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Tabuk Multipurpose Cooperative Inc. vs.

Magdalena Duclan

Tabuk Multipurpose Cooperative Inc. (TAMPCO) is duly registered coop in
Tabuk, Kalinga is engaged in the business of obtaining investments from its
members which are lent out to qualified members-borrowers.
Petitioner Josephine Doctor is TAMPCO Chairperson and BOD member,
Petitioner William Bao-Angan is TAMPCOs CEO.
Respondent Duclan was employed as TAMPCOs Cashier

2002- TAMPCO introduced Special Investment Loans (SILs) to its members

and prospective borrowers. Among those who availed were Falgui and
June 2003- issued Board Action (BA) No. 28 which limited the grant of SILs
to P5M and instructed management to collect outstanding loans and reduce
the amount of loans granted to allowable levels, despite of the BA 28, SILs
were granted to Falgui and Kotoken over and above the ceiling set.
October 26, 2003- due to above-mentioned, BOD issued BA No. 55,
completely halting the grant of SILs pending collection of outstanding loans.
However, SILs were again granted to Falgui P6.697M and Kotoken P3.5M.
Eventually Falgui filed for insolvency while Kotoken failed to pay back her
February 2004- TAMPCO indefinitely suspended Duclan and other Coop
Officials and required them to replace the P6M representing unpaid loans.
March 6, 2004- respondents suspension was fixed to 15 days and ordered to
return to work on March 15, 2004.
The TAMPCO BOD then created a fact finding committee and came out it
the following reports:
o There are loan notes not containing violations
o Special loans were still granted despite of BA 28 and BA 55
o Loans were released even with lacking documents
o Postdated checks inted to pay SILs were not presented
o Extension of the term of loans were done without BOD approval
All the findings were NOT denied by the respondents and as such
o Duclan- will be immediately suspended without pay, collect SILs
release without proper attachments and pay P1.5M value of a check.
Failure to do such will be her dismissal and forfeiture of benefits.
o Duclan, unable to collect the amount was dismissed form employment.
Hence the complaint.
Jully 12, 2005- Duclan (respondent) filed a complaint for illegal dismissal,
with recovery of backwages and other monetary benefits.

1. LA ruling- Duclan found to have been illegally suspended then illegally

dismissed, holding the TAMPCO and its BODs jointly liable. BASIS:
a. Duclans first suspension is indefinite hence illegal.
b. Not accorded the opportunity to defend herself
c. Suspending respondent and requiring her to personally pay the loan
d. Respondent deprived to explain after her suspension the 2nd time.
e. Respondent was suspended twice for the same infraction.
f. Respondent was constructively dismissed (indefinitely suspended)
g. Respondents signing of checks before its release is merely ministerial
h. TAMPCO did not terminate other coworkers commiting the same
2. NLRC ruling- decision of the LA is reversed and set aside.
a. Only second suspension is illegal
b. Illegal dismissal is of a valid cause for her violations
c. Duclan failed to refute the findings against her
d. Release of fund by Duclan is not purely ministerial as she is
expected to check all supporting documents
e. Duclan made deliberate infractions of clear mandatory policies
amounting to gross misconduct
3. CA ruling- decision reversed the NLRCs and reinstating LAs decision.
Petitioner filed MR but the CA denied the same.

1. WON Duclan were illegally dismissed.


SC: the Petition is Granted, reversing and setting aside the CAs resolution.
Reinstating and affirming NLRCs decision.

The persistent refusal of an employee to obey the employers lawful order

amounts to willful disobedience.
Willful disobedience as a ground should be:
o Wilful and intentional, wilfulness must be attended by wrongful and
perverse mental attitude rendering the employees act inconsistent
with proper subordination.
o The violated order must have been reasonable, lawful, made known to
the employee, must pertain to the duties they are engaged to

Discussion Notes 1:

Article 282 of the Labor Code: Termination by Employer

An employer may terminate an employment for any of the following causes:

1. Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;

2. Gross and habitual neglect by the employee of his duties;

3. Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;

4. Commission of a crime or offense by the employee against the person of his

employer or any immediate member of his family or his duly authorized
representatives; and

5. Other causes analogous to the foregoing.

Discussion Notes 2:(though not included in the case)

Art. 285. Termination by employee.

1. An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month
in advance. The employer upon whom no such notice was served may hold the
employee liable for damages.

2. An employee may put an end to the relationship without serving any notice on
the employer for any of the following just causes:

Serious insult by the employer or his representative on the honor

and person of the employee;
Inhuman and unbearable treatment accorded the employee by the
employer or his representative;
Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the
immediate members of his family; and
Other causes analogous to any of the foregoing.