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DAVID, doing business under the name and style "YIELS ISSUE/s:
HOG DEALER," Petitioner, v. JOHN G. MACASIO, Respondent. 1. Whether there is employee employer relationship – YES
G.R. No. 195466 July 2, 2014 2. Whether respondent Macasio engaged on PAKYAW or Task
basis employee - YES
TOPIC: Art. 82 Labor Code Book III, Rule 1, Sec. 2 IRR (Labor Code) 3. Whether respondent Macasio is a Field personnel – NO
The IRR therefore validly qualifies and limits the general exclusion of 4. Whether respondent Macasio is entitled to 3th month pay -
"workers paid by results" found in Article 82 from the coverage of NO
holiday and SIL pay. This is the only reasonable interpretation since 5. Whether respondent Macasia is entitled to SIL, Holiday pay
the determination of excluded workers who are paid by results from the – YES
coverage of Title I is "determined by the Secretary of Labor in
appropriate regulations." Employee engaged in pakyaw basis is not RULING:
excluded from the coverage of SIL or Holiday pay provided they are 1.) Whether there is employee employer relationship - YES
not field personnel. The governing law on 13th moth pay is PD No.
851.53 exempts employees paid on task basis without reference to Macasio is David’s employee. To determine the existence of an
field personnel. employer-employee relationship, four elements generally need to be
considered, namely: (1) the selection and engagement of the
FACTS: employee; (2) the payment of wages; (3) the power of dismissal; and
Macasio filed before the LA a complaint against petitioner for non- (4) the power to control the employees conduct. These elements or
payment of overtime pay, holiday pay and 13th month pay. He also indicators comprise the so-called "four-fold" test of employment
claimed payment for moral and exemplary damages and attorneys relationship.
fees. And payment for service incentive leave (SIL).
Macasios relationship with David satisfies this test. First, David
Macasio alleged that he had been working as a butcher for David since engaged the services of Macasio, thus satisfying the element no. 1.
January 6, 1995. Macasio claimed that David exercised effective David categorically confirmed this fact when, in his "Sinumpaang
control and supervision over his work, pointing out that David: Salaysay," he stated that "nag apply po siya sa akin at kinuha ko siya
1. Set the work day, reporting time and hogs to be chopped, as na chopper. Also, Solano and Antonio stated in their "Pinagsamang
well as the manner by which he was to perform his work; Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho sa Yiels xxx
2. Daily paid his salary of P700.00, which was increased from na pag-aari ni Ariel David bilang butcher" and "kilalanamin si xxx
P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005; and Macasio na isa ring butcher xxx ni xxx David at kasama namin siya sa
3. Approved and disapproved his leaves. aming trabaho." Second, David paid Macasios wages. Third, David
had been setting the day and time when Macasio should report for
Macasio added that David owned the hogs delivered for chopping, as work. This power to determine the work schedule obviously implies
well as the work tools and implements; the latter also rented the power of control. David could regulate Macasios work and could even
workplace refuse to give him any assignment, thereby effectively dismissing him.
And fourth, David had the right and power to control and supervise
In his defense, David claimed that he hired Macasio as a butcher or Macasios work as to the means and methods of performing it. In
chopper on "pakyaw" or task basis who is, therefore, not entitled to addition to setting the day and time when Macasio should report for
overtime pay, holiday pay and 13th month pay pursuant to the work.
provisions of the IRR of the Labor Code.
2.) Whether respondent Macasio engaged on PAKYAW or Task
LABOR ARBITER: The LA gave credence to Davids claim that he basis employee - YES
engaged Macasio on "pakyaw" or task basis. The LA noted the
following facts to support this finding: (1) Macasio received the fixed A distinguishing characteristic of "pakyaw" or task basis engagement,
amount of P700.00 for every work done, regardless of the number of as opposed to straight-hour wage payment, is the non-consideration of
hours that he spent in completing the task and of the volume or the time spent in working. In a task-basis work, the emphasis is on the
number of hogs that he had to chop per engagement; (2) Macasio task itself, in the sense that payment is reckoned in terms of
usually worked for only four hours, beginning from 10:00 p.m. up to completion of the work, not in terms of the number of time spent in the
2:00 a.m. of the following day; and (3) the P700.00 fixed wage far completion of work. Once the work or task is completed, the worker
exceeds the then prevailing daily minimum wage of P382.00. The LA receives a fixed amount as wage, without regard to the standard
added that the nature of Davids business as hog dealer supports this measurements of time generally used in pay computation In Macasios
"pakyaw" or task basis arrangement. concluded that as Macasio was case, the established facts show that he would usually start his work at
engaged on "pakyaw" or task basis, he is not entitled to overtime, 10:00 p.m. Thereafter, regardless of the total hours that he spent at the
holiday, SIL and 13th month pay. workplace or of the total number of the hogs assigned to him for
chopping, Macasio would receive the fixed amount of P700.00 once he
NLRC affirmed the LA Ruling. Thus, the petitioner elevated his case to had completed his task. Clearly, these circumstances show a "pakyaw"
the CA via a petition for certiorari. CA partly granted Macasios or task basis engagement that all three tribunals uniformly found.
certiorari petition and reversed the NLRCs ruling for having been
rendered with grave abuse of discretion. While the CA agreed with the 3.) Whether respondent Macasia is a Field personnel - NO
LA and the NLRC that Macasio was a task basis employee, it
nevertheless found Macasio entitled to his monetary claims following Based on the definition of field personnel under Article 82, we agree
the doctrine laid down in Serrano v. Severino Santos Transit. The CA with the CA that Macasio does not fall under the definition of "field
explained that as a task basis employee, Macasio is excluded from the personnel." The CAs finding in this regard is supported by the
coverage of holiday, SIL and 13th month pay only if he is likewise a established facts of this case: first, Macasio regularly performed his
"field personnel." duties at Davids principal place of business; second, his actual hours
of work could be determined with reasonable certainty; and, third,
As defined by the Labor Code, a "field personnel" is one who performs David supervised his time and performance of duties. Since Macasio
the work away from the office or place of work and whose regular work cannot be considered a "field personnel," then he is not exempted from
hours cannot be determined with reasonable certainty. In Macasios the grant of holiday, SIL pay even as he was engaged on "pakyaw" or
case, the elements that characterize a "field personnel" are evidently task basis.
lacking as he had been working as a butcher at Davids "Yiels Hog
Dealer" business in Sta. Mesa, Manila under Davids supervision and 4.) Whether respondent Macasio is entitled to 3th month pay - NO
control, and for a fixed working schedule that starts at 10:00 p.m.
That the CA erred in finding that the NLRC gravely abused its
The CA awarded Macasios claim for holiday, SIL and 13th month pay discretion in denying this benefit to Macasio. The governing law on
for three years, with 10% attY. fees on the total monetary award. The 13th month pay is PD No. 851.53 13th month pay benefits generally
CA, however, denied Macasios claim for moral and exemplary cover all employees; an employee must be one of those expressly
damages for lack of basis. enumerated to be exempted. Section 3 of the IRR of P.D. No. 851
enumerates the exemptions from the coverage of 13th month pay Article 82 of the Labor Code provides the exclusions from the
benefits. coverage of Title I, Book III of the Labor Code - provisions governing
working conditions and rest periods.
Under Section 3(e), "employers of those who are paid on xxx task
basis, and those who are paid a fixed amount for performing a specific Art. 82. Coverage. The provisions of [Title I] shall apply to employees
work, irrespective of the time consumed in the performance thereof" in all establishments and undertakings whether for profit or not, but not
are exempted. Note that unlike the IRR of the Labor Code on holiday to government employees, managerial employees, field personnel,
and SIL pay, Section 3(e) of the IRR ofPD No. 851 exempts employees members of the family of the employer who are dependent on him for
"paid on task basis" without any reference to "field personnel." This support, domestic helpers, persons in the personal service of another,
could only mean that insofar as payment of the 13th month pay is and workers who are paid by results as determined by the Secretary of
concerned, the law did not intend to qualify the exemption from its Labor in appropriate regulations.
coverage with the requirement that the task worker be a "field xxxx
personnel" at the same time
"Field personnel" shall refer to non-agricultural employees who
5.) Whether respondent Macasia is entitled to SIL, Holiday pay – YES regularly perform their duties away from the principal place of business
or branch office of the employer and whose actual hours of work in the
The payment of an employee on task or pakyaw basis alone is field cannot be determined with reasonable certainty.
insufficient to exclude one from the coverage of SIL and holiday pay.
They are exempted from the coverage of Title I (including the holiday Among the Title I provisions are the provisions on holiday pay (under
and SIL pay) only if they qualify as "field personnel." The IRR therefore Article 94 of the Labor Code) and SIL pay (under Article 95 of the
validly qualifies and limits the general exclusion of "workers paid by Labor Code). Under Article 82,"field personnel" on one hand and
results" found in Article 82 from the coverage of holiday and SIL pay. "workers who are paid by results" on the other hand, are not covered
This is the only reasonable interpretation since the determination of by the Title I provisions. The wordings of Article 82 of the Labor
excluded workers who are paid by results from the coverage of Title I is Code additionally categorize workers "paid by results" and "field
"determined by the Secretary of Labor in appropriate regulations." personnel" as separate and distinct types of employees who are
exempted from the Title I provisions of the Labor Code.
The Cebu Institute Technology ruling was reiterated in 2005 in Auto
Bus Transport Systems, Inc., v. Bautista: A careful perusal of said The pertinent portion of Article 94 of the Labor Code and its
provisions of law will result in the conclusion that the grant of service corresponding provision in the IRR (Section 1, Rule IV of Book 3)
incentive leave has been delimited by the IRR of the Labor Code to reads:
apply only to those employees not explicitly excluded by Section 1 of
Rule V. According to the Implementing Rules, Service Incentive Leave Art. 94. Right to holiday pay. (a) Every worker shall be paid his
shall not apply to employees classified as "field personnel." The phrase regular daily wage during regular holidays, except in retail and service
"other employees whose performance is unsupervised by the establishments regularly employing less than (10) workers. xxxx
employer" must not be understood as a separate classification of SECTION 1. Coverage. This Rule shall apply to all employees except:
employees to which service incentive leave shall not be granted.
Rather, it serves as an amplification of the interpretation of the xxxx
definition of field personnel under the Labor Code as those "whose
actual hours of work in the field cannot be determined with reasonable (e) Field personnel and other employees whose time and performance
certainty." The same is true with respect to the phrase "those who are is unsupervised by the employer including those who are engaged on
engaged on task or contract basis, purely commission basis." Said task or contract basis, purely commission basis, or those who are paid
phrase should be related with "field personnel," applying the rule on a fixed amount for performing work irrespective of the time consumed
ejusdem generis that general and unlimited terms are restrained and in the performance thereof.
limited by the particular terms that they follow. On the other hand, Article 95 of the Labor Code and its
corresponding provision in the IRR(Section 1, Rule V of Book 3)
The Autobus ruling was in turn the basis of Serrano v. Santos Transit pertinently provides:
which the CA cited in support of granting Macasios petition. In Serrano,
the Court, applying the rule on ejusdem generis50 declared that Art. 95. Right to service incentive. (a) Every employee who has
"employees engaged on task or contract basis xxx are not rendered at least one year of service shall be entitled to a yearly
automatically exempted from the grant of service incentive leave, service incentive leave of five days with pay. (b) This provision shall
unless, they fall under the classification of field personnel."51 The not apply to those who are already enjoying the benefit herein
Court explained that the phrase "including those who are engaged on provided, those enjoying vacation leave with pay of at least five days
task or contract basis, purely commission basis" found in Section 1(d), and those employed in establishments regularly employing less than
Rule V of Book III of the IRR should not be understood as a separate ten employees or in establishments exempted from granting this
classification of employees to which SIL shall not be granted. Rather, benefit by the Secretary of Labor and Employment after considering
as with its preceding phrase - "other employees whose performance is the viability or financial condition of such establishment.
unsupervised by the employer" - the phrase "including those who are xxxx
engaged on task or contract basis" serves to amplify the interpretation
of the Labor Code definition of "field personnel" as those "whose actual Section 1. Coverage. This rule shall apply to all employees except:
hours of work in the field cannot be determined with reasonable
certainty." (e) Field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on
Under these provisions, the general rule is that holiday and SIL pay task or contract basis, purely commission basis, or those who are paid
provisions cover all employees. To be excluded from their coverage, a fixed amount for performing work irrespective of the time consumed
an employee must be one of those that these provisions expressly in the performance thereof.
exempt, strictly in accordance with the exemption. Under the IRR,
exemption from the coverage of holiday and SIL pay refer to "field
personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on
task or contract basis[.]" Note that unlike Article 82 of the Labor Code, [G.R. No. 207253. August 20, 2014.]
the IRR on holiday and SIL pay do not exclude employees "engaged
on task basis" as a separate and distinct category from employees CRISPIN B. LOPEZ vs. IRVINE CONSTRUCTION CORP. and
classified as "field personnel." Rather, these employees are altogether TOMAS SY SANTOS
merged into one classification of exempted employees.

Provisions governing SIL and holiday pay Facts:
Respondent Irvine Construction Corp. (Irvine) is a In the case at bar, Irvine asserts that it only temporarily laid-
construction which initially hired petitioner Lopez as laborer in off Lopez from work on December 27, 2005 for the reason that its
November 1994 and, thereafter, designated him as a guard at its project in Cavite had already been finished. It is readily apparent that
warehouse in the year 2000, with a working hours from 7 o'clock in the the supposed lay-off of Lopez was hardly justified considering the
morning until 4 o'clock in the afternoon. On December 18, 2005, Lopez absence of any causal relation between the cessation of Irvine's
was purportedly terminated from his employment, whereupon he was project in Cavite with the suspension of Lopez's work. To repeat,
told "Ikaw ay lay-off muna." Thus, on January 10, 2006, he filed a
Lopez is a regular and not a project employee. Hence, the continuation
complaint for illegal dismissal with prayer for the payment of separation
of his engagement with Irvine, either in Cavite, or possibly, in any of its
benefits against Irvine before the NLRC.
business locations, should not have been affected by the culmination
For its part, respondent Irvine denied Lopez's claims, of the Cavite project alone.
alleging that he was employed only as a laborer who, however,
In light of the well-entrenched rule that the burden to prove
sometimes doubled as a guard. As laborer, Lopez's duty was to bring
the validity and legality of the termination of employment falls on the
construction materials from the suppliers' vehicles to the company
employer, Irvine should have established the bona fide suspension of
warehouse when there is a construction project in Cavite. As
its business operations or undertaking that would have resulted in the
evidenced by an Establishment Termination Report dated December
temporary lay-off of its employees for a period not exceeding six (6)
28, 2005 which Irvine previously submitted before the Department of
months in accordance with Article 286 of the Labor Code. In this case,
Labor and Employment (DOLE), Lopez was, however, temporarily laid-
Irvine failed to prove compliance with the parameters of Article 286 of
off on December 27, 2005 after the Cavite project was finished.
the Labor Code. As the records would show, it merely completed one
Eventually, Lopez was asked to return to work through a letter dated
of its numerous construction projects which does not, by and of itself,
June 5, 2006 (return to work order), allegedly sent to him within the six
amount to a bona fide suspension of business operations or
(6) month period under Article 286 of the Labor Code which pertinently
undertaking. In invoking Article 286 of the Labor Code, the paramount
provides that "[t]he bona-fide suspension of the operation of a business
consideration should be the dire exigency of the business of the
or undertaking for a period not exceeding six (6) months . . . shall not
employer that compels it to put some of its employees
terminate employment." As such, Irvine argued that Lopez's filing of the
temporarily out of work. This means that the employer should be
complaint for illegal dismissal was premature.
able to prove that it is faced with a clear and compelling economic
The Labor Arbiter ruled that Lopez was illegally dismissed. reason which reasonably forces it to temporarily shut down its business
NLRC uphold the LA's ruling. The CA granted Irvine's certiorari petition operations or a particular undertaking, incidentally resulting to the
in a Decision dated September 14, 2012, thereby reversing the NLRC. temporary lay-off of its employees. Due to the grim economic
It held that Lopez's complaint for illegal dismissal was prematurely filed consequences to the employee, case law states that the employer
since there was no indicia that Lopez was actually prevented by Irvine should also bear the burden of proving that there are no posts
from returning to work or was deprived of any work assignments or available to which the employee temporarily out of work can be
duties. On the contrary, the CA found that Lopez was asked to return assigned.
to work within the six-month period under Article 286 of the Labor
The same can be said of the employee in this case as no
Code. Accordingly, it concluded that Lopez was merely temporarily laid
evidence was submitted by Irvine to show any dire exigency which
off, and, thus, he could not have been dismissed.
rendered it incapable of assigning Lopez to any of its projects. Add to
this the fact that Irvine did not proffer any sufficient justification for
singling out Lopez for lay-off among its other three hundred
Issue: employees, thereby casting a cloud of doubt on Irvine's good faith in
pursuing this course of action. Verily, Irvine cannot conveniently
Whether or not petitioner Lopez was illegally dismissed.
suspend the work of any of its employees in the guise of a temporary
lay-off when it has not shown compliance with the legal parameters
under Article 286 of the Labor Code. With Irvine failing to prove such
compliance, the resulting legal conclusion is that Lopez had been
constructively dismissed; and since the same was effected without any
Held: valid cause and due process, the NLRC properly affirmed the LA's
Ruling on the propriety of Irvine's course of action in this ruling that Lopez's dismissal was illegal.
case preliminarily calls for a determination of Lopez's employment
status — that is, whether Lopez was a project or a regular employee.
The NLRC found that no substantial evidence had been presented by
Irvine to show that Lopez had been assigned to carry out a "specific [G.R. No. 149090. February 11, 2005]
project or undertaking," with its duration and scope specified at the
time of engagement. In view of the weight accorded by the courts to BENEDICTO A. CAJUCOM VII, petitioner, vs. TPI PHILIPPINES
factual findings of labor tribunals such as the NLRC, the Court, absent
any cogent reason to hold otherwise, concurs with its ruling that Lopez
was not a project but a regular employee. This conclusion is bolstered
by the undisputed fact that Lopez had been employed by Irvine since
November 1994, or more than 10 years from the time he was laid off FACTS:
on December 27, 2005. Article 280 of the Labor Code provides that
TP Cement and TP Vinyl, respondents, are wholly- owned subsidiaries
any employee who has rendered at least one year of service, whether
of Thai Petrochemical Industry Public Company, Ltd. On June 1, 1995,
such service is continuous or broken, shall be considered a regular
respondents employed Atty. Benedicto A. Cajucom VII, petitioner, as
employee. As a regular employee, Lopez is entitled to security of Vice-President for Legal Affairs with a monthly salary of P70,000.00.
tenure, and, hence, dismissible only if a just or authorized cause exists
therefor. Among the authorized causes for termination under Article As a result of the economic slowdown then experienced in this country,
283 of the Labor Code is retrenchment, or what is sometimes referred respondent TP Cement, having no viable projects, shortened its
to as a "lay-off": corporate term from 50 years to 2 years and 7 months. Thus,
respondents implemented cost-cutting measures resulting in the
retrenchment or termination from the service of their employees, circumventing the provisions of this Title, by serving a written notice on
including petitioner. the worker and the Department of Labor and Employment, at least one
(1) month before the intended date thereof. x x x. In case of
On December 3, 1998, respondents sent petitioner a notice terminating retrenchment to prevent lossesand in cases of closure or cessation of
his services effective December 30, 1998. Simultaneously, operations of the establishment or undertaking not due to serious
respondents, on the same day, filed with the Department of Labor and business losses or financial reverses, the separation pay shall be
Employment (DOLE) an Establishment Termination Report of equivalent to one (1) month pay or at least one-half (1/2) month pay for
petitioners retrenchment from the service. Petitioner contested every year of service, whichever is higher. A fraction of at least six (6)
respondents action, claiming that his retrenchment was based months shall be considered as one (1) whole year.
erroneously on respondents probable losses, instead of their actual,
substantial and imminent losses. Petitioner further claimed that
respondents were motivated by revenge in terminating his services.
In Trendline Employees Association-Southern Philippines Federation
Eventually, or on January 12, 1999, petitioner filed with the Office of of Labor vs. NLRC,[11] we enumerated the requisites of retrenchment,
the Labor Arbiter a complaint for illegal dismissal against respondents. thus:

The Labor Arbiter rendered a Decision holding that respondents failed To be valid, three requisites must concur, as provided in Article 283 of
to adduce sufficient evidence to show that their alleged losses are the Labor Code, as amended, namely: (1) The retrenchment is
substantial and imminent and concluded that petitioner was illegally necessary to prevent losses and the same is proven; (2) Written
dismissed from employment. notice to the employees and to the DOLE at least one month prior to
the intended date thereof; and (3) Payment of separation
Upon appeal, the National Labor Relations Commission (NLRC) pay equivalent to one month pay or at least month pay for every year
promulgated a Decision reversing the Labor Arbiters Decision and of service, whichever is higher.
concluded that the termination from the service of petitioner is just
however, with respect to the monetary reward, the CA have to modify. As mandated by Article 283, the employer shall serve notice of
In the sense that The law requires that a written notice of retrenchment retrenchment to prevent losses on the worker and the DOLE at least
be filed with the DOLE one month before the intended date of one month before the intended date thereof.
retrenchment. The requirement of the law is very clear. n their
memorandum of appeal, private respondents alleged that on Records show that on December 3, 1998, respondents sent petitioner
November 27, 1998, respondent Tritasavit left, at petitioners desk, the and the DOLE separate notices of retrenchment effective December
letter terminating him from the service. It was only on December 3, 30, 1998. Following the provision of Article 283, these notices should
1998 that respondent Tritasavit conferred with petitioner regarding the have been served one month before, or on November 30, 1998.
notice of termination. There is no proof that petitioner came to know of Clearly, respondents failed to comply with the one-month notice
such termination before the latter date. The mere act of leaving, on requirement.
November 27, 1998, the same letter at petitioners table, is not
sufficient notice, as contemplated under the law. From the foregoing rules four possible situations may be derived: (1)
the dismissal is for a just cause under Article 282 of the Labor Code,
for an authorized cause under Article 283, or for health reasons under
Article 284, and due process was observed; (2) the dismissal is without
Both parties filed a motion for reconsideration but it was denied by the just or authorized cause but due process was observed; (3) the
NLRC. Petitioner then filed a petition for certiorari with the Court of dismissal is without just or authorized cause and there was no due
Appeals alleging that the NLRC committed grave abuse of discretion in process; and (4) the dismissal is for just or authorized cause but due
finding that the termination of petitioners employment is justified. process was not observed. (emphasis supplied).

The Court of Appeals rendered the assailed Decision affirming with xxxxxx
modification the NLRCs Decision in the sense that respondents are
also ordered to pay petitioner backwages from the time he was In the fourth situation, the dismissal should be upheld. While the
dismissed up to the time the dismissal is adjudged to be just. procedural infirmity cannot be cured, it should not invalidate the
dismissal. However, employer should be held liable for non-compliance
The Court of Appeals denied petitioners motion for reconsideration. with the procedural requirements of due process.


ISSUE/s: The violation of the petitioners right to statutory due process by the
private respondent warrants the payment of indemnity in the form of
1.) Whether or not the Ca erred in upholding, as lawful and nominal damages. The amount of such damages is addressed to the
valid, his retrenchment from employment on the basis of sound discretion of the court, taking into account the relevant
respondents evidence; and circumstances. Considering the prevailing circumstances in the case at
2.) Whether or not the Ca erred in not finding that petitioner is bar, we deem it proper to fix it at P30,000.00.
entitled to an award of damages.

RULING: G.R. No. 193756 April 10, 2013


Retrenchment, under Article 283 of the Labor Code, as amended, is ROLAND R. TRINIDAD, and AURELIO A. DULDULAO, Petitioners,
recognized as an authorized cause for the dismissal of an employee vs.
from the service. This article provides: RP GUARDIANS SECURITY AGENCY, INC., Respondent.
Art. 283. Closure of Establishment and Reduction of Personnel. The
employer may also terminate the employment of any employee due to FACTS:
the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operations of the Petitioners were hired by respondent RP Guardians Security Agency,
Inc. (respondent) as security guards. They were deployed to various
establishment or undertaking unless the closing is for the purpose of
clients of respondent, the last of which were the different branches of damage brought about by the employee’s dismissal.21 "Reinstatement
Banco Filipino Savings and Mortgage Bank (Banco Filipino). is a restoration to a state from which one has been removed or
separated" while "the payment of backwages is a form of relief that
restores the income that was lost by reason of the unlawful dismissal."
In September 2006, respondent’s security contract with Banco Filipino Therefore, the award of one does not bar the other.22
was terminated. In two (2) memoranda, petitioners were directed to
turnover their duties and responsibilities to the incoming security In this case, respondent would have been liable for reinstatement and
agency and were advised that they would be placed on floating status payment of backwages. Reinstatement, however, was no longer
while waiting for available post. Petitioners waited for their next feasible because, as found by the LA, respondent had already ceased
assignment, but several months lapsed and they were not given new operation of its business.25 Thus, backwages and separation pay, in
assignments. the amount of one month for every year of service, should be paid in
lieu of reinstatement.
Consequently, petitioners filed a complaint7 for constructive dismissal.
In its position paper,8 respondent claimed that there was no dismissal, PETITION IS GRANTED.
of petitioners, constructive or otherwise, and asserted that their
[G.R. No. 1645 March 28, 2007]
termination was due to the expiration of the service contract which was
coterminus with their contract of employment.
PILAR ESPINA, et al, petitioners, vs. HON. COURT OF APPEALS,
The Labor Arbiter (LA) rendered a decision9 in favor of petitioners MHEW WHA LIM and MR. KENG SUN MAR, Respondents.
ordering respondent to pay petitioners separation pay, backwages,
refund of trust fund, moral and exemplary damages, and attorneys FACTS
fees. Aggrieved, respondent appealed to the NLRC.
Respondent MY San informed its employees and union that they
intend to sell the company to respondent Monde and that MY San will
The NLRC promulgated its decision sustaining the finding of terminate their employment and payment of their separation pay will be
constructive dismissal by the LA, and the awards she made in the in accordance with the law. In connection with this event, the union and
decision. The award of moral and exemplary damages, however, were MY San agreed that a list of MY San employees will be submitted to
deleted. Upon denial of its motion for reconsideration, 11 respondent respondent Monde purposes of rehiring if said employee applies and
filed a petition for certiorari before the CA. qualifies, subject to such criteria as the new corporation may
impose. Respondent Monde then commenced its operations. All the
The CA rendered a decision12 dismissing the petition and affirming the former employees of respondent M.Y. San who were terminated upon
assailed NLRC decision and resolution. its closure and who applied and qualified for probationary employment,
including petitioners herein, started working for respondent Monde on a
On motion for reconsideration, the CA issued the Amended contractual basis for a period of six months. Subsequently, petitioners
Decision13 dated May 18, 2010, modifying its earlier decision reducing were terminated on various dates.
the computation of the separation pay from one month pay per year of
service to one-half month pay for every year of service.
Thus, petitioners filed a complaint for illegal dismissal and
Hence, this petition. underpayment, damages and attorney’s fees and litigation cost with the
Whether or not the CA err in reducing the computation of the Petitioners alleged that respondent My San stopped its operations, but
separation pay. three days after, resumed its operation with the same top management
running the business; the union officers, in exchange for being re-hired,
RULING: acceded to bust the union; and the sale of respondent M.Y. San to
respondent Monde was merely a ploy to circumvent the provisions of
YES. the Labor Code.

Respondent M.Y. San insisted that its employer-employee relationship

There is no doubt that petitioners were constructively dismissed. The
with petitioners had ceased to exist, thus, the complaint for illegal
LA, the NLRC and the CA were one in their conclusion that respondent
dismissal against it could no longer prosper. It further contended that
was guilty of illegal dismissal when it placed petitioners on floating
the power to hire and fire employees is now lodged in the new
status beyond the reasonable six-month period after the termination of
business owner, respondent Monde.
their service contract with Banco de Oro.
On the other hand, respondent Monde alleged that petitioners had no
Temporary displacement or temporary off-detail of security guard is, cause of action against it. Monde claimed that the respective
generally, allowed in a situation where a security agency’s client supervisors of Monde conducted an evaluation of the performance of
decided not to renew their service contract with the agency and no post all its probationary employees, including herein complainants, to
is available for the relieved security guard.15 Such situation does not determine their fitness to qualify as regular employees therein. The
normally result in a constructive dismissal. Nonetheless, when the probationary employees of Monde who passed the performance
floating status lasts for more than six (6) months, the employee may be appraisal and who qualified as regular employees thereof were
considered to have been constructively dismissed. 16 No less than the accordingly appointed as such. Out of the one hundred sixteen (116)
Constitution17 guarantees the right of workers to security of tenure, probationary employees engaged by respondent Monde, a total of
thus, employees can only be dismissed for just or authorized causes seventy-four employees qualified for regular employment. For those
and after they have been afforded the due process of law.18 who did not qualify for regular employment, including herein
complainants, respondent Monde gave complainants the remainder of
their probationary period within which to prove their qualification for
Settled is the rule that that an employee who is unjustly dismissed from
regular employment therewith. Notwithstanding the opportunity given to
work shall be entitled to reinstatement without loss of seniority rights
herein complainants to improve their performance to qualify for regular
and other privileges, and to his full backwages, inclusive of allowances
employment with Monde, complainants either: (a) resigned from their
and to his other benefits or their monetary equivalent computed from
employment with Monde; (b) refused to report for work on 02 May 2001
the time his compensation was withheld up to the time of actual
and on the days following; or (c) failed to qualify for regular
reinstatement.19 If reinstatement is not possible, however, the award of
employment at the expiration of the period of their probationary
separation pay is proper.

Backwages and reinstatement are separate and distinct reliefs given to ISSUE
an illegally dismissed employee in order to alleviate the economic
Whether or not petitioners were illegally dismissed. Absence Without Leave (Espina, Aquino, Bandino, Petalio, Jr., Ebreo,
B. Paz, Deocareza and L. Paz), while some others were terminated
HELD because they failed to qualify as regular employees in accordance with
the terms and conditions of their probationary employment with
The SC held that petitioners were validly dismissed. Petitioners were respondent Monde (Celis, Fernandez, Rodriguez, Punzalan, Lourdes
validly separated from respondent MY San. Alfonso Q., Panlilio, Arceo, Pascual, Bajo, Blanco, Abela, Fajanilag,
and Wong).
Work is a necessity that has economic significance deserving legal
protection. The provisions on social justice and protection to labor in It must be noted that petitioners were terminated prior to the expiration
the Constitution dictate so. However, employers are also accorded of their probationary contracts. As probationary employees, they
rights and privileges to assure their self-determination and enjoyed only temporary employment status. In general terms, this
independence and reasonable return of capital. This mass of meant that they were terminable anytime, permanent employment not
privileges comprises the so-called management prerogatives. One of having been attained in the meantime. The employer could well decide
the rights accorded an employer is the right to close an establishment if he no longer needed the probationary’s service or his performance
or undertaking. Just as no law forces anyone to go into business, no fell short of expectations, as a probationary employee is one who, for
law can compel anybody to continue the same. The right to close the a given period of time, is under observation and evaluation to
operations of an establishment or undertaking is explicitly recognized determine whether or not he is qualified for permanent
under the Labor Code as one of the authorized causes in terminating employment. During the probationary period, the employer is given the
employment of workers, the only limitation being that the closure must opportunity to observe the skill, competence and attitude of the
not be for the purpose of circumventing the provisions on terminations employee to determine if he has the qualification to meet the
of employment embodied in article 283 of the Labor Code. reasonable standards for permanent employment. The length of time
is immaterial in determining the correlative rights of both the employer
Under Article 283 of the Labor Code, three requirements are necessary and the employee in dealing with each other during said period. Thus,
for a valid cessation of business operations, namely: as long as the termination was made before the expiration of the six-
(1) service of a written notice to the employees and to the DOLE at month probationary period, the employer was well within his rights to
least one (1) month before the intended date thereof; sever the employer-employee relationship. A contrary interpretation
(2) the cessation must be bona fide in character; and would defeat the clear meaning of the term “probationary.”
(3) payment to the employees of termination pay amounting to at least
one half (1/2) month pay for every year of service, or one (1) month Terminating employment is one of respondent Monde’s
pay, whichever is higher. prerogatives. As an employer, respondent Monde has the right to
regulate, according to its discretion and best judgment, including work
The records reveal that private respondent M.Y. San complied with the assignment, working methods, processes to be followed, working
aforecited requirements. M.Y. San employees were adequately regulations, transfer of employees, work supervision, lay-off of workers
informed of the intended business closure and a written notice to the and the discipline, dismissal and recall of workers. Management has
Regional Director of DOLE was filed by respondent M.Y. San, the prerogative to discipline its employees and to impose appropriate
informing the DOLE that M.Y. San will be closed effective 31 January penalties on erring workers pursuant to company rules and regulations.
This Court has upheld a company’s management prerogatives so long
The ultimate test of the validity of closure or cessation of establishment as they are exercised in good faith for the advancement of the
or undertaking is that it must be bona fide in character. And the burden employer’s interest and not for the purpose of defeating or
of proving such falls upon the employer. circumventing the rights of the employees under special laws and valid
Respondent M.Y. San in good faith complied with the requirements for
closure; sold and conveyed all its assets to respondent Monde for The law imposes many obligations on the employer such as providing
valuable consideration; and there were no previous labor problems. It just compensation to workers, observance of the procedural
has been ruled that an employer may adopt policies or changes or requirements of notice and hearing in the termination of employment.
adjustments in the operations to insure profit to itself or protect the On the other hand, the law recognizes the right of the employer to
investments of its stockholders, and in the exercise of such expect from its workers not only good performance, adequate work and
management prerogative, the employer may merge or consolidate its diligence, but also good conduct and loyalty. The employer may not be
business with another, or sell or dispose all or substantially all of its compelled to continue to employ such persons whose continuance in
assets and properties which may bring about the dismissal or the service will patently be inimical to his interest.
termination of its employees in the process.
Thus, respondent Monde exercised in good faith its management
Petitioners were also validly dismissed by respondent Monde. prerogative as there is no dispute that petitioners had been habitually
absent, neglectful of their work, and rendered unsatisfactory service,
There is no dispute that petitioners were probationary employees as to the damage and prejudice of the company.
stated in their individual contracts of employment with respondent
Monde. While petitioners were only probationary employees who do The decision of the NLRC was affirmed.
not enjoy permanent status, nonetheless, they were still entitled to the
constitutional protection of security of tenure. As may be gleaned in
article 281 of the Labor Code, their employment may only be JISSCOR INDEPENDENT UNION v. TORRES
terminated for a valid and just cause or for failing to qualify as a regular May 1993 G.R. No. 97189
employee in accordance with the reasonable standards made known to Griño-Aquino, J.
him by the employer at the time of engagement and after being
accorded due process. TOPIC: Certification Election Process and Procedure; Posting Notice
SUMMARY: Two unions and management entered into an agreement
Procedural due process requires that the employee be given two setting the date and time of the
written notices before he is terminated, consisting of a notice which certification election and waiving the mandatory 5-day posting
apprises the employee of the particular acts/omissions for which the requirement. After the election, the losing union filed a protest citing,
dismissal is sought and the subsequent notice which informs the among others, the lack of posting. SC held that it was estopped from
employee of the employer’s decision to dismiss him. raising the issue because 1) it was not indicated in the minutes, and 2)
it entered into the agreement.
In the case at bar, petitioners were notified of the standards they have
to meet to qualify as regular employees of respondent Monde when the NATURE: Petition for certiorari alleging the SOLE committed grave
latter apprised them, at the start of their employment. abuse of discretion.

Some of the petitioners in this case voluntarily resigned (Barnuevo, FACTS:

Reyes, Ollorsa, and Cerbito), some were validly dismissed because of
June 1990 - JISSCOR Independent Union (JIU) filed before the DOLE
Med-Arbitration Unit a petition for certification election among the rank-
and-file EEs of the Jacinto Iron and Steel Sheets Corp. (JISSCOR). 

G.R. No. L-13778 April 29, 1960
Aug. 1990 - By agreement of JIU, Samahang Manggagawa ng
Arbiter issued an order setting the certification election on Sept. 4. 
On the scheduled date, instead of an election, another pre-election
conference was held in DOLE.
 o Same parties entered into
agreement: elections would be conducted on Sept. 6, 8am - 3pm, and FACTS:

 that "the mandatory 5 days posting is hereby waived by
agreement of the parties." 
 Ernesto Carpio and other employees of the company, members of the
Union of Philippine Education Employees (NLU) joined a strike staged
Election results: JIU - 46; SMJ-ALU - 50; No Union - 0; Spoiled - 3; on January 1953. After the labor dispute was settled, the Industrial
Total = 99 voted out of 104 eligible 
 Court ordered the reinstatement of the strikers, including Carpio. The
JIU registered a protest in the minutes of the election stating that: "We company, however, opposed the reinstatement of Carpio for the
file protest on the following 
 grounds: using visor, emblem". 
 reason that a criminal complaint had been filed against him in the
Municipal Court of Manila for theft of magazines allegedly belonging to
Sept. 11 - JIU filed a formal protest before the DOLE-NCR, on the ff. the company. He was convicted and sentenced to two months and one
grounds: day of arresto mayor. On appeal to the Court of First Instance, Carpio
1.) Election was very disorderly and irregular; no compliance was acquitted on the ground of reasonable doubt.
with mandatory posting of notice of certification election and
necessary list of qualified voters in accordance with Rule VI, The question of Carpio's reinstatement was heard by the Industrial
§1 Court. After said hearing, the Industrial Court agreed with the finding of
2.) Lack of posting misled/ misinformed the voters/workers on the Court of First Instance that the offense had not been proven
the manner of voting, resulting in spoiled votes beyond reasonable doubt and held that Carpio's acquittal entitled him
3.) Escorting of workers by SMJ-ALU officers and members to reinstatement, though without backpay.
from workplace to election registration; 

4.) Forcing workers to vote for SMJ-ALU by posting a very big ISSUE:
streamer saying, "Vote! Samahang Manggagawa 
JISSCOR-ALU" at the entrance of the chapel where the Whether or not the acquittal of an employee, specially on the ground of
election was held; reasonable doubt, in a criminal case for theft involving articles and
5.) Forcing workers to vote for SMJ-ALU by wearing sunvisors merchandise belonging to his employer, entitles said employee to
and pins saying, "Vote! SMJ-ALU" before and 
 during voting reinstatement.
inside the polling place 

Med-Arbiter issued an order declaring the certification election null and
SOLE granted SMJ-ALU's appeal; issued order certifying it as the sole
and exclusive bargaining agent. 
 The relation of employer and employee, specially where the employee
ISSUE: W/N the election should be nullified has access to the employer's property in the form of articles and
merchandise for sale, necessarily involves trust and confidence. If said
RULING: merchandise are lost and said loss is reasonably attributed to said
NO. Petition has no merit. DISMISSED. 
 employee, and he is charged with theft, even if he is acquitted of the
charge on reasonable doubt, when the employer has lost its
1 confidence in him, it would be highly unfair to require said employer to
Bk. V, Rule VI, §3 provides that grounds of a protest may be filed on continue employing him or to reinstate him, for in that case the former
the spot/ in writing with the representation officer and shall be might find it necessary for its protection to employ another person to
contained in the minutes of the proceedings. Protests not so raised are watch and keep an eye on him.
deemed waived.
 o Minutes show that JIU only protested against
ground #5 (use of emblem, visor, pin). National Labor Organization of Employees and Laborers vs. Court of
Industrial Relations: The reason for this is not difficult to see. The
Hence, other 
 protests not so raised are deemed waived. 
 evidence required by law to establish guilt and to warrant conviction in
a criminal case substantially differs from the evidence necessary to
No merit in contention that non-posting of the notice under Bk. V, Rule
establish responsibility or liability in a civil or non-criminal case. The
VI, §1 misled and confused the workers regarding the mechanics of the
election. JIU is estopped from raising that issue because it signed difference is in the amount and weight of evidence and also in degree.
an agreement with SMJ-ALU to waive such posting. The doctrine of In a criminal case, the evidence or proof must be beyond reasonable
estoppel is based on grounds of public policy, fair dealing, good faith doubt while in a civil or non criminal case it is merely preponderance of
and justice, 
 and its purpose is to forbid one to speak against his own evidence. In further support of this principle we may refer to Art. 29 of
act, representations, or commitments to 
 the injury of one to whom the New Civil Code (Rep. Act 386) which provides that when the
they were directed and who reasonably relied thereon (PNB v. CA). 
 accused in a criminal case is acquitted on the ground of reasonable
doubt a civil action for damages for the same act or omission may be
Results belie JIU's allegation that the workers were misinformed. Only instituted where only a preponderance of evidence is necessary to
3 ballots spoiled out of 99. 
 establish liability.
On the alleged use of sunvisors, pins, emblems: DOLE Undersecretary
found that nothing in the 
 records shows that the alleged wearing of
sunvisors etc., the posting of huge streamers, as well as the alleged In the present case, Carpio was refused reinstatement not because of
escorting of voters by SMJ-ALU have unduly any union affiliation or activity or because the company has been guilty
pressured/influenced/vitiated/affected the choice of the workers of their of any unfair labor practice. As already stated, Carpio was convicted in
bargaining agent. Finding of fact of head of admin agency conclusive the Municipal Court and although he was acquitted on reasonable
upon SC. 
 doubt in the Court of First Instance, the company had ample reason to
distrust him. Under the circumstances, we cannot in conscience
require the company to reemploy or reinstate him.


of his right to organize would constitute an unfair labor
practice on the part of the employer.
G.R. No. L-15171 April 29, 1961
The Court of Appeals reasoned that since plaintiff was assigned to
confidential work the shuffling of the papers of defendant Foster was
Wether or not the CA erred in ordering the reinstatement of the

Leonardo Arca instituted this action alleging that on July 22 1953 he RULING:
was employed by the defendants as clerk-typist; that on August 22, YES.
1954, the defendants terminated his (plaintiff's) services, on the
alleged ground that they were no longer needed; that his employment The consensus of opinion among the members of the Court is that it
was made under an existing agreement between the employees and would be unfair and unjust to the employer to require it to continue
the defendants company under which it was to continue until the work employing the services of the person in whom the manager has lost
assigned to him was to be finished; that the termination of his confidence. The acts committed by the respondent in sending petition
employment constituted a breach of the agreement entered into upon to authorities regarding the activities of his employer, while in
his employment; that defendants must have been irked by act of themselves, legitimate acts of an individual protected by law, by such
plaintiff in organizing a labor union. acts plaintiff has shown conduct which would render him unsuitable for
the work for which the employer intended him — that is, confidential
After a denial of a motion to dismiss, defendants presented their
work. Certainly this is what Foster must have meant when he declared
respective answers. Defendant Charles B. Foster denied the claim of
in court that he had lost confidence in plaintiff.
the plaintiff that his work was to continue until the completion of the
work or project assigned to him, and alleged that under the agreement
between the Lepanto Consolidated Mining Company and its The court further explained that if loss of confidence may not justify
employees dated March 27, 1953, he as the general superintendent reinstatement, neither should the employer be relieved from damages
has the power to determine when a particular work in the mine is that his refusal to continue the employment may cause to the
deemed completed or what work should be curtailed, as well as the employee. The employer has committed a breach of the contract of
power and authority to lay-off and discharge an employee when his employment; if it made a mistake in choosing the right person it may be
services are no longer necessary or when such lay-off or discharge relieved from continuing the employment, but it should not and would
was required in the conduct and furtherance of the company's not be relieved from liability for the damages arising from the breach of
business; that the defendant was discharged because his services the contract of employment.
were no longer needed; that plaintiff accepted the separation slip
without any protest; and that the defendants have the exclusive right to
lay-off employees whose services are no longer required in the The Court believes that the respondent-employee should be granted
furtherance of the business. an award of such damages as he may have suffered by reason of the
breach of the contract of employment, but his reinstatement should not
The trial was held and Judge Jesus de Veyra rendered a judgment be ordered, as it is not appropriate to the peculiar circumstances of the
case. The case should be remanded to the Court of First Instance for
finding that plaintiff's separation was justified and so dismissing the
the determination of the amount of damages which may be awarded to
complaint on the ground:
the respondent-employee.
1.) that he was guilty of dishonesty in that despite the fact that in
the labor management meeting the question of the alleged Therefore, the decision of the Court of Appeals appealed from is
high prices of the Lepanto Store were under discussion, he hereby set aside, but the case is hereby remanded to the Court of First
still wrote a letter to the President of the Philippines. Instance for further trial.
2.) not only by instigating trouble at the Lepanto High School;
not only by snooping among the papers of Mr. Foster; but
principally for organizing a rival labor union while he was still
secretary of the Lepanto Civic Welfare Union.

Appeal having been made to the Court of Appeals. The Court of

Appeals reversed the finding of the lower court that the different acts
committed by the appellant were acts of dishonesty.

1.) It held that the act of appellant in writing the President of the
Philippines requesting for a commercial or price control
agent to investigate the prices in the store of defendants is [G.R. No. 140853. February 27, 2003]
not an act of dishonesty, as it is an exercise of the
constitutional right of the citizen to petition the Government
for redress of his and his co-employees' grievances;
A. that the act of the plaintiff in preparing a complaint ARIEL A. TRES REYES, petitioner, vs. MAXIMS TEA HOUSE and
against the principal of the Lepanto High School was JOCELYN POON, respondents.
also in accord with a civic duty to help the students;
B. that his act of snooping among the papers of the
defendant Foster is only a conclusion, not justified by
the premises, for he is supposed to be entrusted with Respondent Maxims had employed Ariel Tres Reyes as a driver
the duty of reorganizing the confidential files and one since October 1995. He was assigned to its M.H. del Pilar Street,
cannot reorganize the confidential files of an office Ermita, Manila branch. His working hours were from 5:00 P.M. to 3:00
without reshuffling or reading of the same; A.M., and among his duties was to fetch and bring to their respective
C. that the organization of a rival labor union is neither a homes the employees of Maxims after the restaurant closed for the
dishonest act prejudicial to defendants unless it is day.
admitted that the Lepanto Civic Welfare Union to which
he belongs is company controlled, and the curtailment
In the wee hours of the morning of September 27, 1997, avoid a collision. To put it otherwise, petitioner did not insist on his right
petitioner was driving a Mitsubishi L300 van and was sent to fetch of way, notwithstanding the green light in his lane. Still, the collision
some employees of Savannah Moon, a ballroom dancing took place as the ten-wheeler careened on the wrong lane. Clearly,
establishment in Quezon City. Petitioner complied. He was headed petitioner exerted reasonable effort under the circumstances to avoid
towards Meralco Avenue at a cruising speed of 50 to 60 kilometers per injury not only to himself but also to his passengers and the van he
hour, when he noticed a ten-wheeler truck coming his way at full speed was driving. To hold that petitioner was grossly negligent under the
despite the fact that the latters lane had a red signal light on. Petitioner circumstances goes against the factual circumstances shown. It
maneuvered to avoid a collision, but nonetheless the van he was appears to us he was more a victim of a vehicular accident rather than
driving struck the truck. As a result, petitioner and seven of his its cause.
passengers sustained physical injuries and both vehicles were
damaged. There being no clear showing that petitioner was culpable for
gross negligence, petitioners dismissal is illegal. It was error for the
On October 1997, the management of Maxims required Court of Appeals to reverse and set aside the decision of the Third
petitioner to submit a written explanation as to what happened Division of the NLRC.
regarding the accident. He complied but his employer found his
explanation unsatisfactory and as a result he was preventively The petition is GRANTED.
suspended for thirty (30) days. On November 1997, Maxims terminated
petitioner for cause.

Feeling that the vehicular accident was neither a just nor a valid
cause for the severance of his employment, petitioner filed a
complaint[3] for illegal dismissal. [G.R. No. 109390. March 7, 1996]

The Labor Arbiter found that petitioner was grossly negligent in failing
to avoid the collision and sustain the validity of the dismissal of
complainant Ariel A. Tres Reyes. Instead of filing the requisite pleading
for appeal, petitioner filed a Motion for Partial Reconsideration with the JGB and ASSOCIATES, INC., petitioner, vs. NATIONAL LABOR
NLRC. The NLRC opted to treat petitioners motion as an appeal. RELATIONS COMMISSION and ARTURO C.
ARROJADO, respondents.
The NLRC reversed the decision of the Labor Arbiter on the ground
that there was no negligence on petitioners part. Respondents moved
for reconsideration of the decision, but said motion was denied.
Respondents then filed a special civil action for certiorari with the Court On February 25, 1990, before the expiration of his contract of
of Appeals. The appellate court decided in favor of the employer and employment, private respondent was given notice by his employer that
its manager. Hence, the instant case. his employment was terminated for the reason that his performance
both in productivity and efficiency was below average. The termination
ISSUE/S: of his employment took effect on the same day. He was immediately
scheduled to depart Saudi Arabia and on February 28, 1990, three
WON there was gross negligence on the part of the petitioner to days after his dismissal, he found himself already in the Philippines.
warrant dismissal.
On March 12, 1990, private respondent filed with the POEA a
RULING: No. complaint against JGB and Associates, Inc., Tariq Hajj Architects and
Country Bankers Insurance Corporation, alleging illegal dismissal and
The issue of whether a party is negligent is a question of fact. [21] As a
seeking payment of salaries corresponding to the unexpired portion of
rule, the Supreme Court is not a trier of facts and this applies with
his employment contract, salary differential, refund of S.R. 1,000 which
greater force in labor cases.[22] Hence, factual findings of quasi-judicial
was withheld from him for telephone bills, moral damages and
bodies like the NLRC, particularly when they coincide with those of the
attorney’s fees.
Labor Arbiter and if supported by substantial evidence, are accorded
respect and even finality by this Court.[23] But where the findings of the
Petitioner averred that private respondent was dismissed for neglect of
NLRC and the Labor Arbiter are contradictory, as in this case, the
duties and performance below par. Petitioner also alleged that
reviewing court may delve into the records and examine for itself the
although no prior notice of dismissal was given to private respondent,
questioned findings.
he was given in lieu thereof a “notice pay” equivalent to one month
Based on the police traffic accident investigation report, we are
POEA: dismissed private respondents complaint for illegal dismissal
convinced that the accident was the fault of the ten-wheeler trucks
driver. On seeing the signal light change to red, this driver stepped on
NLRC: found the private respondents dismissal as illegal
his brake, not just once but three times, but his truck could not stop.
Since the truck was on the wrong lane, petitioners van, which was in its
proper lane with the green light, smashed into the out-of-control
Petitioner filed a motion for reconsideration but the same was
truck.[26] This episode led to petitioners dismissal which, in our view, is
dismissed by the NLRC in a resolution for lack of merit.
Hence this petition.
Under the Labor Code, gross negligence is a valid ground for an
employer to terminate an employee. Gross negligence is negligence
ISSUE: whether the NLRC gravely abused its discretion in reversing
characterized by want of even slight care, acting or omitting to act in a
the decision of the POEA and ruling that private respondent was
situation where there is a duty to act, not inadvertently but willfully and
intentionally with a conscious indifference to consequences insofar as illegally dismissed
other persons may be affected.[28] In this case, however, there is no
substantial basis to support a finding that petitioner committed gross
In termination cases, the burden of proving just cause for dismissal is
on the employer. In this case, the grounds for the dismissal of private
The test to determine the existence of negligence is as follows: respondent were stated in two documents presented by petitioner
Did petitioner in doing the alleged negligent act use that reasonable before the POEA: (1) the notice of termination given to private
care and caution which an ordinarily prudent person would use in the respondent on February 20, 1990; and (2) the letter of the
same situation?[32] It is not disputed that petitioner tried to turn left to principal, Tariq Hajj on August 1, 1990. In the termination letter, the
foreign employer stated that private respondents performance was
below average. We find that petitioner failed to prove that the NLRC
committed grave abuse of discretion in holding that private respondent
was illegally dismissed. HELD:

The contract of employment between the parties an Employer

may terminate the contract of employment for any of the following 1.) No. The law does not require that an intention to terminate one’s e
causes: mployment should be included in the first notice. It is enough that empl
oyees are properly apprised of the charges brought against them so th
(c) Gross and habitual neglect by the employee of his duties ey can properly prepare their defenses; it is only during the second noti
ce that the intention to terminate one’s employment should be explicitly
(d) Fraud or willful neglect by the employee of his duties

The existence of an actual, formal “trial-

- Gross negligence connotes want of care in the performance of one’s type” hearing, although preferred, is not absolutely necessary to satisfy
duties.[2] Habitual neglect implies repeated failure to perform one’s the employee’s right to be heard. Esguerra was able to present her def
duties for a period of time, depending upon the circumstances. On the enses; and only upon proper consideration of it did Valle Verde send th
other hand, fraud and willful neglect of duties imply bad faith on the e second memorandum terminating her employment. Since Valle Verd
part of the employee in failing to perform his job to the detriment of the e complied with the two-
employer and the latter’s business. notice requirement, no procedural defect exists in Esguerra’s terminati
- None of these causes is stated in the two letters of the employer as on.
reasons for dismissing private respondent. None of the reasons there
stated even approximates any of the causes provided in the contract of
employment for the termination of employment by the employer. 2.) Esguerra held the position of Cost Control Supervisor and had the
- Indeed, the grounds given for private respondent’s dismissal are duty to remit to the accounting department the cash sales proceeds fro
nothing but general, vague and amorphous allegations. As the NLRC m every transaction she was assigned to. This is not a routine task that
noted, the letters do not state particular acts which show that private a regular employee may perform; it is related to the handling of busine
respondent was indeed negligent and that his performance was below ss expenditures or finances. For this reason, Esguerra occupies a posit
par. Nor did petitioner show the tangible financial loss which it claimed ion of trust and confidence –
it suffered as a result of private respondent’s alleged neglect of duty. a position enumerated in the second class of positions of trust(first is f
or the managerial employees). Any breach of the trust imposed upon h
er can be a valid cause for dismissal.
C. G.R. No. 173012, 13 June 2012

G.R. No. 82249 February 7, 1991

WILTSHIRE FILE CO., INC., petitioner,
Valle Verde hired Esguerra as Head Food Checker and was promoted T. ONG, respondents.
to Cost Control Supervisor. The Management found out that proceeds FACTS: Private respondent Vicente T. Ong was the Sales Manager of
had been remitted to the accounting department for an event were lack petitioner Wiltshire File Co., Inc. On 13 June 1985, upon private
ing. There were also unauthorized charges of food on one of the partici respondent’s return from a business and pleasure trip abroad, he was
pants. To resolve the issue, Valle Verde conducted an investigation; th informed by the President of petitioner Wiltshire that his services were
e employees who were assigned in that event were summoned and ma being terminated. Private respondent maintains that he tried to get an
de to explain, in writing, what had transpired. A memorandum was sent explanation from management of his dismissal but to no avail. On 18
to Esguerra requiring her to show cause as to why no disciplinary actio June 1985, when private respondent again tried to speak with the
n should be taken against her for the non- President of Wiltshire, the company’s security guard handed him a
remittance of the Ballroom’s sales. Esguerra was placed under prevent letter which formally informed him that his services were being
ive suspension with pay, pending investigation. Unsatisfied with the ex terminated upon the ground of redundancy.
planation, Esguerra was terminated. Private respondent filed, on 21 October 1985, a complaint before the
Labor Arbiter for illegal dismissal alleging that his position could not
possibly be redundant because nobody (save himself) in the company
Petitioner said that she couldn’t be dismissed on the ground of loss of t was then performing the same duties.
rust and confidence for she was only a regular employee and did not o Petitioner company alleged that the termination of respondent’s
ccupy a supervisory position vested with trust and confidence. Esguerr services was a cost-cutting measure: that in December 1984, the
a also questions the manner of dismissal since the notice was insufficie company had experienced an unusually low volume of orders: and that
nt since it failed to contain any intention to terminate her. it was in fact forced to rotate its employees in order to save the
company. Despite the rotation of employees, petitioner alleged; it
continued to experience financial losses and private respondent’s
position, Sales Manager of the company, became redundant.
During pendency, petitioner closed its business.
LABOR ARBITER ruled that the dismissal was illegal
NLRC held that the termination was attended by malice and bad faith
ISSUE: on the part of petitioner, considering the manner of private respondent
was ordered by the President to pack up and remove his personal
belongings from the office.
 Whether or not intention to terminate should be included in th ISSUE: WON his dismissal was illegal
e notice of informing of charges against an employee. HELD: NO, his dismissal was VALID.
 Whether or not Cost Control Supervisor can be dismissed on In the first place, we note that while the letter informing private
respondent of the termination of his services used the
the ground of loss of trust and confidence.
word “redundant“, that letter also referred to the company having
“incur[red] financial losses which [in] fact has compelled [it] to
resort to retrenchment to prevent further losses”. Thus, what the
letter was in effect saying was that because of financial losses, UNILEVER PHILIPPINES, INC., Petitioner,
retrenchment was necessary, which retrenchment in turn resulted in vs.
the redundancy of private respondent’s position. MARIA RUBY M. RIVERA, Respondent.
In the second place, we do not believe that redundancy in an
employer’s personnel force necessarily or even ordinarily refers to
duplication of work. That no other person was holding the same
position that private respondent held prior to the termination of his
services, does not show that his position had not become redundant.
- Rivera was employed as Unilever’s Area Activation
Indeed, in any well-organized business enterprise, it would be
Executive for Area 9 South in the cities of Cotabato and
surprising to find duplication of work and two (2) or more people doing
the work of one person. We believe that redundancy, for purposes of Davao
our Labor Code, exists where the services of an employee are in - She was primarily tasked with managing the sales,
excess of what is reasonably demanded by the actual distribution and promotional activities in her area and
requirements of the enterprise. Succinctly put, a position is supervising Ventureslink International, Inc. (Ventureslink)
redundant where it is superfluous, and superfluity of a position or - Unilever enforces a strict policy that every trade activity must
positions may be the outcome of a number of factors, such as be accompanied by a Trade Development Program (TDP)
overhiring of workers, decreased volume of business, or dropping and that the allocated budget for a specific activity must be
of a particular product line or service activity previously used for such activity only.
manufactured or undertaken by the enterprise. - in 2007, Unilever’s internal auditor conducted a random audit
Wiltshire, in view of the contraction of its volume of sales and in order and found out that there were fictitious billings and fabricated
to cut down its operating expenses, effected some changes in its
receipts supposedly from Ventureslink amounting to
organization by abolishing some positions and thereby effecting a
P11,200,000.00. It was also discovered that some funds
reduction of its personnel. Thus, the position of Sales Manager was
abolished and the duties previously discharged by the Sales Manager were diverted from the original intended projects. Upon
simply added to the duties of the General Manager, to whom the Sales further verification, Ventureslink reported that the fund
Manager used to report. deviations were upon the instruction of Rivera.
In the instant case, the ground for dismissal or termination of services - Unilever issued a show-cause notice to Rivera asking her to
does not relate to a blameworthy act or omission on the part of the explain the following charges, to wit: a)Conversion and
employee, there appears to us no need for an investigation and Misappropriation of Resources; b) Breach of Fiduciary Trust;
hearing to be conducted by the employer who does not, to begin with, c) Policy Breaches; and d) Integrity Issues
allege any malfeasance or non-feasance on the part of the employee. - Responding through an email, Rivera admitted the fund
In such case, there are no allegations which the employee should diversions and insisted that the diverted funds were all
refute and defend himself from. Thus, to require petitioner Wiltshire to utilized in the company’s promotional ventures in her area of
hold a hearing, at which private respondent would have had the right to coverage.
be present, on the business and financial circumstances compelling
- Unilever found Rivera guilty of serious breach of the
retrenchment and resulting in redundancy, would be to impose upon
the employer an unnecessary and inutile hearing as a condition for company’s Code of Business Principles compelling it to
legality of termination. sever their professional relations.
This is not to say that the employee may not contest the reality or good - Rivera asked for reconsideration and requested Unilever to
faith character of the retrenchment or redundancy asserted as grounds allow her to receive retirement benefits having served the
for termination of services. The appropriate forum for such company for fourteen (14) years already. Unilever denied her
controversion would, however, be the Department of Labor and request, reasoning that the forfeiture of retirement benefits
Employment and not an investigation or hearing to be held by the was a legal consequence of her dismissal from work
employer itself. It is precisely for this reason that an employer seeking - Rivera filed a complaint, Labor Arbiter dismissed her
to terminate services of an employee or employees because of complaint and denied her claim for retirement benefits but
“closure of establishment and reduction of personnel”, is legally ordered Unilever to pay a proportionate 13th month pay and
required to give a written notice not only to the employee but also to the corresponding cash equivalent of her unused leave
the Department of Labor and Employment at least one month before
effectivity date of the termination. In the instant case, private
respondent did controvert before the appropriate labor authorities the - NLRC partially granted Rivera’s prayer. Unilever was
grounds for termination of services set out in petitioner’s letter to him ordered to pay her retirement benefits and separation pay
dated 17 June 1985. - CA affirmed with modification the NLRC resolution. the CA
NOTES: awarded separation pay in her favor as a measure of social
Art. 283. Closure of establishment and reduction of personnel. –– The justice.
employer may also terminate the employment of any employee due to
the installation of labor saving devices, redundancy, retrenchment to ISSUE: WON RIVERA, AS A VALIDLY DISMISSED EMPLOYEE, IS
prevent losses or the closing or cessation of operation of the ENTITLED TO AN AWARD OF SEPARATION PAY.
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on RULING:
the workers and the Ministry of Labor and Employment at least one (1)
month before the intended date thereof. In case of termination due to - NO, RIVERA IS NOT ENTITLED
the installation of labor saving devices or redundancy, the worker - As a general rule, an employee who has been dismissed for
affected thereby shall be entitled to a separation pay equivalent to at any of the just causes enumerated under Article 28215 of the
least his one (1) month pay or to at least one (1) month pay for every Labor Code is not entitled to a separation pay.16 Section 7,
year of service, whichever is higher. In case of retrenchment to prevent Rule I, Book VI of the Omnibus Rules Implementing the
losses and in cases of closures or cessation of operations of Labor Code provides:
establishment or undertaking not due to serious business losses or Sec. 7. Termination of employment by employer.—
financial reverses, the separation pay shall be equivalent to one (1) The just causes for terminating the services of an
month pay or at least one-half (1/2) month pay for every of service,
employee shall be those provided in Article 282 of
whichever is higher. A fraction of at least six (6) months shall be
the Code. The separation from work of an
considered one (1) whole year.
employee for a just cause does not entitle him
to the termination pay provided in the Code,
without prejudice, however, to whatever rights,
G.R. No. 201701 June 3, 2013 benefits and privileges he may have under the
applicable individual or collective agreement with
the employer or voluntary employer policy or
- In exceptional cases the Supreme Court has granted other than petitioners were involved. The alterations on the
separation pay to a legally dismissed employee as an act of shipping documents could not reasonably be attributed to
“social justice” or on “equitable grounds.” In both instances, it petitioners because it was never proven that petitioners alone
is required that the dismissal (1) was not for serious had control of or access to these documents.
misconduct; and (2) did not reflect on the moral character of Willful breach by the employee of the trust reposed in him by his
the employee. employer or duly authorized representative is a just cause for
termination. However, loss of confidence should not be simulated. It
- Separation pay is only warranted when the cause for
should not be used as a subterfuge for causes which are improper,
termination is not attributable to the employee’s fault, such illegal or unjustified. Loss of confidence may not be arbitrarily asserted
as those provided in Articles 283 and 284 of the Labor Code, in the face of overwhelming evidence to the contrary. It must be
as well as in cases of illegal dismissal in which reinstatement genuine, not a mere afterthought to justify an earlier action taken in
is no longer feasible bad faith.
The burden of proof rests on the employer to establish that the
dismissal is for cause in view of the security of tenure that employees
enjoy under the Constitution and the Labor Code. The employer’s
evidence must clearly and convincingly show the facts on which the
loss of confidence in the employee may be fairly made to rest. It must
FELIX B. PEREZ and AMANTE G. DORIA, Petitioners, vs be adequately proven by substantial evidence. Respondents failed to
LUIS SANTIAGO, Respondents. Respondents’ illegal act of dismissing petitioners was aggravated by
their failure to observe due process. To meet the requirements of due
process in the dismissal of an employee, an employer must furnish the
G.R. No. 152048; April 7, 2009 worker with 2 written notices: (1) a written notice specifying the
grounds for termination and giving to said employee a reasonable
opportunity to explain his side and (2) another written notice indicating
that, upon due consideration of all circumstances, grounds have been
established to justify the employer’s decision to dismiss the employee.
Petitioners were neither apprised of the charges against them nor
FACTS: given a chance to defend themselves. They were simply and arbitrarily
separated from work and served notices of termination in total
disregard of their rights to due process and security of tenure.
Respondents failed to comply with the two-notice requirement for
Petitioners Felix B. Perez and Amante G. Doria were employed by
terminating employees.
respondent Philippine Telegraph and Telephone Company (PT&T) as
We note a marked difference in the standards of due process to be
shipping clerk and supervisor, respectively, in PT&T’s Shipping
followed as prescribed in the Labor Code and its implementing rules.
Section, Materials Management Group. Acting on an alleged unsigned
The Labor Code provides that an employer must provide the
letter regarding anomalous transactions at the Shipping Section,
employee ample opportunity to be heard and to defend himself with the
respondents formed a special audit team to investigate the matter. It
assistance of his representative if he so desires.
was discovered that the Shipping Section jacked up the value of the
The omnibus rules implementing the Labor Code, on the other
freight costs for goods shipped and that the duplicates of the shipping
hand, require a hearing and conference during which the employee
documents allegedly showed traces of tampering, alteration and
concerned is given the opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him.
Petitioners were placed on preventive suspension for 30 days for their
In case of conflict, the law prevails over the administrative regulations
alleged involvement in the anomaly. Their suspension was extended
implementing it. The authority to promulgate implementing rules
for 15 days twice. Then in a Memorandum, petitioners were dismissed
proceeds from the law itself. To be valid, a rule or regulation must
from the service for having falsified company documents. Petitioners
conform to and be consistent with the provisions of the enabling
filed a complaint for illegal suspension and illegal dismissal alleging
statute. As such, it cannot amend the law either by abridging or
that they were dismissed on November 8, 1993, the date they received
expanding its scope.
the above-mentioned memorandum.
Article 277(b) of the Labor Code provides that, in cases of termination
LA favored petitioners. NLRC reversed the decision of LA. Petitioners
for a just cause, an employee must be given “ample opportunity to be
appealed to CA. CA affirmed the NLRC decision insofar as petitioners’
heard and to defend himself.” Thus, the opportunity to be heard
illegal suspension for 15 days and dismissal for just cause were
afforded by law to the employee is qualified by the word “ample” which
concerned. However, it found that petitioners were dismissed without
ordinarily means “considerably more than adequate or sufficient.” In
due process. Petitioners now seek a reversal of the CA decision before
this regard, the phrase “ample opportunity to be heard” can be
the SC. They contend that there was no just cause for their dismissal,
reasonably interpreted as extensive enough to cover actual hearing or
that they were not accorded due process and that they were illegally
conference. To this extent, Section 2(d), Rule I of the Implementing
suspended for 30 days.
Rules of Book VI of the Labor Code is in conformity with Article 277(b).
Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI
of the Labor Code should not be taken to mean that holding an actual
hearing or conference is a condition sine qua non for compliance with
ISSUE: the due process requirement in termination of employment. The test for
the fair procedure guaranteed under Article 277(b) cannot be whether
there has been a formal pretermination confrontation between the
Whether respondents were dismissed for just cause and with the employer and the employee. The “ample opportunity to be heard”
observance of due process. standard is neither synonymous nor similar to a formal hearing.
The standard for the hearing requirement, ample opportunity, is
couched in general language revealing the legislative intent to give
some degree of flexibility or adaptability to meet the peculiarities of a
RULING: given situation. To confine it to a single rigid proceeding such as a
formal hearing will defeat its spirit.
Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor
1. Respondents’ evidence is insufficient to clearly and convincingly Code itself provides that the so-called standards of due process
establish the facts from which the loss of confidence outlined therein shall be observed “substantially,” not strictly. This is a
resulted. Other than their bare allegations and the fact that such recognition that while a formal hearing or conference is ideal, it is not
documents came into petitioners’ hands at some point, an absolute, mandatory or exclusive avenue of due process.
respondents should have provided evidence of petitioners’ A hearing means that a party should be given a chance to adduce his
functions, the extent of their duties, the procedure in the handling evidence to support his side of the case and that the evidence should
and approval of shipping requests and the fact that no personnel be taken into account in the adjudication of the controversy. “To be
heard” does not mean verbal argumentation alone inasmuch as one to attend the administrative hearing. On July 4, 2002, Technol sent him
may be heard just as effectively through written explanations, a notice of dismissal.
submissions or pleadings. Therefore, while the phrase “ample Before the Labor Arbiter, Amular alleged that in the afternoon of April
opportunity to be heard” may in fact include an actual hearing, it is not 16, 2002, while he and his co-employee Ducay were walking around
limited to a formal hearing only. The existence of an actual, formal the shopping mall in Balibago, Sta. Rosa, Laguna, they incidentally
“trial-type” hearing, although preferred, is not absolutely necessary to saw Mendoza with whom they wanted to discuss some personal
satisfy the employee’s right to be heard. matters. When they approached Mendoza, the latter raised his voice
Due process of law simply means giving opportunity to be heard and asked what they wanted from him; Amular asked Mendoza what
before judgment is rendered. In fact, there is no violation of due the problem was because Mendoza appeared to be always angry at
process even if no hearing was conducted, where the party was given him (Amular). Mendoza instead challenged Amular and Ducay to a
a chance to explain his side of the controversy. What is frowned upon fistfight and then punched Amular who punched Mendoza in return.
is the denial of the opportunity to be heard. Twin requirements of notice Thereafter, a full-blown fistfight ensued until the barangay tanods in the
and hearing constitute the essential elements of due process in the area pacified the three.
dismissal of employees. It is deemed sufficient for the employer to Amular further alleged that he was asked by his immediate supervisor
follow the natural sequence of notice, hearing and judgment. to submit a report on the incident, which he did on April 18, 2002.
In sum, the following are the guiding principles in connection with the Subsequently, Amular, Mendoza and Ducay were called by Technol
hearing requirement in dismissal cases: management to talk to each other and to settle their differences; they
(a) “ample opportunity to be heard” means any meaningful opportunity agreed and settled their misunderstanding.
(verbal or written) given to the employee to answer the charges against Labor arbiter’s decision
him and submit evidence in support of his defense, whether in a
hearing, conference or some other fair, just and reasonable way. On November 18, 2003, Executive Labor Arbiter Salvador V. Reyes
(b) a formal hearing or conference becomes mandatory only when rendered a decision finding that Amular’s preventive suspension and
requested by the employee in writing or substantial evidentiary subsequent dismissal were illegal. He ruled that Amular’s preventive
disputes exist or a company rule or practice requires it, or when similar suspension was based solely on unsubscribed written statements
circumstances justify it. executed by Mendoza, Rogelio R. Garces and Mary Ann Palma
(c) the “ample opportunity to be heard” standard in the Labor Code (subscribed only on August 8, 2002) and that Mendoza, Amular and
prevails over the “hearing or conference” requirement in the Ducay had settled their differences even before Amular was placed
implementing rules and regulations. under preventive suspension. With respect to Amular’s dismissal, the
On the other hand, an employee may be validly suspended by the Arbiter held that Technol failed to afford him procedural due process
employer for just cause provided by law. Such suspension shall only since he was not able to present his side because he had filed a case
be for a period of 30 days, after which the employee shall either be before the National Labor Relations Commission (NLRC) at the time he
reinstated or paid his wages during the extended period. was called to a hearing; Technol also failed to substantiate its
Where the dismissal was without just or authorized cause and there allegations against Amular; the fistfight occurred around 200 to 300
was no due process, Article 279 of the Labor Code mandates that the meters away from the work area and it happened after office hours.
employee is entitled to reinstatement without loss of seniority rights Arbiter Reyes awarded Amular separation pay (since he did not want
and other privileges and full backwages, inclusive of allowances, and to be reinstated), backwages, 13th month pay, service incentive leave
other benefits or their monetary equivalent computed from the time the pay and attorney’s fees in the total amount of P158,987.70.
compensation was not paid up to the time of actual reinstatement. In
this case, however, reinstatement is no longer possible because of the Technol appealed to the NLRC. On March 30, 2005, the NLRC
length of time that has passed from the date of the incident to final affirmed the labor arbiter’s ruling. It found that Amular was unfairly
resolution. 14 years have transpired from the time petitioners were treated and subjected to discrimination because he was the only one
wrongfully dismissed. To order reinstatement at this juncture will no served with the notice to explain and placed under preventive
longer serve any prudent or practical purpose. So petitioners will just suspension; his co-employee Ducay who was also involved in the
be paid their separation pay. incident was not. Technol moved for reconsideration, but the NLRC
Petition is hereby GRANTED. denied the motion in a resolution rendered on May 30, 2007. Technol
thereafter sought relief from the CA through a petition for certiorari
Technol Eight Philippines Corporation v. NLRC and Denis Amular under Rule 65 of the Rules of Court.
Facts: The petitioner Technol Eight Philippines Corporation (Technol),
located at 127 East Main Avenue, Laguna Technopark, Bian, Laguna, CA decision
manufactures metal parts and motor vehicle components. It hired the In its decision promulgated on November 18, 2008, the CA found no
respondent Dennis Amular (Amular) in March 1998 and assigned him grave abuse of discretion on the part of the NLRC when it affirmed the
to Technols Shearing Line, together with Clarence P. Ducay labor arbiters ruling that Amular was illegally dismissed. While the
(Ducay).Rafael Mendoza (Mendoza) was the lines team leader. appellate court noted that Amular was dismissed on the ground of
On April 16, 2002 at about 5:30 p.m., Mendoza went to the Surf City serious misconduct, a just cause for employee dismissal under the
Internet Caf in Balibago, Sta. Rosa, Laguna. As Mendoza was leaving Labor Code, it opined that Technol failed to comply with the
the establishment, he was confronted by Amular and Ducay who jurisprudential guidelines that misconduct warranting a dismissal: (1)
engaged him in a heated argument regarding their work in the shearing must be serious; (2) must relate to the performance of the employees
line, particularly Mendoza’s report to Avelino S. De Leon, Jr. (De duties; and (3) must show that the employee has become unfit to
Leon), Technol’s Production Control and Delivery (PCD) assistant continue working for the employer.
supervisor, about Amular’s and Ducay’s questionable behavior at work. The appellate court pointed out that the mauling incident occurred
The heated argument resulted in a fistfight that required the outside the company premises and after office hours; it did not in any
intervention of the barangay tanods in the area. manner disrupt company operations nor pose a threat to the safety or
Upon learning of the incident, Technols management sent to Amular peace of mind of Technol workers; neither did it cause substantial
and Ducay a notice of preventive suspension/notice of discharge dated prejudice to the company. It explained that although it was not
May 18, 2002 advising them that their fistfight with Mendoza violated condoning Amular’s misconduct, it found that the penalty of dismissal
Section 1-k of Technol’s Human Resource Department (HRD) Manual. imposed by Technol on Amular was too harsh and evidently
The two were given forty-eight (48) hours to explain why no disciplinary disproportionate to the act committed.
action should be taken against them for the incident. They were placed
under preventive suspension for thirty (30) days, from May 19, 2002 to THE PETITION
June 17, 2002 for Ducay, and May 21, 2002 to June 20, 2002 for Technol posits that the CA gravely erred in ruling that Amular was
Amular. Amular submitted a written statement on May 20, 2002. illegally dismissed, contending that Amular was discharged for violation
Thereafter, Amular received a notice dated June 8, 2002 informing him of Section 1-k of its HRD Manual which penalizes the commission of a
that Technol management will conduct an administrative hearing on crime against a co-employee. It submits that Section 1-k of the HRD
June 14, 2002. He was also given two (2) days to respond in writing to Manual is a reasonable company rule issued pursuant to its
the statements attached to and supporting the notice. A day before the management prerogative. It maintains that the case should have been
hearing or on June 13, 2002, Amular filed a complaint for illegal examined from the perspective of whether the company rule is
suspension/constructive dismissal with a prayer for separation pay, reasonable and not on the basis of where and when the act was
backwages and several money claims, against Technol. Amular failed committed, or even whether it caused damage to the company. It adds
that the manual does not distinguish whether the crime was committed Autobus Workers Union et al. v NLRC
inside or outside work premises or during or after office hours. It This petition for certiorari and prohibition assails the Resolution dated
submits that the matter assumes special and utmost significance in this July 12, 1994 of the respondent NLRC which affirmed the decision of
case because Amular inflicted physical injuries on a supervisor. the Labor Arbiter, which decided that complainant’s dismissal valid and
Technol insists that it had to order Amular’s dismissal in order to in accordance with procedural due process. As financial assistance,
uphold the integrity of the company rules and to avoid the erosion of however, respondents are hereby ordered to give complainant the sum
discipline among its employees of P5,000.00.
Amular’s claims Facts:
Amular said that on April 18, 2002, the Technol’s management called Petitioner Ricardo E. Escanlar worked with Autobus Industries, Inc.
Mendoza, Ducay, and him to a meeting, asked them to explain their (Autobus for brevity) as a Cutting Machine Operator since January 8,
sides and thereafter requested them to settle their differences; without 1981 with a salary of P162.16 per day. He was the recipient of two (2)
hesitation, they agreed to settle and even shook hands afterwards. He Plaques of Appreciation as Model Employee in 1987 and as Valuable
was therefore surprised that on May 18, 2002, he received a Employee in 1988. He was later elected President of the Autobus
memorandum from Technol’s HRD charging him and his co-employee Workers Union (AWU), the union for the rank and file employees.
Ducay for the incident. Without waiting for an explanation, Technol’s On January 29, 1993, Engr. Zosimo Prospero Chavez, Production
management placed him under preventive suspension, but not Ducay. Manager of Autobus, received a handwritten report from one Reynaldo
Adding insult to injury, when Amular followed up his case while on T. Andres, a supervisor. In the report, Andres said that on January 29,
preventive suspension, he was advised by the HRD manager to simply 1993, he told Escanlar and another employee that they will be
resign and accept managements offer of P22,000.00, which offer was reassigned to another section due to lack of manpower. Escanlar was
reiterated during the mandatory conference before the labor arbiter. to be reassigned to the Washer Section while the other employee to
the Painting Section. Escanlar questioned the transfer but went to the
RULING: The Procedural Issue Washing Section still. At around 6:55 a.m., Andres saw Escanlar
Amular undoubtedly committed a misconduct or exhibited improper talking to a certain Odelon Gamora and the conversation lasted for
behavior that constituted a valid cause for his dismissal under the law around 2 minutes. After Escanlar and Gamora talked, Andres
and jurisprudential standards. The circumstances of his misdeed, to approached the petitioner and the latter told Andres that he did not like
our mind, rendered him unfit to continue working for Technol; guilt is how Andres chose personnel to go on overtime pertaining to people
not diminished by his claim that Technols management called the three who were close to Andres and those who treat him for a drink. Andres
of them to a meeting, and asked them to explain their sides and settle then told Escanlar to ask Tomas Marahit if the allegations were true.
their differences, which they did. Mendoza significantly denied the Allegedly, Escanlar told Andres “Gago ka” and Andres told him that
alleged settlement, maintaining that while they were summoned by De they should just talk later at the latter’s office. However, Escanlar
Leon after the incident, he could not shake hands and settle with reiterated, “Gago ka.” Andres left Escanlar and while the former was at
Amular and Ducay since they did not even apologize or ask the Seam Weld section of the company, Escanlar continued to stare at
forgiveness for what they did. him and did not do his job. Andres then asked Escanlar what his
Neither do we believe that Amular was discriminated against because problem was and Escanlar allegedly replied, “Bakit anong gusto mo,
he was not the only one preventively suspended. As the CA itself tang ina mo.” Andres left.
acknowledged, Ducay received his notice of preventive At around 8:30 a.m. on the same day, Andres was on his way to the
suspension/notice of charge on May 19, 2002 while Amular received canteen and Escanlar approchaed him. Escanlar asked what Andres
his on May 21, 2002. These notices informed them that they were told the office regarding the issue between them. Andres told Escanlar
being preventively suspended for 30 days from May 19, 2002 to June to ask the management and the latter allegedly said, “Panapanahon
17, 2002 for Ducay, and May 21, 2002 for Amular. lang yan, panahon mo na ngayon.”
Thus, Amular was not illegally dismissed; he was dismissed for cause. At 3:08 p.m. of the same day, complainant approached Mr. Andres in
the canteen and said “Patunayan mong minura kita at kung hindi,
The Due Process Issue tandaan mo yan.”
The labor arbiter ruled that Technol failed to afford Amular procedural
due process, since he was not able to present his side regarding the On February 5, 1993, Engr. Chavez issued a memorandum to
incident; at the time he was called to a hearing, he had already filed the petitioner Escanlar requiring the latter to explain in writing within 48
illegal dismissal complaint. The NLRC, on the other hand, held that the hours from receipt thereof why no disciplinary action should be taken
memorandum terminating Amulars employment was a mere formality, against him pursuant to the company’s Code of Discipline, for
an afterthought designed to evade company liability since Amular had addressing Reynaldo T. Andres, his supervisor, in profane or obscene
already filed an illegal dismissal case against Technol. language and for threatening him.
We disagree with these conclusions. The notice of preventive On February 6, 1993, Reynaldo Andres wrote a memorandum to Engr.
suspension/notice of discharge served on Amular and Ducay required Chavez that petitioner Escanlar had again threatened him the previous
them to explain within forty-eight (48) hours why no disciplinary action day at the basketball court of the company premises.
should be taken against them for their involvement in the mauling On February 8, 1993, petitioner Escanlar submitted a written
incident. Amular submitted two written statements: the first received by explanation to Engr. Chavez. On the same day, Engr. Chavez through
the company on May 19, 2002 and the other received on May 20, a memorandum informed petitioner Escanlar of the scheduled hearing
2002. On June 8, 2002, Technol management sent Amular a of the January 29 incident on February 17, 1993. The hearing was
memorandum informing him of an administrative hearing on June 14, continued on March 12, 1993.
2002 at 10:00 a.m., regarding the charges against him.[50] At the After the administrative investigation, petitioner Escanlar was served a
bottom left hand corner of the memorandum, the following notation Notice of Termination dated April 19, 1993, for gross misconduct, i.e.,
appears:accept the copy of notice but refused to receive, he will study uttering unsavory remarks and threatening his supervisor with physical
first. A day before the administrative hearing or on June 13, 2002, harm. On April 21, 1993, petitioner filed a complaint for illegal dismissal
Amular filed the complaint for illegal suspension/dismissal and did not against Autobus. After the submission by the parties of their respective
appear at the administrative hearing. On July 4, 2002, the company position papers, the case was deemed submitted for resolution. On
sent Amular a notice of dismissal. October 29, 1993, Labor Arbiter Melquiades Sol D. Del Rosario
What we see in the records belie Amulars claim of denial of procedural rendered a decision finding the dismissal of petitioner valid;
due process. He chose not to present his side at the administrative Complainant felt that being a machine operator and union president at
hearing. In fact, he avoided the investigation into the charges against that, his transfer to the washer section is without legal and justifiable
him by filing his illegal dismissal complaint ahead of the scheduled basis and this constituted harassment. The records discloses,
investigation. Under these facts, he was given the opportunity to be however, that the very Collective Bargaining Agreement, signed by the
heard and he cannot now come to us protesting that he was denied union headed by complainant and respondent provides for such
this opportunity. WHEREFORE, premises considered, we hereby transfer as management prerogative of respondent.
GRANT the petition. The assailed decision and resolution of the Court
of Appeals are REVERSED and SET ASIDE. The complaint for illegal With this blanket grant of management prerogative, complainant who
dismissal is DISMISSED for lack of merit. Costs against respondent headed the union panel that concluded the C.B.A. with respondent
AMULAR. company is now estopped to question his transfer of work. Further, the
reason given for the transfer is the lack of manpower to the two (2)
sections and there is no showing that the transfer is permanent. There
is no evidence on record that showed complainants transfer as
permanent. If at all it was done by respondent to meet the exigencies Felix v. Enertech System Industries, Inc. [ GR, 162007, March 28,
of the situation on account of a dearth in manpower. 2001]
Finally, complainants transfer and subsequent dismissal cannot be
termed unfair labor practice on account of union busting because
complainant failed to show by concrete proof that all the other officers FACTS: Y Company is engaged in the manufacture of boilers and
of the union have been removed or are on the verge of being so. As it tanks. X worked as a welder in respondents company, X, and 3 other
appears on records, the union has been in existence prior to employees were assigned to install a smokerstack at the Big J
complainants ascendancy as president of the union and even with Feedmills in Bulacan. X and his co-workers accomplished daily time
complainant at the helm of the union as president, respondent records on the basis of which the wages were computed. The work as
company readily concluded a Collective Bargaining Agreement with the estimated to be completed in one week, but it took them two weeks to
union. If union busting has been the agenda of respondent, finish. Thus, X and his co employees were given notice to explain why
complainant would not find himself all alone in his present predicament they should not be dismissed for reporting at the jobsites at 11am and
but his co-union officers likewise; but this is not the picture obtaining. leaving the site at 2pm in violation of company rules, in view of reports
that came to the office. Thus, the employee was placed under
With regard to the issue of illegal dismissal, there is evidence on record preventive suspension pending investigation. After investigation, the
that complainant violated Sec. 6 of Rule No. 28 of the Code of petitioner’s were dismissed on grounds of dishonest by falsifying time
Discipline of respondent company, which provides: cards which allowed them to collect full salary and for insubordination.
Seksiyon 6- ASAL AT KILOS pag-insulto o panghihiya, pagbanta ng X filed a compliant for illegal dismissal with the Labor Arbiter who ruled
pananakit o pagpakita ng anumang sinasadyang di paggalang sa isang for X. And NLRC reversed the decision. The CA affirmed the NLRC.
superbisor o sino mang opisyal ng kumpanya.

On appeal, the decision was affirmed by respondent National Labor ISSUE: W/N there was illegal dismissal
Relations Commission in its Resolution dated July 12, 1994.

Petitioner dissatisfied with the NLRC and CA’s decision. HELD: No. The CA taking into account the findings of the NLRC,
correctly concluded that there was substantial evidence showing that
RULING: petitioner did not really work 8 hours a day. The validity of petitioner’s
Misconduct is improper or wrong conduct. It is the transgression of dismissal is a factual question and the rule is well settled that the
some established and definite rule of action, a forbidden act, a findings of fact of quarrel – judicial agencies, like the NLRC, are
dereliction of duty, willful in character, and implies wrongful intent and accorded not only respect, but finally if they are supported by
not mere error in judgment. The misconduct must be of such a grave substantial evidence. Furthermore, the omnibus motion filed by Y Co,
and aggravated character and not merely trivial or unimportant. The during the tendency of the appeal is not an admission that it is the
charge of serious misconduct finds ample support in the record. liable for reinstatement or separation pay.
Petitioner failed to satisfactorily rebut this accusation, his only defense
being self-serving denials.
The repeated utterances by petitioner of obscene, insulting or offensive Manuel C. Felix v. Enertech Systems Industries
words against a superior were not only destructive of the morale of his This is a petition for review on certiorari of the decision of the
co-employees and a violation of the company rules and regulations, respondent Court of Appeals, dated January 6, 2000, affirming the
but also constitute gross misconduct which is one of the grounds decision of the National Labor Relations Commission (NLRC), dated
provided for by law to terminate the services of an employee. His June 17, 1998, declaring the dismissal of petitioner Manuel C. Felix to
attitude toward his supervisor, Reynaldo T. Andres, amounted to be legal, although granting his claim for 13th month pay, and the
insubordination and conduct unbecoming of an employee which appeals court's resolution, dated February 18, 2000, denying
merited the penalty of dismissal. petitioner's motion for reconsideration.
Suffice it to state that an employee may be validly dismissed for
violation of a reasonable company rule or regulation adopted for the FACTS:
conduct of the company’s business. It is the recognized prerogative of Respondent Enertech System Industries, Incorporated is engaged in
the employer to transfer and reassign employees according to the the manufacture of boilers and tanks. Petitioner Manuel C. Felix
requirements of its business. For indeed, regulation of manpower by worked as a welder/fabricator in respondent company. On August 5,
the company clearly falls within the ambit of management prerogative. 1994, petitioner and three other employees, namely, Dante Tunglapan,
A valid exercise of management prerogative is one which, among Hilario Lamog, and Emerson Yanos, were assigned to install a
others, covers: work assignment, working methods, time, supervision smokestack at the Big J Feedmills in Sta. Monica, Bulacan. During the
of workers, transfer of employees, work supervision, and the discipline, entire period they were working at the Big J Feedmills, petitioner and
dismissal and recall of workers. Except as provided for, or limited by his companions accomplished daily time records (DTRs). Petitioner
special laws, an employer is free to regulate, according to his own wrote in his DTR that he had worked eight hours a day on the basis of
discretion and judgment, all aspects of employment. which his wages were computed.
Then petitioner makes the farfetched claim that his dismissal is by
reason of his being the union president, thus Autobus is allegedly guilty The work was estimated to be completed within seven days, but it
of unfair labor practice. actually took the workers until August 17, 1994, or about two weeks,
before it was finished. On that day, petitioner and his three co-
ON DUE PROCESS: employees were each given notice by respondent, which read in part:
The twin requirements of notice and hearing constitute the essential Reports came to our office that for the past few days you were
elements of due process. Due process of law simply means giving reporting at [the] Big J jobsite at around eleven o'clock in the morning
opportunity to be heard before judgment is rendered. In fact, there is and you were leaving said site at two o'clock.
no violation of due process even if no hearing was conducted, where We would like to inform you that said act constitutes Abandonment of
the party was given a chance to explain his side of the controversy. Work which is [a] violation of our Company Code on Employees
What is frowned upon is the denial of the opportunity to be heard. Discipline that warrants a penalty of DISMISSAL.
A formal trial-type hearing is not even essential to due process. It is Therefore, you are hereby given 24 hours to explain your side on the
enough that the parties are given a fair and reasonable opportunity to said matter.
explain their respective sides of the controversy and to present
supporting evidence on which a fair decision can be based. This type August 18, 1994, petitioner and his co-workers were placed under
of hearing is not even mandatory in cases of complaints lodged before preventive suspension for seven working days. On August 26, 1994,
the Labor Arbiter. respondent, through its personnel assistant, Ma. Imelda E. Samson
WHEREFORE, the petition is DISMISSED. The resolution of (MIES), and in the presence of two union officers, Armando B.
respondent NLRC affirming the decision of the Labor Arbiter is Tumamao (ABT) and Jessie T. Yanos (JTY), interviewed Johnny F.
AFFIRMED. Legaspi (JFL), who owned the Big J Feedmills, and his engineer,
Juanito Avena.
Per the interview, MIES asked JFL what time the assigned employees required eight hours daily work during his detail at the Big J Feedmills
started their work. JFL claimed they usually started at 10 a.m. or and, therefore, held that his dismissal was in accordance with the
sometimes 11 a.m. JFL further claimed that since the employees were Company Code of Discipline and the Labor Code.
assigned in the area, they have never completed four hours of work in
one day. Accordingly, some of the employees came in early but they Petitioner filed a motion for reconsideration, but the same was denied.
waited for the others and once the four of them are complete, that is He then elevated the matter to the CA. On January 6, 2000, the CA
when they start with their job. affirmed the dismissal of petitioner although it granted his claim for
ABT asked JFL if the times he saw the employees going to work late 13th month pay.
was when the employees went to their shop to pick up the materials for
their job. JFL said it was what the employees’ claimed. The employees Ruling on reinstatement:
noted they came to work late because they had to get the materials [T]he decision of the Labor Arbiter reinstating a dismissed or separated
from the shop. However, JFL contended that the employees did not get employee, insofar as the reinstatement aspect is concerned, shall
the materials at the same time. The employees went to the shop one at immediately be executory, even pending appeal. The employee shall
a time but they would only work once all four of them are again either be admitted back to work under the same terms and conditions
complete. prevailing prior to his dismissal or separation or, at the option of the
ABT also asked JFL if there was any of the four employees who came employer, merely reinstated in the payroll. The posting of a bond by the
to work at 7 in the morning. JFL claimed, “Wala nga eh, tanghali na employer shall not stay the execution for reinstatement provided
nga sila dumarating, pagdating magtatabraho sandali tapos titigil para herein.
kumain sa tindahan-wala pang alas-dose kumakain na sila kasi baka If at all, therefore, respondent should have reinstated petitioner in the
maubusan sila ng ulam o kakainin, tapos alas-dose magpapahinga na payroll, instead of offering him separation pay.
sila, matutulog doon sa may boiler bago pa lamang mag-alas-kuatro
umaalis na sila kaya wala talagang otso oras ang trabaho nila.” He Zenco Sales Inc. v NLRC
further claimed that one of the employees only approach them when
they need written statements as proof that they are reporting for work, G.R. No. 111110 August 2, 1994
which is supposedly from 7 am to 4 pm. JFL said he refused to make a ZENCO SALES, INC. and/or ZENCO FOOTSTEP, petitioner,
written statement because he knew he would come off as a liar. vs. NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION,
These statements were corroborated by the affidavit 4 of petitioner's
co-employee, Emerson G. Yanos, who stated that petitioner and his This is a special civil action under Rule 65 to nullify the resolution 1 of
co-worker Dante Tunglapan usually arrived for work at the Big J the public respondent of 12 May 1993 in NLRC CA No. M-001029-92
Feedmills between 9:30 to 10:00 a.m., stopped working at 12:00 noon, which affirmed, with modification, the decision 2 of the Executive Labor
then resumed work at 1:00 p.m., continuing until 3:00 p.m. Before Arbiter, Hon. Benjamin Pelaez, of 26 August 1992 in NLRC RABX
going home, they had snacks. Case No.
10-06-00351-91, entitled "Anastacio C. Yap vs. Zenco Sales, Inc.
Reynaldo Tapiru, petitioner's co-employee and neighbor in Sitio and/or Zenco Footstep." The Labor Arbiter had dismissed the private
Kabanatuan, Valenzuela, also stated in an affidavit that he had seen respondent's complaint for illegal dismissal, profit sharing, commission
petitioner either in his house or within their compound on August 6, 7, for 1990, and damages. The public respondent affirmed the decision of
8, and 14, 1994, between 3 and 4 o'clock in the afternoon, when he the Labor Arbiter but awarded "separation pay based on social justice."
was supposed to be working at the Big J Feedmills in Bulacan at that In dismissing the complaint, the Labor Arbiter noted and held:
time. Anent the issue of illegal dismissal, We find for Respondent. The
Internal Audit Report clearly established Complainant's misfeasance
On September 9, 1994, respondent required petitioner to report to the and malfeasance in the performance of his duty as Branch Manager
company lawyer on September 13, 1994 for investigation. On October which resulted to a loss of substantial amount of money and an act
17, 1994, it issued a memorandum placing petitioner under preventive inimical to the interest of Respondent corporation. Complainant is guilty
suspension for 30 days. Finally, on November 21, 1994, respondent of misfeasance for his failure to closely monitor and control the sales
sent petitioner a memorandum terminating his employment on the transactions of salesman Chua and malfeasance because he used
following grounds: Respondent corporation's properties, equipments and personnel in
SECTION 7. DISHONESTY connection with his personal business of buy and sell of used sacks.
6. Falsifying time cards or any other timekeeping records, or drawing These acts of Complainant constitute gross neglect in the performance
salary/allowance by virtue of falsified time cards. of duty and serious misconduct resulting to loss of trust and confidence
SECTION 8. INSUBORDINATION which under Article 292 [should be 282] of the Labor Code, as
4. Willful holding back, slowing down, hindering, or limiting work output. amended, are ground [sic] to terminate an employment.
5. Encouraging, coercing, inciting, bribing, or otherwise inducing any
employee to engage in any practice in violation of the Company's work Complainant contended there was lack of due process in his
rules. termination. Labor Arbiter found otherwise as the complainant was
confronted by the auditors during the investigation.
Petitioner filed a complaint for illegal dismissal against respondent
before the Arbitration Branch of the NLRC. On June 19, 1997, Labor In its resolution of 12 May 1993, NLRC sustained the Labor Arbiter's
Arbiter Arthur Amansec rendered a decision finding petitioner to have conclusion that the complainant was validly dismissed for cause.
been illegally dismissed and ordering respondent. Amansec ordered NLRC, however, ordered the payment of complainant’s separation pay
the petitioner to be reinstated with backwages plus his 13th month pay bae don social justice at the rate of 1 month’s salary for every year of
for 1994. service.

Respondent appealed to the NLRC. Pending appeal, a writ of Petitioner contends: Section 7, Rule 1, Book VI of the Omnibus Rules
execution was issued on September 23, 1997 directing respondent to Implementing the Labor Code. It argues that the only cases where
reinstate petitioner either physically or in the payroll. separation pay shall be granted although the employee was lawfully
On October 10, 1997, respondent filed an omnibus motion arguing that dismissed are when the cause of termination was not attributable to the
reinstatement was no longer possible as the violations of company employee's fault but due to the following reasons: (1) the installation of
rules committed by petitioner had caused strained relations between labor-saving devices, (2) redundancy, (3) retrenchment, (4) cessation
petitioner and itself. Respondent further alleged that because of of the employer's business, or (5) when the employee is suffering from
petitioner's falsification of his daily time records which enabled him to a disease and his continued employment is prohibited by law or is
collect his full salary, it could no longer trust him. Respondent prayed prejudicial to his health and to the health of his co-employees.
that the writ of execution be recalled and that a new order be issued The Office of the Solicitor General then concludes that from the
allowing it to pay petitioner separation pay in lieu of reinstatement. established facts in this case, "it is clear that private respondent was
validly dismissed not only because he committed neglect in the
NLRC decision: Reversed labor arbiter's decision and dismissing performance of his duties and serious misconduct but that his acts of
petitioner's complaint for illegal dismissal for lack of merit. The NLRC using petitioner's equipment and personnel for his personal use and
found sufficient evidence to prove that petitioner put in less than the benefit constitutes an offense involving dishonesty."
premises of [Philippine American Life Insurance Company] at Jones
Ruling: Avenue, Cebu City.
We hold that henceforth separation pay shall be allowed as a measure On December 16, 1993 Philippine American Life Insurance Company
of social justice only in those instances where the employee is validly [the Client, for brevity], through Carlos De Pano, Jr., sent notice to all
dismissed for causes other than serious misconduct or those reflecting concerned that the [Agency] was again awarded the contract of
on his moral character. Where the reason for the valid dismissal is, for [s]ecurity [s]ervices together with a request to replace all the security
example, habitual intoxication or an offense involving moral turpitude, guards in the company’s offices at the cities of Cebu, Bacolod,
like theft or illicit sexual relations with a fellow worker, the employer Cagayan de Oro, Dipolog and Ilagan.
may not be required to give the dismissed employee separation pay, or In compliance therewith, [the Agency] issued on January 12, 1994, a
financial assistance, or whatever other name it is called, on the ground Relief and Transfer Order replacing the complainants as guards [of the
of social justice. Client] and for then to be re-assigned [to] other clients effective
A contrary rule would, as the petitioner correctly argues, have the January 16, 1994. As ordered, the complainants reported but were
effect, of rewarding rather than punishing the erring employee for his never given new assignments but instead they were told, “You were
offense. And we do not agree that the punishment is his dismissal only replace[d] because you are already old.” Precisely, the complainants
and that the separation pay has nothing to do with the wrong he had lost no time but filed the subject illegal dismissal cases on January 18,
committed. January 26 and February 4, 1994 and prayed for payment of
Of course it has. Indeed, if the employee who steals from the company separation pay and other labor standard benefits.
is granted separation pay even as he is validly dismissed, it is not
unlikely that he will commit a similar offense in his next employment [The Client and the Agency] maintained there was no dismissal on the
because he thinks he can expect a like leniency if he is again found part of the complainants, constructive or otherwise, as they were
out. This kind of misplaced compassion is not going to do labor in protected by the contract of security services which allows the recall of
general any good as it will encourage the infiltration of its ranks by security guards from their assigned posts at the will of either party. It
those who do not deserve the protection and concern of the also advanced that the complainants prematurely filed the subject
Constitution. cases without giving the [Agency] a chance to give them some
In the instant case, the private respondent was found guilty of gross assignments.
misconduct for having used his employer's (petitioner's) "properties, On the part of [the Client], it averred further that there [was] no
equipment and personnel in connection with his personal business of employer-employee relationship between it and the complainants as
buy and sale of used sacks." His acts involve gross dishonesty the latter were merely assigned to its Cebu Branch under a job
deliberately done for his personal advantage. The doctrine laid down in contract; that [the Agency] ha[d] its own separate corporate personality
Philippine Long Distance Telephone Co. that separation pay, as a apart from that of [the Client].
measure of social justice, shall be allowed only where the employee is
validly dismissed for causes other than serious misconduct or those Ruling of Respondent Commission
reflecting on his moral character is applicable. Respondent Commission ruled that the complainants were
The challenged resolution of public respondent National Labor constructively dismissed, as the recall of the complainants from their
Relations Commission of 12 May 1993 in NLRC CA No. M-001029-92 long time post[s] at [the premises of the Client] without any good
(Case No. RAB-10-06-00351-91) is MODIFIED by deleting the award reason is a scheme to justify or camouflage illegal dismissal.
of separation pay. In the present case, the complainants case, the complainants were told
by the Agency that they lost their assignment at the Clients premises
because they were already old, and not because they had committed
Sentinel Security Agency, Inc. v NLRC any infraction or irregularity. The NLRC applied RA 7641, which gives
retirement benefits of one-half month pay per year of service to
The transfer of an employee involves a lateral movement within the retirable employees, viz.:
business or operation of the employer, without demotion in rank, xxx As stated earlier xxx, the complainants were in the service of [the
diminution of benefits or, worse, suspension of employment even if Client] for nearly twenty (20) years in the cases of Helcias Arroyo and
temporary. The recall and transfer of security guards require for more than twenty (20) years in the cases of Veronico Zambo and
reassignment to another post and are not equivalent to their placement Rustico Andoy, which long years of service [appear] on record to be
on floating status. Off-detailing security guards for a reasonable period unblemished.
of six months is justified only in bona fide cases of suspension of The complainants were then confronted with an impending sudden loss
operation, business or undertaking. of earning for while the order of [the Agency] to immediately report for
reassignment momentarily gave them hope, there was in fact no
The Case immediate reinstatement. While it could have been prudent for the
In the action for illegal dismissal and payment of salary differential, complainants to wait, they were set unstable and were actually
service incentive leave pay and separation pay filed by private threatened by the statement of the personnel in charge of [the Agency]
respondents, Labor Arbiter Dominador A. Almirante rendered a that they were already old, that was why they were replaced.
Decision, which disposed:
Sentinel Security Agency, Inc. jointly and severally with xxx Philamlife, NLRC Ruling: They were entitled to the twin remedies of back wages
Cebu Branch, to pay complainants the total amount of [s]ixty for one (1) year from the time of their dismissal on January 15, 1994,
[t]housand [o]ne [h]undred [t]welve [p]esos and 50/100 (P60,112.50) in payable by both the Client and the Agency, and separation pay one-
the concept of 13th month pay and service incentive leave benefits as half month pay for every year of service payable only by the Agency.
computed by our Labor Arbitration Reinstatement was not granted due to the resulting antipathy and
NLRC Modified LA’s decision: resentment among the complainants, the Agency and the Client.
MODIFIED in so far as the award of 13th month pay for the previous
years which is hereby excluded. Further, xxx Sentinel Security Agency, Issue: Was there illegal dismissal?
Inc. is hereby ORDERED to pay complainants separation pay at the
rate of month pay for every year of service and for both xxx Philippine We agree that the security guards were illegally dismissed, but not for
American Life Insurance, Inc. and Sentinel Security Agency, Inc. the reasons given by the public respondent. The aforecited contentions
and/or Daniel Iway to pay to the [complainants] jointly and severally of the NLRC are speculative and unsupported by the evidence on
their backwages from January 16, 1994 to January 15, 1995 and the record. As the solicitor general said in his Manifestation in Lieu of
corresponding 13th month pay for the said year. Comment, the relief and transfer order was akin to placing private
respondents on temporary off-detail.
Facts: Being sidelined temporarily is a standard stipulation in employment
The complainants were employees of Sentinel [Security Agency, Inc. contracts, as the availability of assignment for security guards is
hereafter referred to as the Agency] since March 1, 1966 in the case of primarily dependent on the contracts entered into by the agency with
Veronico Zambo; October 27, 1975 in the case of Helcias Arroyo; third parties. Most contracts for security services, as in this case,
September 20, 1985 in the case of Adriano Cabano; February 1, 1990 stipulate that the client may request the replacement of the guards
in the case of Maximo Ortiz; and Ortiz and November 1, 1967 in the assigned to it. In security agency parlance, being placed off detail or on
case of Rustico Andoy. They were assigned to render guard duty at the floating status means waiting to be posted. This circumstance is not
equivalent to dismissal, so long as such status does not continue wages. However, reinstatement is no longer feasible in this case. The
beyond reasonable time. Agency cannot reassign them to the Client, as the former has recruited
In the case at bar, the relief and transfer order per se did not sever the new security guards; the complainants, on the other hand, refuse to
employment relationship between the complainants and the Agency. accept other assignments.
Thus, despite the fact that complainants were no longer assigned to
the Client, Article 287 of the Labor Code, as amended by RA 7641, still This liability of the Client covers the payment of the service incentive
binds the Agency to provide them upon their reaching the retirement leave pay of the complainants during the time they were posted at the
age of sixty to sixty-five years retirement pay or whatever else was Cebu branch of the Client. As service had been rendered, the liability
established in the collective bargaining agreement or in any other accrued, even if the complainants were eventually transferred or
applicable employment contract. On the other hand, the Client reassigned.
(Philamlife) is not liable to the complainants for their retirement pay The service incentive leave is expressly granted by these pertinent
because of the absence of an employer-employee relationship provisions of the Labor Code:
between them. ART. 95. Right to service incentive leave.(a) Every employee who has
rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.
However, the Agency claims that the complainants, after being placed (b) This provision shall not apply to those who are already enjoying the
off-detail, abandoned their employ. The solicitor general, siding with benefit herein provided, those enjoying vacation leave with pay of at
the Agency and the labor arbiter, contends that while abandonment of least five days and those employed in establishments regularly
employment is inconsistent with the filing of a complaint for illegal employing less than ten employees or in establishments exempted
dismissal, such rule is not applicable where [the complainant] from granting this benefit by the Secretary of Labor after considering
expressly rejects this relief and asks for separation pay instead. the viability or financial condition of such establishment.
The Court disagrees. Abandonment, as a just and valid cause for (c) The grant of benefit in excess of that provided herein shall not be
termination, requires a deliberate and unjustified refusal of an made a subject of arbitration or any court [or] admnistrative action.
employee to resume his work, coupled with a clear absence of any Under the Implementing Rules and Regulations of the Labor Code, an
intention of returning to his or her work.[16] That complainants did not unused service incentive leave is commutable to its money equivalent,
pray for reinstatement is not sufficient proof of abandonment. A strong viz.:
indication of the intention of complainants to resume work is their Sec. 5. Treatment of Banefit. - The service incentive leave shall be
allegation that on several dates they reported to the Agency for commutable to its money equivalent if not used or exhausted at the
reassignment, but were not given any. In fact, the contention of end of the year.
complainant is that the Agency constructively dismissed them.
Abandonment has recently been ruled to be incompatible with WHEREFORE, the petition is DISMISSED and the assailed Decision
constructive dismissal. We, thus, rule that complainants did not and Resolution are hereby AFFIRMED, but the award of the thirteenth-
abandon their jobs. month pay is DELETED. Costs against petitioners.

Further explanation on illegal dismissal: Westin Philippine Plaza Hotel v. NLRC

In several cases, the Court has recognized the prerogative of
management to transfer an employee from one office to another within
the same business establishment, as the exigency of the business may Petitioner seeks to annul the Decision of the Third Division of the
require, provided that the said transfer does not result in a demotion in National Labor Relations Commission dated March 29, 1995 in NLRC
rank or a diminution in salary, benefits and other privileges of the NCR Case No. 00-07-04820-93, and its Resolution dated June 22,
employee; or is not unreasonable, inconvenient or prejudicial to the 1995 denying petitioners motion for reconsideration.
latter; or is not used as a subterfuge by the employer to rid himself of
an undesirable worker. Facts: Private respondent was continuously employed by petitioner in
A transfer means a movement (1) from one position to another of various capacities from July 1, 1977 until his dismissal on February 16,
equivalent rank, level or salary, without a break in the service; and (2) 1993. Initially hired as pest controller, he was later posted as room
from one office to another within the same business establishment. attendant. Next he served as bellman, until he was finally assigned as
In this case, transfer of the complainants implied more than a relief doorman in November, 1981, and stayed in that position until his
from duty to give them time to rest a mere changing of the guards. employment was terminated by petitioner.
Rather, their transfer connoted a reshuffling or exchange of their posts,
or their reassignment to other posts, such that no security guard would On December 28, 1992, private respondent received a memorandum
be without an assignment. from the management transferring him from doorman to linen room
However, this legally recognized concept of transfer was not
attendant in the Housekeeping Department effective December 29,
implemented. The agency hired new security guards to replace the
1992. The position of doorman is categorized as guest-contact position
complainants, resulting in a lack of posts to which the complainants
could have been reassigned. Thus, it refused to reassign Complainant while linen room attendant is a non-guest contact position. The transfer
Andoy when he reported for duty on February 2, 4 and 7, 1994; and was allegedly taken because of the negative feedback on the manner
merely told the other complainants on various dates from January 25 to of providing service to hotel guests by private respondent. This
27, 1994 that they were already too old to be posted anywhere. assessment was primarily based on the report of professional
shoppers engaged by petitioner to evaluate and review the various
On the six-month floating status of security guards: The Agency now services of the hotel and its personnel. Earlier, private respondent had
explains that since, under the law, the Agency is given a period of not figured in altercations with drivers of taxicabs servicing petitioner’s
more than six months to retain the complainants on floating status, the guests.
complaint for illegal dismissal is premature. This contention is incorrect.
A floating status requires the dire exigency of the employers bona fide Instead of accepting his new assignment, private respondent went on
suspension of operation, business or undertaking. In security services, vacation leave from December 29, 1992, to January 16, 1993. In the
this happens when the clients that do not renew their contracts with a meantime, the President of the National Union of Workers in Hotels,
security agency are more than those that do and the new ones that the Restaurants and Allied Industries (NUWHRAIN) appealed to
agency gets. However, in the case at bar, the Agency was awarded a management concerning private respondent’s transfer. In her
new contract by the Client. There was no surplus of security guards response, Ms. Merceditas Santos, petitioners director for human
over available assignments. If there were, it was because the Agency resources development, clarified that private respondents transfer is
hired new security guards. Thus, there was no suspension of
merely a lateral movement. She explained that management believed
operation, business or undertaking, bona fide or not, that would have
that private respondent was no longer suited to be in a guest-contact
justified placing the complainants off-detail and making them wait for a
period of six months. If indeed they were merely transferred, there position, but there was no demotion in rank or pay.
would have been no need to make them wait for six months.
When private respondent reported back to work, he still did not assume
The only logical conclusion from the foregoing discussion is that the
Agency illegally dismissed the complainants. Hence, as a necessary his post at the linen room. Notwithstanding several reminders from the
consequence, the complainants are entitled to reinstatement and back
personnel department and even his union, private respondent refused or benefit to the company. An employee’s right to security of tenure
to report to his new work station. does not give him such a vested right in his position as would deprive
the company of its prerogative to change his assignment or transfer
Thus, on February 11, 1993, private respondent was served with a him where he will be most useful.
memorandum asking him to explain in writing why no disciplinary
action should be taken against him for insubordination. The Finally it must be stressed that to sanction the disregard or
memorandum noted that while private respondent regularly came to disobedience by employees of a reasonable rule or order laid down by
the hotel every day, he just stayed at the union office. Private management would be disastrous to the discipline and order within the
respondent was again reminded to report to his new job otherwise he enterprise. It is in the interest of both the employer and the employee
would be clearly defying a lawful order. In his reply private respondent, to preserve and maintain order and discipline in the work environment.
however, merely questioned the validity of his transfer without giving Deliberate disregard of company rules or defiance of management
the required explanation. prerogative cannot be countenanced. This is not to say that the
employees have no remedy against rules or orders they regard as
On February 16, 1993, petitioner terminated private respondent’s unjust or illegal. They can object thereto, ask to negotiate thereon,
employment on the ground of insubordination. Feeling aggrieved, bring proceedings for redress against the employer. But until and
private respondent filed with the Department of Labor and Employment unless the rules or orders are declared to be illegal or improper by
which later indorsed to the NLRC for appropriate action a complaint for competent authority, the employees ignore or disobey them at their
illegal dismissal against petitioner. peril. In the case at bar, private respondent was repeatedly reminded
not only by management but also by his union to report to his work
Labor Arbiter’s decision: June 16, 1994: dismissal was legal. station but to no avail. His continued refusal to follow a legal order
brought on the fit consequence of dismissal from his position for which
Appeal: NLRC reversed LA’s decision declaring that the transfer was in
management could not be justly faulted.
fact the nature of a disciplinary action noting that there was not just
cause for the dismissal. NLRC ordered the payment of backwages WHEREFORE, the petition is hereby GRANTED. The assailed
from February 16, 1993 until the date of the decision, payment of decision of the National Labor Relations Commission is hereby SET
separation pay equivalent to one (1) month pay for every year of ASIDE. The decision of the Labor Arbiter dated June 16, 1994, is
service, in lieu of reinstatement. REINSTATED. No pronouncement as to costs.
Issue: Did the NRLC gravely abuse its discretion in ruling that there ARTEMIO LABOR, PEDRO BONITA, JR., DELFIN MEDILLO,
was no just and valid cause for dismissing private respondent. And the ALLAN ROMMEL GABUT, and IRENEO VISABELLA, petitioners,
pivotal query is whether private respondent was guilty of vs. NATIONAL LABOR RELATIONS COMMISSION, GOLD CITY
insubordination or not? COMMERCIAL COMPLEX, INC., and RUDY UY, respondents.
Petitioner contends that private respondents continued refusal to report FACTS:
to his new work assignment constituted gross insubordination. It avers Labor et al. were employees of Gold City at its Eye Ball
that the transfer of private respondent was a valid exercise of its Disco located at Tagum, Davao. In August 19, 1991, they filed a
management prerogative. complaint in DOLE in Davao City, charging Gold City with violations of
labor standards laws, specifically for underpayment of the minimum
wage non-payment of 13th month pay for 1991, premiums for holidays
Under Article 282 (a) of the Labor Code, as amended, an employer and rest days, holiday pay service incentive leave pay, night shift
may terminate an employment for serious misconduct or willful differential and allowance. They also filed with the NLRC in Davao City
disobedience by the employee of the lawful orders of his employer or a complaint against Gold City and its President, Rudy Uy, for illegal
representative in connection with his work. But disobedience to be a dismissal and for the same violations of labor standards laws.
just cause for dismissal envisages the concurrence of at least two (2) Days after filing the complaint, the petitioners alleged that
requisites: (a) the employees assailed conduct must have been willful Gold City prevented them from entering their work place; that their time
or intentional, the willfulness being characterized by a wrongful and cards were taken off the time card rack; and that they were advised to
perverse attitude; and, (b) the order violated must have been resign. They assailed the notice of termination given to them by Gold
reasonable, lawful, made known to the employee and must pertain to City dated September 6, 1991, and denied having abandoned their
the duties which he has been engaged to discharge. work for, as a matter of fact, Labor was on an approved leave August
19-22, 1991 but was not allowed to return to work after that date. They
In the present case, the willfulness of private respondent’s accused Gold City of unfair labor practice for illegally dismissing them
insubordination was shown by his continued refusal to report to his in retaliation for their having filed a complaint for labor standards
new work assignment. Thus, upon receipt of the order of transfer, violations against it. They also denied having signed any quitclaim or
private respondent simply took an extended vacation leave. Then, compromise settlement.
when he reported back to work, he did not discharge his duties as linen Gold City asserted that the petitioners were not illegally
room attendant despite repeated reminders from the personnel office terminated but had abandoned their work by not reporting to their place
as well as his union. Worse, while he came to the hotel every day, he of employment. It further alleged that as early as June 1991, the
just went to the union office instead of working at the linen room. More petitioners were under investigation for the dishonest acts for which
than that, when he was asked to explain why no disciplinary action they were charged with estafa and/or theft in the Office of the
should be taken against him, private respondent merely questioned the Provincial Prosecutor, and to preempt any action to be taken therein,
transfer order without submitting the required explanation. Based on the petitioners filed the "baseless and unfounded complaint" with the
the foregoing facts, private respondent’s intransigence was very DOLE for the labor standards violation and furthermore, abandoned
evident. their work to make it appear that they were illegally dismissed. It also
alleged that on September 6, 1991, each of the petitioners was sent a
On legality of transfer: The Court recognized and upheld the notice of possible termination due to abandonment or for absence
prerogative of management to transfer an employee from one office to without official leave or notice for six consecutive days, with a warning
another within the business establishment, provided that there is no that if no explanation is given within seven days from receipt thereof,
demotion in rank or a diminution of his salary, benefits and other they will be terminated, but the petitioners failed to reply to the notice
privileges. This is a privilege inherent in the employers right to control and did not report for work. It then concluded that the abandonment
and manage its enterprise effectively. Besides, it is the employers justified their dismissal.
prerogative, based on its assessment and perception of its employees On 27 March 1992, the Labor Arbiter rendered his decisions
qualifications, aptitudes and competence, to move him around in the in favor of the petitioners declaring the dismissal illegal.
various areas of its business operations in order to ascertain where the Gold City appealed the Labor Arbiter's decision to the NLRC.
employee will function with utmost efficiency and maximum productivity On September 24, 1992, the NLRC promulgated the challenged
decision reversing that of the Labor Arbiter's and dismissing the Midas Touch Food Corp. vs NLRC and Iris Fe
petitioners' complaint. It also ruled that there was abandonment by the Isaac (1996)
petitioners and that Gold City, in terminating them, complied with the
procedural requirements since it gave notice and granted them an
opportunity to explain their absences, which they did not avail of. In
ruling that the petitioners were not illegally dismissed, the NLRC found Facts:
that just cause existed, viz., their dishonest acts which do not require
proof beyond reasonable doubt.
ISSUE: Respondent Iris Fe Isaac was dismissed as operations
Whether there was abandonment by the petitioners. manager by petitioner for alleged lack of self
HELD: confidence. Respondent filed a complaint for illegal
There was none. dismissal before the Labor Arbiter which rendered a
To constitute abandonment, two elements must concur: (1)
decision in favor of petitioner finding the said dismissal
the failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee
to be valid. However, petitioner was ordered to pay the
relationship, with the second element as the more determinative factor complainants there separation pay, etc. Both parties
and being manifested by some overt acts. Mere absence is not appealed to the NLRC and the decision of the Labor
sufficient. It is the employer who has the burden of proof to show a Arbiter was reversed, this time ruling in favor of Isaac.
deliberate and unjustified refusal of the employee to resume his Hence, petitioner elevated the case to the SC assailing
employment without any intention of returning. Gold City failed to the decision of the NLRC.
discharge this burden. It did not adduce any proof of some overt act of
the petitioners that clearly and unequivocally show their intention to
abandon their posts. On the contrary, the petitioners lost no time in Issue: Whether the petitioner may avail the special
filing the case for illegal dismissal against them, taking only four days civil action for certiorari?
from the time most of them were prevented from entering their work
place on August 22, 1991 to the filing of the complaint on August 26,
1991. They cannot, by any reasoning, be said to have abandoned their
work, for as we have also previously ruled, the filing by an employee of Held: YES
a complaint for illegal dismissal is proof enough of his desire to return
to work, thus negating the employer's charge of abandonment. The rule requiring motion for reconsideration before
Furthermore, petitioners Labor and Bonita presented proof that during
filing a petition for certiorari “admits of certain
some of those days that they were supposedly on AWOL (absence
without official leave), they were actually on official leave as approved exceptions, among which is the finding that under the
by no less than Rudy Uy himself. Neither Gold City nor Rudy Uy had circumstances of the case, a motion for reconsideration
disputed this. would be useless.”
It may further be observed that the timing of Gold City's
alleged refusal to allow the petitioners to enter their work place is
highly suspicious. It happened only two days after the petitioners filed
their complaint for labor standards violations with the DOLE. Mere In this case, the Supreme Court found it quite
coincidence? We think not. What it is, though, is evidence that lends impossible for the NLRC to reverse itself under the
credence to the allegation of the petitioners that they did not abandon
foregoing facts and so, a motion for reconsideration
their employment as Gold City asserts but were prevented from going
to work. Thus, we cannot agree with the NLRC when it said that the will be deemed useless.
petitioners "had to jump the gun against the respondents in order to
save their faces from their own wrong doings, dishonest acts" by filing
the case for illegal dismissal against the respondents.

ADDITIONAL; On Dishonesty
On 2 September 1991, one Atty. Rolando Casaway
requested that a criminal action against the petitioners for theft and/or
estafa be instituted. In support thereof, he attached to his letter the
affidavits employees where they attested to alleged acts committed by
the petitioners during the period from June to August 1991 which
deprived Eye Ball Disco of certain amounts of money. According to the
affiants, the petitioners would get the claim stubs from customers of
Eye Ball Disco that entitle them to one free drink each, but the
petitioners did not surrender these stubs to the cashier and instead
made the customers pay for the drinks; then, later, when other
customers ordered drinks, the petitioners would surrender these stubs
to the cashier as "payment" for the drinks of these other customers and
pocket their payment. (It was dismissed; late filed)