.
However, considering the length of service of complaint and for humanitarian
reason she would be given financial assistance based on one-month pay on
every year of service.
On appeal, the NLRC in a decision dated February 26, 1993, reversed the
labor arbiters ruling, the dispositive portion of the decision[3] reads:
WHEREFORE, the appealed Decision is hereby SET ASIDE and
VACATED. Another one ENTERED ordering respondent to pay complainant
her backwages and separation pay in the total amount of P83,392.40.
Complainants other claims are hereby DISMISSED for lack of merit.
SO ORDERED.
The reversal was anchored on the failure by the private respondent, in
dismissing Mrs. Martin, to accord her the necessary procedural due process.[4]
Meanwhile, private respondent set up a committee to investigate the veracity
of the rumors. After two weeks of inquiry, the committee rendered its report
confirming the illicit relationship between the petitioner and Mrs. Martin.[5]
In view of the committees finding, on December 19, 1990, petitioner was
charged administratively for immorality and was required to present his side
on the controversy. Five months later or in May 1991, petitioner was informed
by the private respondents Board of Directors of his dismissal effective June
1, 1991.[6] Unable to accept such verdict, petitioner filed a complaint for illegal
dismissal on August 12, 1991 before the NLRC Regional Arbitration Branch
No. III, San Fernando, Pampanga. After a full blown trial was conducted,
Labor Arbiter Quintin C. Mendoza rendered a decision dated January 12,
1993, dismissing petitioners complaint but at the same time awarding
monetary sums as financial assistance, the dispositive portion of which reads,
thus:
WHEREFORE, judgement is hereby issued dismissing the complaint, but
ordering respondent Hagonoy Institute Inc. and/or Mrs. Elisea B. Banag
(respondent Principal) or Mrs. Marta B. Zuniga (respondent Directress) to pay
complainant (petitioner) the sum of thirteen thousand and seven hundred fifty
(P13,750.00) pesos (as financial assistance), the rest of the complaint being
hereby dismissed for lack of basis or merit.
SO ORDERED.
In an effort to seek the reversal of the labor arbiters decision, petitioner filed
an appeal before the NLRC, which, however, did not find any substantial
reason to overturn the labor arbiters ruling. Thus, in a decision[7] dated
November 29, 1993, the NLRC dismissed the appeal, to wit:
WHEREFORE, premises considered, the instant appeal should be, as it is
hereby, dismissed for lack of merit.
SO ORDERED.
Petitioners motion for reconsideration suffered the same fate.[8] Thus, this
petition for certiorari under Rule 65 of the Rules of Court.
We hereby uphold the NLRCs finding dismissing petitioner from his
employment.
The crux of the controversy is whether the illicit relationship between the
petitioner and Mrs. Martin could be considered immoral as to constitute just
cause to terminate an employee under Article 282 of the Labor Code.
We have consistently held that in order to constitute a valid dismissal, two
requisites must concur: (a) the dismissal must be for any of the causes
expressed in Art. 282 of the Labor Code, and (b) the employee must be
accorded due process, basic of which are the opportunity to be heard and
defend himself.[9]
Under Article 282 of the Labor Code, as amended, the following are deemed
just causes to terminate an employee:
(a)Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties:
(c) Fraud or willfull breach by the employee of the trust reposed in him by
his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person
of his employer or any immediate member of his family or his duly authorize
representative; and
(e) Other causes analogous to the foregoing.
Moreover, it is provided inter alia under Section 94[10] of the Manual of
Regulations for Private Schools:
Section 94. Causes of Terminating Employment. In addition to the just cases
enumerated in the Labor Code, the employment of school personnels,
including faculty, may be terminated for any of the following causes:
xxxxxx xxx
E. Disgraceful or immoral conduct.
Private respondent, in justifying the termination of the petitioner, contends
that being a teacher, he must live up to the high moral standards required of
his position. In other words, it asserts that its purpose in dismissing the
petitioner was to preserve the respect of the community towards the teachers
and to strengthen the educational system.[11]
On the other hand, petitioner merely argues that the alleged illicit relationship
was not substantially proven by convincing evidence by the private
respondent as to justify his dismissal.
On the outset, it must be stressed that to constitute immorality, the
circumstances of each particular case must be holistically considered and
evaluated in light of the prevailing norms of conduct and applicable laws.[12]
American jurisprudence has defined immorality as a course of conduct which
offends the morals of the community and is a bad example to the youth whose
ideals a teacher is supposed to foster and to elevate,[13] the same including
sexual misconduct.[14] Thus, in petitioners case, the gravity and seriousness of
the charges against him stem from his being a married man and at the same
time a teacher.
We cannot overemphasize that having an extra-marital affair is an afront to the
sanctity of marriage, which is a basic institution of society. Even our Family
Code provides that husband and wife must live together, observe mutual love,
respect and fidelity.[15] This is rooted in the fact that both our Constitution and
our laws cherish the validity of marriage and unity of the family.[16] Our laws,
in implementing this constitutional edict on marriage and the family
underscore their permanence, inviolability and solidarity.[17]
As a teacher, petitioner serves as an example to his pupils, especially during
their formative years[18] and stands in loco parentis to them.[19] To stress their
importance in our society, teachers are given substitute and special parental
authority under our laws.[20]
Consequently, it is but stating the obvious to assert that teachers must adhere
to the exacting standards of morality and decency. There is no dichotomy of
morality. A teacher, both in his official and personal conduct, must display
exemplary behavior. He must freely and willingly accept restrictions on his
conduct that might be viewed irksome by ordinary citizens. In other words,
the personal behavior of teachers, in and outside the classroom, must be
beyond reproach.
Accordingly, teachers must abide by a standard of personal conduct which not
only proscribes the commission of immoral acts, but also prohibits behavior
creating a suspicion of immorality because of the harmful impression it might
have on the students.[21] Likewise, they must observe a high standard of
integrity and honesty.[22]
From the foregoing, it seems obvious that when a teacher engages in extra-
marital relationship, especially when the parties are both married, such
behavior amounts to immorality, justifying his termination from
employment.[23]
Having concluded that immorality is a just cause for dismissing petitioner, it is
imperative that the private respondent prove the same. Since the burden of
proof rests upon the employer to show that the dismissal was for a just and
valid cause,[24] the same must be supported by substantial evidence.[25]
Undoubtedly, the question of immorality by the petitioner is factual in nature.
Thus, we reiterate the well-settled rule that factual findings by the NLRC,
particularly when it coincides with those by the Labor Arbiter, are accorded
respect, even finality, and will not be disturbed for as long as such findings are
supported by substantial evidence.[26] A scrutiny of the records of the instant
petition leads us to concur with the NLRCs finding that petitioner indeed
entered into an illicit relationship with his co-teacher. This fact was attested to
by the testimonies of nine witnesses (a fourth year student, a security guard, a
janitor and six co-teachers) which petitioner failed to rebut.
In fact, the petitioners only recourse was to deny the accusation and insinuate
that these witnesses were coerced by the private respondent to give their
testimonies. However, under such circumstances, it is not enough for
petitioner to simply cast doubt on the motives of the witnesses; he must
present countervailing evidence to prove that no such affair took place.
In short, we cannot just ignore the witnesses affidavits and their subsequent
testimonies during the investigation as to the culpability of the petitioner on
the sole basis of the latters denial. In any event, we have held that denial, if
unsubstantiated by clear and convincing evidence, is a negative and self-
serving evidence which has no weight in law and cannot be given greater
evidentiary value over the testimony of credible witnesses who testified on
affirmative matters.[27]
Further bolstering the witnesses testimonies is the the absence of any motive
on their part to falsely testify against the petitioner. Thus, since there is
nothing to indicate that the witnesses were moved by dubious or improper
motives to testify falsely against the petitioner, their testimonies are hereby
accorded full faith and credit.
Likewise, petitioner cannot take comfort from the letter dated November 7, other than serious misconduct or those reflecting his moral character. Where
1990 signed by 28 of his co-teachers, expressing their unequivocal support for the reason for the valid dismissal is, for example, habitual intoxication or an
Mrs. Arlene Martin.[28] It must be noted that the said letter did not in any way offense involving moral turpitude, like theft or illicit sexual relationship with a
absolve Mrs. Martin from any wrongdoing. It merely affirmed the fact that fellow worker, the employer may not be required to give the dismissed
when she was forcibly asked to take a leave of absence on November 3, 1990 employee separation pay, or financial assistance, or whatever other name it is
the same was done in a precipitous manner, without the benefit of due process. called, on the ground of social justice.
Moreover, it must be stressed that the expression of support was personal to
Mrs. Martin, and the same should not redound to the benefit of the petitioner. The above ruling has consistently been applied in terminating an employee
Indeed, if petitioner really had the support of his peers, then it should have when it involves his moral character.[32]
been easy for him to obtain a similar letter from them in the course of his WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED.
administrative investigation. However, not only did he not get such support, The questioned Resolution dated March 8, 1994 and the decision of the
but six of his co-teachers even testified against him during the inquiry. National Labor Relations Commission dated November 29, 1993, are
Finally, petitioner cannot invoke in his favor the ruling in the Arlene Martin AFFIRMED with the MODIFICATION deleting the financial assistance
case, wherein the NLRC ruled that her dismissal was illegal. It must be noted granted to petitioner in the amount of P13,750.00. Costs against petitioner.
that the reason for declaring Martins dismissal as illegal was the failure by the SO ORDERED.
private respondent to accord her the required due process.[29]
As aptly observed by the NLRC in its decision:[30]
In the case at bar, the complainant was amply afforded the due process
requirements of law. He was dismissed only on June 1, 1991 after an
exhaustive investigation. A committee was formed to conduct an inquiry.
(Rollo, pp. 43-44) An administrative charge for immorality was filed against
him. (Rollo, p. 45) He was even required to testify in said case. (Rollo, p. 46)
He was given the opportunity to answer said accusation. (Rollo, p. 47) He was
JOSE S. SANTOS, JR., PETITIONER, VS. NATIONAL LABOR
in fact present during the hearing on January 17, 1991 and gave his side. x x x
RELATIONS COMMISSION, HAGONOY INSTITUTE INC., ITS
In fine, herein complainant (petitioner) cannot successfully seek refuge in the
DIRECTRESS, MARTA B. ZUNIGA AND PRINCIPAL B. BANAG,
cited case of Martin. (Rollo, pp. 48-49)
RESPONDENT.
In view of our finding that petitioners dismissal was for a just and valid
cause, the grant of financial assistance by the NLRC is without any factual DECISION
and legal basis. In PLDT v. NLRC, [31] we held that:
ROMERO, J.:
We hold henceforth separation pay shall be as a measure of social justice
only in these instances where the employee is validly dismissed for cause
It is to state the obvious that schools, next only to the home, wield a weighty
influence upon the students, especially during the latters formative years, for
it instills in them the values and mores which shall prepare them to discharge
their rightful responsibilities as mature individuals in society. At the vanguard
in nurturing their growth are the teachers who are directly charged with
rearing and educating them. As such, a teacher serves as a role model for his
students. Corollarily, he must not bring the teaching profession into public
disrespect or disgrace.[1] For failure to live up to the exacting moral standards
demanded by his profession, petitioner Jose Santos was dismissed from his
employment on the ground of immorality. We uphold his dismissal.
The following facts are hereunder narrated.
Petitioner, a married man, was employed as a teacher by the private
respondent Hagonoy Institute Inc. from June 1980 until his dismissal on June
1, 1991. Likewise working as a teacher for the private respondent was Mrs.
Arlene T. Martin, also married. In the course of their employment, the couple
fell in love. Thereafter, rumors regarding the couples relationship spread,
especially among the faculty members and school officials.
Concerned about the rumors, on November 3, 1990, the private respondent
advised Mrs. Martin to take a leave of absence which she ignored, as she
continued to report for work. Consequently, on November 9, 1990, she was
barred from reporting for work and was not allowed to enter the private
respondents premises, effectively dismissing her from her employment.
In view of her termination from the service, on November 13, 1990, Mrs.
Martin filed a case for illegal dismissal before the NLRC Regional Arbitration
Branch No. III, San Fernando, Pampanga[2] against the private respondent.
After the parties had submitted their respective evidence and position paper,
Labor Arbiter Ariel Santos rendered a decision dismissing the complaint, the
dispositive part of which states:
WHEREFORE, the complaint filed by the complainant Arlene Martin is
hereby DISMISSED for utter lack of merit.
However, considering the length of service of complaint and for humanitarian
reason she would be given financial assistance based on one-month pay on
every year of service.
On appeal, the NLRC in a decision dated February 26, 1993, reversed the
labor arbiters ruling, the dispositive portion of the decision[3] reads:
WHEREFORE, the appealed Decision is hereby SET ASIDE and
VACATED. Another one ENTERED ordering respondent to pay complainant
her backwages and separation pay in the total amount of P83,392.40.
Complainants other claims are hereby DISMISSED for lack of merit.
SO ORDERED.
The reversal was anchored on the failure by the private respondent, in
dismissing Mrs. Martin, to accord her the necessary procedural due process.[4]
Meanwhile, private respondent set up a committee to investigate the veracity
of the rumors. After two weeks of inquiry, the committee rendered its report
confirming the illicit relationship between the petitioner and Mrs. Martin.[5]
In view of the committees finding, on December 19, 1990, petitioner was
charged administratively for immorality and was required to present his side
on the controversy. Five months later or in May 1991, petitioner was informed
by the private respondents Board of Directors of his dismissal effective June
1, 1991.[6] Unable to accept such verdict, petitioner filed a complaint for illegal
dismissal on August 12, 1991 before the NLRC Regional Arbitration Branch
No. III, San Fernando, Pampanga. After a full blown trial was conducted,
Labor Arbiter Quintin C. Mendoza rendered a decision dated January 12,
1993, dismissing petitioners complaint but at the same time awarding
monetary sums as financial assistance, the dispositive portion of which reads,
thus:
WHEREFORE, judgement is hereby issued dismissing the complaint, but
ordering respondent Hagonoy Institute Inc. and/or Mrs. Elisea B. Banag
(respondent Principal) or Mrs. Marta B. Zuniga (respondent Directress) to pay
complainant (petitioner) the sum of thirteen thousand and seven hundred fifty
(P13,750.00) pesos (as financial assistance), the rest of the complaint being
hereby dismissed for lack of basis or merit.
SO ORDERED.
In an effort to seek the reversal of the labor arbiters decision, petitioner filed
an appeal before the NLRC, which, however, did not find any substantial
reason to overturn the labor arbiters ruling. Thus, in a decision[7] dated
November 29, 1993, the NLRC dismissed the appeal, to wit:
WHEREFORE, premises considered, the instant appeal should be, as it is
hereby, dismissed for lack of merit.
SO ORDERED.
Petitioners motion for reconsideration suffered the same fate.[8] Thus, this
petition for certiorari under Rule 65 of the Rules of Court.
We hereby uphold the NLRCs finding dismissing petitioner from his
employment.
The crux of the controversy is whether the illicit relationship between the
petitioner and Mrs. Martin could be considered immoral as to constitute just
cause to terminate an employee under Article 282 of the Labor Code.
We have consistently held that in order to constitute a valid dismissal, two
requisites must concur: (a) the dismissal must be for any of the causes
expressed in Art. 282 of the Labor Code, and (b) the employee must be
accorded due process, basic of which are the opportunity to be heard and
defend himself.[9]
Under Article 282 of the Labor Code, as amended, the following are deemed
just causes to terminate an employee:
(a)Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties:
(c) Fraud or willfull breach by the employee of the trust reposed in him by
his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person
of his employer or any immediate member of his family or his duly authorize
representative; and
(e) Other causes analogous to the foregoing.
Moreover, it is provided inter alia under Section 94[10] of the Manual of
Regulations for Private Schools:
Section 94. Causes of Terminating Employment. In addition to the just cases
enumerated in the Labor Code, the employment of school personnels,
including faculty, may be terminated for any of the following causes:
xxxxxx xxx
E. Disgraceful or immoral conduct.
Private respondent, in justifying the termination of the petitioner, contends
that being a teacher, he must live up to the high moral standards required of
his position. In other words, it asserts that its purpose in dismissing the
petitioner was to preserve the respect of the community towards the teachers
and to strengthen the educational system.[11]
On the other hand, petitioner merely argues that the alleged illicit relationship
was not substantially proven by convincing evidence by the private
respondent as to justify his dismissal.
On the outset, it must be stressed that to constitute immorality, the
circumstances of each particular case must be holistically considered and
evaluated in light of the prevailing norms of conduct and applicable laws.[12]
American jurisprudence has defined immorality as a course of conduct which
offends the morals of the community and is a bad example to the youth whose
ideals a teacher is supposed to foster and to elevate,[13] the same including
sexual misconduct.[14] Thus, in petitioners case, the gravity and seriousness of
the charges against him stem from his being a married man and at the same
time a teacher.
We cannot overemphasize that having an extra-marital affair is an afront to the
sanctity of marriage, which is a basic institution of society. Even our Family
Code provides that husband and wife must live together, observe mutual love,
respect and fidelity.[15] This is rooted in the fact that both our Constitution and
our laws cherish the validity of marriage and unity of the family.[16] Our laws,
in implementing this constitutional edict on marriage and the family
underscore their permanence, inviolability and solidarity.[17]
As a teacher, petitioner serves as an example to his pupils, especially during
their formative years[18] and stands in loco parentis to them.[19] To stress their
importance in our society, teachers are given substitute and special parental
authority under our laws.[20]
Consequently, it is but stating the obvious to assert that teachers must adhere
to the exacting standards of morality and decency. There is no dichotomy of
morality. A teacher, both in his official and personal conduct, must display
exemplary behavior. He must freely and willingly accept restrictions on his
conduct that might be viewed irksome by ordinary citizens. In other words,
the personal behavior of teachers, in and outside the classroom, must be
beyond reproach.
Accordingly, teachers must abide by a standard of personal conduct which not
only proscribes the commission of immoral acts, but also prohibits behavior
creating a suspicion of immorality because of the harmful impression it might
have on the students.[21] Likewise, they must observe a high standard of
integrity and honesty.[22]
From the foregoing, it seems obvious that when a teacher engages in extra-
marital relationship, especially when the parties are both married, such
behavior amounts to immorality, justifying his termination from
employment.[23]
Having concluded that immorality is a just cause for dismissing petitioner, it is
imperative that the private respondent prove the same. Since the burden of
proof rests upon the employer to show that the dismissal was for a just and
valid cause,[24] the same must be supported by substantial evidence.[25]
Undoubtedly, the question of immorality by the petitioner is factual in nature.
Thus, we reiterate the well-settled rule that factual findings by the NLRC,
particularly when it coincides with those by the Labor Arbiter, are accorded
respect, even finality, and will not be disturbed for as long as such findings are
supported by substantial evidence.[26] A scrutiny of the records of the instant
petition leads us to concur with the NLRCs finding that petitioner indeed
entered into an illicit relationship with his co-teacher. This fact was attested to
by the testimonies of nine witnesses (a fourth year student, a security guard, a
janitor and six co-teachers) which petitioner failed to rebut.
In fact, the petitioners only recourse was to deny the accusation and insinuate
that these witnesses were coerced by the private respondent to give their
testimonies. However, under such circumstances, it is not enough for
petitioner to simply cast doubt on the motives of the witnesses; he must
present countervailing evidence to prove that no such affair took place.
In short, we cannot just ignore the witnesses affidavits and their subsequent
testimonies during the investigation as to the culpability of the petitioner on
the sole basis of the latters denial. In any event, we have held that denial, if
unsubstantiated by clear and convincing evidence, is a negative and self-
serving evidence which has no weight in law and cannot be given greater
evidentiary value over the testimony of credible witnesses who testified on
affirmative matters.[27]
Further bolstering the witnesses testimonies is the the absence of any motive
on their part to falsely testify against the petitioner. Thus, since there is
nothing to indicate that the witnesses were moved by dubious or improper
motives to testify falsely against the petitioner, their testimonies are hereby
accorded full faith and credit.
Likewise, petitioner cannot take comfort from the letter dated November 7,
1990 signed by 28 of his co-teachers, expressing their unequivocal support for
Mrs. Arlene Martin.[28] It must be noted that the said letter did not in any way
absolve Mrs. Martin from any wrongdoing. It merely affirmed the fact that
when she was forcibly asked to take a leave of absence on November 3, 1990
the same was done in a precipitous manner, without the benefit of due process.
Moreover, it must be stressed that the expression of support was personal to
Mrs. Martin, and the same should not redound to the benefit of the petitioner.
Indeed, if petitioner really had the support of his peers, then it should have
been easy for him to obtain a similar letter from them in the course of his
administrative investigation. However, not only did he not get such support,
but six of his co-teachers even testified against him during the inquiry.
Finally, petitioner cannot invoke in his favor the ruling in the Arlene Martin
case, wherein the NLRC ruled that her dismissal was illegal. It must be noted
that the reason for declaring Martins dismissal as illegal was the failure by the
private respondent to accord her the required due process.[29]
As aptly observed by the NLRC in its decision: [30]
In the case at bar, the complainant was amply afforded the due process
requirements of law. He was dismissed only on June 1, 1991 after an
exhaustive investigation. A committee was formed to conduct an inquiry.
(Rollo, pp. 43-44) An administrative charge for immorality was filed against
him. (Rollo, p. 45) He was even required to testify in said case. (Rollo, p. 46)
He was given the opportunity to answer said accusation. (Rollo, p. 47) He was
in fact present during the hearing on January 17, 1991 and gave his side. x x x
In fine, herein complainant (petitioner) cannot successfully seek refuge in the
cited case of Martin. (Rollo, pp. 48-49)
In view of our finding that petitioners dismissal was for a just and valid
cause, the grant of financial assistance by the NLRC is without any factual
and legal basis. In PLDT v. NLRC, [31] we held that:
We hold henceforth separation pay shall be as a measure of social justice
only in these instances where the employee is validly dismissed for cause
other than serious misconduct or those reflecting his moral character. Where
the reason for the valid dismissal is, for example, habitual intoxication or an
offense involving moral turpitude, like theft or illicit sexual relationship with a
fellow worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other name it is
called, on the ground of social justice.
The above ruling has consistently been applied in terminating an employee
when it involves his moral character.[32]
WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED.
The questioned Resolution dated March 8, 1994 and the decision of the
National Labor Relations Commission dated November 29, 1993, are
AFFIRMED with the MODIFICATION deleting the financial assistance
granted to petitioner in the amount of P13,750.00. Costs against petitioner.
SO ORDERED.
[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]
[29]

[30]

[31]

[32]

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]
[25]

[26]

[27]

[28]

[29]

[30]

[31]

[32]