IV. Post Employment were attendant upon her resignation from BMG.
were attendant upon her resignation from BMG. As her consent was allegedly vitiated, the act of resigning
A. Termination of Employment by the Employee
1. Resignation
a) When Notice Not Required
(1) Article 285(b) of the Labor Code of the Philippines
b) When Notice Required
(1) Article 285(a) of the Labor Code of the Philippines
c) Cases:
(1) BMG Records vs. Aida Aparecio, G.R. 153920, 5 September 2007.
G.R. No. 153290 September 5, 2007
BMG RECORDS (PHILS.), INC. and JOSE YAP, JR., petitioners, vs. AIDA C. APARECIO and NATIONAL LABOR
RELATIONS COMMISSION, respondents.
AZCUNA, J.:
SUMMARY: BMG Records is engaged in the business of selling various audio records nationwide. In 1990, it
hired Aparecio as one of the promo girls in its Cebu branch. For working from Monday to Sunday, she received
a salary of P181 per day. On May 25, 1998, Aparecio filed a complaint against BMG and its Branch Manager,
Jose Yap, Jr., for illegal dismissal and non-payment of overtime pay, holiday pay, premium pay for rest day, 13th
month pay, service incentive leave, and separation pay.
Aparecio’s side: she was illegally dismissed from employment on April 30, 1998; that before said date, however,
she was asked by respondent to resign and will be paid all her benefits due– and to execute a letter of
resignation;
- she was lured, induced and compelled to submit a letter of resignation believing on respondent's promise and
assurance to pay all the benefits due her;
- That after executing said resignation letter, the respondent did not make good its promise and instead did an
accounting by themselves in her absence and arrived on a computation that her liability per their accounting
reached the amount of P8,000; that since they offered to pay a separation pay of only P12,000, minus her alleged
accountability of P8,000, they are ready to pay the balance thereof any time;
BMG’s side: Aparecio was initially performing well as an employee but as years passed she seemed to be
complacent in the performance of her job and was comparing the salaries of promo girls in other companies. It
appeared that she was no longer interested in her job.
- In April 1998, Aparecio and two other promo girls, Soco andMutya, intimated to their supervisor that they
were intending to resign and were requesting for some financial assistance.
- The 3 tendered their resignations, which were accepted. When they processed the required individual
clearance, it was found out that they had incurred some shortages after inventory. Per agreement, said
shortages were deducted from the amounts due them. Aparecio obtained the benefits yet refused to sign the
release and quitclaim, protesting the amount of P9,170.12 deducted from the financial assistance. She was
adamant but BMG stood by the previous agreement.
LA: dismissed Aparecio's complaint. NLRC: found that Aparecio was illegally dismissed from service. CA:
affirmed in toto the NLRC.
ISSUE: W/N Aparecio resigned and was not in fact illegally dismissed (YES).
This Court finds and so holds that the submissions of Aparecio in all her pleadings failed to substantiate the
allegation that her consent was vitiated at the time she tendered her resignation and that petitioners are guilty
of illegal dismissal. In a nutshell, Aparecio submits that fraud, undue influence, intimidation, and/or mistake
became involuntary; hence, petitioners are guilty of illegal dismissal.
This Court finds nothing to support Aparecio's allegation that fraud was employed on her to resign. Aparecio
alleged that her resignation was wrongfully obtained when petitioners did not keep the promise of giving her
employment benefits and financial assistance without any deductions. Without a showing of the nature and
extent of such "inducement," however, such submission fails to establish that there was in fact a deception on
the part of petitioners. Even if it is considered that there was an assurance given by petitioners and that they
later reneged on their promise, this Court still finds no injustice made since Aparecio, who only questioned the
manner by which the inventory was conducted – that it was held without her presence – but did not categorically
deny her accountabilities with BMG, would unjustly be enriched without the deduction. Likewise, Aparecio did
not adduce any competent evidence to prove that force or threat was applied by petitioners.
What is clear is that there is no concrete evidence, direct or circumstantial, showing that undue influence was
used by petitioners in such a way that it took improper advantage of its power over the will of Aparecio and
deprived the latter of a reasonable freedom of choice.
Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons
cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate
oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with
the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be
considered in determining whether in fact, he or she intended to sever from his or her employment.
The circumstances surrounding Aparecio's resignation should be given due weight in determining whether she
had intended to resign. In this case, such intent is very evident:
a. Aparecio already communicated to other people that she was about to resign to look for
a better paying job since she had been complaining that employees like her in other companies were
earning much more;
b. prior to the submission of her resignation letter, Aparecio and two other promo girls
approached their supervisor, intimated their desire to resign, and requested that they be given
financial assistance, which petitioners granted on the condition that deductions would be made in
case of shortage after inventory;
c. Aparecio, Soco, and Mutya submitted their duly signed resignation letters, which were
accepted by petitioners; and
d. Aparecio already initiated the processing of her clearance; thus, she was able to receive
her last salary, 13th month pay, and tax refund but refused to receive the financial assistance less the
deductions made.
The acceptance by petitioners of Aparecio's resignation rendered the same effective. Upon such acceptance, it
may not be unilaterally withdrawn without the consent of petitioners. When the employee later signified the
intention of continuing his or her work, it was already up to the employer to accept the withdrawal of his or
her resignation. The mere fact that the withdrawal was not accepted does not constitute illegal dismissal, the
acceptance of the withdrawal of the resignation being the employer's sole prerogative.
FACTS: BMG Records is engaged in the business of selling various audio records nationwide. On September 2,
1990, it hired Aida C. Aparecio as one of the promo girls in its Cebu branch. For working from Monday to Sunday,
she received a salary of P181 per day.
On May 25, 1998, Aparecio filed a complaint against BMG and its Branch Manager, Jose Yap, Jr., for illegal
dismissal and non-payment of overtime pay, holiday pay, premium pay for rest day, 13th month pay, service
incentive leave, and separation pay.
Aparecio’s side:
- she was illegally dismissed from employment on April 30, 1998; that before said date, however, she was
asked by respondent to resign and will be paid all her benefits due– and to execute a letter of resignation;
- That in view of respondent's insistence to prepare and execute a letter-resignation, even without proper
accounting of any accountability, she was lured, induced and compelled to submit a letter of resignation
believing on respondent's promise and assurance to pay all the benefits due her;
- That after executing said resignation letter, the respondent did not make good its promise and instead did
an accounting by themselves in her absence and arrived on a computation that her liability per their
accounting reached the amount of P8,000; that since they offered to pay a separation pay of only P12,000,
minus her alleged accountability of P8,000, they are ready to pay the balance thereof any time;
- That she was under respondent's employ for 7 years, 7 months and 28 days when illegally terminated from her
employment.
BMG’s side:
- Aparecio was initially performing well as an employee but as years passed she seemed to be complacent in
the performance of her job and was comparing the salaries of promo girls in other companies. It appeared that
she was no longer interested in her job.
- In April 1998, Aparecio and two other promo girls, Jovelina V. Soco and Veronica P. Mutya, intimated to their
supervisor that they were intending to resign and were requesting for some financial assistance. BMG made
it clear that, as a company policy, an employee who resigns from service is not entitled to financial assistance,
but considering the length of their service and due to humanitarian consideration it would accede to the request
after they secure their respective clearances.
- The 3 tendered their resignations, which were accepted. When they processed the required individual
clearance, it was found out that they had incurred some shortages after inventory. Per agreement, said
shortages were deducted from the amounts due them. Thus, Soco and Mutya received their last salary, a
proportion of the 13th month pay, tax refund and financial assistance less the deductions, and they executed
their releases and quitclaims. Except for the financial assistance, Aparecio also obtained the same yet refused
to sign the release and quitclaim, protesting the amount of P9,170.12 deducted from the financial assistance.
She was adamant but BMG stood by the previous agreement.
LA: dismissed Aparecio's complaint. Since the letter of resignation showed no signs that it was made through
duress or compulsion, it was concluded that the severance of her employment in BMG was brought about by
her resignation and not by the illegal dismissal supposedly committed by the latter. Nonetheless, realizing
petitioners' promise to pay financial assistance to Aparecio, the labor arbiter ordered the payment of
P18,824.00 (fixed at half month pay for every year of service, with a fraction of at least 6 months being
considered as one year) instead of P9,170.12 which was not amply substantiated.
NLRC: found that Aparecio was illegally dismissed from service. The NLRC admitted its dilemma in determining
whether Aparecio offered to resign on the condition that she would be paid with termination benefits or
whether the resignation was triggered by BMG which offered the monetary consideration. It concluded that:
x x x It must be stressed that resignation is inconsistent with the filing of the complaint. Moreover,
even in the absence of physical force, duress or compulsion applied upon complainant when she
executed the alleged resignation letter, factual circumstances tend to show the strong and irresistible
economic pressure originating from respondent if only to push the complainant into accepting the
offer. It is safe therefore to presume that an employee or laborer who waives in advance any benefit
granted him by law does so, certainly not in his interest or through generosity, but under the forceful
intimidation or urgent need, and hence, he could not have done so acted freely and voluntarily." xxx
CA: affirmed in toto the NLRC. It held:x x x Based on the evidence submitted, the petitioners failed to support
their claim that Aparecio's resignation was made out of her own volition. Granting arguendo that Aparecio
executed a resignation letter, it appears that she did it in consideration of the separation pay and other benefits
promised by the petitioner.x x x
This Court initially resolved to deny the petition for:
(a.) failure of the petitioners to sufficiently show that the CA committed any reversible error in the challenged
decision and resolution as to warrant the exercise by this Court of its discretionary appellate jurisdiction in this
case; and
(b.) failure of the petition to show extraordinary circumstance justifying a departure from the established
doctrine that findings of facts of the CA are well-nigh conclusive on this Court and will not be reviewed or
disturbed on appeal.
This Court resolved to reinstate the petition and require the parties to submit their respective memoranda.
ISSUE: W/N Aparecio resigned and was not in fact illegally dismissed (YES).
HELD: the petition is GRANTED and the Decision and Resolution of the CA affirming the of the NLRC are hereby
REVERSED AND SET ASIDE. The Decision of the LA finding that Aparecio was not illegally dismissed is hereby
REINSTATED AND AFFIRMED.
THIS CASE IS AN EXCEPTION TO THE GENERAL RULE THAT THE SC IS NOT A TRIER OF FACTS
In exceptional cases, we may be constrained to delve into and resolve factual issues when there is insufficient
or insubstantial evidence to support the findings of the tribunal or court below, or when too much is concluded,
inferred or deduced from the bare or incomplete facts submitted by the parties. This Court finds the need to
review the records to determine the facts with certainty not only because the NLRC and the LA have come up
with conflicting positions but also because the findings of the NLRC, as supported by the CA on substantial
matters, appear to be contrary to the evidence at hand.
APARECIO’S CONSENT WAS NOT VITIATED; BMG NOT GUILTY OF ILLEGAL DISMISSAL
Reading through the records would ineluctably reveal that the evidence upon which both the NLRC and the CA
based their conclusion rests on rather shaky foundation. After careful analysis, this Court finds and so holds that
the submissions of Aparecio in all her pleadings failed to substantiate the allegation that her consent was
vitiated at the time she tendered her resignation and that petitioners are guilty of illegal dismissal.
In her memorandum of appeal before the NLRC, Aparecio asserted in main:
xxx The arbiter should have seriously considered the temper of the time in relation to our deteriorating economy
on the issue of whether or not the resignation letter was voluntary. But he did not. To the arbiter, resignation
letter can only be set aside if it is shown that it was made through duress or compulsion. What about FRAUD?
The complainant did not offer to resign. She was offered by respondents that all labor standard benefits
including but not limited to payment of overtime, salary differentials and separation pay should be given if she
would resign. This she was made to believe by the respondents. And complainant really believed them.
Unfortunately, however, complainant found herself jobless and penniless. Her resignation was obtained
through fraud xxx It is clear that complainant submitted her resignation letter not because she has some
accountabilities but because of respondents' offer which was hard to resist xxx
On the other hand, her Comment before the CA stated further:
x x x At any rate, respondents wish to point out that the finding of the NLRC that private respondent employee
did not voluntarily resign but was illegally dismissed is well-supported by evidence. The following considerations
clearly show this, to wit:
One. It is admitted by both petitioners and the respondents that the supposed resignation of private respondent
was conditional in nature. It was premised on employers ’performance of certain prestations or petitioners'
compliance with certain conditions.
Two. The supposed decision of private respondent to tender a resignation is vitiated by vices of consent. The
resignation letter was wrongfully obtained from private respondent on petitioners' inducement and promise to
pay employment benefits and financial assistance without any deductions. However, it is now clear that right
from the start, petitioners did not intend to comply with their promise. After private respondent handed in a
resignation letter, petitioners raised all obstacles to prevent private respondent from actually receiving the
promised employment benefits and financial assistance. Accordingly, it can be easily said that fraud vitiated
private respondent's consent.
Three. The resignation letter was also obtained from private respondent through undue pressure and influence
which again vitiates the same. The respondent NLRC made this finding: "Moreover, even in the absence of
physical force, duress or compulsion applied upon complainant when she executed the alleged resignation
letter, factual circumstances tend to show the strong and irresistible economic pressure originating from
respondent if only to push the complainant into accepting the offer."
Four. At the very least, it could be easily said that the decision to resign is vitiated by mistake. It is unrebutted
that private respondent handed in a resignation letter on the firm belief that petitioners would pay her the
promised employment benefits and financial assistance without deductions. Resignation is also a form of
contract. Like any other contracts, it can be vitiated by mistake and other vices of consent x x x
Five. Finally, it could also be said that the resignation letter was ineffective because there was no meeting of
the minds on the matter of resignation. As pointed out earlier, it is an admitted fact that the supposed
resignation was conditional in character in the sense that it was premised on certain conditions. Accordingly,
the resignation letter could only be considered as a mere offer. Since the petitioners obviously did not accept
the conditions attendant to the offer to resign, there is no resignation to speak of. x x x
In a nutshell, Aparecio submits that fraud, undue influence, intimidation, and/or mistake were attendant upon
her resignation from BMG. As her consent was allegedly vitiated, the act of resigning became involuntary; hence,
petitioners are guilty of illegal dismissal.
The argument is not tenable.
Based on the pleadings, this Court finds nothing to support Aparecio's allegation that fraud was employed on
her to resign. Fraud exists only when, through insidious words or machinations, the other party is induced to
act and without which, the latter would not have agreed to. This Court has held that the circumstances
evidencing fraud and misrepresentation are as varied as the people who perpetrate it, each assuming different
forms and may be committed in as many different ways. Fraud and misrepresentation are, therefore, never
presumed; it must be proved by clear and convincing evidence and not mere preponderance of evidence. This
Court does not sustain findings of fraud upon circumstances which create only suspicion; otherwise, it would be
indulging in speculations and surmises.
Aparecio alleged that her resignation was wrongfully obtained when petitioners did not keep the promise of
giving her employment benefits and financial assistance without any deductions. Without a showing of the
nature and extent of such "inducement," however, such submission fails to establish that there was in fact a
deception on the part of petitioners. Even if it is considered that there was an assurance given by petitioners
and that they later reneged on their promise, this Court still finds no injustice made since Aparecio, who only
questioned the manner by which the inventory was conducted – that it was held without her presence – but did
not categorically deny her accountabilities with BMG, would unjustly be enriched without the deduction.
Likewise, Aparecio did not adduce any competent evidence to prove that force or threat was applied by
petitioners. For intimidation to vitiate consent, the following requisites must be present:
(1) that the intimidation caused the consent to be given;
(2) that the threatened act be unjust or unlawful;
(3) that the threat be real or serious, there being evident disproportion between the evil and the resistance
which all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser
evil; and
(4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary
means or ability to inflict the threatened injury to his person or property.
In the instant case, not one of these essential elements was amply proven by Aparecio.
Petitioners correctly point out that the NLRC finding of a "strong and irresistible economic pressure originating
from petitioners if only to push [Aparecio] into accepting the offer" is not supported by any evidence in the
records but is merely based on conjectures and guesswork. What is clear is that there is no concrete evidence,
direct or circumstantial, showing that undue influence was used by petitioners in such a way that it took
improper advantage of its power over the will of Aparecio and deprived the latter of a reasonable freedom of
choice. Granting for the sake of argument that BMG was in a "more advantageous position”, it would
nonetheless be unfair to presume that it utilized the same against Aparecio. The allegation of exploitation is a
very serious matter and should not be taken lightly. Proof is absolutely essential.
Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons
cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate
oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with
the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be
considered in determining whether in fact, he or she intended to sever from his or her employment.
The circumstances surrounding Aparecio's resignation should be given due weight in determining whether she
had intended to resign. In this case, such intent is very evident:
e. Aparecio already communicated to other people that she was about to resign to look for
a better paying job since she had been complaining that employees like her in other companies were
earning much more;
f. prior to the submission of her resignation letter, Aparecio and two other promo girls
approached their supervisor, intimated their desire to resign, and requested that they be given
financial assistance, which petitioners granted on the condition that deductions would be made in
case of shortage after inventory;
g. Aparecio, Soco, and Mutya submitted their duly signed resignation letters, which were
accepted by petitioners; and
h. Aparecio already initiated the processing of her clearance; thus, she was able to receive
her last salary, 13th month pay, and tax refund but refused to receive the financial assistance less the
deductions made.
The foregoing facts were affirmatively narrated and attested to in the notarized affidavit of Soco and Cinco and
have remained incontrovertible as they were never denied by Aparecio.
The acceptance by petitioners of Aparecio's resignation rendered the same effective. Upon such acceptance, it
may not be unilaterally withdrawn without the consent of petitioners. When the employee later signified the
intention of continuing his or her work, it was already up to the employer to accept the withdrawal of his or
her resignation. The mere fact that the withdrawal was not accepted does not constitute illegal dismissal, the
acceptance of the withdrawal of the resignation being the employer's sole prerogative.
Certainly, what transpired here was caused by an employee's error of judgment and not by the employer's
application of means vitiating the consent to resign. It would be utterly unfair to attribute to petitioners the
commission of illegal dismissal and to impose upon them the burden of accepting back Aparecio who
unequivocally manifested her intent and willingness to sever her employment ties.
 (2) Noel Mora vs. Avesco Marketing Corporation, G.R. 177414, 14 November 2008.
G.R. No. 177414 November 14, 2008
NOEL E. MORA, petitioner, vs. VESCO MARKETING CORPORATION, respondent.
Summary:
Petitioner Mora as hired as a "sales engineer" at Avesco.
On March 25, 2003, he tendered his letter of resignation to be effective a month after or on April 25, 2003. The
filing of a resignation letter came about after he was confronted for "selling competitors' products" to the
prejudice and detriment of respondent and was given the option of either immediately resigning or face
administrative charges.
However, petitioner changed his mind and withdrew his letter of resignation on the same day, after respondent
denied his request to have his resignation;
The next day (March 26), there was notice of disciplinary action-"show cause" letter by respondent Avesco,
indefinitely suspending petitioner. The letter provides that there was a report that petitioner again have
committed another breach of trust against our Company where petitioner undertaken sale transaction inimical
to the interest of the Company.
Petitioner responded the next day, and denied being "culpable" and sought to know what were those "particular
transactions"-bases of breach of trust. He had not had the courtesy of any reply from respondents, however.
His preventive suspension effective March 26, 2003 lapsed into termination six days later or on April 1, 2003,
which he was to learn from third parties.
Petitioner filed a complaint for illegal dismissal; VA dismissed on the ground that petitioner had voluntarily
resigned; CA affirmed;
The SC held that Petitioner did not Voluntarily resigned, and is thus illegally dismissed.
Voluntary resignations being unconditional in nature, both the intent and the overt act of relinquishment should
concur.
If the employer introduces evidence purportedly executed by an employee as proof of voluntary resignation yet
the employee specifically denies such evidence, the employer is burdened to prove the due execution and
genuineness of such evidence.
Respondent in this case failed to discharge such burden. The notice of disciplinary action-"show cause" letter
indefinitely suspending petitioner, even after petitioner had submitted on March 25, 2003 his letter of
resignation, albeit alleged to have withdrawn on even date, negates respondent's assertion of voluntary
separation. If respondent considered petitioner resigned on account of his March 25, 2003 letter, to be effective
on April 25, 2003, there would have been no more need to preventively suspend him effective March 26, 2003
"until further notice pending investigation" of his alleged transgressions.
Moreover, for a resignation tendered by an employee to take effect, it should first be accepted or approved by
the employer.
Petitioner's "resignation" being premised on a qualification ─ that it be effective April 25, 2003 ─ was conditional
in character. It is thus only considered as a mere offer. Since respondent did not accept the condition attendant
to the offer as, it bears repeating, he was in fact given a "show cause" letter a day after, there was no resignation
to speak of.
FACTS:
In March 1996, petitioner was hired as a "sales engineer" at Avesco Marketing Corporation (respondent) to
supervise and install sound and communications systems for its clientele. On March 25, 2003, he tendered his
letter of resignation to be effective a month after or on April 25, 2003.
(The letter reads: Dear Sir: It is with much reluctance and regret that I must ask to be released from my position
of Sales Engineer at Avesco Marketing. For the past seven years, I cannot forget how much this company has
meant to me. With this regard, I'm tendering my resignation effective on April 25, 2003. Please extend to Mr.
Jimmy Tang my appreciation of his kindness during the time I served.)
It appears that petitioner's filing of a resignation letter came about after he was confronted for "selling
competitors' products" to the prejudice and detriment of respondent and was given the option of either
immediately resigning or face administrative charges.
It further appears that petitioner changed his mind and withdrew his letter of resignation on the same day,
March 25, 2003, after respondent denied his request to have his resignation made effective a month after or
on April 25, 2003. Petitioner was later to claim that he inadvertently left a copy of the letter at respondent's
office.
The following day or on March 26, 2003, respondent's personnel manager issued to petitioner a notice of
disciplinary action reading:
A report by your Superiors has reached our office just recently some days ago [sic] that you again
have committed another breach of trust [sic] against our Company in violation of our [sic] Company Rules and
Regulations. This time instead of attending to the products you have to sell, you have surreptitiously
undertaken sales transaction [sic], which is patently inimical to the interest of the Company that results to sales
loss for the company. x x x x.
As you know very well, earlier[,] you have been disciplined for breach of trust against the Company .
. . where you served a penalty of six days suspension . . . with a stern warning that commission of similar offense
will eventually lead to your dismissal from the service of the company. The report that reached us now is a
repetition of similar breach of trust reported upon you as Jr. Sales Engineer and for this, Management is
constrained to dismiss you from the service for loss of trust and confident [sic] in gross violation of our
Company Rules & Regulations on Dishonesty and Fraud.
On account of the foregoing, you are hereby directed to submit to the undersigned not later than 48
hours upon receipt of this memo why dismissal penalty should not be effected against you for the cited
violation. Should you fail to comply with our requirement, the company may have no other recourse except to
initiate dismissal proceedings. Meantime, you are placed under preventive suspension effective today, March
26, 2003 until further notice pending investigation of your case. (Emphasis and underscoring supplied)
In his March 27, 2003 Response to the above-quoted notice, petitioner gave his side as follows, quoted
verbatim:
In response to your memo with reference no. PD-C003-095 dated March 26, 2003 regarding to [sic]
the preventive suspension you serve to me [sic], I am not culpable.
The report of my superior that I am surreptitiously selling other products instead of our products is
just speculation and his mere tactics [sic] for our unfavorable sales output for the month. I sell products only
from Avesco and never transact/deal other products. I know the consequences of that move and never cross to
my mind doing that kind of accusation [sic].
I have been accused for a thing [sic] that I did not know what particular transactions [sic], I was not
being talked by my superior [sic] about this or even asked me [sic], this is just a one[-]sided accusation and I am
willing to know what it is all about. Your office did not explain to me what this accusation is all about[,] instead
offering me an immediate resignation and your notice is a step for my termination [sic].
x x x x (Emphasis and underscoring supplied)
Petitioner had not heard from respondent thereafter. He was later to learn from third party sources that his
employment had been terminated as of April 1, 2003.
Petitioner thereupon filed a complaint for illegal dismissal before the NLRC
LA: dismissed for lack of jurisdiction since the dispute falls within the province of the grievance procedure
provided for by the CBA between respondent and the workers' union.
The case was thus referred to the National Conciliation and Mediation Board for voluntary arbitration.
VA Barriatos: dismissed petitioner's complaint upon the ground that he had voluntarily resigned.10 Petitioner
received a copy of the decision on August 31, 2004. Forty nine days later or on October 19, 2004, he filed a
petition for certiorari before the CA;
CA: denied the same, similarly finding him to have voluntarily resigned from his job. MR denied;
Hence, this petition.
Petitioner: argues that he was only inveigled to file a resignation letter on March 25, 2003 after he was asked
by respondent's vice president to immediately resign and that respondent's subsequent show cause order cum
preventive suspension clearly proves that he did not resign.
Respondent: maintains that petitioner resigned
(procedural infirmities in the petition, foremost of which is its attribution of grave abuse of discretion on the
part of the appellate court)
ISSUE: WON petitioner voluntarily resigned? —NO
WON petitioner was illegally dismissed? —YES
HELD: CA decision reversed and set aside; Respondent is ordered to reinstate petitioner with full backwages
without loss of seniority rights and privileges from the time of his dismissal until his actual reinstatement or, if
reinstatement is no longer feasible, to give him separation pay equivalent to at least one month salary for every
year of service.
RATIO:
(SKIP this PROCEDURAL shit)
The Court notes that the appellate court erred in giving due course to petitioner's petition for
certiorari, for his proper mode of appeal was for review under Rule 43 of the 1997 Rules of Civil Procedure.
Section 1 of Rule 43 reading:
SECTION 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals*
and from awards, judgments final orders or resolutions of or authorized by any quasi-judicial agency in the
exercise of its quasi-judicial functions. Among these agencies are…xxx…voluntary arbitrators authorized by law.
vis-á-vis Section 4 thereof requires that the petition for review to be taken to the Court of Appeals should be
filed within fifteen (15) days from notice of the award, judgment or final order or resolution of the VA.
While Sec. 2 of the same Rule 43 provides that said Rule shall not apply to judgments or final orders issued under
the Labor Code, the same refers only to cases decided by labor arbiters which are appealable to the National
Labor Relations Commission.
As earlier noted, petitioner filed before the appellate court a petition for certiorari on October 19,
2004 or 49 days after receipt of the decision of the VA at which time the 15-day period to file appeal had expired.
An independent action for certiorari may of course be availed of when there is no appeal or any plain, speedy
and adequate remedy in the ordinary course of law, if the decision of the voluntary arbitrator involves a question
of jurisdiction. What petitioner is contesting, however, is the finding that he voluntarily resigned. Where the
error is not one of jurisdiction, but of law or fact which is a mistake of judgment, the proper remedy should be
appeal. The appellate court should thus have dismissed outright the petition for certiorari, as the decision of the
VA had already become final and executory.
(TOPIC HERE!!!)
1. NO VOLUNTARY RESIGNATION; THERE WAS NO RESIGNATION TO SPEAK OF;
In Mobile Protective & Detective Agency v. Ompad, the Court held that should an employer interpose the
defense of resignation, as in the present case, it is still incumbent upon the employer, respondent herein, to
prove that the employee voluntarily resigned.
Voluntary resignations being unconditional in nature, both the intent and the overt act of relinquishment
should concur. If the employer introduces evidence purportedly executed by an employee as proof of voluntary
resignation yet the employee specifically denies such evidence, as in petitioner's case, the employer is burdened
to prove the due execution and genuineness of such evidence.
Respondent in this case failed to discharge such burden. The notice of disciplinary action-"show cause" letter
indefinitely suspending petitioner, even after petitioner had submitted on March 25, 2003 his letter of
resignation, albeit alleged to have withdrawn on even date, negates respondent's assertion of voluntary
separation. If respondent considered petitioner resigned on account of his March 25, 2003 letter, to be
effective on April 25, 2003, there would have been no more need to preventively suspend him effective March
26, 2003 "until further notice pending investigation" of his alleged transgressions.
It is significant to note that in his response to the March 26, 2003 "show cause" letter of respondent, petitioner
denied being "culpable" and sought to know what were those "particular transactions"-bases of breach of trust.
He had not had the courtesy of any reply from respondents, however. His preventive suspension effective March
26, 2003 lapsed into termination six days later or on April 1, 2003, which he was to learn from third parties.
For a resignation tendered by an employee to take effect, it should first be accepted or approved by the
employer. Petitioner's receipt by respondent's personnel department of his resignation letter is not equivalent
to approval. Since petitioner requested that his resignation was to be effective a month later or on April 25,
2003, respondent's approval was a fortiori necessary.
That respondent issued the "show cause" letter a day after petitioner filed the controversial letter of resignation
could only mean that it did not accept the same.
Petitioner's "resignation" being premised on a qualification ─ that it be effective April 25, 2003 ─ was
conditional in character. It is thus only considered as a mere offer. Since respondent did not accept the
condition attendant to the offer as, it bears repeating, he was in fact given a "show cause" letter a day after,
there was no resignation to speak of.
2. Petitioner was illegally dismissed;
While selling of respondent's competitors' products is a valid ground for termination of employment, an
employer cannot just hurl generalized accusations but should at least cite specific instances and proof in support
thereof. Respondent relied on a "report by [petitioner's] superiors" in faulting petitioner. What this alleged
"report" was and what it contained, no testimonial or documentary proof thereof was proffered. And while
respondent gave the impression that it conducted or was going to conduct an investigation on the basis of the
"report," there is no showing that one such was conducted and, if there was, what the result was.
The tenor of respondent's "show cause" letter sent to petitioner ─ it was "constrained to dismiss" petitioner ─
shows that it was terminating his services, the incongruent directive for him to explain notwithstanding.
While the appellate court's ratio that "preventive suspension is a disciplinary measure for the protection of the
company's property pending investigation of any alleged malfeasance or misfeasance committed by the
employee,"28 is well-taken, it overlooked that the preventive suspension of petitioner effective on March 26,
2003 "until further notice" lapsed into dismissal six days later without petitioner substantiating the basis
therefor.
Petitioner's questioned filing of the illegal dismissal case three months and 20 days after he withdrew his letter
of resignation does not dent his case. Under the law, he has four years to file his complaint.

(ON CLAIM OF DAMAGES: DENIED)

His claim for damages and attorney's fees must be denied in light of his failure to prove the bases therefor.
Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly
caused. Broad allegations, bereft of proof, cannot sustain the award of moral damages, as well as attorney's
fees.
 2. Abandonment
a) Tan Brothers Corporation of Basilan City vs. Edna Escudero, G.R. No. 188711, 8 July 2013.
G.R. No. 188711 | July 8, 2013
TAN BROTHERS CORPORATION OF BASILAN CITY THROUGH ITS OWNER/MANAGER, MAURO F. TAN,
PETITIONERS, vs. EDNA R. ESCUDERO, RESPONDENT.
PEREZ, J.:
SUMMARY: Respondent Edna R. Escudero (Escudero) was hired as bookkeeper by petitioner Tan Brothers
Corporation. On 1 September 2004, Escudero filed against Tan Brothers a complaint for illegal dismissal,
underpayment of wages, cost of living allowance and 13th month pay. Escudero alleged that starting July 2003,
her monthly salary of ₱2,500.00 was not paid on time by Tan Brothers. After having the corporation’s office
remodeled in the early part of 2004, Tan Brothers allegedly rented out the office space Escudero used to occupy
and ceased giving her further assignments. Eventually constrained to stop reporting for work because of her
dire financial condition, Escudero claimed that Tan Brothers "shrewdly maneuvered" her illegal dismissal from
employment. On the other hand, Tan Brothers averred that Escudero abandoned her employment when she
stopped reporting for work in July 2003. Aside from taking with her most of the corporation’s payrolls, vouchers
and other material documents evidencing due payment of wages and labor standard benefits, Tan Brothers
maintained that, without its knowledge and consent, Escudero appropriated for herself an Olivetti typewriter
worth ₱15,000.00. With Escudero’s refusal to heed its demands for the return of the typewriter, Tan Brothers
asseverated that it was left with no choice but to lodge a complaint with the barangay authorities. LA: rendered
a decision, finding Tan Brothers guilty of constructively dismissing Escudero from employment. NLRC: AFFIRMED
LA’S DECISION IN TOTO. CA: DENIED Tan Brothers ’petition and affirming the NLRC’s resolution of its appeal.
Tan Brothers contended that Escudero abandoned her employment and that the same was not negated by the
filing of her complaint for illegal dismissal more than one year after she stopped reporting for work
ISSUE: W/N ESCUDERO WAS ILLEGALLY DISMISSED (or W/N ESCUDERO ABANDONED HER EMPLOYMENT)
SC: As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. It constitutes neglect of duty and is a just cause for termination of
employment under paragraph (b) of Article 282 of the Labor Code.To constitute abandonment, however, there
must be a clear and deliberate intent to discontinue one's employment without any intention of returning. In
this regard, two elements must concur: (1) failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the
more determinative factor and being manifested by some overt acts. Otherwise stated, absence must be
accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work
anymore. It has been ruled that the employer has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of returning.
On the theory that the same is proof enough of the desire to return to work, the immediate filing of a complaint
for illegal dismissal – more so when it includes a prayer for reinstatement – has been held to be totally
inconsistent with a charge of abandonment. While it is true that Escudero’s complaint prayed for separation
pay in lieu of reinstatement, Tan Brothers loses sight of the fact, however, that it had the burden of proving its
own allegation that Escudero had abandoned her employment in July 2003. As allegation is not evidence, the
rule has always been to the effect that a party alleging a critical fact must support his allegation with substantial
evidence which has been construed to mean such relevant evidence as a reasonable mind will accept as
adequate to support a conclusion. Confronted with Escudero’s assertion that she reported for work despite
irregular payment of her salaries and was forced to stop doing so after her wages were not paid in May 2004,
the record shows that Tan Brothers proffered nothing beyond bare allegations to prove that Escudero had
abandoned her employment in July 2003.
It is, on the other hand, doctrinal that abandonment is a matter of intention and cannot, for said reason, be
lightly inferred, much less legally presumed from certain equivocal acts. Viewed in the light of Escudero’s
persistence in reporting for work despite the irregular payment of her salaries starting July 2003, we find that
her subsequent failure to do so as a consequence of Tan Brothers ’non-payment of her salaries in May 2004 is
hardly evincive of an intention to abandon her employment. Indeed, mere absence or failure to report for work,
even after a notice to return work has been served, is not enough to amount to an abandonment of
employment. Considering that a notice directing Escudero to return to work was not even issued in the
premises, we find that the CA committed no reversible error in ruling out Tan Brother’s defense of
abandonment.
The same may be said of the CA’s rejection of the employer’s contention that the employee signified her
intention to sever the parties ’employer-employee relationship when she illegally appropriated for herself the
corporation’s typewriter and took its payrolls, vouchers and other material documents. Since unsubstantiated
accusation, without more, is not synonymous with guilt, the CA correctly brushed aside Escudero’s supposed
infraction which Tan Brothers reported to the barangay authorities of Seaside, Isabela City only on 6 September
2004 or after the filing of the complaint a quo
FACTS:
In July 1991, respondent Edna R. Escudero (Escudero) was hired as bookkeeper by petitioner Tan Brothers
Corporation of Basilan City (Tan Brothers), a corporation primarily engaged in the real estate business. On 1
September 2004, Escudero filed against Tan Brothers a complaint for illegal dismissal, underpayment of
wages, cost of living allowance and 13th month pay. Escudero alleged in her position paper that, starting July
2003, her monthly salary of ₱2,500.00 was not paid on time by Tan Brothers. After having the corporation’s
office remodeled in the early part of 2004, Tan Brothers allegedly rented out the office space Escudero used
to occupy and ceased giving her further assignments. Eventually constrained to stop reporting for work
because of her dire financial condition, Escudero claimed that Tan Brothers "shrewdly maneuvered" her
illegal dismissal from employment.
On the other hand, Tan Brothers averred that Escudero was paid a daily wage of ₱155.00, and she abandoned
her employment when she stopped reporting for work in July 2003. Aside from taking with her most of the
corporation’s payrolls, vouchers and other material documents evidencing due payment of wages and labor
standard benefits, Tan Brothers maintained that, without its knowledge and consent, Escudero appropriated
for herself an Olivetti typewriter worth ₱15,000.00. With Escudero’s refusal to heed its demands for the
return of the typewriter, Tan Brothers asseverated that it was left with no choice but to lodge a complaint
with the barangay authorities of Seaside, Isabela City on 6 September 2004. In support of its claim of due
payment of its employees ’wages and benefits, Tan Brothers submitted copies of its remaining vouchers and
payrolls from 24 December 1997 to 31 July 2000 which were prepared by Escudero and the result of the
inspection conducted by the Department of Labor and Employment (DOLE) Regional Office No. 9 that cleared it
of violations of labor standard laws.
LA: rendered a decision, finding Tan Brothers guilty of constructively dismissing Escudero from employment.
Rejecting Tan Brothers ’claim that Escudero resigned from and/or abandoned her employment, the Labor
Arbiter ruled that the former circumvented the substantive and procedural requirements of due process when
it withheld the latter’s salaries and stopped utilizing her services despite her presence at work. Also brushed
aside was Tan Brother’s claim regarding the typewriter allegedly taken by Escudero on the ground that the cause
of action relative thereto, if any, pertained to the regular courts. While giving credence to the pieces of
documentary evidence adduced by Tan Brothers to prove due payment of wages and labor standard benefits to
its employees, the Labor Arbiter ruled that, as a consequence of her constructive dismissal, Escudero was
entitled to separation pay in the sum of ₱48,508.80 and backwages in the sum of ₱68,720.80 or a total of
₱117,229.60 in monetary awards.
NLRC: AFFIRMED LA’S DECISION IN TOTO. Echoing the Labor Arbiter’s conclusion that Escudero was
constructively dismissed, the NLRC further ruled that Tan Brother’s claim of loss of the typewriter, having
been made after said employee’s institution of the case a quo, was retaliatory and a mere afterthought.
Its motion for reconsideration of the foregoing resolution denied for lack of merit, Tan Brothers filed the Rule
65 petition for certiorari before the CA. In support of its petition, Tan Brothers faulted the NLRC with grave
abuse of discretion for not finding that Escudero abandoned her employment despite her admission that she
unilaterally stopped reporting for work. On the theory that abandonment is a serious misconduct which
constituted a just cause for termination of employment under Article 282 of the Labor Code of the Philippines,
it was, likewise, argued that the award of backwages and separation pay in favor of Escudero were bereft of
legal basis.
CA: DENIED Tan Brothers ’petition and affirming the NLRC’s resolution of its appeal. Finding that Escudero was
constructively dismissed when Tan Brothers stopped paying her salaries and giving her work assignments, the
CA ruled out abandonment absent any showing that the former intended to sever the employer-employee
relationship with the latter. Considered not established by an employee’s mere absence or failure to report
to work, abandonment was likewise held to be contradicted by the filing of an action for illegal dismissal. The
CA also gave a short shrift to Tan Brothers ’claim that Escudero took its typewriter and corporate records for
lack of showing that the latter was confronted with and was given an opportunity to refute the charges against
her.
CONTENTION OF TAN BROS: Escudero abandoned her employment and that the same was not negated by the
filing of her complaint for illegal dismissal more than one year after she stopped reporting for work.
ISSUE: W/N ESCUDERO WAS ILLEGALLY DISMISSED–YES (or W/N ESCUDERO ABANDONED HER
EMPLOYMENT–NO)
RATIO:
As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. It constitutes neglect of duty and is a just cause for termination of
employment under paragraph (b) of Article 282 of the Labor Code.To constitute abandonment, however, there
must be a clear and deliberate intent to discontinue one's employment without any intention of returning. In
this regard, two elements must concur: (1) failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as
the more determinative factor and being manifested by some overt acts. Otherwise stated, absence must be
accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work
anymore. It has been ruled that the employer has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of returning.
Defense of Tan Brothers: argues that Escudero unilaterally stopped reporting for work in July 2003. In addition
to the latter’s prolonged absence from work, Tan Brothers calls our attention to Escudero’s supposed
appropriation of the corporation’s typewriter and records which supposedly evinced her intention to sever the
parties ’employer-employee relations. It is argued that, having committed the foregoing infraction to get even
with her employer, it would have been unthinkable for Escudero to plan on further reporting for work.
Considering that the complaint did not pray for reinstatement and was filed only on 1 September 2004 or more
than one year after Escudero’s supposed last attendance at work, Tan Brothers also fault the CA for applying
the rule that abandonment is negated by the employee’s filing of a complaint for illegal dismissal. Ultimately,
Tan Brothers maintains that the award of backwages and separation pay should have been disallowed in view
of Escudero’s abandonment of her employment.
On the theory that the same is proof enough of the desire to return to work, the immediate filing of a complaint
for illegal dismissal – more so when it includes a prayer for reinstatement – has been held to be totally
inconsistent with a charge of abandonment. While it is true that Escudero’s complaint prayed for separation
pay in lieu of reinstatement, Tan Brothers loses sight of the fact, however, that it had the burden of proving
its own allegation that Escudero had abandoned her employment in July 2003. As allegation is not evidence,
the rule has always been to the effect that a party alleging a critical fact must support his allegation with
substantial evidence which has been construed to mean such relevant evidence as a reasonable mind will accept
as adequate to support a conclusion. Confronted with Escudero’s assertion that she reported for work despite
irregular payment of her salaries and was forced to stop doing so after her wages were not paid in May 2004,
the record shows that Tan Brothers proffered nothing beyond bare allegations to prove that Escudero had
abandoned her employment in July 2003.
It is, on the other hand, doctrinal that abandonment is a matter of intention and cannot, for said reason, be
lightly inferred, much less legally presumed from certain equivocal acts. Viewed in the light of Escudero’s
persistence in reporting for work despite the irregular payment of her salaries starting July 2003, we find that
her subsequent failure to do so as a consequence of Tan Brothers ’non-payment of her salaries in May 2004
is hardly evincive of an intention to abandon her employment. Indeed, mere absence or failure to report for
work, even after a notice to return work has been served, is not enough to amount to an abandonment of
employment. Considering that a notice directing Escudero to return to work was not even issued in the
premises, we find that the CA committed no reversible error in ruling out Tan Brother’s defense of
abandonment.
The same may be said of the CA’s rejection of the employer’s contention that the employee signified her
intention to sever the parties ’employer-employee relationship when she illegally appropriated for herself
the corporation’s typewriter and took its payrolls, vouchers and other material documents. Since
unsubstantiated accusation, without more, is not synonymous with guilt, the CA correctly brushed aside
Escudero’s supposed infraction which Tan Brothers reported to the barangay authorities of Seaside, Isabela
City only on 6 September 2004 or after the filing of the complaint a quo.
In order to terminate an employee’s services for a just cause, moreover, it is essential that the two-notice
requirement must be complied with by the employer, to wit: a) a written notice containing a statement of the
cause for the termination to afford the employee ample opportunity to be heard and defend himself with the
assistance of his representative, if he so desires; and b) if the employer decides to terminate the services of the
employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reason
therefor. The requirement of these notices is not a mere technicality, but a requirement of due process to which
every employee is entitled.
Neither are we inclined to disturb the CA’s finding that Escudero was constructively dismissed by Tan Brothers
which, as employer, had the burden of proving that said employee was dismissed for a just and valid cause.
Constructive dismissal occurs when there is cessation of work because continued employment is rendered
impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a
clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving
the latter with no other option but to quit. The test is whether a reasonable person in the employee's position
would have felt compelled to give up his position under the circumstances. Much though Tan Brothers may
now be inclined to disparage the same as mere alibis, the fact that Escudero was deprived of office space, was
not given further work assignment and was not paid her salaries until she was left with no choice but stop
reporting for work all combine to make out a clear case of constructive dismissal.
Having been constructively dismissed, Escudero was correctly found entitled to backwages and attorney’s fees
by the Labor Arbiter, the NLRC and the CA. Under Article 279 of the Labor Code, as amended, employees who
have been illegally terminated from employment are entitled to the twin reliefs of reinstatement without loss
of seniority rights and to the payment of full back wages corresponding to the period from their illegal dismissal
up to actual reinstatement. Reinstatement is a restoration to the 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. Proper where reinstatement is not advisable or feasible as when antagonism already
caused a severe strain in the relationship between the employer and the employee, separation pay may also be
awarded where, as here, reinstatement is no longer practical or in the best interest of the parties or when the
employee decides not to be reinstated anymore.
 b) Fianza vs. National Labor Relations Commission, G.R. No. 163061, 26 June 2013.
G. R. No. 163061, June 26, 2013
ALFONSO L. FIANZA, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), BINGA
HYDROELECTRIC PLANT, INC., ANTHONY C. ESCOLAR, ROLAND M. LAUTCHANG, Respondents.
SERENO, C.J.:
SUMMARY: Petitioner Fianza was employed as Officer for Social Acceptance of respondent Binga Hydroelectric
Plant, Inc. In February 1999, petitioner did not receive his salary of P15,000 for the first 15 days of the month of
February. He was advised not to report for work until his status was officially clarified by the Manila office. After
petitioner made several other inquiries concerning his status, he was told by a supervisor to report for work.
However, he was also told that the new management committee had to concur in his reappointment before he
could be reinstated in the payroll. It also wanted an opportunity to determine whether his services would still
be necessary to the company. Meanwhile, the chief of the rehabilitation department of the company
recommended his return. As the management committee did not act on his inquiries for several months, on 24
May 1999 petitioner filed a Complaint for illegal dismissal before the LA. LA: RULED IN FAVOR OF PETITIONER.
NLRC: REVERSED LA’s decision.CA: AFFIRMED NLRC’s reversal, and denied his motion for reconsideration.
ISSUE: W/N PETITIONER ABANDONED HIS WORK- NO
SC: At the outset, it is clear that the requisites for a judicial declaration of abandonment are absent in this case.
Suffice it to say that abandonment is a fact that must be proven in accordance with the standard set by this
Court:
It is well-settled in our jurisprudence that “For abandonment to constitute a valid cause for termination
of employment, there must be a deliberate, unjustified refusal of the employee to resume his
employment. This refusal must be clearly shown. Mere absence is not sufficient, it must be accompanied
by overt acts unerringly pointing to the fact that the employee does not want to work anymore”
(Emphasis and italics supplied).
Abandonment as a fact and a defense can only be claimed as a ground for dismissal if the employer follows the
procedure set by law. In line with the burden of proof set by law, the employer who alleges abandonment “has
the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment
without any intention of returning.” As this Court has stated in Agabon v. National Labor Relations Commission:
For a valid finding of abandonment, these two factors should be present: (1) the failure to report for
work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee
relationship, with the second as the more determinative factor which is manifested by overt acts from
which it may be deduced that the employees has no more intention to work. The intent to discontinue
the employment must be shown by clear proof that it was deliberate and unjustified.
From the foregoing, it is clear that respondent company failed to prove the necessary elements of
abandonment. Additionally, the NLRC and the CA failed to take into account the strict requirements set by
jurisprudence when they determined the existence of abandonment on the basis of mere allegations that were
contradicted by the evidence shown.
The very act of filing the Complaint for illegal dismissal should have negated any intention on petitioner’s part
to sever his employment. In fact, it should already have been sufficient evidence to declare that there was no
abandonment of work. Moreover, petitioner went back to the company several times to inquire about the status
of his employment. The fact that his inquiries were not answered does not prejudice this position.
Throughout the entire ordeal, petitioner was vigilant in protecting himself from any claim that he had
abandoned his work. The following circumstances evinced his intent to return to work:
1. His continuous inquiry with respondent about the status of his work.
2. His willingness to return to work at any time, subject to the approval of respondent, and his visits to
the plant to apply for work.
3. His filing of an illegal dismissal case.
Considering all these facts, established by the LA and confirmed by the NLRC and the CA, we conclude that both
appellate bodies were remiss in declaring the existence of abandonment.
FACTS:
On 3 June 1997, petitioner Fianza was employed as Officer for Social Acceptance of respondent Binga
Hydroelectric Plant, Inc. The details of his employment are embodied in Memorandum 97-103 dated 2 June
19974 issued by Mr. Catalino Tan, the president and chairperson of the board at that time.
In February 1999, petitioner did not receive his salary of P15,000 for the first 15 days of the month of February.
He was advised not to report for work until his status was officially clarified by the Manila office. After
petitioner made several other inquiries concerning his status, he was told by a supervisor to report for work.
However, he was also told that the new management committee had to concur in his reappointment before
he could be reinstated in the payroll. It also wanted an opportunity to determine whether his services would
still be necessary to the company. Meanwhile, the chief of the rehabilitation department of the company
recommended his return. As the management committee did not act on his inquiries for several months, on 24
May 1999 petitioner filed a Complaint for illegal dismissal before the LA.
LA: RULED IN FAVOR OF PETITIONER. It applied the jurisprudentially-established control test to show that the
petitioner and respondent company had a prevailing employer-employee relationship. The arbiter thought that
since petitioner was hired directly by the president of the company, he was entitled to a fixed income of P30,000.
Moreover, despite the existence of a controversy in respect of the corporation’s ownership and rehabilitation,
the employer-employee relationship subsisted on the basis of the doctrine of successor employer. As to
petitioner’s dismissal, the LA recognized the obligation of the company to maintain complete records of its
personnel and transactions. It was further opined that there was no abandonment because of respondent
company’s failure to comply with the strict requirements of the law for a declaration of abandonment. Finally,
for purposes of determining liability, the LA deemed petitioner a “supervisory employee” and accordingly
granted the benefits pertaining thereto. The LA nonetheless denied the prayer for moral damages, having seen
no proof of malice on the part of respondent.
NLRC: REVERSED LA’s decision. It decided that the employer-employee relationship was not sufficiently
established, since the appointment letter recognized the probationary status of petitioner. It found
circumstances that allegedly negated his permanent and regular employment, such as his direct reporting to
the hiring authority, his direct hiring which bypassed the existing hiring procedures of the company, his lack of
a daily time record, the absence of the position “Social Acceptance Officer” from the organizational table of the
company, the characterization of his salary as “retainer’s fees,” and the non-inclusion of his appointment in the
company records.
CA: AFFIRMED NLRC’s reversal, and denied his motion for reconsideration
CONTENTIONS OF PETITIONER: he was a supervisory employee, as shown by the evidence he presented and
the nature of his work. He further contends that he did not abandon his work, because he always made sure
he followed up the status of his employment, and he was willing to go back to work once he was re-enrolled
in the payroll.
CONTENTION OF RESPONDENT COMPANY: asserts in its Memorandum that petitioner was a confidential
consultant of its former president and chairperson Catalino Tan. As such, petitioner’s tenure was therefore
co-terminus with that of Mr. Tan.
ISSUE: W/N PETITIONER ABANDONED HIS WORK- NO Respondent company claims that because petitioner was a confidential employee of its former president, his
(NOTE: the nature of the employment is also an issue in this case. W/N PETITIONER IS A REGULAR EMPLOYEE- tenure was co-terminus with that of his employer. To establish this contention, respondent cites the CA’s
YES. PETITIONER IS ILLEGALLY DISMISSED) determination of the facts, as follows:

RATIO: 1. Petitioner directly reported to Mr. Tan, the hiring authority.

1ST ISSUE: W/N PETITIONER ABANDONED HIS WORK 2. The hiring did not pass through the existing procedure.
At the outset, it is clear that the requisites for a judicial declaration of abandonment are absent in this case. 3. The position of officer for social acceptance was absent from the company’s table of organization
Suffice it to say that abandonment is a fact that must be proven in accordance with the standard set by this and position title.
Court: 4. Petitioner did not submit any daily time record.
It is well-settled in our jurisprudence that “For abandonment to constitute a valid cause for termination 5. Monthly fees received from Mr. Tan were denominated as retainer fees and subjected to 10%
of employment, there must be a deliberate, unjustified refusal of the employee to resume his deductions.
employment. This refusal must be clearly shown. Mere absence is not sufficient, it must be 6. Petitioner was not included in the payroll.
accompanied by overt acts unerringly pointing to the fact that the employee does not want to work 7. The taxes on the fees were paid by respondent company on behalf of petitioner.
anymore” (Emphasis and italics supplied). 8. Petitioner’s name was absent from respondent’s records.
Abandonment as a fact and a defense can only be claimed as a ground for dismissal if the employer follows the
procedure set by law. In line with the burden of proof set by law, the employer who alleges abandonment “has
the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment
These facts allegedly proved that petitioner was the confidential employee of Mr. Tan, respondent’s former
without any intention of returning.” As this Court has stated in Agabon v. National Labor Relations Commission:
president. All of this occurred in the context of a rehabilitation receivership conducted by the Securities and
For a valid finding of abandonment, these two factors should be present: (1) the failure to report for
Exchange Commission Management Committee.
work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-
employee relationship, with the second as the more determinative factor which is manifested by overt
Respondent company failed to realize however that Mr. Tan, being its president, was clothed with authority
acts from which it may be deduced that the employees has no more intention to work. The intent to
to hire employees on its behalf. This was precisely the import of petitioner’s appointment papers, which even
discontinue the employment must be shown by clear proof that it was deliberate and unjustified.
carried the letterhead of the company. There is no indication from the facts that his employment was of a
confidential nature. The wording of his appointment itself does not bear out that conclusion, viz:
From the foregoing, it is clear that respondent company failed to prove the necessary elements of
To: Mr. Alfonso Fianza
abandonment. Additionally, the NLRC and the CA failed to take into account the strict requirements set by
From: Mr. Catalino Tan
jurisprudence when they determined the existence of abandonment on the basis of mere allegations that were
Subject: Job and Responsibilities
contradicted by the evidence shown.
Date: June 2, 1997
No: Mem97-10
The very act of filing the Complaint for illegal dismissal should have negated any intention on petitioner’s part
to sever his employment. In fact, it should already have been sufficient evidence to declare that there was no
This is to confirm your appointment as officer for social acceptance of BHEPI projects effective June 3,
abandonment of work. Moreover, petitioner went back to the company several times to inquire about the
1997. In this position, you will be directly reporting to me and to those whom I will designate to assure
status of his employment. The fact that his inquiries were not answered does not prejudice this position.
compliance and attainment of our corporate objectives in relation to the reforestation program, silt
control, and the social and livelihood projects to lift up the [unintelligible word] condition of the residence
Throughout the entire ordeal, petitioner was vigilant in protecting himself from any claim that he had
in your area of operations. Specifically, your job and responsibilities are:
abandoned his work. The following circumstances evinced his intent to return to work:

1. Promote social acceptance by the local residence of the Itogon and the nearby municipalities of the
1. His continuous inquiry with respondent about the status of his work.
corporate projects as required in the ROL contract and the Supplemental Agreement signed by the
2. His willingness to return to work at any time, subject to the approval of respondent, and his visits to
company with the National Power Corporation.
the plant to apply for work.
2. Identify problems in implementing ROL projects and offer possible solutions that the company may
3. His filing of an illegal dismissal case.
adopt in resolving conflicts.
3. Assist in monitoring the success and failure of the company’s sponsored projects designed to help
Considering all these facts, established by the LA and confirmed by the NLRC and the CA, we conclude that both the social and economic well-being of the people in the Itogon community.
appellate bodies were remiss in declaring the existence of abandonment. 4. Submit monthly report covering the above mentioned work.
5. In addition to the above, you may suggest to the management for their consideration any program
2ND ISSUE: W/N PETITIONER IS A REGULAR EMPLOYEE that will help attain the corporation objectives as a partner for progress of the whole province by the
Since the first question has been disposed of, the second one now becomes the core issue, because the year 2000.
existence of an employer-employee relationship in the nature of regular employment will determine whether
or not the company dismissed petitioner illegally.
You will be under employment probation for two months during which we will evaluate your
performance and will serve as the basis for permanent employment. Your compensation will be P25,000
monthly inclusive of all benefits.
 Allow me to welcome you to the BHEPI family.

SGD. Catalino Tan

Several things stand out in this appointment paper. First, its letterhead is that of respondent company,
indicating the official nature of the document. Second, there is no indication that the employment is co-
terminus with that of the appointing power, or that the position was a confidential one. In fact, alongside the
obligation of petitioner to report to Mr. Tan, is that of reporting to those whom the latter had designated as
well as to the management in case petitioner had any suggestion. This description evinces a supervisory
function, by which the employee will carry out company policy, but can only give suggestions to management
as to the creation or implementation of a new policy.

Finally, the appointment paper recognizes that the petitioner would initially be on probation status for two
months, at the end of which he would be made a permanent employee should his services be found
satisfactory by respondent. All these circumstances are evident from the appointment paper itself, which belies
the claim of respondent that it had no employer-employee relationship with petitioner.

For the foregoing reasons, this Court must assess whether it was a reversible error of law for the appellate court
to rule that there was no grave abuse of discretion that amounted to a lack or an excess of jurisdiction on the
part of the NLRC when it reversed the findings of the LA. Since what is at stake in this case is the proper
application of the doctrine of abandonment and the legal concept of regular employment, it is clear to this Court
that the CA indeed committed a reversible error, and that petitioner was therefore unjustly and illegally
dismissed.
 c) New Ever Marketing vs. Court of Appeals, G.R. 140555, 14 July 2005.
G.R. No. 140555 July 14, 2005
NEW EVER MARKETING, INC., Petitioners,
vs.
HON. COURT OF APPEALS, ESPIRITU YLANAN, CESAR FULO, and WILFREDO
BILASA, Respondents.
Summary:
Petitioner New Ever Marketing, Inc. hired respondents Espiritu Ylanan and Cesar Fulo as
drivers and Wilfredo Bilasa as delivery man (pahinante).
Respondents filed against petitioner and Marcelo Calacday, its General Manager, a
complaint for illegal dismissal.
Respondent Ylanan alleged that from October 17-22, 1994, he did not report for work
because he attended to an errand; that when he reported back for work on October 24,
1994 and October 25, 1994 (with respondents Fulo and Bilasa), he was barred from entering
the premises and instructed to wait for a certain Ding who later arrived at noon time, after
he had left the premises; that when he called the office the next day, October 26, 1994,
Sally, the office secretary, told him to report for work on October 31, 1994; that when he
reported for work on October 31, 1994, petitioner company was closed and the company
guard told him to come back on November 2, 1994; that when he arrived on November 2,
1994, the company guard again told him to wait for Ding who arrived at noon time after he
had left; and that on November 3, 1994, Calacday informed him and respondent Fulo that
they were considered as "AWOL [absent without official leave]."
Respondent Fulo alleged that on October 15, 1994, petitioner asked him to secure a new
Community Tax Certificate; that as October 16, 1994 was a Sunday, he did not report for
work the following day, October 17, 1994, to be able to secure one; that when he reported
for work on October 18, 1994, he was prevented by the company guard from entering the
company premises and asked to wait for Ding who did not arrive until noon that day, so he
went home; that from October 19 to November 2, 1994, he reported for work daily, but was
made to wait for Ding;
Respondent Bilasa alleged that on October 17, 1994, he was sent home due to his allergies;
that because of his condition, he informed Calacday that he may not be able to report for
work the following day; that the next day, October 18, 1994, he was absent as his allergy
had not subsided; that after seeking medical attention, the doctor advised him to take a
leave of absence for one week; that when he reported for work on October 24, 1994, he
was denied entry to the premises until Ding arrived; and that he never received any letter
from the petitioner informing him that he had abandoned his work.
Petitioner contended that respondents failed to report for work without filing a leave of
absence; the respondents were sent letters requiring them to explain why no disciplinary
action should be taken against them for violating company rules on absences and tardiness
and that despite receipt of the letters, respondents did not submit any written explanation;
– EV and that petitioner sent another letter or memorandum informing them that they were
deemed to have abandoned their jobs.
According to Petitioner, it had validly dismissed the respondents for incurring absences
without filing the application for leave which was tantamount to an abandonment of work
and that the respondents did not report for work after the two memoranda had been sent to
them individually. Commented [1]:
The SC held that such contention has no merit.
The substantive aspect for a valid dismissal provides that to constitute
abandonment of work, two (2) requisites must concur: (a) the employee must have failed
to report for work or must have been absent without justifiable reason; and (b) there must
have been a clear intention on the part of the employee to sever the employer-employee
relationship as manifested by overt acts. Abandonment as a just ground for dismissal
requires deliberate, unjustified refusal of the employee to resume his employment. Mere
absence or failure to report for work, after notice to return, is not enough to amount to
abandonment. Moreover, abandonment is a matter of intention; it cannot be inferred or
presumed from equivocal acts.
In this case, respondents had sought permission and had informed petitioner of
their reasons for being absent and had reported back to petitioner's office the following
day. It cannot be said that respondents had abandoned their work during the period the
absences in question were incurred. It became a strange scenario for them to be reporting
for work early in the morning only to be told to wait for Ding who would arrive at noon time.
In the meantime, they were not even allowed to enter the premises or do their assigned
tasks. This being so, respondents sought recourse by filing an illegal dismissal case
against petitioner. Clearly, respondents never intended to sever the employer-employee
relation and abandon their work. On the contrary, they clearly showed their desire to
continue their employment with petitioner and to be reinstated to their former positions.
Indeed, an employee who loses no time in protesting his layoff cannot by any reasoning
be said to have abandoned his work, for it is well-settled that the filing by an employee of
a complaint for illegal dismissal with a prayer for reinstatement is proof enough of his
desire to return to work, thus, negating the employer’s charge of abandonment.
FACTS:
Petitioner New Ever Marketing, Inc. hired respondents Espiritu Ylanan and Cesar Fulo
as drivers and Wilfredo Bilasa as delivery man (pahinante) commencing in February
1987, November 1988, and June 1989, respectively.
Respondents filed against petitioner and Marcelo Calacday, its General Manager, a
complaint for illegal dismissal and sought the payment of overtime pay, premium pay for
services rendered during holidays, service incentive leave, and 13th month pay for the year
1994. They also filed a separate case against petitioner with the Social Security System for
alleged non-remittance of SSS premiums.
In their complaints, respondents alleged, as follows:
Respondent Ylanan: That a fine of ₱500.00 for a traffic violation he committed on
September 12, 1994, supposedly for the account of the petitioner, was deducted from his
salary for September 17, 1994; that for his October 15, 1994 salary, deductions were made
for SSS premiums corresponding to the months of January and February 1993, but
apparently, the same were not accordingly remitted; that from October 17-22, 1994, he
did not report for work because he attended to an errand; that when he reported back
for work on October 24, 1994 and October 25, 1994 (with respondents Fulo and
Bilasa), he was barred from entering the premises and instructed to wait for a certain
Ding who later arrived at noon time, after he had left the premises; that when he called
the office the next day, October 26, 1994, Sally, the office secretary, told him to report
for work on October 31, 1994; that when he reported for work on October 31, 1994,
petitioner company was closed and the company guard told him to come back on
November 2, 1994; that when he arrived on November 2, 1994, the company guard
again told him to wait for Ding who arrived at noon time after he had left; and that on
November 3, 1994, Calacday informed him and respondent Fulo that they were
considered as "AWOL [absent without official leave]."
Respondent Fulo: That on October 15, 1994, petitioner asked him to secure a new
Community Tax Certificate; that as October 16, 1994 was a Sunday, he did not report
for work the following day, October 17, 1994, to be able to secure one; that when he
reported for work on October 18, 1994, he was prevented by the company guard from
entering the company premises and asked to wait for Ding who did not arrive until
noon that day, so he went home; that from October 19 to November 2, 1994, he
reported for work daily, but was made to wait for Ding; and that because of the
foregoing, he and the two other respondents were constrained to file a complaint for
illegal dismissal against the petitioner and Calacday.
Respondent Bilasa: That on October 17, 1994, he was sent home due to his allergies;
that because of his condition, he informed Calacday that he may not be able to report
for work the following day; that the next day, October 18, 1994, he was absent as his
allergy had not subsided; that after seeking medical attention, the doctor advised him
to take a leave of absence for one week; that when he reported for work on October
24, 1994, he was denied entry to the premises until Ding arrived; and that he never
received any letter from the petitioner informing him that he had abandoned his work.
PETITIONER: as to respondents Fulo and Ylanan, petitioner countered: That starting
October 17, 1994, they failed to report for work without filing a leave of absence; that
on October 21, 1994, Calacday sent a letter requiring them to explain why no
disciplinary action should be taken against them for violating company rules on
absences and tardiness; that despite receipt of the said letter, respondents did not
submit any written explanation; and that on November 4, 1994, petitioner sent
another letter informing them that they were deemed to have abandoned their jobs.
As to respondent Bilasa, petitioner averred: That on October 19, 1994, respondent Bilasa
was absent from work without filing a leave of absence; that on October 23, 1994,
petitioner sent him a memorandum, directing him to explain why no disciplinary
action should be taken against him for being absent, but he failed to do so; and that
on November 4, 1994, petitioner gave another memorandum informing Bilasa that he
was deemed to have abandoned his job for failure to explain his unexcused
absences.
Petitioner also asserted that it validly terminated the services of respondents due to
abandonment of work and that the matter had been reported to the Department of
Labor and Employment. Calacday pointed out that he should be excluded from being a
party to the case as petitioner has a separate and distinct personality.
LA: rendered a decision dismissing the complaint for illegal dismissal on the ground that
petitioner had a just cause to dismiss respondents, i.e., for abandonment of work, and that
petitioner had complied with the notice requirement prior to terminating their employment.
However, the labor arbiter ordered petitioner to pay the monetary claims of respondents for
unpaid wages, 13th month pay, and service incentive leave pay for the year 1994 since
there was no proof that the same had been paid.
NLRC: modified the decision of the LA. It found petitioner guilty of constructively dismissing
respondents. The NLRC ordered petitioner to reinstate respondents to their positions
without loss of seniority rights and other privileges appurtenant thereto, with the payment of
full backwages from the time they were illegally dismissed until actual reinstatement. The
pertinent portions of the NLRC’s decision state:
.xxx..A close examination of the aforesaid memos, however, readily reveals the
absence of proof that they were indeed sent to, much less received by, the herein
complainants. Certainly, such absence is fatal, more so under complainants ’vehement
denial that they ever received such memos. Clearly, under this fact, such memos cannot
take the place of notice to comply with the requisite of a valid notice in administrative due
process.
Moreover, in cases of abandonment, the absence of "animus revertendi" must be clearly
proven. Respondent, We find, failed to discharge this burden. It failed to show that
complainants indeed no longer intended to return to their jobs inspite of due notice afforded
to them to do so.
On the contrary, We are convinced that the proximity of the filing of their complaint with what
they perceive to be the unreasonable arrival of "Ding" as they were instructed to wait for, is
concrete proof sufficient to show that they have the least intention to give up their job, much
less abandon the same….xxx
CA: dismissed petitioner’s action (petition for review) and later denied its motions for
reconsideration.
ISSUE: WON the services of respondents were validly terminated due to abandonment of
work?—NO
WON there is abandonment of work on the part of the respondents? —NO
HELD: No abandonment; Petition dismissed;
RATIO:
(Inalis ko procedural issue…Petitioner:filed with SC a petition for certiorari under Rule 65 of
the ROC. SC:the appropriate remedy to this Court is a petition for review on certiorari under
Rule 45, not a petition for certiorari under Rule 65. This petition for certiorari under Rule 65
should, therefore, be dismissed for being the wrong remedy.)
Even if this Court were to treat the present petition as a petition for review on certiorari under
Rule 45 and overlook its procedural infirmity, the same would still be denied for lack of merit.

First. Petitioner asserts that through its General Manager, Marcelo Calacday, it had sent a
letter requiring the respondents to explain why it should not take disciplinary actions
against them for violation of company rules on absences and tardiness; that despite
receipt of the said letter, respondents did not submit any written explanation thereto; and
that, thereafter, it sent another letter informing them that they were deemed to have
abandoned their jobs.
These allegations have not been sufficiently proven.
Under the Labor Code, there are twin requirements to justify a valid dismissal
from employment: (a) the dismissal must be for any of the causes provided in Article 282
of the Labor Code (substantive aspect) and (b) the employee must be given an
opportunity to be heard and defend himself (procedural aspect).
As to procedural aspect, two notices are required: (a) written notice containing a
statement of the cause for termination, to afford the employee an opportunity to be heard
and defend himself with the assistance of his representative, if he desires; and (b) if the
employer decides to terminate the services of the employee, written notice must be given
to the employee stating clearly the reason therefor.
The records reveal that petitioner did not adduce evidence that it had
served the respondents with copies of the memoranda (re explanation for their
unauthorized absences) and the subsequent memoranda (re its decision to
terminate their employment due to abandonment) and that the same were actually
received by each of the respondents. Petitioner’s bare assertion failed to overcome
the declarations of the respondents that they never received copies of the
memoranda.
RELATED SA TOPIC:
Second. Petitioner maintains that it had validly dismissed the respondents for
incurring absences without filing the application for leave which was tantamount to
an abandonment of work and that the respondents did not report for work after the
two memoranda had been sent to them individually.
This contention has no merit.
The substantive aspect for a valid dismissal provides that to constitute
abandonment of work, two (2) requisites must concur: (a) the employee must have
failed to report for work or must have been absent without justifiable reason; and
(b) there must have been a clear intention on the part of the employee to sever the
employer-employee relationship as manifested by overt acts. Abandonment as a
just ground for dismissal requires deliberate, unjustified refusal of the employee to
resume his employment. Mere absence or failure to report for work, after notice to
return, is not enough to amount to abandonment. Moreover, abandonment is a
matter of intention; it cannot be inferred or presumed from equivocal acts.
In this case, respondents had sought permission and had informed
petitioner of their reasons for being absent and had reported back to petitioner's
office the following day. It cannot be said that respondents had abandoned their
work during the period the absences in question were incurred. It became a strange
scenario for them to be reporting for work early in the morning only to be told to
wait for Ding who would arrive at noon time. In the meantime, they were not even
allowed to enter the premises or do their assigned tasks. This being so,
respondents sought recourse by filing an illegal dismissal case against petitioner.
Clearly, respondents never intended to sever the employer-employee relation and
abandon their work. On the contrary, they clearly showed their desire to continue
their employment with petitioner and to be reinstated to their former positions.
Indeed, an employee who loses no time in protesting his layoff cannot by any
reasoning be said to have abandoned his work, for it is well-settled that the filing by
an employee of a complaint for illegal dismissal with a prayer for reinstatement is
proof enough of his desire to return to work, thus, negating the employer’s charge
of abandonment. Commented [3]:
All the antecedents show that petitioner had constructively dismissed the
respondents. Constructive dismissal is defined as quitting when continued employment is
rendered impossible, unreasonable or unlikely as the offer of employment involves a
demotion in rank and diminution of pay. In this case, respondents were deemed
constructively dismissed because whenever they would report for work in the morning,
they were barred, without any
justifiable reason, by petitioner’s guard from entering the premises and were made to wait
for Ding who would arrive in the office at around noon, after they had waited for a long
time and had left.
Petitioner, therefore, failed to prove by clear and convincing evidence that there
was just cause for terminating the employment of respondents and that there was
compliance with the two-notice rule. Article 277(b) of the Labor Code places the burden
of proving that the termination of employment was for a valid or authorized cause on the Commented [2]:
employer. The employer’s failure to discharge this burden means that the dismissal is not
justified and the employee is entitled to reinstatement. In this case, petitioner failed to
establish that respondents deliberately and unjustifiably refused to resume their
employment without any intention of returning thereto.
Under Article 279 of the Labor Code, an employee who is unjustly dismissed is entitled to
reinstatement, without loss of seniority rights and other privileges, and to the payment of
his full backwages, inclusive of allowances, and other benefits or their monetary
equivalent, computed from the time his compensation was withheld up to the time of his
actual reinstatement. Thus, respondents are entitled to reinstatement with the
payment of full backwages from the time their compensations were withheld, i.e.,
from the time of their illegal dismissal, up to the time of their actual reinstatement.

d) RBC Cable vs. Marcial Baluyot, G.R. No. 172670, 20 January 2009 - MARKO
G.R. No. 172670 January 20, 2009
RBC CABLE MASTER SYSTEM AND/OR EVELYN CINENSE, Petitioners, vs. MARCIAL BALUYOT, Respondent.
PUNO, C.J.
Summary: Petitioner RBC, a cable firm, hired respondent Baluyot as a lineman sometime in March 1996. He
held the position up to March 2001 when he was allegedly illegally dismissed.
On February 1, 2001, when private respondent reported for work, he was informed that no blank official receipts
could be issued to him for his collection job for that day or for a month because he is being suspended. Thus,
for one month, he did not report for work and when he reported back to duty, he was told by petitioner RBC
that he is now out of job and is considered terminated.
Petitioner denied dismissing private respondent by contending that it was private respondent who abandoned
his work, when, sometime in March 2001, he left without any notice and never returned back for work.
Petitioner RBC also alleged that private respondent in the course of his employment, committed several
infractions, to wit:
a) On several occasions, private respondent Marcial Baluyot did not issue Official Receipts to subscribers for the
monthly subscriptions and dues he collected from them;
b) Worst, private respondent willfully and deliberately did not remit to petitioner the amounts he collected from
said subscribers.
c) That private respondent misappropriated said amounts for his own personal use. Because of private
respondent’s misappropriation of his collection of monthly cable rentals and subscription fees and theft of
money belonging to petitioner, the latter filed a criminal case for Estafa against private respondent.
d) In order to cover up his misappropriations, private respondent falsified documents by making it appear that
three customers paid to him in checks. The said checks were remitted to petitioner RBC but which all bounced
because the account was already closed. And upon inquiry it was discovered that said checks were drawn against
the current account of private respondent’s wife who was then abroad. Because of this incident, petitioner RBC
filed another Criminal case against private respondent for Falsification arising from his acts of forging and
falsifying the aforementioned checks to be able to cover up for the amounts he misappropriated.
e) That private respondent was also engaged in illegal installation of cable lines to TV sets of persons who are
not clients of petitioner.
f) That private respondent also twice stole a motorcycle belonging to petitioner RBC resulting in the filing of a
criminal case against him for qualified theft.
Thereafter, private respondent was recalled back to work on March 1, 2001 and he executed a promissory note
for the amount of his unremitted collections which included an undertaking that he will not repeat his various
infractions, otherwise, he submits himself to automatic termination of his employment. Petitioner RBC,
however alleged that sometime in the same month of March 2001, private respondent did not report for work
without permission from and/or prior notice to petitioner that is why petitioner considered private respondent
absent without official leave (AWOL).
Private Respondent contended that after his suspension, he reported back to work. Upon his return, petitioner
RBC told him that he is now out of job and is considered terminated.
LA dismissed the complaint of illegal dismissal for lack of merit. The NLRC reversed and set aside the decision of
the LA and ruled that private respondent did not abandon his job but was illegally dismissed.
SC held that he was illegally dismissed. To constitute abandonment, two elements must concur: (1) the failure
to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-
employee relationship, with the second element as the more determinative factor and being manifested by
some overt acts. Mere absence is not sufficient. The employer has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any intention of returning.
The evidence in the case at bar shows that respondent has always humbly accepted his fault and asked for
petitioners ’forgiveness, to wit:
xxx
“Ipagdarasal ko sa Diyos na sana palambutin ang inyong puso at bigyan pa po ninyo ako nang isang pang
pagkakataong mapatunayan ang pagmamalasakit ko sa kompanyang ito at tuluyang maituwid ang aking
pagkakamali.”
Hence, we find it hard to believe that he will just abandon his job after petitioners gave him a chance to continue
working for them.
We uphold the following findings of the CA that respondent did not abandon his job:
In the case at bar, the charge of abandonment is belied by the following circumstances: First, the high
improbability of private respondent to intentionally abandon his work considering that he had already served a
penalty of suspension for his infractions and violations as well as the petitioner’s tacit condonation of the
infractions he committed, by permitting him to go back to work and by asking him to execute a promissory note.
It is incongruent to human nature, that after having ironed things out with his employer, an employee would
just not report for work for no apparent reason. Secondly, there was no proof that petitioner sent private
respondent a notice of termination on the ground of abandonment, if indeed it is true that he really failed to go
back to work. Section 2, Rule XVI, Book V, Rules and regulations implementing the Labor Code provides that any
employer who seeks to dismiss a worker shall furnish him a written notice stating the particular act or omission
constituting the ground for his dismissal. In cases of abandonment of work, the notice shall be served at the
worker’s last known address.
For this reason, We are constrained to give credence to private respondent’s assertion that he attempted to
report back to work but he was just asked to leave as he was considered terminated. And lastly, private
respondent’s filing of a case for illegal dismissal with the labor arbiter negates abandonment. As held by the
Supreme Court, a charge of abandonment is totally inconsistent with the immediate filing of a complaint for
illegal dismissal, more so when it includes a prayer for reinstatement.
Topic: Abandonment
Facts:
Petitioner RBC Cable Master System (petitioner RBC) is a cable firm engaged in the business of providing home
cable service, owned and managed by Engr. Reynaldo Cinense and his wife, co-petitioner Evelyn Cinense.
Sometime in March 1996, petitioner RBC hired herein private respondent Marcial Baluyot as a Lineman. As
lineman, private respondent received a compensation of P110.00 per day plus an allowance of P100 as driver
of the motorcycle he leased to petitioner. He was also given free gasoline and maintenance allowance, free
cable subscription and other benefits accorded by law. In 1999, private respondent was appointed as collector,
which position he held up to March 2001 when he was allegedly illegally dismissed. Beginning March 2000,
petitioner RBC imposed a new salary scheme for collectors where they are no longer paid monthly salaries
and instead their remuneration was computed at the rate of 5% percent (sic) based on the total collections
for a given month.
In the middle part of the year 2000, private respondent learned that his outstanding loan from cash advances
accumulated to P18,000.00. The cash advances he made [were] pursuant to a long time practice for the
employees of petitioner RBC to advance amounts of money in the form of cash values with the condition that
the same be deducted from their monthly salaries on a staggered or periodic basis.
Private respondent averred that upon the urgings of petitioner for him to promptly settle his obligations, the
latter delivered a Yamaha motorcycle registered in his name, valued at P40,000.00 as a security for the loan.
This agreement was evidenced by a Deed of Chattel mortgage executed in favor of petitioner RBC.
Petitioner RBC, on the other hand, alleged that it leased the said motorcycle from private respondent in
connection with its various cable TV operations, for an agreed price of P100.00 per day. The lease of the
motorcycle was terminated only after private respondent ceased owning the said motorcycle for failing to pay
Eagle Financial Services, Group inc. (sic), his monthly amortizations for the same and after the motorcycle was
re-possessed by said financing company. Petitioner RBC eventually purchased from Eagle Financial Services the
said motorcycle for use in its Cable TV business.
On February 1, 2001, when private respondent reported for work, he was informed that no blank official
receipts could be issued to him for his collection job for that day or for a month because he is being suspended.
Thus, for one month, he did not report for work and when he reported back to duty, he was told by petitioner
RBC that he is now out of job and is considered terminated.
Petitioner: Denied dismissing private respondent by contending that it was private respondent who
abandoned his work, when, sometime in March 2001, he left without any notice and never returned back for
work. Petitioner RBC also alleged that private respondent in the course of his employment, committed several
infractions, to wit:
a) On several occasions, private respondent Marcial Baluyot did not issue Official Receipts to subscribers for the
monthly subscriptions and dues he collected from them;
b) Worst, private respondent willfully and deliberately did not remit to petitioner the amounts he collected from
said subscribers.
c) That private respondent misappropriated said amounts for his own personal use. Because of private
respondent’s misappropriation of his collection of monthly cable rentals and subscription fees and theft of
money belonging to petitioner, the latter filed a criminal case for Estafa against private respondent.
d) In order to cover up his misappropriations, private respondent falsified documents by making it appear that
three customers paid to him in checks. The said checks were remitted to petitioner RBC but which all bounced
because the account was already closed. And upon inquiry it was discovered that said checks were drawn against
the current account of private respondent’s wife who was then abroad. Because of this incident, petitioner RBC
filed another Criminal case against private respondent for Falsification arising from his acts of forging and
falsifying the aforementioned checks to be able to cover up for the amounts he misappropriated.
e) That private respondent was also engaged in illegal installation of cable lines to TV sets of persons who are
not clients of petitioner.
f) That private respondent also twice stole a motorcycle belonging to petitioner RBC resulting in the filing of a
criminal case against him for qualified theft.
Because of the foregoing infractions and misdeeds allegedly committed by private respondent, petitioner RBC
was forced to suspend private respondent for one (1) month effective February 1, 2001 to February 28, 2001.
Thereafter, private respondent was recalled back to work on March 1, 2001 and he executed a promissory
note for the amount of his unremitted collections which included an undertaking that he will not repeat his
various infractions, otherwise, he submits himself to automatic termination of his employment. Petitioner RBC,
however alleged that sometime in the same month of March 2001, private respondent did not report for work
without permission from and/or prior notice to petitioner that is why petitioner considered private
respondent absent without official leave (AWOL).
Private Respondent: Contended that after his suspension, he reported back to work. Upon his return, petitioner
RBC told him that he is now out of job and is considered terminated. Thus, on January 8, 2002, private
respondent filed a case for illegal dismissal before the Regional Arbitration Board in Tuguegarao City, Cagayan.
LA: Rendered a decision dismissing the complaint for illegal dismissal for lack [of] merit. The LA anchored his
decision on the strength of his finding that private respondent abandoned his job and committed acts of
dishonesty such as theft of company funds and property.
NLRC: Reversed and set aside the decision of the LA and ruled that private respondent did not abandon his
job but was illegally dismissed. Private respondent is entitled to backwages from March 1, 2001 to November
5, 2002, the date of the decision of the LA, and separation pay in lieu of reinstatement equivalent to ½ pay for
every year of service from March 1996 to March 2001 based on his wage rate of P4,200.
CA: Affirmed the decision of the NLRC with the modification that the award of separation pay be computed at
1 month pay for every year of service reckoned reckoned from March 1, 2001 up to finality of its decision.
MR was filed but the same was denied. Hence, the present case.
ISSUE: (1) WON the issue of abandonment cannot be passed upon by the NLRC for not being raised on appeal;
(2) WON respondent was illegally dismissed – YES.
Ruling: Petition is DENIED. Decision of the CA is AFFIRMED.
RATIO:
First Issue(Procedural):
On the first issue, we hold that the NLRC did not abuse its discretion when it resolved the issue on abandonment.
Petitioners argue that the NLRC committed grave abuse of discretion when it went beyond the issues raised
before it on appeal. Petitioners contend that Rule IV, Section 3-C of the 1990 NLRC Rules of Procedure limits the
review powers of the NLRC in cases of perfected appeals, to those specific issues raised on appeal. According to
petitioners, the assignment of errors in respondent’s Appeal Memorandum before the NLRC did not question
the fact that he abandoned his job since nowhere therein did he raise any issue regarding the matter of
abandonment.
We disagree. Respondent’s Appeal Memorandum states:
GROUNDS FOR APPEAL:
1. THERE IS EVIDENCE OF GRAVE ABUSE OF DISCRETION ON THE PART OF THE LABOR ARBITER; AND
2. THERE ARE SERIOUS ERRORS IN HIS FINDINGS OF FACT WHICH WOULD CAUSE GRAVE OR
IRREPARABLE DAMAGE OR INJURY TO THE APPELLANTS.
ASSIGNMENT OF ERRORS:
1. The Honorable Executive Labor Arbiter committed serious error in dismissing the above-entitled
case for lack of merit;
2. The Honorable Executive Labor Arbiter erred seriously IN admitting respondent’s position paper
after issuing an order submitting the case for resolution;
3. The Honorable Executive Labor Arbiter gravely erred in not expunging the respondent’s position
paper from the records;
4. The Executive Labor Arbiter committed serious error in misconstruing Annexes "L" and "M"
presented by Appellee as admission of the offenses imputed against appellant;
5. the executive labor arbiter committed serious error in failing to appreciate the evidences
presented by appellant[.]
Although respondent did not specifically cite abandonment above, it is evident from the foregoing that he
questioned the Labor Arbiter’s factual finding that he was not illegally dismissed in his appeal before the
NLRC. Moreover, contrary to petitioners ’assertion, respondent never admitted that he abandoned his job. A
perusal of respondent’s pleadings filed in the proceedings below shows that he maintained that he did not
abandon his job and the reason why he did not report to work for a month was because he was suspended by
petitioners. Indeed, the pivotal issue in this case is whether or not he was illegally dismissed. The matter of
abandonment has to be necessarily discussed for being corollary to the main issue of illegal dismissal.
Petitioners ’argument that the issue of abandonment was not properly raised on appeal is therefore incorrect.
At any rate, an unassigned error closely related to the error properly assigned, or upon which the determination
of the question raised by the error properly assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as error.
2nd Issue:
There are two reasons given by petitioners to support their contention that respondent was not illegally
dismissed. First, respondent committed several infractions during the course of his employment. Second,
respondent abandoned his job.
After a careful review of the case, we find sufficient evidence to warrant the finding that respondent was illegally
dismissed.
First, we note that the memoranda covering the alleged infractions committed by respondent during the course
of his employment and respondent’s written explanations thereto were all executed prior to the Promissory
Note dated March 5, 2001 signed by respondent which states:
“I, Marcial Baluyot, an authorized collector commission basis of RBC CABLE has been earlier suspended due to
unauthorized spending of my collection worth P6,330.00 pesos.
On March 1, 2001, I had been (sic) reported back to work with a promised (sic) not to repeat the abovementioned
violation, otherwise, I will submit myself for automatic termination from my work.
Furthermore, I promised (sic) to pay the amount of P7,279.50 pesos including the interest equivalent to the
amount spent with in (sic) a period of 3 (three) months which will be deducted from my commission, every 15th
and 30th of the month.”
As can be gleaned above, after respondent was punished with suspension by petitioners, he was admitted
back to work on the condition that he will not repeat the same violations and he will pay back the sums he
owed. Hence, we agree with the CA that these prove that petitioners had condoned the infractions previously
committed by the respondent.
Petitioners, however, insist that there was no condonation of the misdeeds committed by respondent.
According to petitioners, the suspension of respondent was in the nature of a preventive suspension and he was
admitted back to work in order for him to face the administrative process. Also, petitioners contend that the
alleged penalty imposed upon respondent only pertains to the unauthorized appropriation of the amount of
₱6,330.00 and not to his other acts of dishonesty such as theft of company funds and property, illegal installation
of cable lines and falsification of checks. It is also contended that the said promissory note was merely intended
to prove the civil liability of respondent for the amount he misappropriated.
Petitioners ’arguments deserve scant consideration. The tenor of the promissory note stating the conditions
under which he will be admitted back to work negates petitioners ’argument that his suspension was only
preventive in nature. The facts that: (1) the other infractions were already known to petitioners and they have
accepted respondent’s explanations on the same prior to the execution of the promissory note; and (2) they
continued to employ him thereafter lead us to believe that the penalty imposed covered his other infractions.
Moreover, it should be noted that the promissory note obliges respondent to pay ₱7,279.50 with interest for a
period of three (3) months which clearly contradicts petitioners ’assertion that the penalty imposed was only
for the misappropriation of the sum of ₱6,330.00.
We therefore affirm the finding of the CA that the real controversy arose only when, after the execution of the
promissory note, respondent allegedly failed to report back to work without notice to petitioners.
(related to topic):
To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without
valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the
second element as the more determinative factor and being manifested by some overt acts. Mere absence is
not sufficient. The employer has the burden of proof to show a deliberate and unjustified refusal of the
employee to resume his employment without any intention of returning.
The evidence in the case at bar shows that respondent has always humbly accepted his fault and asked for
petitioners ’forgiveness, to wit:
xxx
“Ipagdarasal ko sa Diyos na sana palambutin ang inyong puso at bigyan pa po ninyo ako nang isang pang
pagkakataong mapatunayan ang pagmamalasakit ko sa kompanyang ito at tuluyang maituwid ang aking
pagkakamali.”
Hence, we find it hard to believe that he will just abandon his job after petitioners gave him a chance to
continue working for them. We uphold the following findings of the CA that respondent did not abandon his
job:
In the case at bar, the charge of abandonment is belied by the following circumstances: First, the high
improbability of private respondent to intentionally abandon his work considering that he had already served
a penalty of suspension for his infractions and violations as well as the petitioner’s tacit condonation of the
infractions he committed, by permitting him to go back to work and by asking him to execute a promissory
note. It is incongruent to human nature, that after having ironed things out with his employer, an employee
would just not report for work for no apparent reason. Secondly, there was no proof that petitioner sent private
respondent a notice of termination on the ground of abandonment, if indeed it is true that he really failed to
go back to work. Section 2, Rule XVI, Book V, Rules and regulations implementing the Labor Code provides that
any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular act or
omission constituting the ground for his dismissal. In cases of abandonment of work, the notice shall be
served at the worker’s last known address (Icawat vs. National Labor Relations Commission, 334 SCRA 75, 81
[2000]).
For this reason, We are constrained to give credence to private respondent’s assertion that he attempted to
report back to work but he was just asked to leave as he was considered terminated. And lastly, private
respondent’s filing of a case for illegal dismissal with the labor arbiter negates abandonment. As held by the
Supreme Court, a charge of abandonment is totally inconsistent with the immediate filing of a complaint for
illegal dismissal, more so when it includes a prayer for reinstatement (Globe Telecom, Inc. vs Florendo-Flores,
390 SCRA 201, 2002[sic]-203 [2002]).
Relief – Backwages or Reinstatement
Finally, an employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement.
If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an
illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one (1)
month salary for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are
entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed
from the time their actual compensation was withheld from them up to the time of their actual reinstatement
but if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal
termination up to the finality of the decision.
In the case at bar, considering the strained relations between the parties brought about by petitioners ’filing of
criminal cases against respondent, reinstatement is not viable. The Court of Appeals is therefore correct in
awarding separation pay equivalent to one (1) month pay for every year of service computed from the date of
his illegal dismissal on March 1, 2001 up to the finality of the decision.
 e) Danny Mame vs. Court of Appeals, G.R. No. 167953, 3 April 2007 - YODH
G.R. No. 167953 April 3, 2007
DANNY MAME, Petitioner, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, VIRGILIO
CUERPO and NORILYN CUERPO, Respondents.
SUMMARY: The petitioner Mami worked as a carpenter for the respondent Cuerpo spouses. Eventually, Mami
was promoted to foreman carpenter. Among the projects he would supervise was the Bayot Residence in Baguio
city. During the course of the project, it turned out that Mami had erroneously installed the narra planks on the
stairs of the residence. Hence, he was reprimanded by Norilyn Cuerpo. After being reprimanded, Mami
proceeded to the construction barracks. The period between the incident and the filing of the case was 10 days.
The LA rendered a decision in favor of the Cuerpos. It found that Mami had abandoned his work.
The NLRC reversed the LA. It held that since Mame stayed in the barracks for a long time, the Cuerpos could
have easily reached out to him in order to compel him to return to work. Since they did not do this nor did they
institute proceedings against him nor did they notify him of his termination, such dismissal was illegal.
The CA reversed the NLRC. It held that Mami did abandon the Cuerpos. However, there was no evidence that
the Cuerpos terminated the services of Mami for having abandoned his work.
SC: Mami did not abandon his work. In cases where abandonment is the cause for termination of employment,
two factors must concur: (1) there is a clear, deliberate and unjustified refusal to resume employment; and
(2) a clear intention to sever the employer-employee relationship.
It was quite improbable for petitioner to have abandoned his job after having been employed with respondents
for twelve years. If, as the CA ruled, petitioner had decided to do so, petitioner would have immediately left
Baguio City to file his complaint; however, he remained in the workers ’barracks until September 28, 2001.
FACTS:
Respondents Virgilio and Norilyn Cuerpo were engaged in the construction business, undet the name “V.C.
Building Trade and Wooworks. Among the carpenter and worker employees of the Cuerpos was petitioner
Danny Mame, whose task was to supervise the workers at the Bonifacio Firing Range Project.
Later, Mame was promoted to foreman carpenter. He was tasked to supervise over a number of projects. Among
these projects was the Bayot Residence in Baguio City.
During the construction project at Baguio City, Norilyn Cuerpo called Mame’s attention to the erroneous
installation of narra planks on the stairs of the Bayot residence. The Cuerpo spouses had to correct the error
and to pay the costs therefor.
According to Mame, the Cuerpo spouses told him, “Umalis ka na, ayaw na kitang makita dito. Tanggal ka na sa
trabaho.” This was followed by scathing insults. Hence, he left his employment.
The Cuerpo spouses counter that Norilyn merely called the attention of Mame regarding the complaint of the
architect regarding the incorrect installation of the planks. They merely reprimanded Mame and the latter
resented the incident, opting to stay in the barracks.
This incident occurred on September 18, 2001. The petitioner Mame filed his complaint for illegal dismissal on
September 28, 2001. Mame sought reinstatement as well as payment of holiday pay, holiday premium pay,
service incentive leave pay, 13th month pay, and moral and exemplary damages, as well as the costs of the suit.
The Cuerpos maintained that petitioner walked out from his employment and abandoned his work. They had
the right to call his attention since his work was deficient. Instead of being remorseful, complainant even
threatened to convince his co-workers to walk out from their jobs. In her reply, respondent Norilyn denied that
she terminated the employment of complainant and insulted him on September 21, 2001. Petitioner was a
troublemaker and had difficulty with authority figures.
LA: Dismissed the complaint. LA found that Mame walked out on the Cuerpos when his attention was called to
the wrong installation. He had no one to blame but himself. The LA awarded the damages except for the holiday
premium pay.
Mame filed an appeal at the NLRC.
NLRC: Ruled in favor of Mame. Appellees failed to establish any overt act from which we can infer the clear
intention of appellant to desist from employment. After the incident, Mame still stayed in the construction
barracks, hence Mame was within easy reach of appellees. Yet, during this period, appellees never took any
step to compel appellant to return to work, did not question his alleged continued refusal to work and did not
institute any investigation or proceedings to cause his termination from work due to abandonment. Appellees
did not give appellant written notice of his termination on the ground of abandonment. Failure to do so makes
the termination illegal.
Hence, the Cuerpos filed a petition for Certiorari with the CA.
CA: Ruled in favor of the Cuerpos. For having walked out, the private respondent provided a factual and legal
basis for the petitioners to consider him as having abandoned his work and to terminate his services for said
reason. There was simply no evidence that petitioners terminated him for having abandoned his work. It cannot
even be characterized as constructive dismissal.
It is erroneous on the part of the public respondent to fault petitioners for not initiating any formal investigation.
It is unfounded as it proceeds from a presumption that petitioners terminated his services for abandonment.
Why would they do so if they were not contemplating the termination of his services for said reason? It must
be remembered that he has been working for them since January of 1988. For such a petty misunderstanding,
the petitioners had no reason to expect that private respondent would consider himself as terminated and
precipitately file a case. How can a few days of non-communication be deemed a decision to terminate him?
Obviously, his rash filing of the complaint was premature.
That the private respondent did walk out was viewed by the public respondent as "beyond logic." It is hardly
surprising, however. The petitioner had been rendering his services for several employers in the business
whenever these were needed. Because of his skill, he had no difficulty earning a living. Thus, it could be said
that he had many clientele and could well-afford to leave the petitioners. To take with him their money for no
sweat at all, however, the Court cannot countenance.
PETITIONER’S CONTENTION: Respondents failed to prove that he abandoned his job. He avers that he was
subjected to insults, the very reason why he walked out of his job. Thus, his absence was work-related, due to
respondent Norilyn’s hostile treatment. Nonetheless, his mere absence or failure to report for work does not
amount to abandonment. He was not issued written notices to report back to work, nor was he asked to explain
why he was absent. Considering that he had been working for respondents for 12 years, it was unlikely that he
would abandon his job. The fact that he was not given a written notice of termination due to abandonment
makes the termination illegal. To buttress his arguments, petitioner cites the ruling of this Court in Tan v.
National Labor Relations Commission.

ISSUE: WON petitioner Mame’s walking out constituted Abandonment

RULING: NO. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals are REVERSED AND SET ASIDE. The Decision of the NLRC is REINSTATED. No costs.

RATIO:

We find that contrary to the rulings of the NLRC and the CA, petitioner prayed for his immediate reinstatement
with full back wages plus assorted monetary benefits in his Position Paper. He made the same prayer in his
Memorandum on Appeal in the NLRC.16 However, petitioner declared therein that the decision of the NLRC
(which declared that he was entitled to separation pay) was correct; and, in his petition in this Court, he prayed
that the decision of the NLRC be reinstated. In fine, petitioner is no longer praying for reinstatement to his
former employment with respondents.

We also reject the ruling of the CA that petitioner’s "walk-out" and his failure to report to work afterwards is
not sufficient to anchor a finding of abandonment. It must be noted that petitioner must have been so
humiliated when respondent Norilyn blamed him for the erroneous installation of narra planks on the stairs of
the Bayot residence. He sulked and remained in the crew barracks. He did not immediately leave the site.
Thus, it cannot be concluded solely by such circumstances that petitioner thereby abandoned his job.
Notwithstanding, respondents themselves did not consider petitioner as having abandoned his job by his mere
absence from September 18, 2001 to September 28, 2001 when he left Baguio City and arrived in Manila to file
his complaint in the NLRC. The ten-day interval from the time of the incident between petitioner and respondent
Norilyn Cuerpo up to the time he filed the complaint for illegal dismissal is so short that it is quite absurd to
expect respondents to consider that petitioner had abandoned his job. In fact, respondents were not actually
aware that petitioner quit his job.

In cases where abandonment is the cause for termination of employment, two factors must concur: (1) there
is a clear, deliberate and unjustified refusal to resume employment; and (2) a clear intention to sever the
employer-employee relationship. The burden of proof that there was abandonment lies with the employer.
Where the employee takes steps to protest his layoff, it cannot be said that he has abandoned his work because
a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal,
more so when it includes a prayer for reinstatement.

There is logic in the finding of the NLRC that it was quite improbable for petitioner to have abandoned his job
after having been employed with respondents for twelve years. If, as the CA ruled, petitioner had decided to do
so, petitioner should have immediately left Baguio City to file his complaint; however, he remained in the
workers ’barracks until September 28, 2001.
 f) Fe La Rosa vs. Ambassador Hotel, G.R. No. 177059, 13 March 2009; - MONA
G.R. No. 177059 March 13, 2009
FE LA ROSA, OFELIA VELEZ, CELY DOMINGO, JONA NATIVIDAD and EDGAR DE LEON, Petitioners, vs.
AMBASSADOR HOTEL, Respondent.
Ponente: CARPIO MORALES, J.
SUMMARY: Employees of Ambassador Hotel including herein petitioners alleged that, following their filing of
complaints with the DOLE-NCR which prompted an inspection of the hotel’s premises by a labor inspector,
respondent was found to have been violating labor standards laws and was thus ordered to pay them some
money claims. This purportedly angered respondent’s management which retaliated by suspending and/or
constructively dismissing them by drastically reducing their work days through the adoption of a work
reduction/rotation scheme. Petitioners filed complaints for illegal dismissal, illegal suspension, and illegal
deductions against the hotel and its manager, Yolanda L. Chan.
The LA and the NLRC found that there was illegal dismissal. However, the CA reversed holding that there was
no constructive dismissal because petitioners "simply disappeared from work" upon learning of the work
reduction/rotation scheme. The appellate court went on to hold that respondent’s adoption of the work
reduction/rotation scheme, as well as its reassignment of petitioners, was a valid exercise of management
prerogative, absent any showing that the same was done out of vengeance. It further held inapplicable the rule
that the institution of a complaint for illegal dismissal is inconsistent with abandonment, because petitioners
failed to pray for reinstatement as they instead prayed for separation pay.
ISSUE: WON petitioners are guilty of abandonment
RULING: NO. In all the pro-forma complaints filed by petitioners before the NLRC, they prayed for reinstatement
or, in the alternative, for the award to them of separation pay. And they reiterated this prayer in their Position
Paper, specifically in paragraph 14 thereof, viz:
14. Due process was not followed in the constructive dismissal of the complainants. Hence they are
entitled to reinstatement with full backwages or in the alternative to full separation pay of one
month per year of service.
For abandonment to exist, two requisites must concur:
1. The employee must have failed to report for work or must have been absent without valid or
justifiable reason; and
2. There must have been a clear intention on the part of the employee to sever the employer-
employee relationship as manifested by some overt acts.
The second element is the more determinative factor. Abandonment as a just ground for dismissal thus requires
clear, willful, deliberate, and unjustified refusal of the employee to resume employment. Mere absence or
failure to report for work, even after notice to return, is not tantamount to abandonment. The burden of proof
to show that there was unjustified refusal to go back to work rests on the employer.
FACTS:
On April 17, 2002, employees of Ambassador Hotel including herein petitioners filed before the NLRC several
complaints, docketed as NLRC Case Nos. 04-02018-02, 30-04-02019-02, 08-06442-02 and 02-03643-02, for
illegal dismissal, illegal suspension, and illegal deductions against the hotel (respondent) and its manager,
Yolanda L. Chan. They alleged that, following their filing of complaints with the DOLE-NCR which prompted
an inspection of the hotel’s premises by a labor inspector, respondent was found to have been violating labor
standards laws and was thus ordered to pay them some money claims.
This purportedly angered respondent’s management which retaliated by suspending and/or constructively
dismissing them by drastically reducing their work days through the adoption of a work reduction/rotation
scheme. Criminal cases for estafa were likewise allegedly filed against several of the employees involved,
some of which cases were eventually dismissed by the prosecutor’s office for lack of merit.
The complaints against respondent subject of the present petition were consolidated.
LA: By Decision of September 30, 2003, the labor arbiter found respondent and its manager Yolanda L. Chan
guilty of illegal dismissal and ordered them to pay petitioners ’separation pay at ½ month for every year of
service with full backwages, and 10% of the monetary award as attorney’s fees.
NLRC: By Decision2 dated September 8, 2005, affirmed the labor arbiter’s ruling with the modification that five
of the complainants, namely Diana P. Castillo, Lorena L. Hildao, Gilbert Ongjoco, Salvador So and Ma. Pilar A.
Barcenilla, were directed to report back to work, and respondent was directed to accept them without having
to pay them backwages. With respect to petitioners, the NLRC held that Edgar de Leon was "actually dismissed
but illegally" on November 7, 2001 and that with respect to the four other petitioners, they were
constructively dismissed on April 15, 2002 by virtue of respondent’s memorandum of even date.
Thus, the NLRC disposed: WHEREFORE, premises considered, the Decision appealed from is hereby MODIFIED.
Diana P. Castillo, Lorena I. Hildao, Gilbet Ongjoco, Salvador So and Ma. Pilar A. Barcenilla were not dismissed.
They are ordered to report back to work and respondents to accept them back, but without backwages.
[Herein petitioners] Fe La Rosa, Ofelia Velez, Cely Domingo and Jona Natividad were constructively dismissed,
and Edgar de Leon actually dismissed but illegally. Accordingly, the awards made in their favor are AFFIRMED.
SO ORDERED.
On respondent’s motion for reconsideration, the NLRC, by Decision dated January 27, 2006, modified its
decision by, among other things, absolving respondent’s manager Yolanda L. Chan of any personal liability.
Respondent appealed and prayed for the issuance of an injunctive writ before the Court of Appeals, faulting
the NLRC to have committed grave abuse of discretion 1) in finding that petitioners were illegally dismissed, 2)
in awarding backwages and separation pay, and 3) in requiring it to pay them the monetary equivalent of their
service incentive leaves.
Respondent maintained that its act of reducing the number of work days per week was valid, as it was done
to save its business from bankruptcy due to economic reverses.
CA: granted respondent’s prayer for a TRO and subsequently for a writ of preliminary injunction.
By Decision dated December 12, 2006, the appellate court reversed the NLRC decision and
dismissed petitioners ’complaints, holding that there was no constructive dismissal because
petitioners "simply disappeared from work" upon learning of the work reduction/rotation scheme;
and that in their position paper submitted before the NLRC, petitioners only prayed for separation
pay and not for reinstatement, hence, following settled jurisprudence, the latter relief has been
foreclosed.
The appellate court went on to hold that respondent’s adoption of the work reduction/rotation
scheme, as well as its reassignment of petitioners, was a valid exercise of management
prerogative, absent any showing that the same was done out of vengeance. It further held
inapplicable the rule that the institution of a complaint for illegal dismissal is inconsistent with
abandonment, because petitioners failed to pray for reinstatement as they instead prayed for
separation pay.
Petitioners ’motion for reconsideration having been denied by the appellate court by Resolution dated March
7, 2007, they instituted the present petition for review on certiorari.
PETITIONERS ’DEFENSE: Petitioners deny having abandoned their jobs. And they take exception to the appellate
court’s finding that they did not pray for reinstatement, they inviting attention to paragraph 14, page 5 of
their verified position paper reading: "x x x Hence they are entitled to reinstatement with full backwages, or
in the alternative to full separation pay of one month per year of service," as well as to their prayer in the
pro-forma complaints filed before the labor arbiter asking for the same relief.
Petitioners question as bereft of specific proof the appellate court’s ruling that the work
reduction/rotation scheme adopted by respondent was a valid exercise of management prerogative.
Finally, petitioners question the issuance by the appellate court of a TRO, and subsequently of a writ
of preliminary injunction conditioned on respondent’s posting of a bond which was lower than the
judgment award, hence, prejudicial to them.
ISSUE: WON petitioners are guilty of abandonment
RULING: NO. WHEREFORE, the petition is GRANTED.
The CA Decision dated December 12, 2006 and Resolution dated March 7, 2007 are REVERSED and SET ASIDE.
The NLRC Decision dated September 8, 2005 and Resolution dated January 21, 2006 are REINSTATED. SO
ORDERED.
RATIO:
The petition is impressed with merit.
While it is settled that the Court is not a trier of facts and does not, as a rule, re-examine the evidence presented
by the parties to a case, there are a number of recognized exceptions, such as when the judgment is based on
a misapprehension of facts; when the findings of facts of lower courts are conflicting; or when the findings of
facts are premised on the supposed absence of evidence but which are contradicted by the evidence on record.
The appellate court predicated its reversal of the NLRC decision that petitioners were illegally dismissed on
petitioners ’supposed abandonment of their jobs, and justified the work rotation/reduction scheme adopted by
respondent as a valid exercise of management prerogative in light of respondent’s business losses.
The records fail, however, to show any documentary proof that the work reduction scheme was adopted due
to respondent’s business reverses. Respondent’s memorandum dated April 5, 2000 (sic, should be 2002)
informing petitioners of the adoption of a two-day work scheme effective April 5, 2002 made no mention why
such scheme was being adopted. Neither do the records show any documentary proof that respondent
suffered financial losses to justify its adoption of the said scheme to stabilize its operations.
What is undisputed, as found by both the labor arbiter and the NLRC and admitted by respondent itself, is that
the complaints for violation of labor standards laws were filed by petitioners against respondent at the DOLE-
NCR, some of which complaints were partially settled; and that almost immediately after the partial settlement
of the said complaints, the work reduction/rotation scheme was implemented.
Case law holds that constructive dismissal occurs when there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.
Respondent’s sudden, arbitrary and unfounded adoption of the two-day work scheme which greatly reduced
petitioners ’salaries renders it liable for constructive dismissal.
MAIN-ISSUE (TOPIC):
Respecting the appellate court’s ruling that petitioners "simply disappeared" from their work, hence, they are
guilty of abandonment, the same does not lie.
Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does
not want to work anymore. And the burden of proof to show that there was unjustified refusal to go back to
work rests on the employer.
Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal
acts.
For abandonment to exist, two requisites must concur:
1. The employee must have failed to report for work or must have been absent without valid or
justifiable reason; and
2. There must have been a clear intention on the part of the employee to sever the employer-
employee relationship as manifested by some overt acts.
The second element is the more determinative factor. Abandonment as a just ground for dismissal thus
requires clear, willful, deliberate, and unjustified refusal of the employee to resume employment. Mere
absence or failure to report for work, even after notice to return, is not tantamount to abandonment.
Respondent, which has the onus of proving that petitioners abandoned their work, failed to discharge the same,
however.
Upon the other hand, petitioners ’immediate filing of complaints for illegal suspension and illegal dismissal
after the implementation of the questioned work scheme, which scheme was adopted soon after petitioners ’
complaints against respondent for violation of labor standards laws were found meritorious, negates
respondent’s claim of abandonment. An employee who takes steps to protest his dismissal cannot by logic be
said to have abandoned his work.
As for the appellate court’s ruling that petitioners are not entitled to reinstatement because they did not pray
for it in their complaints, the same does not lie. In all the pro-forma complaints filed by petitioners before the
NLRC, they prayed for reinstatement or, in the alternative, for the award to them of separation pay. And they
reiterated this prayer in their Position Paper, specifically in paragraph 14 thereof, viz:
14. Due process was not followed in the constructive dismissal of the complainants. Hence they are
entitled to reinstatement with full backwages or in the alternative to full separation pay of one
month per year of service.
Besides, under Article 279 of the Labor Code and based on settled jurisprudence, an employee dismissed
without just cause and without due process, like petitioners herein, are entitled to reinstatement and
backwages or payment of separation pay.
In fine, the Court finds that petitioner Edgar de Leon was illegally dismissed on November 7, 2001, and the
rest of the petitioners were illegally dismissed on April 15, 2002 from which dates the payment of backwages,
at the above-stated rate determined by the Labor Arbiter and affirmed by the NLRC, are to be reckoned with.
This leaves it unnecessary to still pass on the issue of the propriety of the appellate court’s issuance of a TRO
and injunctive writ.
 g) MZR Industries vs. Majen Colambot, G.R. No. 179001, 28 August 2013; - JESS Colambot already found another employment, each party must bear his or her own loss, thus, placing them on
equal footing.

Facts:
G.R. No. 179001. August 28, 2013.*
Petition for Review on Certiorari (Rule 45) seeking reversal of CA decision & resolution, reversing NLRC decision
MZR INDUSTRIES, MARILOU R. QUIROZ and LEA TIMBAL, petitioners, vs. MAJEN COLAMBOT, respondent.
& resolution which set aside the LA decision.
Topic: Abandonment
- On February 8, 2000, petitioner Marilou Quiroz, Owner and Vice-President for Finance and Marketing of MZR,
Ponente: Peralta, J.
hired respondent Majen Colambot (Colambot) as messenger.
- Colambot’s duties and responsibilities included field, messengerial and other liaison work
Summary:
Petitioner Quiroz hired respondent Colambot as messenger. Beginning 2002, Colambot’s work performance
- However, beginning 2002, Colambot’s work performance started to deteriorate.
started to deteriorate therefore, petitioners issued several memoranda to Colambot for habitual tardiness,
negligence, and violations of office policies. He was given written warnings from 2003 to 2004 but despite
- Petitioners issued several memoranda to Colambot for habitual tardiness, negligence, and violations of office
written warnings, Colambot failed to mend his ways. On Oct 25 2004, Petitioner Timbal (MZR’s Administrative
policies.6 He was also given written warnings for:
Manager) gave notice of suspension for insubordination and negligence to Colambot (Suspended from Nov 26
- Insubordination [committed on August 27, 2003 and September 11-12, 2003];
2004-Dec 6 2004). Petitioners claimed that they waited for Colambot to report back to work on Dec 7 2004 but
- Negligence caused by careless handling of confidential office documents [Sept 16, 2003];
they never heard from him anymore. Later, petitioners were surprised to find out that Colambot filed complaint
- Leaving his post without proper turnover [Sept 22, 2004]; and,
for illegal dismissal, illegal suspension, underpayment of salaries, holiday pay, service incentive pay, 13th month
- Insubordination [Oct 4, 2004]
pay & separation pay.
- Petitioners claimed that despite written warnings for repeated tardiness and insubordination, Colambot failed
- Colambot’s contention: He was made to choose between resigning from company/ company would terminate
to mend his ways.
his services. He said he refused to resign. He alleged that Quiroz made him sign a memorandum for his
suspension therefore after affixing his signature, Quiroz told him that effective Dec 7 2004, he is already deemed
- Hence, in a Memorandum dated October 25, 2004 issued by petitioner Lea Timbal (Timbal), MZR’s
terminated. On Dec 2 2004, he went back to company to get his salary but Timbal asked him to turn over his
Administrative Manager, Colambot was given a notice of suspension for insubordination and negligence.
Company ID.
- Again, in a Memorandum dated November 25, 2004, Colambot was suspended from November 26, 2004 until
- Petitioners ’contention: They never terminated Colambot’s employment. Colambot’s failure to report to work
December 6, 2004 for insubordination.
since Dec 7 2004 without any approved vacation/ sick leave constituted abandonment of work.
- Allegedly, Colambot disobeyed and left the office despite clear instructions to stay in the office
- LA: there was no abandonment as there was no deliberate intent on part of Colambot to sever employer-
because there was an important meeting in preparation for a very important activity the following
employee relationship
day.
- NLRC: Colambot abandoned his work due to refusal to report for work after suspension.
- CA: reversed NLRC; Colambot was illegally dismissed.
- Petitioners claimed they waited for Colambot to report back for work on December 7, 2004, but they never
- Issue: WON Colambot was guilty of abandonment (No)
heard from him anymore. Later, petitioners were surprised to find out that Colambot had filed a complaint for
- SC: No illegal dismissal; no abandonment.
illegal suspension, underpayment of salaries, overtime pay, holiday pay, rest day, service incentive leave and
-In the present case, other than Colambot’s unsubstantiated allegation of having been verbally terminated from
13th month pay.
his work, there was no evidence presented to show that he was indeed dismissed from work or was prevented
- On December 16, 2004, the complaint was amended to illegal dismissal, illegal suspension, underpayment of
from returning to his work. A review of the Notice of Suspension dated November 25, 2004 shows that
salaries, holiday pay, service incentive pay, 13th month pay and separation pay.
respondent was merely suspended from work for 6 days,
- In a number of cases, this Court consistently held that to constitute abandonment of work, 2 elements must
Colambot:
be present:
- For his part, Colambot narrated that he worked as a messenger for petitioners since Feb 2000.
1. The employee must have failed to report for work or must have been absent without valid or
- That on November 2004, he was directed to take care of the processing of a document in Roxas Boulevard,
justifiable reason; and
Pasay City. When he arrived at the office around 6 to 7 pm, he looked for petitioner Quiroz to give the
2. There must have been a clear intention on the part of the employee to sever the employer-
documents. The latter told him to wait for her for a while. When respondent finally had the chance to talk to
employee relationship manifested by some overt act.
Quiroz, she allegedly told him that she is dissatisfied already with his work performance. Afterwards, Colambot
- In the instant case, other than Colambot’s failure to report back to work after suspension, petitioners failed
claimed that he was made to choose between resigning from the company or the company will be the one to
to present any evidence which tend to show his intent to abandon his work. It is a settled rule that mere absence
terminate his services. He said he refused to resign.
or failure to report for work is not enough to amount to abandonment of work. There must be a concurrence
- Colambot alleged that Quiroz made him sign a memorandum for his suspension, from Nov 26 to Dec 6, 2004.
of the intention to abandon and some overt acts from which an employee may be deduced as having no more
After affixing his signature, Quiroz told him that effective Dec 7, 2004, he is already deemed terminated.
intention to work.
- Later, on December 2, 2004, respondent went back to the company to look for Timbal to get his salary. He
- These circumstances, taken together, the lack of evidence of dismissal and the lack of intent on the part of the
claimed that Timbal asked him to turn over his company I.D.
respondent to abandon his work, the remedy is reinstatement but without backwages. However, considering
that reinstatement is no longer applicable due to the strained relationship between the parties and that
Petitioners:
- Petitioners, however, insisted that while Colambot was suspended due to insubordination and negligence,
they maintained that they never terminated Colambot’s employment. Ruling:
- They added that Colambot’s failure to report for work since Dec 7, 2004 without any approved vacation/ sick - While we recognize the rule that in illegal dismissal cases, the employer bears the burden of proving that the
leave constituted abandonment of his work, but they never terminated his employment. termination was for a valid or authorized cause, in the present case, however, the facts and the evidence do
- Petitioners further emphasized that even with Colambot’s filing of the complaint against them, his employment not establish a prima facie case that the employee was dismissed from employment. Before the employer
with MZR has not been terminated. must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial
evidence the fact of his dismissal from service. If there is no dismissal, then there can be no question as to the
Colambot: legality or illegality thereof.
- Argued contrary to petitioners ’claim that he abandoned his job, he claimed that he did not report back to
work after the expiration of his suspension on December 6, 2004, because Quiroz told him that his - In the present case, other than Colambot’s unsubstantiated allegation of having been verbally terminated from
employment was already terminated effective December 7, 2004. his work, there was no evidence presented to show that he was indeed dismissed from work or was prevented
from returning to his work. In the absence of any showing of an overt or positive act proving that petitioners
Labor Arbiter: [no abandonment] had dismissed respondent, the latter’s claim of illegal dismissal cannot be sustained — as the same would be
- [April 28 2006] Respondents are guilty of illegal dismissal (ordered reinstatement) self-serving, conjectural and of no probative value.
- There was no abandonment as there was no deliberate intent on the part of Colambot to sever the
employer-employee relationship. - A review of the Notice of Suspension dated November 25, 2004 shows that respondent was merely suspended
- Colambot should have been notified to return back to work, which petitioner failed to do. from work for 6 days, there was, however, no evidence that Colambot was terminated from work.
TO : MAJEN COLAMBOT
Aggrieved, petitioners appealed the decision before the NLRC.
MZR MESSENGER
FROM : HUMAN RESOURCE DEPT
NLRC: [Colambot abandoned his work; no illegal dismissal]
DATE : NOV. 25, 2004
- [Oct 31 2006] Granted appeal. Judgment of LA set aside.
RE : SUSPENSION DUE TO
- The NLRC pointed out that Colambot’s complaint was unsupported by any evidence and was not even made
INSUBORDINATION
under oath, thus, lacking in credibility and probative value.
xxxx
- Colambot abandoned his work due to his refusal to report for work after his suspension. The failure of MZR
Cases of insubordination and violations have been filed against you many times. We kept on
to notify Colambot to return back to work is not tantamount to actual dismissal.
reminding that you should have changed and improved your working attitudes because it
greatly affects not only your working performance but the company’s productivity as well.
- Colambot filed MR, but was denied
Your attitude only shows HARD HEADEDNESS AND LACK OF RESPECT TO YOUR SUPERIORS
- Thus, via a petition for certiorari under Rule 65 ROC, raising grave abuse of discretion as a ground, Colambot
which in any company cannot tolerate.
appealed before the CA and sought that the Decision dated Oct 31, 2006 and Resolution dated December 21,
2006 of the NLRC be reversed and set aside.
With these, you are suspended for 6 working days effective November 26, 2004, you will
only report on December 7, 2004.
CA: [reversed NLRC; Colambot was illegally dismissed]
- Granted the petition and reversed the assailed Decision of the NLRC.
THIS IS OUR LAST WARNING FOR YOU TO IMPROVE, FAILURE TO DO SO MAY MEAN
- Colambot was illegally dismissed based on the grounds that:
TERMINATION OF YOUR EMPLOYMENT CONTRACT.
(1) MZR failed to prove abandonment on the part of Colambot, and
xxxx
(2) MZR failed to serve Colambot with the required written notices of dismissal.

- Petitioners appealed, but was denied in a Resolution20 dated July 25, 2007.

Petitioners ’argument:
- They did not terminate the employer-employee relationship with Colambot. Other than Colambot’s self- - While the same appeared to contain a warning of termination should Colambot fail to improve his behavior,
serving and unverified narration of facts, he failed to present any document showing that he was terminated it is likewise apparent that there was also a specific instruction for him to report back to work, on December
from work. 7, 2004, upon serving his suspension.
- Petitioners assert that Colambot abandoned his work when he failed to report back to work without an - The subject of the Letter, i.e., “Suspension due to Insubordination,” the wordings and content of the letter
approved vacation or sick leave, thus, he is not entitled to an award of separation pay and backwages. is a clear-cut notice of suspension, and not a notice of termination.
- The notice of suspension may have contained warnings of termination, but it must be noted that such was
Issue: conditioned on the ground that — Colambot would fail to improve his attitude/behavior. There were no
WON Colambot abandoned his work [or was guilty of abandonment] (No) wordings whatsoever implying actual or constructive dismissal.
- Thus, Colambot’s general allegation of having been orally dismissed from the service as against the clear
Held: No illegal dismissal; No abandonment wordings and intent of the notice of suspension which he signed, we are then inclined to believe that there was
CA reversed. NLRC resolution reinstated. no dismissal.

- In Machica v. Roosevelt Services Center, Inc., this Court sustained the employer’s denial as against the
employees ’categorical assertion of illegal dismissal. In so ruling, this Court held that:
The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were
burdened to prove their allegation that respondents dismissed them from their employment. It must
be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that
the employer bears the burden of proof in illegal dismissal cases finds no application here because the
respondents deny having dismissed the petitioners.
Hence, as between respondents ’general allegation of having been orally dismissed from the
service vis-a-vis those of petitioners which were found to be substantiated by the sworn statement of
foreman Wenifredo, we are persuaded by the latter. Absent any showing of an overt or positive act
proving that petitioners had dismissed respondents, the latter’s claim of illegal dismissal cannot be
sustained. Indeed, a cursory examination of the records reveal no illegal dismissal to speak of.27
- In Abad v. Roselle Cinema, we ruled that the substantial evidence proffered by the employer that it had not
terminated the employee should not be ignored on the pretext that the employee would not have filed the
complaint for illegal dismissal if he had not really been dismissed. We held that such non sequitur reasoning
cannot take the place of the evidence of both the employer and the employee.
- Suffice it to say that, it is the employer who has the burden of proof to show a deliberate and unjustified refusal
of the employee to resume his employment without any intention of returning. It is therefore incumbent upon
petitioners to ascertain the respondents ’interest or non-interest in the continuance of their employment. This,
petitioners failed to do so.
- These circumstances, taken together, the lack of evidence of dismissal and the lack of intent on the part of the
respondent to abandon his work, the remedy is reinstatement but without backwages. However, considering
that reinstatement is no longer applicable due to the strained relationship between the parties and that
Colambot already found another employment, each party must bear his or her own loss, thus, placing them
on equal footing.
- Verily, in a case where the employee’s failure to work was occasioned neither by his abandonment nor by a
termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his
own loss.

- Neither could the petitioners be blamed for failing to order respondent to return back to work. Records
show that Colambot immediately filed the complaint for illegal dismissal on Dec 16, 2004, or just a few days
when he was supposed to report back to work on Dec 7, 2004. For petitioners to order respondent to report
back to work, after the latter had already filed a case for illegal dismissal, would be unsound.

- However, while the Court concurs with the conclusion of the NLRC that there was no illegal dismissal, no
dismissal having actually taken place, the Court does not agree with its findings that Colambot committed
abandonment of work.

- In a number of cases, this Court consistently held that to constitute abandonment of work, 2 elements must
be present:
1. The employee must have failed to report for work or must have been absent without valid
or justifiable reason; and
2. There must have been a clear intention on the part of the employee to sever the employer-
employee relationship manifested by some overt act.

- In the instant case, other than Colambot’s failure to report back to work after suspension, petitioners failed
to present any evidence which tend to show his intent to abandon his work. It is a settled rule that mere
absence or failure to report for work is not enough to amount to abandonment of work. There must be a
concurrence of the intention to abandon and some overt acts from which an employee may be deduced as
having no more intention to work.
- On this point, the CA was correct when it held that:
Mere absence or failure to report for work, even after notice to return, is not tantamount to
abandonment. The burden of proof to show that there was unjustified refusal to go back to work rests
on the employer. Abandonment is a matter of intention and cannot lightly be presumed from certain
equivocal acts. To constitute abandonment, there must be clear proof of deliberate and unjustified
intent to sever the employer-employee relationship. Clearly, the operative act is still the employee’s
ultimate act of putting an end to his employment. Furthermore, it is a settled doctrine that the filing
of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employee
who takes steps to protest his dismissal cannot logically be said to have abandoned his work. The filing
of such complaint is proof enough of his desire to return to work, thus negating any suggestion of
abandonment.32
 h) Tegimenta Chemical Phils, Vivian Rose D. Garcia, Mary Anne Oco, G.R. No. 175369, 27 February 2013 -
ALVIN
G.R. No. 175369. February 27, 2013
TEGIMENTA CHEMICAL PHILS. and VIVIAN ROSE D. GARCIA, Petitioners, vs. MARY ANNE
OCO, Respondent.
Summary: Respondent Oco worked as a clerk, and later on as a material controller, for Tegimenta, a company
owned by petitioner Garcia. By reason of her pregnancy, Oco incurred numerous instances of absence and
tardiness from March to April 2002. Garcia subsequently advised her to take a vacation, which the latter did
from May 01-15. On her return, Oco immediately worked for the next 4 working days of May. However, on May
21 Garcia allegedly told her to no longer report to the office effective that day. Hence, respondent no longer
went to work. Oco nevertheless called Garcia at the end of the month, but was informed that she had no more
job to do. Hence, on June 3, respondent filed a Complaint for illegal dismissal and prayed for reinstatement and
back wages before the LA. Later on, she amended her Complaint by asking for separation pay instead of
reinstatement.
She claims that she was verbally dismissed without any valid cause and without due process; that Tegimenta
hired new employees to replace her. In their defense, petitioners countered that she had abandoned her job by
being continuously AWOL (June 16-30). They further narrated that they could not possibly terminate her
services, because she still had to settle her accountabilities. The LA and NLRC ruled in favor of Oco, stating that
her dismissal is illegal. The CA, however, overturned the said decisions, pronouncing that no actual dismissal
transpired; rather, Oco was merely on AWOL. On reconsideration, the CA reversed its earlier ruling. Was Oco
illegally dismissed? Yes.
The inquiry into whether Garcia verbally fired Oco and whether the employee abandoned her job are factual
determinations generally beyond the jurisdiction of this Court; An established doctrine in labor cases is that
factual questions are for labor tribunals to resolve. Their consistent findings are binding and conclusive and will
normally not be disturbed, since this Court is not a trier of facts. Therefore, on the basis of these circumstances
alone, the appeal before us already deserves scant consideration. Most notably, the LA observed that the
employers "did not deny the claims of complainant [Oco] that she was simply told not to work." This silence
constitutes an admission that fortifies the truth of the employee’s narration. Considering this rule of evidence,
together with the immaterial discrepancies, this Court thus rules against wholly invalidating the findings of the
courts a quo.
Did Oco abandon her work by being on AWOL? No
For abandonment to exist, two factors must be present: (1) the failure to report for work or absence without a
valid or justifiable reason; and (2) a clear intention to sever the employer-employee relationship, with the
second element as the more determinative factor being manifested by some overt acts. The mere absence of
an employee is not sufficient to constitute abandonment. As an employer, Tegimenta has the burden of proof
to show the deliberate and unjustified refusal of the employee to resume the latter’s employment without any
intention of returning.
Here, Tegimenta failed to discharge its burden of proving that Oco desired to leave her job. The courts a quo
uniformly found that she had continuously reported for work right after her vacation, and that her office
attendance was simply cut off when she was categorically told not to report anymore. These courts even noted
that she had also called up the office to follow up her status; and when informed of her definite termination,
she lost no time in filing a case for illegal dismissal. Evidently, her actions did not constitute abandonment and
instead implied her continued interest to stay employed.
Second, the marginal notes in the June 16-30, 2002 payroll showing that she was on leave are dubious. For one,
the CA dutifully detected that none of the succeeding payroll sheets indicated that Oco was considered by the
company as merely AWOL. Hence, it becomes questionable whether there is regularity in making simple
notations as Tegimenta’s reference in considering the status of an employee. Therefore, we hold that the
marginal notations in a single payroll sheet are not competent proofs to back up petitioner’s main defense.
Finally, petitioners posit that Oco’s act of replacing the prayer for reinstatement with that for separation pay
implied that respondent abandoned her employment. Abandonment is a matter of intention and cannot lightly
be inferred or legally presumed from certain equivocal acts. For abandonment to be appreciated, there must
be a "clear, willful, deliberate, and unjustified refusal of the employee to resume employment." Here, the mere
fact that Oco asked for separation pay, after she was told to no longer report for work, does not reflect her
intention to leave her job. She is merely exercising her option under Article 279 of the Labor Code, which entitles
her to either reinstatement and back wages or payment of separation pay.
Facts:
Starting Sep. 5, 2001, respondent worked as a clerk, and later on as a material controller, for petitioner
Tegimenta Chemical Philippines, Incorporated (Tegimenta), a company owned by petitioner Vivian Rose D.
Garcia (Garcia).
By reason of her pregnancy, Oco incurred numerous instances of absence and tardiness from March to April
2002. Garcia subsequently advised her to take a vacation, which the latter did from May 01-15, 2002
On her return, Oco immediately worked for the next 4 working days of May. However, on May 21, 2002,
Garcia allegedly told her to no longer report to the office effective that day. Hence, respondent no longer
went to work. She nevertheless called petitioner at the end of the month, but was informed that she had no
more job to do.
Immediately thereafter, on June 3, 2002, respondent filed a Complaint for illegal dismissal and prayed for
reinstatement and back wages before the LA. Later on, she amended her Complaint by asking for separation
pay instead of reinstatement.
In her Position Paper, Oco maintained that petitioner verbally dismissed her without any valid cause and without
due process. To bolster her story, respondent adduced that Tegimenta hired new employees to replace her. In
their defense, petitioners countered that she had abandoned her job by being continuously absent without
official leave (AWOL). They further narrated that they could not possibly terminate her services, because she
still had to settle her accountabilities.
LA: disbelieved the narration of petitioners and thus ruled in favor of respondent. The arbiter deduced that the
employer only wanted to "make it appear that the complainant was not dismissed from employment, as she
could not prove it with any Memorandum issued to that effect and yet, they also maintain that complainant
was AWOL." The LA further observed that petitioners did not deny the main claim of respondent that she had
simply been told not to report for work anymore.
Aggrieved, petitioners appealed to the NLRC. They assailed the ruling of the LA for having been issued based not
on solid proof, but on mere allegations of the employee. They advanced further that Oco had abandoned her
employment, given that she claimed separation pay instead of reinstatement.
NLRC: The NLRC reviewed the records of the case and found that the documentary evidence coincided with the
allegations of Oco.
Consequently, it affirmed her claim that Garcia, without advancing any reason and without giving any written
notice, had categorically told her not to work for Tegimenta anymore. Accordingly, the NLRC sustained the
illegality of respondent’s dismissal.
NLRC MR: On MR, the NLRC still affirmed the LA’s Decision in toto. Thus, petitioners pursued their action before
the CA via a Rule 65 Petition.
Alleging grave abuse of discretion amounting to lack or excess of jurisdiction, petitioners again assailed the
factual determinations of the LA and the NLRC. In doing so, they attacked Oco’s allegations for being inconsistent
with the evidence on record.
Petitioners reiterated the following before the CA: (1) the payroll sheets from May to August 2002 belied the
claim of Oco that Tegimenta had hired new employees to replace her; (2) the time cards showing respondent’s
attendance in the office on 21 May 2002 negated the story that Garcia had verbally instructed her not to report
for work starting from the said date; and (3) the Complaint that Oco filed before the LA, stating that she was
fired on 3 June 2002, contradicted her allegation in her Position Paper that she was ultimately terminated on 30
May 2002 – a discrepancy of three days.13 The employer also highlighted the marginal notation on the 16 to 30
June 2002 payroll sheet, which indicated that the company considered respondent "on leave."
CA: Appreciating these inconsistencies, together with the marginal notes in the payroll sheet, the CA overturned
the courts a quo and pronounced that no actual dismissal transpired; rather, Oco was merely on AWOL.
Subsequently, respondent sought reconsideration. She insisted that petitioners actually terminated her
services, and that they failed to discharge their burden to prove that it was she who had abandoned work by
being on AWOL.
CA II: This time around, the CA reversed its earlier ruling. Albeit belatedly, the CA realized that (1) the alleged
hiring of new employees, (2) the presence of Oco in the office on the day of her termination, and (3) the three-
day discrepancy between the date of her dismissal, stated in her Complaint before the LA and that in her Position
Paper were all immaterial to the threshold question of whether she abandoned her work or was illegally
dismissed.
Proceeding therefore with the main issue, the CA debunked petitioners ’insistence that Oco abandoned her
employment by being on AWOL. Firstly, it noted that she reported for work right after her vacation, an act that
indicated her intention to resume her employment. In this light, petitioners failed to prove that she had intended
to abandon her work. The appellate court held:
A deeper study of the records show that Tegimenta failed to adduce proof of any overt act of Oco that clearly
and unequivocably showed her intention to abandoned her work when she allegedly absented herself without
leave. The absences incurred by Oco do not indicate that she already abandoned her work, especially
considering that Oco reported for work after the agreed dates of her vacation leave, and she subsequently
filed an illegal dismissal case against Tegimenta.
Secondly, the CA rejected the payroll sheets as proof that Oco was on AWOL. It held that the company’s marginal
notes reflecting that she was "on leave" had no supporting attachments. It even construed the notations as
incompetent evidence because, despite her absence, the payroll sheets for July 2002 onwards had no notations
at all that she was "on leave."
Thirdly, the CA dismissed petitioners ’argument that Oco had effectively abandoned her work and waived her
claim for back wages when she changed her prayer from reinstatement to separation pay. The appellate court
simply explained that opting for separation pay, in lieu of reinstatement, could not support the allegation that
Oco abandoned her work; and that the relief for separation pay did not preclude the grant of back ages, as these
two awards were twin remedies available to an illegally dismissed employee.
Completely dissatisfied with the reversal of their fortune, petitioners implore this Court (1) to discredit the
allegation of Oco that she had in fact been dismissed by them and (2) to make a finding that she abandoned her
work by being on AWOL.
Issues:
1. WON Oco was illegally dismissed (YES)
2. WON Oco abandoned her work by being on AWOL (NO)
Held:
1. The Factual Determination of the Employee’s Dismissal
Prefatorily, the inquiry into whether Garcia verbally fired Oco and whether the employee abandoned her job
are factual determinations generally beyond the jurisdiction of this Court; and in addition to the weakness of
petitioners ’case, all the courts below consistently affirmed the certainty of the employee’s dismissal by the
employer.
An established doctrine in labor cases is that factual questions are for labor tribunals to resolve. Their
consistent findings are binding and conclusive and will normally not be disturbed, since this Court is not a
trier of facts. Therefore, on the basis of these circumstances alone, the appeal before us already deserves
scant consideration.
Nevertheless, petitioners adamantly try to persuade this Court to believe their narration that they did not
dismiss Oco. To prove their version of the story, they poke holes in her narration by harping on her allegedly
false claim that Tegimenta hired replacements and by faulting her for rendering work on the very day that her
services were supposedly terminated. Unfortunately, these purported defects in her narration cannot carry the
day for petitioners.
According to the CA, the hiring of new employees and the presence of Oco on the day of her termination were
all immaterial to resolving the issue of whether she was on AWOL or was illegally dismissed. We find this
appreciation to be correct. Courts consider the evidence as material if it refers to the be-all and end-all of a
petitioner’s cause. Here, none of the loopholes can resolve the case, since it is expected that dismissals may
occur even if no prior replacements were hired, and an employer can indeed attempt to terminate employees
on any day that they come in for work.
Petitioners also make a big fuss about the differing termination dates that Oco stated in her Complaint (3
June 2002) and her Position Paper (30 May 2002). But in Prieto v. NLRC, we held that employees who are not
assisted by lawyers when they file a complaint with the LA may commit a slight error that is forgivable if
rectified later on.
Here, Oco only had one inadvertence when she filled out the Complaint in template form. She also stated in
all her subsequent pleadings before the LA, the NLRC, the CA and this Court that she was dismissed on 30 May
2002. On this point, we similarly rule by regarding the inaccuracy as an error that is insufficient to destroy her
case.
Most notably, the LA observed that the employers "did not deny the claims of complainant [Oco] that she
was simply told not to work." As in Solas v. Power & Telephone Supply Phils. Inc., this silence constitutes an
admission that fortifies the truth of the employee’s narration. Section 32, Rule 130 of the Rules Court,
provides:
An act or declaration made in the presence and within the hearing or observation of a party who does or says
nothing when the act or declaration is such as naturally to call for action or comment if not true, and when
proper and possible for him to do so, may be given in evidence against him.
Considering this rule of evidence, together with the immaterial discrepancies, this Court thus rules against
wholly invalidating the findings of the courts a quo.
2. The Employer’s Defense of Absence without Official Leave
After unsuccessfully assailing the narration of the employee, petitioners argue that Oco abandoned her job by
being on AWOL. As bases for this affirmative defense, they highlight her previous instances of absence and
tardiness. Then, they emphasize the marginal notes in the 16 to 30 Jun 2002 payroll, which showed that she was
on leave. Finally, they equate the employee’s act of asking for separation pay instead of reinstatement as an act
of abandonment.
The bases cited by petitioners are bereft of merit.
First, the nonappearance of Oco at work was already accepted by the company as having resulted from
complications in her pregnancy. In fact, Garcia herself offered respondent a vacation leave. Therefore, given
that the absences of the latter were grounded on justifiable reasons, these absences cannot serve as the
antecedent to the conclusion that she had already abandoned her job.
For abandonment to exist, two factors must be present: (1) the failure to report for work or absence without
a valid or justifiable reason; and (2) a clear intention to sever the employer-employee relationship, with the
second element as the more determinative factor being manifested by some overt acts.
The mere absence of an employee is not sufficient to constitute abandonment. As an employer, Tegimenta
has the burden of proof to show the deliberate and unjustified refusal of the employee to resume the latter’s
employment without any intention of returning.
Here, Tegimenta failed to discharge its burden of proving that Oco desired to leave her job. The courts a quo
uniformly found that she had continuously reported for work right after her vacation, and that her office
attendance was simply cut off when she was categorically told not to report anymore. These courts even
noted that she had also called up the office to follow up her status; and when informed of her definite
termination, she lost no time in filing a case for illegal dismissal. Evidently, her actions did not constitute
abandonment and instead implied her continued interest to stay employed.
Finally, petitioners posit that Oco’s act of replacing the prayer for reinstatement with that for separation pay
implied that respondent abandoned her employment.
Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain
equivocal acts. For abandonment to be appreciated, there must be a "clear, willful, deliberate, and unjustified
refusal of the employee to resume employment." Here, the mere fact that Oco asked for separation pay, after
she was told to no longer report for work, does not reflect her intention to leave her job. She is merely
exercising her option under Article 279 of the Labor Code, which entitles her to either reinstatement and back
wages or payment of separation pay.
As an end note, petitioners advance a procedural lapse on the part of the CA. They argue that since no new
facts, evidence or circumstances were introduced by respondent to the appellate court, it cannot issue a
Resolution that reverses its earlier Decision.
In Astraquillo v. Javier, we have similarly dealt with this contention and considered it as flawed. Our procedural
laws allow motions for reconsideration and their concomitant resolutions, which give the same court an
opportunity to reconsider and review its own ruling.
As stated in Section 5(g) of Rule 135, every court shall have the inherent power to amend and control its
processes and orders, so as to make them conformable to law and justice. "This power includes the right to
reverse itself, especially when in its honest opinion it has committed an error or mistake in judgment, and that
to adhere to its decision will cause injustice to a party-litigant." Thus, upon finding that petitioners had indeed
illegally dismissed respondent, the CA merely exercised its prerogative to reverse an incorrect judgment.
IN VIEW THEREOF, the 24 April 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 87706 is AFFIRMED.
The 12 May 2006 Petition for Review on Certiorari filed by Tegimenta Chemical Philippines, Incorporated and
Vivian Rose D. Garcia is hereby DENIED for lack of merit.
B. Termination of Employment by the Employer

Second, the marginal notes in the 16 to 30 June 2002 payroll showing that she was on leave are dubious. For
one, the CA dutifully detected that none of the succeeding payroll sheets indicated that Oco was considered
by the company as merely AWOL. Hence, it becomes questionable whether there is regularity in making
simple notations as Tegimenta’s reference in considering the status of an employee. Therefore, we hold that
the marginal notations in a single payroll sheet are not competent proofs to back up petitioner’s main
defense.

This Court also rejects the invocation by petitioners of the best evidence rule. According to them, the payroll
sheet, and not the mere allegation of Oco, is the best evidence that they did not terminate her.

However, petitioners seem to miss the whole import of the best evidence rule. This rule is used to compel the
production of the original document, if the subject of the inquiry is the content of the document itself. The
rule provides that the court shall not receive any evidence that is merely substitutionary in nature, such as a
photocopy, as long as the original evidence of that document can be had.

Based on the explanation above, the best-evidence rule has no application to this case. The subject of the
inquiry is not the payroll sheet of Tegimenta rather, the thrust of this case is the abundance of evidence
present to prove the allegation that Oco abandoned her job by being on AWOL. Consequently, the employer
cannot be logically stumped by a payroll sheet, but must be able to submit testimonial and other pieces of
documentary evidence – like leave forms, office memos, warning letters and notices – to be able to prove that
the employee abandoned her work.
 1. Substantive Due Process Requirements
a) Just Causes for Termination
(1) Article 282, Labor Code of the Philippines
(a) Serious Misconduct
i) Norman Yabut vs. Manila Electric Company, et. al., G.R. No. 190436, 16 January 2012. - RINA
G.R. No. 190436 January 16, 2012
NORMAN YABUT, Petitioner, vs.
MANILA ELECTRIC COMPANY and MANUEL M. LOPEZ, Respondents.
REYES, J.:
SUMMARY: Norman Yabut had worked with Meralco from Feb 1989 until his dismissal on Feb 5, 2004 as a
Branch Field Representative. On October 4, 2003, Meralco's Inspection Office issued a memorandum informing
it of an illegal service connection at the petitioner's residence. The Inspection Office claimed discovering
shunting wires installed on the meter base for SIN 708668501, registered under Yabut's name. These wires
allegedly allowed power transmission to the residence despite the fact that Meralco had earlier disconnected
his electrical service due to his failure to pay his electric bills.
Meralco's Head of Investigation-Litigation Office issued to the petitioner a notice. The offense under Section 7
(3) of Meralco's Company Code on Employee Discipline referred to in the notice is with penalty of dismissal on
the first offense and is defined as follows:
SECTION 7. Dishonesty.
The following acts shall constitute violation of this Section:
3) Directly or indirectly tampering with electric meters or metering installations of the Company or the
installation of any device, with the purpose of defrauding the Company.
Petitioner admitted being the registered customer of Meralco at No. 17 Earth Street, Meralco Village 8, Batia,
Bocaue, Bulacan. He claimed that his electrical service was disconnected sometime in July 2003 for unpaid
electric bills. On October 3, 2003, he was informed by his wife that Meralco discovered shunting wires on their
meter base during an inspection. He nonetheless claimed that on the same day, he had already given to an
officemate the amount of ₱8,432.35 and requested that the same be paid to Meralco to cover his outstanding
electric bills. Yabut denied knowing the person who installed the discovered shunting wires.
Meralco's findings were summarized in a memorandum. It indicated that Yabut’s electric service was
disconnected on April 3, 2003 for account delinquency. Notwithstanding the disconnection and the fact that
Meralco’s service hadn’t been reconnected, Yabut's meter registered electric consumption. In view of these
findings, Meralco issued a notice of dismissal addressed to the petitioner. The notice cites violation of Section
7, paragraph 3 of Meralco's Company Code on Employee Discipline and Article 282 (a), (c), (d) and (e) of the
Labor Code of the Philippines as bases for the dismissal.
LA: declared the petitioner illegally dismissed from the service and entitled to reinstatement plus backwages
and attorney's fees.
NLRC: dismissed the herein respondents' appeal for lack of merit. It also denied the respondents’ MR.
CA: reversed the NLRC. It attributed unto Yabut authorship of the meter tampering and illegal use of electricity
– acts which it regarded as serious misconduct. Yabut's MR was denied.
ISSUE: W/N Yabut was illegally dismissed by MERALCO. (NO)
HELD:
The just causes are enumerated in Article 282, which provides:
Article 282. Termination by employer. - An employer may terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
The requirement for a just cause was satisfied in this case. The petitioner's violation of the company rules was
evident. It is significant that SIN 708668501 is registered under his name, and its meter base is situated within
the premises of his property. His claim that he failed to know or even notice the shunted wires fails to persuade
as we consider the meter located in the front of his house, the nature of his work as branch field representative,
his long-time employment with Meralco and his familiarity with illegal connections of this kind.
Significantly, "(t)ampering with electric meters or metering installations of the Company or the installation of
any device, with the purpose of defrauding the Company" is classified as an act of dishonesty from Meralco
employees, expressly prohibited under company rules.
Article 282 (a) provides that an employer may terminate an employment because of an employee's serious
misconduct. Misconduct is defined as the "transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment."
For serious misconduct to justify dismissal, the following requisites must be present:
(a) it must be serious;
(b) it must relate to the performance of the employee's duties; and
(c) it must show that the employee has become unfit to continue working for the employer.
We conclude that he committed a serious misconduct. Installation of shunting wires is no doubt a serious
wrong as it demonstrates an act that is willful or deliberate, pursued solely to wrongfully obtain electric power
through unlawful means. The act clearly relates to the petitioner's performance of his duties given his position
as branch field representative who is equipped with knowledge on meter operations, and who has the duty to
test electric meters and handle customers' violations of contract. Instead of protecting the company’s interest,
the petitioner himself used his knowledge to illegally obtain electric power from Meralco.
While the installation of the shunted wires benefited the petitioner as a customer of Meralco, his act cannot be
fully severed from his status as the respondent's employee. The dismissal is also justified as the act imputed
upon the petitioner qualifies as "fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative" under Article 282 (c) of the Labor Code. As a supervisor with duty
and power that included testing of service meters and investigation of violations of contract of customers, his
position can be treated as one of trust and confidence, requiring a high degree of honesty as compared with
ordinary rank-and-file employees.
In this case, the acts complained of were clearly work-related because they related to matters the petitioner
handled as branch field representative. Taking into account the results of its investigations, Meralco cannot be
expected to trust Yabut to properly perform his functions and to meet the demands of his job. His dishonesty,
involvement in theft and tampering of electric meters clearly prejudice Meralco, since he failed to perform the
duties which he was expected to perform.
FACTS:
This case stems from a complaint for illegal dismissal and monetary claims filed by herein petitioner Norman
Yabut against respondents Meralco and Meralco officer Manuel M. Lopez.
The petitioner had worked with Meralco from Feb 1989 until his dismissal from employment on Feb 5, 2004. At
the time of dismissal, he was assigned at the Meralco Malabon Branch Office as a Branch Field Representative
tasked to conduct surveys on service applications, test electric meters, investigate consumer-applicants' records
of Violations of Contract and perform such other duties and functions as may be required by his superior.
On October 4, 2003, Meralco's Inspection Office issued a memorandum addressed to Meralco's Investigation-
Legal Office, informing it of an illegal service connection at the petitioner's residence. The Inspection Office
claimed discovering shunting wires installed on the meter base for (SIN) 708668501, registered under Yabut's
name. These wires allegedly allowed power transmission to the residence despite the fact that Meralco had
earlier disconnected his electrical service due to his failure to pay his electric bills.
Meralco's Head of Investigation-Litigation Office issued to the petitioner a notice, received by the petitioner's
wife and with pertinent portions that read:
Please report to our Mr. Rodolfo C. Serra of the Investigation-Litigation at 8th Floor, Lopez Building, Meralco
Center, Ortigas Avenue, Pasig City on November 11, 2003, at 9:00 a.m. as the Inspection had found your
disconnected electric service with SIN No. 708668501 directly connected by a shunting wire to energize your
empty meter base. If proven true, such act constitutes dishonesty in violation of Section 7 (3) of the Company
Code on Employee Discipline and/or serious misconduct or an act analogous to fraud or commission of a crime
under Article 282 (a) and (e) of the Labor Code of the Philippines.
In this investigation, you are entitled to be assisted by a counsel or an authorized union representative. You are
also allowed to present evidence and material witnesses to testify in your favor. Should you fail to appear on
the aforementioned date, we shall take it to mean that you are waiving your right to present your side and
refute the aforesaid charge and evidence against you. If you appear alone, we shall take it to mean that you are
waiving your right to be represented by such counsel or union representative.
The offense under Section 7 (3) of Meralco's Company Code on Employee Discipline referred to in the notice is
with penalty of dismissal on the first offense and is defined as follows:
SECTION 7. Dishonesty.
The following acts shall constitute violation of this Section:
3) Directly or indirectly tampering with electric meters or metering installations of the Company or the
installation of any device, with the purpose of defrauding the Company.
Petitioner: presented his sworn statement where he admitted being the registered customer of Meralco at No.
17 Earth Street, Meralco Village 8, Batia, Bocaue, Bulacan. He claimed that his electrical service was
disconnected sometime in July 2003 for unpaid electric bills. On October 3, 2003, he was informed by his wife
that Meralco discovered shunting wires on their meter base during an inspection. He nonetheless claimed that
at about 8:00 o'clock in the morning of the same day, prior to his wife's notice upon him, he had already given
to an officemate the amount of ₱8,432.35 and requested that the same be paid to Meralco to cover his
outstanding electric bills. The amount of ₱8,432.35 plus ₱1,540 as service deposit was then paid for the
petitioner's account on October 3, 2003 at about 9:30 o'clock in the morning.
Yabut denied knowing the person who installed the discovered shunting wires. While he did not always go
home to their house in Bulacan as there were times when he stayed in his sister's residence in Malabon, the
petitioner confirmed that he was regularly in his Bulacan house. His residence had electricity even prior to the
full settlement of his outstanding bills through a connection made to the line of his neighbor Jojo Clemente.
He confirmed that the inspected meter base was installed within his lot's premises. Claiming that he had been
obtaining electricity from a neighbor, he argued that shunting wires in his meter base could have caused an
electrical malfunction. As to Meralco's allegation that Yabut's wife had admitted the petitioner's authorship of
the illegal connection, Yabut denied knowing of such admission.
Meralco’s Litigation – Investigation Office summarized the results of Meralco's findings in a memorandum. It
indicated that Yabut’s electric service was disconnected on April 3, 2003 for account delinquency.
Notwithstanding the disconnection and the fact that Meralco’s service had not been reconnected, Yabut's meter
registered electric consumption.
In view of these findings, Meralco, through its Senior Assistant VP for HR Administration R. A. Sapitula, issued
on February 4, 2004 a notice of dismissal addressed to the petitioner. The notice cites violation of Section 7,
paragraph 3 of Meralco's Company Code on Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor
Code of the Philippines as bases for the dismissal. The pertinent portions of the notice read:
Administrative investigation duly conducted established that on October 3, 2003, acting on a tip that you are
resorting to illegal service connection, the Company's Inspection Squad team found 2 shunting wires in an
energized empty meter base installed at your residence at #17 Earth Street, Meralco Village, Batia, Bocaue,
Bulacan. Your wife admitted that you were the one who installed the shunted wires on your meter base to have
power because she and your two children were sick. The illegal connection enabled you to defraud the company
by consuming unregistered electricity which makes you liable for violation of Section 7, par. 3 of the Company
Code on Employee Discipline, defined as "(d)irectly or indirectly tampering with electric meters or metering
installations of the Company or the installation of any device, with the purpose of defrauding the Company,"
penalized therein with dismissal from the service.
Under Article 282 of the Labor Code of the Philippines, the termination of your employment in Meralco is
justified on the following grounds: "(a) Serious misconduct x x x by the employee x x x in connection with his
work; "(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
representative; "(d) Commission of a crime or offense by the employee against x x x his employer; and "(e)
Other causes analogous to the foregoing."
Based on the foregoing, Management is constrained to dismiss you for cause from the service and employ of
the Company, as you are hereby so dismissed effective February 5, 2004, with forfeiture of all rights and
privileges.
Aggrieved by the decision of the management, Yabut filed with the NLRC a complaint for illegal dismissal and
money claims against Meralco and Lopez.
LA: declared the petitioner illegally dismissed from the service and entitled to reinstatement plus backwages
and attorney's fees.
The labor arbiter observed that there was no clear and direct evidence to prove that Yabut performed the
shunting of his metering installation. Furthermore, the act imputed upon Yabut was not related to the
performance of his duties as a Meralco employee, but as a customer of the company's electric business. Finally,
it was ruled that Meralco failed to observe the twin requirements of due process in termination cases.
NLRC: dismissed the herein respondents' appeal for lack of merit. It also denied the respondents’ MR.
CA: reversed the NLRC. It attributed unto Yabut authorship of the meter tampering and illegal use of electricity
– acts which it regarded as serious misconduct. Yabut's motion for reconsideration was denied.
ISSUE: W/N Yabut was illegally dismissed by MERALCO. (NO)
HELD: WHEREFORE, the petition for review on certiorari is hereby DENIED. The assailed Decision and Resolution
of the CA are hereby AFFIRMED.
THE DISMISSAL OF THE PETITIONER WAS FOUNDED ON JUST CAUSES - topic
Article 279: "(i)n cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. x x x" The just causes are enumerated in Article 282,
which provides:
Article 282. Termination by employer. - An employer may terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
The requirement for a just cause was satisfied in this case. We note that the petitioner's employment was
terminated by the respondents for violation of Section 7, par. 3 of Meralco's Company Code on Employee
Discipline, and for the existence of just cause under Article 282 (a), (c), (d) and (e) of the Labor Code.
The petitioner's violation of the company rules was evident. While he denies any involvement in the
installation of the shunting wires which Meralco discovered, it is significant that SIN 708668501 is registered
under his name, and its meter base is situated within the premises of his property. Said meter registered
electric consumption during the time his electric service was officially disconnected by Meralco. It was the
petitioner and his family who could have benefited from the illegal connection, being the residents of the area
covered by the service. His claim that he failed to know or even notice the shunted wires fails to persuade as
we consider the meter located in the front of his house, the nature of his work as branch field representative,
his long-time employment with Meralco and his familiarity with illegal connections of this kind.
The logical conclusion that may be deduced is that the petitioner was a party, or at the very least, one who
agreed to the installation of the shunted wires, and who also benefited from the illegal connection at the
expense of his employer-company. In sustaining the CA's findings, we consider the rule that in administrative
and quasi-judicial proceedings, the quantum of proof necessary is substantial evidence or such relevant
evidence as a reasonable mind may accept as adequate to support a conclusion.
Significantly, "(t)ampering with electric meters or metering installations of the Company or the installation of
any device, with the purpose of defrauding the Company" is classified as an act of dishonesty from Meralco
employees, expressly prohibited under company rules. It is reasonable that its commission is classified as a
severe act of dishonesty, punishable by dismissal even on its first commission, given the nature and gravity of
the offense and the fact that it is a grave wrong directed against their employer.
Article 282 (a) provides that an employer may terminate an employment because of an employee's serious
misconduct, a cause that was present in this case in view of the petitioner's violation of his employer's code of
conduct. Misconduct is defined as the "transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment."
For serious misconduct to justify dismissal, the following requisites must be present:
(a) it must be serious;
(b) it must relate to the performance of the employee's duties; and
(c) it must show that the employee has become unfit to continue working for the employer.
We again consider the petitioner's duties and powers as a Meralco employee, and we conclude that he
committed a serious misconduct. Installation of shunting wires is no doubt a serious wrong as it demonstrates
an act that is willful or deliberate, pursued solely to wrongfully obtain electric power through unlawful means.
The act clearly relates to the petitioner's performance of his duties given his position as branch field
representative who is equipped with knowledge on meter operations, and who has the duty to test electric
meters and handle customers' violations of contract. Instead of protecting the company’s interest, the
petitioner himself used his knowledge to illegally obtain electric power from Meralco. His involvement in this
incident deems him no longer fit to continue performing his functions for respondent-company.
While the installation of the shunted wires benefited the petitioner as a customer of Meralco, his act cannot
be fully severed from his status as the respondent's employee. As correctly observed by the CA, "(i)t is an
offense against the Company Code of Employee Discipline. As a field representative, he is knowledgeable on the
mechanics of meter and metering installation."
The dismissal is also justified as the act imputed upon the petitioner qualifies as "fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized representative" under Article 282 (c)
of the Labor Code. While the petitioner contests this ground by denying that his position is one of trust and
confidence, it is undisputed that at the time of his dismissal, he was holding a supervisory position. As a
supervisor with duty and power that included testing of service meters and investigation of violations of
contract of customers, his position can be treated as one of trust and confidence, requiring a high degree of
honesty as compared with ordinary rank-and-file employees.
The Coca-Cola Export Corporation v. Gacayan: Law and jurisprudence have long recognized the right of
employers to dismiss employees by reason of loss of trust and confidence. In the case of supervisors or
personnel occupying positions of responsibility, loss of trust justifies termination. Loss of confidence as a just
cause for termination of employment is premised from the fact that an employee concerned holds a position of
trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such
as the custody, handling, or care and protection of the employer's property. But, in order to constitute a just
cause for dismissal, the act complained of must be "work-related" such as would show the employee
concerned to be unfit to continue working for the employer.
In this case, the acts complained of were clearly work-related because they related to matters the petitioner
handled as branch field representative. Taking into account the results of its investigations, Meralco cannot be
expected to trust Yabut to properly perform his functions and to meet the demands of his job. His dishonesty,
involvement in theft and tampering of electric meters clearly prejudice Meralco, since he failed to perform
the duties which he was expected to perform.
Considering the foregoing, this Court agrees that there were just causes for the petitioner's dismissal. We
emphasize that dismissal of a dishonest employee is to the best interest not only of the management but also
of labor. As a measure of self-protection against acts inimical to its interest, a company has the right to dismiss
its erring employees. An employer cannot be compelled to continue employing an employee guilty of acts
inimical to the employer’s interest, justifying loss of confidence in him.
THE REQUIREMENTS OF PROCEDURAL DUE PROCESS WERE SATISFIED
Procedural due process: notice and hearing constitute the essential elements of due process in the dismissal of
employees. The employer must furnish the employee with two written notices before termination of
employment can be legally effected. The first apprises the employee of the particular acts or omissions for which
dismissal is sought. The second informs the employee of the employer's decision to dismiss him. With regard to
the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that
an actual hearing should always and indispensably be held.

These requirements were satisfied in this case. The first required notice was dated November 3, 2003,
sufficiently notifying the petitioner of the particular acts being imputed against him, as well as the applicable
law and the company rules considered to have been violated. In his sworn statement dated November 17, 2003,
the petitioner admitted receiving Meralco's notice of investigation:

37. T. Natanggap mo ba yong notice ng investigation na may petsang November 3, 2003 na personally na
ipinadala namin sa iyo sa bahay mo na may numerong 17 Earth St., Meralco Village 8, Batia, Bocaue,
Bulacan?

S. Opo.

38. T. Ipinapakita ko sa iyo ang isang notice ng investigation na may petsang November 3, 2003 na naka-
addressed (sic) sa isang Mr. Norman C. Yabut ng 17 Earth Street, Meralco Village 8, Batia, Bocaue,
Bulacan at ang may lagda ay si Atty. J.R.T. Albarico, head ng Investigation-Litigation ng Meralco. Dito
sa nasabing notice ay may nakalagay sa ibaba na received by Salvacio (sic) M. Yabut na may kanyang
pirma, at nakalagay din ang date na 11/03/03 at ang nakalagay sa relationship ay wife. Ano ang
masasabi mo tungkol sa bagay na ito.

S. Ito po yong notice ng investigation na aking natanggap at ang nakatanggap nito ay ang aking misis
na si Maria Salvacion Yabut.

On November 17, 2003, Meralco conducted a hearing on the charges against the petitioner. During said time,
the petitioner was accorded the right to air his side and present his defenses on the charges against him.
Significantly, a high-ranking officer of the supervisory union of Meralco assisted him during the said
investigation. His sworn statement that forms part of the case records even listed the matters that were raised
during the investigation.

Finally, Meralco served a notice of dismissal dated February 4, 2004 upon the petitioner. Such notice notified
the latter of the company's decision to dismiss him from employment on the grounds clearly discussed therein.
 (b) Willful Disobedience
i) Kakampi and its members, Victor Panuelos, vs. Kingspoint Express and Logistic, , G.R. No. 194813, 25 April
2012 – VAL
G.R. No. 194813 | April 25, 2012
Kakampi and its Members, Victor Panuelos, et al., represented by David Dayalo, Kakampi Vice President and
Attorney-in-Fact, Petitioner, vs.Kingspoint Express and Logistic and/or MARY Ann Co, Respondents.
REYES, J.:
SUMMARY: Victor Pañuelos (Pañuelos), Bobby Dacara (Dacara), Alson Dizon (Dizon), Saldy
Dimabayao (Dimabayao), Fernando Lupangco, Jr. (Lupangco), Sandy Pazi (Pazi), Camilo Tabarangao,
Jr. (Tabarangao), Eduardo Hizole (Hizole) and Reginald Carillo (Carillo) were the former drivers of
Kingspoint Express and Logistic (Kingspoint Express). They were dismissed from service on January
20, 2006 on the grounds of serious misconduct, dishonesty, loss of trust and confidence and
commission of acts inimical to the interest of Kingspoint Express. Prior thereto, Kingspoint Express
issued separate notices to explain to the individual petitioners on January 16, 2006. The individual
petitioners failed to submit their written explanation within the stated period. Subsequently, Kingspoint
Express issued to them separate yet uniformly worded notices on January 20, 2006, informing them of
their dismissal. A complaint for illegal dismissal was subsequently filed, alleging that the charges
against them were fabricated and that their dismissal was prompted by Kingspoint Express’ aversion
to their union activities. LA: found Dacara, Lupangco, Pazi, Tabarangao, Hizole and Carillo illegally
dismissed. On the other hand, the complaint was dismissed insofar as Panuelos, Dizon and Dimabayao
are concerned as they were deemed not to have filed their position papers. While the allegation of anti-
unionism as the primordial motivation for the dismissal is considered unfounded, the respondents failed
to prove that the dismissal was for a just cause. NLRC: affirmed LA’s decision. Respondents moved
for reconsideration and the NLRC reversed itself and declared the individual petitioners legally
dismissed. Petitioners moved for reconsideration but the same was denied. Subsequently, the
petitioners filed a petition for certiorari with the CA. CA: reversed and set aside the NLRC Decision.
Respondents promptly filed a motion for reconsideration. Similar to the NLRC, the CA reversed itself
and retracted its earlier finding that the individual petitioners were illegally dismissed.
ISSUE: W/N PETITIONERS’ DISMISSAL IS VALID (W/N THE REFUSAL OF PETITIONERS TO
SUBMIT THEMSELVE TO DRUG TEST IS A JUST CAUSE)
RULING: YES TO BOTH.
RATIO: It is fundamental that in order to validly dismiss an employee, the employer is required to
observe both substantive and procedural due process – the termination of employment must
be based on a just or authorized cause and the dismissal must be effected after due notice and
hearing.20
As to whether Kingspoint Express complied with the substantive requirements of due process, this
Court agrees with the CA that the concerned employees’ refusal to submit themselves to drug
test is a just cause for their dismissal.
An employer may terminate an employment on the ground of serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative in
connection with his work.1âwphi1
Willful disobedience requires the concurrence of two elements: (1) the employee's assailed
conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee, and must pertain to
the duties which he had been engaged to discharge. Both elements are present in this case.
As to the first element, that at no point did the dismissed employees deny Kingspoint Express’
claim that they refused to comply with the directive for them to submit to a drug test or, at the
very least, explain their refusal gives rise to the impression that their non-compliance is
deliberate. The utter lack of reason or justification for their insubordination indicates that it was
prompted by mere obstinacy, hence, willful and warranting of dismissal.
As to the second element, no belabored and extensive discussion is necessary to recognize the
relevance of the subject order in the performance of their functions as drivers of Kingspoint Express.
As the NLRC correctly pointed out, drivers are indispensable to Kingspoint Express’ primary
business of rendering door-to-door delivery services. It is common knowledge that the use of
dangerous drugs has adverse effects on driving abilities that may render the dismissed
employees incapable of performing their duties to Kingspoint Express and acting against its
interests, in addition to the threat they pose to the public.
FACTS: Victor Pañuelos (Pañuelos), Bobby Dacara (Dacara), Alson Dizon (Dizon), Saldy Dimabayao (Dimabayao),
Fernando Lupangco, Jr. (Lupangco), Sandy Pazi (Pazi), Camilo Tabarangao, Jr. (Tabarangao), Eduardo Hizole
(Hizole) and Reginald Carillo (Carillo) were the former drivers of Kingspoint Express and Logistic (Kingspoint
Express), a sole proprietorship registered in the name of Mary Ann Co (Co) and engaged in the business of
transport of goods. They were dismissed from service on January 20, 2006 on the grounds of serious
misconduct, dishonesty, loss of trust and confidence and commission of acts inimical to the interest of
Kingspoint Express.
Prior thereto, Kingspoint Express issued separate notices to explain to the individual petitioners on January
16, 2006, uniformly stating that:
RE: CHARGES OF DISHONESTY
SERIOUS MISCONDUCT &
LOSS OF CONFIDENCE
Dear Mr. Dacara:
You are hereby formally charged with DISHONESTY, SERIOUS MISCONDUCT, LOSS OF CONFIDENCE,
and acts inimical to the company, by filing with the National Labor Relations Commission (NLRC)
false, malicious, and fabricated cases against the company. Further, your refusal to undergo drug
testing is unwarranted and against company policy.
Please submit your answer or explanation to the foregoing charges within forty-eight (48) hours
[from] receipt hereof. Your failure to do so would mean that you waive your right to submit your
answer.
You may likewise opt for a formal investigation with the assistance of counsel, or proceed with the
investigation as you may choose.
In the meantime, you are place[d] under preventive suspension for thirty (30) days effective on
January 16, 2006. You are physically barred from company premises while the preventive
suspension exists[.]3
The individual petitioners failed to submit their written explanation within the stated period. Subsequently,
Kingspoint Express issued to them separate yet uniformly worded notices on January 20, 2006, informing
them of their dismissal. Kingspoint Express expressed its decision in this wise:
On January 16, 2006, you were formally charged with DISHONESTY, SERIOUS MISCONDUCT and
LOSS OF CONFIDENCE and ACTS INIMICAL TO THE COMPANY based on the following acts:
1. FABRICATION OF BASELESS MONEY CLAIMS against the company;
NLRC: affirmed LA’s decision in its Resolution8 dated April 30, 2008, thus:
2. MISLEADING FELLOW CO-WORKERS to sign the MALICIOUS COMPLAINT FOR MONEY
CLAIMS against the company;
3. REFUSAL TO UNDERGO THE COMPANY’S GENERAL DRUG TEST[;]
4. EXTORTING MONEY FROM CO-WORKERS TO FUND ACTIVITIES THAT THEY WERE
NEVER FULLY INFORMED OF;
You were given two (2) days to respond to these charges, but you failed to do [so].4
In addition to the foregoing, Dacara was dismissed for consummating his sexual relations with one of Co’s
household helpers inside Co’s residence thus impregnating her.5
A complaint for illegal dismissal was subsequently filed, alleging that the charges against them were
fabricated and that their dismissal was prompted by Kingspoint Express ’aversion to their union activities.
LA: found Dacara, Lupangco, Pazi, Tabarangao, Hizole and Carillo illegally dismissed. On the other hand, the
complaint was dismissed insofar as Panuelos, Dizon and Dimabayao are concerned as they were deemed not
to have filed their position papers. While the allegation of anti-unionism as the primordial motivation for the
dismissal is considered unfounded, the respondents failed to prove that the dismissal was for a just cause. The
pertinent portion of the decision reads:
From a perusal and examination of the pieces of evidence adduced by the respondents in support of
their defense, this Office finds the same as not being sufficient and substantial to establish the
charges of serious misconduct and breach of trust. Consider the following:
On the complainants ’alleged refusal to undergo the company’s general drug testing, the same is
explicitly nothing but an unsubstantiated allegation, therefore, undeserving of judicial and quasi-
judicial cognizance.
On the alleged act of the complainants in extorting money from co-workers to fund activities that
they were not fully informed of as well as the alleged misleading of co-workers to sign "malicious
money claims" against the company, it is to be noticed that respondents ’support or evidence thereto
are the joint affidavit of drivers and helpers as well as that of one Ronie Dizon. On said pieces of
evidence, this Office could not give much probative or evidentiary value and weight thereto as said
sworn statements may definitely not be said to have genuinely emanated from the affiants (sic)
drivers and helpers. To be precise, the joint-affidavit of the drivers and helpers (annex "B",
respondents ’position paper) obviously was "tailor-made", so to speak, to conform with the
respondents ’position or defense in the instant case. Said joint-affidavit in fact is couched in english,
thus, tremendously lowering the probability that the statements therein really came from the
"hearts and souls" of the lowly-educated drivers and helpers.
On the breach of trust allegedly committed by Bobby Dacara with respect to the alleged act of
repeatedly sneaking in the household of respondent Mary Ann Co and thereafter impregnating one
of the latter’s househelps, the same is nothing but an unsubstantiated allegation and therefore,
undeserving of judicial and quasi-judicial cognizance. Jurisprudence definitely is explicit on this point
that an affirmative allegation made by a party must duly be proven to merit acceptance (People vs.
Calayca, 301 SCRA 192).7
In the case at bar, We are persuaded to agree with the findings of the Labor Arbiter that "the pieces
of evidence adduced by the respondents in support of their defense x x x not being sufficient and
substantial to establish the charges of serious misconduct and breach of trust" (Records, p. 96).9
In addition, the NLRC ruled that the respondents failed to comply with the procedural requirements
of due process. Specifically:
It is also observed that much is to be desired insofar as the observance of the procedural due process
aspect is concerned. Firstly, there was no compliance with the due process requirement of the law
considering that the uniformly worded first notice, all dated January 16, 2006, sent by respondents-
appellants to the complainants-appellees, did not apprise them of the particular acts or omission for
which their dismissal were sought. As clearly shown by the said individual notices, each of the
complainants-appellees was merely informed that he or she is "formally charged with DISHONESTY,
SERIOUS MISCONDUCT, LOSS OF CONFIDENCE and acts inimical to the Company" x x x without
specifying the particular or specific acts or omissions constituting the grounds for their dismissal.
The purpose of the first notice is to sufficiently apprise the employee of the acts complained of and
to enable the employee to prepare his defense. In this case, though, the said first notice did not
identify the particular acts or omissions committed by each of the complainants-appellees. The
extent of their knowledge and participation in the generally described charges were not specified in
the said first notice, hence, the complainants-appellee could not be expected to intelligently and
adequately prepare their defense. The first notice should neither be pro-forma nor vague; that it
should set out clearly what each of the employees is being held liable for. They should be given ample
opportunity to be heard and not mere opportunity. Ample opportunity means that each of the
complainants-appellees should be specifically informed of the charges in order to give each of them,
an opportunity to refute such accusations. Since, the said first notices are inadequate, their dismissal
could not be in accordance with due process x x x.
Secondly, there was no just or authorized cause for the respondents-appellants to terminate the
complainants-appellees ’services. It is observed that the Notices of Termination, all dated January
20, 2006, merely mentioned the ground relied upon, to wit:
xxxx
Placing side by side the first (1st) notices and the Notice of Termination, We can easily notice the
wide disparity between them. In the first (1st) notices, the alleged charges leveled against each of
complainants-appellees were couched in general terms, such as: DISHONESTY, SERIOUS
MISCONDUCT, LOSS OF CONFIDENCE and ACTS INIMICAL TO THE COMPANY, such that the
complainants-appellees could not be expected to prepare their responsive pleadings; while the
uniformly worded Notices of Termination, as earlier quoted, the charges leveled against of (sic) them
are more specific.10
Respondents moved for reconsideration and the NLRC reversed itself and declared the individual petitioners
legally dismissed:
Respondent company is an entity engaged in the delivery of goods called "door-to-door" business.
As such, respondents are in custody of goods and moneys belonging to customers. Thus,
respondents want to ensure that their drivers are drug-free and honest. It is undeniable that
persons taking prohibited drugs tend to commit criminal activities when they are "high", as most
of them are out of their minds. Complainants are drivers and are on the road most of the time.
Thus, they must see to it that they do not cause damage to other motor vehicles and pedestrians.
Likewise, when delivering goods and money, it is not impossible that they could commit acts inimical
to the respondents ’interest, like failure to deliver the money or goods to the right person or do a
"hold-up me" scenario.
Thus, to guarantee complainants-drivers ’safety and effective performance of their assigned tasks,
respondents ordered complainants to undergo drug testing. However, they refused to follow the
directive. Neither did they give a clear explanation for their refusal to the respondents. This shows
complainants ’wrongful attitude to defy the reasonable orders which undoubtedly pertain to their
duties as drivers of the respondents. Such act is tantamount to willful disobedience of a lawful
order, a valid ground for dismissal under the Labor Code, as amended.
Furthermore, employees who are not complainants in this case, in a sworn statement attested to the
fact that complainants tricked them to sign papers which turned out to be a complaint for money
claims. They also accused them of abusing their trust in order to achieve their selfish motives.
Complainants even convinced them to shell out part of their salaries without authorization and
consent, as "panggatos para sa papeles, transportasyon ng abugado" but said money was used for
the Union’s purposes. Worse, complainants even threatened them to file criminal charges against
them if they did not follow the complainants ’evil plans. x x x
In their Rejoinder, respondents also mentioned about the loss of cargoes to be delivered to
Pampanga and Nueva Ecija. Complainants failed to refute the allegations nor comment on the
matter. This led to respondents ’loss of trust and confidence reposed in them. Considering that the
drivers have in their possession money and goods to be delivered, the continuance of their
employment depends on the trust and confidence in them. Undeniably, trust, once lost is hard to
regain.
xxxx
We disagree.
On January 16, 2006, respondents sent each of the complainants a letter stating the infractions
committed by them. They directed them to explain the said infractions with a warning that failure to
do so would mean waiver of their right to submit their answer. They further advised them to "opt
for a formal investigation with assistance of the counsel, or proceed with the investigation you may
choose".
However, complainants failed to answer. Neither did they do any act to dispute the charges. They
remained silent on the infractions which a person would not normally do if he is not guilty of the said
charges. If they were really innocent, immediately, even without any notice, they should have
reacted and did everything to dispute the charges. But they failed, despite the notice to explain. This
would lead to the conclusion that they were guilty of the charges imputed against them. As a
consequence thereof, the complainants are considered to have waived their right to defend
themselves.12
Petitioners moved for reconsideration but the same was denied. Subsequently, the petitioners filed a
petition for certiorari with the CA.
CA: reversed and set aside the NLRC Decision dated July 17, 2008 and Resolution dated September 30, 2008.
Thus:
Initially, this Court must determine whether the petitioners violated the Company Policies as would
warrant their dismissal from the service. However, a painstaking review of the records of this case
negate[s] a finding of such culpability on the part of the petitioners.
The charges of dishonesty, serious misconduct and loss of confidence against the petitioners are
nothing more than bare allegations as neither the show cause orders nor the termination letters
specify in clear and unmistakable manner, the specific acts committed by the petitioners as would
amount to dishonesty, serious misconduct or loss of confidence. Neither of these notices even
contain any averments as to how and when the alleged infractions were committed by the
petitioners.
xxx
In this case, respondent company had not been able to identify an act of dishonesty, serious
misconduct or any illicit act, which the petitioners may have committed in connection with their
work, except the allegation that petitioners filed false, malicious, and fabricated cases against the
company which, under the Labor Code, is not a valid ground for termination of employment. There
is even no mention of any company policy or rule violated by any of the petitioners to warrant their
dismissal. The charges are clearly unfounded.
xxxx
The superficial compliance with two notices and a hearing in this case cannot be considered valid
where the notices to explain where issued four (4) days before the petitioners were terminated. The
termination was obviously hurriedly effected, as the respondent failed to give the petitioners the
avenue to contradict the charges against them either by submission of their answer or by the conduct
of an actual investigation in order to give spirit to the requirement of due process. Petitioners were
thus robbed of their rights to explain their side, to present evidence and rebut what was presented
against them, rights ensured by the proper observance of procedural due process.15
Respondents promptly filed a motion for reconsideration. Similar to the NLRC, the CA reversed itself and
retracted its earlier finding that the individual petitioners were illegally dismissed. In its Amended
Decision16 dated March 16, 2010, the CA concluded that the two (2) notices issued by Kingspoint Express
complied with the requirements of the law:
In the assailed Decision, We conceded that all the petitioners were actually furnished with a letter
dated 16 January 2006. In each letter, petitioners were individually charged with "dishonesty, serious
misconduct, loss of confidence for performing acts inimical to the company by filing with the NLRC
false, malicious and fabricated cases against the company and their refusal to undergo drug testing."
They were directed to submit an answer or explanation within forty-eight (48) hours and were even
given the option to avail of a formal investigation with the assistance of counsel. They were further
 advised that failure to submit said answer/explanation would mean waiver on their part. Thus, when
they failed to submit an explanation/Answer, and failed to inform their employer that they wanted
a formal investigation on the matter, their employer was constrained to serve upon them on 20
January 2006, or four (4) days later, separate notices of termination stating the offenses they
committed, viz.:
xxxx
Show-cause letters/memoranda create a burden on the employees to explain their innocence. In
turn, it is from such explanation that the employer will be obliged to prove his case in an
investigation. Since the petitioners did not explain, much less invoke their right to investigation, it
follows that they are deemed to have waived their rights under Art. 277(b) of the Labor Code.
Technically, the law on evidence considers them to have admitted the charges against them. With
such admission, the employer is discharged from the need to prove the offenses charged. It is well-
settled that in any forum, whether judicial or administrative, a party need not prove what is
admitted.17 (Citations omitted)
The CA also held that the individual petitioners performed acts, which constitute serious misconduct:
The assailed Decision admits what constitutes serious misconduct.
Here, except for Bobby Dacara, each of the three petitioners conceded the existence of the
following bases for their dismissal: (1) complainants ’refusal to undergo mandatory drug-testing;
(2) creating disharmony and distrust among the workers and misleading them to go against the
employer; and (3) losing cargo with a value of P250,000.00 entrusted to respondent company for
door-to-door delivery.
Verily, each of the aforestated grounds independently constitute[s] serious misconduct. Each of
them were (sic) committed in relation to petitioners ’work. And again, the commission of said
infractions constitutes a ground to dismiss under Art. 282(a) of the Code. The Court, therefore,
gravely erred when it held that no serious misconduct was committed by petitioners in this case.
On the other hand, in the case of Bobby Dacara, records show that he committed breach of trust
and confidence by sneaking into the house of private respondent Co and engaging one of Co’s
helpers in repeated sexual congress leading to her pregnancy. As held in Santos, Jr. vs. NLRC, such
behavior amounts to immorality which is a case of serious misconduct; a just cause to dismiss an
employee.18 (Citation omitted)
Petitioners moved for reconsideration but this was denied by the CA.
ISSUE: W/N PETITIONERS ’DISMISSAL IS VALID (W/N THE REFUSAL OF PETITIONERS TO SUBMIT THEMSELVE
TO DRUG TEST IS A JUST CAUSE)
RULING: YES TO BOTH. WHEREFORE, premises considered, the Decision dated March 16, 2010 and Resolution
dated December 16, 2010 of the Court of Appeals are AFFIRMED with MODIFICATION in that respondent
Kingspoint Express and Logistic is hereby held liable for the payment of nominal damage, in the amount of
₱30,000.00 each to petitioners Bobby Dacara, Fernando Lupangco, Jr., Sandy Pazi, Camilo Tabarangao, Jr.,
Eduardo Hizole and Reginaldo Carillo, for non-observance of procedural due process required in terminating
employment.
RATIO: It is fundamental that in order to validly dismiss an employee, the employer is required to observe both
substantive and procedural due process – the termination of employment must be based on a just or
authorized cause and the dismissal must be effected after due notice and hearing.20
As to whether Kingspoint Express complied with the substantive requirements of due process, this Court agrees
with the CA that the concerned employees ’refusal to submit themselves to drug test is a just cause for their
dismissal.
An employer may terminate an employment on the ground of serious misconduct or willful disobedience by
the employee of the lawful orders of his employer or representative in connection with his work.1âwphi1
Willful disobedience requires the concurrence of two elements: (1) the employee's assailed conduct must have
been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have
been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been
engaged to discharge. Both elements are present in this case.
As to the first element, that at no point did the dismissed employees deny Kingspoint Express ’claim that
they refused to comply with the directive for them to submit to a drug test or, at the very least, explain
their refusal gives rise to the impression that their non-compliance is deliberate. The utter lack of reason or
justification for their insubordination indicates that it was prompted by mere obstinacy, hence, willful and
warranting of dismissal.
It involves little difficulty to accuse Kingspoint Express of anti-unionism and allege that this was what motivated
the dismissal of the petitioners, but the duty to prove such an accusation is altogether different. That the
petitioners failed at the level of substantiation only goes to show that their claim of unfair labor practice is a
mere subterfuge for their willful disobedience.
As to the second element, no belabored and extensive discussion is necessary to recognize the relevance of the
subject order in the performance of their functions as drivers of Kingspoint Express. As the NLRC correctly
pointed out, drivers are indispensable to Kingspoint Express ’primary business of rendering door-to-door
delivery services. It is common knowledge that the use of dangerous drugs has adverse effects on driving
abilities that may render the dismissed employees incapable of performing their duties to Kingspoint Express
and acting against its interests, in addition to the threat they pose to the public.
The existence of a single just cause is enough to order their dismissal and it is now inconsequential if the other
charges against them do not merit their dismissal from service. It is therefore unnecessary to discuss whether
the other acts enumerated in the notices of termination issued by Kingspoint Express may be considered as any
of the just causes.1âwphi1
Nonetheless, while Kingspoint Express had reason to sever their employment relations, this Court finds its
supposed observance of the requirements of procedural due process pretentious. While Kingspoint Express
required the dismissed employees to explain their refusal to submit to a drug test, the two (2) days afforded
to them to do so cannot qualify as "reasonable opportunity", which the Court construed in King of Kings
Transport, Inc. v. Mamac21 as a period of at least five (5) calendar days from receipt of the notice.
Thus, even if Kingspoint Express ’defective attempt to comply with procedural due process does not negate
the existence of a just cause for their dismissal, Kingspoint Express is still liable to indemnify the dismissed
employees, with the exception of Panuelos, Dizon and Dimabayao, who did not appeal the dismissal of their
complaints, with nominal damages in the amount of ₱30,000.00.

(c) Gross and Habitual Neglect of Duty
i) Cavite Apparel, Incorporated, et. al. vs. Michelle Marquez, G.R. No. 172044, 6 February 2013. – PIA
G.R. No. 172044 : February 06, 2013
CAVITE APPAREL, INCORPORATED and ADRIANO TIMOTEO, Petitioners, v. MICHELLE MARQUEZ, Respondent
SUMMARY: Cavite Apparel, a corp engaged in the manufacture of garments for export, hired Michelle Marquez
as a regular employee in its Finishing Department for 6 years. She enjoyed vacation and sick leaves of 7 days per
year. During the course of her employment, she committed several infractions, namely: AWOL on three different
occasions from December 1999 through April 2000 which were meted with written warning for the first
occasion, 3 days suspension for the second, and 6 day suspension for the third. In May 2000, Michelle failed to
report to work again because she got sick but was able to present a medical certificate which Cavite Apparel
denied the receipt of. A few days later, Michelle did not report for work for 12 days due to illness but was able
to submit the necessary medical certificate. Nonetheless, she was suspended and when she returned, was told
that her employment has been terminated for habitual absenteeism which prompted Michelle to file complaint
illegal dismissal. LA ruled in favor of Cavite Apparel while the NLRC reversed such. CA affirmed holding that her
absences were not habitual. Cavite Apparel contends that it’s its prerogative to discipline its employees and
thus when Michelle, in patent violation of the company’s rules of discipline, deliberately, habitually, and without
prior authorization and despite warning did not report for work, she committed serious misconduct and gross
neglect of dut. Michelle on the other hand contends that she had only four absences in her 6 years of
employment with Cavite Apparel. She explains that her absence on May 8, 2000 was justified as she was sick
and had sick leave benefits against which Cavite Apparel could have charged her absences. Also, it had already
sanctioned her for the three prior infractions. Under the circumstances, the penalty of dismissal for her fourth
infraction was very harsh.
ISSUE: WON Michelle’s dismissal was valid due to gross neglect of duty
The SC held that Michelles four absences were not habitual; "totality of infractions" doctrine not applicable. It
discussed that neglect of duty, to be a ground for dismissal under Article 282 of the Labor Code, must be both
gross and habitual. Gross negligence imparts want of care in the performance of one’s duties. While habitual
neglect is the repeated failure to perform one’s duties for a period of time, depending on the
circumstances. The records are bereft of any indication that apart from the four occasions when she did not
report for work, Michelle had been cited for any infraction since she started her employment with the company
in 1994. Four absences in her six years of service, cannot be considered gross and habitual neglect of duty,
especially so since the absences were spread out over a six-month period.
FACTS:
Cavite Apparel is a domestic corporation engaged in the manufacture of garments for export. On August 22,
1994, it hired Michelle as a regular employee in its Finishing Department. Michelle enjoyed, among other
benefits, vacation and sick leaves of seven (7) days each per annum. Prior to her dismissal on June 8, 2000,
Michelle committed the following infractions (with their corresponding penalties):
a. First Offense: Absence without leave (AWOL) on December 6, 1999 - written warning
b. Second Offense: AWOL on January 12, 2000- stern warning with three (3) days suspension
c. Third Offense: AWOL on April 27, 2000 - suspension for six (6) days.
On May 8, 2000, Michelle got sick and did not report for work. When she returned, she submitted a medical
certificate. Cavite Apparel, however, denied receipt of the certificate. Michelle did not report for work on May
15-27, 2000 (12 days) due to illness. When she reported back to work, she submitted the necessary medical
certificates. Nonetheless, Cavite Apparel suspended Michelle for six (6) days (June 1-7, 2000). When Michelle
returned on June 8, 2000, Cavite Apparel terminated her employment for habitual absenteeism.
Michelle filed a complaint for illegal dismissal with prayer for reinstatement, backwages and attorneys fees
with the NLRC.
LA RAMOS: dismissed the complaint. He noted that punctuality and good attendance are required of
employees in the company’s Finishing Department. Hence, Michelle’s four absences without official leave
were considered as habitual and constitutive of gross neglect of duty, a just ground for termination of
employment. Due process had been observed in Michelles dismissal, noting that in each of her absences, Cavite
Apparel afforded Michelle an opportunity to explain her side and dismissed her only after her fourth absence.
Michelle’s dismissal was valid.
NLRC: reversed LA decision. The NLRC noted that for Michelle’s first three absences, she had already been
penalized ranging from a written warning to six days suspension. These, the NLRC declared, should have
precluded Cavite Apparel from using Michelle’s past absences as bases to impose on her the penalty of
dismissal, considering her six years of service with the company. It likewise considered the penalty of dismissal
too severe. The NLRC thus concluded that Michelle had been illegally dismissed and ordered her reinstatement
with backwages.
CA:
CAVITE APPAREL: NLRC acted with grave abuse of discretion when it set aside the LAs findings and
ordered Michelles reinstatement. It disagreed with the NLRCs opinion that Michelle’s past infractions
could no longer be used to justify her dismissal since these infractions had already been penalized
and the corresponding penalties had been imposed.
CA dismissed Cavite Apparels petition. While it agreed that habitual absenteeism without official leave, in
violation of company rules, is sufficient reason to dismiss an employee, it nevertheless did not consider
Michelles four absences as habitual. It especially noted that Michelle submitted a medical certificate for her
May 8, 2000 absence, and thus disregarded Cavite Apparels contrary assertion. The CA explained that Michelles
failure to attach a copy of the medical certificate in her initiatory pleading did not disprove her claim. The CA
agreed with the NLRC that since Cavite Apparel had already penalized Michelle for her three prior absences, to
dismiss her for the same infractions and for her May 8, 2000 absence was unjust. Citing jurisprudence, The CA
concluded that her dismissal was too harsh, considering her six years of employment with Cavite Apparel; it was
also a disproportionate penalty as her fourth infraction appeared excusable.
CA denied Cavite Apparels motion for reconsideration
Cavite Apparel imputes grave abuse of discretion against the CA when
1. it did not find that the NLRC committed grave abuse of discretion in setting aside the decision of
the CA;
2. it failed to consider Michelles 4 AWOLs over a period of six months, from December 1999 to May
2000, habitual; and
3. it ruled that the series of violations of company rules committed by Michelle were already meted
with the corresponding penalties.
CAVITE APPAREL: it’s its prerogative to discipline its employees and thus when Michelle, in patent violation
of the company’s rules of discipline, deliberately, habitually, and without prior authorization and despite
warning did not report for work on May 8, 2000, she committed serious misconduct and gross neglect of duty.
It submits that dismissal for violation of company rules and regulations is a dismissal for cause as the Court
stressed in Northern Motors, Inc., v. National Labor Union, et al.
MICHELLE: her dismissal was arbitrary and unreasonable. For one, she had only four absences in her 6 years
of employment with Cavite Apparel. She explains that her absence on May 8, 2000 was justified as she was sick
and had sick leave benefits against which Cavite Apparel could have charged her absences. Also, it had already
sanctioned her for the three prior infractions. Under the circumstances, the penalty of dismissal for her fourth
infraction was very harsh. Finally, as the CA correctly noted, Cavite Apparel terminated her services on the fourth
infraction, without affording her prior opportunity to explain.
ISSUE: WON Michelle’s dismissal was valid due to gross neglect of duty
HELD: NO. WHEREFORE, premises considered, the petition is DENIED. The assailed January 23, 2006 decision
and March 23, 2006 resolution of the Court of Appeals in CA-G.R. SP No. 89819 are AFFIRMED. Costs against
Cavite Apparel, Incorporated.
RATIO:
After a careful review of the merits of the case, particularly the evidence adduced, we find no reversible error
committed by the CA when it found no grave abuse of discretion in the NLRC ruling that Michelle had been
illegally dismissed. Michelles four absences were not habitual; "totality of infractions" doctrine not applicable
Cavite Apparel argues that Michelles penchant for incurring unauthorized and unexcused absences despite its
warning constituted gross and habitual neglect of duty prejudicial to its business operations. It insists that by
going on absence without official leave four times, Michelle disregarded company rules and regulations; if
condoned, these violations would render the rules ineffectual and would erode employee discipline. Cavite
Apparel disputes the CAs conclusion that Michelles four absences without official leave were not habitual since
she was able to submit a medical certificate for her May 8, 2000 absence. It asserts that, on the contrary, no
evidence exists on record to support this conclusion. It maintains that it was in the exercise of its management
prerogative that it dismissed Michelle; thus, it is not barred from dismissing her for her fourth offense, although
it may have previously punished her for the first three offenses. Citing the Courts ruling in Mendoza v. NLRC, it
contends that the totality of Michelles infractions justifies her dismissal.
We disagree and accordingly consider the company’s position unmeritorious.
Neglect of duty, to be a ground for dismissal under Article 282 of the Labor Code, must be both gross and
habitual.
Gross Negligence Habitual Neglect
- want of care in the performance of ones duties -repeated failure to perform ones duties for a period of time,
depending on the circumstances
Under these standards and the circumstances obtaining in the case, we agree with the CA that Michelle is not
guilty of gross and habitual neglect of duties.
Cavite Apparel faults the CA for giving credit to Michelles argument that she submitted a medical certificate to
support her absence on May 8, 2000; there was in fact no such submission, except for her bare allegations. It
thus argues that the CA erred in holding that since doubt exists between the evidence presented by the
employee and that presented by the employer, the doubt should be resolved in favor of the employee. The
principle, it contends, finds no application in this case as Michelle never presented a copy of the medical
certificate. It insists that there was no evidence on record supporting Michelles claim, thereby removing the
doubt on her being on absence without official leave for the fourth time, an infraction punishable with dismissal
under the company rules and regulations.
Based on what we see in the records, there simply cannot be a case of gross and habitual neglect of duty against
Michelle. Even assuming that she failed to present a medical certificate for her sick leave on May 8, 2000, the
records are bereft of any indication that apart from the four occasions when she did not report for work,
Michelle had been cited for any infraction since she started her employment with the company in 1994. Four
absences in her six years of service, to our mind, cannot be considered gross and habitual neglect of duty,
especially so since the absences were spread out over a six-month period.
Michelles penalty of dismissal too harsh or not proportionate to the infractions she commited
Although Michelle was fully aware of the company rules regarding leaves of absence, and her dismissal might
have been in accordance with the rules, it is well to stress that we are not bound by such rules.
Caltex Refinery Employees Association v. NLRC and Gutierrez v. Singer Sewing Machine Company: even when
there exist some rules agreed upon between the employer and employee on the subject of dismissal, the same
cannot preclude the State from inquiring on whether [their] rigid application would work too harshly on the
employee." This Court will not hesitate to disregard a penalty that is manifestly disproportionate to the
infraction committed.
Michelle might have been guilty of violating company rules on leaves of absence and employee discipline, still
we find the penalty of dismissal imposed on her unjustified under the circumstances. As earlier mentioned,
Michelle had been in Cavite Apparels employ for six years, with no derogatory record other than the four
absences without official leave in question, not to mention that she had already been penalized for the first
three absences, the most serious penalty being a six-day suspension for her third absence on April 27, 2000.
While previous infractions may be used to support an employees dismissal from work in connection with a
subsequent similar offense, we cautioned employers in an earlier case that although they enjoy a wide latitude
of discretion in the formulation of work-related policies, rules and regulations, their directives and the
implementation of their policies must be fair and reasonable; at the very least, penalties must be commensurate
to the offense involved and to the degree of the infraction.
As we earlier expressed, we do not consider Michelles dismissal to be commensurate to the four absences she
incurred for her six years of service with the company, even granting that she failed to submit on time a medical
certificate for her May 8, 2000 absence. We note that she again did not report for work on May 15 to 27, 2000
due to illness. When she reported back for work, she submitted the necessary medical certificates. The reason
for her absence on May 8, 2000 due to illness and not for her personal convenience all the more rendered her
dismissal unreasonable as it is clearly disproportionate to the infraction she committed.
Finally, we find no evidence supporting Cavite Apparels claim that Michelles absences prejudiced its
operations; there is no indication in the records of any damage it sustained because of Michelles absences.
Also, we are not convinced that allowing Michelle to remain in employment even after her fourth absence or
the imposition of a lighter penalty would result in a breakdown of discipline in the employee ranks. What the
company fails to grasp is that, given the unreasonableness of Michelles dismissal i.e., one made after she had
already been penalized for her three previous absences, with the fourth absence imputed to illness confirming
the validity of her dismissal could possibly have the opposite effect. It could give rise to belief that the
company is heavy-handed and may only give rise to sentiments against it.
In fine, we hold that Cavite Apparel failed to discharge the burden of proving that Michelles dismissal was for a
lawful cause. We, therefore, find her to have been illegally dismissed.
As a final point, we reiterate that while we recognize management’s prerogative to discipline its employees, the
exercise of this prerogative should at all times be reasonable and should be tempered with compassion and
understanding. Dismissal is the ultimate penalty that can be imposed on an employee. Where a penalty less
punitive may suffice, whatever missteps may be committed by labor ought not to be visited with a consequence
so severe for what is at stake is not merely the employees position but his very livelihood and perhaps the life
and subsistence of his family.
 ii) Century Iron Works, Inc., et. al. vs. Eleto B. Banas, G.R. No. 184116, 19 June 2013. - EV
G.R. No. 184116 June 19, 2013
CENTURY IRON WORKS, INC. and BENITO CHUA, Petitioners,
vs.
ELETO B. BANAS, Respondent.
Summary:
Respondent Banas worked at petitioner Century Iron worked as an inventory comptroller.
Sometime in 2002, Century Iron received letters of complaint from its gas suppliers
regarding alleged massive shortage of empty gas cylinders. In the investigation that
Century Iron conducted in response to the letters, it found that Bañas failed to make a
report of the missing cylinders.
Century Iron required Bañas to explain why no disciplinary action should be taken against
him for loss of trust and confidence and for gross and habitual neglect of duty. Thereafter,
Century Iron issued a Memorandum requiring Bañas to attend a hearing regarding the
missing cylinders. Bañas subsequently appeared at the hearing to air his side.
Subsequently, Petitioners terminated Bañas ’services on grounds of loss of trust and
confidence, and habitual and gross neglect of duty.
Bañas responded to his dismissal by filing a complaint for illegal dismissal with prayer for
reinstatement and money claims.
Petitioners claim that Bañas was grossly and habitually negligent in his duty which further
justified his termination. According to petitioners. Bañas committed numerous infractions
during his tenure amounting to gross and habitual neglect of duty. These included
absences without leave, unauthorized under time, failure to implement proper standard
warehousing and housekeeping procedure, negligence in making inventories of materials,
and failure to ensure sufficient supplies of oxygen-acetylene gases.
The SC held that Bañas was grossly and habitually neglectful of his duties. Thus, the
complaint for illegal dismissal is dismissed for lack of merit.
Bañas ’self-serving and unsubstantiated denials cannot defeat the concrete and
overwhelming evidence submitted by the petitioners. The evidence on record shows that
Bañas committed numerous infractions in his one year and eleven-month stay in Century
Iron. On October 27, 2000, Century Iron gave Bañas a warning for failing to check the
right quantity of materials subject of his inventory. On December 29, 2000, Bañas went
undertime. On January 2, 2001, Bañas incurred an absence without asking for prior leave.
On August 11, 2001, he was warned for failure to implement proper warehousing and
housekeeping procedures. On August 21, 2001, he failed to ensure sufficient supplies of
oxygen-acetylene gases during business hours. On November 15, 2001, Bañas was again
warned for failing to secure prior permission before going on leave. In May 2002, Century
Iron’s accounting department found out that Bañas made double and wrong entries in his
inventory.
Article 282 of the Labor Code provides that one of the just causes for terminating an
employment is the employee’s gross and habitual neglect of his duties. This cause
includes gross inefficiency, negligence and carelessness.
"Gross negligence connotes want or absence of or failure to exercise slight care or
diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. Fraud and willful neglect of duties
imply bad faith of the employee in failing to perform his job, to the detriment of the Commented [4]:
employer and the latter’s business. Habitual neglect, on the other hand, implies repeated
failure to perform one's duties for a period of time, depending upon the circumstances."
To the mind of the SC, such numerous infractions are sufficient to hold him grossly and
habitually negligent. His repeated negligence is not tolerable. The totality of infractions or
the number of violations he committed during his employment merits his dismissal.
Moreover, gross and habitual negligence includes unauthorized absences and tardiness,
as well as gross inefficiency, negligence and carelessness.
FACTS:
Respondent Eleto B. Banas worked at petitioner Century Iron beginning July 5, 2000 until
his dismissal on June 18, 2002. Bañas responded to his dismissal by filing a complaint for
illegal dismissal with prayer for reinstatement and money claims.
According to Century Iron, Bañas worked as an inventory comptroller whose duties
are to: (1) train newly hired warehouseman; (2) initiate analysis on the discrepancies
concerning records and inventories; (3) check and confirm warehouseman’s report; (4)
check the accuracy of materials requisition before issuance to the respective
warehouseman at the jobsite; (5) monitor and maintain records; and (6) recommend and
initiate corrective or preventive action as may be warranted.
Sometime in 2002, Century Iron received letters of complaint from its gas suppliers
regarding alleged massive shortage of empty gas cylinders. In the investigation that
Century Iron conducted in response to the letters, it found that Bañas failed to
make a report of the missing cylinders. On May 14, 2002, Century Iron required Bañas
to explain within forty-eight (48) hours from receipt of its letter why no disciplinary action
should be taken against him for loss of trust and confidence and for gross and habitual
neglect of duty. On May 31, 2002, Century Iron issued a Memorandum requiring Bañas to
attend a hearing regarding the missing cylinders. Bañas subsequently appeared at the
hearing to air his side.
On June 17, 2002, Century Iron, through Personnel Officer Mr. Virgilio T. Bañaga,
terminated Bañas ’services on grounds of loss of trust and confidence, and
habitual and gross neglect of duty. The termination was effective June 18, 2002.
Respondent Bañas: alleged that he merely worked as an inventory clerk who is not
responsible for the lost cylinders. He pointed out that his tasks were limited to
conducting periodic and yearly inventories, and submitting his findings to the
personnel officer. He maintained that unlike a supervisory employee, he was not
required to post a bond and he did not have the authority to receive and/or release
cylinders in the way that a warehouseman does. Therefore, he cannot be terminated on
the ground of loss of confidence.
Petitioners, on the othjer hand, asserted that Bañas was a supervisory employee who
was responsible for the lost cylinders. They maintained that Bañas committed
numerous infractions during his tenure amounting to gross and habitual neglect of
duty. These included absences without leave, unauthorized under time, failure to
implement proper standard warehousing and housekeeping procedure, negligence
in making inventories of materials, and failure to ensure sufficient supplies of
oxygen-acetylene gases.
LA: ruled that Bañas was illegally dismissed. The LA did not believe Century Iron’s
assertions that Bañas worked as an inventory comptroller and that he was grossly and
habitually neglectful of his duties. The evidence on record shows that Bañas was an
inventory clerk whose duties were merely to conduct inventory and to submit his report to
the personnel officer. As an inventory clerk, it was not his duty to receive the missing
items. The LA also ruled that Century Iron deprived Bañas of due process because the
purpose of the hearing was to investigate the lost cylinders and not to give Bañas an
opportunity to explain his side.
NLRC: affirmed the LA’s ruling in toto. It ruled that the various memoranda issued by
Century Iron explicitly show that Bañas was an inventory clerk. It noted that Century Iron
unequivocally stated in its termination report dated July 29, 2002 that Bañas was an
inventory clerk. It also pointed out that Century Iron failed to present the Contract of
Employment or the Appointment Letter which was the best evidence that Bañas was an
inventory comptroller.
CA: affirmed with modification the NLRC decision. It agreed with the lower tribunals ’
finding that Bañas was merely an inventory clerk. It, however, ruled that Bañas was
afforded due process. It held that Bañas had been given ample opportunity to air his side
during the hearing, pointing out that the essence of due process is simply an opportunity
to be heard.
Hence, this petition.
Petitioners argue that the CA erred when it did not disturb the NLRC’s finding that Bañas
was merely a rank-and-file employee. Citing Capitol Medical Center, Inc. v. Dr. Meris, they
contend that for factual findings of the NLRC to be accorded respect, these must be
sufficiently supported by the evidence on record. The petitioners assert that Bañas was a
supervisory employee who, in the interest of the employer, effectively recommended
managerial actions using his independent judgment. They point out that one of Bañas ’
duties as an inventory comptroller was to recommend and initiate corrective or preventive
action as may be warranted.
The petitioners also maintain that Bañas was dismissed for just and valid causes.
They reiterate that since Bañas was a supervisory employee, he could be dismissed on
the ground of loss of confidence. Finally, the petitioners claim that Bañas was grossly
and habitually negligent in his duty which further justified his termination.
ISSUE:
1. (Not related)WON questions of fact may be inquired into in a petition for certiorari under
Rule 65 of the Rules of Court? —NO
2. (Not related) WON Bañas occupied a position of trust and confidence, or was routinely
charged with the care and custody of Century Iron’s money or property? —NO
3.. WON loss of confidence is a ground for terminating a rank-and-file employee who is
not routinely charged with the care and custody of the employer’s money or property?
4. WON Bañas was grossly and habitually neglectful of his duties? —YES
5. WON Bañas ’termination from his employment was for valid and just causes? —
YES
HELD: Bañas was grossly and habitually neglectful of his duties; CA’s decision reversed;
The complaint for illegal dismissal is dismissed for lack of merit.
RATIO:
1. In a petition for review on certiorari under Rule 45, only questions of law may be put into
issue while in a petition for certiorari under Rule 65, only questions of jurisdiction may be
inquired into
We clarify that the petitioners filed a petition for certiorari under Rule 65 of the Rules of
Court before the CA. Both the petitioners and the CA have confused Rule 45 and Rule 65.
The petition before us involves mixed questions of fact and law. The issues of whether
Bañas occupied a position of trust and confidence, or was routinely charged with the care
and custody of the employer’s money or property, and whether Bañas was grossly and
habitually neglectful of his duties involve questions of fact which are necessary in
determining the legal question of whether Bañas ’termination was in accordance with
Article 282 of the Labor Code.
We will only touch these factual issues in the course of determining whether the CA
correctly ruled whether or not the NLRC committed grave abuse of discretion in the
process of deducing its conclusions from the evidence proffered by the parties. In
reviewing in this Rule 45 petition the CA’s decision on a Rule 65 petition, we will answer
the question: Did the CA correctly determine whether the NLRC committed grave abuse of
discretion in ruling on this case?
2. Bañas did not occupy a position of trust and confidence nor was he in charge of the
care and custody of Century Iron’s money or property
The CA properly affirmed the NLRC’s ruling that Bañas was a rank-and-file employee who
was not charged with the care and custody of Century Iron’s money or property. The ruling
of the CA, finding no grave abuse of discretion in the LA and the NLRC rulings and are
supported by substantial evidence, is, to our mind, correct. The evidence on record
supports the holding that Bañas was an ordinary employee. There is no indication that the
NLRC’s decision was unfair or arbitrary. It properly relied on Century Iron’s numerous
memoranda36 where Bañas was identified as an inventory clerk. It correctly observed that
Century Iron unequivocably declared that Bañas was an inventory clerk in its July 29,
2002 termination report with the Department of Labor and Employment.37 Moreover, as
the NLRC judiciously pointed out, Century Iron failed to present the Contract of
Employment or the Appointment Letter, the best evidence that would show that Bañas
was an inventory comptroller.
3. Since Bañas was an ordinary rank-and-file employee, his termination on the ground of
loss of confidence was illegal
Since Bañas did not occupy a position of trust and confidence nor was he routinely in
charge with the care and custody of Century Iron’s money or property, his termination on
the ground of loss of confidence was misplaced.
We point out in this respect that loss of confidence applies to: (1) employees occupying
positions of trust and confidence, the managerial employees; and (2) employees who are
routinely charged with the care and custody of the employer’s money or property which
may include rank-and-file employees. Examples of rank-and-file employees who may be
dismissed for loss of confidence are cashiers, auditors, property custodians, or those who,
in the normal routine exercise of their functions, regularly handle significant amounts of
money or property. Thus, the phrasing of the petitioners ’second assignment of error is
inaccurate because a rank-and-file employee who is routinely charged with the care and
custody of the employer’s money or property may be dismissed on the ground of loss of
confidence.
"Gross negligence connotes want or absence of or failure to exercise slight care or
diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. Fraud and willful neglect
of duties imply bad faith of the employee in failing to perform his job, to the
detriment of the employer and the latter’s business. Habitual neglect, on the other
hand, implies repeated failure to perform one's duties for a period of time,
depending upon the circumstances."
To our mind, such numerous infractions are sufficient to hold him grossly and
habitually negligent. His repeated negligence is not tolerable. The totality of
infractions or the number of violations he committed during his employment merits
his dismissal. Moreover, gross and habitual negligence includes unauthorized
absences and tardiness, as well as gross inefficiency, negligence and
carelessness. As pronounced in Valiao v. Court of Appeals, "fitness for continued Commented [6]:
employment cannot be compartmentalized into tight little cubicles of aspects of character,
conduct, and ability separate and independent of each other.”

4. Bañas was grossly and habitually neglectful of his duties Besides, the determination of who to keep in employment and who to dismiss for cause is Commented [5]:
one of Century Iron's prerogatives. Time and again, we have recognized that the employer
With respect to Century Iron’s assertion that Bañas was grossly and habitually neglectful has the right to regulate, according to its discretion and best judgment, ell aspects of
of his duties, the CA erred in ruling that the NLRC did not commit grave abuse of employment, including work assignment, working methods, processes to be followed,
discretion in concluding that the dismissal was illegal. The NLRC’s finding that there was working regulations, transfer of employees, work supervision, lay-off of workers and the
illegal dismissal on the ground of gross and habitual neglect of duties is not supported by discipline, dismissal and recall of workers. It would be the height of injustice if we force an
the evidence on record. It believed in Bañas ’bare and unsubstantiated denial that he was employer to retain the services of an employee who does not value his work.
not grossly and habitually neglectful of his duties when the record is replete with pieces of
evidence showing the contrary. Consequently, the NLRC capriciously and whimsically
exercised its judgment by failing to consider all material evidence presented to it by the
petitioners and in giving credence to Bañas ’claim which is unsupported by the evidence
on record.

Bañas ’self-serving and unsubstantiated denials cannot defeat the concrete and
overwhelming evidence submitted by the petitioners. The evidence on record
shows that Bañas committed numerous infractions in his one year and eleven-
month stay in Century Iron. On October 27, 2000, Century Iron gave Bañas a
warning for failing to check the right quantity of materials subject of his inventory.
On December 29, 2000, Bañas went undertime. On January 2, 2001, Bañas incurred
an absence without asking for prior leave. On August 11, 2001, he was warned for
failure to implement proper warehousing and housekeeping procedures. On August
21, 2001, he failed to ensure sufficient supplies of oxygen-acetylene gases during
business hours. On November 15, 2001, Bañas was again warned for failing to
secure prior permission before going on leave. In May 2002, Century Iron’s
accounting department found out that Bañas made double and wrong entries in his
inventory.

Article 282 of the Labor Code provides that one of the just causes for terminating
an employment is the employee’s gross and habitual neglect of his duties. This
cause includes gross inefficiency, negligence and carelessness.
 (d) Fraud or Wilful Breach By The Employee Of The Trust Reposed In
Him
i) Prudential Guarantee and Assurance Employee Labor Union vs. NLRC, et. al., G.R. No. 185335, 13 June 2012
- MARKO
G.R. No. 185335 June 13, 2012
PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE LABOR UNION and SANDY T. VALLOTA, Petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, PRUDENTIAL GUARANTEE AND ASSURANCE INC., and/or
JOCELYN RETIZOS, Respondents.
Topic: (d) Fraud or Wilful Breach by the Employee of the Trust Reposed in Him
Summary: Petitioner Vallota commenced his employment with respondent PGAI on May 16, 1995 as a Junior
Programmer assigned to the Electronic Data Processing Department(EDP). In August 2005, Vallota was elected
to the Board of Directors of the union in PGAI. On the same year, PGAI conducted an on-the-spot security check
on the computers in the IT Dept., beginning with the one assigned to Vallota. After exploring the contents of all
the folders and subfolders, the inspection team found a folder named “MAA”. Vallota was questioned if he is
working for MAA, which he denied. The PGAI network administrator then saved a copy of the contents of the
MAA folder in a floppy disk. Thereafter, Vallota received a memorandum directing him to explain within 72
hours why highly confidential files were stored in his computer and was preventively suspended for 30 days.
Another memorandum was sent extending the said preventive suspension. Vallota complied and sent his letter
of reply, but he was later on given a notice of termination of his employment effective January 10, 2006 on the
ground of loss of trust and confidence. Thus, Vallota and petitioner Union filed a complaint for illegal dismissal
against PGAI. LA rendered a decision in favor of petitioners. Ordered reinstatement of Vallota plus entitlement
to backwages. The NLRC initially affirmed the LA but later on reversed itself upon MR. The NLRC reasoned out
that the respondents had submitted substantial and sufficient evidence to prove that there existed grounds for
the PGAI to lose trust and confidence in Vallota. CA denied appeal for lack of merit and sustained the award of
the NLRC. MR was also denied. The issue in this case is WON petitioner was validly dismissed on the ground of
loss and trust confidence. The SC held that he was illegally dismissed.
Loss of confidence should ideally apply only to cases involving employees occupying positions of trust and
confidence or to those situations where the employee is routinely charged with the care and custody of the
employer's money or property.
There are 2 requisites for dismissal on the ground of loss of trust and confidence:
1. The employee concerned must be one holding a position of trust and confidence; and
2. There must be an act that would justify the loss of trust and confidence.
As for the 1st requisite, there are two (2) classes of positions of trust. The first class consists of managerial
employees. They are defined as those vested with the powers or prerogatives to lay down management policies
and to hire, transfer suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend
such managerial actions. The second class consists of cashiers, auditors, property custodians, etc. They are
defined as those who in the normal and routine exercise of their functions, regularly handle significant amounts
of money or property. Based on the standards set by previous jurisprudence, Vallota’s position as Junior
Programmer is analogous to the second class of positions of trust and confidence. Though he did not physically
handle money or property, he became privy to confidential data or information by the nature of his functions.
At a time when the most sensitive of information is found not printed on paper but stored on hard drives and
servers, an employee who handles or has access to data in electronic form naturally becomes the unwilling
recipient of confidential information.
As for the 2nd requisite, the loss of trust and confidence must be based on a willful breach of trust and founded
on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof
beyond reasonable doubt is not necessary. In this case, there was no other evidence presented to prove fraud
in the manner of securing or obtaining the files found in Vallota’s computer. In fact, aside from the presence of
these files in Vallota’s hard drive, there was no other evidence to prove any gross misconduct on his part. There
was no proof either that the presence of such files was part of an attempt to defraud his employer or to use the
files for a purpose other than that for which they were intended. If anything, the presence of the files reveals
some degree of carelessness or neglect in his failure to delete them, but it is an extremely farfetched conclusion
bordering on paranoia to state that it is part of a larger conspiracy involving corporate espionage. If anything,
the presence of the files would merely merit the development of some suspicion on the part of the employer,
but should not amount to a loss of trust and confidence such as to justify the termination of his employment.
Such act is not of the same class, degree or gravity as the acts that have been held to be of such character. While
Vallota’s act or omission may have been done carelessly, it falls short of the standard required for termination
of employment. It does not manifest either that the employee concerned is unfit to continue working for his
employer.
Facts:
MENDOZA, J.
Petitioner Sandy T. Vallota commenced his employment with respondent Prudential Guarantee and
Assurance, Inc. (PGAI) on May 16, 1995 as a Junior Programmer assigned to the Electronic Data Processing
(EDP) Department. He reported directly to Gerald Dy Victory, then head of the EDP, until his replacement by
respondent Jocelyn Retizos (Retizos) sometime in 1997.
In August of 2005, Vallota was elected to the Board of Directors of the Union.
On November 11, 2005, PGAI’s Human Resource Manager, Atty. Joaquin R. Rillo (Atty. Rillo), invited Union
President, Mike Apostol (Apostol) to his office. Atty. Rillo informed Apostol that PGAI was going to conduct an
on-the-spot security check in the Information and Technology (IT) Department. Atty. Rillo also requested that
Union representatives witness the inspection to which Apostol agreed.
The inspection team proceeded to the IT Department, and the EDP head, through PGAI network administrator
Angelo Gutierrez (Gutierrez), initiated the spot check of IT Department computers, beginning with the one
assigned to Vallota. After exploring the contents of all the folders and subfolders in the "My Documents"
folder, Gutierrez apparently did not find anything unusual with Vallota’s computer and said "Wala naman,
saan dito?" Retizos insisted, "Nandyan yan," and took over the inspection until she found a folder named
"MAA." She then exclaimed, "Heto oh! Ano to? Bakit may MAA dito?" Retizos asked Vallota, "Are you working
for MAA?" Vallota replied, "Hindi po, MAA mutual life po yan na makikita po sa internet." Gutierrez saved a
copy of the contents of the MAA folder in a floppy disk.
Sensing that Vallota was being singled out, Apostol insisted that all the computers in the IT Department,
including that of Retizos, be also subjected to a spot security check. Later, at Retizos ’office, and in the presence
of Atty. Rillo, Vallota was informed that Retizos and Atty. Rillo would print the files found in his computer under
the folder "MAA." Vallota did not object. After the files were printed, Vallota and the Union Secretary were
asked to sign each page of the printout. Vallota, however, was not given a copy of the printed file.
On November 14, 2005, Vallota received a memorandum directing him to explain within 72 hours why highly
confidential files were stored in his computer. The case was assigned Reference No. AC-05-02. The same
memorandum also informed him that he was being placed under preventive suspension for 30 days effective
upon receipt of the said notice. A second memorandum, also dated November 14, 2005, notified Vallota of the
extension of his preventive suspension for another 30 days, in view of the fact that the management needed
more time to evaluate the administrative case against him.
Vallota responded in writing on November 21, 2005. Three days later, on November 24, 2005, PGAI sent him
another memorandum requesting further details on some of the matters he raised in his response. In a letter
dated December 6, 2005, Vallota requested a conference, to be attended by a Union representative and counsel. 0 0.
In reply, PGAI sent Vallota another memorandum9 dated December 7, 2005, which, among others, set a new
x 2 0
deadline for Vallota to submit his reply and evidence in his defense.
0
In compliance with the deadline set, Vallota submitted his reply-memorandum dated December 12, 2005,
outlining his response to the charges.
The NLRC reasoned out that the respondents had submitted substantial and sufficient evidence to prove that
Meanwhile, the Union sent a letter to PGAI President Philip K. Rico (Rico) requesting that a grievance committee
there existed grounds for the PGAI to lose trust and confidence in Vallota. The NLRC also found grave abuse of
be convened and that the contents of the computers of other IT personnel be similarly produced. The request
discretion on the part of the LA to disregard the affidavits of Tolentino, Retizos and Allan Unson, as the LA
for the convening of a grievance committee was ignored. On December 21, 2005, Vallota was given a notice of
himself did not set a hearing for the purpose of cross-examining the said witnesses or verifying the statements
termination of his employment effective January 10, 2006 on the ground of loss of trust and confidence. The
made in their affidavits. As reflected in the decretal portion, although the NLRC ruled that the dismissal was
decision (AC-05-02) was embodied in a memorandum dated December 21, 2005.
valid, it still directed the respondents to grant Vallota financial assistance of one-half (1/2) month pay for every
year of his ten (10) years of service.
Thus, the petitioners filed a complaint for illegal dismissal with claims for full backwages, moral and exemplary
damages, and attorney’s fees. The case was docketed as NLRC-NCR Case No. 00-01-00387-06.
The petitioners moved for a reconsideration of the decision, but the sae was denied.
LA: Rendered a decision in favor of petitioners. Ordered reinstatement of Vallota plus entitlement to backwages.
CA: Denied the petition for lack of merit and sustained the award of the NLRC. MR was also denied. Hence, the
On March 31, 2006, Labor Arbiter Aliman D. Mangandog (LA) rendered a decision13 in favor of the petitioners,
present case.
the dispositive portion of which reads:
ISSUE/S: (1) WON the petitioner was validly dismissed on the ground of loss and trust confidence - NO;
The LA held that PGAI failed to meet its burden of evidence, and the conflicting claims of the parties were
(2) WON the requirements of procedural due process for termination were observed.
resolved in favor of Vallota for failure of PGAI to adduce substantial evidence to support its claim. The LA further
held that the dismissal was not commensurate to the misconduct complained of, especially considering that it
RULING: Petition is GRANTED. Decision of the CA is REVERSED and SET ASIDE, and the decision of the LA is
was Vallota’s first offense.
REINSTATED but MODIFIED to the effect that, in addition to backwages, petitioner Sandy T. Vallota is entitled
On the matter of the blank gate pass stored in Vallota’s computer, the LA found as satisfactory his explanation
to be awarded separation pay equivalent to 1 month salary for every year of service in lieu of reinstatement.
that Joseph Tolentino (Tolentino), a PGAI employee, requested him, from time to time, to print a gate pass
whenever he had to bring tools outside of the company premises. The LA cited Vallota’s argument that "it is
RATIO:
quite odd [that] despite the fact that the gate pass form was admitted by the respondents in [their] Reply as
their exclusive property, complainant’s possession of the same was not considered x x x Possession of Company
1st Issue:
property without authorization."
Whether the petitioner was validly dismissed on the ground of loss of trust and confidence
The LA further found that the respondents were not able to establish that Vallota used company property for
his personal benefit. Nothing on record could show that he made an attempt to defraud his employer. With
The Court’s discussion in Mabeza v. National Labor Relations Commission is instructive:
regard to the charge that, without authorization, he misused or removed company documents, the LA opined
that if this were true, the respondents should have conducted a thorough investigation to determine the liable
Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check
persons.17
for terminating their employees. Such a vague, all-encompassing pretext as loss of confidence, if unqualifiedly
given the seal of approval by this Court, could readily reduce to barren form the words of the constitutional
Finally, the LA ruled that Vallota was denied due process since the respondents refused to conduct a hearing,
guarantee of security of tenure. Having this in mind, loss of confidence should ideally apply only to cases
despite Vallota’s request, to thresh out the matters raised by him in his memoranda.
involving employees occupying positions of trust and confidence or to those situations where the employee
is routinely charged with the care and custody of the employer's money or property. To the first class belong
NLRC: Dismissed the appeal of PGAI on the ground that the respondents failed to submit a certificate of non-
managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies
forum shopping in accordance with the ROC of the NLRC. Upon MR, the NLRC reversed and set aside the
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively
decision of the LA. However, respondent is hereby ordered to pay complainant financial assistance equivalent
recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians,
to one-half (1/2) month pay for every year of service or xx the amount of ninety two thousand pesos (₱
etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of
92,000.00.)
money or property.
₱ 1 =
1 0 ₱ Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property
8 y 9 custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel's guests
, r 2, at the end of her shift would not fall under any of these two classes of employees for which loss of confidence,
4 s 0 if ably supported by evidence, would normally apply. Illustrating this distinction, this Court, in Marina Port
0 . 0 Services, Inc. vs. NLRC, has stated that:
To be sure, every employee must enjoy some degree of trust and confidence from the employer as that is one
reason why he was employed in the first place. One certainly does not employ a person he distrusts. Indeed,
even the lowly janitor must enjoy that trust and confidence in some measure if only because he is the one who
opens the office in the morning and closes it at night and in this sense is entrusted with the care or protection
of the employer's property. The keys he holds are the symbol of that trust and confidence.
By the same token, the security guard must also be considered as enjoying the trust and confidence of his
employer, whose property he is safeguarding. Like the janitor, he has access to this property. He too, is charged
with its care and protection.
Notably, however, and like the janitor again, he is entrusted only with the physical task of protecting that
property. The employer's trust and confidence in him is limited to that ministerial function. He is not entrusted,
in the Labor Arbiter's words, 'with the duties of safekeeping and safeguarding company policies, management
instructions, and company secrets such as operation devices.' He is not privy to these confidential matters,
which are shared only in the higher echelons of management. It is the persons on such levels who, because they
discharge these sensitive duties, may be considered holding positions of trust and confidence. The security
guard does not belong in such category.
More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify
what would otherwise be, under the provisions of law, an illegal dismissal. "It should not be used as a subterfuge
for causes which are illegal, improper and unjustified. It must be genuine, not a mere afterthought to justify an
earlier action taken in bad faith."
In Bristol Myers Squibb (Phils.), Inc. v. Baban,32 the Court discussed the requisites for a valid dismissal on the
ground of loss of trust and confidence:
It is clear that Article 282(c) of the Labor Code allows an employer to terminate the services of an employee
for loss of trust and confidence. The right of employers to dismiss employees by reason of loss of trust and
confidence is well established in jurisprudence.
The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned
must be one holding a position of trust and confidence. Verily, We must first determine if respondent holds such
a position.
There are two (2) classes of positions of trust. The first class consists of managerial employees. They are defined
as those vested with the powers or prerogatives to lay down management policies and to hire, transfer suspend,
lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The
second class consists of cashiers, auditors, property custodians, etc. They are defined as those who in the
normal and routine exercise of their functions, regularly handle significant amounts of money or property.
xxx
The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of
trust and confidence to be a valid cause for dismissal must be based on a willful breach of trust and founded on
clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof
beyond reasonable doubt is not necessary.
Thus, the first question to be addressed is whether Vallota held a position of trust and confidence. In previous
cases, the following positions were classified under the second class of holders of positions of trust and
confidence: a pharmaceutical company’s district manager employed to handle pharmaceutical products for
distribution to medical practitioners and sale to drug outlets, a bank manager, and an employee tasked with
purchasing supplies and equipment. The position of a contract claims assistant tasked with monitoring
enforcement of contracts involving large sums of money was also classified to be analogous to this second class
of holders of positions of trust and confidence.
Vallota was employed by PGAI as a Junior Programmer assigned to the EDP Department. His functions included
the following:
- Installation of PGAI System on all designated branches
- Development of internal programs as required by the organization
- Handling and maintenance of all programs as per advise.
- Conduct[s] operation training on PGAI systems on all PGAI branches
- Generates and handles renewal list of all applicable lines.
- Generates and produces renewal notice of all lines as required.
- Generates paid premium production of all agents.
- Generates outstanding production reports of all agents.
- Generates report on top account executive per I.T. supervisor instruction.
- Generates and handle[s] data on top agents per AE premium production.
- Handles and maintains uploading system, accounting data per advise, account receivable system, motor car
policy system, claims motor car system, check disbursement system, cash call system, R.I. outgoing and incoming
system, facultative systems.
- All other task[s] as may be assigned to him from time to time.
Based on the standards set by previous jurisprudence, Vallota’s position as Junior Programmer is analogous to
the second class of positions of trust and confidence. Though he did not physically handle money or property,
he became privy to confidential data or information by the nature of his functions. At a time when the most
sensitive of information is found not printed on paper but stored on hard drives and servers, an employee
who handles or has access to data in electronic form naturally becomes the unwilling recipient of confidential
information.
Having addressed the nature of his position, the next question is whether the act complained of justified the
loss of trust and confidence of Vallota’s employer so as to constitute a valid cause for dismissal. It must, thus,
be determined whether the alleged basis for dismissal was based on clearly established facts.
The act alleged to have caused the loss of trust and confidence of PGAI in Vallota was the presence in his
computer’s hard drive of a folder named "MAA" allegedly containing files with information on MAA Mutual Life
Philippines, a domestic corporation selling life insurance policies to the buying public, and files relating to PGAI’s
internal affairs:
1. MAA Mutualife Philippines, Inc. prospectus consisting of five (5) pages
2. MAA Mutualife Philippines, Inc. corporate profile consisting of six (6) pages
3. PGAI client’s (sic) questionnaire consisting of five (5) pages
4. PGAI values and strategy
5. PGAI Client Servising (sic): Proposed Service Standard consisting of seven (7) pages
6. PGAI Marketing Department Division consisting of twenty (20) pages
6.1 Marketing Department present set-up
6.2 Present Table of Organization
6.3 How is the market evolving? How does it affect PGAI?
6.4 The strategy of change
6.5 Segmentation
6.6 Proposed Table of Organization
6.7 Proposed PGA Super Branch
6.7.a Objectives
6.7.b Accounts to be service
6.8 Proposed Chart for the Retail Division
6.8.a Dual Objective
6.9 Marketing Administration
6.10 Analysis of Statistics
6.11 Proposed Corporate Accounts Servicing Division
6.11.a Facts
6.11.b 2003 and 2004 Dealership Production Statistics
6.11.c 2003 -2004 Budget Analysis
7. PGAI Marketing Division: An Analysis & Proposed Solution consisting of seven (7) pages
8. PGAI Customer Service Commitment consisting of six (6) pages
9. PGAI Gate Pass Form
Following such discovery, Vallota was charged with the following violations of Company Rules on Company
Property:
1. Possession of company property without authorization;
2. Securing or obtaining Prudential materials or supplies fraudulently;
3. Using Company equipment, property, or material to perform or create something for personal gain or
purpose; and
4. Misuse or removal from company premises without proper authorization of Prudential records or confidential
information of any nature.
Vallota and the Union argue, among others, that (1) the respondents failed to prove by substantial evidence
that Vallota’s position did not allow him to access confidential information and that the data found in his
computer had been used for his personal gain; (2) Vallota did not deliberately get the files from other
departments; instead, such files were acquired in the process of fixing diskettes and printing information as
requested by his co-employees; (3) no evidence was presented to prove that Vallota sold or was about to sell
corporate documents to MAA Mutual Life Corporation or to any company; and (4) the respondents ’refusal to
convene a grievance machinery was a clear abuse of management prerogative.
The respondents, on the other hand, counter that Vallota admitted ownership of the files found in his computer.
They also argue that it was the Data Center Technical Support Staff, and not the Junior Programmer, who
handled recovery/fixing/printing of files of the nature of those found in Vallota’s possession; that it was a
remote possibility that the Junior Programmer would be directly requested to assist employees, since the
Methods Analyst would have been the designee for such task; that Vallota’s functions as Junior Programmer did
not include matters relating to web development; that under standard IT procedure and company practice, the
employees who requested assistance from the IT Department were required to fill up a Job Request Form (JRF),
which was then submitted for prior approval by the IT Head; that Retizos, as IT Head, could not recall signing or
approving any request pertaining to the recovered PGAI files; that Vallota could not produce a single JRF when
he was asked to do so and explained the lack of JRFs by stating that such file repairs, file recovery, or printing
jobs were merely "little favors" and that such were considered as company "practice"; and that he, however,
refused to reveal the names of the employees who had sought assistance in the fixing/printing/recovery of the
PGAI files.
The respondents aver that Vallota also had in his computer the PGAI Gate Pass Form template,44 a company
property that could not be copied, stored, or reproduced without company permission. They also claim that
Vallota was guilty of using company equipment, property or material to perform or create something for
personal gain or purpose. MAA files, alleged to be highly confidential and sensitive, were found in Vallota’s
computer which he explained were downloaded from the MAA website outside of company premises merely
for information. Upon searching the MAA website, however, they (respondents) did not find any of the said
files.
They also found that the MAA website was accessible only to certain users and was not open to the public as
claimed by Vallota. Given all of these, the respondents concluded that Vallota’s possession of the PGAI and MAA
files appeared to be part of a plan to take advantage of the said documents for personal gain.
While the law and this Court recognize the right of an employer to dismiss an employee based on loss of trust
and confidence, the evidence of the employer must clearly and convincingly establish the facts upon which
the loss of trust and confidence in the employee is based.
To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and
founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely,
without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or
suspicion; otherwise, the employee would remain eternally at the mercy of the employer. Further, in order to
constitute a just cause for dismissal, the act complained of must be work-related and show that the employee
concerned is unfit to continue working for the employer. Such ground for dismissal has never been intended
to afford an occasion for abuse because of its subjective nature.
It must also be remembered that in illegal dismissal cases like the one at bench, the burden of proof is upon the
employer to show that the employee’s termination from service is for a just and valid cause. The employer’s
case succeeds or fails on the strength of its evidence and not the weakness of that adduced by the employee, in
keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the
evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial
evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the
employer to discharge the foregoing onus would mean that the dismissal is not justified and, therefore, illegal.
In this case, there was no other evidence presented to prove fraud in the manner of securing or obtaining the
files found in Vallota’s computer. In fact, aside from the presence of these files in Vallota’s hard drive, there
was no other evidence to prove any gross misconduct on his part. There was no proof either that the presence
of such files was part of an attempt to defraud his employer or to use the files for a purpose other than that
for which they were intended. If anything, the presence of the files reveals some degree of carelessness or
neglect in his failure to delete them, but it is an extremely farfetched conclusion bordering on paranoia to
state that it is part of a larger conspiracy involving corporate espionage.
Moreover, contrary to the respondents ’allegations, the MAA files found in Vallota’s computer, the prospectus
and corporate profile, are not sensitive corporate documents. These are documents routinely made available
to the public, and serve as means to inform the public about the company and to disseminate information about
the products it sells or the services it provides, in order that potential clients may make a sound and informed
decision whether or not to purchase or avail of such goods and services.
If anything, the presence of the files would merely merit the development of some suspicion on the part of
the employer, but should not amount to a loss of trust and confidence such as to justify the termination of
his employment. Such act is not of the same class, degree or gravity as the acts that have been held to be of
such character. While Vallota’s act or omission may have been done carelessly, it falls short of the standard
required for termination of employment. It does not manifest either that the employee concerned is unfit to
continue working for his employer.
Termination of employment is a drastic measure reserved for the most serious of offenses. When the act
complained of is not so grave as to result in a complete loss of trust and confidence, a lower penalty such as
censure, warning, or even suspension, would be more circumspect. This is of particular significance here where
during Vallota’s ten years of service to PGAI, not once was he ever warned or reprimanded for such printing
services.
2nd Issue:
Whether the procedural due process requirements for termination were observed
The petitioners allege that Vallota was denied due process of law, as the records of the case clearly show that
his request for an administrative hearing was denied without reason by PGAI. Citing Rule 1, Section 2(d) of the
Implementing Rules of Book VI of the Labor Code, the petitioners argue that a hearing or conference must be
conducted to afford the employee an opportunity to respond to the charge, and to present or rebut evidence
presented against him. The petitioners are of the position that the unjustified refusal of PGAI to conduct a
hearing violated the said provision of the Rules implementing the Labor Code, as well as Vallota’s right to defend
himself before an impartial investigating body.
The Court explained the concept of the opportunity to be heard in the case of Perez v. Philippine Telegraph and
Telephone Company:
After receiving the first notice apprising him of the charges against him, the employee may submit a written
explanation (which may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence
in support thereof, like relevant company records (such as his 201 file and daily time records) and the sworn
statements of his witnesses. For this purpose, he may prepare his explanation personally or with the assistance
of a representative or counsel. He may also ask the employer to provide him copy of records material to his
defense.1âwphi1 His written explanation may also include a request that a formal hearing or conference be
held. In such a case, the conduct of a formal hearing or conference becomes mandatory, just as it is where there
exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of
employment pretermination procedure.
To this extent, we refine the decisions we have rendered so far on this point of law.
This interpretation of Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code reasonably
implements the "ample opportunity to be heard" standard under Article 277(b) of the Labor Code without
unduly restricting the language of the law or excessively burdening the employer. This not only respects the
power vested in the Secretary of Labor and Employment to promulgate rules and regulations that will lay down
the guidelines for the implementation of Article 277(b). More importantly, this is faithful to the mandate of
Article 4 of the Labor Code that "[a]ll doubts in the implementation and interpretation of the provisions of [the
Labor Code], including its implementing rules and regulations shall be resolved in favor of labor."
In sum, the following are the guiding principles in connection with the hearing requirement in dismissal cases:
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to
the employee to answer the charges against him and submit evidence in support of his defense,
whether in a hearing, conference or some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in
writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when
similar circumstances justify it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or
conference" requirement in the implementing rules and regulations.
In light of the above discussion, Vallota is entitled to reinstatement and backwages, reckoned from the date he
was illegally dismissed until the finality of this decision in accordance with jurisprudence.62
In view of the strained relations between Vallota and PGAI, however, it is not in the best interest of the parties,
nor is it advisable or practical to order reinstatement. Where reinstatement is no longer viable as an option,
separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative.
It must be stressed, however, that an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement, which are separate and distinct. In Golden Ace Builders v. Tagle, it was written:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs
provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained
relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed
employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable,
and backwages.
The normal consequences of respondents ’illegal dismissal, then, are reinstatement without loss of seniority
rights, and payment of backwages computed from the time compensation was withheld up to the date of
actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one
(1) month salary for every year of service should be awarded as an alternative. The payment of separation
pay is in addition to payment of backwages.
Velasco v. National Labor Relations Commission, emphasizes:
The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded
if the employee decides not to be reinstated. (Emphasis in the original; italics supplied)
Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative
to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates
the employee from what could be a highly oppressive work environment. On the other hand, it releases the
employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.
This has been the consistent ruling in the award of separation pay to illegally dismissed employees in lieu of
reinstatement, in addition to the award of backwages.
Finally, Vallota, having been compelled to litigate in order to seek redress, is entitled, as he had prayed early on,
to the award of attorney’s fees equivalent to 10% of the total monetary award.

In this case, the two-notice requirement was complied with. By the petitioners ’own admission, PGAI issued to
Vallota a written Notice of Charges & Preventive Suspension (Ref. No. AC-05-02) dated November 14, 2005. After
an exchange of memoranda, PGAI then informed Vallota of his dismissal in its decision dated December 21,
2005.

Given, however, that the petitioners expressly requested a conference or a convening of a grievance committee,
following the Court’s ruling in the Perez case, which was later cited in the recent case of Lopez v. Alturas Group
of Companies, such formal hearing became mandatory. After PGAI failed to affirmatively respond to such
request, it follows that the hearing requirement was not complied with and, therefore, Vallota was denied his
right to procedural due process.
 ii) Rexie A. Hormillosa vs. Coco-Cola Bottlers Phils. Inc., et. al., G.R. No. 198699, 9 October 2013 - YODH
G.R. No. 198699 October 9, 2013
REXIE A. HORMILLOSA, Petitioner, vs. COCA-COLA BOTTLERS PHILS., INC., represented by its Iloilo Plant
Human Resource Head, ROBERTO RICHARD H. DOLAR, Respondent.
SUMMARY: The petitioner Hormillosa was a route salesman for Coca-Cola Bottlers Philippines. As such, he was
charged with the sale of Coca-Cola products, which naturally involved handling money.
An audit was conducted by Regional Sales Supervisor Tiosayco, who found several anomalies committed by
Hormillosa. It turned out that Hormillosa was making fictitious sales, falsifying records, issuing fictitious credit
sales, mis-issuing invoices and receipts, forging signatures, among others.
Hence, Hormillosa was called to answer at the investigation, which he deferred multiple times until he sent a
final letter to the company, informing the latter that he had filed an Unfair Labor Practice case. CBPI sent a final
letter to Hormillosa terminating him for loss of trust and confidence, among others.
LA Lagoc dismissed the illegal dismissal case of Hormillosa. Hormillosa was just using the union to thwart
management’s exercise of its legal prerogative.
NLRC Remanded the case to the Sub-Regional Arbitration Branch for the LA’s failure to follow a certain NLRC
rule.
LA Acosta ruled in favor of Hormillosa. His reason was that since the witnesses of CBPI did not appear in the
hearings as ordered, it had no other alternative but to give Hormillosa the "benefit of the doubt
NLRC affirmed the LA. It held that there was no substantial evidence that Hormillosa falsified and issued
fictitious invoices and that Coke was able to prove its allegations.
The CA reversed the NLRC.
The SC ruled in favor of Coca Cola. It held that there are Two (2) Requisites for dismissal based on loss of trust
and confidence. The First Requisite is that the employee must be occupying a position of trust and confidence.
The Second Requisite is that there must be an act that would justify the loss of trust and confidence and such
breach must be willful.
In the present case, Hormillosa was occupying a position of trust and confidence since Route Salesmen ordinarily
deal with funds and properties of their employers. Further, Hormillosa’s act of issuing the invoices was done
willfully. CBPI had a set of rules and regulations, one of which was that only those outlets, which had outlet
control, were entitled to enjoy credit from CBPI. Salesmen were not allowed to extend credit to those who
had no outlet numbers or outlet profiles from CBPI. Evidently, Hormillosa disregarded and disobeyed the
company rules.
FACTS: The petitioner Hormillosa was employed as a route salesman by Coca-Cola Bottlers Philippines
(CBPI). His tasks included selling CBPI soft drink products, either on cash or on credit basis; receiving payments
from proceeds of the sale or payments of past due or current accounts; issuing sales invoices; and receiving
empty bottles and cases of soft drinks (empties).
During the course of employment, CBPI District Sales Supervisor Raul Tiosayco III conducted a verification and
audit of the accounts handled by Hormillosa. Tiosayco found several violations of Coke’s Employee Code of
Disciplinary Rules and Regulations.
These violations were "Fictitious sales transactions; Falsification of company
records/data/documents/invoices/reports; fictitious issuances of TCS/COL(Temporary Credit Sales/Container
on Loan); non-issuance or mis-issuance of invoices and receipts as well as commercial documents to dealers;
forgery; misuse, abuse or defalcation of funds form market development program."
Specifically, these were the instances of violations committed by Hormillosa:
1. As reflected in an invoice, Shirley Jardeleza (Jardeleza) had an outstanding container on loan
(COL). Upon verification, however, this account was denied by Jardeleza. According to her, they
would always buy in cash and this statement was substantiated by an attached affidavit signed by
her;
2. Mrs. Feby Panerio, who was previously served by Hormillosa, denied her indebtedness as
reflected in her COL account. Mrs. Panerio admitted that she was personally requested by
Hormillosa to sign the COL issuance with the promise that he would settle it himself;
3. Hormillosa also issued a temporary credit sale (TCS) and COL in the name of Arnold Store but
used the outlet number of Virgie Bucaes (Bucaes) who happened to be not one of Coca-Cola’s
authorized credit outlets. Bucaes acknowledged that she received 50 cases but her understanding
was that when she received the cases, they were part of her market development program product
assistance; and
4. Mrs. Cecilia Palmes (Palmes) denied her indebtedness and complained that her signature was
forged as shown in the invoice.
Hence, Hormillosa was issued a memorandum, informing him that he was being put on grounded status and be
subject to investigation.
Tiosayco issued another memorandum calling Hormillosa to report for question-and-answer investigation.
Hormillosa requested for deferment, which was granted.
Another memorandum was issued calling Hormillosa for investigation with a warning that failure on his part to
appear on the said date would be deemed a waiver of his right to be heard and his case would be submitted for
resolution based on the evidence of CBPI.
A last memorandum was sent to Hormillosa to submit his written explanation. Hormillosa replied via letter,
saying that the investigation was now “moot and academic” since he filed an Unfair Labor Practice case
against CBPI.
Thereafter, a termination letter was sent to Hormillosa. It cited the grounds for Hormillosa’s termination:
1. Issuance of fictitious and falsified COL invoices particularly to named outlets or customers namely
Shirley Jardeleza, Cecilia Palmes, Feby Panerio, and Virgie Bañares
2. Misappropriation of Company Funds
3. Violation of Company Rules and Regulations
4. Loss of Trust and Confidence
After the termination of Hormillosa, Tiosayco discovered 2 more anomalies about Hormillosa:
1. Hormillosa tampered a sales invoice issued to Aurelia and Cedy Tafida by placing an amount
different from that which he had submitted to the Finance Department.
2. Winnie Pajarillo purchased soft drinks and deposited an amount representing the empties. It
was agreed that the deposit would be refunded to Pajarillo upon the return of the empties. When
Pajarillo returned the empties and asked for a refund, he only made a partial payment.
Hormillosa filed a case for ULP, Illegal Dismissal, Illegal Deduction, Illegal Grounding, Non-payment of
Commission, Non-payment of 13th Month pay, Violation of CBA, Damages, and Attorney’s Fees against CBPI.
(DISREGARD) PETITIONER’S CONTENTIONS: Hormillosa claimed that he was a member of the Board of Directors
of CBPI’s Employees Union. As secretary of the Union, he sent a copy of the new list of union officers to the
management with a warning that if CBPI would not stop harassing the members of the union, it would declare
a strike.
He claimed that the audit was in violation of Section 2(d), Article III of the Collective Bargaining Agreement (CBA)
which provides: "The Company shall coordinate with the Union authorized representative to witness the
account verification that the company will conduct with respect to questionable accounts issued to Company
customers by route salesman or relief salesmen under investigation."
LA 1: Labor Arbiter Lagoc dismissed the illegal dismissal case, ruled in favor of Coke. The termination was proper
LA held that Hormillosa was just using the union to thwart management’s exercise of its legal prerogative.
However, LA awarded Hormillosa a separation pay, citing the case of Magos v. NLRC.
NLRC 1: Remanded the case to the LA. It found the decision of the LA violative of Section 5(b), Rule V of the
1990 NLRC Rules:
If the Labor Arbiter finds no necessity of further hearing after the parties have submitted their
position papers and supporting documents, he shall issue an Order to that effect and shall inform
the parties, stating the reason therefor
LA failed to issue the said order despite the fact that he found no necessity of holding a trial on the merits. The
absence of this order deprived Hormillosa his right to due process.
LA 2: Labor Arbiter Acosta ruled in favor of Hormillosa. He explained that because the witnesses of CBPI did not
appear in the hearings as ordered, it had no other alternative but to give Hormillosa the "benefit of the doubt"
and decide the case in his favor.
NLRC 2: Upheld the decision of LA Acosta, reasoning out that they found no substantial evidence that
Hormillosa falsified and issued fictitious invoices and CBPI failed to "unleash the burden of proof" to justify
his termination.
CA: Reversed the NLRC. Hormillosa’s dismissal was valid. It held that LA Acosta’s decision was violative of Sec.
14 of Rule V of the 2005 Revised Rules of the NLRC:
SECTION 14. Contents of Decisions. – The decisions and orders of the Labor Arbiter shall be clear and
concise and shall include a brief statement of the: a) facts of the case; b) issues involved; c) applicable
laws or rules; d) conclusions and the reasons therefor; and e) specific remedy or relief granted. In
cases involving monetary awards, the decision or orders of the Labor Arbiter shall contain the amount
awarded.
Moreover, the CA observed that the evidence of CBPI substantially proved the valid dismissal of Hormillosa.
Hormillosa was validly dismissed under Article 282 (c) of Labor Code, as amended. It states that loss of
confidence applies to cases involving employees who occupy positions of trust and confidence or to those
situations where the employee is routinely charged with the care and custody of the employer’s money or
property.15 The CA pointed out that there were established circumstances proving such breach of trust and
confidence.
ISSUE: WON Hormillosa’s dismissal based on loss of trust and confidence was valid
RULING: YES. WHEREFORE, the petition is DENIED.
RATIO:
Art. 282. Termination by employer. – An employee may terminate an employment for any of the
following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and
 (e) Other causes analogous to the foregoing. SECOND REQUISITE

In labor cases, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient Although the case was remanded to the SRAB, it was not for the purpose of conducting a new trial or hearing,
to support a conclusion is required. The CA was correct when it ruled that Hormillosa’s employment was validly but for Hormillosa to confront the witnesses against him and refute the evidence on record against him. The
terminated under paragraph (c) of the above provision. There was substantial evidence to justify his dismissal. remand order did not vacate the earlier hearings and the evidence earlier adduced by both parties.

REQUISITES FOR A VALID DISMISSAL ON THE GROUND OF LOSS OF TRUST AND CONFIDENCE Except for the affidavits of Cecilia Palmes, Fely Paneiro and Shirley Jardeleza, the evidence against him remained
in the records, particularly the documents and invoices he submitted to CBPI. The falsified invoices remained
unexplained by him.
SC cited Bristol Myers Squibb (Phils.), Inc. v. Baban

Hormillosa cannot deny that fact that he issued sales invoices to Arnold Store, a store unregistered or
The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned
unaccredited with CBPI. He transacted with the said store using the account of Virgie Bucaes, proprietor of
must be one holding a position of trust and confidence.
Virgie’s Eatery.

The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of
Hormillosa extended credit to Arnold Store, an unknown customer to CBPI, as documented by two credit sales
trust and confidence to be a valid cause for dismissal must be based on a willful breach of trust and founded on
invoices, Invoice Nos. 79872 and 79873, amounting to ₱5,600.00 and ₱4,806.00, respectively. Hence, he gave a
clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof
false and misleading representation that the account was that of Bucaes.
beyond reasonable doubt is not necessary.

FIRST REQUISITE
There are two (2) classes of positions of trust. The first class consists of managerial employees. They are defined
as those vested with the powers or prerogatives to lay down management policies and to hire, transfer suspend,
lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The
second class consists of cashiers, auditors, property custodians, etc. They are defined as those who in the normal
and routine exercise of their functions, regularly handle significant amounts of money or property.
Hormillosa, being a route salesman, falls under the second class. By selling soft drink products and collecting
payments for the same, he was considered an employee who regularly handled significant amounts of money
and property in the normal and routine exercise of his functions.
Nature Of the Position of Route Salesman
CBPI had a set of rules and regulations, one of which was that only those outlets, which had outlet control,
were entitled to enjoy credit from CBPI. Salesmen were not allowed to extend credit to those who had no
outlet numbers or outlet profiles from CBPI. Evidently, Hormillosa disregarded and disobeyed the company
rules.
Nature of the Breach
SC Cited Tiu and/or Conti Pawnshop v. National Labor Relations Commission:
The language of Article 282(c) of the Labor Code requires that the loss of trust and confidence must
be based on willful breach of the trust reposed in the employee by the employer. Ordinary breach
will not suffice; it must be willful. Such breach is willful if it is done intentionally, knowingly, and
purposely, without justifiable excuse as distinguished from an act done carelessly, thoughtlessly,
heedlessly, or inadvertently.

Coca Cola Bottlers, Phils. V. Kapisanan ng Malayang Manggagawa sa Coca-Cola-FFW and Florention Ramirez:
In the case at bench, Hormillosa's act of issuing sales invoices to Arnold Store could not have been performed
without intent and knowledge on his part as such act could not have been done without planning or merely
We agree that route salesmen are likely individualistic personnel who roam around selling soft drinks, through negligence. Hence, the breach was willful.
deal with customers and are entrusted with large asset and funds and property of the employer.
There is a high degree of trust and confidence reposed on them, and when confidence is breached,
the employer may take proper disciplinary action on them. The work of a salesman exposes him to
voluminous financial transactions involving his employer’s goods. The life of the soft drinks
company depends not so much on the bottling or production of the product since this is primarily
done by automatic machines and personnel who are easily supervised but upon mobile and far-
ranging salesmen who go from store to store all over the country or region. Salesmen are highly
individualistic personnel who have to be trusted and left essentially on their own. A high degree of
confidence is reposed on them because they are entrusted with funds or properties of their
employer.

Clearly, Hormillosa occupies a position of trust.

 ii) Rexie A. Hormillosa vs. Coco-Cola Bottlers Phils. Inc., et. al., G.R. No. 198699, 9 October 2013 - YODH
citing Tiu and/or Conti Pawnshop v. National Labor Relations Commission, et. al., G.R.No. 83433, 12
November 1992 - MONA
G.R. No. 83433 November 12, 1992
CONRADO TIU and/or CONTI PAWNSHOP, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
CARMEN L. ANCHETA, respondents.
Ponente: DAVIDE, JR., J.
Summary: Private respondent Carmen L. Ancheta started as an appraiser in the CONTI PAWNSHOP and ended
up as a pawnshop supervisor by the time she was dismissed. Petitioners received an anonymous letter informing
them that the private respondent was involves in certain anomalies in the pawnshop. The letter alleged that he
was using such equipments in her personal business dealings which involved the buying and selling of jewelry.
petitioners conducted an investigation and found that she was not guilty of such, but she violated the company
policy of allowing employees to purchase jewelry at a discounted rate or agent's price provided the same is for
the personal use of the employee himself or his immediate family. Private respondent submitted a handwritten
answer wherein she admitted that some of her relatives who are not members of her immediate family bought
jewelry form the said pawnshop at the agent's price. However, this was done with the approval of the
petitioners' salesgirls who thought that there was nothing wrong with selling the same at a discounted rate to
relatives of their co-employee. Private respondent emphasized that it was her relatives who personally went to
the pawnshop to buy for themselves and that there was nothing clandestine about it.
Finding the explanation unsatisfactory, the petitioners, on 25 January 1986, issued an inter-office memorandum
to the private respondent informing her that pending the result of an over all evaluation of the charge against
her, she is to be placed under suspension from 27 January 1986 until 25 February 1986 or for a total of thirty
(30) days. Subsequently, on 27 January 1986, barely two (2) days after the issuance of the aforesaid
memorandum, and on the day she was to start serving the suspension, private respondent received a letter
from the petitioners informing her of her termination from employment effective 25 February 1986. Petitioner
said that these acts of unfaithfulness and abuse leads management to LOSE ITS TRUST AND CONFIDENCE which
is a requisite in respondent’s position as appraiser.
ISSUE: WON respondent is guilty of breach of trust and confidence
RULING: NO. Undoubtedly, an employer may terminate the services of an employees due to loss of trust and
confidence. However, there must be some basis therefor.
In the language of the aforequoted Article 283(c) of the Labor Code, the same must be based on willful breach
of the trust reposed in the employee by his employer. Ordinary breach will not suffice; it must be willful.
That the Petitioner allegedly made purchases for her cousins, housemaid and godchildren has not been fully
established by the Respondent, and except for the self-serving, gratuitous and hearsay statement of Mrs.
Rosario Boquirin, who is the Senior Technical Assistant of Respondent Plaza Conti, not an iota of proof has been
presented to prove this imputation. On the contrary, in the Explanation/Reply submitted by Petitioner, it was
clearly shown that the purchases were personally made by her relative directly from the sales personnel of
Respondent and not by the Petitioner. Moreover, even granting that Petitioner has indeed, made purchases of
jewelries for her distant relatives or who are not immediate members of her family, we see no wrong at all
because the purchases were fully paid in accordance with the prescribed agent's price. Finally, assuming that
the Petitioner has violated this employee' privilege, we believe that the penalty of dismissal is too severe,
inhuman and highly unjustified because violation of said privilege has no direct relevancy or connection with
her works as an Appraiser.
Also, as to the issue of due process, petitioners violated the twin requirement of notice and hearing. It is clear
that the private respondent was not afforded a reasonable time to answer the 10 January 1986 letter which was
given to her on the same date. This letter gave her until the end of the same day to submit her explanation; she
had, therefore, less than twenty-four (24) hours to prepare and submit the explanation. She did not even have
the time to consult with a lawyer. Aside from this, she was not even given the opportunity to be heard. Two (2)
days after receiving the notice of suspension, allegedly because petitioners were still evaluating her case, she
was served with a notice of dismissal.
FACTS:
This is a special civil action for certiorari seeking the reversal of the 28 January 1988 decision of public
respondent NLRC in NLRC Case No. RAB III-5-2673-86, which ordered the petitioners to pay the private
respondent backwages for a period of two (2) years and separation pay equivalent to one (1) month pay for
every year of service, a fraction of at least six (6) months to be considered one (1) year.
Private respondent Carmen L. Ancheta was the petitioners' employee from April 1970 until 25 February 1986
when she was dismissed on the alleged ground of loss of trust and confidence. She started as an appraiser in
the CONTI PAWNSHOP and ended up as a pawnshop supervisor by the time she was dismissed.
As an appraiser, she had the following duties:
(1) to accept jewelry and other articles offered as pledge;
(2) to test and appraise such jewelry and other articles for genuineness; and
(3) to weigh and appraise the articles and assess the amounts for which they could be pledged.
As pawnshop supervisor, she not only performed the functions of an appraiser, but supervised the business
and personnel of the petitioners as well. The supervisor aspect of the job entailed the training of personnel on
how to appraise pieces of jewelry.
Sometime in December of 1985, petitioners received an anonymous letter informing them that the private
respondent was involves in certain anomalies in the pawnshop. This letter specifically cited the private
respondent's false claim that certain pawnshop equipment issued to her were lost; the letter alleged that the
latter version is mere fabrication, as he was using such equipments in her personal business dealings which
involved the buying and selling of jewelry.
By virtue thereof, petitioners conducted an investigation and came out with the finding that while private
respondent was not guilty of the wrong alleged in the letter, she violated certain company policies. These
discovered infractions pertain to the policy of allowing employees to purchase jewelry at a discounted rate or
agent's price provided the same is for the personal use of the employee himself or his immediate family.
Petitioners established this policy to give their employees the opportunity to buy jewelry for themselves at the
lowest price possible.
In their letter of 10 January 1986 to the private respondent, petitioners required the latter to explain why she
should not be dismissed for violating the said company policy in the face of a well-founded belief that the
jewelry she bought at a discounted price was being sold by her to parties other than the members of the
immediate family. She was given until the end of the same day to give her explanation.
Within this short span of time, private respondent submitted a handwritten answer wherein she admitted
that some of her relatives who are not members of her immediate family bought jewelry form the said
pawnshop at the agent's price. However, this was done with the approval of the petitioners' salesgirls who
thought that there was nothing wrong with selling the same at a discounted rate to relatives of their co-
employee. Private respondent emphasized that it was her relatives who personally went to the pawnshop to
buy for themselves and that there was nothing clandestine about it.
Finding the explanation unsatisfactory, the petitioners, on 25 January 1986, issued an inter-office
memorandum to the private respondent informing her that pending the result of an over all evaluation of the
charge against her, she is to be placed under suspension from 27 January 1986 until 25 February 1986 or for a
total of thirty (30) days.
Subsequently, on 27 January 1986, barely two (2) days after the issuance of the aforesaid memorandum, and
on the day she was to start serving the suspension, private respondent received a letter from the petitioners
informing her of her termination from employment effective 25 February 1986. The letter, quoted verbatim,
follows:
In connection with the unauthorized purchases of jewelry items, and after the audit and inspection
by the Internal Auditor; subsequent investigation clearly and sufficiently proves that:
1) You are properly and thoroughly informed of all company rules and policies yet you not
only violated but abused them just the same by purchasing a considerable number of
jewelry items;
2) When asked to present said items, it was found that they were purchased for persons
not within your immediate family, of which only three (3) out of the fourteen (14) were
shown, of which
3) You sought to cover up for the act by presenting additional piece of jewelry which when
checked against the records, description was not included in the unauthorized purchases
made. This alone was a very clear act of dishonesty.
4) That it was one of your responsibility to purchase items sold by individuals to the
company, yet further investigation was made and it was learned that your were buying
jewelries from Conti customers for your personal purpose right in the premises of Conti
Pawnshop during business hours.
5) Your explanation on these matters has been found unsatisfactory.
6) Summing up all the above and considering the reports and records contained on file
(indicating activities in-conflict with the interest of the company) — that the violations
are serious infractions to the existing rules and regulations with intentions of personal
gain.
These acts of unfaithfulness and abuse leads management to LOSE ITS TRUST AND
CONFIDENCE ON YOU which is a requisite in your position as appraiser thus deeming it
necessary that your employment be terminated within 30 days from receipt of this
letter and you are placed under suspension without pay until your termination which is
on February 25, 1986.
Thereafter, on 13 February 1986, the petitioners' personnel manager informed the Ministry of Labor of
Olongapo City about the private respondent's termination effective 25 February 1986.
On 15 April 1986, private respondent filed with the Olongapo District Labor Office in Olongapo City a
complaint for illegal dismissal against the petitioners. The Labor Arbiter required the parties to submit their
respective position papers and other documentary evidence.
LA: On 29 July 1987, LA Vladimir PL. Sampang rendered a decision in favor of the private respondent (petitioner
therein) and ordered the petitioners as follows:
1. To pay the unpaid wages of Petitioner from January 15, 1986 up to February 25, 1986
in the sum of Two Thousand Eight Hundred Sixty Six Pesos & Thirty Centavos (P2,866.30);
2. To immediately reinstate Petitioner to her former or equivalent position without loss
of seniority rights and with full backwages and other benefits from the date of her illegal
dismissal until fully reinstated, and should reinstatement become impossible due to
strained relationship, to pay the separation pay of petitioner equivalent to her one (1)
month salary or one-half (1/2) month salary per year of service whichever is higher, a
fraction of at least six (6) months service considered as one (1) whole year in addition to
backwages and other benefits;
3. To pay Petitioner moral and exemplary damages in the sum of Ten Thousand
(P10,000.00) Pesos.
Aggrieved by the said decision, petitioners interposed an appeal before the public respondent NLRC.
They alleged therein that the Labor Arbiter committed grave abuse of discretion and serious errors
in his findings of fact which would cause them grave or irreparable damage and injury.
NLRC: On 28 January 1988, the NLRC promulgated the challenged decision affirming, with modification, the
decision of the Labor Arbiter. By way of modification, the NLRC decreed the removal of the order for the
reinstatement of the private respondent and deletion of the award of moral and exemplary damages in favor
of the latter. The NLRC found it inappropriate to reinstate the private respondent because she was occupying a
sensitive position in the business of the petitioners. Thus, to the latter, she had "ceased to be an effective tool
in the furtherance of" their business. The dispositive portion of the said decision reads:
WHEREFORE, premises considered, the decision of the Labor Arbiter below is hereby
modified as follows:
1. Respondent Conti Pawnshop is hereby ordered to pay complainant backwages
equivalent on her two (2) years salary; plus separation pay computed at one (1) month's
salary for every year of service, a fraction of at least six (6) months to be considered as
one year.
2. The award for moral and exemplary damages is deleted for lack of factual and legal
basis.
SO ORDERED. 6
Their motion to reconsider the said decision having been denied in the public respondent's Resolution of 14
March 1988, petitioners filed the instant special civil action for certiorari.
PETITIONERS ’DEFENSE:
Citing Article 282(c), of the Labor Code, as amended, petitioners contend that loss of trust and confidence is a
valid ground for terminating one's employment. The article reads:
Art. 283. Termination by employer. — An employer may terminate an employment for
any of the following just causes:
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative.
In the Resolution of 22 February 1988, this Court gave due course to the petition after the filing by the public
respondent, through the Office of the Solicitor General, of its Comment, and by the petitioners of their reply to
the latter. The parties were then required to submit their respective Memoranda.
ISSUE: WON NLRC committed grave abuse of discretion and error in awarding backwages and separation pay
there being a clear basis for the dismissal from employment of the private respondent.
RULING: NO. WHEREFORE, for lack of merit, the Petition is DISMISSED. The appealed decision is hereby
AFFIRMED, subject to the modification as to backwages which shall be for three (3) years without any
qualification and deduction. This Decision shall be immediately executory. Costs against the petitioners. SO
ORDERED.
RATIO:
Undoubtedly, an employer may terminate the services of an employees due to loss of trust and confidence.
However, there must be some basis
therefor.
In the language of the aforequoted Article 283(c) of the Labor Code, the same must be based on willful breach
of the trust reposed in the employee by his employer. Ordinary breach will not suffice; it must be willful. Such
breach is willful if it is done internationally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Elsewise stated, it must
be based on substantial evidence and not on the employer's whims or caprices or suspicion; otherwise, the
employees would eternally remain at the mercy of the employer. It should be genuine and not simulated; nor
should it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes
which are improper, illegal, or unjustified. It has never been intended to afford an occasion for abuse by the
employer of its prerogative, as it can easily be subject to abuse because of its subjective nature.
In the case at bar, the Labor Arbiter found untenable the grounds relied upon by the petitioners. He wrote:
Anent the issue of whether Petitioner was illegally dismissed or not, we find that the
defense of loss of trust and confidence advanced by Respondent is merely speculative,
conjectural and devoid of factual basis, in fact and in law. The imputed alleged violation
by the Petitioner of a privilege given to all employees wherein they are allowed to make
purchases of jewelries at Conti at agent's price for their personal use and their immediate
families, in that the Petitioner allegedly made purchases for her cousins, housemaid and
godchildren has not been fully established by the Respondent, and except for the self-
serving, gratuitous and hearsay statement of Mrs. Rosario Boquirin, who is the Senior
Technical Assistant of Respondent Plaza Conti, not an iota of proof has been presented
to prove this imputation. On the contrary, in the Explanation/Reply submitted by
Petitioner, it was clearly shown that the purchases were personally made by her relative
directly from the sales personnel of Respondent and not by the Petitioner. Moreover,
even granting that Petitioner has indeed, made purchases of jewelries for her distant
relatives or who are not immediate members of her family, we see no wrong at all
because the purchases were fully paid in accordance with the prescribed agent's price.
Finally, assuming that the Petitioner has violated this employee' privilege, we believe that
the penalty of dismissal is too severe, inhuman and highly unjustified because violation
of said privilege has no direct relevancy or connection with her works as an Appraiser.
At most, the privilege should have taken away from her, instead of an outright and
canibalistic dismissal from her work.
Likewise, the imputation that her records reveal that in the past, Petitioner has accepted
fake five (5) items of jewelries in four (4) separate instances in a span of one (1) month
with two (2) transactions each, from only one (1) person, and that as a customer has
allegedly told management that Petitioner purchased from her jewelries that she was
going to sell, is too general, besides being hearsay and more of a product of a senile and
moribund imagination, because if it were true, where are the records referred to? Why
were they not presented in as evidenced? How, where and when in the past were those
items accepted and from whom has Petitioner accepted those fake items? Who was that
customer who allegedly told management that petitioner purchased jewelries she was
going to sell? If there is any truth to this, why was not the Petitioner then immediately
investigated and dismissed? Finally, the anonymous letter received by Respondent
sometime on December 1985 implicating the Petitioner in buying jewelry Conti premises
for her own personal purpose and was not buying at all for the Respondent Conti,
thereby depriving the latter of this particular business competing with it, is done mere
figments of a very fertile halucination because such an anonymous letter is but a
hearsay evidence and therefore, inadmissible. If there is any truth to this, again, why was
not the Petitioner right then and there immediately investigated and dismissed if
warranted?
The public respondent sustained this findings and conclusions of the Labor Arbiter, thus:
After a careful scrutiny of the records of the case, We find for the complainant. Indeed
complainant holds a sensitive position in respondent's business, but it must be noted that
dismissal of an employee on the ground of loss of trust and confidence must have some
basis. All that the respondent submitted with respect to the alleged purchases of jewelries
from a customer in the pawnshop premises for her personal ends was the anonymous
letter that the respondent allegedly received. Such evidence is clearly hearsay and
inadmissible. As to the alleged purchases of five (5) fake jewelries (sic), nothing in the
records support such allegation except for the report of respondent's Senior Technical
Assistant Rosario B. Boquirin. Granted such allegation were true, respondent should have
investigated complainant upon discovery of the alleged offense. Respondent should have
immediately called complainant's attention. Evidently, respondent failed to do this.
Moreover, nowhere in the records of the case is there any indication that complainant
was ever reprimanded or investigated. With respect to the lost equipments, this charge
was likewise not proven. The accusation is at most speculative and conjectural. On the
matter of complainant's alleged abuse of the privilege extended to her by respondent,
We believe that, granting that there was such abuse, dismissal of the complainant is
severe penalty. We agree with the Labor Arbiter’s conclusion.
The above findings of fact by the Labor Arbiter and the public respondents are supported not merely by the
substantial, but by a clear preponderance of evidence. We find no reason to disturb such findings. Settled is
the rule that findings of quasi-judicial agencies which have acquired expertise in the specific matters entrusted
to there jurisdiction are accorded by this Court not only with respect but even finality if they are supported by
substantial evidence. Petitioners have not convinced Us that We should depart from this rule.
ON THE ISSUE OF DUE-PROCESS:
There is, however, something more in the conduct of the petitioners which dilutes the merits of their claims and
dims their hope for support from this Court. They deprived the private respondents of her right to due process
— which is at the heart employee's right to security of tenure and is fully guaranteed by both the 1973 and 1987
Constitutions.
Article 278, now Article 277, of the Labor Code of the Philippines, us amended by Batas Pambansa Blg. 130,
implements this guaranty of due process. The pertinent portions thereof reads:
(b) Subject to the constitutional rights of workers to security of tenure and there right to
be protected against dismissal except for a just or authorized cause and without
prejudiced to the requirement of notice Article 284 of this Code, the clearance to
terminate employment shall no longer be necessary.
However, the employer shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and to defend herself with the
assistance of his representative is he so desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by the Ministry of Labor and
Employment. Any decision taken by the employer shall be not prejudice to the right of
the worker to contest the validity or legality of his dismissal by filling a complaint with the
regional branch of the National Labor Relations Commission. The burden of proving that
the termination was for a valid or authorized cause shall rest of the employer. The
Ministry may suspend the effects of the termination pending the resolution of the case
of the event of the prima facie finding by the Ministry that the termination may cause a
serious labor disputes or is in implementation of a mass lay-off.
The same guaranty is likewise embodied in Sections 2 to 6, Rule XIV, Book V of the Rules
Implementing the Labor Code, to wit:
 Sec. 2. Notice of dismissal. — Any employer who seeks to dismiss a worker shall furnish backwages for three (3) years without qualification and deduction, and for separation pay at the rate of one (1)
him a written notice stating the particular acts or omission constituting the grounds for month salary for every year of service, would be in order. The challenged decision pegged the award of
dismissal. In cases of abandonment of work, the notice shall be served at the worker's last backwages at two (2) years only. It should be modified to three (3) years.
known address.
Sec. 3. Preventive suspension. — The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent threat
to the life or property of the employer or of his co-workers.
Sec. 4. Period of suspension. — No preventive suspension shall last longer than 30 days.
The employer shall thereafter reinstate the worker in his former or in a substantially
equivalent position or the employer may extend the period of suspension provided that
during the period of extension, he pays the wages and other benefits due to the worker.
In such case, the worker shall not be bound to reimburse the amount paid to him during
the extension if the employer decides, after completion of the hearing, to dismiss the
worker.
Sec. 5. Answer and hearing. — The worker may answer the allegations stated against him
in the notice of dismissal within a reasonable period from receipt of such notice. The
employer shall afford the worker ample opportunity to be heard and to defend himself
with the assistance of his representative, if he so desires.
Sec. 6. Decision to dismiss. — The employer shall immediately notify a worker in writing
of a decision to dismiss him stating clearly the reasons thereof.

It is evident from the said provisions that the employer is required to furnish an employee who is
to be dismissed two (2) written notices before such termination. The first is the notice to apprise
the employee of the particular acts or omissions for which his dismissal is sought. This may be loosely
considered as the proper charge. The second is the notice informing the employee of the employer's
decision to dismiss him. This decision, however, must come only after the employee is given a
reasonable period from receipt of the first notice within which to answer the charge, and ample
opportunity to be heard and defend himself with the assistance of his representative, if he so desires.
This is in consonance with the express provisions of law on the protection to labor and the broader
dictates of procedural due process. Non-compliance therewith is fatal because this requirements are
conditions sine qua non before dismissal may be validly effected.

Although an employer has the right to dismissed an employee, the former should not be careless in exercising
such right. The manner of dismissal should be in full accord with the law and cannot be left entirely to the whims
of the employer for at stake is not only the employee's position, but also his means of livelihood.

In the instant case, petitioners violated the twin requirement of notice and hearing. It is clear that the private
respondent was not afforded a reasonable time to answer the 10 January 1986 letter which was given to her on
the same date. This letter gave her until the end of the same day to submit her explanation; she had,
therefore, less than twenty-four (24) hours to prepare and submit the explanation. She did not even have the
time to consult with a lawyer. Aside from this, she was not even given the opportunity to be heard. Two (2)
days after receiving the notice of suspension, allegedly because petitioners were still evaluating her case, she
was served with a notice of dismissal. The "suspension" was, therefore, a clever subterfuge to mask her
immediate dismissal which was obviously already decided upon. Even the suspension has no basis since her
continued employment posed no "serious imminent threat to the life or property" of the petitioners or the
private respondent's co-workers. Thus, the petitioners made a mockery of the solemn guarantee of due
process.

The dismissal then of the private respondent was wrong and illegal. Ordinarily, reinstatement with backwages
should be decreed. However, the former relief may no longer feasible in this case. The antipathy and antagonism
existing between the petitioners and the private respondent militate against the latter's reinstatement; thus,
such reinstatement will no longer serve any prudent purpose. Pursuant to settled jurisprudence, an award for