BISIG MANGGAGAWA SA TRYCO V. NLRC (G.R. NO.

151309)
Tryco Pharma Corporation, manufacturer of veterinary medicines with principal office in Caloocan City, and petitioner union Bisig Manggagawa
Sa Tryco (BMT), the exclusive bargaining representative of the rank-and-file employees, signed separate Memoranda of Agreement providing for a
compressed workweek schedule to be implemented in the company. BMT and Tryco negotiated for the renewal of their CBA but failed to arrive at
a new agreement. Meanwhile, Tryco received a letter from the Bureau of Animal Industry of the Department of Agriculture reminding the former
that its production should be conducted in Bulacan City and not in Caloocan City. Accordingly, Tryco issued a memo directing petitioners herein
who are members of BMT to report to the plant site in Bulacan. Contending that the transfer of its members constitutes unfair labor practice, BMT
declared a strike. Later, petitioner employees filed separate complaints for illegal dismissal and added that the transfer of petitioners to the Bulacan
site is intended to paralyze the union. LA dismissed the complaint. NLRC and CA affirmed.
Issues:
(1) Whether the transfer of petitioners amounted to constructive dismissal; and
(2) Whether the transfer of petitioners amounted to unfair labor practice.
Ruling: NO.

(1) Management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of
the business is, therefore, generally not constitutive of constructive dismissal. Thus, the consequent transfer of Tryco’s personnel, assigned to the
Production Department was well within the scope of its management prerogative. When the transfer is not unreasonable, or inconvenient, or
prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee may
not complain that it amounts to a constructive dismissal. However, the employer has the burden of proving that the transfer of an employee is for
valid and legitimate grounds.

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries, benefits and other privileges of the
petitioners. The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal.
Objection to a transfer that is grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the
transfer is not a valid reason to disobey an order of transfer. The distance from Caloocan to San Rafael, Bulacan is not considerably great so as to
compel petitioners to seek living accommodations in the area and prevent them from commuting to Metro Manila daily to be with their families.

(2) We cannot see how the mere transfer of its members can paralyze the union. The union was not deprived of the membership of the petitioners
whose work assignments were only transferred to another location. More importantly, there was no showing or any indication that the transfer
orders were motivated by an intention to interfere with the petitioners’ right to organize. Unfair labor practice refers to acts that violate the
workers’ right to organize. With the exception of Article 248(f) of the Labor Code of the Philippines, the prohibited acts are related to the workers’
right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices.

-------------------------------------------------------------
CAPITOL MEDICAL CENTER VS. MERIS (470 SCRA 125, SEPTEMBER 16, 2005)

FACTS:

Capitol Medical Center hired Dr. Meris in 1974 as Chief of its Industrial Service Unit (ISU).
In 1992, however, or after about 18 years of service, Dr. Meris was notified that the ISU will be abolished and that his services will be terminated.
He, however, doubted the closure.
The ISU was not, in fact, abolished. It continued to operate with Dr. Clemente as head.
Dr. Meris believed it was a mere ploy for his ouster due to his refusal to retire. He sought reinstatement but was unheeded.
Dr. Meris then filed a complaint for illegal dismissal but the Labor Arbiter dismissed the same and was only granted his hospital retirement plan.
On appeal, the NLRC set aside the retirement plan on the ground that Dr. Meris did not, in fact, retire. It ordered payment of separation pay instead.
The CA, however, ruled that Dr. Meris was illegally dismissed. Hence, present action by Capitol.
ISSUE: Was there illegal dismissal?

RULING: Yes.

Although employers have management prerogatives, including the right to close the operation of an establishment or undertaking, they must
comply with the legal requirements and not offend the protected rights of labor.
Requisites: (a) done in good faith to advance the company’s interest; and (b) not for the purpose of defeating or circumventing the rights of
employees under the law.
Capitol failed to prove its good faith in closing the ISU.
The “Analysis of Income and Expenses” which showed there were losses was doubtful since it was prepared by the internal auditor who happened
to be a relative of Dr. Clemente.
The accounting records, in fact, showed increasing revenues from 1989 to 1991.
San Miguel Corp vs. Numeriano Layoc Jr.
Facts: Respondents were among the "Supervisory Security Guards" of the Beer Division of San Miguel Corporation. They started working as
guards with the petitioner San Miguel Corporation assigned to the Beer Division on different dates until such time that they were promoted as
supervising security guards. From the commencement of their employment, the private respondents were required to punch their time cards for
purposes of determining the time they would come in and out of the company's work place. Corollary, the private respondents were availing the
benefits for overtime, holiday and night premium duty through time card punching. However, in the early 1990's, the San Miguel Corporation
embarked on a Decentralization Program aimed at enabling the separate divisions of the San Miguel Corporation to pursue a more efficient and
effective management of their respective operations.
As a result of the Decentralization Program, the Beer Division of the San Miguel Corporation implemented on January 1, 1993 a "no time card
policy" whereby the Supervisory I and II composing of the supervising security guards of the Beer Division were no longer required to punch their
time cards. Consequently, on January 16, 1993, without prior consultation with the private respondents, the time cards were ordered confiscated
and the latter were no longer allowed to render overtime work. However, in lieu of the overtime pay and the premium pay, the personnel of the
Beer Division of the petitioner San Miguel Corporation affected by the "No Time Card Policy" were given a 10% across-the-board increase on
their basic pay while the supervisors who were assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging from
P2,000.00 to P2,500.00 a month.
Hence, this complaint filed for unfair labor practice, violation of Article 100 of the Labor Code of the Philippines, and violation of the equal
protection clause and due process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of the Philippines.
Issue: Whether the circumstances in the present case constitute an exception to the rule that supervisory employees are not entitled to overtime pay.
Ruling: Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to
managerial employees. The other provisions in the Title include normal hours of work (Article 83), hours worked (Article 84), meal periods
(Article 85), night shift differential (Article 86), overtime work (Article 87), undertime not offset by overtime (Article 88), emergency overtime
work (Article 89), and computation of additional compensation (Article 90). It is thus clear that, generally, managerial employees such as
respondents are not entitled to overtime pay for services rendered in excess of eight hours a day. Respondents failed to show that the circumstances
of the present case constitute an exception to this general rule.
Aside from their allegations, respondents were not able to present anything to prove that petitioners were obliged to permit respondents to render
overtime work and give them the corresponding overtime pay. Even if petitioners did not institute a "no time card policy," respondents could not
demand overtime pay from petitioners if respondents did not render overtime work. The requirement of rendering additional service differentiates
overtime pay from benefits such as thirteenth month pay or yearly merit increase. These benefits do not require any additional service from their
beneficiaries. Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code.
Hence, the petition is granted.---------------------
PHILIPPINE AIRLINES, INC., Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and AIDA M. QUIJANO, Respondents.
LEONARDO-DE CASTRO, J.:
FACTS:
An investigating committee chaired by Leslie W. Espino formally charged Quijano as Manager-ASAD in connection with the processing and
payment of commission claims to Goldair Pty. Ltd. wherein PAL overpaid commissions to the latter.
Pending further investigation, the Espino Committee placed Quijano under preventive suspension and at the same time required her to submit her
answer to the charges.
Another Administrative charge involving the same Goldair anomaly was filed, this time including Committee Chairman Leslie W. Espino and
Committee Member Romeo R. Ines and several others, for "gross incompetence and inefficiency, negligence, imprudence, mismanagement,
dereliction of duty, failure to observe and/or implement administrative and executive policies, and related acts or omissions." Pending the result of
investigation by another committee chaired by Judge Martin S. Ocampo, the PAL Board of Directors suspended respondents.
The Ocampo Committee having submitted its findings to the PAL Board of Directors, the latter considered respondents resigned from the service
effective immediately, for loss of confidence and for acts inimical to the interest of the company.
Her motion for reconsideration having been denied by the Board, Quijano filed the instant case against PAL for illegal suspension and illegal
dismissal.
The Labor Arbiter dismissed private respondents complaint. Undeterred, private respondent filed an appeal before the NLRC which rendered the
assailed Decision vacated and set aside. Petitioner filed a Motion for Reconsideration but this was denied by the NLRC.
ISSUE:
Whether or not respondent is illegally dismissed?
HELD:
LABOR LAW
At the onset, it should be noted that the parties do not dispute the validity of private respondents dismissal from employment for loss of confidence
and acts inimical to the interest of the employer. The assailed September 29, 1995 Decision of the NLRC was emphatic in declaring that it was "not
prepared to rule as illegal the preventive suspension and eventual dismissal from the service of [private respondent]" and rightfully so because the
last position that private respondent held, Manager-ASAD (Agents Services Accounting Division), undeniably qualifies as a position of trust and
confidence.
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 employers 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.
As a general rule, employers are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those who, while
not of similar rank, perform functions which by their nature require the employers full trust and confidence. This must be distinguished from the
case of ordinary rank and file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the
events in question; mere uncorroborated assertions and accusations by the employer will not suffice.
LABOR LAW
The language of Article 279 of the Labor Code is pregnant with the implication that a legally dismissed employee is not entitled to separation pay,
to wit:
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
However, in exceptional cases, this Court has granted separation pay to a legally dismissed employee as an act of "social justice" or based on
"equity." In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the
employee or would involve moral turpitude. This equitable and humanitarian principle was first discussed by the Court in the landmark case of
Philippine Long Distance Telephone Co. (PLDT) v. National Labor Relations Commission.
Serious misconduct as a valid cause for the dismissal of an employee is defined simply as improper or wrong conduct. It is a 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 of
judgment. To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not
merely trivial or unimportant. However serious such misconduct, it must, nevertheless, be in connection with the employees work to constitute just
cause for his separation. The act complained of must be related to the performance of the employees duties such as would show him to be unfit to
continue working for the employer. On the other hand, moral turpitude has been defined as "everything which is done contrary to justice, modesty,
or good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in general,
contrary to justice, honesty, modesty, or good morals."
In the case at bar, the transgressions imputed to private respondent have never been firmly established as deliberate and willful acts clearly directed
at making petitioner lose millions of pesos. At the very most, they can only be characterized as unintentional, albeit major, lapses in professional
judgment. Likewise, the same cannot be described as morally reprehensible actions. Thus, private respondent may be granted separation pay on the
ground of equity which this Court had defined as "justice outside law, being ethical rather than jural and belonging to the sphere of morals than of
law. It is grounded on the precepts of conscience and not on any sanction of positive law, for equity finds no room for application where there is
law."
DENIED
WILTSHIRE FILE CO., INC., petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION and VICENTE T. ONG, respondents.
FACTS: Private respondent Vicente T. Ong was the Sales Manager of petitioner Wiltshire File Co., Inc. On 13 June 1985, upon private
respondent’s return from a business and pleasure trip abroad, he was informed by the President of petitioner Wiltshire that his services were being
terminated. Private respondent maintains that he tried to get an explanation from management of his dismissal but to no avail. On 18 June 1985,
when private respondent again tried to speak with the President of Wiltshire, the company’s security guard handed him a letter which formally
informed him that his services were being terminated upon the ground of redundancy.
Private respondent filed, on 21 October 1985, a complaint before the Labor Arbiter for illegal dismissal alleging that his position could not possibly
be redundant because nobody (save himself) in the company was then performing the same duties.
Petitioner company alleged that the termination of respondent’s services was a cost-cutting measure: that in December 1984, the company had
experienced an unusually low volume of orders: and that it was in fact forced to rotate its employees in order to save the company. Despite the
rotation of employees, petitioner alleged; it continued to experience financial losses and private respondent’s position, Sales Manager of the
company, became redundant.
During pendency, petitioner closed its business.

LABOR ARBITER ruled that the dismissal was illegal

NLRC held that the termination was attended by malice and bad faith on the part of petitioner, considering the manner of private respondent was
ordered by the President to pack up and remove his personal belongings from the office.

ISSUE: WON his dismissal was illegal

HELD: NO, his dismissal was VALID.

In the first place, we note that while the letter informing private respondent of the termination of his services used the word “redundant“, that letter
also referred to the company having “incur[red] financial losses which [in] fact has compelled [it] to resort to retrenchment to prevent further
losses”. Thus, what the letter was in effect saying was that because of financial losses, retrenchment was necessary, which retrenchment in turn
resulted in the redundancy of private respondent’s position.

In the second place, we do not believe that redundancy in an employer’s personnel force necessarily or even ordinarily refers to duplication of
work. That no other person was holding the same position that private respondent held prior to the termination of his services, does not show that
his position had not become redundant. Indeed, in any well-organized business enterprise, it would be surprising to find duplication of work and
two (2) or more people doing the work of one person. We believe that redundancy, for purposes of our Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where
it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased
volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.

Wiltshire, in view of the contraction of its volume of sales and in order to cut down its operating expenses, effected some changes in its
organization by abolishing some positions and thereby effecting a reduction of its personnel. Thus, the position of Sales Manager was abolished
and the duties previously discharged by the Sales Manager simply added to the duties of the General Manager, to whom the Sales Manager used to
report.

In the instant case, the ground for dismissal or termination of services does not relate to a blameworthy act or omission on the part of the employee,
there appears to us no need for an investigation and hearing to be conducted by the employer who does not, to begin with, allege any malfeasance
or non-feasance on the part of the employee. In such case, there are no allegations which the employee should refute and defend himself from.
Thus, to require petitioner Wiltshire to hold a hearing, at which private respondent would have had the right to be present, on the business and
financial circumstances compelling retrenchment and resulting in redundancy, would be to impose upon the employer an unnecessary and inutile
hearing as a condition for legality of termination.

This is not to say that the employee may not contest the reality or good faith character of the retrenchment or redundancy asserted as grounds for
termination of services. The appropriate forum for such controversion would, however, be the Department of Labor and Employment and not an
investigation or hearing to be held by the employer itself. It is precisely for this reason that an employer seeking to terminate services of an
employee or employees because of “closure of establishment and reduction of personnel”, is legally required to give a written notice not only to the
employee but also to the Department of Labor and Employment at least one month before effectivity date of the termination. In the instant case,
private respondent did controvert before the appropriate labor authorities the grounds for termination of services set out in petitioner’s letter to him
dated 17 June 1985.

NOTES:

Art. 283. Closure of establishment and reduction of personnel. –– The employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor
saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month pay for every of service, whichever is higher. A fraction of at least six (6) months
shall be considered one (1) whole year.
PRIMO E. CAONG, JR., ALEXANDER J. TRESQUIO, and LORIANO D. DALUYON, petitioners, vs. AVELINO REGUALOS,respondent.

NACHURA, J.:

FACTS:

Petitioners Caong, Tresquio and Daluyon were employed as jeepney drivers by Respondent Regualos under a boundary agreement. They filed
separate complaints for illegal dismissal against Regualos who barred them from driving the jeepneys due to deficiencies in their boundary
payments. However, Regualos told them that they could resume their use of the vehicles after they pay their arrears.

Regualos alleged that the petitioners were lessees of his vehicles and not his employees. Thus, the Labor Arbiter had no jurisdiction. The Labor
Arbiter ruled that there was an employer-employee relationship between Regualos and the petitioners and that there was no dismissal because they
would be allowed to use the vehicles once they pay their arrears. A reasonable sanction was deemed to be an appropriate penalty.

Petitioners appealed the decision to the NLRC, which agreed with the Labor Arbiter. The CA also affirmed. It ruled that the employer-employee
relationship of the parties was not severed but merely suspended because Regualos refused to allow petitioners to drive the jeepneys when they
failed to pay their obligations.

ISSUE: Whether the petitioners were illegally dismissed.

HELD: The petition is unmeritorious.

LABOR LAW - Employer-employee relationships

It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-
employee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called
"boundary" that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee.

The Labor Arbiter, the NLRC, and the CA uniformly declared that petitioners were not dismissed from employment but merely suspended pending
payment of their arrears. Findings of fact of the CA, particularly where they are in absolute agreement with those of the NLRC and the Labor
Arbiter, are accorded not only respect but even finality, and are deemed binding upon this Court so long as they are supported by substantial
evidence.

We have no reason to deviate from such findings. Indeed, petitioners suspension cannot be categorized as dismissal, considering that there was no
intent on the part of respondent to sever the employer-employee relationship between him and petitioners. In fact, it was made clear that petitioners
could put an end to the suspension if they only pay their recent arrears. As it was, the suspension dragged on for years because of petitioners
stubborn refusal to pay. It would have been different if petitioners complied with the condition and respondent still refused to readmit them to
work. Then there would have been a clear act of dismissal. But such was not the case. Instead of paying, petitioners even filed a complaint for
illegal dismissal against respondent.

Petition is DENIED.

Phil. Telegraph and Telephone Corp. vs. Laplana, et al.

G.R. No. 76645
Facts:
Laplana was a cashier of the Baguio City Branch Office of the Philippine Telegraph and TelephoneCorporation (PT & T). PT & T's treasurer, Mrs.
Alicia A. Arogo, directed Laplana to transfer tothe company's branch office at Laoag City. Laplana refused the reassignment reasoning that: (a)she
has already established her permanent residence in Baguio city and in view of saidreassignment, her salary alone will not be enough; (b) she will be
away from my family which willaffect her efficiency; (c) the reassignment would require a long adjustment period which wouldaffect performance
of her job.PT & T's treasurer reiterated her directive for Laplana's transfer to the Laoag Branch stating thatif she does not report, it shall be
considered as her abandonment of her job. Subsequently, Laplanamanifested that she cannot accept the job offer and that she be retrenched instead.
Hence,termination of Laplana's employment on account of retrenchment thereupon followed.Laplana filed with the Labor Arbiters' Office insisting
that when she refused to be transferred, theDefendants made good its warning by terminating her services on the ground of
"retrenchment,"although the truth is, she was forced to be terminated and that there was no ground at all for theretrenchment company's "act of
transferring is baseless and was only meant to harass and forceher to resign eventually. In response, PT&T alleged that it was exercising
management prerogatives and their directive to transfer Laplana was in good faith, more so that Laplana wasterminated on her explicit declaration
that "she was willing to be retrenched rather than beassigned.
LA ruled in Laplana’s favor stating that transferring an employe
e, as practice of management prerogatives, is not by itself unlawful. However, such right is not absolute as
it must not bemotivated by discrimination or in bad faith, or is effected as a form of punishment or demonitionwithout sufficient cause. The LA
stated that in the instant case, the transfer of Laplana is patentlya demotion and a form of punishment without just cause and would cause untold
suffering on her
part. NLRC affirmed the LA’s judgment.
Issue:
Whether an employee’s reason of perso
nal inconvenience or hardship in opposition to employer'sdecision to transfer him to another work place is justified and overrules management
prerogativeeven in the absence of bad faith or underhanded motives on the
latter’s part.
dissolved principally because of the company’s policy that married women are not qualified for employment in the company, and not merely
because of her supposed acts of dishonesty.
The government abhors any stipulation or policy in the nature adopted by PT&T. As stated in the labor code:
“ART. 136. Stipulation against marriage. — It shall be unlawful for an employer to require as a condition of employment or continuation of
employment that a woman shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of marriage.”
The policy of PT&T is in derogation of the provisions stated in Art.136 of the Labor Code on the right of a woman to be free from any kind of
stipulation against marriage in connection with her employment and it likewise is contrary to good morals and public policy, depriving a woman of
her freedom to choose her status, a privilege that is inherent in an individual as an intangible and inalienable right. The kind of policy followed by
PT&T strikes at the very essence, ideals and purpose of marriage as an inviolable social institution and ultimately, family as the foundation of the
nation. Such policy must be prohibited in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of the laws of the
land not only for order but also imperatively required.

Held:
There can be no quarrel with the Arbiter's formulation of the general principle governing anemployer's prerogative to transfer his employees from
place to place or from one position toanother subject only to the condition that it be not "motivated by discrimination or (made) in badfaith, or
effected as a form of punishment or demotion without sufficient cause.The difficulty lies in the situation where no such illicit, improper or
underhanded purpose can beascribed to the employer, the objection to the transfer being ground solely upon the, personalinconvenience or hardship
that will be caused to the employee by reason of the transfer. Whatthen?In this case, the employee had to all intents and purposes resigned from her
position. She hadunequivocally asked that she be considered dismissed, herself suggesting the reason therefor –– retrenchment. She accepted
separation pay. On the other hand, the employer has not been shownto be acting otherwise than in good faith, and in the legitimate pursuit of what
it considered its bestinterests, in deciding to transfer her to another office. There is no showing whatever that theemployer was transferring Laplana
to another work place, not because she would be more usefulthere, but merely "as a subterfuge to rid itself of an undesirable worker," or "to
penalize anemployee for union activities.Certainly, the Court cannot accept the proposition that when an employee opposes his employer'sdecision
to transfer him to another work place, there being no bad faith or underhanded motiveson the part of either party, it is the employee's wishes that
should be made to prevail

PT&T vs NLRC
PT&T vs. NLRC
272 SCRA 596

FACTS:

PT&T (Philippine Telegraph & Telephone Company) initially hired Grace de Guzman specifically as “Supernumerary Project Worker”, for a fixed
period from November 21, 1990 until April 20, 1991 as reliever for C.F. Tenorio who went on maternity leave. She was again invited for
employment as replacement of Erlina F. Dizon who went on leave on 2 periods, from June 10, 1991 to July 1, 1991 and July 19, 1991 to August 8,
1991.

On September 2, 1991, de Guzman was again asked to join PT&T as a probationary employee where probationary period will cover 150 days. She
indicated in the portion of the job application form under civil status that she was single although she had contracted marriage a few months earlier.
When petitioner learned later about the marriage, its branch supervisor, Delia M. Oficial, sent de Guzman a memorandum requiring her to explain
the discrepancy. Included in the memorandum, was a reminder about the company’s policy of not accepting married women for employment. She
was dismissed from the company effective January 29, 1992. Labor Arbiter handed down decision on November 23, 1993 declaring that petitioner
illegally dismissed De Guzman, who had already gained the status of a regular employee. Furthermore, it was apparent that she had been
discriminated on account of her having contracted marriage in violation of company policies.

ISSUE: Whether the alleged concealment of civil status can be grounds to terminate the services of an employee.

HELD:

Article 136 of the Labor Code, one of the protective laws for women, explicitly prohibits discrimination merely by reason of marriage of a female
employee. It is recognized that company is free to regulate manpower and employment from hiring to firing, according to their discretion and best
business judgment, except in those cases of unlawful discrimination or those provided by law.

PT&T’s policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul of the right against discrimination
provided to all women workers by our labor laws and by our Constitution. The record discloses clearly that de Guzman’s ties with PT&T were
 Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 of the
Court of Appeals dated May 31, 2001 and its Resolution dated September 11, 2001 in CA-G.R. No. 62704, "PERCIVAL AGUINALDO,
Petitioner, versus NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE INDUSTRIAL SECURITY AGENCY CORP., and FAR
EAST BANK AND TRUST COMPANY, Respondents."

On April 11, 1988, Philippine Industrial Security Agency Corporation (PISAC), petitioner, hired Percival Aguinaldo, respondent, as a security
guard. He was assigned to secure the premises of Far East Bank & Trust Company (FEBTC) Branch in Santiago City. In 1993, he was promoted as
Branch Head Guard.2

On November 13, 1998, Ms. Remy Tumamao, petitioner’s roving personnel, caught respondent without headgear and smoking while on duty.
Respondent explained his side in a Memorandum3 dated November 14, 1998, thus:

"This is in response with the inspection done last Friday November 13, 1998 at 10:30AM by Ms. Remy Tumamao of the Chief security office.

I was not able to use my perching cap at that time because my hair is still wet. I was in complete attire before the incident but when I received an
emergency call from our armor crew who, on that time has a cash transfer to Central Bank Tuguegarao Cagayan, I was informed that our armor car
had a mechanical trouble. So even if it was raining, I called our Mechanic immediately residing beside our branch.

Thank you for your kind consideration on this matter.

SG. PERCIVAL AGUINALDO

HEAD GUARD"

On November 23, 1998, petitioner security agency issued a memorandum to respondent directing him to report to the FEBTC main office in
Malabon City for investigation.4 The following day, or on November 24, petitioner issued a Relief Order5 ordering him to report to its head office
for further clarification of his status, thus:

"(Y)ou are hereby relieved from your post at FEBTC Br., Santiago City effective 24 November 1998.
Zafra v CA
Report to PISACORP head Office for further clarification of your status.
Facts
Petitioners Zafra and Ecarma were hired by PLDT as Operations Analyst and were assigned at the PLDT Center in Cebu. Thereafter petitioners
By order: x x x"
were chosen for the OMC Specialist and System Software Acceptance Training Program in Germany where they stayed for almost three months.
Upon their return from Germany, they were informed that they will be transferred to Sampaloc, Manila effective January, next year. Pettitoners
Also on November 24, Antonio B. Banastas, Jr., Branch Head of FEBTC, Santiago City, wrote a Memorandum6 to petitioner requesting the
were unwilling to transfer to Manila so they went to the PLDT Head Office in Mandaluyong to air their grievance. However, their appeal fell on
retention of respondent in the same office, thus:
deaf ears so they tendered their resignation. Petitioners then filed a complaint for constructive dismissal before the NLRC Regional Arbitration
Branch. The presiding Labor Arbiter referred the complaint to the NCMB for appropriate action. The parties then agreed to designate Atty. Lim as
"MEMORANDUM:
their voluntary arbitrator. Atty. Lim then declared that petitioners were illegally dismissed by reason of the forced resignation or constructive
discharge from their employment. The CA however, reversed such decision.
F O R : COL. MARCIAL CONACO, JR.
Issue:
ASSISTANT VICE PRESIDENT
WON petitioners were constructively dismissed
Held:
SECURITY OFFICE
Yes. The transfer of an employee ordinarily lies within the ambit of management prerogatives. However, a transfer amounts to constructive
dismissal when it is unreasonable, inconvenient, or prejudicial to the employee and involves a demotion in rank or diminution of salaries, benefits
S U B J E C T: WAIVER OF RELIEVE ORDER TO
and other privileges. In this case, petitioners were unceremoniously transferred necessitating their relocation of their families from Cebu to Manila.
SECURITY GUARD PERCIVAL AGUINALDO
This act of the Management appears to be arbitrary without the usual notice that should have been done even prior to the petitioner’s training
abroad. From the employees’ viewpoint, such action affecting their families is burdensome, economically and emotionally. Their forced transfer is
--------------------------------------------------------------------------------------
not only inconvenient, unreasonable and prejudicial but also in defiance of basic due process and fair play in employment relations.
This is relative to the spot inspection report of Ms. Remy Tumamao on November 13, 1998.
The fact that petitioners, in their application for employment, agreed to be transferred or assigned to any branch should not be taken in isolation,
but rather in conjunction with the established company practice in PLDT. The standard operating procedure in PLDT is to inform personnel
On the morning of November 13, 1998 our armoured car was on its way to deliver cash to Central Bank in Tuguegarao. At around 10:00 A.M., our
regarding the nature and location of their future assignments after training abroad. The need for the dissemination of notice of transfer to employees
armoured car personnel called up Mr. Aguinaldo and informed him that they incurred a mechanical trouble. Upon receiving the message, Mr.
before sending them abroad for training should be deemed necessary and later to have ripened into a company practice or policy that could no
Aguinaldo went out to fetch or call a mechanic. Since it was raining on that morning, he did not wear his perching cap because his hair was still
longer be peremptorily withdrawn, discontinued, or eliminated by the employer.
wet. It was during that moment when Ms. Tumamao saw him in the branch.
Needless to say, had they known about their pre-planned reassignments, petitioners could have declined the foreign training intended for personnel
assigned to the Manila office. The lure of a foreign trip is fleeting while a reassignment from Cebu to Manila entails major and permanent
In view of the degree of offense committed by our Security Guard, he should be given a written reprimand and not relieved from his post since this
readjustments for petitioners and their families.
was his first offense.

Mr. Aguinaldo has been with the branch for ten years, he is a person of good moral character and has performed his job above our expectations.
PHILIPPINE INDUSTRIAL SECURITY AGENCY CORPORATION, petitioner,
vs. In view of this, I would like to seek your approval for the retention of Mr. Aguinaldo.
PERCIVAL AGUINALDO, respondent.
Thank you.
DECISION
(Sgd.) ANTONIO B. BANASTAS, JR.
SANDOVAL-GUTIERREZ, J.: BRANCH HEAD"

However, petitioner, in its letter7 dated December 2, 1998, denied the above request, thus:
"Please be advised that your request of retention at your former post (FEBTC Santiago) was denied. In view hereof, please report to Supervisor
Lary Lopez for reassignment while you are reserved to the new bank branch that will soon to operate at Santiago.
Please be guided accordingly.
PEPITO C. NOVERAS
Operations Officer"
Forthwith, petitioner assigned respondent temporarily to FEBTC Malabon City Branch pending the opening of another Branch in Santiago City
where according to said petitioner, he will be re-assigned.
This prompted respondent to file with the Office of the Labor Arbiter, Tuguegarao, Cagayan a complaint for illegal dismissal and non-payment of
separation pay with damages against petitioner.
On November 3, 1999, Executive Labor Arbiter Ricardo N. Olairez rendered a Decision8 dismissing respondent’s complaint for lack of merit.
On appeal, the National Labor Relations Commission (NLRC) rendered its Decision9 dated March 29, 2000 reversing the appealed Decision, thus:
"Did the Executive Labor Arbiter err in not ruling that the complainant was illegally dismissed from employment?
Based on the memorandum dated December 2, 1998, respondent PISAC did not put the complainant on a floating status. Rather, it gave him a ‘new
assignment’ as a reserved (security guard) for the new bank branch that was supposedly going to operate soon in Santiago. Clearly, what was given
to him was a mockery of an assignment. There was no date given for his assumption of his ‘new’ post. There was no assurance that it would ever
be realized. In fact, there is not even a single reference to the above-mentioned ‘new agreement’ in any of the pleadings of respondent PISAC.
Respondent PISAC simply ignored every reference to the memorandum dated December 2, 1998 that the complainant made in his own pleadings.
Respondent PISAC’s act of giving the complainant an assignment in the future amounts to an indefinite suspension. It is settled that an indefinite
suspension is tantamount to a constructive dismissal (Oriental Mindoro Electric Cooperative, Inc. vs. NLRC (246 SCRA 294). Under these
circumstances, the complainant would ordinarily be entitled to reinstatement with full backwages (Article 279, Labor Code). However, since he
prayed for separation pay in the complaint, he should be awarded separation pay in lieu of reinstatement and of course, full backwages.
WHEREFORE, the decision is hereby reversed. Respondent Philippine Industrial Security Agency Corp. is hereby ordered to pay the complainant
his full backwages from November 24, 1998 to the date of the finality of this decision and separation pay amounting to ₱59,400.00 (₱5,400 x 11
years = ₱59,400.00).
SO ORDERED."
On May 19, 2000, petitioner filed a motion for reconsideration. Surprisingly, it was granted by the NLRC in its Decision10 dated August 29, 2000
thus:
"WHEREFORE, the instant Motion for Reconsideration is GRANTED. Our Decision of 29 March 2000 is hereby RECONSIDERED and SET
ASIDE. The 3 November 1999 Decision of Executive Labor Arbiter Ricardo N. Olairez dismissing the case is hereby REINSTATED.
SO ORDERED."
Respondent then filed a motion for reconsideration but was denied by the NLRC in its Resolution11 dated December 7, 2000.
Hence, respondent filed with the Court of Appeals a petition for certiorari12 under Rule 65 of the 1997 Rules of Civil Procedure, as amended.
On May 31, 2001, the Appellate Court rendered its Decision13 granting the petition and setting aside the Decision of the NLRC. In finding for
respondent, the Appellate Court held:
"The petition is impressed with merit.
Petitioner claims that his reassignment to another post that was not yet open amounted to constructive dismissal. We agree.
A constructive dismissal is a quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank and a diminution in pay (Philippine Japan Active Carbon Corp. vs. NLRC, G.R. No. 83239, March 8, 1989). As further explained
in Jarcia vs. NLRC (266 SCRA 97 [1997]):
‘In case of constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for valid and
legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer must
be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. Failure of the employer to overcome this burden of proof, the employee’s demotion shall
no doubt be tantamount to unlawful constructive dismissal.’
In the case at bar, petitioner was validly relieved from his post for violating a company policy. The petitioner did not contest this violation as he in
fact admitted to committing it during the investigation, though with a valid and plausible explanation. What tarnishes the whole scene is the fact
that after petitioner was relieved from his old post in Santiago City, Isabela, he was temporarily reassigned to the head office of private respondent
PISA in Malabon, Metro Manila pending the opening of another bank in Isabela (Rollo, p. 60). This act is unfair and downright oppressive
considering that petitioner, along with his family, is a long-time resident of Santiago City, Isabela. The transfer would mean that petitioner would
be away from his family or that he would bring his entire family to Manila entailing expenses. Further, it remains unclear if petitioner would be
reassigned back to Isabela, as the said plan remains ambiguous for it is not clearly shown when the said reassignment would take place. In the
Notice given to petitioner, it is stated that his reassignment to Manila is good for 179 days and maybe renewed after its expiration. We cannot give
evidentiary weight to private respondent PISA’s claim that petitioner will be reassigned back to another branch in Isabela as no evidence to that
effect was offered.
While it is true that an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers (San Miguel Brewery
Sales vs. Ople, G.R. No. 53515, February 8, 1989), and this right to transfer employees forms part of management prerogatives, the employee’s
transfer should not be unreasonable, nor inconvenient, nor prejudicial to him. It should not involve a demotion in rank or diminution of his salaries,
benefits and other privileges, as to constitute constructive dismissal (PT&T vs. Laplana, G.R. No. 76645, July 23, 1991).
Hence, petitioner cannot be faulted for filing an illegal dismissal case. While the case does not directly fall under the traditional concept of ‘illegal
dismissal’ case, We hold that it partakes of the nature of constructive dismissal. In Philippine Advertising Counselors, Inc. vs. NLRC, 263 SCRA
395 (1996) and Masagana Concrete Products vs. NLRC, 313 SCRA 576 (1999), the Supreme Court keenly made this observation, to wit:
‘Constructive dismissal, however, does not always involve such kinds of diminution, an act of clear discrimination, insensibility, or disdain by an
employer may become so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued
employment.’
As explained earlier, this Court is fully aware of the right of management to transfer its employees as part of management prerogative. But like all
rights, the same cannot be exercised with unbridled discretion. The managerial prerogative to transfer personnel must be exercised without grave
abuse of discretion, bearing in mind the basic element of justice and fair play.
However, private respondent Far East Bank cannot be held liable for petitioner’s backwages as it is not the employer of the petitioner.
WHEREFORE, the petition is GRANTED. The NLRC Decision dated August 29, 2000 is hereby SET ASIDE. Private respondent PISA is hereby
ordered to REINSTATE petitioner to his former position without loss of seniority rights and privileges and to PAY his backwages computed from
the time the same were withheld from him."14 (Emphasis supplied)
Petitioner filed a motion for reconsideration but was denied in a Resolution dated September 11, 2001.15
Hence, the present recourse, petitioner ascribing to the Court of Appeals the following assignments of error:
1. The questioned Decision and Resolution of the Court of Appeals "are manifestly not in accord with law and established jurisprudence;" and
2. The petition is "dismissible outright for having been filed in violation of the Rule against forum-shopping."16
Petitioner primarily contends that respondent’s re-assignment to Malabon City is only temporary, otherwise, he would have been placed in a
"floating status." Moreover, such re-assignment is a valid exercise of management prerogative done in good faith and with valid reason.
Respondent counters that the Court of Appeals correctly ruled that his re-assignment is "unfair and downright oppressive" and constitutes
constructive dismissal. The "floating status" anticipated by petitioner is just imaginary and without any basis, as the move to transfer him to a new
or other post is completely unnecessary. Besides, Mr. Banastas, strongly recommended his retention in FEBTC-Santiago City considering that he
has been with the Santiago City Branch for ten years and has performed his job efficiently.17 His transfer to Malabon City is tantamount to
constructive dismissal.
On the issue of forum-shopping, respondent contends that he filed only one petition for certiorari and that is with the Court of Appeals, docketed
therein as CA-G.R. SP No. 62704.1avvphi1.zw+
For his part, the Solicitor General submits that the Court of Appeals did not err in giving due course to respondent’s petition. First, the issue raised
by petitioner is factual which necessarily calls for an examination of the evidence and is, therefore, not reviewable in a petition for certiorari.
Second, there is no evidence on record showing that respondent indeed filed another petition for review.
The petition must fail.
Settled is the rule that findings of facts of the Court of Appeals are accorded respect, even finality, and will not be disturbed especially where such
findings are supported by substantial evidence.18 One of the exceptions, however, is when there is a variance between the findings of the NLRC
and the Court of Appeals, as in this case.
Jurisprudence recognizes the exercise of management prerogative. For this reason, courts often decline to interfere in legitimate business decisions
of employers.19 In fact, labor laws discourage interference in employers’ judgment concerning the conduct of their business.20
In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of
operation to another – provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated
by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.21
By transferring respondent to the Malabon City FEBTC Branch, petitioner resorted to constructive dismissal. A transfer amounts to constructive
dismissal when the transfer is unreasonable, unlikely, inconvenient, impossible, or prejudicial to the employee,22 as in this case. It is defined as an
involuntary resignation resorted when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.23
In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for just and valid grounds,
such as genuine business necessity.24 The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee; nor does it involve a demotion in rank or a diminution of salary and other benefits. Should the employer fail to overcome this burden of
proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.25
In the case at bar, petitioner failed to overcome this burden of proof. Foremost, respondent explained that he was in complete attire that morning.
However, the bank personnel informed him that the FEBTC armor car, on its way to deliver cash to the Central Bank Office in Tuguegarao,
incurred mechanical trouble. So he immediately went outside to fetch a mechanic. It was then raining, hence, he got wet – the reason why he was
not wearing his perching cap. Under the circumstances, his failure to wear his perching cap is justified. Thus, he should not be held liable for any
violation of office regulations which warrants his transfer to another work place.
Second, the letter of Mr. Banastas recommending the retention of respondent in the FEBTC Santiago City Branch negates petitioner’s reasons in
re-assigning the latter to the FEBTC Malabon City Branch. Service-oriented enterprises, such as petitioner's business of providing security
services, generally adhere to the business adage that "the customer or client is always right".26 Here, petitioner disregarded such aphorism.
Petitioner’s act manifests insensibility to the welfare of respondent and his family. Obviously, his transfer to Malabon City will be prejudicial to
them economically and emotionally. Indeed, , petitioner’s action is in defiance of basic due process and fair play in employment relations.27
Third, petitioner’s excuse in re-assigning respondent to Malabon City, pending the opening of another FEBTC Branch in Santiago City is
unreasonable. The Appellate Court is correct in holding that there is no assurance that a new FEBTC Branch will be opened in Santiago City.
In Blue Dairy Corporation vs. NLRC,28 we ruled that:
"x x x the managerial prerogative to transfer personnel must not be exercised with grave abuse of discretion, bearing in mind the basic elements of
justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker. x x x"
WHEREFORE, the petition is hereby DENIED. The assailed Decision of the Court of Appeals is AFFIRMED. Costs against petitioner.
SO ORDERED.
Panganiban, (Chairman), Corona, Carpio-Morales, and Garcia, JJ., concur.
[G.R. No. 118647. October 11, 2000]
CONSOLIDATED FOOD CORP. vs. NLRC, et al.
SECOND DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated OCT 11 2000.
G.R. No. 118647 (Consolidated Food Corporation, et al. vs. National Labor Relations Commission and Wilfredo M. Baron.)
Private respondent Wilfredo M. Baron filed a motion for reconsideration of this Court's Decision of 23 September 1999 which reversed the finding
of public respondent National Labor Relations Commission (NLRC) that he was constructively dismissed. He alleges that the findings of fact of the
NLRC must be accorded respect and finality; there is substantial evidence that he did not abandon his job but was constructively dismissed hence
illegally dismissed; and, he was denied his right to due process.
After a careful perusal of the grounds discussed by respondent Baron, this Court finds that these matters have already been fully and exhaustively
discussed in the Decision of this Court. Although factual findings of the NLRC are entitled to respect and finality when supported by substantial
evidence, this Court will not uphold erroneous conclusions of the NLRC when the latter committed grave abuse of discretion in arriving at its
decision or when the findings of facts from which the conclusions were based were not supported by substantial evidence.1 Labor vs. National
Labor Relations Commission, G.R. No. 110388, 14 September 1995, 248 SCRA 183. In this case, the Court takes exception to the rule that the
findings on technical matters by NLRC are conclusive and binding upon this Court since it is clear that a palpable and demonstrable mistake had
been committed and should be rectified.
The NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that respondent Baron was constructively
dismissed because he was subjected to various audits concerning his sales activities and was transferred from Baguio City and re-assigned to the
main office. Records show that there was substantial evidence of the existence of irregularities committed by respondent Baron in the use of funds
entrusted to him which he failed to account for. Re-assignments made by management pending investigation of irregularities allegedly committed
by an employee fall within the ambit of management prerogative and cannot be considered as amounting to constructive dismissal.
Moreover, contrary to the contention of respondent Baron that he was denied due process when he was dismissed, records show that during the
audit and investigation on the alleged fraud he committed against petitioners, he was given every opportunity to raise his defenses and explain the
discrepancies in the funds in his possession. It also appears from the records that when respondent Baron absented himself from the company
without leave from 18 March to 13 April 1991 he was sent two (2) notices, one on 13 April 1991 and another on 18 April 1991 requiring him to
explain his unauthorized absences. Indeed, respondent Baron sent a letter to petitioners on 29 April 1991 explaining his alleged unauthorized
absences. However instead of returning to work on 15 May 1991 as he promised in his reply letter to petitioners and justify his cause. respondent
Baron filed a complaint with the Labor Arbiter for alleged constructive dismissal on 14 May 1991 and did not report for work anymore. Although
this Court ruled that respondent Baron was not constructively dismissed, we nonetheless ordered petitioners jointly and severally to pay respondent
Baron his unpaid salaries and proportionate 13th-month pay for the period of his new assignment from 1 January 1991 to 15 March 1991 as well as
attorney's fees for the recovery of his unpaid wages.
ACCORDINGLY, the motion for reconsideration of private respondent Wilfredo M. Baron is DENIED and this. denial is FINAL. Let copies of the
Resolutions of 26 August 2000, 6 December 1991 and 16 February 2000 intended for Atty. Edgardo M. Tamoria, counsel for public respondent
NLRC, but returned unserved with notations "Deceased," together with this Resolution, be sent to the NLRC at its offices at PPSTA Building,
Banawe Street, corner Quezon Avenue, Quezon City.
SO ORDERED.
Josephine Ruiz vs Wendel Osaka Realty
Facts:
Petitioner was hired as secretary to respondent (Delfin), the president of DMWAI there after appointed as executive assistant to the president of
respondent WORC. Sometime in 2002, the BIR informed Delfin of the tax deficiency allegations against his companies. On November 2002, he
discovered that “various very important files”11 of DMWAI were missing. He required the employees to answer a questionnaire but the petitioner
failed to comply. ThusDelfin sent a letter17 to petitioner informing her that she would be placed under a 30-day preventive suspension and another
15 days with pay. After 45 day period, she reported back to work and was transferred to the Cavite city branch. Thereafter, petitioner amended her
Complaint for illegal suspension to include constructive illegal dismissal.
CA ruled, that the transfer of petitioner was justified, considering the gravity of the offense she was being charged with.41
Issue:
w/n the transfer is valid.
Held:
Yes. An employer has the inherent right to transfer or assign an employee in pursuance of its legitimate business interest, subject only to the
condition that the move be not motivated by bad faith. Having lost his trust and confidence in petitioner, respondent Delfin had the right to transfer
her to ensure that she would no longer have access to the companies’ confidential files. Although it is true that petitioner has yet to be proven
guilty, respondents had the authority to reassign her, pending investigation.
FARROL vs. CA (G.R. No. 133259 February 10, 2000
Issue:
Farrol was a station cashier at RCPI Cotobato. There was a shortage of P50,985.37 in their branch’s Peragram, Petty and General Cash Funds.
Field Auditor require Farrol to explain the shortage, paid to RCPI P25,000.00 of the cash shortage. RCPI required petitioner to explain why he
should not be dismissed from employment. Consequently, Farrol was placed in a preventive suspension. Farrol explained that the missing funds
were used for the retirement benefits.
Farrol was terminated. RCPI claimed that it sent a letter, informing Farrol of his termination and the reasons thereof. Unaware of termination letter,
Farrol requested to be reinstated.
Voluntary Arbitrator ruled that petitioner was illegally dismissed from employment. CA reversed the ruling of the arbitrator and dismissed the
complaint for illegal dismissal.
Farrol filed the instant petition for review on certiorari on the grounds that his dismissal was illegal because he was not afforded due process and
that he "cannot be held liable for the loss of trust and confidence reposed in him" by RCPI
RCPI alleged that under its rules, petitioner’s infraction is punishable by dismissal.
Issue:
WON RCPI complied with the procedure for termination of employment
WON employer’s rules may preclude the State from inquiring whether the strict and rigid application or interpretation thereof would
be harsh to the employee.
1. No. Book V, Rule XIV, of the Omnibus Rules Implementing the Labor Code existing at the time petitioner was discharged from work, outlines
the procedure for termination of employment. The employer must comply with the twin requirements of two notices and hearing. The first notice is
that which apprises the employee of the particular acts or omissions for which his dismissal is sought, and after affording the employee an
opportunity to be heard, a subsequent notice informing the latter of the employer’s decision to dismiss him from work.
As regards the first notice, RCPI simply required petitioner to "explain in writing why he failed to account" for the shortage and demanded that he
restitute the same. On the assumption that the foregoing statement satisfies the first notice, the second notice sent by RCPI to petitioner does not
"clearly" cite the reasons for the dismissal, contrary to the requirements set by the above-quoted Section 6 of Book V, Rule XIV of the Omnibus
Rules.
2.No. Assuming further that there was breach of trust and confidence, it appears that this is the first infraction committed by petitioner. Although
the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by
substantive due process and tempered by the fundamental policy of protection to labor enshrined in the Constitution. Infractions committed by an
employee should merit only the corresponding sanction demanded by the circumstances. The penalty must be commensurate with the act, conduct
or omission imputed to the employee and imposed in connection with the employer’s disciplinary authority.
RCPI alleged that under its rules, petitioner’s infraction is punishable by dismissal. However, employer’s rules cannot preclude the State from
inquiring whether the strict and rigid application or interpretation thereof would be harsh to the employee. Petitioner has no previous record in his
twenty-four long years of service - this would have been his first offense. The Court thus holds that the dismissal imposed on petitioner is unduly
harsh and grossly disproportionate to the infraction which led to the termination of his services. A lighter penalty would have been more just, if not
humane. In any case, petitioner paid back the cash shortage in his accounts. Considering, however, that the latter is about to retire or may have
retired from work, it would no longer be practical to order his reinstatement.
WHEREFORE, in view of the foregoing, the assailed decision of the Court of Appeals is REVERSED and SET ASIDE and new one entered
REINSTATING the decision of the Voluntary Arbitrator
MANILA WATER COMPANY, Petitioner, v. CARLITO DEL ROSARIO, Respondent.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari1 filed pursuant to Rule 45 of the Revised Rules of Court, assailing the 31 March 2009 Decision2
rendered by the Fifth Division of the Court of Appeals in CA–G.R. SP No. 92583. In its assailed decision, the appellate court: (1) reversed as
grave abuse of discretion the Resolution of the National Labor Relations Commission (NLRC) which dismissed the petition of Manila Water
Company (Manila Water) on technical grounds; and (2) proceeded to affirm with modification the ruling of the Labor Arbiter. Manila Water was
ordered to pay respondent Carlito Del Rosario (Del Rosario) separation pay to be computed from 1 August 1997 up to June 2000.
In a Resolution3 dated 7 July 2009, the appellate court refused to reconsider its earlier decision.
The Facts
On 22 October 1979, Del Rosario was employed as Instrument Technician by Metropolitan Waterworks and Sewerage System (MWSS).
Sometime in 1996, MWSS was reorganized pursuant to Republic Act No. 8041 or the National Water Crisis Act of 1995, and its implementing
guidelines – Executive Order No. 286. Because of the reorganization, Manila Water absorbed some employees of MWSS including Del Rosario.
On 1 August 1997, Del Rosario officially became an employee of Manila Water.
Sometime in May 2000, Manila Water discovered that 24 water meters were missing in its stockroom. Upon initial investigation, it appeared that
Del Rosario and his co–employee, a certain Danilo Manguera, were involved in the pilferage and the sale of water meters to the company’s
contractor. Consequently, Manila Water issued a Memorandum dated 23 June 2000, directing Del Rosario to explain in writing within 72 hours
why he should not be dealt with administratively for the loss of the said water meters.4 In his letter–explanation,5 Del Rosario confessed his
involvement in the act charged and pleaded for forgiveness, promising not to commit similar acts in the future.
On 29 June 2000, Manila Water conducted a hearing to afford Del Rosario the opportunity to personally defend himself and to explain and clarify
his defenses to the charge against him. During the formal investigation Del Rosario was found responsible for the loss of the water meters and
therefore liable for violating Section 11.1 of the Company’s Code of Conduct.6 Manila Water proceeded to dismiss Del Rosario from
employment on 3 July 2000.7cralawred
This prompted Del Rosario to file an action for illegal dismissal claiming that his severance from employment is without just cause. In his Position
Paper submitted before the labor officer, Del Rosario averred that his admission to the misconduct charged was not voluntary but was coerced by
the company. Such admission therefore, made without the assistance of a counsel, could not be made basis in terminating his employment.
Refuting the allegations of Del Rosario, Manila Water pointed out that he was indeed involved in the taking of the water meters from the
company’s stock room and of selling these to a private contractor for personal gain. Invoking Section 11.1 of the Company’s Code of Conduct,
Manila Water averred that such act of stealing the company’s property is punishable by dismissal. The company invited the attention of this Court
to the fact that Del Rosario himself confessed his involvement to the loss of the water meters not only in his letter–explanation, but also during the
formal investigation, and in both instances, pleaded for his employer’s forgiveness.8cralawlawlibrary
After weighing the positions taken by the opposing parties, including the evidence adduced in support of their respective cases, the Labor Arbiter
issued a Decision9 dated 30 May 2002 dismissing for lack of merit the complaint filed by Del Rosario who was, however, awarded separation pay.
According to the Labor Arbiter, Del Rosario’s length of service for 21 years, without previous derogatory record, warrants the award of separation
pay. The decretal portion of the decision reads:
WHEREFORE, viewed from the foregoing, judgment is hereby rendered DISMISSING the complaint for illegal dismissal for lack of merit.
[Manila Water] is hereby ordered to pay complainant separation pay equivalent to one–half (1/2) month’s salary for every year of service based on
his basic salary (Php 11,244.00) at the time of his dismissal. This shall be computed from [1 August 1997] up to June 2000, the total amount of
which is ONE HUNDRED EIGHTEEN THOUSAND SIXTY–TWO (Php 118,062.00) PESOS.10
In a Resolution11 dated 30 September 2003, the NLRC dismissed the appeal interposed by Manila Water for its failure to append a certification
against forum shopping in its Memorandum of Appeal.
Similarly ill–fated was Manila Water’s Motion for Reconsideration which was denied by the NLRC in a Resolution12 dated 28 April 2005.
On Certiorari, the Court of Appeals in its Decision dated 31 March 2009, reversed the NLRC Resolution and held that it committed a grave abuse
of discretion when it dismissed Manila Water’s appeal on mere technicality. The appellate court, however, proceeded to affirm the decision of the
Labor Arbiter awarding separation pay to Del Rosario. Considering that Del Rosario rendered 21 years of service to the company without previous
derogatory record, the appellate court considered the granting of separation pay by the labor officer justified. The fallo of the assailed Court of
Appeals Decision reads:
WHEREFORE, the petition is partly granted. The assailed Resolutions dated September 30, 2003 and [April 28, 2005] of public respondent NLRC
are set aside. The Decision dated May 30, 2002 of the [L]abor [A]rbiter is reinstated, subject to the modification that the computation of the award
of separation pay [to] private respondent shall be counted from August 1, 1997 x x x up to June 2000.13
In a Resolution14 dated 7 July 2009, the Court of Appeals refused to reconsider its earlier decision.
Unrelenting, Manila Water filed the instant Petition for Review on Certiorari assailing the foregoing Court of Appeals Decision and Resolution on
the sole ground that:
THE [COURT OF APPEALS] SERIOUSLY ERRED IN ISSUING THE QUESTIONED DECISION AND RESOLUTION WHICH DIRECTLY
CONTRAVENE BOOK VI, RULE 1, AND SECTION 7 OF THE OMNIBUS RULES IMPLEMENTING THE LABOR CODE AND
PREVAILING JURISPRUDENCE WHICH CATEGORICALLY PROVIDE THAT AN EMPLOYEE SEPARATED FROM SERIOUS
MISCONDUCT IS NOT ENTITLED TO TERMINATION (SEPARATION) PAY.15
The Court’s Ruling
In the instant petition, Manila Water essentially questions the award of separation pay to respondent who was dismissed for stealing the company’s
property which amounted to gross misconduct. It argues that separation pay or financial assistance is not awarded to employees guilty of gross
misconduct or for cause reflecting on his moral character.16
Del Rosario for his part maintains that there is no legal ground to justify his termination from employment. He insists that his admission pertaining
to his involvement in the loss of the water meters was merely coerced by the company. Since his dismissal was without valid or just cause, Del
Rosario avers that Manila Water is guilty of illegal dismissal rendering it liable for the payment of backwages and separation pay.17
It must be stressed at the outset that the correctness of the Labor Arbiter’s pronouncement on the legality of Del Rosario’s dismissal is no longer an
issue and is beyond modification. While Manila Water timely appealed the ruling of the Labor Arbiter awarding separation pay to Del Rosario, the
latter did not question the dismissal of his illegal termination case.18 It is settled in our jurisprudence that a party who has not appealed cannot
obtain from the appellate court any affirmative relief other than the ones granted in the appealed decision.19 Due process prevents the grant of
additional awards to parties who did not appeal.20 Having said that, this Court will no longer dwell on the issue of whether or not Del Rosario
was illegally dismissed from employment. Included in the closed aspect of the case is respondent’s argument that the absence of his counsel when
he admitted the charge against him diminished the evidentiary value of such admission. Nonetheless, it may be mentioned that the constitutional
right to counsel is available only during custodial investigation. If the investigation is merely administrative conducted by the employer and not a
criminal investigation, the admission made during such investigation may be used as evidence to justify dismissal.21
Our focus will be on the propriety of the award for separation pay.
As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 28222 of the Labor Code is not entitled
to a separation pay.23 Section 7, Rule I, Book VI of the Omnibus Rules implementing the Labor Code provides:
Sec. 7. Termination of employment by employer. &mdash The just causes for terminating the services of an employee shall be those provided in
Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in the
Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective agreement
with the employer or voluntary employer policy or practice.
In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee as an act of “social justice” or on “equitable
grounds."24 In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of
the employee.25cralawred
In the leading case of Philippine Long Distance Telephone Company v. NLRC,26 we laid down the rule that separation pay shall be allowed as a
measure of social justice only in the instances where the employee is validly dismissed for causes other than serious misconduct reflecting his
moral character. We clarified that:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for
example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may
not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social
justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense.
And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of
course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that
he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out. This kind of
misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the
protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best[,] it may
mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when
the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can
equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have
proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.27
In the subsequent case of Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission,28 we expanded
the exclusions and elucidated that separation pay shall be allowed as a measure of social justice only in instances where the employee is validly
dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust,
commission of a crime against the employer or his family, or those reflecting on his moral character. In the same case, we instructed the labor
officials that they must be most judicious and circumspect in awarding separation pay or financial assistance as the constitutional policy to provide
full protection to labor is not meant to be an instrument to oppress the employers.29 The commitment of the court to the cause of the labor should
not embarrass us from sustaining the employers when they are right, as here. In fine, we should be more cautious in awarding financial assistance
to the undeserving and those who are unworthy of liberality of the law.30
Guided by the foregoing rules, we have carefully treaded the path of compassionate justice in the subsequent cases so as not to slip and favor labor
at the expense of management.
In Tirazona v. Phillippine EDS Techno–Service, Inc. (PET, Inc.),31 we denied the award of separation pay to an employee who was dismissed
from employment due to loss of trust and confidence.
While [this] Court commiserates with the plight of Tirazona, who has recently manifested that she has since been suffering from her poor health
condition, the Court cannot grant her plea for the award of financial benefits based solely on this unfortunate circumstance. For all its conceded
merit, equity is available only in the absence of law and not as its replacement. Equity as an exceptional extenuating circumstance does not favor,
nor may it be used to reward, the indolent or the wrongdoer for that matter. This Court will not allow a party, in guise of equity, to benefit from its
own fault.32 (Emphasis supplied).
The attendant circumstances in the present case considered, we are constrained to deny Del Rosario separation pay since the admitted cause of his
dismissal amounts to serious misconduct. He is not only responsible for the loss of the water meters in flagrant violation of the company’s policy
but his act is in utter disregard of his partnership with his employer in the pursuit of mutual benefits.
In the recent case of Daabay v. Coca–Cola Bottlers,33 this Court reiterated our ruling in Toyota and disallowed the payment of separation pay to an
employee who was found guilty of stealing the company’s property. We repeated that an award of separation pay in such an instance is misplaced
compassion for the undeserving who may find their way back and weaken the fiber of labor.
That Del Rosario rendered 21 years of service to the company will not save the day for him. To this case, Central Pangasinan Electric Cooperative,
Inc. v. National Labor Relations Commission is on all fours, thus:
Although long years of service might generally be considered for the award of separation benefits or some form of financial assistance to mitigate
the effects of termination, this case is not the appropriate instance for generosity under the Labor Code nor under our prior decisions. The fact that
private respondent served petitioner for more than twenty years with no negative record prior to his dismissal, in our view of this case, does not
call for such award of benefits, since his violation reflects a regrettable lack of loyalty and worse, betrayal of the company. If an employee’s length
of service is to be regarded as a justification for moderating the penalty of dismissal, such gesture will actually become a prize for disloyalty,
distorting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of undesirables.34 (Emphasis supplied).
Indubitably, the appellate court erred in awarding separation pay to Del Rosario without taking into consideration that the transgression he
committed constitutes a serious offense. The grant of separation pay to a dismissed employee is determined by the cause of the dismissal. The
years of service may determine how much separation pay may be awarded. It is, however, not the reason why such pay should be granted at all.
In sum, we hold that the award of separation pay or any other kind of financial assistance to Del Rosario, under the nomenclature of compassionate
justice, is not warranted in the instant case. A contrary rule would have the effect of rewarding rather than punishing an erring employee,
disturbing the noble concept of social justice.
WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals are hereby
REVERSED and SET ASIDE.ChanRoblesVirtualawlibrary
SO ORDERED.
SALVADOR O. MOJAR, EDGAR B. BEGONIA, Heirs of the late JOSE M. CORTEZ, RESTITUTO GADDI, VIRGILIO M. MONANA,
FREDDIE RANCES, and EDSON D. TOMAS, Petitioners,
vs.
AGRO COMMERCIAL SECURITY SERVICE AGENCY, INC., et al.,1 Respondents.
DECISION
SERENO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to annul the entire proceedings before the Court of Appeals
(CA) in CA-G.R. SP No. 102201, in which it issued its Decision dated 21 July 2008 and Resolution dated 16 March 2009.2
Statement of Facts and of the Case
Petitioners were employed as security guards by respondent and assigned to the various branches of the Bank of Commerce in Pangasinan, La
Union and Ilocos Sur.
In separate Office Orders dated 23 and 24 May 2002, petitioners were relieved from their respective posts and directed to report to their new
assignments in Metro Manila effective 3 June 2002. They, however, failed to report for duty in their new assignments, prompting respondent to
send them a letter dated 18 June 2002. It required a written explanation why no disciplinary action should be taken against them, but the letter was
not heeded.
On 15 February 2005, petitioners filed a Complaint for illegal dismissal against respondent and the Bank of Commerce, Dagupan Branch, before
the National Labor Relations Commission (NLRC). Petitioners claimed, among others, that their reassignment was a scheme to sever the employer-
employee relationship and was done in retaliation for their pressing their claim for salary differential, which they had earlier filed against
respondent and the Bank of Commerce before the NLRC. They also contended that the transfer to Manila was inconvenient and prejudicial, since
they would incur additional expenses for board and lodging.
On 22 May 2006, the Labor Arbiter (LA) rendered a Decision3 finding that petitioners were illegally dismissed. The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents to reinstate all the complainants to their former assignment
in Pangasinan with full backwages and if reinstatement is no longer possible, to pay separation pay of one month for every year of service each of
the seven complainant security guards. (A detailed computation of the judgment award is attached as Annex "A.")4 (Italicized in the original)
On appeal, the NLRC affirmed the LA’s ruling, with the modification that the Complaint against the Bank of Commerce was dismissed.5 The
dispositive portion provides:
WHEREFORE, premises considered, the appeal of Agro Commercial Security Service Agency, Inc. is hereby DISMISSED for lack of merit. The
Appeal of Bank of Commerce is GRANTED for being impressed with merit. Accordingly, judgment is hereby rendered MODIFYING the
Decision of the Labor Arbiter dated May 22, 2006 by DISMISSING the complaint against Bank of Commerce-Dagupan. All other dispositions of
the Labor Arbiter not so modified, STAYS.6

On 23 January 2008, respondent filed a Motion for Extension to file a Petition for Certiorari before the CA. In a Resolution dated 20 February
2008, the latter granted the Motion for Extension, allowing respondent until 10 February 2008 within which to file its Petition. On 9 February 2008,
respondent filed its Petition for Certiorari before the appellate court.
On 30 June 2008, the CA issued a Resolution noting that no comment on the Petition had been filed, and stating that the case was now deemed
submitted for resolution.
On 21 July 2008, the CA rendered its Decision. Finding merit in the Petition, it found the Orders transferring petitioners to Manila to be a valid
exercise of management prerogative. The records were bereft of any showing that the subject transfer involved a diminution of rank or salaries.
Further, there was no showing of bad faith or ill motive on the part of the employer. Thus, petitioners’ refusal to comply with the transfer orders
constituted willful disobedience of a lawful order of an employer and abandonment, which were just causes for termination under the Labor Code.
However, respondent failed to observe the due process requirements in terminating them. The dispositive portion of the CA Decision provides:
WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision and Resolution of the NLRC dated July 31, 2007
and October 31, 2007[,] respectively, in NLRC NCR CA No. 046036-05 are REVERSED and SET ASIDE. The complaints of private respondents
for illegal dismissal are hereby DISMISSED. However, petitioner is ordered to pay private respondents the sum of ₱ 10,000.00 each for having
violated the latter’s right to statutory due process.7
On 1 August 2008, petitioner Mojar filed a Manifestation8 before the CA, stating that he and the other petitioners had not been served a copy of the
CA Petition. He also said that they were not aware whether their counsel before the NLRC, Atty. Jose C. Espinas, was served a copy thereof, since
the latter had already been bedridden since December 2007 until his demise on "25 February 2008."9 Neither could their new counsel, Atty. Mario
G. Aglipay, enter his appearance before the CA, as petitioners failed to "get [the] folder from the office of Atty. Espinas, as the folder can no longer
be found."10
Thereafter, petitioners filed a Motion to Annul Proceedings11 dated 9 September 2008 before the CA. They moved to annul the proceedings on the
ground of lack of jurisdiction. They argued that the NLRC Decision had already attained finality, since the Petition before the CA was belatedly
filed, and the signatory to the Certification of non-forum shopping lacked the proper authority.
In a Resolution dated 16 March 2009, the CA denied the Motion to Annul Proceedings.
Hence, this Petition.
The Petition raised the following arguments: (1) There was no proof of service attached to the Motion for Extension to file a Petition for Certiorari
before the CA; thus, both the Motion and the Petition were mere scraps of paper. (2) Respondent purposely intended to exclude petitioners from the
proceedings before the CA by omitting their actual addresses in the CA Petition, a mandatory requirement under Section 3, Rule 46; in relation to
Section 1, Rule 65 of the Rules of Court. Further, respondent failed to prove the valid service of its CA Petition upon petitioners’ former counsel of
record. (3) The CA was grossly ignorant of the law in ignoring jurisprudence, which states that when the floating status of an employee lasts for
more than six months, the latter may be considered to have been constructively dismissed.
On 3 September 2009, respondent filed its Comment on the Petition, pursuant to this Court’s 29 June 2009 Resolution. In its Comment, it argued
that the CA Decision had already become final and executory, inasmuch as the Motion to Annul Proceedings, a procedural approach not provided
for in the Rules, was filed some 44 days after the service of the CA Decision on the counsel for petitioners. Further, Atty. Aglipay had then no legal
standing to appear as counsel, considering that there was still no substitution of counsel at the time he filed the Motion to Annul Proceedings. In
any case, petitioners are bound by the actions of their counsel, Atty. Espinas.
On 1 March 2010, this Court issued a Resolution requiring petitioners to file their reply, which petitioners complied with on 26 April 2010. In their
Reply, petitioners state among others that the records of the CA case showed that there was a deliberate violation of their right to due process. The
CA Petition did not contain the required affidavit of service, which alone should have caused the motu proprio dismissal thereof. Further, the
instant Petition before this Court is an appropriate mode to contest the CA Decision and Resolution, which petitioners contend are void judgments.
They also argue that there is no rule on the client’s substitution in case of the death of counsel. Instead, the reglementary period to file pleadings in
that case must be suspended and made more lenient, considering that the duty of substitution is transferred to a non-lawyer.
On 30 March 2011, respondent filed a Motion for Early Resolution of the case. Petitioners likewise filed a Motion for Leave (For the Admission of
the Instant Comment on Private Respondent’s Motion for Early Resolution), stating that they were joining respondent in moving for the early
resolution of the case.
This Court will resolve the issues raised in seriatim.
Actual Addresses of Parties
Petitioners contend that the CA should not have taken cognizance of the Petition before it, as their actual addresses were not indicated therein as
required under Section 3, Rule 4612 of the Rules of Court, and pursuant to Cendaña v. Avila.13 In the 2008 case Cendaña, this Court ruled that the
requirement that a petition for certiorari must contain the actual addresses of all the petitioners and the respondents is mandatory. The failure to
comply with that requirement is a sufficient ground for the dismissal of a petition.
This rule, however, is not absolute. In the 2011 case Santos v. Litton Mills Incorporated,14 this Court ruled that where the petitioner clearly
mentioned that the parties may be served with the court’s notices or processes through their respective counsels, whose addresses have been clearly
specified as in this case, this act would constitute substantial compliance with the requirements of Section 3, Rule 46. The Court further observed
that the notice required by law is notice to counsel if the party has already appeared by counsel, pursuant to Section 2, Rule 13 of the Rules of
Court.
In its Petition before the CA, respondent clearly indicated the following:
THE PARTIES
2.0. The petitioner AGRO COMMERCIAL SECURITY SERVICE AGENCY, INC. (hereafter petitioner AGRO), is a corporation existing under
Philippine laws, and may be served with process thru counsel, at his address hereunder indicated; private respondents (1) SALVADOR O.
MOJAR; (2) EDGAR B. BEGONIA; (3) JOSE M. CORTEZ; (4) FREDDIE RANCES; (5) VIRGILIO MONANA; (6) RESTITUTU [sic] GADDI;
and, (7) EDSON D. TOMAS, are all of age, and during the material period, were in the employ of petitioner AGRO as security guards; said
respondents may be served with process thru their common counsel, ATTY. JOSE C. ESPINAS at No. 51 Scout Tuazon, Quezon City; on the other
hand, respondent National Labor Relations Commission, 1st Division, Quezon City, is the agency having jurisdiction over labor disputes in the
Philippines and may be served with process at offices in Quezon City;15
The foregoing may thus be considered as substantial compliance with Section 3, Rule 46. In any case, and as will be discussed further below, the
CA had sufficient reason to take cognizance of the Petition.
Affidavit of Service
Section 3, Rule 46 provides that the petition for certiorari should be filed together with the proof of service thereof on the respondent. Under
Section 13, Rule 13 of the Rules of Court, if service is made by registered mail, as in this case, proof shall be made by an affidavit of the person
mailing and the registry receipt issued by the mailing office. Section 3, Rule 46 further provides that the failure to comply with any of the
requirements shall be sufficient ground for the dismissal of the petition.
Petitioners allege that no affidavit of service was attached to the CA Petition. Neither is there any in the copy of the CA Petition attached to the
instant Petition. In its Comment, respondent claims that petitioners – through their counsel, Atty. Aglipay – can be charged with knowledge of the
pendency of the CA Petition. It says that on April 2008, Atty. Aglipay filed before the NLRC an Entry of Appearance and Motion for Execution
Pending Appeal.16 However, petitioners merely indicated therein that they were "respectfully mov[ing] for the execution pending appeal of the
Labor Arbiter’s decision dated 22 May 2006 affirmed by the NLRC."17 There was no indication that they had been served a copy of the CA
Petition. No other proof was presented by respondent to show petitioners’ actual receipt of the CA Petition. In any case, this knowledge, even if
presumed, would not – and could not – take the place of actual service and proof of service by respondent.
In Ferrer v. Villanueva,18 petitioner therein failed to append the proof of service to his Petition for Certiorari. Holding that this failure was a fatal
defect, the Court stated:
There is no question that petitioner herein was remiss in complying with the foregoing Rule. In Cruz v. Court of Appeals, we ruled that with
respect to motions, proof of service is a mandatory requirement. We find no cogent reason why this dictum should not apply and with more reason
to a petition for certiorari, in view of Section 3, Rule 46 which requires that the petition shall be filed "together with proof of service thereof." We
agree with the Court of Appeals that the lack of proof of service is a fatal defect. The utter disregard of the Rule cannot be justified by harking to
substantial justice and the policy of liberal construction of the Rules. Technical rules of procedure are not meant to frustrate the ends of justice.
Rather, they serve to effect the proper and orderly disposition of cases and thus effectively prevent the clogging of court dockets. (Emphasis in the
original)
Indeed, while an affidavit of service is required merely as proof that service has been made on the other party, it is nonetheless essential to due
process and the orderly administration of justice.19
Be that as it may, it does not escape the attention of this Court that in the CA Resolution dated 16 March 2009, the appellate court stated that their
records revealed that Atty. Espinas, petitioners’ counsel of record at the time, was duly served a copy of the following: CA Resolution dated 20
February 2008 granting respondent’s Motion for Extension of Time to file the CA Petition; CA Resolution dated 24 April 2008 requiring
petitioners to file their Comment on the CA Petition; and CA Resolution dated 30 June 2008, submitting the case for resolution, as no comment
was filed.
Such service to Atty. Espinas, as petitioners’ counsel of record, was valid despite the fact he was already deceased at the time. If a party to a case
has appeared by counsel, service of pleadings and judgments shall be made upon his counsel or one of them, unless service upon the party is
specifically ordered by the court. It is not the duty of the courts to inquire, during the progress of a case, whether the law firm or partnership
representing one of the litigants continues to exist lawfully, whether the partners are still alive, or whether its associates are still connected with the
firm.20
It is the duty of party-litigants to be in contact with their counsel from time to time in order to be informed of the progress of their case. It is
likewise the duty of parties to inform the court of the fact of their counsel’s death.21 Their failure to do so means that they have been negligent in
the protection of their cause.22 They cannot pass the blame to the court, which is not tasked to monitor the changes in the circumstances of the
parties and their counsel.
Substitution of Counsel
An employer has the right to transfer or assign its employees from one office or area of operation to another in pursuit of its legitimate business
Petitioners claim that Atty. Espinas passed away on 8 February 2008. They further claim that he was already bedridden as early as December 2007, interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the transfer is not motivated by
and thus they "failed to get any information whether [he] was served with a copy of the [CA Petition]."23 discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause.31

Petitioners were negligent in the conduct of their litigation. Having known that Atty. Espinas was already bedridden as early as December 2007,
they should have already obtained new counsel who could adequately represent their interests. The excuse that Atty. Aglipay could not enter his
appearance before the CA "because [petitioners] failed to get [their] folder from the office of Atty. Espinas"24 is flimsy at best.
The requirements for a valid substitution of counsel have been jurisprudentially settled in this wise:
While petitioners may claim that their transfer to Manila will cause added expenses and inconvenience, we agree with the CA that, absent any
showing of bad faith or ill motive on the part of the employer, the transfer remains valid.
WHEREFORE, the Petition is DENIED. The Court of Appeals Decision dated 21 July 2008 and Resolution dated 16 March 2009 in CA-G.R. SP
No. 102201 are hereby AFFIRMED.

Under Section 26, Rule 138 of the Rules of Court and established jurisprudence, a valid substitution of counsel has the following requirements: (1) SO ORDERED.
the filing of a written application for substitution; (2) the client's written consent; (3) the consent of the substituted lawyer if such consent can be
obtained; and, in case such written consent cannot be procured, (4) a proof of service of notice of such motion on the attorney to be substituted in
the manner required by the Rules. Where death of the previous attorney is the cause of substitution of the counsel, a verified proof of the death of
such attorney (usually a death certificate) must accompany the notice of appearance of the new counsel.25

The fact that petitioners were unable to obtain their folder from Atty. Espinas is immaterial. Proof of service upon the lawyer to be substituted will
suffice where the lawyer’s consent cannot be obtained. With respect to the records of the case, these may easily be reconstituted by obtaining
copies thereof from the various courts involved.

Petitioners allegedly went to the CA sometime prior to 31 July 2008, or the date of filing of their Manifestation before the CA, to inquire about the
status of their case. Allegedly, they "always visited the Court of Appeals for [the] development of their case."26 It is doubtful that a person who
regularly follows up the status of his case before a court would not be told, first, that a petition has been filed against him; and, second, that the
court’s resolutions have been sent to his counsel. It is questionable why, knowing these matters, petitioners did not seek the replacement of their
counsel, if the latter was unable to pursue their case. Further, despite their manifestation that, sometime prior to 31 July 2008, they were already
aware that the case had been submitted for resolution, they still waited until 9 September 2008 – or until they allegedly had knowledge of the CA
Decision – before they filed the Motion to Annul Proceedings.

In Ampo v. Court of Appeals,27 this Court explained the vigilance that must be exercised by a party:

We are not persuaded by petitioner’s argument that he was not aware that his counsel had died or that an adverse judgment had already been
rendered until he received the notice of promulgation from the RTC of Butuan City on April 20, 2005. Time and again we have stated that equity
aids the vigilant, not those who slumber on their rights. Petitioner should have taken it upon himself to periodically keep in touch with his counsel,
check with the court, and inquire about the status of the case. Had petitioner been more prudent, he would have found out sooner about the death of
his counsel and would have taken the necessary steps to prevent his present predicament.

xxx xxx xxx

Litigants who are represented by counsel should not expect that all they need to do is sit back, relax and await the outcome of their cases. Relief
will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own
negligence. The circumstances of this case plainly show that petitioner only has himself to blame. Neither can he invoke due process. The essence
of due process is simply an opportunity to be heard. Due process is satisfied when the parties are afforded a fair and reasonable opportunity to
explain their respective sides of the controversy. Where a party, such as petitioner, was afforded this opportunity to participate but failed to do so,
he cannot complain of deprivation of due process. If said opportunity is not availed of, it is deemed waived or forfeited without violating the
constitutional guarantee.

In this case, petitioners must bear the fruits of their negligence in the handling of their case. They may not decry the denial of due process, when
they were indeed afforded the right to be heard in the first place.

Substantive Issue: Illegal Dismissal

Petitioners argue that they were illegally dismissed, based on the 1989 case Agro Commercial Security Services Agency, Inc. v. NLRC.,28 which
holds that when the floating status of employees lasts for more than six (6) months, they may be considered to have been illegally dismissed from
the service.

Unfortunately, the above-mentioned case is not applicable here. In Agro, the service contracts of the security agency therein with various
corporations and government agencies – to which the security guards were previously assigned – were terminated, generally due to the
sequestration of the said offices. Accordingly, many of the security guards were placed on floating status. "Floating status" means an indefinite
period of time when one does not receive any salary or financial benefit provided by law.29 In this case, petitioners were actually reassigned to
new posts, albeit in a different location from where they resided. Thus, there can be no floating status or indefinite period to speak of. Instead,
petitioners were the ones who refused to report for work in their new assignment.

In cases involving security guards, a relief and transfer order in itself does not sever the employment relationship between the security guards and
their agency. Employees have the right to security of tenure, but this does not give them such a vested right to their positions as would deprive the
company of its prerogative to change their assignment or transfer them where their services, as security guards, will be most beneficial to the
client.30

AURELIO VS. NLRC ET AL DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
JEAN C. AURELIO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NORTHWESTERN COLLEGE, BEN A. NICOLAS,
ERNESTO B. ASUNCION, JOFFREY AURELIO, JOSE G. CASTRO, FRANCISCO SANTELLA, ALBA B. CADAY, LILIA PAZ, WILFRED
A. NICOLAS, GLENN AQUINO, LUCIDIA RUIZ-FLOREZ, respondents., G.R. No. 99034, Apr 12, 1993
FACTS:
Petitioner started as clinical instructor of the College of Nursing of Northwestern College (NWC) in June 1917. In October 1979, petitioner was
appointed Dean of the College of Nursing. In September 1981, petitioner was promoted to College Administrator or Vice-President for
Administration, retaining concurrently her position of Dean of the College of Nursing then she was later promoted to Executive Vice-President.
April 10, 1988, petitioner’s husband, Oscar Aurelio, a stockholder of respondent NWC, was elected Auditor. On May 1, 1988, the individual
respondents, as Board of Directors, took over the management of respondent NWC. This new management unleashed a series of reorganization
affecting the petitioner and her husband, Oscar Aurelio.
Petitioner, wrote a letter informing the President of Northwestern College that she was going on an indefinite leave. Petitioner sent a copy of the
letter to the Secretary of DECS praying for assistance. The Secretary DECS referred the letter to the DECS Director of Region I and the latter was
ordered “to investigate and look into the problem of NWC College of Nursing, Laoag City immediately. PRC recommends suspension of the
operation of College of Nursing due to lack of Dean and faculty to supervise students.” The representatives of the Regional Director submitted their
official findings and recommendations confirming the truth of the allegations of petitioner in her letter. The DECS also confirmed the willingness
of petitioner to withdraw her indefinite leave of absence. They refused to accept petitioner. Petitioner filed her complaint for illegal dismissal
against private respondents and prayed for reinstatement plus backwages, moral and exemplary damages, and attorney’s fees.
On April 30, 1988, the annual regular meeting of stockholders was held at the principal office of the corporation in Laoag City. New set of Board
members were elected. The new Board conducted a preliminary audit which revealed that the college was financially distressed, unable to meet its
maturing obligations with its creditor bank. The new management embarked on a realignment of positions and functions of the different department
in order to minimize expenditures. As a result of the audit, NWC was compelled to abolish the administrative positions held by petitioner, which
she did not contest.
LA dismissed the complaint. Petitioner went to NLRC which merely modified the decision of LA. Hence this appeal.
ISSUE:
whether NWC can validly terminate the administrative position held by petitioner.
Whether NWC observed due process in dismissing petitioner.
RULING:
YES. As found by the NLR, Petitioner was a managerial employee who has to have the complete trust and confidence of respondents. While it may
be true that complainant was not strictly an accountable employee primarily responsible for disbursement of whatever funds, respondents had some
basis in losing its trust and confidence in complainant. Respondents’ evidence showed that under the principle of command responsibility,
complainant was in a sense responsible in the monitoring of monetary transactions involving funds from library collections and from Related
Learning Science collection. For it has been held that in case of termination due to loss of trust and confidence proof beyond reasonable doubt of
misconduct is not necessary but some basis being sufficient.
Petitioner’s claim of constructive dismissal stems from her alleged removal from the positions of Administrator, Vice President for Administration
and Executive Vice President. From the time petitioner assumed the position of Executive Vice President, she did not possess any legal right to
claim security of tenure concerning this position because she assumed the same without authority from the Board of Directors. Petitioner cannot
claim that she was dismissed from the position of Administrator and Vice-President for Administration because her continuous occupation of the
positions is at the discretion or pleasure of the Board of Directors.
The acquisition of security of tenure by the teacher signifies that he/she shall thenceforth have the right to remain in employment as such teacher
until he reaches the compulsory retirement age in accordance with the rules of the school or the law. That tenure, once acquired, cannot be
adversely affected or defeated by requiring the teacher to execute contracts stipulating the termination of his/her employment upon the expiration
of a fixed period or term. Contracts of that sort are anathema and will be struck down as null and void.
Now, a teacher may also be appointed as a department head or administrative officer of the school, e.g., as member of the school’s governing
council, as college dean or assistant dean, as high school principal, as college secretary. Except in the case of a clear and explicit agreement to the
contrary, the acceptance by a teacher of an administrative position offered to him or to which he might have aspired, does not operate as a
relinquishment or loss by him of his security of tenure as a faculty member; he retains his tenure as a teacher during all the time that he occupies
the additional position of department head or administrative officer of the school.
The teacher designated as administrative officer ordinarily serves for a definite term or at the pleasure of the school head or board of trustees or
regents depending on the rules of the school and the agreement he may enter into with the institution. There is nothing wrong in said practice of
having teachers serve as administrative officials for a fixed term or in a non-permanent capacity.
A distinction should be drawn between the teaching staff of private educational institutions, on one hand — teachers, assistant instructors, assistant
professors, associate professors, full professors — and department or administrative heads or officials on the other — college or department
secretaries, principals, directors,” assistant, deans, deans. The teaching staff, the faculty members, may and should acquire tenure in accordance
with the rules and regulations of the Department of Education and Culture and the school’s own rules and standards. On the other hand, teachers
appointed to serve as administrative officials do not normally and should not expect to, acquire a second or additional tenure. The acquisition of
such an additional tenure is not normal, is the exception rather than the rule, and should therefore be clearly and specifically provided by law or
contract.
The management of NWC rests on its Board of Directors including the selection of members of the faculty who may be allowed to assume other
positions in the college aside from that of teacher or instructor. When the then new Board of Directors abolished the additional positions held by
the petitioner, it was merely exercising its right.
The Board abolished the positions not because the petitioner was the occupant thereof but because the positions had become redundant with
functions overlapping those of the President of the college. The Board of Directors has the power granted by the Corporation Code to implement a
reorganization of respondent college’s offices, including the abolition of various positions, since it is implied or incidental to its power to conduct
the regular business affairs of the corporation.
Petitioner also failed to rebut the findings of the labor arbiter. In the instant petition, she has again failed to overturn private respondents’ evidence
as well as the findings of the labor arbiter which were affirmed by the NLRC. Petitioner’s application for an indefinite leave of absence was not
approved by the college authorities, but this notwithstanding, she failed to follow-up her application and did not report for work. Believing she was
dismissed, petitioner filed the complaint for illegal dismissal, illegal deductions, underpayment, unpaid wages or commissions and for moral
damages and attorney’s fees.
Employers, generally, are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those of similar rank
performing functions which by their nature require the employer’s trust and confidence, than in the case of ordinary rank-and-file employees.
Article 282(c) of the Labor Code provides that an employer may terminate an employment for “fraud or willful breach by the employee of the trust
reposed in him by his employer or his duly authorized representative.”
Loss of trust and confidence is a valid ground for dismissing an employee. Termination of employment on this ground does not require proof
beyond reasonable doubt. All that is needed is for the employer to establish sufficient basis for the dismissal of the employee. Both the LA NLRC
found that there is some basis for respondent NWC’s loss of trust and confidence on petitioner. The dismissal of the petitioner was for a just and
valid cause
NO. It appears on record that the investigation of petitioner’s alleged irregularities was conducted only after the filing of the complaint for illegal
dismissal. Under Section 1, Rule XIV of the Implementing Rules and Regulations of the Labor Code, the dismissal of an employee must be for a
just or authorized cause and after due process.
The two requirements of this legal provision are:
The legality of the act of dismissal, that is, dismissal under the ground provided under Article 283 of the New Labor Code; and
The legality in the manner of dismissal, that is, with due observance of the procedural requirements of Sections 2, 5, and 6 of BP Blg. 130.
While the Labor Code treats of the nature and the remedies available with regard to the first, such as: (a) reinstatement to his former position
without loss of seniority rights, and (b) payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement,
said Code does not deal at all with the second, that is, the manner of dismissal, which is therefore, governed exclusively by the Civil Code.
In cases where there was a valid ground to dismiss an employee but there was non-observance of due process, this Court held that only a sanction
must be imposed upon the employer for failure to give formal notice and to conduct an investigation required by law before dismissing the
employee . Employer must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before
dismissing petitioner from employment. The measure of this award depends on the facts of each case and the gravity of the omission committed by
the employer.
WHEREFORE, the decision under review is hereby AFFIRMED with MODIFICATION.
GOLDEN THREAD ET AL VS. NLRC ET AL DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
G.R. No. 119157 March 11, 1999
GOLDEN THREAD KNITTING INDUSTRIES, INC., GEORGE NG and WILFREDO BICO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, GEORGE MACASPAC, MARY ANN MACASPAC, ROMULO ALBASIN, MELCHOR
CACHUCHA, GILBERT RIVERA and FLORA BALBINO, respondents.
FACTS: The complainants alleged that in the first week of May 1992 they organized a labor union. On 22 May 1992 Cristina Balingit, wife of the
union Chairman, was dismissed from emyloyment as sewer. In the last week of May union Chairman Deogracias Balingit himself was, suspended
from work as knitting operator. On 1 June 1992 petitioners shortened the number of working days of the union officers and members from six (6)
to three (3) days a week.
Petitioners contended that they resorted to rotation of work, which affected practically all employees, because of the low demand for their towels
and shirts. Petitioners also avowed that they validly dismissed five (5) of the complainants. According to petitioners, some slashed several bundles
of towels on 3 July 1992, while the positions of some became redundant. One of them threatened the Personnel Manager and violated company
rules by removing her time card from the rack, while another one was not dismissed but abandoned his employment on 7 July 1992.
LABOR ARBITER ruled that they were validly dismissed, while the reduction of working days and suspension or dismissal of union officers or
members were not shown to have been done in retaliation to the complainants’ act of organizing a union.
NLRC reversed the ruling for a number of the complainants, holding that they were illegally dismissed.
ISSUE: WON they were validly dismissed
HELD:
(SA MGA NAG SLASH NG TOWELS) We find that petitioners were unable to substantiate the charge of serious misconduct against the ones
who slashed the towels. They were likewise denied procedural due process. As correctly observed by respondent NLRC, petitioners failed to afford
Macaspac and Albasin the benefit of hearing and investigation before termination. It is also our observation that neither did petitioners comply with
the requirement on notices. An established rule of long standing is that to effect a completely valid and unassailable dismissal, an employer must
show not only sufficient ground therefor but must also prove that procedural due process has been observed by giving the employee two (2)
notices: one, of the intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss.
(SA MGA NATANGGAL FOR REDUNDANCY) The characterization of an employee’s services as no longer necessary or sustainable, and
therefore properly terminable, is an exercise of business judgment on the part of the employer. (Management Prerogative) HOWEVER, SC
questioned petitioners’ exercise of management prerogative because it was not shown that Rivera and Macaspac’s positions were indeed
unnecessary, much less was petitioners’ claim supported by any evidence. It is not enough for a company to merely declare that it has become
overmanned. It must produce adequate proof that such is the actual situation in order to justify the dismissal of the affected employees for
redundancy.
Furthermore, we have laid down the principle that in selecting the employees to be dismissed, a fair and reasonable criteria must be used, such as
but not limited to:
(a) less preferred status (e.g., temporary employee),
(b) efficiency, and
(c) seniority.
However, no criteria whatsoever was used by the employer in this case.
Another procedural lapse committed by petitioners is the lack of written notice to the DOLE required under Art. 283 of the Labor Code. The
purpose of such notice is to ascertain the verity of the cause of termination of employment.
(DUN SA NANG THREATEN NG MANAGER) The utterances by an employee of obscene, insulting or offensive words against a superior justify
his dismissal for gross misconduct. The scornful attitude is also destructive of his co-employees’ morale. However, the dismissal will not be upheld
where it appears, as in this case, that the employee’s act of disrespect was provoked by the employer. Balbino hurled invectives at petitioner Bico
because she was provoked by the baseless suspension imposed on her. Under the circumstances, we believe that dismissal was a harsh penalty; one
(1) week suspension would have sufficed.
(DUN SA NAG ABANDON NG WORK) It is essential that:
(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 to sever the employer-employee relationship manifested by some overt acts.
The circumstance that Cachucha lost no time in filing a complaint for illegal dismissal against petitioners on 16 July 1992 is incompatible with the
charge of abandonment and confirms in fact that he was refused entry into the company premises on 6 July 1992.
Pantranco North Express Inc vs. NLRC Case Digest
Pantranco North Express, Inc., vs. NLRC & Urbano Suñiga
259 SCRA 161 (1996)
Facts: Private respondent was hired by petitioner in 1964 as a bus conductor. He eventually joined the Pantranco Employees Association-PTGWO.
He continued in petitioner's employ until August 12, 1989, when he was retired at the age of fifty-two (52) after having rendered twenty five years'
service. The basis of his retirement was the compulsory retirement provision of the collective bargaining agreement between the petitioner and the
aforenamed union. On February 1990, private respondent filed a complaint for illegal dismissal against petitioner with NLRC. The complaint was
consolidated with two other cases of illegal dismissal having similar facts and issues, filed by other employees, non-union members.
Labor Arbiter rendered his decision finding that the three complainants were illegally and unjustly dismissed and order the respondent to reinstate
them to their former or substantially equivalent positions without loss of seniority rights with full back wages and other benefits. Petitioner
appealed to public respondent, which issued the questioned Resolution affirming the labor arbiter's decision in toto.
Issue: Whether or not the CBA stipulation on compulsory retirement after twenty-five years of service is legal and enforceable.
Ruling: The Court rules that the CBA stipulation is legal and enforceable.
The bone of contention in this case is the provision on compulsory retirement after 25 years of service.
Article XI, Section 1 (e) (5) of the May 2, 1989 Collective Bargaining Agreement 8 between petitioner company and the union states:
Section 1. The COMPANY shall formulate a retirement plan with the following main features:
(e) The COMPANY agrees to grant the retirement benefits herein provided to regular employees who may be separated from the COMPANY for
any of the following reasons:
(5) Upon reaching the age of sixty (60) years or upon completing twenty-five (25) years of service to the COMPANY, whichever comes first, and
the employee shall be compulsory retired and paid the retirement benefits herein provided."
The said Code provides: Art. 287. Retirement. — Any employee may be retired upon reaching the retirement age established in the Collective
Bargaining Agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement
benefits as he may have earned under existing laws and any collective bargaining or other agreement."
The Court agrees with petitioner and the Solicitor General. Art. 287 of the Labor Code as worded permits employers and employees to fix the
applicable retirement age at below 60 years. Moreover, providing for early retirement does not constitute diminution of benefits. In almost all
countries today, early retirement, i.e., before age 60, is considered a reward for services rendered since it enables an employee to reap the fruits of
his labor — particularly retirement benefits, whether lump-sum or otherwise — at an earlier age, when said employee, in presumably better
physical and mental condition, can enjoy them better and longer.
As a matter of fact, one of the advantages of early retirement is that the corresponding retirement benefits, usually consisting of a substantial cash
windfall, can early on be put to productive and profitable uses by way of income-generating investments, thereby affording a more significant
measure of financial security and independence for the retiree who, up till then, had to contend with life's vicissitudes within the parameters of his
fortnightly or weekly wages. Thus we are now seeing many CBAs with such early retirement provisions. And the same cannot be considered a
diminution of employment benefits.
Being a product of negotiation, the CBA between the petitioner and the union intended the provision on compulsory retirement to be beneficial to
the employees-union members, including herein private respondent. When private respondent ratified the CBA with the union, he not only agreed
to the CBA but also agreed to conform to and abide by its provisions. Thus, it cannot be said that he was illegally dismissed when the CBA
provision on compulsory retirement was applied to his case.
Incidentally, we call attention to Republic Act No. 7641, known as "The Retirement Pay Law", which went into effect on January 7, 1993.
Although passed many years after the compulsory retirement of herein private respondent, nevertheless, the said statute sheds light on the present
discussion when it amended
Art. 287 of the Labor Code, to make it read as follows: Retirement. — Any employee may be retired upon reaching the retirement age establish in
the collective bargaining agreement or other applicable employment contract.
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching
the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at
least five (5) years in the said establishment may retire . . ."
The aforequoted provision makes clear the intention and spirit of the law to give employers and employees a free hand to determine and agree upon
the terms and conditions of retirement. Providing in a CBA for compulsory retirement of employees after twenty-five (25) years of service is legal
and enforceable so long as the parties agree to be governed by such CBA. The law presumes that employees know what they want and what is good
for them absent any showing that fraud or intimidation was employed to secure their consent thereto.
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PANTOJA VS. SCA DIGEST
DECEMBER 21, 2016 ~ VBDIAZ
PANTOJA VS. SCA
G.R. No. 163554
APRIL 23, 2010
FACTS: Respondent, a corporation engaged in the manufacture, sale and distribution of industrial paper and tissue products, employed Pantoja and
was eventually assigned at respondent’s Paper Mill No. 4, the section which manufactures the company’s industrial paper products, as a back
tender in charge of the proper operation of the section’s machineries.
In a Notice of Transfer, respondent informed petitioner of its reorganization plan and offered him a position at Paper Mill No. 5 under the same
terms and conditions of employment in anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4 . The closure and
concomitant reorganization is in line with respondent’s decision to streamline and phase out the company’s industrial paper manufacturing
operations due to financial difficulties.
However, petitioner rejected respondent’s offer for his transfer. Thus, a notice of termination of employment was sent to petitioner as his position
was declared redundant by the closure of Paper Mill No. 4. He then received his separation pay and thereafter executed a release and quitclaim in
favor of respondent. later, respondent informed the DOLE of its reorganization and partial closure by submitting with the said office an
Establishment Termination Report together with the list of 31 terminated employees.
Petitioner filed a complaint for illegal dismissal against respondent assailing his termination as without any valid cause. He averred that the alleged
redundancy never occurred as there was no permanent shutdown of Paper Mill No. 4 due to its continuous operation since his termination.
In its defense, respondent refuted petitioner’s claim of illegal dismissal. It argued that petitioner has voluntarily separated himself from service by
opting to avail of the separation benefits of the company instead of accepting reassignment/transfer to another position of equal rank and pay.
According to respondent, petitioner’s discussion on the alleged resumption of operation of Paper Mill No. 4 is rendered moot by the fact of
petitioner’s voluntary separation.
the Labor Arbiter rendered a Decision dismissing petitioner’s complaint for lack of merit. Upon appeal by petitioner, the NLRC reversed the
Labor Arbiter’s Decision by finding petitioner’s separation from employment illegal. The NLRC gave credence to petitioner’s evidence of Paper
Mill No. 4’s continuous operation.
Respondent sought reconsideration of the NLRC’s ruling**, which was however denied. Respondent filed a petition for certiorari with the CA,
which reversed the NLRC’s Decision and reinstated the Labor Arbiter’s Decision dismissing the complaint. It ruled that there was no illegal
dismissal as the act of petitioner in rejecting the transfer and accepting the separation pay constitutes a valid basis for the separation from
employment. Respondent’s Motion to Annul the NLRC’s Entry of Judgment was granted by the CA. Petitioner’s MR was denied
ISSUE: WON there was illegal dismissal
HELD: WHEREFORE, the petition is DENIED. The assailed Decision of the CA dismissing petitioner complaint for illegal dismissal and the
Resolution denying the MR are AFFIRMED.
NO
Respondent presented evidence of the low volume of sales and orders for the production of industrial paper in 1999 which inevitably resulted to the
company’s decision to streamline its operations. Exercising its management prerogative and sound business judgment, respondent decided to cut
down on operational costs by shutting down one of its paper mill. As held in International Harvester Macleod, Inc. v. IAC , the determination of the
need to phase out a particular department and consequent reduction of personnel and reorganization as a labor and cost saving device is a
recognized management prerogative which the courts will not generally interfere with. Apparently, respondent implemented its streamlining or
reorganization plan with good faith, not in an arbitrary manner and without prejudicing the tenurial rights of its employees.
As long as no arbitrary or malicious action on the part of an employer is shown, the wisdom of a business judgment to implement a cost saving
device is beyond this court’s determination. After all, the free will of management to conduct its own business affairs to achieve its purpose cannot
be denied.
NOTES:
the reason why Paper Mill no. 4 continued it operation after the separation of Pantoja:
Respondent sought reconsideration of the NLRC’s ruling. It denied the fact that Paper Mill No. 4 continued to be fully operational in 1999.
Respondent asseverated that when Paper Mill No. 4 was shut down in 1999 due to its low production output as certified in an affidavit executed by
SCA’s VP-Tissue Manufacturing Director, there was a necessity to occasionally run from time to time the machines in Paper Mill No. 4 only for
the purpose of maintaining and preserving the same and does not mean that Paper Mill No. 4 continued to be operational. It was only in 2000 that
Paper Mill No. 4 was subsequently reopened due to a more favorable business climate, which decision is recognized as a rightful exercise of
management prerogative.
MORALES vs. HARBOUR CENTRE DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
G.R. No. 174208 January 25, 2012
JONATHAN V. MORALES, Petitioner,
vs.
HARBOUR CENTRE PORT TERMINAL, INC. Respondent.
FACTS: On 16 May 2000, petitioner Jonathan V. Morales (Morales) was hired by respondent Harbour Centre Port Terminal, Inc. (HCPTI) as an
Accountant and Acting Finance Officer with a monthly salary of P18,000.00. Regularized on 17 November 2000, Morales was promoted to
Division Manager of the Accounting Department, for which he was compensated a monthly salary of P33,700.00, plus allowances starting 1 July
2002.
Subsequent to HCPTI’s transfer to its new offices at Vitas, Tondo, Manila on 2 January 2003, Morales received an inter-office memorandum dated
27 March 2003, reassigning him to Operations Cost Accounting, tasked with the duty of “monitoring and evaluating all consumables requests,
gears and equipment” related to the corporation’s operations and of interacting with its sub-contractor, Bulk Fleet Marine Corporation.
Morales wrote Singson (admin manager), protesting that his reassignment was a clear demotion since the position to which he was transferred was
not even included in HCPTI’s plantilla. For the whole of the ensuing month Morales was absent from work and/or tardy. Singson issued to Morales
a 29 April 2003 inter-office memorandum denominated as a First Warning.
In view of the absences Morales continued to incur, HCPTI issued a Second Warning dated 6 May 2003 and a Notice to Report for Work and Final
Warning dated 22 May 2003.
LABOR ARBITER: Morales was not constructively dismissed
NLRC: Morales’ reassignment was a clear demotion despite lack of showing of diminution of salaries and benefits.

CA rendered the herein assailed decision, reversing the NLRC’s 29 July 2005 Decision, upon the following findings and conclusions: (a) Morales’
reassignment to Operations Cost Accounting was a valid exercise of HCPTI’s prerogative to transfer its employees as the exigencies of the
business may require; (b) the transfer cannot be construed as constructive dismissal since it entailed no demotion in rank, salaries and benefits; and,
(c) rather than being terminated, Morales refused his new assignment by taking a leave of absence from 4 to 17 April 2003 and disregarding
HCPTI’s warnings and directives to report back for work.
ISSUE: WON Morales was constructively dismissed
HELD: YES
Constructive dismissal exists where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as
an offer involving a demotion in rank or a diminution in pay” and other benefits. Aptly called a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain
by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued
employment. In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and
action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial
to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive
dismissal.
Morales was subsequently reassigned by HCPTI “from managerial accounting to Operations Cost Accounting” on 27 March 2003, without any
mention of the position to which he was actually being transferred. That the reassignment was a demotion is, however, evident from Morales’ new
duties which, far from being managerial in nature, were very simply and vaguely described as inclusive of “monitoring and evaluating all
consumables requests, gears and equipments related to [HCPTI’s] operations” as well as “close interaction with [its] sub-contractor Bulk Fleet
Marine Corporation.”
Morales’ demotion is evident from the fact that his reassignment entailed a transfer from a managerial position to one which was not even included
in the corporation’s plantilla.
Star Paper Corporation vs. Simbol | Puno Case Digest
Star Paper Corporation vs. Simbol
487 SCRA 228
FACTS: Petitioner was the employer of the respondents. Under the policy of Star Paper the employees are:
1. New applicants will not be allowed to be hired if in case he/she has a relative, up to the 3rd degree of relationship, already employed by the
company.
2. In case of two of our employees (singles, one male and another female) developed a friendly relationship during the course of their employment
and then decided to get married, one of them should resign to preserve the policy stated above.
Respondents Comia and Simbol both got married to their fellow employees. Estrella on the other hand had a relationship with a co-employee
resulting to her pregnancy on the belief that such was separated. The respondents allege that they were forced to resign as a result of the
implementation of the said assailed company policy.
The Labor Arbiter and the NLRC ruled in favor of petitioner. The decision was appealed to the Court of Appeals which reversed the decision.
ISSUE: Whether the prohibition to marry in the contract of employment is valid
HELD: It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but were asked to resign when
they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an
employee of the Repacking Section, could be detrimental to its business operations. Neither did petitioners explain how this detriment will happen
in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-
machine. The policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold the questioned rule
without valid justification, the employer can create policies based on an unproven presumption of a perceived danger at the expense of an
employee’s right to security of tenure.
Petitioners contend that their policy will apply only when one employee marries a co-employee, but they are free to marry persons other than co-
employees. The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the
disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the
employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company.
Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given
to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislature’s silence that married persons are not
protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed
proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative. Corollary, the issue
as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic.
In the case of Estrella, the petitioner failed to adduce proof to justify her dismissal. Hence, the Court ruled that it was illegal.
Whether or not the policy of the employer banning spouse from working in the same company, a valid exercise of management prerogative.
RULING:
No, it is not a valid exercise of management prerogative and violates the rights of employees under the constitution. The case at bar involves
Article 136 of the Labor Code which provides “it shall be unlawful for an employer to require as a condition of employment or continuation of
employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be
deemed resigned or separated , or to actually dismiss, discharge , discriminate or otherwise prejudice a woman employee merely by reason of her
marriage.” The company policy of Star Paper, to be upheld, must clearly establish the requirement of reasonableness. In the case at bar, there was
no reasonable business necessity. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then
an employee of the Repacking Section, could be detrimental to its business operations. The questioned policy may not facially violate Article 136
of the Labor Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a
showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. Lastly, the absence of a statute expressly prohibiting marital
discrimination in our jurisdiction cannot benefit the petitioners.
DUNCAN ASSOC OF DETAILMAN-PTGWO and TECSON vs. GLAXO WELLCOME PHILS DIGEST
DECEMBER 21, 2016 ~ VBDIAZ
G.R. No. 162994 September 17, 2004
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
FACTS: Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as medical representative on
October 24, 1995, after Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study and abide by existing company rules; to
disclose to management any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug
companies and should management find that such relationship poses a possible conflict of interest, to resign from the company. Code of Conduct of
Glaxo similarly provides these conditions; that otherwise, the management and the employee will explore the possibility of a “transfer to another
department in a non-counterchecking position” or preparation for employment outside the company after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-Camarines Norte sales area. Subsequently, Tecson entered into a
romantic relationship with Bettsy, an employee of Astra Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in
Albay. She supervised the district managers and medical representatives of her company and prepared marketing strategies for Astra in that area.
Even before they got married, Tecson received several reminders from his District Manager regarding the conflict of interest which his relationship
with Bettsy might engender. Still, love prevailed, and Tecson married Bettsy in September 1998.
Tecson’s superior reminded him that he and Bettsy should decide which one of them would resign from their jobs. Tecson requested for time to
comply with the company policy against entering into a relationship with an employee of a competitor company. He explained that Astra, Bettsy’s
employer, was planning to merge with Zeneca, another drug company; and Bettsy was planning to avail of the redundancy package to be offered by
Astra.
Tecson again requested for more time resolve the problem. Thereafter, Tecson applied for a transfer in Glaxo’s milk division, thinking that since
Astra did not have a milk division, the potential conflict of interest would be eliminated. His application was denied in view of Glaxo’s “least-
movement-possible” policy.
Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his request
was denied. Tecson defied the transfer order and continued acting as medical representative in the Camarines Sur-Camarines Norte sales area.
DEVELOPMENT OF THE CASE: Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for
voluntary arbitration, but Tecson declined the offer. On November 15, 2000, the National Conciliation and Mediation Board (NCMB) rendered its
Decision declaring as valid Glaxo’s policy on relationships between its employees and persons employed with competitor companies, and
affirming Glaxo’s right to transfer Tecson to another sales territory.
CA sustained; MR denied.
Petitioner’s Contention: that Glaxo’s policy against employees marrying employees of competitor companies violates the equal protection clause of
the Constitution because it creates invalid distinctions among employees on account only of marriage. They claim that the policy restricts the
employees’ right to marry; that Tecson was constructively dismissed
GLAXO argues: that the company policy prohibiting its employees from having a relationship with and/or marrying an employee of a competitor
company is a valid exercise of its management prerogatives and does not violate the equal protection clause;
The policy is also aimed at preventing a competitor company from gaining access to its secrets, procedures and policies; that Tecson can no longer
question the assailed company policy because when he signed his contract of employment, he was aware that such policy was stipulated therein.
ISSUE: WON Glaxo’s policy against its employees marrying employees from competitor companies is valid
HELD: The Court finds no merit in the petition.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from
competitors, especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees is reasonable under the
circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy,
Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right of enterprises to
adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth.
Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every
labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and
enforcement in the interest of fair play.21
EQUAL-PROTECTION: Glaxo does not impose an absolute prohibition against relationships between its employees and those of competitor
companies. Its employees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to
avoid is a conflict of interest between the employee and the company that may arise out of such relationships.
Moreover, records show that Glaxo gave Tecson several chances to eliminate the conflict of interest brought about by his relationship with Bettsy.
PETITION DENIED.
______________
Other Issue on Constructive dismissal:
The Court finds no merit in petitioners’ contention that Tescon was constructively dismissed when he was transferred from the Camarines Norte-
Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur sales area, and when he was excluded from attending the company’s
seminar on new products which were directly competing with similar products manufactured by Astra. Constructive dismissal is defined as a
quitting, an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; 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.30 None of these conditions are present in the instant case.
YRASUEGUI VS. PAL
NOVEMBER 17, 2013 ~ VBDIAZ
G.R. No. 168081, October 17, 2008
ARMANDO G. YRASUEGUI, petitioners,
vs.
PHILIPPINE AIRLINES, INC., respondents.
FACTS: THIS case portrays the peculiar story of an international flight steward who was dismissed because of his failure to adhere to the weight
standards of the airline company.
The proper weight for a man of his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the
Cabin and Crew Administration Manual of PAL.
In 1984, the weight problem started, which prompted PAL to send him to an extended vacation until November 1985. He was allowed to return to
work once he lost all the excess weight. But the problem recurred. He again went on leave without pay from October 17, 1988 to February 1989.
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained overweight. On January 3, 1990, he was informed
of the PAL decision for him to remain grounded until such time that he satisfactorily complies with the weight standards. Again, he was directed to
report every two weeks for weight checks, which he failed to comply with.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight check would be dealt with accordingly. He was given
another set of weight check dates, which he did not report to.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of company standards on weight
requirements. Petitioner insists that he is being discriminated as those similarly situated were not treated the same.
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, “and considering the utmost
leniency” extended to him “which spanned a period covering a total of almost five (5) years,” his services were considered terminated “effective
immediately.”
LABOR ARBITER: held that the weight standards of PAL are reasonable in view of the nature of the job of petitioner. However, the weight
standards need not be complied with under pain of dismissal since his weight did not hamper the performance of his duties.
NLRC affirmed.
CA: the weight standards of PAL are reasonable. Thus, petitioner was legally dismissed because he repeatedly failed to meet the prescribed weight
standards. It is obvious that the issue of discrimination was only invoked by petitioner for purposes of escaping the result of his dismissal for being
overweight.
ISSUE: WON he was validly dismissed.
HELD: YES
A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification of an employee in
order to keep the job. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code.
In the case at bar, the evidence on record militates against petitioner’s claims that obesity is a disease. That he was able to reduce his weight from
1984 to 1992 clearly shows that it is possible for him to lose weight given the proper attitude, determination, and self-discipline. Indeed, during the
clarificatory hearing on December 8, 1992, petitioner himself claimed that “[t]he issue is could I bring my weight down to ideal weight which is
172, then the answer is yes. I can do it now.”
Petitioner has only himself to blame. He could have easily availed the assistance of the company physician, per the advice of PAL.
In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an analogous cause under Article
282(e) of the Labor Code that justifies his dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA
correctly puts it, “[v]oluntariness basically means that the just cause is solely attributable to the employee without any external force influencing or
controlling his actions. This element runs through all just causes under Article 282, whether they be in the nature of a wrongful action or omission.
Gross and habitual neglect, a recognized just cause, is considered voluntary although it lacks the element of intent found in Article 282(a), (c), and
(d).”
NOTES:
The dismissal of petitioner can be predicated on the bona fide occupational qualification defense. Employment in particular jobs may not be limited
to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion, or national origin is an actual
qualification for performing the job. The qualification is called a bona fide occupational qualification (BFOQ). In short, the test of reasonableness
of the company policy is used because it is parallel to BFOQ. BFOQ is valid “provided it reflects an inherent quality reasonably necessary for
satisfactory job performance.”
The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In order to achieve this, it must
necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should
be viewed as imposing strict norms of discipline upon its employees.
The primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety.
Separation pay, however, should be awarded in favor of the employee as an act of social justice or based on equity. This is so because his dismissal
is not for serious misconduct. Neither is it reflective of his moral character.
from Atty. Renes^^

AVON V LUNA
FACTS
- Leticia Luna worked as a Supervisor in Beautifont.
- Subsequently, when Avon Cosmetics took over the management and operations of Beautifont, Avon and Luna entered into an
agreement entitled Supervisor’s Agreement through which she became a part of the independent sales force of Avon. The pertinent
provision is:
o 5) That the Supervisor shall sell or offer to sell, display or promote only and exclusively the products sold by the
Company.
- Luna was invited by a former Avon employee to become Group Franchise Director of another company, Sandre Philippines, which
sells vitamins and other food supplements.
- Luna consulted with a law firm to render a legal opinion as to the legal consequence of the Supervisor’s Agreement with Avon.
- In response to that, the firm explained that the Supervisor’s Agreement was contrary to law and public policy.
- Subsequently, Avon caught wind of Luna’s position as Group Franchise Director of another company, and ordered for the cancellation
of the Supervisor’s Agreement.
ISSUE
- Whether or not paragraph 5 of the Supervisor’s Agreement is null and void for being against public policy.
HELD – NO
- In business parlance, this is commonly termed as the "exclusivity clause." This is defined as agreements which prohibit the obligor
from engaging in "business" in competition with the obligee.
- This exclusivity clause is more often the subject of critical scrutiny when it is perceived to collide with the Constitutional proscription
against "reasonable restraint of trade or occupation” (Article 19).
- First off, restraint of trade or occupation embraces acts, contracts, agreements or combinations which restrict competition or
obstruct due course of trade
o Whether under the particular circumstances of the case and the nature of the particular contract involved, such contract is,
or is not, against public interest
- Contracts requiring exclusivity are not per se void. Each contract must be viewed vis-à-vis all the circumstances surrounding such
agreement in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition.
- When is a restraint in trade unreasonable? Authorities are one in declaring that a restraint in trade is unreasonable when it is
contrary to public policy or public welfare (Ferrazzini v. Gsell).
- And what is public policy? that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency
to be injurious to the public or against the public good.
- Applied to contracts, in the absence of express legislation or constitutional prohibition, a court, in order to declare a contract void as
against public policy, one must find that the contract as to the consideration or thing to be done, has a tendency to injure the public, is
against the public good, or contravenes some established interests of society, or is inconsistent with sound policy and good morals, or
tends clearly to undermine the security of individual rights, whether of personal liability or of private property
Application to the case at bar
- There is nothing invalid or contrary to public policy par. 5 of the Supervisor’s Agreement.
- Such prohibition is neither directed to eliminate the competition like Sandré Phils., Inc. nor foreclose new entrants to the market.
Sandré Philippines, Inc. is still very much free to distribute its products in the market but it must do so at its own expense.
The exclusivity clause does not in any way limit its selling opportunities, just the undue use of the resources of petitioner Avon.
- It would be unfair to Avon if the talents and skills Luna acquired while working under it would be shared to its competitor Sandre
Philippines. This would be tantamount to unjust enrichment.
ST. LUKE’S MEDICAL CENTER EMPLOYEE’S FOUNDATION AFW
v.
NLRC
Facts:
Congress passed and enacted Republic Act No. 7431 known as the “Radiologic Technology Act of 1992.” Said law requires that no person shall
practice or offer to practice as a radiology and/or x-ray technologist in the Philippines without having obtained the proper certificate of registration
from the Board of Radiologic Technology. Petitioner Maribel Santos was hired as X-Ray Technician in the Radiology department of private
respondent St. Luke’s Medical Center, Inc. (SLMC).
Pursuant to RA 7431 the assistant Executive Director-Ancillary Services and HR Director of private respondent SLMC issued a final notice to all
practitioners of Radiologic Technology to comply with the requirement otherwise, the unlicensed employee will be transferred to an area which
does not require a license to practice if a slot is available.
The Director of the Institute of Radiology issued another memorandum to petitioner Maribel S. Santos advising her that only a license can assure
her of her continued employment at the Institute of Radiology of the private respondent SLMC and that the latter is giving her the last chance to
take and pass the forthcoming board examination scheduled in June 1998; otherwise, private respondent SLMC shall be constrained to take action
which may include her separation from employment. On November 23, 1998, the Director of the Institute of Radiology issued a notice to
petitioner Maribel S. Santos informing the latter that the management of private respondent SLMC has approved her retirement in lieu of
separation pay. SLMC issued a “Notice of Separation from the Company” to petitioner Maribel S. Santos effective December 30, 1998 in view of
the latter’s refusal to accept private respondent SLMC’s offer for early retirement.
Petitioner Maribel Santos files a complaint against private respondent illegal dismissal and non-payment of salaries, allowances and other monetary
benefits. She
further contends that her failure to pass the board licensure exam for exam for X-ray
technicians did not constitute just cause for termination as it violated her
constitutional right to security of tenure. The appellate court finds this contention
untenable, hence this petition for certiorari.
Issue:
Whether or not the petitioner is legally dismissed pursuant to R.A. 7431
exercising police power of the State?
Held:
Yes, the petitioner dismissal is valid due to her inability to secure a certificate
of registration from Board of Radiologic Technology.
While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police
power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who
desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to
engaging in their chosen careers. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions
connected with the health and safety of its citizens. Respondent being engaged in the hospital and health care business, is a proper subject of the
cited law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyes and complainant private interest override public
interest. The law is clear that the Certificate of Registration cannot be substituted by any other requirement to allow a person to practice as a
Radiologic Technologist and/or X-ray Technologist (Technician
Leonardo v. National Labor Relations Commission, G.R. Nos. 125303 &
126937, [June 16, 2000], 389 Phil 118-130)
Second Division; De Leon, Jr., J.
G.R. No. 125303
Petitioner: Danilo Leonardo
Respondents: NLRC and Reynaldo’s Marketing Corporation, et. al.
G.R. No. 126937
Petitioners: Aurelio Fuerte and Danilo Leonardo
Respondents: Raul Aquino, Victoriano of Calycay and Rogelio Ralaya, as Chairman and Members of NLRC, Second Division and Reynaldp’s
Marketing and/or Reynaldo Padua
DOCTRINE:
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.
FACTS :
*This case is the consolidated complaints for illegal dismissal filed by employees hired by Reynaldo Marketing Corporation
 In August 11, 1981, Aurelio Fuerte was employed by Reynaldo Marketing Corporation as muffler specialist and a supervisor in 1988.
On January 3, 1992, he was informed by the personnel manager that he would be transferred to its Sucat plant due to his failure to
meet his sales quota and his supervisor’s allowance was withdrawn. For sometime, he reported for work, however, he protested on his
transfer. Hence, he filed a complaint for illegal dismissal.
 In March 4, 1988, Danilo Leonardo was hired by Reynaldo Marketing Corporation as an auto-aircon mechanic. On April 22, 1992, he
was informed by the personnel manager that his services were no longer needed. He then filed a complaint for illegal dismissal.
CONTENTIONS:
 A. EMPLOYEE
- Termination was illegal.
B. EMPLOYER
- It did not terminate petitioners’ services.
- In Fuerte’s case, he was demoted pursuant to company policy intended to foster competition among its employees.
He failed to meet his quota for a number of consecutive months. He is to be re-appointed supervisor and his
allowance is restored when the employee concerned succeeds in meeting the quota again.
- With regard to Leonardo, the company did not sever his employment but it was Leonardo who abandoned his post
following an investigation wherein he was asked to explain an alleged sideline where a certain driver of a red
Corolla arrived one night at the shop looking for Leonardo saying that it was prearranged that he was to pick up
Leonardo who would perform a private service on a vehicle. When the management confronted him and asked his
explanation, Leonardo gave contradictory excuses claiming that it was for an aunt. When he was pressed to present
his aunt, it was then that he stopped working and filed for illegal dismissal after 10 months from his alleged
termination.
RULING OF THE LOWER COURTS:
 LA decided in favor of complainant-employees. It ordered their reinstatement and awarded money sum (backwages).
 On appeal, NLRC modified LA decision. It affirmed decision in favor of Fuerte (reinstatement but without backwages) but
dismissed the complaint of Leonardo for lack of merit.
ISSUE:
Whether the petitioners were illegally dismissed-NO
RULING + RATIO:
Fuerte’s Case
Court held that Fuerte may not be deemed to have abandoned his job and neither was he constructively dismissed by private respondent.
Further, there was substantial proof that respondent complied with the procedural requisite of giving the employee the opportunity to
refute or contest the employer’s grounds or reasons for said transfer or demotion.
While due process required by law is applied on dismissals, the same is also applicable to demotions as demotions likewise affect the employment
of a worker whose right to continued employment, under the same terms and conditions, is also protected by law. Moreover, considering that
demotion is, like dismissal, also a punitive action, the employee being demoted should as in cases of dismissals, be given a chance to contest the
same.
An employer acts well within its rights in transferring an employee as it sees fit provided that there is no demotion in rank or diminution in pay.
Demotion in rank or diminution in pay are badges in bad faith and constitute constructive dismissal.
Constructive dismissal is defined an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or
unlikely; 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 .
On the otherhand, the practice of a company in laying off workers because they failed to make the work quota has been recognized in this
jurisdiction. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause
for dismissal. Such work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results.
This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the
employer’s interest. This arrangement is an allowable exercise of company rights. An employer is entitled to impose productivity standards for its
workers, and in fact, non-compliance may be visited with a penalty even more severe than demotion.
In the case of abandonment, it can be a ground for illegal dismissal when there is (1) failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention, as manifested by some overt acts, to sever the employer-employee relationship. Filing of a complaint
for illegal dismissal is inconsistent with a charge of abandonment.
Accordingly, given that Fuerte may not be deemed to have abandoned his job, and neither was he constructively dismissed by private
respondent, the Commission did not err in ordering his reinstatement but without backwages. 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.
 an entire case above and beyond the sole legal question raised.
Leonardo’s Case
Based on evidence on record, it was sufficiently established that Leonardo abandoned his work. After being pressed by the respondent
company to present the customer regarding his unauthorized solicitation of sideline work from the latter and whom he claims to be his
aunt, he never reported back to work anymore. This finding is bolstered by the fact that after he left the respondent company, he got
employed with Dennis Motors Corporation as Air-Con Mechanic. Leonardo never alleges any reason why respondents would want him to
ease him out from his job and it took him 10 long months to file his case. All the above facts clearly point that the filing of his case is a mere
afterthought on the part of complainant Leonardo.
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 facts that the employee simply does not want to work anymore.
Leonardo cannot protest that he was not given due process. He was never terminated but only became a subject of an investigation. He refused to
sign the memorandum asking him to explain the incident in question. In a similar case, the Court has held that an employee’s refusal to sign the
minutes of an investigation cannot negate the fact that he was accorded due process.
Disposition: Affirmed decision of the NLRC.
LUNA vs. ALLADO CONSTRUCTION CO., INC.
G.R. No. 175251
30 May 2011
o Petitioner Rodolfo Luna filed a complaint before the Executive Labor Arbiter against respondent company, alleging that he was the
latter’s employee, having been a party of the company’s pool of personnel.
o He alleged that he continuously rendered services as a warehouseman & timekeeper in respondent’s construction projects;
o That he was given a travel order to proceed to the main office in Davao City for reassignment; but upon arrival, was told to sign
several sets of “Contract of Project Employment;”
o When he refused, he was no longer given a reassignment or any other work.
o Respondents alleged that petitioner Luna applied for a LOA, which was granted. Upon its expiry, he was advised to report to the
company’s project but refused to report for work.
o LA: dismissed the complaint for illegal dismissal, but ordered respondent to pay P18,000 as financial assistance. Respondents
appealed questioning the validity of the grant of financial assistance.
o NLRC: reversed & declared respondents guilty of illegal dismissal & to pay petitioner 1-month salary for every year of service,
computed at P170.00 per day, & full backwages up to the finality of the decision. Respondents appealed.
 CA: granted & reinstated LA decision but deleted the award of financial assistance. It also held that NLRC committed grave abuse of
discretion when it ruled on the issue of illegal dismissal. Petitioner filed an MR, which was denied.
Whether or not the NLRC, in the exercise of its inherent powers, review issues not brought during the appeal.
o Section 4(c), Rule VI of the 2002 Rules of Procedure of the NLRC, which was in effect at the time respondents appealed the LA’s
decision, expressly provided that, on appeal, the NLRC shall limit itself only to the specific issues that were elevated for review.
o In the case at bar, the NLRC evidently went against its own rules of procedure when it passed upon the issue of illegal dismissal
although the question raised by respondents in their appeal was concerned solely with the legality of the LA’s award of financial assistance despite
the finding that petitioner was lawfully terminated.
o To reiterate, the clear import of the aforementioned procedural rule is that the NLRC shall, in cases of perfected appeals, limit itself to
reviewing those issues which are raised on appeal. As a consequence thereof, any other issues which were not included in the appeal shall become
final and executory.
o Article 218(c) of the Labor Code grants the NLRC the authority to “correct, amend or waive any error, defect or irregularity whether
in substance or in form” in the exercise of its appellate jurisdiction. However, a careful perusal of the body of jurisprudence wherein we upheld the
validity of the NLRC’s invocation of that prerogative would reveal that the said cases involved factual issues and circumstances materially
dissimilar to the case at bar.
o it is already settled in jurisprudence that the NLRC may not rely on Article 218(c) of the Labor Code as basis for its act of reviewing
o It was incorrect for the NLRC to conclude that doubt exists between the evidence of both parties, thus, necessitating a ruling in favor
of petitioner, because a careful examination of the records of this case would reveal that there was no adequate evidentiary support for petitioner’s
purported cause of action – actual illegal dismissal.

CASE DIGEST: YMBONG V. ABS-CBN
G.R. No. 184885 : March 7, 2012
ERNESTO G. YMBONG, Petitioner, v. ABS-CBN BROADCASTING CORPORATION, VENERANDA SY AND DANTE LUZON,
Respondents.
VILLARAMA, JR., J.:
FACTS:
Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in Cebu as a
television talent. On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or the Policy on Employees Seeking
Public Office which requires any employee who intends to run for any public office to file his/her resignation letter at least thirty (30) days prior to
the official filing of the certificate of candidacy either for national or local election.
Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon, Assistant Station
Manager of DYAB issued a memorandum dated March 25,1998 which required any employee/talent who wants to run for any position in the
coming election will have to file a leave of absence the moment he/she files his/her certificate of candidacy. Luzon, however, admitted that upon
double-checking of the exact text of the policy and subsequent confirmation with the ABS-CBN Head Office, he saw that the policy actually
required suspension for those who intend to campaign for a political party or candidate and resignation for those who will actually run in the
elections.
Ymbong ran as councilor of Lapu-Lapu City but Ymbong lost in the May 1998 elections. Later, Ymbong and Patalinghug both tried to come back
to ABS-CBN Cebu. According to Luzon, he informed them that they cannot work there anymore because of company policy. This was stressed
even in subsequent meetings and they were told that the company was not allowing any exceptions. ABS-CBN, however, agreed out of pure
liberality to give them a chance to wind up their participation in the radio drama, Nagbabagang Langit, since it was rating well and to avoid an
abrupt ending.
Ymbong in contrast contended that after the expiration of his leave of absence, he reported back to work as a regular talent and in fact continued to
receive his salary. On September 14, 1998, he received a memorandum stating that his services are being terminated immediately, much to his
surprise. Thus, he filed an illegal dismissal complaint against ABS-CBN, Luzon and DYAB Station Manager Veneranda Sy. The Labor Arbiter and
the NLRC, upon appeal, rendered a decision finding the dismissal of Ymbong illegal. ABS-CBN filed a petition for certiorari before the CA and
the latter reversed the NLRC decision.
ISSUE: Whether or not Ymbong was illegally dismissed.
HELD: Court of Appeals decision is affirmed.
LABOR LAW
So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose
of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. In the instant
case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity
and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in
any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are
clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.
The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in relation to his
principal task of administering the networks radio station in the Cebu region, the exercise of such power should be in accord with the general rules
and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, the March 25, 1998 Memorandum issued by Luzon which only
requires employees to go on leave if they intend to run for any elective position is in absolute contradiction with Policy No. HR-ER-016 issued by
the ABS-CBN Head Office in Manila which requires the resignation, not only the filing of a leave of absence, of any employee who intends to run
for public office. Having been issued beyond the scope of his authority, the March 25, 1998 Memorandum is therefore void and did not supersede
Policy No. HR-ER-016. Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his recollection of the company policy
when he issued the March 25, 1998 Memorandum and stated therein that upon double-checking of the exact text of the policy statement and
subsequent confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required resignation for those who will actually run
in elections because the company wanted to maintain its independence. Since the officer who himself issued the subject memorandum
acknowledged that it is not in harmony with the Policy issued by the upper management, there is no reason for it to be a source of right for
Ymbong.
As Policy No. HR-ER-016 is the subsisting company policy and not Luzon's March 25, 1998 Memorandum, Ymbong is deemed resigned when he
ran for councilor.
DENIED
PRODUCERS BANK vs. NLRC and PRODUCERS BANK EMPLOYEES ASSOC DIGEST
DECEMBER 20, 2016 ~ VBDIAZ
G.R. No. 100701 March 28, 2001
PRODUCERS BANK OF THE PHILIPPINES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PRODUCERS BANK EMPLOYEES ASSOCIATION, respondents.
FACTS: The present petition originated from a complaint filed by private respondent on 11 February 1988 with the Arbitration Branch, NLRC,
charging petitioner with diminution of benefits, non-compliance with Wage Order No. 6 and non-payment of holiday pay. In addition, private
respondent prayed for damages.
Labor arbiter dismissed the complaint for lack of merit. NLRC, however, granted all of private respondent’s claims, except for damages. Petition
filed a Motion for Partial Reconsideration, which was denied by the NLRC. Hence, recourse to this Court.
Petitioner contends: that the NLRC gravely abused its discretion in ruling as it did for the succeeding reasons stated: (1) it contravened the Supreme
Court decision in Traders Royal Bank v. NLRC, et al., G.R. No. 88168, promulgated on August 30, 1990, (2) its ruling is not justified by law and
Art. 100 of the Labor Code, (3) its ruling is contrary to the CBA, and (4) the so-called “company practice invoked by it has no legal and moral
bases” (4) petitioner, under conservatorship and distressed, is exempted under Wage Order No. 6.
ISSUE: WON respondent is entitled for the payment of the above-mentioned monetary claims, particularly BONUS.[Hindi ko na po sinama ung
ibang issues]
HELD:
As to the bonuses, private respondent declared in its position papers filed with the NLRC that –
Producers Bank of the Philippines, a banking institution, has been providing several benefits to its employees since 1971 when it started its
operation. Among the benefits it had been regularly giving is a mid-year bonus equivalent to an employee’s one-month basic pay and a Christmas
bonus equivalent to an employee’s one whole month salary (basic pay plus allowance);
When P.D. 851, the law granting a 13thmonth pay, took effect, the basic pay previously being given as part of the Christmas bonus was applied as
compliance to it (P.D. 851), the allowances remained as Christmas bonus;
From 1981 up to 1983, the bank continued giving one month basic pay as mid-year bonus, one month basic pay as 13thmonth pay but the
Christmas bonus was no longer based on the allowance but on the basic pay of the employees which is higher;
In the early part of 1984, the bank was placed under conservatorship but it still provided the traditional mid-year bonus;
By virtue of an alleged Monetary Board Resolution No. 1566, bank only gave a one-half (1/2) month basic pay as compliance of the 13thmonth
pay and none for the Christmas bonus.
Respondent’s Contention: that the mid-year and Christmas bonuses, by reason of their having been given for thirteen consecutive years, have
ripened into a vested right and, as such, can no longer be unilaterally withdrawn by petitioner without violating Article 100 of Presidential Decree
No. 4429 which prohibits the diminution or elimination of benefits already being enjoyed by the employees. Although private respondent concedes
that the grant of a bonus is discretionary on the part of the employer, it argues that, by reason of its long and regular concession, it may become part
of the employee’s regular compensation.
Petitioner asserts: that it cannot be compelled to pay the alleged bonus differentials due to its depressed financial condition, as evidenced by the
fact that in 1984 it was placed under conservatorship by the Monetary Board. According to petitioner, it sustained losses in the millions of pesos
from 1984 to 1988, an assertion which was affirmed by the labor arbiter. Moreover, petitioner points out that the collective bargaining agreement of
the parties does not provide for the payment of any mid-year or Christmas bonus. On the contrary, section 4 of the collective bargaining agreement
states that –
Acts of Grace. Any other benefits or privileges which are not expressly provided in this Agreement, even if now accorded or hereafter accorded to
the employees, shall be deemed purely acts of grace dependent upon the sole judgment and discretion of the BANK to grant, modify or withdraw.
A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employer’s business and
made possible the realization of profits. It is an act of generosity granted by an enlightened employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits.12 The granting of a bonus is a management prerogative, something given in addition to
what is ordinarily received by or strictly due the recipient.13 Thus, a bonus is not a demandable and enforceable obligation,14 except when it is
made part of the wage, salary or compensation of the employee.15
However, an employer cannot be forced to distribute bonuses which it can no longer afford to pay. To hold otherwise would be to penalize the
employer for his past generosity. Thus, in Traders Royal Bank v. NLRC,16 we held that –
It is clear x x x that the petitioner may not be obliged to pay bonuses to its employees. The matter of giving them bonuses over and above their
lawful salaries and allowances is entirely dependent on the profits, if any, realized by the Bank from its operations during the past year.
xxx
In light of these submissions of the petitioner, the contention of the Union that the granting of bonuses to the employees had ripened into a
company practice that may not be adjusted to the prevailing financial condition of the Bank has no legal and moral bases. Its fiscal condition
having declined, the Bank may not be forced to distribute bonuses which it can no longer afford to pay and, in effect, be penalized for its past
generosity to its employees. –
Private respondent’s contention, that the decrease in the mid-year and year-end bonuses constituted a diminution of the employees’ salaries, is not
correct, for bonuses are not part of labor standards in the same class as salaries, cost of living allowances, holiday pay, and leave benefits, which
are provided by the Labor Code.
This doctrine was reiterated in the more recent case of Manila Banking Corporation v. NLR1
Petitioner was not only experiencing a decline in its profits, but was reeling from tremendous losses triggered by a bank-run which began in 1983.
In such a depressed financial condition, petitioner cannot be legally compelled to continue paying the same amount of bonuses to its employees.
Thus, the conservator was justified in reducing the mid-year and Christmas bonuses of petitioner’s employees. To hold otherwise would be to
defeat the reason for the conservatorship which is to preserve the assets and restore the viability of the financially precarious bank. Ultimately, it is
to the employees’ advantage that the conservatorship achieve its purposes for the alternative would be petitioner’s closure whereby employees
would lose not only their benefits, but their jobs as well.
LEPANTO CERAMICS INC v LEPANTO CERAMICS EMPLOYEES’ ASSOCIATION
2 March 2010 | Carpio, J.
FACTS
1998, P (engaged in buying and selling ceramic tiles and similar products) gave 3k bonus to employees who are members of R, a legitimate labor
organization.
1999, CBA: Grants Christmas package/bonus for members of R. The Christmas bonus was one of the enumerated “existing benefit, practice of
traditional rights” which “shall remain in full force and effect.”
Section 8. – All other existing benefits, practice of traditional rights consisting of Christmas Gift package/bonus, reimbursement of transportation
expenses in case of breakdown of service vehicle and medical services and safety devices by virtue of company policies by the UNION and
employees shall remain in full force and effect.
Section 1. EFFECTIVITY. This agreement shall become effective on September 1, 1999 and shall remain in full force and effect without change
for a period of four (4) years or up to August 31, 2004 except as to the representation aspect which shall be effective for a period of five (5) years.
It shall bind each and every employee in the bargaining unit including the present and future officers of the Union.
1999, 2000 and 2001, the bonus was not in cash. Instead, P gave each of the members of R Tile Redemption Certificates equivalent to P3,000.00
(OMG so useful <3). The bonus for the year 2002 is the root of the present dispute. P gave a year-end cash benefit of P600 and offered a cash
advance to interested employees equivalent to one (1) month salary payable in one year. The R objected and argued that this was in violation of the
CBA it executed with the petitioner.
Settlement, mediation failed. In voluntary arbitration, R noted that in a speech during the Christmas celebration, one of the company’s top
executives assured the employees of said bonus. However, the Human Resources Development Manager informed them that the traditional bonus
would not be given as the company’s earnings were intended for the payment of its bank loans.
P’s arguments:
1. Extra compensation was based on available resources for a given year and the workers are not entitled to a bonus if the company does not make
profits.
2. P incurred net losses for the years 2001 and 2002 totaling to P1.5 billion; and since 1999, when the CBA was signed, the company’s
accumulated losses amounted to over P2.7 billion.
3. Grant of a one (1) month salary cash advance was not meant to take the place of a bonus but was meant to show the company’s sincere desire to
help its employees despite its precarious financial condition.
4. CBA provision on a “Christmas gift/bonus” refers to alternative benefits.
5. Even if CBA contained an unconditional obligation to grant the bonus, the present difficult economic times had already legally released it
therefrom pursuant to Article 1267 of the Civil Code.
Voluntary arbitrator, CA, and now SC all rule for R.
ISSUE
WON P required to pay R’s Christmas bonus – YES
RULING
A “bonus” is a gratuity or act of liberality. It is given in addition to what is ordinarily received by or strictly due the recipient. It is granted to an
employee for his industry and loyalty which contributed to the success of the employer’s business and made possible the realization of profits. It
helps to spur the employee to greater efforts.
Generally, a bonus is not a demandable and enforceable obligation. For a bonus to be enforceable, it must have been promised by the employer and
expressly agreed upon by the parties. Given that the bonus in this case is integrated in the CBA, it is now a demandable obligation. By its
incorporation in the CBA, the Christmas bonus due is more than just an act of generosity but a contractual obligation. In labor law the CBA is the
law between the parties and they are obliged to comply with its provisions.
CBA reveals that the same provides for the “Christmas gift package/bonus” without qualification. Terse and clear, the said provision did not state
that the bonus depends on the petitioner’s financial standing.
It is noteworthy that in 1998 and 1999 Financial Statements, P took note that “the 1997 financial crisis in the Asian region adversely affected the
Philippine economy.” It is clear P was aware of the imminence and possibility of business losses owing to the 1997 financial crisis. In 1998,
petitioner suffered a net loss of 14M. Yet it gave a 3k bonus.
All given, business losses are a feeble ground to repudiate obligation under CBA. The rule is settled that any benefit and supplement enjoyed by
employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on
the constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full protection.
The Court is fully aware that implementation to the letter of the subject CBA provision may further deplete petitioner’s resources. Petitioner’s
remedy though lies not in the Court’s invalidation of the provision but in the parties’ clarification of the same in subsequent CBA negotiations.
INTERPHIL LABORATORIES EMPLOYEES UNION-FFW v. INTERPHIL LABORATORIES, GR No. 142824, 2001-12-19
Facts:
Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-and-file employees of Interphil Laboratories,
Inc., a company engaged in the business of manufacturing and packaging pharmaceutical products. They had a Collective Bargaining
Agreement (CBA) effective from 01 August 1990 to 31 July 1993.
Ocampo requested for a meeting to discuss the duration and effectivity of the CBA. Salazar acceded and a meeting was... held on 15 April 1993
where the union officers asked whether Salazar would be amenable to make the new CBA effective for two (2) years, starting 01 August 1993.
Salazar, however, declared that it would still be premature to discuss the matter and that the company could not make... a decision at the moment.
The very next day... the... employees stopped working and left their workplace without sealing the containers and securing the raw materials they
were working on. When Salazar inquired about the reason for their refusal to follow their normal work schedule, the employees told him to "ask the
union... officers.
In the meeting, Enrico Gonzales, a union director, told Salazar that the employees would only return to their normal work schedule if... the
company would agree to their demands as to the effectivity and duration of the new CBA. Salazar again told the union officers that the matter
could be better discussed during the formal renegotiations of the CBA... nion was apparently unsatisfied with the answer of... the company, the
overtime boycott continued.
petitioner union submitted with respondent company its CBA proposal, and the latter filed its counter-proposal.
respondent company filed with the National Labor Relations Commission (NLRC) a petition to declare illegal petitioner union's "overtime boycott"
and "work slowdown" which, according to respondent company, amounted to illegal strike... respondent company filed with the National
Conciliation and Mediation Board (NCMB) an urgent request for preventive mediation aimed to help the parties in their CBA negotiations.[...
respondent company filed with Office of the Secretary of Labor and Employment a petition for assumption of jurisdiction.
petitioner union filed with the NCMB a Notice of Strike citing unfair labor practice allegedly committed by respondent company
Labor Arbiter Caday submitted his recommendation to the then Secretary of Labor Leonardo A. Quisumbing.[8] Then Secretary Quisumbing
approved and adopted the report in his Order
HEREFORE, finding the said Report of Labor Arbiter Manuel R. Caday to be supported by substantial evidence, this Office hereby RESOLVES to
APPROVE and ADOPT the same as the decision in this case, and judgment is hereby rendered:
(1) Declaring the overtime boycott' andwork slowdown' as illegal strike;
(2)
Declaring the respondent union officers... who spearheaded and led the overtime boycott and work slowdown, to have lost their employment status;
Petitioner union moved for the reconsideration of the order but its motion was denied. The union went to the Court of Appeals via a petition for
certiorari. In the now questioned decision promulgated on 29 December 1999, the appellate court dismissed the petition.
The union's motion for reconsideration was likewise denied.
Issues:
As to the second issue of whether or not the respondents have engaged in "overtime boycott" and "work slowdown" f
Ruling:
both amounting to illegal strike, the evidence presented is equally crystal clear that the "overtime boycott" and "work... slowdown" committed by
the respondents amounted to illegal strike.
Evidently, from all the foregoing, respondents' unjustified unilateral alteration of the 24-hour work schedule thru their concerted activities of
"overtime boycott" and "work slowdown" from April 16, 1993 up to March 7, 1994, to force the petitioner company to accede to their...
unreasonable demands, can be classified as a strike on an installment basis, as correctly called by petitioner company.
It is thus undisputed that members of the union by their own volition decided not to render overtime services... etitioner union even admitted this in
its Memorandum... filed with the Court of Appeals, as well as in the... petition before this Court, which both stated that "(s)sometime in April 1993,
members of herein petitioner, on their own volition and in keeping with the regular working hours in the Company x x x decided not to render
overtime".[21] Such admission... confirmed the allegation of respondent company that petitioner engaged in "overtime boycott" and "work
slowdown" which, to use the words of Labor Arbiter Caday, was taken as a means to coerce respondent company to yield to its unreasonable
demands.
More importantly, the "overtime boycott" or "work slowdown" by the employees constituted a violation of their CBA, which prohibits the union or
employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption of work.
n Ilaw at Buklod ng Manggagawa vs. NLRC,[23] this Court ruled:... x x x (T)he concerted activity in question would still be illicit because contrary
to the workers' explicit contractual commitment "that there shall be no strikes, walkouts, stoppage or slowdown of work, boycotts, secondary
boycotts, refusal to handle any... merchandise, picketing, sit-down strikes of any kind, sympathetic or general strikes, or any other interference with
any of the operations of the COMPANY during the term of xxx (their collective bargaining) agreement."
What has just been said makes unnecessary resolution of SMC's argument that the workers' concerted refusal to adhere to the work schedule in
force for the last several years, is a slowdown, an inherently illegal activity essentially illegal even in the absence of a... no-strike clause in a
collective bargaining contract, or statute or rule. The Court is in substantial agreement with the petitioner's concept of a slowdown as a "strike on
the installment plan;" as a willful reduction in the rate of work by concerted action of workers for the... purpose of restricting the output of the
employer, in relation to a labor dispute; as an activity by which workers, without a complete stoppage of work, retard production or their
performance of duties and functions to compel management to grant their demands. The Court also... agrees that such a slowdown is generally
condemned as inherently illicit and unjustifiable, because while the employees "continue to work and remain at their positions and accept the
wages paid to them," they at the same time "select what part of their allotted tasks they care... to perform of their own volition or refuse openly or
secretly, to the employer's damage, to do other work;" in other words, they "work on their own terms." x x x.[24]
WHEREFORE, the petition is DENIED DUE COURSE
Principles:
The appellate court also correctly held that the question of the Secretary of Labor and Employment's jurisdiction over labor-related disputes was
already settled in International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor Union (ALU)[10] where the Court declared:
In the present case, the Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over a labor
dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide... the same accordingly.
Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising
therefrom, including cases over which the labor arbiter has exclusive jurisdiction.
CASE DIGEST: MALAYAN EMPLOYEES ASSOCIATION-FFW AND RODOLFO MANGALINO, Petitioners, v. MALAYAN INSURANCE
COMPANY, INC., Respondent. G.R. No. 181357; February 2, 2010.
FACTS: The union is the exclusive bargaining agent of the rank-and-file employees of the company.A provision in the unions collective bargaining
agreement (CBA) with the company allows union officials to avail of union leaves with pay for a total of ninety-man days per year for the purpose
of attending grievance meetings, Labor-Management Committee meetings, annual National Labor Management Conferences, labor education
programs and seminars, and other union activities.
The company issued a rule in November 2002 requiring not only the prior notice that the CBA expressly requires, but prior approval by the
department head before the union and its members can avail of union leaves.The rule was placed into effect in November 2002 without any
objection from the union until a union officer, Mangalino, filedunion leave applications in January and February, 2004. His department head
disapproved the applications because the department was undermanned at that time.
Despite the disapproval, Mangalino proceeded to take the union leave. He said he believed in good faith that he had complied with the existing
company practice and with the procedure set forth in the CBA. The company responded by suspending him for one week and, thereafter, for a
month, for his second offense in February 2004.
The union raised the suspensions as a grievance issue and went through all the grievance processes, including the referral of the matter to the
company president, Yvonne Yuchengco. After all internal remedies failed, the union went to the National Conciliation and Mediation Board for
preventive mediation. When this recourse also failed, the parties submitted the dispute to voluntary arbitration. It was declared that the leave was
invalid.
Notably, the decision was not unanimous. Voluntary Arbitrator dela Fuente submitted the following dissent:
The act of any employee that can only be interpreted to be an open and utter display of arrogance and unconcern for the welfare of his Company
thru the use of what he pretends to believe to be an unbridled political right cannot be allowed to pass without sanction lest the employer desires
anarchy and chaos to reign in its midst.
Hence, having failed to comply with the requirements for availment of union leaves and for going on such leave despite the express disapproval of
his superior, Mr. Mangalinos two suspensions are valid and he is not entitled to any backwages for the duration of his suspensions.
The company appealed the decision to the CA on May 12, 2005 through a petition for review under Rule 43 of the Rules of Court (Rules).In a
decision promulgated on June 26, 2007, the CA granted the company's petition and upheld the validity of Mangalino's suspension on the basis of
the company's prerogative to prescribe reasonable rules to regulate the use of union leaves.
The union moved for the reconsideration of the CA decision and received the CA's denial (through its resolution of November 29, 2007) on
December 8, 2007.
The union seeks relief from this Court against the CA decision through its Rule 65 petition for certiorari filed on February 6, 2008. It alleged that
the CA committed grave abuse of discretion when, despite the clear terms of the CBA grant of union leaves, it disregarded the evidence on record
and recognized that the company's use of its management prerogative as justification was proper.
In its comment, the company raised both procedural and substantive objections.
ISSUE: Should the union have filed an appeal under Rule 45 of the Rules and not a petition for certiorari?
HELD: The company position that the union should have filed an appeal under Rule 45 of the Rules and not a petition for certiorari is
correct.Section 1, Rule 45 of the Rules states that:
SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a judgment or final order or resolution of the
Court of Appeals,the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law,may file with the Supreme Court a
verified petition for review oncertiorari.The petition shall raise only questions of law which must be distinctly set forth.
Complementing this Rule is Section 1, Rule 65 which provides that aspecial civil action forcertiorariunder Rule 65 lies only when "there is no
appeal, nor plain, speedy and adequate remedy in the ordinary course of law."From this Rule proceeds the established jurisprudential ruling that a
petition forcertioraricannot be allowed when a party fails to appeal a judgment despite the availability of that remedy, ascertiorariis not a substitute
for a lost appeal.
In our Resolution ofMarch 5, 2008, we opted to liberally apply the rules and to treat the petition as a petition for review on certiorariunder Rule 45
in order to have a total view of the merits of the petition in light of the importance of a ruling on the presented issues.The union which did not
present any justification at the outset for the petitions deficiencies, particularly for the late filing had this to say:
In a resolution dated 05 March 2008, this Honorable Court resolved to treat the petition in the above-captioned case as a petition for review on
certiorari under Rule 45 of the Rules of Civil Procedure.All along the petitioner thought that the filing of the petition for certiorari under Rule 65 is
appropriate considering that the ground raised is grave abuse of discretion by the Honorable Court of Appeals for reversing the decision of the
majority decision of the Panel of Voluntary Arbitration in arbitrary and whimsical manner.
For having treated this petition under Rule 45 of the Rules of Civil Procedure, petitioner humbly admits that delay was incurred in the filing
thereof, such delay was caused by several factors beyond control such as the transfer of handling legal assistant to another office and the
undersigned had to reassign the case for the preparation of the petition.Furthermore, the undersigned counsel, other than being the Chief of FFW
LEGAL CENTER is also the Vice President of the Federation of Free Workers (FFW), who has to attend similar and urgent pressing problems of
local affiliates arising from the effects of contracting out and closure of companies.
Considering the issue to be resolved requires only two CBA provisions (1) the recognition of management prerogative (Section 1, Article III of the
CBA), and union leave (Section 3, Article XV of the CBA) to guide the Honorable Court reached a decision, petitioner honestly thought that the
other pleadings referred to by respondent are not relevant.
With this kind and tenor of justification, we appear to have acted with extreme liberality in recognizing the petition as a Rule 45 petition and in
giving it due course.We cannot extend the same liberality, however, with respect to the unions violation of the established rules on timelines in the
filing of petitions, which violations the company has kept alive by its continuing objection. While we can be liberal in considering the mode of
review of lower court decisions (and even in the contents of the petition which the company insists are deficient), we cannot do the same with
respect to the time requirements that govern the finality of these decisions. A final judgment can no longer be disturbed under the combined
application of the principles of immutability of final judgments and res judicata, subject only to very exceptional circumstances not at all present in
this case.
Under Rule 45, a petition for review oncertiorari should be filed within 15 days from notice of judgment, extendible in meritorious cases for a total
of another 30 days.Given that a Rule 45 petition is appropriate in the present case, the period of 60 days after notice of judgment is way past the
deadline allowed, so that the CA decision had lapsed to finality by the time the petition with us was filed.This reason alone even without
considering the companys other technical objection based on the unions failure to attach relevant documents in support of the petition amply
supports the denial of the petition.
The lack of merit of the petition likewise precludes us from resolving it in the unions favor. In short, we see no reversible error in the CAs ruling.
While it is true that the union and its members have been granted union leave privileges under the CBA, the grant cannot be considered separately
from the other provisions of the CBA, particularly the provision on management prerogatives where the CBA reserved for the company the full and
complete authority in managing and running its business. We see nothing in the wordings of the union leave provision that removes from the
company the right to prescribe reasonable rules and regulations to govern the manner of availing of union leaves, particularly the prerogative to
require prior approval.Precisely, prior notice is expressly required under the CBA so that the company can appropriately respond to the request for
leave.In this sense, the rule requiring prior approval only made express what is implied in the terms of the CBA.
In any event, any doubt in resolving any interpretative conflict is settled by subsequent developments in the course of the parties implementation of
the CBA, specifically, by the establishment of the company regulation in November 2002 requiring prior approval before the union leave can be
used. The union accepted this regulation without objection since its promulgation (or more than a year before the present dispute arose), and the
rule on its face is not unreasonable, oppressive, nor violative of CBA terms.Ample evidence exists in the records indicating the unions
acquiescence to the rule. Notably,no letter from the union complaining about the unilateral change in policy or any request for a meeting to discuss
this policy appears on record.The union and its members have willingly applied for approval as the rule requires. Even Mangalino himself, in the
past, had filed applications for union leave with his department manager, and willingly complied with the disapproval without protest of any kind.
Thus, when Mangalino asserted his right to take a leave without prior approval, the requirement for prior approval was already in place and
established, and could no longer be removed except with the companys consent or by negotiation and express agreement in future CBAs.
The prior approval policy fully supported the validity of the suspensions the company imposed on Mangalino. We point out additionally that as an
employee, Mangalino had the clear obligation to comply with the management disapproval of his requested leave while at the same time registering
his objection to the company regulation and action. That he still went on leave, in open disregard of his superiors orders, rendered Mangalino open
to the charge of insubordination, separately from hisabsence without official leave. This charge, of course, can no longer prosper even if laid today,
given the lapse of time that has since transpired.
In light of the petitions procedural infirmities, particularly its late filing that rendered the CA decision final, and the petitions lack of substantive
merit, denial of the petition necessarily follows. DENIED.
Negros Slashers, Inc., et al. v. Alvin L. Teng [G.R. No. 187122]
05
APR
February 22, 2012
Facts:
Respondent Alvin Teng is a professional basketball player who started his career as such in the Philippine Basketball Association and then later on
played in the Metropolitan Basketball Association (MBA).
Some time in one of his games, particularly Game Number 4 of the MBA Championship Round for the year 2000 season, Teng had a below-par
playing performance. Because of this, the coaching staff decided to pull him out of the game. Teng then sat on the bench, untied his shoelaces and
donned his practice jersey. On the following game, Game Number 5 of the Championship Round, Teng called-in sick and did not play.
On March 16, 2001, because of what happened, the management of Negros Slashers came up with a decision, and through its General Manager,
petitioner Rodolfo Alvarez, wrote Teng informing him of his termination from the team.
Issue:
Whether or not Teng’s dismissal from the Negros Slashers Team was unjustified and too harsh considering his misconduct.
Ruling:
YES.
As ruled in Sagales v. Rustan’s Commercial Corporation, while the employer has the inherent right to discipline, including that of dismissing its
employees, this prerogative is subject to the regulation by the State in the exercise of its police power.
In this regard, it is a hornbook doctrine that infractions committed by an employee should merit only the corresponding penalty demanded by the
circumstance. The penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection
with the disciplinary authority of the employer.
In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of dismissal. There was no warning or admonition for
respondent’s violation of team rules, only outright termination of his services for an act which could have been punished appropriately with a
severe reprimand or suspension.
NEGROS SLASHERS, INC., RODOLFO C. ALVAREZ AND VICENTE TAN, PETITIONERS, VS. ALVIN L. TENG, RESPONDENT.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari assailing the Decision[1] dated September 17, 2008 and Resolution[2] dated February 11 2009 of the
Court of Appeals (CA) in CA-G.R. SP No. 00817. The appellate court had reversed and set aside the September 10, 2004 Decision[3] and March
21, 2005 Resolution[4] of the National Labor Relations Commission (NLRC) and reinstated with modification the Decision[5] of the Labor Arbiter
finding respondent to have been illegally dismissed.cralaw
The facts are undisputed.
Respondent Alvin Teng is a professional basketball player who started his career as such in the Philippine Basketball Association and then later on
played in the Metropolitan Basketball Association (MBA).
On February 4, 1999, Teng signed a 3-year contract[6] (which included a side contract and agreement for additional benefits and bonuses) with the
Laguna Lakers. Before the expiration of his contract with the Laguna Lakers on December 31, 2001, the Lakers traded and/or transferred Teng to
petitioner Negros Slashers, with the latter assuming the obligations of Laguna Lakers under Teng’s unexpired contract, including the monthly
salary of P250,000, P50,000 of which remained to be the obligation of the Laguna Lakers. On March 28, 2000, the management of the Laguna
Lakers formally informed Teng of his transfer to the Negros Slashers.[7] Teng executed with the Negros Slashers the Player’s Contract of
Employment.[8]
On Game Number 4 of the MBA Championship Round for the year 2000 season, Teng had a below-par playing performance. Because of this, the
coaching staff decided to pull him out of the game. Teng then sat on the bench, untied his shoelaces and donned his practice jersey. On the
following game, Game Number 5 of the Championship Round, Teng called-in sick and did not play.
On November 21, 2000, Vicente Tan, Finance Head of Negros Slashers, wrote[9] Teng requiring him to explain in writing why no disciplinary
action should be taken against him for his precipitated absence during the crucial Game 5 of the National Championship Round. He was further
informed that a formal investigation would be conducted on November 28, 2000. The hearing, however, did not push through because Teng was
absent on the said scheduled investigation. Hearing was rescheduled for December 11, 2000. On said date, the investigation proceeded, attended
by Teng’s representatives, Atty. Arsenio Yulo and Atty. Jose Aspiras.[10] A subsequent meeting was also conducted attended by the management,
coaching staff and players of the Negros Slashers team, wherein the team members and coaching staff unanimously expressed their sentiments
against Teng and their opposition against the possibility of Teng joining back the team.[11]
On March 16, 2001, the management of Negros Slashers came up with a decision, and through its General Manager, petitioner Rodolfo Alvarez,
wrote[12] Teng informing him of his termination from the team.
On July 28, 2001, Teng filed a complaint before the Office of the Commissioner of the MBA pursuant to the provision of the Uniform Players
Contract which the parties had executed. Subsequently, on November 6, 2001, Teng also filed an illegal dismissal case with the Regional
Arbitration Branch No. VI of the NLRC.[13]
On July 16, 2002, the Labor Arbiter issued a decision finding Teng’s dismissal illegal and ordering petitioner Negros Slashers, Inc. to pay Teng
P2,530,000 representing his unpaid salaries, separation pay and attorney’s fees. The Labor Arbiter ruled that the penalty of dismissal was not
justified since the grounds relied upon by petitioners did not constitute serious misconduct or willful disobedience or insubordination that would
call for the extreme penalty of dismissal from service. The dispositive portion of the Labor Arbiter’s decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of complainant illegal and respondents Negros Slashers,
Inc. are hereby ordered to PAY complainant the total sum of TWO MILLION FIVE HUNDRED THIRTY THOUSAND (P2,530,000.00) PESOS
representing complainant’s unpaid salaries, separation pay and attorney’s fee, the award to be deposited with this Office within ten (10) days from
receipt of this Decision.
All other claims are hereby DISMISSED for lack of merit.
SO ORDERED.[14]
The case was then appealed to the NLRC. On September 10, 2004, the NLRC issued a Decision setting aside the July 16, 2002 Decision of the
Labor Arbiter and entering a new one dismissing the complaint for being premature since the arbitration proceedings before the Commissioner of
the MBA were still pending when Teng filed his complaint for illegal dismissal. The dispositive portion of the NLRC Decision reads:
WHEREFORE, premises considered, the decision of the Executive Labor Arbiter a quo is hereby REVERSED and SET ASIDE. A new one is
entered, dismissing the instant case for being premature.
SO ORDERED.[15]
Teng filed a motion for reconsideration, but it was denied for being filed beyond the ten-day reglementary period provided for in Section 15,[16]
Rule VII of the NLRC Rules of Procedure.
Aggrieved, Teng filed a petition for certiorari with the CA assailing the NLRC Decision dated September 10, 2004 and the Resolution dated March
21, 2005 denying his motion for reconsideration.
On September 17, 2008 the CA rendered the assailed Decision setting aside the September 10, 2004 Decision and March 21, 2005 Resolution of
the NLRC and reinstating with modification the Labor Arbiter’s Decision.
The CA reinstated the findings of the Labor Arbiter that Teng was illegally dismissed because the grounds relied upon by petitioners were not
enough to merit the supreme penalty of dismissal. The CA held that there was no serious misconduct or willful disobedience or insubordination on
Teng’s part. On the issue of jurisdiction, the CA ruled that the Labor Arbiter had jurisdiction over the case notwithstanding the pendency of
arbitration proceedings in the Office of the Commissioner of the MBA.
Petitioners sought reconsideration of the above ruling, but their motion was denied by the CA in a Resolution[17] dated February 11, 2009.
Petitioners now come to this Court assailing the Decision dated September 17, 2008 and Resolution dated February 11, 2009 of the CA.
Firstly, petitioners argue that respondent Teng and his counsel committed a blatant violation of the rule against forum shopping. Petitioners aver
that on July 28, 2001, Teng filed a complaint before the MBA pursuant to the voluntary arbitration provision of the Uniform Players Contract he
executed with Negros Slashers, Inc. During the pendency of said complaint, Teng filed another complaint for illegal dismissal with the Labor
Arbiter. It is petitioners’ position that Teng lied by certifying under oath that there is no similar case pending between him and Negros Slashers,
Inc., when in fact, months before he had filed a complaint with the MBA alleging the same factual antecedents and raising the same issues.
Secondly, petitioners argue that the CA erred in ruling that Teng’s offenses were just minor lapses and irresponsible action not warranting the harsh
penalty of dismissal. Petitioners allege that the CA paid scant attention to two very important pieces of evidence which would clearly show the
gravity and seriousness of the offenses committed by Teng. Petitioners claim that these two documents, i.e., the minutes of the meeting[18] of
players, management, and coordinating staff, and a petition[19] by the players to the management not to allow Teng to come back to the team,
would show that Teng should not have been treated as an ordinary working man who merely absented himself by feigning sickness when called
upon to work. Petitioners argue that the nature of the work and team atmosphere should have been considered and given credence. By neglecting
these two documents, the CA failed to appreciate the gravity of the misconduct committed by Teng and the effects it had on the basketball
organization.
Petitioners also argue that respondent’s petition for certiorari with the CA should have been dismissed outright because it was filed beyond the
reglementary period. Petitioners point out that Teng received the NLRC Decision on October 15, 2004 and therefore had ten days[20] or until
October 25, 2004 within which to file a motion for reconsideration. But he filed his motion for reconsideration only on October 26, 2004 and said
motion was denied[21] on March 21, 2005 for being filed late. Thereafter he filed his petition for certiorari[22] with the CA on June 20, 2005.
Petitioners contend that the petition for certiorari was filed beyond the period allowed by the Rules of Court because the 60-day period to file the
petition for certiorari should have started to run from the receipt of the NLRC decision on October 15, 2004. And it should have expired on
December 14, 2004 because it was as if no motion for reconsideration was filed in the NLRC. Further, petitioners argue that the CA could not take
cognizance of the case because it is a settled rule that certiorari as a special civil action will not lie unless a motion for reconsideration is first filed
before the NLRC to allow it an opportunity to correct its errors. In this case, since the motion for reconsideration was filed late, it should have
been treated as if no motion for reconsideration was filed.
Teng, on the other hand, maintains that there is no violation of the rule against forum shopping. He submits that he indeed filed his complaint
before the MBA as early as July 28, 2001. Unfortunately, for more than three months, the supposed voluntary arbitration failed to yield any result
until the MBA itself was dissolved. It was only on November 2001, after exhausting the arbitration process, did he file his complaint before the
Labor Arbiter. In other words, it was only after the MBA failed to come up with a resolution on the matter did he opt to seek legal redress
elsewhere.
On the merits, Teng relies on the reasoning of the Labor Arbiter in finding that his alleged lapses and misconduct were too minor to justify the
extreme penalty of dismissal from service. In large part, he quotes the Labor Arbiter’s decision, and emphasizes the Labor Arbiter’s statements
that (1) loosening of the shoe laces and the donning of the practice jersey are not indicative of serious misconduct that would justify dismissal from
employment; (2) it cannot be concluded that he merely feigned sickness when he informed the Coach of his inability to play during Game No. 5;
and (3) there is no showing of any bad faith or ill motive on his part that would qualify his actions as serious, severe and grave as to warrant
termination from service.
Teng also argues that the CA aptly clarified and explained the legal reason why the petition for certiorari was given due course despite some
procedural lapses regarding the motion for reconsideration with the NLRC. Teng stresses that jurisprudence allows the relaxation of procedural
rules even of the most mandatory character in the interest of substantial justice. In this particular case, justice and equity calls for the relaxation of
the reglementary period for filing a motion for reconsideration as well as the rule prohibiting the filing of a petition for certiorari without first filing
a motion for reconsideration.
Simply put, the basic issues for our resolution are as follows: (1) whether the CA erred in giving due course to respondent Teng’s petition for
certiorari despite its late filing; (2) whether Teng violated the rule on forum shopping when he filed a complaint for illegal dismissal with the
Regional Arbitration Branch of the NLRC while a similar complaint was pending in the Office of the Commissioner of the MBA; and (3) whether
the CA erred in ruling that Teng’s dismissal from the Negros Slashers Team was unjustified and too harsh considering his misconduct.
The petition is bereft of merit.
On the first issue raised by petitioners, we rule that the CA did not commit a reversible error in giving due course to Teng’s petition for certiorari
although said petition was filed late. Ordinarily, rules of procedure are strictly enforced by courts in order to impart stability in the legal system.
However, in not a few instances, we relaxed the rigid application of the rules of procedure to afford the parties the opportunity to fully ventilate
their cases on the merits. This is in line with the time honored principle that cases should be decided only after giving all the parties the chance to
argue their causes and defenses. In that way, the ends of justice would be better served. For indeed, the general objective of procedure is to
facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote
the administration of justice.[23] In Ong Lim Sing, Jr. v. FEB Leasing and Finance Corporation,[24] we ruled:
Courts have the prerogative to relax procedural rules of even the most mandatory character, mindful of the duty to reconcile both the need to
speedily put an end to litigation and the parties’ right to due process. In numerous cases, this Court has allowed liberal construction of the rules
when to do so would serve the demands of substantial justice and equity. x x x
Indeed the prevailing trend is to accord party litigants the amplest opportunity for the proper and just determination of their causes, free from the
constraints of needless technicalities.
Here, besides the fact that a denial of the recourse to the CA would serve more to perpetuate an injustice and violation of Teng’s rights under our
labor laws, we find that as correctly held by the CA, no intent to delay the administration of justice could be attributed to Teng. The CA therefore
did not commit reversible error in excusing Teng’s one-day delay in filing his motion for reconsideration and in giving due course to his petition
for certiorari.
As regards the second issue, we likewise find no merit in petitioners’ claim that respondent’s act of filing a complaint with the Labor Arbiter while
the same case was pending with the Office of the Commissioner of the MBA constituted forum shopping.
For forum shopping to exist, it is necessary that (a) there be identity of parties or at least such parties that represent the same interests in both
actions; (b) there be identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two
preceding particulars is such that any judgment rendered in one action will, regardless of which party is successful, amount to res judicata in the
other action.[25]
Petitioners are correct as to the first two requisites of forum shopping. First, there is identity of parties involved: Negros Slashers Inc. and
respondent Teng. Second, there is identity of rights asserted i.e., the right of management to terminate employment and the right of an employee
against illegal termination. However, the third requisite of forum shopping is missing in this case. Any judgment or ruling of the Office of the
Commissioner of the MBA will not amount to res judicata. As defined in Agustin v. Delos Santos,[26]
Res Judicata is defined as “a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment.” According to the
doctrine of res judicata, an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of competent
jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same
or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit. To state simply, a final judgment or
decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all points and
matters determined in the former suit. (Emphasis supplied.)
To clarify, res judicata is defined in jurisprudence as to have four basic elements: (1) the judgment sought to bar the new action must be final; (2)
the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a
judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action.[27]
Here, although contractually authorized to settle disputes, the Office of the Commissioner of the MBA is not a court of competent jurisdiction as
contemplated by law with respect to the application of the doctrine of res judicata. At best, the Office of the Commissioner of the MBA is a private
mediator or go-between as agreed upon by team management and a player in the MBA Player’s Contract of Employment.[28] Any judgment that
the Office of the Commissioner of the MBA may render will not result in a bar for seeking redress in other legal venues. Hence, respondent’s
action of filing the same complaint in the Regional Arbitration Branch of the NLRC does not constitute forum shopping.
On the third issue, we find that the penalty of dismissal handed out against Teng was indeed too harsh.
We understand petitioners in asserting that a basketball organization is a “team-based” enterprise and that a harmonious working relationship
among team players is essential to the success of the organization. We also take into account the petition of the other team members voicing out
their desire to continue with the team without Teng. We note likewise the sentiments of the players and coaching staff during the meeting of
February 4, 2001 stating how they felt when Teng “abandoned” them during a crucial Game Number 5 in the MBA championship round.
Petitioners rely heavily on the alleged effects of Teng’s actions on the rest of the team. However, such reaction from team members is expected
after losing a game, especially a championship game. It is also not unlikely that the team members looked for someone to blame after they lost the
championship games and that Teng happened to be the closest target of the team’s frustration and disappointment. But all these sentiments and
emotions from Negros Slashers players and staff must not blur the eyes of the Court from objectively assessing Teng’s infraction in order to
determine whether the same constitutes just ground for dismissal. The incident in question should be clear: Teng had a below-par performance
during Game Number 4 for which he was pulled out from the game, and then he untied his shoelaces and donned his practice jersey. In Game
Number 5, he did not play.
As an employee of the Negros Slashers, Teng was expected to report for work regularly. Missing a team game is indeed a punishable offense.
Untying of shoelaces when the game is not yet finished is also irresponsible and unprofessional. However, we agree with the Labor Arbiter that
such isolated foolishness of an employee does not justify the extreme penalty of dismissal from service. Petitioners could have opted to impose a
fine or suspension on Teng for his unacceptable conduct. Other forms of disciplinary action could also have been taken after the incident to impart
on the team that such misconduct will not be tolerated.
In Sagales v. Rustan’s Commercial Corporation,[29] this Court ruled:
Truly, while the employer has the inherent right to discipline, including that of dismissing its employees, this prerogative is subject to the
regulation by the State in the exercise of its police power.
In this regard, it is a hornbook doctrine that infractions committed by an employee should merit only the corresponding penalty demanded by the
circumstance. The penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection
with the disciplinary authority of the employer. (Emphasis in the original.)
In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of dismissal. There was no warning or admonition for
respondent’s violation of team rules, only outright termination of his services for an act which could have been punished appropriately with a
severe reprimand or suspension.cralaw
WHEREFORE, the petition for review on certiorari is DENIED for lack of merit and the Decision of the Court of Appeals dated September 17,
2008 and Resolution dated February 11, 2009, in CA-G.R. SP No. 00817 are hereby AFFIRMED.
With costs against the petitioners.
SO ORDERED.
VILLARUEL VS. YEO HAN GUAN
DECEMBER 19, 2016 ~ VBDIAZ
TOPIC: DISEASE (ART 284)
VILLARUEL VS. YEO HAN GUAN
G.R. No. 169191
June 01, 2011
FACTS: Villaruel filed with the NLRC NCR-Quezon City a Complaint for payment of separation pay against Yuhans Enterprises.
Resignation is defined as the voluntary act of an employee who finds himself in a situation
where he believes that personal reasons cannot be sacrificed in favor of the exigency of
the service and he has no other choice but to disassociate himself from his employment.15
Petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise engaged in the
business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan.Petitioner further alleged that in
October 1998, he got sick and was confined in a hospital; In December 1998, he reported for work but was no longer permitted to go back because
of his illness; he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he
was offered a sum of P15,000.00 as his separation pay; however, the said amount corresponds only to the period between 1993 and 1999; petitioner
prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent refused.
On the other hand, respondent averred that petitioner was hired as machine operator from March 1993 until he stopped working sometime in
February 1999 on the ground that he was suffering from illness; after his recovery, petitioner was directed to report for work, but he never showed
up. Respondent was later caught by surprise when petitioner filed the instant case for recovery of separation pay. Respondent claimed that he never
terminated the services of petitioner and that during their mandatory conference, he even told the latter that he could go back to work anytime but
petitioner clearly manifested that he was no longer interested in returning to work and instead asked for separation pay.
ISSUE: is Villaruel entitled to separation pay?
HELD: YES, but only financial assistance as a measure of social justice
Article 284 of the Labor Code reads:
An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to
at least 1 month salary or to ½ month salary for every year of service whichever is greater, a fraction of at least six months being considered as 1
whole year.
A plain reading of the abovequoted provision clearly presupposes that it is the employer who terminates the services of the employee found to be
suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-
employees. It does not contemplate a situation where it is the employee who severs his or her employment ties.
The Court agrees with the CA in its observation of the following circumstances as proof that respondent did not terminate Villaruel’s employment:
first, the only cause of action in petitioner’s original complaint is that he was “offered a very low separation pay”; second, there was no allegation
of illegal dismissal, both in petitioner’s original and amended complaints and position paper; and, third, there was no prayer for reinstatement. This
is tantamount to resignation.
Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment
However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an
employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or
CBA, or it is sanctioned by established employer practice or policy.
Since petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, he is not entitled to separation pay
under the provisions of the Labor Code.
**
It may not be amiss to point out at this juncture that aside from Article 284 of the Labor Code, the award of separation pay is also authorized in the
situations dealt with in Article 283 of the same Code and under Section 4 (b), Rule I, Book VI of the IRR of the said Code where there is illegal
dismissal and reinstatement is no longer feasible. By way of exception, this Court has allowed grants of separation pay to stand as “a measure of
social justice” where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.
This Court, in a number of cases, has granted financial assistance to separated employees as a measure of social and compassionate justice and as
an equitable concession. Taking into consideration the factual circumstances obtaining in the present case, the Court finds that petitioner is entitled
to this kind of assistance. The Court notes that there is no evidence on record to show that petitioner has any derogatory record during his long
years of service with respondent and that his employment was severed not by reason of any infraction on his part but because of his failing physical
condition. Based on the foregoing, the Court finds that the award of financial assistance is deemed equitable under the circumstances.
CASE DIGEST: COLLEGE OF THE IMMACULATE CONCEPTION, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and
ATTY. MARIUS F. CARLOS, PH.D., Respondents. G.R. No. 167563; March 22, 2010.
FACTS: Petitioner, through its President, appointed respondent as its acting dean effective from June 1996- May 2000, with an understanding that
upon expiration of his term, he shall be appointed as a full time professor without diminution of his teaching salary as Dean.
After the expiration of his term, respondent requested for the payment of overload pay, arguing that the regular full time load of a faculty member
is only six and he had 8. Petitioner however denied the claim and directed to explain why no disciplinary action should be taken against him for
engaging in the practice of law and teaching law in another law school without prior permission from the petitioner.
Respondent admitted that he was teaching at Araullo University without written permission because it was unnecessary. As to his law practice, he
explained that the only case he was handling was a petition for Declaration of Nullity of Marriage, which was referred to him by petitioner's Vice-
President for Academic Affairs. Respondent said that his demotion from Dean of the Department to a Faculty member was without legal basis and
that the non-renewal of his appointment as Dean was arbitrary, capricious, unlawful, tainted with abuse of discretion, and injurious to his integrity
and reputation.
Petitioner refused to accept the explanation and gave respondent two options: to become a full-time professor or a part time professor. Since
respondent did not choose any, petitioner informed respondent that he will not be assigned any teaching load for the succeeding semester pursuant
to Section 16.8, CHED Memorandum No. 19, series of 1998, which requires professors to give a formal notice when teaching in another school.
Aggrieved, respondent filed a case for illegal dismissal. The LA ruled that respondent was illegally dismissed and ordered his reinstatement. On
appeal to the NLRC, the decision was set aside but the NLRC ordered to reinstate complainant as full-time professor. Petitioner filed a motion for
reconsideration arguing that respondent should be directed to refund the petitioner all the amounts he received by way of payroll reinstatement but
the same was denied. Petitioner filed a petition for certiorari to the CA but the same was also denied. Upon denial of its motion for reconsideration,
the instant petition is filed to the SC.
ISSUE: Would the reversal of the LA's decision require respondent to reimburse petitioner all the salaries and benefits he received pursuant to the
immediate execution of the LA's erroneous decision?
HELD: Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay
the wages of the dismissed employee during the period of appeal until reversal by the higher court.
It was held in Air Philippines Corporation v. Zamora, citing Roquero v. Philippine Airlines, Inc., that:
Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the
wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been
reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary
he received for he is entitled to such, more so if he actually rendered services during the period.
It is not disputed at this point that the LA erred in ordering respondent's reinstatement as Dean. The NLRC ruled that respondent should have been
merely reinstated as a full-time law professor, because the term of his appointment as Dean had long expired. However, such mistake on the part of
the LA cannot, in any way, alter the fact that during the pendency of the appeal of his decision, his order for respondent's reinstatement as Dean
was immediately executory. Article 223 of the Labor Code provides that: In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall
either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided therein.
Moreover, it bears stressing that the manner of immediate reinstatement, pending appeal, or the promptness thereof is immaterial, as illustrated in
the following two scenarios:
Situation No. 1. (As in the cases of Air Philippines Corporation and International Container Terminal Services, Inc.) The LA ruled in favor of the
dismissed employee and ordered his reinstatement. However, the employer did not immediately comply with the LA's directive. On appeal, the
NLRC reversed the LA and found that there was no illegal dismissal. In this scenario, We ruled that the employee is entitled to payment of his
salaries and allowances pending appeal.
Situation No. 2. (As in the present case) The LA ruled in favor of the dismissed employee and ordered the latter's reinstatement. This time, the
employer complied by reinstating the employee in the payroll. On appeal, the LA's ruling was reversed, finding that there was no case of illegal
dismissal but merely a temporary sanction, akin to a suspension. Here, We also must rule that the employee cannot be required to reimburse the
salaries he received because if he was not reinstated in the payroll in the first place, the ruling in situation no. 1 will apply, i.e., the employee is
entitled to payment of his salaries and allowances pending appeal.
Thus, either way we look at it, at the end of the day, the employee gets his salaries and allowances pending appeal. The only difference lies as to
the time when the employee gets it. DENIED.
CASE DIGEST: NATIONWIDE SECURITY AND ALLIED SERVICES V. VALDERAMA
G.R. No. 186614 : February 23, 2011
NATIONWIDE SECURITY AND ALLIED SERVICES, INC., Petitioner, v. RONALD P. VALDERAMA, Respondent.
NACHURA, J.:
FACTS:
Respondent was hired by petitioner as security guard. Almost 4 years after, he was relieved from service and was not given any assignment
thereafter. He filed a complaint for constructive dismissal and nonpayment of 13th month pay. Petitioner presented a different version. It alleged
that respondent was not constructively or illegally dismissed, but had voluntarily resigned.
The LA declared respondent to have been constructively dismissed. On appeal, the NLRC modified the LA decision. It declared that respondent
was neither constructively terminated nor did he voluntarily resign. As such, respondent remained an employee of petitioner. The NLRC thus
ordered respondent to immediately report to petitioner and assume his duty. The CA set aside the resolutions of the NLRC and reinstated that of the
LA. The CA sustained respondent’s claim of constructive dismissal and pointed out that respondent remained on floating status for more than six
(6) months, and petitioner offered no credible explanation why it failed to provide a new assignment to respondent
ISSUE: Whether or not the CA erred in sustaining respondent’s claim of constructive dismissal.
HELD:
The petition lacks merit.
LABOR LAW: Floating status
In cases involving security guards, a relief and transfer order in itself does not sever employment relationship between a security guard and his
agency. An employee has the right to security of tenure, but this does not give him a vested right to his position as would deprive the company of
its prerogative to change his assignment or transfer him where his service, as security guard, will be most beneficial to the client.
Jurisprudence is trite with pronouncements that the temporary inactivity or “floating status” of security guards should continue only for six months.
Otherwise, the security agency concerned could be liable for constructive dismissal. In this case, respondent remained on “floating status” for more
than six months. He was relieved on January 30, 2006, and was not given a new assignment at the time he filed the complaint on August 2, 2006.
Petition is DENIED.
CASE DIGEST: BARROGA V. DATA CENTER COLLEGE & BACTAD
G.R. No. 174158 : June 27, 2011
WILLIAM ENDELISEO BARROGA, Petitioner, v. DATA CENTER COLLEGE OF THE PHILIPPINES and WILFRED BACTAD,
Respondents.
DEL CASTILLO, J.:
FACTS:
On November 11, 1991, William Barroga was employed as an Instructor in Data Center College Laoag City branch in Ilocos Norte. On June 6,
1992, he was transferred University of Northern Philippines (UNP) in Vigan, Ilocos Sur where the school had a tie-up program. Petitioner was
informed that in addition to his monthly salary, a P1,200.00 allowance for board and lodging during his stint as instructor in UNP-Vigan would be
given. In 1994, he was recalled to Laoag campus. On October 3, 2003, petitioner he was again transferred to Data Center College Bangued, Abra
branch as Head for Education/Instructor due to an urgent need for an experienced officer and computer instructor thereat. Petitioner declined to
accept his transfer to Abra citing the deteriorating health condition of his father and the absence of additional remuneration to defray expenses for
board and lodging.
On November 10, 2003, petitioner filed a Complaint for constructive dismissal against respondents. Petitioner alleged that his proposed transfer to
Abra constitutes a demotion in rank and diminution in pay and would cause personal inconvenience and hardship. He argued that although he was
being transferred to Abra branch supposedly with the same position he was then holding in Laoag branch as Head for Education, he later learned
through a Memorandumfrom the administrator of Abra branch that he will be re-assigned merely as an instructor, thereby relegating him from an
administrative officer to a rank-and-file employee. Moreover, the elimination of his allowance for board and lodging will result to an indirect
reduction of his salary which is prohibited by labor laws.
For their part, respondents claimed that they were merely exercising their management prerogative to transfer employees for the purpose of
advancing the school interests. They argued that petitioner refusal to be transferred to Abra constitutes insubordination. They claimed that
petitioner appointment as instructor carries a proviso of possible re-assignments to any branch or tie-up schools as the school necessity demands.
Respondents argued that petitioner designation as Head for Education in Laoag branch was merely temporary and that he would still occupy his
original plantilla item as instructor at his proposed assignment in Abra branch. Respondents denied liability to petitioner monetary claims.
The Labor Arbiter rendered a Decision dismissing the Complaint for lack of merit. The NLRC affirmed the LA decision but it found petitioner to
be entitled to overload honorarium and ordered Data Center College of the Philippines, to pay the complainant the sum of P73,730.39 representing
overload honorarium.
Both parties eventually filed petitions for certiorari before the CA. Respondentspetition for certiorari was docketed as CA-G.R. SP No. 94205,
which is not subject of the instant review. On the other hand, petitioner filed on April 7, 2006, a Petition for Certiorari with the CA docketed as
CA-G.R. SP No. 93991 assailing the NLRC finding that no constructive dismissal existed. Realizing his failure to attach the requisite affidavit of
service of the petition upon respondents, petitioner filed on April 27, 2006, an Ex-Parte Manifestation and Motion to admit the attached affidavit of
service and registry receipt in compliance with the rules.
On May 15, 2006, the CA dismissed the petition in CA-G.R. SP No. 93991 for failure to state material dates as to when the petitioner received the
assailed decision dated August 25, 2005 and when he filed a Motion for Reconsideration thereof and for failing to attach the initiatory pleadings
and the respondentsMotion for Reconsideration of the Decision dated August 25, 2005. Petitioner motion for reconsideration was likewise
dismissed.
ISSUE: Whether or not the Court of Appeals committed grave abuse of discretion in not giving due course to the petition despite petitioner
substantial compliance with the requisite formalities?
HELD: The decision of the Court of Appeal is set aside.
REMEDIAL LAW
The three material dates which should be stated in the petition for certiorari under Rule 65 are the dates when the notice of the judgment was
received, when a motion for reconsideration was filed and when the notice of the denial of the motion for reconsideration was received. These dates
should be reflected in the petition to enable the reviewing court to determine if the petition was filed on time. Indeed, petitioner petition before the
CA stated only the date of his receipt of the NLRC Resolution denying his motion for partial reconsideration. It failed to state when petitioner
received the assailed NLRC Decision and when he filed his partial motion for reconsideration. However, this omission is not at all fatal because
these material dates are reflected in petitioner Partial Motion for Reconsideration attached as Annex "N" of the petition. In Acaylar, Jr. v. Harayo,
the Court held that failure to state these two dates in the petition may be excused if the same are evident from the records of the case. It was further
ruled by this Court that the more important material date which must be duly alleged in the petition is the date of receipt of the resolution of denial
of the motion for reconsideration. In the case at bar, petitioner has duly complied with this rule.
REMEDIAL LAW
Petitioner failure to attach respondent motion for reconsideration to the assailed NLRC decision is not sufficient ground for the CA to outrightly
dismiss his petition. The issue that was raised in respondentsmotion for reconsideration is the propriety of the NLRC grant of overload honorarium
in favor of petitioner. This particular issue was not at all raised in petitioner petition for certiorari with the CA, therefore, there is no need for
petitioner to append a copy of this motion to his petition. Besides, as already mentioned, the denial of respondentsmotion for reconsideration has
been assailed by respondents before the CA docketed as CA-G.R. SP No. 94205. At any rate, the Rules do not specify the documents which should
be appended to the petition except that they should be relevant to the judgment, final order or resolution being assailed. Petitioner is thus justified
in attaching the documents which he believed are sufficient to make out a prima facie case.
LABOR LAW
Despite the mistake of the CA in instantly dismissing the case, herein instant petition still merits dismissal based on substantial grounds. After a
careful review of the records and the arguments of the parties, there is no sufficient basis to conclude that petitioner re-assignment amounted to
constructive dismissal.
Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable or unlikely, or because of a demotion in
rank or a diminution of pay. It exists when there is a clear act of discrimination, insensibility or disdain by an employer which becomes unbearable
for the employee to continue his employment.Petitioner alleges that the real purpose of his transfer is to demote him. Petitioner further argues that
his re-assignment will entail an indirect reduction of his salary or diminution of pay considering that no additional allowance will be given to cover
for board and lodging expenses. He claims that such additional allowance was given in the past and therefore cannot be discontinued and
withdrawn without violating the prohibition against non-diminution of benefits.
These allegations are bereft of merit.
Petitioner was originally appointed as instructor in 1991 and was given additional administrative functions as Head for Education during his stint in
Laoag branch. He did not deny having been designated as Head for Education in a temporary capacity for which he cannot invoke any tenurial
security. Hence, being temporary in character, such designation is terminable at the pleasure of respondents who made such appointment.Moreover,
respondentsright to transfer petitioner rests not only on contractual stipulation but also on jurisprudential authorities. The Labor Arbiter and the
NLRC both relied on the condition laid down in petitioner employment contract that respondents have the prerogative to assign petitioner in any of
its branches or tie-up schools as the necessity demands. In any event, it is management prerogative for employers to transfer employees on just and
valid grounds such as genuine business necessity.
Petitioner contention that his re-assignment was tainted with bad faith cannot be given credit. As a matter of fact, respondents suggested that
petitioner take an indefinite leave of absence to attend to his ailing father. Also, during the time when respondents directed all its administrative
officers to submit courtesy resignations, petitioner letter of resignation was not accepted. This bolsters the fact that respondents never intended to
get rid of petitioner. In fine, petitioner assertions of bad faith on the part of respondents are purely unsubstantiated conjectures.
The Court agrees with the Labor Arbiter that there was no violation of the prohibition on diminution of benefits. Indeed, any benefit and perks
being enjoyed by employees cannot be reduced and discontinued, otherwise, the constitutional mandate to afford full protection to labor shall be
offended.But the rule against diminution of benefits is applicable only if the grant or benefit is founded on an express policy or has ripened into a
practice over a long period which is consistent and deliberate.
Petitioner failed to present any other evidence that respondents committed to provide the additional allowance or that they were consistently
granting such benefit as to have ripened into a practice which cannot be peremptorily withdrawn. Moreover, there is no conclusive proof that
petitioner basic salary will be reduced as it was not shown that such allowance is part of petitioner basic salary. Hence, there will be no violation of
the rule against diminution of pay enunciated under Article 100 of the Labor Code.
Labor Law Digest: NIPPON HOUSING PHIL. INC. V. MAIAH ANGELA LEYNES [G.R. No. 177816, August 3, 2011]
NIPPON HOUSING PHIL. INC. V. MAIAH ANGELA LEYNES
[G.R. No. 177816, August 3, 2011]
Perez, J.
Facts:
Maiah Leynes was hired as Property Manager for respondent NHPI’s building maintenance business. She handled the project for their only client,
Bay Gardens Condominium. She was also responsible for the hiring and deployment of manpower, salary and position determination as well as the
assignment of the schedules and responsibilities of employees. In one incident, Leynes had a misunderstanding with Engr. Cantuba, the Building
Engineer assigned at the Project, regarding the extension of the latters working hours. NHPIs Vice President went on to issue a memorandum,
attributing the incident to simple personal differences and directing Leynes to allow Engr. Cantuba to report back for work.
Disappointed with the foregoing management decision, Leynes submitted to NHPIs President, a letter asking for an emergency leave of absence
for the supposed purpose of coordinating with her lawyer regarding her resignation letter. While
NHPI offered the Property Manager position to Engr. Carlos Jose as a consequence Leynes signification of her intention to resign, it also appears
that Leynes sent another letter to NHPI on the same day, expressing her intention to return to work on and to call off her planned resignation upon
the advice of her lawyer. Leynes was constrained to send out a written protest regarding the verbal information she supposedly received from
Reyes that a substitute has already been hired for her position. Leynes was further served by petitioner with a letter and memorandum relieving her
from her position and directing her to report to NHPIs main office while she was on floating status.
Aggrieved, Leynes lost no time in filing against NHPI and its above-named officers the complaint for illegal dismissal, unpaid salaries, benefits,
damages and attorney’s fees docketed before the NLRC. She claimed that her being relieved from her position without just cause and replacement
by one Carlos Jose amounted to an illegal dismissal from employment.
NHPI and its officers asserted that the management exercise of the prerogative to put an employee on floating status for a period not exceeding six
months was justified in view of her threatened resignation from her position and BGCCs request for her replacement.
During the pendency of the case, however, Reyes eventually served the DOLE Leynes with the 8 August 2002 notice terminating her services
effective 22 August 2002, on the ground of redundancy or lack of a posting commensurate to her position at the Project. Leynes was offered by
NHPI the sum of P28,188.16 representing her unpaid wages, proportionate 13th month pay, tax refund and service incentive leave pay (SILP).
Issue:
1) Whether or not placing an employee on floating status is tantamount to constructive dismissal.
2) Was the complaint for illegal dismissal proper?
3) Was the dismissal valid on the ground of redundancy?
4) Was there a violation on the 30 day notice requirement?
5) Was Leynes entitled to separation pay, and other monetary awards?
Held:
1) NO. Acting on Leynes letter protesting against the hiring of her replacement and reiterating her lack of intention to resign from her position,
the record, moreover, shows that NHPI simply placed her on floating status until such time that another project could be secured for her.
The rule is settled, however, that "off-detailing" is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time
and that it is only when such a "floating status" lasts for more than six months that the employee may be considered to have been
constructively dismissed.
In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an
employee are for valid and legitimate grounds such as genuine business necessity.
Article 286 of the Labor Code has been applied to other industries when, as a consequence of the bona fide suspension of the operation of a
business or undertaking, an employer is constrained to put employees on floating status for a period not exceeding six months.
2) NO. A complaint for illegal dismissal filed prior to the lapse of said six-month and/or the actual dismissal of the employee is generally
considered as prematurely filed.
3) YES. With no other client aside from BGCC for the building management side of its business, we find that NHPI was acting well within its
prerogatives when it eventually terminated Leynes services on the ground of redundancy. One of the recognized authorized causes for the
termination of employment, redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the
demands of the business enterprise.
4) YES. Where dismissal is for an authorized cause like redundancy, the employer is, instead, required to serve a written notice of
termination on the worker concerned and the DOLE, at least one month from the intended date thereof. Here, NHPI specifically made Leynes
termination from service effective 22 August 2002, but only informed said employee of the same on 8 August 2002 and filed with the
DOLE the required Establishment Termination Report only on 16 August 2002. For its failure to comply strictly with the 30-day minimum
requirement for said notice and effectively violating Leynes right to due process, NHPI should be held liable to pay nominal damages in the sum of
P50,000.00. The penalty should understandably be stiffer because the dismissal process was initiated by the employer's exercise of its management
prerogative.
5) YES, AND NO. Having been validly terminated on the ground of redundancy, Leynes is entitled to separation pay equivalent to one month
salary for every year of service but not to the backwages adjudicated in her favor by the Labor Arbiter. For lack of showing of bad faith, malice or
arbitrariness on the part of NHPI, there is, however, no justifiable ground for an award of moral and exemplary damages. For lack of factual or
legal bases, we find no cause to award attorneys fees in favor of Leynes. In the absence of the same showing insofar as NHPIs corporate officers
are concerned, neither is there cause to hold them jointly and severally liable for the monetary awards.
Petition granted.
FRANCIS BELLO, REPRESENTED HEREIN BY HIS DAUGHTER AND ATTORNEY-IN-FACT, GERALDINE BELLO-ONA,
PETITIONER, VS. BONIFACIO SECURITY SERVICES, INC. AND SAMUEL TOMAS, RESPONDENTS.
DECISION
BRION, J.:
We resolve the petition for review on certiorari,[1]filed by petitioner Francis Bello, to challenge the decision[2] and the resolution[3] of the Court
of Appeals (CA) in CA-G.R. SP. No. 105402.[4]
The Factual Background
Respondent Bonifacio Security Services, Inc. (BSSI) is a domestic private corporation engaged in the business of providing security services. In
July 2001, the BSSI hired Bello as a roving traffic marshal to manage traffic and to conduct security and safety-related operations in the Bonifacio
Global City (BGC). In August 2001, Bello was posted at the Negros Navigation Company in Pier 2, North Harbor, to supervise sectoral operations.
In November 2001, he was assigned at BGC as assistant detachment commander. After a week, he was transferred to Pacific Plaza Towers as
assistant detachment commander and later as detachment commander. In June 2002, he was assigned at Pier 2, North Harbor as assistant
detachment commander, but later reassigned to BGC. In August 2002, the BSSI hired a new operations manager, resulting in the reorganization of
posts. In October 2002, Bello was assigned as roving traffic marshal at the BGC. On October 25, 2002, he filed an indefinite leave of absence when
his new assignment took effect.
On November 5, 2002, Bello filed a complaint against the BSSI and its General Manager, respondent Samuel Tomas, with the National Labor
Relations Commission (NLRC),[5] claiming that he had been constructively dismissed when he was demoted from a detachment commander to a
mere traffic marshal. He alleged that he received a series of promotions from 2001 to 2002, from traffic marshal to supervisor, to assistant
detachment commander, and to detachment commander.[6]
The BSSI denied Bello's claim of constructive dismissal, arguing that no promotion took place; Bello's designation as assistant detachment
commander or detachment commander was not an employment position but a duty-related assignment; Bello abandoned his job when he went on
an indefinite leave of absence and did not report for work.[7]
The Labor Arbiter's Ruling
In his December 29, 2005 decision,[8] Labor Arbiter Cresencio G. Ramos, Jr. found that Bello was illegally dismissed, noting that the BSSI failed
to adduce evidence that Bello abandoned his employment. Thus, he ordered Bello's reinstatement and awarded him backwages amounting to
P391,474.25.
After the NLRC dismissed the BSSI's belated appeal and subsequent motion for reconsideration,[9] the latter filed a petition for certiorari with the
CA. The CA granted the petition,[10] thus reinstating BSSI's appeal with the NLRC.
In its March 26, 2008 resolution, the NLRC affirmed the labor arbiter's decision, finding that Bello had been constructively dismissed when he was
demoted to the rank-and-file position of traffic marshal after occupying the supervisory position of assistant detachment commander and
detachment commander.[11] The denial of BSSI's subsequent motion for reconsideration led it back to the CA on a petition for certiorari under
Rule 65 of the Rules of Court.[12]
The CA Ruling
The CA nullified the NLRC resolutions, finding the records bereft of evidence substantiating the labor arbiter's and the NLRC's conclusions that
Bello had been constructively dismissed.[13] It noted that Bello offered no evidence to prove that there was a series of promotions that would
justify his claim of subsequent demotion. The CA denied the BSSI's motion for reconsideration,[14] paving the way for the present petition.
The Petition
Bello insists that he was constructively dismissed when he was demoted to a mere traffic marshal after having been promoted to the positions of
supervisor, assistant detachment commander, and detachment commander.
The Case for the BSSI
The BSSI prays for the petition's outright dismissal due to a defective verification, arguing that the special power of attorney (SPA) of Bello's
attorney-in-fact, Geraldine Bello-Ona, was limited to representing him in the NLRC case only and not to the present petition; and that Bello-Ona
has no personal knowledge of the allegations in the petition. On the merits of the case, the BSSI contends that the CA correctly ruled that there was
no evidence to substantiate the NLRC's finding of constructive dismissal.
The Issues
The core issues boil down to: whether the petition should be dismissed outright for defective verification; and whether the CA erred in annulling
the NLRC's resolutions.
The Court's Ruling
The petition lacks merit.
Verification of a pleading is a formal, not jurisdictional, requirement intended to secure the assurance that the matters alleged in a pleading are true
and correct.[15] Thus, the court may simply order the correction of unverified pleadings or act on them and waive strict compliance with the
rules.[16] It is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or
petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct.[17]
In this case, we find that the petition's verification substantially complied with the requirements of the rules. The SPA authorized Bello-Ona to
represent Bello in the case entitled "Francis Bello v. Bonifacio Security Services, Inc. and/or Samuel Tomas, (CA) Case No. 047829-06; NLRC-
N[CR] Case No. 00-11-09529-2002"[18] - the case from which the present petition originated. As the daughter of Bello, Bello-Ona is deemed to
have sufficient knowledge to swear to the truth of the allegations in the petition, which are matters of record in the tribunals and the appellate court
below.
On the merits of the case, we find no reason to disturb the CA conclusion that there was no constructive dismissal. Case law defines constructive
dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as 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.[19]
We note that, other than his bare and self-serving allegations, Bello has not offered any evidence that he was promoted in a span of four months
since his employment as traffic marshal in July 2001 to a detachment commander in November 2001. During his six-month probationary period of
employment,[20] it is highly improbable that Bello would be promoted after just a month of employment, from a traffic marshal in July 2001 to
supervisor in August 2001, and three months later to assistant detachment commander and to detachment commander in November 2001. At most,
the BSSI merely changed his assignment or transferred him to the post where his service would be most beneficial to its clients. The management's
prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is
generally not constitutive of constructive dismissal.[21] We see this to be the case in the present dispute so that the consequent reassignment of
Bello to a traffic marshal post was well within the scope of the BSSI's management prerogative.
WHEREFORE, we hereby DENY the petition and AFFIRM the assailed CA decision and resolution in CA-G.R. SP. No. 105402. Costs against the
petitioner.
SO ORDERED.
Carpio, (Chairperson), Leonardo-De Castro,* Perez, and Sereno, JJ., concur.
UNITED LAB V. DOMINGO (G.R. NO. 186209; SEPTEMBER 21, 2011)
CASE DIGEST: UNITED LABORATORIES, INC., PETITIONER, VS. JAIME DOMINGO SUBSTITUTED BY HIS SPOUSE CARMENCITA
PUNZALAN DOMINGO, ANONUEVO REMIGIO, RODOLFO MARCELO, RAUL NORICO AND EUGENIO OZARAGA, RESPONDENTS.
(G.R. No. 186209; September 21, 2011).
FACTS: Sometime in 2001, under a Physical Distribution Master Plan (PDMP), Unilab consolidated its finished goods inventories and logistics
activities (warehousing, order processing and shipping) into one distribution center located in Metro Manila. As a result, Unilab closed down its
sixteen (16) provincial depots. The job functions of the employees working thereat were declared redundant and their positions were abolished.
Unilab gave the redundant employees a separation package of two and a half (2 1/2) months' pay for every year of service.IaHDA
In the succeeding year, on 7 January 2002, respondents wrote Unilab requesting for their separation or retirement from service under a separation
package similar or equivalent to that of the redundant employees in the provincial depots. Respondents referred to this separation package as
theagong Sibolrogram./span>
On 9 April 2002, respondents' counsel, on their behalf, wrote Unilab reiterating respondents' previous request to be separated from service under
Unilab's purportedagong SibolProgram. Particularly, respondents were keen on retiring and receiving 2 1/2 months' pay for every year of service,
and all the other benefits which Unilab had extended to the redundant employees in the provincial depots. The message and sentiment were that
"they should likewise be retired under the same redundancy plan or retirement scheme [because] their positions are similarly situated [to] the
'retired employees' of [Unilab's] distribution centers under the principle that 'things that are alike should be treated alike' since they also hold the
position of 'distribution personnel.'"
ISSUE: Is constructive dismissal applicable to the respondents?
HELD: Constructive dismissal is a derivative of dismissal without cause; an involuntary resignation, nay, a dismissal in disguise.It occurs when
there isessation of workecause 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
withother option but to quit. In turn, dismissal without cause is prohibited because of the Constitutional security of tenure of workers.
Thus, it is stated in Article XIII, Section 3 of the Constitution that: [Workers] shall be entitled to security of tenure, humane conditions of work,
and a living wage.
From the start, respondents insisted that Unilab has unjustifiably refused to grant them the same separation package granted to the redundant
employees in the provincial depots. Respondents demanded that this higher separation package be applied for their retirement as they are "similarly
situated" with the redundant employees. Respondents wished for the cessation of their employment, specifying, however, their availment of
retirement benefits equivalent to the separation package of the redundant employees. Effectively, respondents were exercising their right to
terminate their employment, invoking a hodgepodge of provisions from the Unilab Retirement Plan, Unilab's purported Bagong Sibol Program, and
the Labor Code.
The Labor Code describes as basic policy the worker's security of tenure. Thus:
ART. 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between worker and employers.he State shall assure the rights of workerso self-
organization, collective bargaining,ecurity of tenure, and humane conditions of work.
ART. 279. Security of Tenure. In 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. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual reinstatement.
Simply put, security of tenure from which springs the concept of constructive dismissal is not an absolute right. It cannot be pleaded to avoid the
transfer or assignment of employees according to the requirements of the employer's business. Such transfer or assignment becomes objectionable
only when it is not for "reasonable returns on investments," and for "expansion and growth" which are constitutionally recognized employer's
rights, but is sought merely as a convenient cover for oppression. GRANTED.
Jonathan Morales vs Harbour Centre Point Terminal
Facts
On 16 May 2000, Morales was hired by respondent) as an Accountant and Acting Finance Officer regularized and promoted. He was reassigned to
Operations Cost Accounting. Thereafter, he filed a protest. For the whole of the ensuing month Morales was absent from work and/or tardy. He
received 3 consecutive warnings. Morales filed a complaint dated 25 April 2003 against HCPTI, Filart and Singson, for constructive dismissal. He
alleged that subsequent to its transfer to its new offices, HCPTI had suspended all the privileges enjoyed by its Managers, Division Chiefs and
Section Heads.
Labor Arbiter: ruled that Morales’ reassignment was a valid exercise of HCPTI’s management prerogative which cannot be construed as
constructive dismissal absent showing that the same was done in bad faith and resulted in the diminution of his salary and benefits. On appeal:
reversed. CA: same with labor arbiter
ISSUE:
WHETHER OR NOT THE CHANGE IN THE DESIGNATION/POSITION OF PETITIONER CONSTITUTED CONSTRUCTIVE
DISMISSAL..
Held:
Yes.Constructive dismissal exists where there is cessation of work because "continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank or a diminution in pay"and other benefits. Aptly called a dismissal in disguise or an act
amounting to dismissal but made to appear as if it were not,constructive dismissal may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to
forego his continued employment. In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving
that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable,
inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to
unlawful constructive dismissal. HCPTI miserably failed to discharge the foregoing onus. Morales’ demotion is evident from the fact that his
reassignment entailed a transfer from a managerial position to one which was not even included in the corporation’s plantilla.
Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered with,is
not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice.Thus, an
employer may transfer or assign employees from one office or area of operation to another, provided there is no demotion in rank or diminution of
salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or
demotion without sufficient cause. Indeed, having the right should not be confused with the manner in which that right is exercised.
CASE DIGEST: ROBINSONS GALLERIA & MANUEL V. RANCHEZ
G.R. No. 177937, January 19, 2011
ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS MANUEL, petitioners, vs. IRENE R. RANCHEZ,
respondents.
NACHURA, J.:
FACTS:
Respondent Ranchez was a probationary employee for 5 months. She was hired as a cashier by Robinsons sometime within that period. Two weeks
after she was hired, she reported the loss of cash which she had placed in the company locker. She offered to pay for the lost amount but the
Operations Manager of Robinsons had her strip-searched then reported her to the police even though they found nothing on her person. An
information for Qualified Theft was filed with the Quezon City Regional Trial Court. She was detained for 2 weeks for failure to immediately post
bail. Weeks later, respondent Ranchez filed a complaint for illegal dismissal and damages. A year later, Robinsons sent to respondent by mail a
notice of termination and/or notice of expiration of probationary employment.
The Labor Arbiter dismissed the complaint for illegal dismissal, alleging that at the time of filing respondent Ranchez had not yet been terminated.
She was merely investigated. However, the NLRC reversed this ruling, stating that Ranchez was illegally dismissed and that Robinson's should
reinstate her. It held that Ranchez was deprived of due process when she was strip-searched and sent to jail for two weeks because such amounted
to constructive dismissal, making it impossible for the respondent to continue under the employment. Even though she was merely a probationary
employee, the lapse of the probationary contract did not amount to a valid dismissal because there was already an unwarranted constructive
dismissal beforehand.
The NLRC denied Robinson's motion for reconsideration. The CA affirmed the decision of the NLRC.
ISSUE: Whether respondent was illegally terminated from employment by petitioners.
HELD: The petition is unmeritorious.
LABOR LAW: Probationary employees; termination of employment
There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer
determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.
A probationary employee, like a regular employee, enjoys security of tenure.However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code,i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at
the time of the engagement.Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the 2. Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner against the SDA.
following:
Held/Ratio:
(1) a just or
(2) an authorized cause; and 1. No. The matter at hand relates to the church and its religious ministers but what is involved here is the relationship of the church as an employer
(3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. and the minister as an employee, which is purely secular because it has no relationship with the practice of faith, worship or doctrines. The grounds
invoked for petitioner’s dismissal are all based on Art. 282 of Labor Code.
Article 277(b) of the Labor Code mandates that the employer shall furnish the worker, whose employment is sought to be terminated, a written
notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the 2. Yes. SDA was exercising its management prerogative (not religious prerogative) to fire an employee which it believes is unfit for the job. It
assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of would have been a different case if Austria was expelled or excommunicated from the SDA.
Labor and Employment.

In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process.The haphazard
manner in the investigation of the missing cash, which was left to the determination of the police authorities and the Prosecutor's Office, left
respondent with no choice but to cry foul.Administrative investigation was not conducted by petitioner Supermarket.On the same day that the PLDT vs. NLRC
missing money was reported by respondent to her immediate superior, the company already pre-judged her guilt without proper investigation, and OCTOBER 23, 2012 ~ VBDIAZ
instantly reported her to the police as the suspected thief, which resulted in her languishing in jail for two weeks. PLDT vs. NLRC
The due process requirements under the Labor Code are mandatory and may not be replaced with police investigation or court proceedings. An G.R. No. 80609 August 23, 1988
illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no
longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively. Facts:
In this case, since respondent was a probationary employee at the time she was constructively dismissed by petitioners, she is entitled to separation Abucay, a traffic operator of the PLDT, was accused by two complainants of having demanded and received from them the total amount of
pay and backwages. Reinstatement of respondent is no longer viable considering the circumstances. P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone installation. Investigated and heard, she was
found guilty as charged and accordingly separated from the service. She went to the Ministry of Labor and Employment claiming she had been
DENIED illegally removed. After consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed
for lack of merit. Nevertheless, the dispositive portion of labor arbiter’s decision declared:

Austria v. NLRC G.R. No. 124382 August 16, 1999 WHEREFORE, the instant complaint is dismissed for lack of merit.
Austria v. NLRC
G.R. No. 124382 August 16, 1999 Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of the fact that the deal happened outhide the premises of
respondent company and that their act of giving P3,800.00 without any receipt is tantamount to corruption of public officers, complainant must be
KTA: Relationship of the church as an employer and the minister as an employee is purely secular in nature because it has no relation with the given one month pay for every year of service as financial assistance.
practice of faith, worship or doctrines of the church, such affairs are governed by labor laws. The Labor Code applies to all establishments, whether
religious or not. Both the petitioner and the private respondent appealed to the National Labor Relations Board, which upheld the said decision in toto and
dismissed the appeals. The private respondent took no further action, thereby impliedly accepting the validity of her dismissal. The petitioner,
however, is now before us to question the affirmance of the above- quoted award as having been made with grave abuse of discretion.
Facts:
The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled to reinstatement and backwages as
The Seventh Day Adventists(SDA) is a religious corporation under Philippine law. The petitioner was a pastor of the SDA for 28 years from 1963 required by the labor laws. However, an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any
until 1991, when his services were terminated. relief at all because his dismissal is in accordance with law. In the case of the private respondent, she has been awarded financial assistance
equivalent to ten months pay corresponding to her 10 year service in the company despite her removal for cause. She is, therefore, in effect
On various occasions from August to October 1991, Austria received several communications form Ibesate, the treasurer of the Negros Mission, rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is made on the ground of equity
asking him to admit accountability and responsibility for the church tithes and offerings collected by his wife, Thelma Austria, in his district and to and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and encourages instead of deterring
remit the same to the Negros Mission. corruption.

The petitioner answered saying that he should not be made accountable since it was Pastor Buhat and Ibesate who authorized his wife to collect the For its part, the public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial assistance is not
tithes and offerings since he was very ill to be able to do the collecting. intended as a reward for her offense but merely to help her for the loss of her employment after working faithfully with the company for ten years.
In support of this position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa and Soco v.
A fact-finding committee was created to investigate. The petitioner received a letter of dismissal citing: Mercantile Corporation of Davao, where the employees were dismissed for cause but were nevertheless allowed separation pay on grounds of
1) Misappropriation of denominational funds; social and compassionate justice.
2) Willful breach of trust;
3) Serious misconduct; Issue: WON Separation pay is proper.
4) Gross and habitual neglect of duties; and
5) Commission of an offense against the person of 
employer's duly authorized representative as grounds for the termination of his services. Held:

Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, and sued the SDA for reinstatement and backwages plus damages. Decision We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly
was rendered in favor of petitioner. dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for
example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may
SDA appealed to the NLRC. Decision was rendered in favor of respondent. not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social
justice.
Issue:
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense.
1. Whether or not the termination of the services of the petitioner is an ecclesiastical affair, and, as such, involves the separation of church and And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of
state. course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that
he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out. This kind of
misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the
protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when
the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can
equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have
proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.
Applying the above considerations, we hold that the grant of separation pay in the case at bar is unjustified. The private respondent has been
dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has
worked with the PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a regrettable lack of loyalty
that she should have strengthened instead of betraying during all of her 10 years of service with the company. If regarded as a justification for
moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the
efforts of labor to cleanse its ranks of all undesirables.
Petition granted
G.R. No. 164376 July 31, 2006
NATIONAL LABOR RELATIONS COMMISSION, ST. JUDE CATHOLIC SCHOOL, REV. FR. NOEL BEJO, MS. PRISCILLA LOPEZ, MS.
NATIVIDAD TAN, MS. VILMA LAO, MS. JENNIFER GIL, MS. REMEDIOS CABANLIT and MR. CAMILO GELIDO, petitioners,
vs.
MA. BERNADETTE S. SALGARINO, respondent.
DECISION
CHICO-NAZARIO, J.:
Before us is a Petition for Review of the Decision1 and Resolution2 of the Court of Appeals, dated 21 May 2003 and 1 July 2004, respectively,
reversing and setting aside the Decision3 dated 28 September 2001, and Resolution4 dated 29 November 2001 of National Labor Relations
Commission (NLRC), and reinstating the Decision5 of Labor Arbiter Edgardo M. Madriaga, dated 11 January 2001, finding petitioners guilty of
illegal dismissal.
The facts are:
In April 1988, respondent Maria Bernadette A. Salgarino was employed by petitioner St. Jude Catholic School as Mathematics teacher. She was
tasked to teach Algebra, Trigonometry, Statistics and Analytical Geometry for third and fourth year high school students.6
On 15 February 1999, or two weeks before the fourth periodical test of that school year, respondent went on maternity leave. She was expected to
be back in petitioner school on 19 March 1999. During her official leave, she conducted make-up tests in her house in order to improve the grades
of some of her students. However, this was done by the respondent without the prior permission of petitioners. At this same period, her co-teachers,
Ms. Maria Luisa Capistrano (Capistrano), Mrs. Angelita Rivera and Mrs. Michel Bongyad substituted for her in her classes. On 2 March 1999, the
periodical test for Mathematics IV was conducted and the same was administered by Capistrano, since respondent was still on leave.7
One of herein petitioners, Head Teacher Ms. Priscila Lopez (Lopez), instructed the substitute teachers to check the test papers and compute the
grades of the students in Sections 4-A, 4-B and 4-C.8
On 9 March 1999, the white sheets or the grading sheets for the 4th year students were accomplished by the substitute teachers. It was shown that
some 4th year students obtained a failing grade in Math.9 Subsequently, respondent, while still on leave, requested Capistrano to deliver to her
house the white sheets which contained the grades in Math of respondent's students. Capistrano delivered the white sheets to respondent's home
through a student named Eunice Weeguano.10 Upon receiving them, respondent encircled the failing grades under the column of Daily Work
(DW) and placed a passing grade beside each encircled grade. Respondent asserted that as the handling teacher, she had the prerogative to pass her
students. She revealed that she required her students to do some projects and conducted make-up tests for them before she went on maternity leave
and to improve the final grades of the concerned students. She avers that out of valid and humanitarian reasons, she indicated a passing grade of
75% beside the grades of those with failing grades. Her decision was based on:
(1) The concerned students could have performed better in their periodical test if a substitute teacher was assigned during the two weeks that she
was on maternity leave before the examination;
(2) [Respondent] had required her students before she went on leave to make extra projects and activities and those who had failing grades made
well enough to pull up their grades;
(3) The concerned students have good 4th quarter test results before she went on leave; and
(4) Had the student[s] with the lowest grade (70%) been failed x x x, the school would have violated Section 68 (b) of the Manual of Regulation for
Private Schools.11
Upon return of the white sheets, the substitute teachers noticed therein the additions made by respondent. The substitute teachers immediately
reported the matter to Lopez who, in turn, referred the matter to petitioner Rev. Fr. Noel Bejo (Fr. Bejo), SVD, Acting Director/Principal of
petitioner school.12
On 24 March 1999, Fr. Bejo instructed respondent to report to his office. He gave her a letter which directed her to submit herself to a panel of
investigators and explain why she had allegedly tampered school records, violated school policies and committed misconduct.13
On 26 March 1999, respondent was investigated for her act of increasing the grades of her students while she was on maternity leave. Respondent
and the substitute teachers were allowed to attend and participate in the investigation. The investigation yielded the following relevant facts14:
(1) That respondent increased the grades of her students who failed;
(2) That respondent gave tests in her house to some students;
(3) That respondent's reason for giving tests in her house is because she wanted to help the students who were failing x x x. [S]he wanted to give
considerations and she admitted that it was her fault for asking the students go to her house;
(4) That respondent admitted changing her student's grades before they were submitted and checked by the school principal;
(5) Respondent x x x argued that she had the right to pass her students.
The investigating panel reached the conclusion that respondent altered her students' grades while she was on leave, which is, according to them, a
case of education malpractice or grave misconduct and grossly prejudicial to the good name of the petitioner school. In particular, the investigating
committee found respondent to have violated Article XV, Section 79 and Article XVII, Section 94, paragraph (b) of the Manual of Regulations for
Private Schools, to wit:
Article XV, Section 79. Basis for Grading. The final grade or rating given to a pupil or student in a subject should be based solely on his scholastic
performance. Any addition or diminution to the grade in a subject for co-curricular activities, attendance, or misconduct shall not be allowed,
except as may otherwise be explicitly provided for by an individual school x x x, and provided further that such adjustments are relevant to the
subject content and requirements x x x.
Article XVII, Section 94, par. (b). Negligence in keeping school or student records, or tampering with or falsification of the same; x x x.
On these bases, the members of the investigating committee ruled to terminate respondent's services. On 15 April 1999, a termination letter was
served on respondent. On 29 April 1999, respondent filed with the Labor Arbiter a Complaint for illegal dismissal, proportionate 13th month pay,
actual, moral and exemplary damages, and attorney's fees against petitioners.15
In his Decision16 dated 11 January 2001, Labor Arbiter Edgardo Madriaga ruled that respondent was illegally dismissed as there was no valid or
just cause to terminate her employment. The relevant portion of the Decision reads:
A teacher has the academic freedom to pass or fail any or all her students as (sic) per his or her discretion. In this case, the teacher opted for
liberality rather than strictness. There was no proof that she did so out of malice or immoral considerations. There are liberal or generous teachers
and there are so-called terror teachers who prefer to flunk all their students. They balance each other out.
We, therefore, rule that complainant was not dismissed for a valid or just cause.
She is therefore entitled to reinstatement with backwages, proportionate 13th month pay and 10% thereof as attorney's fees, computed below as
follows:
xxxx
WHEREFORE, premises considered, complainant is hereby declared to have been illegally dismissed, and respondent school is hereby directed to
reinstate her and pay her money claims as computed above.
On appeal by petitioners, the NLRC reversed and set aside the Decision of the Labor Arbiter, on the ground that respondent's act of giving failing
students higher grades than what they actually earned is tantamount to serious misconduct which justified her dismissal. The relevant portion of the
NLRC Decision17 reads:
The very actuations of the complainant – first claiming that it was her prerogative to pull up failing grades, then blaming the substitute teachers for
copying the grades she gave the failing students, and even Mr. Lopez for supposedly scheming to get rid of her; claiming that she gave the failing
students extra projects before she went on leave, yet failing to reflect the credits they earned from the supposed extra projects in the grading sheets
– are not consistent with her avowed innocence.
In conclusion, this Commission finds the complainant's act of giving failing students higher grades than what they actually earned to be tantamount
to serious misconduct, which justifies her dismissal. The notion of academic freedom, which to her credit, she did not raise as a defense, does not
excuse her misconduct.
WHEREFORE, the decision appealed from is hereby REVERSED and the instant case DISMISSED for lack of merit.
Respondent filed a Motion for Reconsideration of the NLRC Decision which was denied for lack of merit in a Resolution dated 29 November
2001.18 Aggrieved, respondent filed a Petition for Certiorari before the Court of Appeals. The appellate court reversed and set aside the Decision
dated 28 September 2001, and Resolution dated 29 November 2001 of the NLRC. Reinstating the 11 January 2001 Decision of the Labor Arbiter,
the Court of Appeals ratiocinated:
Absent any proof that the giving of passing grades was done with malice or immoral considerations, this court has no other choice but to declare
that the herein petitioner [respondent] was illegally dismissed for choosing to be a considerate mentor to her students. Whether such choice is a
mistake of the teacher should not be visited with a consequence so severe. Indeed, the penalty of dismissal is unduly harsh considering that the
petitioner had been in the employ of the respondent school for eleven years and it does not appear that she had a previous derogatory record,
notwithstanding the claim there was alleged breach of trust. The law regards the workers with compassion. Unemployment brings untold hardships
and sorrows upon those dependent on the wage-earner.
WHEREFORE, for having been issued with grave abuse of discretion, the assailed decision and resolution of the respondent commission are
REVERSED and SET ASIDE. The Decision of Labor Arbiter Edgardo M. Madriaga is hereby REINSTATED.19
Petitioners moved for a reconsideration thereof, which was denied by the appellate court20 in the Resolution dated 1 July 2004.
Consequently, on 2 September 2004, petitioners filed before this Court, a Petition for Review on Certiorari. In our Resolution21 dated 13 October
2004, we denied the Petition in this wise:
In accordance with Rule 45 and other related provisions of the 1997 Rules of Civil Procedure, as amended, governing appeals by certiorari to the
Supreme Court, only petitions which are accompanied by or comply strictly with the requirements specified therein shall be entertained. On the
basis thereof, the Court Resolves to DENY the petition for review on certiorari for petitioners' failure to:
(a) submit a valid affidavit of service of copies of the petition in accordance with Sections 3 and 5, Rule 45 and Section 5(d), Rule 56 in relation to
Section 13, Rule 13 of the Rules, since the jurat of the attached affidavit of service does not indicate the affiants' community tax certificate numbers
or any competent evidence of affiants' identity; and
(b) properly verify the petition in accordance with Section 1, Rule 45 in relation to Section 4, Rule 7, and submit a valid certification on nonforum
shopping in accordance with Section 4(e), Rule 45 in relation to Section 5, Rule 7, Section 2, Rule 42 and Sections 4 and 5(d), Rule 56, since only
five (5) of seven (7) petitioners signed the attached verification and certification of nonforum shopping, and no proof of authority has been shown
by affiants to sign on behalf of petitioner school and co-petitioners x x x.22
On 4 April 2005, petitioners filed a Motion for Reconsideration with motion to exclude Rev. Fr. Noel Bejo and Jennifer Gill as petitioners, alleging
therein that:
The reason for the failure of Fr. Bejo and Ms. Gill to sign the verification and certification of non-forum shopping is the fact that they were
impleaded in the case below merely in their representative capacities. Since they are no longer connected with the school, they are, for all intents,
no longer interested in this case. The undersigned counsel still included their names in the caption with the intention to maintain consistency in the
caption of the case as Fr. Bejo and Ms. Gill were also impleaded by herein respondent Salgarino in the Court of Appeals case she filed.
Undersigned counsel now realizes that they should not have been included as petitioners in this case since there could be no personal liability on
their part. The matter now in issue are limited to backwages and reinstatement, which concern only the school.23
Thus, we reinstated the Petition but replaced Rev. Fr. Teodoro Gapuz for Fr. Bejo as one of the petitioners hereof since Fr. Bejo was replaced by
Fr. Gapuz as School Director in 2001.24
Petitioners raise the following issues for our consideration:
I maternity leave; of not having sought permission from petitioners before conducting the make-up tests in her house,26 contrary to the policy of the
WHETHER OR NOT RESPONDENT LABOR ARBITER MADRIAGA AND THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT FOUND PRIVATE RESPONDENT SALGARINO
TO HAVE BEEN ILLEGALLY DISMISSED NOTHWITHSTANDING THE FACT THAT PRIVATE RESPONDENT ADMITTED TO HAVE
CHANGED THE FAILING GRADES TO PASSING MARKS OF THIRTY TWO (32) OF HER STUDENTS WHILE SHE WAS ON
MATERNITY LEAVE.
II
WHETHER OR NOT RESPONDENT LABOR ARBITER MADRIAGA AND THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT PRIVATE RESPONDENT
SALGARINO WAS ENTITLED TO REINSTATEMENT, BACKWAGES, 13th MONTH PAY AND ATTORNEY'S FEES;
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE ERRONEOUS DECISION OF THE
RESPONDENT LABOR ARBITER;
(A) THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT DID NOT RULE CATEGORICALLY ON
THE ISSUE OF WHETHER OR NOT A TEACHER MAY CHANGE THE FAILING GRADES TO PASSING MARKS OF HER STUDENTS
OR THAT THE GIVING OF GRADES IS DISCRETIONARY;
(B) THE HONORABLE COURT OF APPEALS COMMITTED A GLARING ERROR AND/OR ABUSE OF DISCRETION IN RULING THAT
PETITIONERS FAILED TO PROVE THE JUST CAUSE OF PRIVATE COMPLAINANT'S DISMISSAL;
(C) THE HONORABLE COURT OF APPEALS COMMITTED GROSS ABUSE OF DISCRETION IN RULING THAT THERE WAS NO
BREACH OF TRUST COMMITTED BY THE ERRANT PRIVATE RESPONDENT;
(D) THE HONORABLE COURT OF APPEALS COMMITTED GROSS ABUSE OF DISCRETION IN RULING THAT THE ERRANT
TEACHER HAD THE RIGHT OR DISCRETION TO GIVE PASSING GRADES OUT OF HUMANITARIAN CONSIDERATIONS.
According to petitioners, Section 79 of the Manual of Regulations for Private Schools mandates that a student's grade should be based solely on his
academic performance; that it is therefore a serious academic malpractice or grave misconduct for respondent to give grades that are not based on
their scholastic performance; that it is a serious misconduct for respondent to give grades at the time she was still on maternity leave because she
has no moral or legal authority then to do so; that there is nothing in the Manual which states that a teacher has the discretion or the option as to
what grade she will give her students; and that a teacher has the obligation to determine the grades of students based solely on their academic
performance.
The Labor Code commands that before an employer may legally dismiss an employee from the service, the requirement of substantial and
procedural due process must be complied with. Under the requirement of substantial due process, the grounds for termination of employment must
be based on just or authorized causes. The following are just causes for the termination of employment under Article 282 of the Labor Code:
(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.
In the instant case, it appears that since respondent was still on maternity leave, the substitute teachers conducted the final exams in Math for the
4th year students of respondent. Upon computation by the substitute teachers of the grades of the said students, it was shown that some of them
obtained failing grades in Math. Subsequently, respondent requested one of the substitute teachers (Capistrano) to deliver to her house the white
sheets which contained the grades in Math of respondent's students. With due respect to, and trust in, respondent as the handling teacher in Math,
Capistrano delivered the white sheets to respondent through a student named Eunice Weeguano. Upon return of the white sheets, the substitute
teachers discovered that the failing grades under the column of Daily Work (DW) were encircled and a passing grade was written beside each
encircled grade.25 The substitute teachers immediately reported the matter to Lopez who referred the matter to Fr. Bejo. The increase in grades
enabled the concerned students to obtain a passing grade in Mathematics IV, and thus, were able to graduate on time.
Proceeding therefrom, we shall determine whether the aforesaid act of respondent constitutes serious misconduct which justified her dismissal from
employment.
To our mind, the acts of the respondent in increasing the marks and indicating passing grades on the white sheets of her students while she was on
petitioners that permission should first be granted before conducting make-up tests that must be conducted in the school premises; of making the
increases in the grades of the students during her maternity leave which is not allowed since the substitute teachers were the ones authorized to
compute and give the grades for the concerned students; and of invoking humanitarian consideration in doing so which is not a basis in the Manual
of Regulations for Private Schools for grading a student, are all acts of transgression of school rules, regulations and policies.
Truly, then, respondent had committed a misconduct. However, such misconduct is not serious enough to warrant her dismissal from employment
under paragraph (a) of Article 282 of the Labor Code.

Misconduct is defined as improper or wrong conduct. It is 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 of judgment. The misconduct to be serious within the
meaning of the act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious,
must nevertheless be in connection with the work of the employee to constitute just cause from his separation.27
In order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it
is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the
act or conduct must have been performed with wrongful intent.
There is no evidence to show that there was ulterior motive on the part of the respondent when she decided to pass her students. Also, it was not
shown that respondent received immoral consideration when she did the same. From the Labor Arbiter up to this Court, respondent has maintained
her stand that her decision to pass the concerned students was done out of humanitarian consideration.
Respondent was moved by pity when she learned that some of her students obtained a failing grade in her subject and, thus, will not graduate on
time. Respondent believes that some of her students obtained a failing grade in her subject because they were not properly prepared for the 4th
periodical exams. She claims that, although the substitute teachers conducted the 4th periodical exams and computed their grades, there were no
teachers assigned to conduct classes, lectures and review before the said exam. Thus, unmindful of the events that may transpire thereafter,
respondent decided to increase the marks of her students and gave them passing grades.
Respondent argued that had she failed the subject students, some of them would be enrolling in more than two subjects for summer which is not
allowed under Section 68(b), Article XIII of the Manual28 that provides that a student may enroll in no more than two subjects during the summer,
either for the purpose of making up for subjects previously failed, or for earning advanced credits in other subjects. Respondent avers that some of
the students with failing grades in Math had also failed in their two Chinese subjects. Hence, to avoid the violation of the Manual, respondent
decided to pass these students.
Based on the foregoing, respondent may have committed an error of judgment in deciding to pass her students, but it cannot be said that she was
motivated by any wrongful intent in doing so. As such, her misconduct cannot be considered as grave in character which would warrant her
dismissal from employment. We, thus, find her to be guilty only of simple misconduct. It is settled that a misconduct, which is not serious or grave,
cannot be a valid basis for dismissing an employee.29
Special consideration should also be given to the fact that respondent has been in the employ of petitioners for 10 years or more, and she has no
previous derogatory record. Further, respondent is a recipient of numerous academic excellence awards and recognized by her students and some of
her peers in the profession as a competent teacher. Given the foregoing, the penalty of dismissal imposed by petitioners on respondent for a first
offense seems unduly harsh and disproportionate to the misconduct being complained of.30 This Court has consistently ruled that the penalty to be
imposed on an erring employee must be commensurate with the gravity of his offense.31
In the actual imposition by the employer of the penalties on erring employees, due consideration must be given to their length of service and the
number of violations they have committed during their employ.32 Where a penalty less punitive would suffice, whatever missteps may be
committed by labor ought not to be visited with a consequence so severe.33 In light of the aforestated considerations, the penalty of dismissal will
appear to be too drastic and unreasonable.
Petitioner invoked Section 94(b), Article XVII of the Manual of Regulations for Private Schools34 which provides that the employment of a
teacher may be terminated for negligence in keeping school or student records, or tampering with or falsification of the same. According to
petitioners, respondent violated the said section when she encircled the failing grades under the DW and indicated a passing grade beside each
encircled grade.
Assuming for the sake of argument that respondent had indeed violated Section 94(b) of the Manual, her dismissal from employment is still
invalid. Section 94(b) uses the word "may" and not "shall." In this jurisdiction, the tendency has been to interpret the word "shall" or "may" as the
context or a reasonable construction of the statute in which they are used demands or requires. As a general rule, the word "may" when used in
statute is permissive only and operates to confer discretion while the word "shall" is imperative, operating to impose a duty which may be
enforced.35 In the case at bar, the use of the word "may" under Section 94(b) thereof implies that petitioners are permitted and authorized to
terminate the employment of respondent for tampering or falsification of school records. However, such authority is not absolute. It does not give
petitioners the unlimited power to automatically terminate the employment of respondent. Such authority is merely permissive and discretionary.
Such prerogative cannot be permitted by this Court if exercised arbitrarily and unfairly to defeat the constitutional protection to labor. Moreover, as
heretofore pointed out, there are circumstances present in this case which mitigate the misconduct of respondent. It would be different if the word
"shall" is used or the same is phrased in a negative manner. In such a case, the dismissal of respondent is mandatory and automatic.36 We find no
exception to deviate from this general rule of statutory construction.
Petitioners argue that the Labor Arbiter erred in ruling that respondent, as a teacher, has the academic freedom to pass or fail any or all students per
his or her discretion.
We agree, however, with the Court of Appeals that the issue of academic freedom is misplaced in this labor case. Academic freedom of faculty
members refer to the freedom of teachers from control of thought or utterance of his academic research, findings or conclusions, and has nothing to
do with the discretion of teachers to pass or fail any or all her students according to his discretion.37 Hence, we find no compelling reason to
determine the same.
Finally, petitioners contend that when respondent tampered the grades of her students, she willfully breached the trust and confidence reposed upon
her by petitioners, thus, her dismissal is valid under paragraph (c) of Article 282 of the Labor Code.
We deviate.
In several cases, we made pronouncements that loss of confidence as a ground for validly dismissing an employee under Article 282 of Labor Code
applies only to employees occupying positions of trust and confidence or those routinely charged with the care and custody of the employer's
money or property. In the case of Mabeza v. National Labor Relations Commission,38 we ruled that:
[L]oss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations
where the employee is routinely charged with the care and custody of the employer's money or property. To the first class belong the managerial
employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign, or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors,
property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or
property x x x.
Likewise, in the case of Concorde Hotel v. Court of Appeals,39 we declared that:
Loss of confidence applies only to cases involving employees who occupy positions of trust and confidence, or those situations where the
employee is routinely charged with the care and custody of the employer's money or property x x x.
In the instant case, it is clear that respondent is neither a managerial employee or one vested with the powers or prerogatives to lay down
management prerogatives. Nor one belonging to the class of cashiers, auditors, property custodians, or those, who, in the normal and routine
exercise of their functions, regularly handle significant amounts of money or property.
It is now settled that petitioners failed to comply with the requirement of substantial due process in terminating the employment of respondent. We
will now determine whether petitioners had complied with the procedural aspect of lawful dismissal.
In the termination of employment, the employer must (a) give the employee a written notice specifying the ground or grounds of termination,
giving to said employee reasonable opportunity within which to explain his side; (b) conduct a hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so desires, is given the opportunity to respond to the charge, present his evidence or rebut
the evidence presented against him; and (c) give the employee a written notice of termination indicating that upon due consideration of all
circumstances, grounds have been established to justify his termination.40
Petitioners had complied with all of the above stated requirements as shown by the following established facts:
On 24 March 1999, petitioner Fr. Bejo instructed respondent to report to the former's office. He gave her a letter which instructed her to submit
herself to a panel and explain why she had allegedly tampered school records and violated school policies.41
On 26 March 1999, petitioners conducted an investigation on the matter which was held at the New Guidance Office of the petitioner School. The
panel of investigators were composed of petitioners Fr. Bejo, Ms. Vilma Lao (Registrar), Mrs. Naty Tan, (Guidance Office Head), Lopez, Mr.
Camilo Gelido, Mrs. Jennifer Gill, Ms. Remedios Cabanlit (High School Coordinators). Also present during the investigation were respondent and
the substitute teachers. Petitioner Fr. Bejo propounded the following questions to respondent:
1. Why did you ask students to take their tests in your house?
2. Why did you make changes in the grades in class record and white sheets even before they were checked by Ms. Lopez?
3. Why was there a big discrepancy in the grades?
4. Why did you ask a student to bring the white sheets to your house? These are official school documents.
Respondent was allowed to answer the abovementioned questions. She explained and defended her acts. After the investigation, petitioners
deliberated as to their course of action in resolving respondent's case. Subsequently, petitioners decided to dismiss the respondent from
employment for violating Sections 79 and 94 of the Manual of Regulations for Private Schools, and for undue disregard of school policies.42
On 15 April 1999, a termination letter was served by petitioners on respondent.43
While petitioners had complied with the procedural aspect of due process in terminating the employment of respondent, they failed to comply with
the substantive aspect of due process as the act complained of does not constitute serious misconduct. Hence, we still hold that the dismissal is
illegal.
It must be emphasized at this point that the onus probandi to prove the lawfulness of the dismissal rests with the employer. In termination cases, the
burden of proof rests upon the employer to show that the dismissal is for just and valid cause. Failure to do so would necessarily mean that the
dismissal was not justified and therefore was illegal.44 In the instant case, petitioners failed to discharge the burden of proving the legality and
validity of respondent's dismissal.
We are not unmindful of the equally important right of petitioners, as employer, under our Constitution to be protected on their property and
interest. However, the particular circumstances attendant in the instant case convinced us that the supreme penalty of dismissal upon respondent is
not justified. The law regards the workers with compassion. Even where a worker has committed an infraction of company rules and regulations, a
penalty less punitive than dismissal may suffice. This is not only because of the law's concern for the workingman. There is, in addition, his family
to consider. Unemployment brings untold hardships and sorrows on those dependent upon the wage-earner.45
As a caveat, it would do well for respondent to act more conscientiously and with more regard to the policies of petitioners in the future. A
repetition or similar misconduct may call for a more severe penalty in the future.
Finally, there being no evidentiary support for the claim of respondent for damages, the same was correctly denied by the Labor Arbiter and Court
of Appeals.
WHEREFORE, the Petition for Review is DENIED. The Decision of the Court of Appeals dated 21 May 2003 and its Resolution dated 1 July 2004
in CA-G.R. SP No. 69955, are hereby AFFIRMED. Petitioners are hereby ORDERED to reinstate respondent to her former position or its
equivalent without loss of seniority rights or privileges plus full backwages computed from the time her salaries were withheld until she is finally
reinstated. With costs.
Panganiban, C.J., Ynares-Santiago, Austria-Martinez, Callejo, Sr., J.J., concur.
33. Llamas v. Ocean Gateway Maritime and Management Services Inc., G.R. No. 179293, August 14, 2009
Facts:
Ocean Gateway Maritime and Management, Inc (OGMM). hired Eden Llamas as an accounting manager. OGMM's Chief Executive Officer
Macaraig called petitioner’s attention because of her failure, despite repeated demands, to accomplish the long overdue monthly and annual
company financial reports and to remit the company’s contributions to the SSS and PhilHealth. But Llamas failed to comply with the instruction as
money for the purpose was not credited to the company’s account at the bank.
Macaraig sent a memorandum to petitioner charging her with gross and habitual neglect of duty and/or misconduct or willful disobedience and
insubordination, detailing therein the bases of the charges, and requiring her to submit a written explanation why she should not be penalized or
dismissed from employment but OMGG found the explanation unsatisfactory
Issues:
WON the dismissal was for a just cause
WON due process was observed
Ruling:
THE DISMISSAL WAS FOR A JUST CAUSE.
Under Article 282 (b) of the Labor Code, negligence must be both gross and habitual to justify the dismissal of an employee. Gross negligence is
characterized by want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and
intentionally with a conscious indifference to consequences insofar as other persons may be affected.
In the present case, Llamas, as respondent’s Accounting Manager, failed to discharge her important duty of remitting SSS/PhilHealth
contributions not once but quadruple times, resulting in respondent’s incurring of penalties totaling P18,580.41, not to mention the
employees/members’ contributions being unupdated.
Her claim of being overworked and undermanned does not persuade. As noted by respondent, the company had been in operation for less than
three (3) months at the time the negligence and delays were committed, with only a few transactions and only with one principal, Malaysian
Merchant Marine Bhd., hence, its financial and accounting books should not have been difficult to prepare. Moreover, as claimed by respondent
which was not refuted by petitioner, she failed to remit the contributions as early as November 2001 during which time, however, on-the-job
trainees were still with the company, hence, her claim of being undermanned behind such failure does not lie.
As to the delay in the remittance of SSS/PhilHealth contributions for January 2002, which petitioner claims to be due to the fact that the money
intended for payment was not yet credited as of February 20, 2002 to respondent’s bank account, as well as to her absence the following day or on
February 21, 2002 due to hypertension, the Court is not persuaded, given that at that time, she had already been in delay in the performance of her
duties.
On petitioner’s declaration that “I believe that I did something good for our office when our declaration of gross income submitted to City Hall for
the renewal of our municipal license was lower than our actual gross income for which the office had paid a lower amount,” the Court finds the
same as betraying a streak of dishonesty in her. It partakes of serious misconduct.
x x x Misconduct has been defined as improper or wrong conduct. It is 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 of judgment. The misconduct to be serious
must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must nevertheless be
in connection with the employee’s work to constitute just cause for his separation. Thus, for misconduct or improper behavior to be a just cause for
dismissal, (a) it must be serious; (b) must relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit
to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the
service would be patently inimical to his employer’s interest.[12] (Emphasis supplied)
For her act of understating the company’s profits or financial position was willful and not a mere error of judgment, committed as it was in order
to “save” costs, which to her warped mind, was supposed to benefit respondent. It was not merely a violation of company policy, but of the law
itself, and put respondent at risk of being made legally liable. Verily, it warrants her dismissal from employment as respondent’s Accounting
Manager, for as correctly ruled by the appellate court, an employer cannot be compelled to retain in its employ someone whose services is inimical
to its interests.
2. As to the second issue of whether due process was accorded petitioner, the Court rules in the affirmative. Far from being arbitrary, the
termination of her services was effected after she was afforded the opportunity to, as she did, submit her explanation on why she should not be
disciplined or dismissed, which explanation, it bears reiteration, was, however, found unsatisfactory.
JOEB M. ALIVIADO, et.al Petitioners, v. PROCTER & GAMBLE PHILS., INC., and PROMM-GEM INC., Respondents.
DEL CASTILLO,J.:
FACTS:
Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as 1982 or as late as June 1991, to either May 5, 1992
or March 11, 1993, more specifically as follows: They all individually signed employment contracts with either Promm-Gem or SAPS for periods
of more or less five months at a time.They were assigned at different outlets, supermarkets and stores where they handled all the products of P&G.
They received their wages from Promm-Gem or SAPS.
SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such as habitual absenteeism, dishonesty or changing
day-off without prior notice.
P&G is principally engaged in the manufacture and production of different consumer and health products, which it sells on a wholesale basis to
various supermarkets and distributors.To enhance consumer awareness and acceptance of the products, P&G entered into contracts with Promm-
Gem and SAPS for the promotion and merchandising of its products.
In December 1991, petitioners filed a complaintagainst P&G for regularization, service incentive leave pay and other benefits with damages. The
complaint was later amendedto include the matter of their subsequent dismissal.
On November 29, 1996, the Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no employer-employee relationship
between petitioners and P&G. He found that the selection and engagement of the petitioners, the payment of their wages, the power of dismissal
and control with respect to the means and methods by which their work was accomplished, were all done and exercised by Promm-Gem/SAPS. He
further found that Promm-Gem and SAPS were legitimate independent job contractors.
NLRC affirmed the appealed decision. Petitioners filed a motion for reconsideration but the motion was denied.
Petitioners then filed a petition forcertiorariwith the CA, alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part
of the Labor Arbiter and the NLRC. However, said petition was also denied by the CA. Hence, this petition.
ISSUE:
Whether P&G is the employer of petitioners;
Whether petitioners were illegally dismissed
HELD: The decision of the Court of Appeals is sustained.
LABOR LAW
In the instant case, the financial statementsof Promm-Gem show that it has authorized capital stock ofP1 million and a paid-in capital, or capital
available for operations, ofP500,000.00 as of 1990.It also has long term assets worthP432,895.28 and current assets ofP719,042.32. Promm-Gem
has also proven that it maintained its own warehouse and office space with a floor area of 870 square meters.It also had under its name three
registered vehicles which were used for its promotional/merchandising business. Promm-Gem also has other clientsaside from P&G.Under the
circumstances, we find that Promm-Gem has substantial investment which relates to the work to be performed. These factors negate the existence
of the element specified in Section 5(i) of DOLE Department Order No. 18-02.
The records also show that Promm-Gem supplied its complainant-workers with the relevant materials, such as markers, tapes, liners and cutters,
necessary for them to perform their work. Promm-Gem also issued uniforms to them. It is also relevant to mention that Promm-Gem already
considered the complainants working under it as its regular, not merely contractual or project, employees.
This circumstance negates the existence of element (ii) as stated in Section 5 of DOLE Department Order No. 18-02, which speaks
ofcontractualemployees. This, furthermore, negates on the part of Promm-Gem bad faith and intent to circumvent labor laws which factors have
often been tipping points that lead the Court to strike down the employment practice or agreement concerned as contrary to public policy, morals,
good customs or public order.
Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find that it is a legitimate independent contractor.
On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of onlyP31,250.00. There is no other evidence
presented to show how much its working capital and assets are. Furthermore, there is no showing of substantial investment in tools, equipment or
other assets.
Where labor-only contracting exists, the Labor Code itself establishes an employer-employee relationship between the employer and the employees
of the labor-only contractor.The statute establishes this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The
contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if
such employees had been directly employed by the principal employer.
LABOR LAW
Loss of trust and confidence, as a ground for dismissal, must be based on the wilful breach of the trust reposed in the employee by his employer.
Ordinary breach will not suffice. A breach of trust is wilful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.
Loss of trust and confidence, as a cause for termination of employment, is premised on the fact that the employee concerned holds a position of
responsibility or of trust and confidence. As such, he must be invested with confidence on delicate matters, such as custody, handling or care and
protection of the property and assets of the employer. And, in order to constitute a just cause for dismissal, the act complained of must be work-
related and must show that the employee is unfit to continue to work for the employer.In the instant case, the petitioners-employees of Promm-Gem
have not been shown to be occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show that they are unfit
to continue to work as merchandisers for Promm-Gem.
YABUT vs. MERALCO AND LOPEZ DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
G.R. No. 190436 January 16, 2012
NORMAN YABUT, Petitioner,
vs.
MANILA ELECTRIC COMPANY and MANUEL M. LOPEZ, Respondents.
FACTS: The petitioner had worked with Meralco from February 1989 until his dismissal from employment on February 5, 2004. At the time of
said dismissal, he was assigned at the Meralco Malabon Branch Office as a Branch Field Representative tasked, among other things, to conduct
surveys on service applications, test electric meters, investigate consumer-applicants’ records of Violations of Contract (VOC) and perform such
other duties and functions as may be required by his superior.
Meralco’s Inspection Office issued a memorandum3 addressed to Meralco’s Investigation-Legal Office, informing it of an illegal service
connection at the petitioner’s residence, particularly at No. 17 Earth Street, Meralco Village 8, Batia, Bocaue, Bulacan. The Inspection Office
claimed discovering shunting wires installed on the meter base for Service Identification Number (SIN) 708668501, registered under petitioner
Yabut’s name. These wires allegedly allowed power transmission to the petitioner’s residence despite the fact that Meralco had earlier
disconnected his electrical service due to his failure to pay his electric bills.
Given this report, Meralco’s Head of Investigation-Litigation Office issued to the petitioner a notice (to report and explain) dated November 3,
2003, received by the petitioner’s wife on the same day and with pertinent portions that read:
In the course of the company’s investigations, the petitioner presented his sworn statement xxx petitioner nonetheless claimed that at about 8:00
o’clock in the morning of the same day, prior to his wife’s notice upon him of the inspection, he had already given to an officemate the amount of
P8,432.35 and requested that the same be paid to Meralco to cover his outstanding electric bills. The amount of P8,432.35 plus P1,540 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 xxx 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.
In view of these findings, respondent Meralco, through its Senior Assistant Vice President for Human Resources Administration R. A. Sapitula,
issued on February 4, 2004 a notice of dismissal10 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.
Aggrieved by the decision of the management, Yabut filed with the National Labor Relations Commission (NLRC) a complaint11 for illegal
dismissal and money claims against Meralco and Lopez.
Development of Case: LA ruled in favour of petitioner Yabut; NLRC affirmed; CA reversed the rulings of the NLRC. In finding the petitioner’s
dismissal lawful, the appellate court attributed unto Yabut authorship of the meter tampering and illegal use of electricity – acts which it regarded
as serious misconduct; MR Denied. Hence, this petition.
ISSUE: WON petitioner was illegally dismissed by respondent.
HELD: NO
The dismissal of the petitioner was founded on just causes under Article 282 of the Labor Code of the Philippines.
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 herein 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.
The logical conclusion that may be deduced from these attending circumstances 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.
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.
To reiterate, 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.22
Installation of shunting wires is without 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.
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 after
he rose from the ranks since commencement of his employment with Meralco. 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.
Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence. More so, 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.
His dishonesty, involvement in theft and tampering of electric meters clearly prejudice respondent 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.
Petition Denied.
CASE TITLE: Gold City Integrated Port Services, Inc. (Inport) vs Honorable National Labor
Relations Commission (NLRC) and Jose L. Bacalso
GR NO.: G.R. No. 86000
DATE: September 21, 1990
PETITIONER: Gold City Integrated Port Services, Inc. (Inport)
RESPONDENT: Honorable National Labor Relations Commission (NLRC) and Jose L. Bacalso
DOCTRINES:
The right of an employee to procedural due process consists of the twin rights of notice and
hearing. The purpose of the requirement of notice is obviously to enable the employee to defend
himself against the charge preferred against him by presenting and substantiating his version of
the facts.
Not every case of insubordination or wilful disobedience by an employee of a lawful work-
connected order of the employer or its representative is reasonably penalized with dismissal. For
one thing, Article 282 refers to "serious misconduct or wilful disobedience". There must be
reasonable proportionality between, on the one hand, the wilful disobedience by the employee
and, on the other hand, the penalty imposed therefor.
FACTS. Private respondent Bacalso suspected by management of under measuring cargo. Hence, on 23
January 1987, the cargo control officer ordered two (2) other admeasurers to re-measure three (3) pallets
of bananas which had already been measured by private respondent. The re-measurement revealed that
respondent had under-measured the bananas by 1.427 cubic meters.
Private respondent felt insulted by the re-measurement so he confronted Nigel Mabalacad (one of the
admeasurers) in the presence of their superior who ordered them to stop but said confrontation still led to
fistfight. Private respondent Bacalso was then charged with assaulting a co-employee and falsifying
reports and records of the company relative to the performance of his duties, and was preventively
suspended until his termination on April 11, 1987 upon the grounds of assaulting a co-employee and of
insubordination.
Private respondent Bacalso filed a complaint for illegal dismissal with the DOLE RAB 10 contending that
there was no evidence that he had 1illfully disobeyed any order given by his superior during the incident
1
and that assaulting a co-employee is not just cause for dismissal under Article 282 (d) of the Labor Code
because that act was not an offense committed against his employer’s duly authorized representative.
The LA ruled in favor of Bacalso stating that assault on a co-employee was punishable only with fifteen
(15) days suspension under the CBA’s Schedule of penalties. The NLRC adopted the LA ruling but
ordered the reinstatement of Bacalso.
Before the Supreme Court, Gold City contented that management’s prerogative to promulgate rules of
discipline and to enforce the Schedule of disciplinary sanctions providing for dismissal of an employee
who commits gross disrespect of a superior officer.
ISSUES: (a) Whether private respondent was denied due process in the course of his dismissal; and (b)
Whether private respondent was dismissed for a just cause.
Art. 282. Termination by Employer.-An employer may terminate an employment for any of the following causes: a) Serious
misconduct or wilful disobedience by the employee of the lawful orders of his employer or representative in connection with his work
RULING:
A. Yes. Correct specification of private respondent's alleged wrongdoing was obviously important here,
since the penalty that could appropriately be meted out depended upon what offense was charged and
proven. It has been stressed by the Court that the right of an employee to procedural due process
16
consists of the twin rights of notice and hearing. The purpose of the requirement of notice is obviously
to enable the employee to defend himself against the charge preferred against him by presenting and
substantiating his version of the facts. Since Gold City here in effect charged private respondent with a
second offense other than falsification of company records, it was incumbent upon petitioner employer to
have given private respondent additional time and opportunity to meet the new charge against him of
insubordination. Gold City failed to do that here. In so failing, Gold City failed to accord to private
respondent the full measure of his right to procedural due process. The fact that in the proceedings
before the Labor Arbiter the conduct of private respondent that petitioner regarded as insubordination was
substantiated, does not militate against this conclusion.
B. No. Though the Court ruled that private respondent's act constituted wilful disobedience to a lawful
order of petitioner's representative, it nonetheless ruled that he was unlawfully terminated either under
Article 282 (a) of the Labor Code or under the CBA Schedule of penalties.
The Court ruled that not every case of insubordination or wilful disobedience by an employee of a lawful
work-connected order of the employer or its representative is reasonably penalized with dismissal. For
one thing, Article 282 refers to "serious misconduct or wilful disobedience". There must be reasonable
proportionality between, on the one hand, the wilful disobedience by the employee and, on the other
hand, the penalty imposed therefor. Examination of the circumstances surrounding private respondent's
assault upon his co-employee shows that no serious or substantial danger had been posed by that
fistfight to the well-being of his other co-employees or of the general public doing business with petitioner
employer; and neither did such behavior threaten substantial prejudice for the business of his employer.
The fistfight occurred inside the offices of the Surveyors' Division, more particularly, Mr. Guangco's office,
away from the view of petitioner's customers or of the general public.
PERMEX INC. v. NLRC, GR No. 125031, 2000-01-24
Facts:
Petitioner, Permex Producer and Exporter Corporation (hereinafter Permex), is a company engaged in the business of canning tuna and sardines,
both for export and domestic consumption. Its office and factory are both located in Zamboanga City.
Private respondent Emmanuel Filoteo, an employee of Permex, was terminated by petitioners allegedly for flagrantly and deliberately violating
company rules and regulations. More specifically, he was dismissed allegedly for falsifying his daily time record.
As water treatment operator, Filoteo did not have a fixed working schedule. His... hours of work were dependent upon the company's shifting
production schedules.
On the evening of July 31,1994, at around 9:20 p.m., Filoteo, together with Pelayo, went to see the Assistant Production Manager to inquire if
"butchering" of fish would be done that evening so they could start operating the boiler. They were advised to wait from 9:30 p.m. to
10:00 p.m. for confirmation.
At or about 10:00 p.m., Filoteo and Pelayo went back to the Assistant Production Manager's office. There they were informed that there would be
no "butchering" of tuna that night. Filoteo then sought permission to go home, which was granted. Filoteo then hurriedly got his things... and
dashed off to the exit gate to catch the service jeep provided by Permex.
The next day, August 1, 1994, Filoteo reported for work as usual. He then remembered that he had to make a re-entry in his daily time record for
the previous day. He proceeded to the Office of the Personnel Manager to retime his DTR entry. Later, he received a memorandum from... the
Assistant Personnel Officer asking him to explain, in writing, the entry he made in his DTR. Filoteo complied and submitted his written
explanation that same evening. Sdaamiso
On August 8, 1994, Filoteo was suspended indefinitely. His explanation was found unsatisfactory. He was dismissed from employment on August
23, 1994.
The dismissal arose from Filoteo's alleged violation of Article 2 of the company rules and regulations.
On September 5, 1994, Filoteo filed a complaint for illegal dismissal with claims for separation pay, damages, and attorney's fees with the Labor
Arbiter
Filoteo appealed to the NLRC. Finding merit therein, the Commission's Fifth Division promulgated its resolution, reversing and setting aside the
Labor Arbiter's decision, by disposing as follows:
"WHEREFORE, the decision appealed from, is Vacated and Set Aside and a new one entered declaring the complainant to have been illegally
dismissed by respondent company. Accordingly, respondent Permex, Inc., through its corporate officers, is hereby ordered and... directed to pay
complainant, Emmanuel Filoteo, separation pay at the rate of one (1) month salary for every year of service or in the equivalent of four (4) months
separation pay and backwages effective August 23, 1994 up to the promulgation of this decision, inclusive of fringe... benefits, if any. Further,
respondent company is ordered to pay complainant moral and exemplary damages in the sum of P10,000.00 and P5,000.00, respectively, as well as
attorney's fees equivalent to ten (10%) percent of the total monetary award
Issues:
whether or not private respondent was illegally terminated from his employment.
Ruling:
In the present case, the NLRC found that the two-fold requirements for a valid dismissal were not satisfied by the petitioners.
Such dismissal, in our view, was too harsh a penalty for an unintentional infraction, not to mention that it was his first offense committed without
malice, and committed also by others who were not equally penalized
It is clear that the alleged false entry in private respondent's DTR was actually the result of having logged his scheduled time-out in advance on
July 31, 1994. But it appears that when he timed in, he had no idea that his work schedule (night shift) would be cancelled. When it... was
confirmed at 10:00 p.m. that there was no "butchering" of tuna to be done, those who reported for work were allowed to go home, including private
respondent. In fact, Filoteo even obtained permission to leave from the Assistant Production Manager.
Considering the factory practice which management tolerated, we are persuaded that Filoteo, in his rush to catch the service vehicle, merely forgot
to correct his initial time-out entry. Nothing is shown to prove he deliberately falsified his daily time record to deceive the... company. The NLRC
found that even management's own evidence reflected that a certain Felix Pelayo, a co-worker of private respondent, was also allowed to go home
that night and like private respondent logged in advance 7:00 a.m. as his time-out. This supports Filoteo's claim... that it was common practice
among night-shift workers to log in their usual time-out in advance in the daily time record.
where a violation of company policy or breach of company rules and regulations was found to have been tolerated by management, then the... same
could not serve as a basis for termination.
All told we see no reason to find that the NLRC gravely abused its discretion when it ruled that private respondent was illegally dismissed. Hence
we concur in that ruling. Nonetheless, we find that the award of moral and exemplary damages by the public respondent is not in... order and must
be deleted. Moral damages are recoverable only where the dismissal of the employee was tainted by bad faith or fraud, or where it constituted an
act oppressive to labor, and done in a manner contrary to morals, good customs, or public policy.[13] Exemplary damages may be awarded only if
the dismissal was done in a wanton, oppressive, or malevolent manner.[14] None of these circumstances exist in the present case.
Permex v NLRC and Filoteo
Facts:
 Permex initially hired Emmanuel Filoteo as a mechanic. Eventually, Filoteo was promoted to water treatment operator, a position he
held until his termination.
 As water treatment operator, Filoteo did not have a fixed working schedule. His hours of work were dependent upon the company's
shifting production schedules.
 On July 31, 1994, Filoteo was scheduled for the night shift from 7:00 p.m. to 7:00 a.m. the following day. That night he reported for
work together with his co-workers, Felix Pelayo and Manuel Manzan. They logged in at the main gate and guardhouse of the
petitioner's factory. Filoteo entered his time-in at 8:45 p.m. and since he was scheduled to work until 7:00 a.m. the next day, he wrote
7:00 a.m. in his scheduled time-out. This practice of indicating the time out at the moment they time in, was customarily done by
most workers for convenience and practicality since at the end of their work shift, they were often tired and in a hurry to catch
the available service vehicle for their trip home, so they often forgot to log out. There were times also when the Log Book was
brought to the Office of the Personnel Manager and they could not enter their time out. The company had tolerated the
practice.
 On the evening of July 31, 1994, at around 9:20 p.m., Filoteo, together with Pelayo, went to see the Assistant Production Manager to
inquire if "butchering" of fish would be done that evening so they could start operating the boiler. They were advised to wait from
9:30 p.m. to 10:00 p.m. for confirmation.
 At or about 10:00 p.m., Filoteo and Pelayo went back to the Assistant Production Manager's office. There they were informed that
there would be no "butchering" of tuna that night. Filoteo then sought permission to go home, which was granted. Filoteo then
hurriedly got his things and dashed off to the exit gate to catch the service jeep provided by Permex.
 The next day, Filoteo reported for work as usual. He then remembered that he had to make a re-entry in his daily time record for the
previous day. He proceeded to the Office of the Personnel Manager to retime his DTR entry. Later, he received a memorandum from
the Assistant Personnel Officer asking him to explain, in writing, the entry he made in his DTR. Filoteo complied and submitted his
written explanation that same evening.
 Thereafter, Filoteo was suspended indefinitely. His explanation was found unsatisfactory. He was dismissed from employment on
August 23, 1994.
 The dismissal arose from Filoteo's alleged violation of Article 2 of the company rules and regulations. The offense charged was
entering in his DTR that he had worked from 8:45 p.m. of July 31, 1994 to 7:00 a.m. of August 1, 1994, when in fact he had worked
only up to 10:00 p.m.
 Filoteo filed a complaint for illegal dismissal with claims for separation pay, damages, and attorney's fees with the Labor Arbiter.
 LA dismissed the complaint for lack of merit but awarded P1,000.00 by way of indemnity pay for violation of due process.
 Upon appeal to the NLRC, the decision of the LA was reversed and set aside. NLRC declared that Filoteo was illegally dismissed and
awarded separation pay, backwages and damages.
Issue: Whether or not Filoteo was illegally terminated from his employment.
Held: In the present case, the NLRC found that the two-fold requirements for a valid dismissal were not satisfied by the petitioners. First,
petitioner's charge of serious misconduct of falsification or deliberate misrepresentation was not supported by the evidence on the record contrary
to Art. 277 of the Labor Code which provides that:
Art. 277. Miscellaneous provisions. —
(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and
authorized cause. . . The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. . .
Second, the private respondent was not afforded an opportunity to be heard. As found by the NLRC:
. . . Aside from the fact that there was no valid and justifiable cause for his outright dismissal from the service, complainant's dismissal as correctly
held by the Labor Arbiter was tainted with arbitrariness for failure of respondent company (petitioner herein) to observe procedural due process in
effecting his dismissal. Admittedly, complainant was suspended indefinitely on August 8, 1994 and subsequently dismissed on August 23, 1994
without any formal investigation to enable complainant to defend himself.
Such dismissal, in our view, was too harsh a penalty for an unintentional infraction, not to mention that it was his first offense committed without
malice, and committed also by others who were not equally penalized.
It is clear that the alleged false entry in private respondent's DTR was actually the result of having logged his scheduled time-out in advance on
July 31, 1994. But it appears that when he timed in, he had no idea that his work schedule (night shift) would be cancelled. When it was confirmed
at 10:00 p.m. that there was no "butchering" of tuna to be done, those who reported for work were allowed to go home, including private
respondent. In fact, Filoteo even obtained permission to leave from the Assistant Production Manager.
Considering the factory practice which management tolerated, we are persuaded that Filoteo, in his rush to catch the service vehicle, merely forgot
to correct his initial time-out entry. Nothing is shown to prove he deliberately falsified his daily time record to deceive the company. The NLRC
found that even management's own evidence reflected that a certain Felix Pelayo, a co-worker of private respondent, was also allowed to go home
that night and like private respondent logged in advance 7:00 a.m. as his time-out. This supports Filoteo's claim that it was common practice among
night-shift workers to log in their usual time-out in advance in the daily time record.
Moreover, as early as Tide Water Associated Oil Co. v. Victory Employees and Laborers' Association, 85 Phil. 166 (1949), we ruled that, where a
violation of company policy or breach of company rules and regulations was found to have been tolerated by management, then the same could not
serve as a basis for termination.
Aparente, Sr. v. NLRC [G.R. No. 117652, April 27, 2000]
Tuesday, January 27, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Labor Law
FACTS: Petitioner was employed by Coca-Cola Bottlers Phils. Inc., as assistant mechanic. Petitioner drove private respondent’s truck to install a
panel sign and accidentally sideswiped a ten year old girl whose injuries incurred hospitalization expenses of up to Php 19, 534. 45. Such amount
was not reimbursed by insurance as petitioner had no driver’s license at the time of the accident; therefore private respondent shouldered the
expenses. Private respondent conducted an investigation where petitioner was given the opportunity to defend himself. Petitioner was then
dismissed for violating the company rules and regulation for blatant disregard of established control procedures resulting in company damages.
ISSUE: W/N petitioner was validly dismissed.
HELD: Yes. Although petitioner contends that he was investigated simply for the offense of driving without a valid driver’s license, it was clear
that he was fully aware that he was being investigated for his involvement in the vehicular accident. It was also known to him that the accident
caused the victim to suffer serious injuries leading to expenses which the insurance refused to cover. Due process does not necessarily require a
hearing, as long as one is given reasonable opportunity to be heard. Despite petitioner’s 18 years of satisfactory service and that the infraction
committed by him was his first offense; petitioner’s dismissal is justified by the company rules and regulations. In order to constitute willful
disobedience, the employee’s conduct must have been willful or intentional and the order violated must have been reasonable, lawful, made known
to the employee and must pertains to the duties which he had been engaged to discharge. Such elements are attendant in the present case. Although
an employee who is dismissed for just cause is not entitled to any financial assistance, due to equity considerations as this is petitioner’s first
offense in 18 years of service, he is to be granted separation pay by way of financial assistance of ½ month’s pay every year of service.
APARENTE SR V NLRC (COCA-COLA BOTTLERS PHIL)
331 SCRA 82
DE LEON JR; April 27, 2000
FACTS
- Rolando Aparante, Sr. was first employed by private respondent Coca-Cola Bottlers Phils., Inc. (CCBPI), General Santos City Plant as assistant
mechanic in April 1970. He rose through the ranks to eventually hold the position of advertising foreman until his termination on May 12, 1988 for
alleged violation of company rules and regulations. His monthly salary at the time of his termination was P5,600.
- On November 9, 1987, Aparante drove CCBPI's advertising truck to install a panel sign. He sideswiped Marilyn Tejero, a ten-year old girl. He
brought Tejero to Heramil Clinic for first aid treatment. As the girl suffered a 2 cm fracture on her skull which was attributed to the protruding bolt
on the truck's door, she was subsequently transferred to the General Santos City Doctor's Hospital where she underwent surgical operation. She
stayed in the hospital for about a month.
- Five days after the accident, he reported the incident to CCBPI. At about the same time, he submitted himself to the police authorities at
Polomolok, South Cotabato for investigation where it was discovered that he had no driver's license at the time of the accident. In view thereof,
FGU Insurance Corporation, an insurer of CCBPI's vehicles, did not reimburse the latter for the expenses it incurred in connection with Tejero's
hospitalization – a total amount of P19,534.45.
- CCBPI conducted an investigation of the incident where Aparente was given the opportunity to explain his side and to defend himself.
On May 12, 1988, Aparente was dismissed for having violated the company rules and regulations particularly Sec. 12 of Rule 005-858 for blatant
disregard of established control procedures resulting in company damages.
- The Labor Arbiter ordered his reinstatement without back wages. The NLRC affirmed but reversed its ruling upon motion of CCBPI. It declared
the dismissal as one for just cause and effected after observance of due process.
ISSUES
1. WON the NLRC erred in holding that CCBPI afforded petitioner due process
2. WON the NLRC erred in upholding the dismissal despite its initial finding that the CCBPI had implicitly tolerated petitioner’s driving without a
license
3. WON the infraction committed by petitioner warrants the penalty of dismissal despite the fact that it was his first offense during his 18 long
years of satisfactory and unblemished service
HELD
1. NO
Ratio The essence of due process does not necessarily mean or require a hearing but simply a reasonable opportunity or a right to be heard or as
applied to administrative proceedings, an opportunity to explain one's side. In labor cases, the filing of position papers and supporting documents
fulfill the requirements of due process.
Reasoning
- Aparente was fully aware that he was being investigated for his involvement in the vehicular accident that took place on November 9, 1987. It
was also known to him that as a result of the accident, the victim suffered a 2 cm fracture on her skull which led to the latter's surgical operation
and confinement in the hospital for which CCBPI incurred expenses amounting to P19,534.45 which FGU Insurance Corporation refused to
reimburse upon finding that he was driving without a valid driver's license. Thus, being aware of all these circumstances and the imposable
sanctions under CCBPI's Code of Disciplinary Rules and Regulations, he should have taken it upon himself to present evidence to lessen his
culpability.
2. NO
Reasoning
- According to Aparente, he informed the company that he had lost his license five months before the accident. Notwithstanding such fact, the
company allowed him to continue driving the vehicle assigned to him. Thus, he shifts the blame to the company, claiming that it should have
simply ordered him to desist from driving the vehicle once it was informed of the loss of his license. His contention is belied by his very own
admission in his position papers filed before the Labor Arbiter and the NLRC that the company had in fact prohibited him from driving
immediately after he lost his license, and had requested him to secure a new license. However, through misrepresentations, he led CCBPI to believe
that he had procured another driver's license. Thus, he was permitted to drive again.
3. YES
Ratio The law warrants the dismissal of an employee without making any distinction between a first offender and a habitual delinquent where the
totality of the evidence was sufficient to warrant his dismissal. In protecting the rights of the laborer, the law authorizes neither oppression nor self-
destruction of the employer.
Reasoning
- Company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and
must be complied with until finally revised or amended, unilaterally or preferably through negotiation, by competent authority. The Court has
upheld a company's management prerogatives so long as they are exercised in good faith for the advancement of the employer's interest and not for
the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.
- First, Aparente's dismissal is justified by Company rules and regulations. It is true that his violation of company rules is his first offense.
Nonetheless, the damage caused to private respondent amounted to more than P5,000, thus, the penalty of discharge is properly imposable as
provided by CCBPI's Code of Disciplinary Rules and Regulations.
- Second, Article 282, in order that an employer may dismiss an employee on the ground of willful disobedience, there must be concurrence of at
least two requisites: The employee's assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and
perverse attitude; and 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. We have found these requisites to be present in the case at bar. The evidence clearly reveals the willful act of
Aparente in driving without a valid driver's license, a fact that he even tried to conceal during the investigation conducted by CCBPI. Such
misconduct should not be rewarded with re-employment and back wages, for to do so would wreak havoc on the disciplinary rules that employees
are required to observe.
- In the instant case, we find the award to petitioner of separation pay by way of financial assistance equivalent to 1/2 month's pay for every year of
service equitable. Although meriting termination of employment, petitioner's infraction is not as reprehensible or unscrupulous as to warrant
complete disregard for the fact that this is his first offense in an employment that has spanned 18 long years.
Disposition Decision of the NLRC is AFFIRMED.
FEDERICO NUEZ, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER MANUEL ASUNCION, PHILIPPINE
OVERSEAS TELECOMMUNICATIONS CORPORATION (PHILCOMSAT), HONORIO POBLADOR, RAMON NIETO, FRED AUJERO and
ROMEO VALENCIA, Respondents.
Cesar F. Maravilla, Jr. for petitioner.chanrobles virtual law library
Tanjuatco, Corpus, Tanjuatco, Tagle-Chua, Cruz & Aquino for private respondent.
BELLOSILLO, J.:
After nineteen years of service to private respondent company, the Philippine Overseas Telecommunications Corporation (PHILCOMSAT),
petitioner Federico Nuez found himself dismissed from his job for his refusal to heed an order of a ranking company official. He is now before us
contending that his inaction did not constitute willful disobedience and, in any case, his dismissal from the service is a penalty grossly
disproportionate to the charge of willful disobedience in view of his length of service. He seeks reinstatement.chanroblesvirtualawlibrarychanrobles
virtual law library
Petitioner Nuez was a driver of private respondent PHILCOMSAT since 1 May 1970. On 25 November 1988 he was assigned to its station in
Baras, Antipolo, Rizal, from seven-thirty in the morning to three-thirty in the afternoon. At one-thirty that afternoon, Engr. Jeremias Sevilla, the
officer in charge and the highest ranking official of the station, asked Nuez to drive the employees to the Makati head office to collect their profit
shares. Nuez declined saying that he had an important personal appointment right after office hours. At two-thirty that same afternoon, he also
declined a similar order given on the phone by his vehicle supervisor, Pedro Sibal, reasoning that "Ayaw kong magmaneho dahil may bibilhin ako
sa Lagundi. Kung gusto mo yong 'loyalist' ang magmaneho."chanrobles virtual law library
In his memorandum of 28 November 1988, Station Manager Ramon Bisuna required Nuez to explain within seventy-two hours why he should not
be administratively dealt with for disobeying an order of their most senior officer on 25 November 1988. In his written reply dated 1 December
1988, Nuez mentioned a personal appointment in justification for his refusal to render "overtime" service and that "ferrying employees . . . was not
a kind of emergency that . . . warrants (the) charge of disobedience."chanrobles virtual law library
Taking into consideration the reports of Engr. Sevilla and Supervisor Sibal as well as the letter of petitioner Nuez, AVP for Transport and
Maintenance Fredelino Aujero referred the matter to Vice President for Administration Ramon V. Nieto for appropriate action and invited his
attention to the Code of Disciplinary Action of the company providing that "refusal to obey any lawful order or instruction of a superior is
classified as insubordination, an extremely serious offense and its first infraction calls for dismissal of the erring employee." The report of Aujero
pointed out that Nuez could have obeyed the directive and still have enough time to attend to his appointment because the order was given him two
hours before his tour of duty ended and, moreover, he was seen playing billiards after office hours. Vice President Nieto then issued a
memorandum to Nuez terminating his employment effective 26 December 1988 for insubordination.chanroblesvirtualawlibrarychanrobles virtual
law library
In his letter for reconsideration dated 1 January 1989, Nuez explained to Vice President Nieto that after failing to get a ride to Lagundi, he went
with the company coaster at four-thirty in the afternoon and then proceeded to TMC to play billiards when the person he wanted to see at Lagundi
had already left.chanroblesvirtualawlibrarychanrobles virtual law library
On 6 March 1989, Nuez filed this suit for illegal dismissal, indemnity pay, moral and exemplary damages and attorney's
fees.chanroblesvirtualawlibrarychanrobles virtual law library
On 29 January 1990, Labor Arbiter Manuel P. Asuncion dismissed the complaint for lack of merit but awarded Nuez a "monetary consideration" in
an amount equivalent to his one-half month salary for every year of service. On appeal, the National Labor Relations Commission affirmed on 15
June 1992 the decision of the Labor Arbiter but limited the financial assistance to Nuez in an amount equivalent to three months basic pay
only.chanroblesvirtualawlibrarychanrobles virtual law library
In this extraordinary recourse for certiorari, Nuez seeks to set aside the decision of the NLRC and prays for reinstatement with full back wages
from the date of dismissal to actual reinstatement without loss of seniority rights and other benefits, an award of P50,000 in moral damages and
P50,000 in exemplary damages, attorney's fees of 10% of the total monetary award and other equitable reliefs. Nuez avers that NLRC committed
grave abuse of discretion in failing to consider the evidence on record and in relying only on the memorandum of PHILCOMSAT; in finding that
there was just cause for dismissal; and, in affirming his dismissal which is too harsh and disproportionate a penalty for a minor charge considering
his 19 years of good service.chanroblesvirtualawlibrarychanrobles virtual law library
It is undisputed that Nuez deliberately refused to obey the directive of officer-in-charge Engr. Sevilla and his supervisor Sibal. The argument that
Engr. Sevilla is not the immediate superior of Nuez is not an excuse not only because Sibal, the other officer who reiterated the same directive, was
his own supervisor but more importantly because it is not required that the officer giving the order must be the immediate superior of the employee,
it being sufficient that the officer is the alter ego of the employer with regard to the order and the order relates to the duty of the employee. In
Family Planning Organization of the Philippines, Inc. v. National Labor Relations Commission, 1 we said -
In order that the willful disobedience by the employee of the orders, regulations or instructions of the employer may constitute a just cause for
terminating his employment, said orders, regulations, or instructions must be: (1) reasonable and lawful, (2) sufficiently known to the employee,
and (3) in connection with the duties which the employee has been engaged to discharge.
Petitioner claims that the absence of an emergency situation when the alleged infraction was committed would not warrant his dismissal,
considering that he is a recipient of two citations for exemplary service during his 19-year stint with the company and that not one of the employees
supposedly adversely affected complained.chanroblesvirtualawlibrarychanrobles virtual law library
We are not persuaded. In San Miguel Corporation v. Ubaldo, 2 we acknowledged the discretion of the employer to regulate all aspects of
employment as well as the corresponding obligation of the workers to obey company rules and regulations. Deliberate disregard or disobedience of
the rules cannot be countenanced and any justification for the violation is deemed inconsequential. In fact, this is one ground the Labor Code
provides for termination of employment since an employer cannot be compelled to continue retaining a worker found guilty of maliciously
committing acts detrimental to its interests. A contrary rule would render a mockery of the regulations the employees are required to
observe.chanroblesvirtualawlibrarychanrobles virtual law library
The existence of an emergency situation is irrelevant to the charge of willful disobedience; an opposite principle would allow a worker to shield
himself under his self-designed concept of "non-emergency situation" to deliberately defy the directive of the employer. Neither is the resulting
damage vital. The heart of the charge is the crooked and anarchic attitude of the employee towards his employer. Damage aggravates the charge but
its absence does not mitigate nor negate the employee's liability. The fact that a replacement driver was able to perform the task could neither alter
the gravity of the charge, this responsibility being personal to the perpetrator. The length of service rendered by the employee is also
inconsequential for it does not lessen a bit the rebellious temper of the employee object of the charge. We thus find no grave abuse of discretion in
the finding of the NLRC that there is a just ground for the termination of petitioner from the services.chanroblesvirtualawlibrarychanrobles virtual
law library
As regards the procedural due process, it is provided in Art. 277,
par. (b), of the Labor Code that -
Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized
cause and without prejudice to the requirement of notice under Article 283 of this Code, 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 himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated
pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right
of the worker to contest the validity or legality of his dismissal by filing 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 on the
employer . . . .
Particularly, the Implementing Rules and Regulations of the Labor Code provides that -
Sec. 1. Security of tenure and due process. - No worker shall be dismissed except for a just or authorized cause provided by law and after due
process.chanroblesvirtualawlibrarychanrobles virtual law library
Sec. 2. Notice of Dismissal. - Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal . . . .chanroblesvirtualawlibrary chanrobles virtual law library
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.chanroblesvirtualawlibrarychanrobles virtual law library
Sec. 6. Decision to dismiss. - The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons
therefor.chanroblesvirtualawlibrarychanrobles virtual law library
Sec. 7. Right to contest dismissal. - Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity
or legality of his dismissal by filing a complaint with the Regional Branch of the Commission . . . .chanroblesvirtualawlibrary chanrobles virtual
law library
Sec. 11. Report on dismissal. - The employer shall submit a monthly report to the Regional Office having jurisdiction over the place of work all
dismissal effected by him during the month, specifying therein the names of the dismissed workers, the reasons for their dismissal, the dates of
commencement and termination of employment, the positions last held by them and such other information as may be required by the Ministry for
policy guidance and statistical purposes. 3chanrobles virtual law library
We also held in Manggagawa ng Komunikasyon sa Pilipinas v. National Labor Relations Commission: 4
What the law requires, as held in De Leon v. NLRC (G.R. No.
L-52056, October 30, 1980, 100 SCRA 691), cited by petitioners, is for the employer to inform the employee of the specific charges against him
and to hear his side or defenses. This does not however mean a full adversarial proceeding. Litigants may be heard thru: (1) pleadings, written
explanations, position papers, memorandum; (2) oral arguments. In both instances, the employer plays an active role - he must provide the
employee the opportunity to present his side and answer the charges, in substantial compliance with due process. Actual adversarial proceeding
becomes necessary only for clarification or when there is a need to propound searching questions to unclear witnesses. This is a procedural right
which the employee must, however, ask for it is not an inherent right, and summary proceedings may be conducted. This is to correct the common
but mistaken perception that procedural due process entails lengthy oral arguments. Hearing in administrative proceedings and before quasi-judicial
agencies are neither oratorical contests nor debating skirmishes where cross examination skills are displayed. Non-verbal devices such as written
explanations, affidavits, position papers or other pleadings can establish just as clearly and concisely aggrieved parties' predicament or defense.
What is essential is ample opportunity to be heard, meaning, every kind of assistance that management must accord the employee to prepare
adequately for his defense.
In the case at bar, petitioner was given adequate opportunity under the circumstances to answer the charge. His written explanation was taken into
consideration in arriving at the decision to dismiss him. His demand for a hearing before his employer is now too late. First, he should have insisted
on a hearing in the initial proceedings conducted by the company, and second, his written explanation admitted the complained inaction thereby
rendering unnecessary any hearing thereon. Since the defense Nuez interposed was in the nature of a justifying circumstance, the burden shifted to
him to prove that his inaction was warranted. This, Nuez failed to overthrow not only before the company but also before the Labor Arbiter and
NLRC.chanroblesvirtualawlibrarychanrobles virtual law library
Nuez now seeks refuge in Sec. 8, Art. VII, of the existing Collective Bargaining Agreement which provides -
No employee shall be deemed dismissed, suspended, demoted or reprimanded without any just, lawful and reasonable cause and previous due
process. Both the employee concerned and the Union shall be informed in writing of the charges against the former who shall be allowed union
representation during the investigation. If no disciplinary action is taken by the company within fifteen (15) days from and after the case has been
reviewed by the VP concerned, the case shall be considered closed. 5chanrobles virtual law library
The CBA provision imposes on PHILCOMSAT three (3) non-statutory responsibilities, namely, to inform the union in writing of the charge, to
allow the employee union representation, and for its Vice-President to take action on the charge within fifteen days otherwise the case shall be
deemed closed. The testimony of union lady President Frances Cariño discloses that the union was served the show cause memorandum addressed
to Nuez the day after Nuez received his and that the union helped edit the explanation submitted by Nuez to PHILCOMSAT. There was no
occasion for PHILCOMSAT to disallow, hence to violate, the right of Nuez to union representation for the reason that neither Nuez nor the union
asked for an investigation where that right may be demanded. The allegation of Nuez that the AVP/VP concerned acted on the report of Station
Manager Bisuna 12 days from receipt thereof 6 proves compliance with the third responsibility. The fact that under the company rules, the
AVP/VP concerned must decide the case within 48 hours from receipt of the papers from the Personnel Manager is inconsequential for two
reasons: first, this provision does not impose a sanction for failure to meet the 48 hour deadline (unlike in the aforequoted CBA provision) and it
cannot be fairly presumed that the charge prescribes after the 48th hour; and second, the rule presupposes the transmittal of papers from the
Personnel Manager who does not appear to have participated in the proceedings below.chanroblesvirtualawlibrarychanrobles virtual law library
There is no ground, statutory or contractual, for the claim of Nuez that he should have been required to present his side before Aujero and Bisuna in
the course of the making of their reports. This is not required by law nor by the aforequoted CBA provision.chanroblesvirtualawlibrarychanrobles
virtual law library
As if grasping for straws, Nuez hurls a malicious allegation that NLRC "relied only on the memorandum of respondents." Strangely, what he
quotes in support of this accusation is not the said memorandum but the findings of fact of the Labor Arbiter which the NLRC reaffirmed. In any
case, however, the discretion of a quasi-judicial body, like the Labor Arbiter or the NLRC, to decide a case one way or another is broad enough to
justify his or its adoption of the arguments put forth by one of the parties, as long as these are legally tenable and supported by facts on record.
Since in almost all cases only one of the contending parties prevails and usually the tribunal adopts the theory of the prevailing party, it is not safe
to postulate that the evidence of the losing party is never considered.chanroblesvirtualawlibrarychanrobles virtual law library

There is also no basis to disregard the letter report of Sibal containing the quotations in the vernacular for being hearsay. Although Sibal was not
presented by PHILCOMSAT nothing prevented Nuez from summoning him to scrutinize the veracity of the report. If he was able to present Station
Manager Bisuna as a hostile witness, there is no reason why he could not do the same to Sibal. Moreover, not only was the Sibal report not
categorically denied by Nuez, but worse, he even used it in evidence against PHILCOMSAT. 7Notwithstanding the foregoing, we need only
reiterate our ruling in Rabago v. NLRC 8 -
. . . . The argument that the affidavit is hearsay because the affiants were not presented for cross-examination is not persuasive because the rules of
evidence are not strictly observed in proceedings before administrative bodies like the NLRC, where decisions may be reached on the basis of
position papers only.
The same could be said of the logbook reports of the security guard which are being assailed as hearsay.chanroblesvirtualawlibrarychanrobles
virtual law library
Without admitting culpability, Nuez asserts that the penalty of dismissal is too harsh to warrant his dismissal, citing the cases of Philippine
Airlines, Inc. v. Philippine Airlines Employees Association (PALEA), 9decided under the
pre-Labor Code laws and jurisprudence, and Catalan v. Genilo. 10chanrobles virtual law library
The factual circumstances attending these two cases are different from what transpired in the case at bench. In the PAL case, Fidel Gotangco,
charged with theft of company property, was ordered reinstated by the Court not only because this was his first offense in his 17 years of service
and in the absence of damage to the company but also because of having been "under preventive suspension to date." More revealing in the said
decision is the incertitude of the Court whether the facts did constitute the charge so much so that we considered the situation as "too harsh an
appraisal to view it as constituting a theft." The Catalan case where petitioners therein were charged with violation of the company rule against
"Drinking in the Company Premises or Coming to Work Under the Influence of Alcohol," is similar to the PAL case aforecited. There, we
sustained the observation of the Solicitor General that "the actual violation of the company rule or regulation was not committed." In the case at
bar, the charge of willful disobedience is clearly established, hence, the dismissal of petitioner was inevitable.chanroblesvirtualawlibrarychanrobles
virtual law library
We held in Aguilar v. NLRC 11 that -
Willful disobedience of the employer's lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two (2)
requisites: the employee's assailed conduct must have been willful or intentional, the willfulness being characterized by a "wrongful and perverse
attitude." 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 (Gold City Integrated Port Services v. NLRC, 89 SCRA 811 [1990]) . . . .chanroblesvirtualawlibrarychanrobles virtual law
library
We agree with the NLRC that the acts of herein complainant in defiantly disobeying the rules of the company even after investigation, shows her
cavalier attitude which leaves the management no other recourse but to terminate her services. To condone such conduct will certainly erode the
discipline that an employer would uniformly enforce so that it can expect compliance with said rules and obligations by its other employees.
Otherwise the rule necessary and proper for the operation of its business would be rendered ineffectual (Soco vs. Mercantile Corporation of Davao,
et al., 148 SCRA 526 [1987]). An employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of
misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interests (Colgate
Palmolive Phils., Inc. vs. Ople, et al., 163 SCRA 323 [1988]).
As regards monetary awards given petitioner, we have no reason to deviate from our disposition in Aguilar v. NLRC, supra, thus -
With regard to the award of financial assistance to petitioner, We find that the same is not justified. Petitioner's willful disobedience of the orders of
her employer constitutes serious misconduct. As We held in the case of Del Monte Phil., Inc. vs. NLRC (188 SCRA 370 [1990]), "henceforth
separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character." Hence, the employer . . . . may not be required to give the petitioner separation pay,
or financial assistance, or whatever other name it is called, on the ground of social justice.
In fine, petitioner's employment with PHILCOMSAT for 19 years cannot save him in the same way as the 23 years of Aguilar with her
employer.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE the assailed decision is AFFIRMED except as regards the award of financial assistance which is ordered
deleted.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED.
LORES REALTY ENTERPRISES, INC., LORENZO Y. SUMULONG III VS. VIRGINIA E. PACIA (G.R. NO. 171189, 9 MARCH 2011,
MENDOZA, J.) SUBJECT: TERMINATION FROM EMPLOYMENT; AWARD OF DAMAGES (BRIEF TITLE: LORES REALTY VS.
PACIA).
The Facts
In 1982, respondent Virginia E. Pacia (Pacia) was hired by LREI. At the time of her dismissal, she was the assistant manager and officer-in-
charge of LREI’s Accounting Department under the Finance Administrative Division.
On October 28, 1998, LREI’s acting general manager, petitioner Sumulong, through Ms. Julie Ontal, directed Pacia to prepare Check
Voucher No. 16477 worth P150,000.00 as partial payment for LREI’s outstanding obligation to the Bank of the Philippine Islands-Family Bank
(BPI-FB). Pacia did not immediately comply with the instruction. After two repeated directives, Pacia eventually prepared Check No. 0000737526
in the amount of P150,000.00. Later, Sumulong again directed Pacia to prepare Check Voucher No. 16478 in the amount of P175,000.00 to settle
the balance of LREI’s outstanding indebtedness with BPI-FB. Pacia once again was slow in obeying the order. Due to the insistence of Sumulong,
however, Pacia eventually prepared Check No. 0000737527 in the amount of P175,000.00.
To explain her refusal to immediately follow the directive, Pacia reasoned out that the funds in LREI’s account were not sufficient to cover
the amounts to be indicated in the checks.
The next day, October 29, 1998, Sumulong issued a memorandum[3] ordering Pacia to explain in writing why she refused to follow a clear
and lawful directive.
On the same day, Pacia replied in writing and explained that her initial refusal to prepare the checks was due to the unavailability of funds to
cover the amounts and that she only wanted to protect LREI from liability under the Bouncing Checks Law.[4]
On November 6, 1998, Pacia received a notice of termination[5] stating, among others, that she was being dismissed because of her willful
disobedience and their loss of trust and confidence in her.
Pacia then filed a Complaint for Unfair Labor Practice due to Harassment, Constructive Dismissal, Moral and Exemplary Damages[6]
against LREI and Sumulong. Subsequently, Pacia filed an Amended Complaint[7] to include the charges of illegal dismissal and non-payment of
salaries.
On March 11, 1999, the Labor Arbiter (LA) rendered a decision[8] finding that the dismissal of Pacia was for a just and valid cause but
ordering payment of what was due her
On appeal, the NLRC in its March 31, 2000 Decision[9] reversed the LA’s Decision and found LREI and Sumulong guilty of illegal
dismissal.
Hence, the petition.
THE ISSUES
1. WHETHER OR NOT THE INSTANT PETITION FOR REVIEW RAISES QUESTIONS OF LAW.
2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE NLRC THAT THE ESTABLISHED
FACTS JUSTIFY RESPONDENT’S TERMINATION FROM EMPLOYMENT.
3. WHETHER OR NOT THE AWARD OF BACKWAGES MUST BE COMPUTED FROM THE TIME OF DISMISSAL UNTIL FINALITY
OF THE DECISION ESTABLISHING HER ILLEGAL DISMISSAL.[12]
In essence, the main issue to be resolved is whether Pacia’s dismissal was justified under the circumstances.
The Court finds no merit in the petition.
At the outset, it must be emphasized that the issues raised in this petition are questions of fact which are not proper subjects of an appeal by
certiorari. Well-settled is the rule that under Rule 45 of the Rules of Court, only questions of law may be raised before this Court.[13] A
disharmony between the factual findings of the LA and the NLRC, however, opens the door to a review by this Court. Factual findings of
administrative agencies are not infallible and will be set aside when they fail the test of arbitrariness. Moreover, when the findings of the NLRC
contradict those of the LA, this Court, in the exercise of its equity jurisdiction, may look into the records of the case and re-examine the questioned
findings.[14]
LREI and Sumulong argue that Pacia’s refusal to obey the directives of Sumulong was a “manifest intent not to perform the function she was
engaged to discharge.”[15] They are of the position that Pacia’s claim of “good intentions” in refusing to prepare the checks was a mere
afterthought. They stress that the instruction to prepare a check despite the absence of sufficient funds to cover the same was, nevertheless, a lawful
order.
On the other hand, Pacia counters that her initial reluctance to prepare the checks, which she knew were not sufficiently funded, cannot “be
characterized as ‘wrongful or perverse attitude.’”[16] In her view, the directive to prepare the checks at the time it was not sufficiently funded was
not a lawful order contemplated in Article 282 of the Labor Code. It was an unlawful directive because it asked for the preparation of a check
despite the fact that the account had no sufficient funds to cover the same. She further explained that she did not comply with the directive in order
to protect Sumulong and LREI from any liability in the event that the checks would be dishonored upon presentment for payment for insufficiency
of funds.
Article 282 of the Labor Code enumerates the just causes for which an employer may terminate the services of an employee, to wit:
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. [Emphasis supplied]
The offense of willful disobedience requires the concurrence of two (2) requisites: (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.[17]
Let it be noted at this point that the Court finds nothing unlawful in the directive of Sumulong to prepare checks in payment of LREI’s obligations.
The availability or unavailability of sufficient funds to cover the check is immaterial in the physical preparation of the checks.
Pacia’s initial reluctance to prepare the checks, however, which was seemingly an act of disrespect and defiance, was for honest and well
intentioned reasons. Protecting LREI and Sumulong from liability under the Bouncing Checks Law[18] was foremost in her mind. It was not
wrongful or willful. Neither can it be considered an obstinate defiance of company authority. The Court takes into consideration that Pacia, despite
her initial reluctance, eventually did prepare the checks on the same day she was tasked to do it.
The Court also finds it difficult to subscribe to LREI and Sumulongs’s contention that the reason for Pacia’s initial reluctance to prepare the checks
was a mere afterthought considering that “check no. 0000737527 under one of the check vouchers she reluctantly prepared, bounced when it was
deposited.”[19] Pacia’s apprehension was justified when the check was dishonored. This clearly affirms her assertion that she was just being
cautious and circumspect for the company’s sake. Thus, her actuation should not be construed as improper conduct.
In finding for Pacia, the Court is guided by the time-honored principle that if doubt exists between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter. The rule in controversies between a laborer and his master distinctly states that
doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former’s favor.[20]
Realda v. New Age Graphics
G.R. No. 192190
April 25, 2012
By: Karen P. Lustica
Facts: Petitioner Billy Realda was the former machine operator of respondent New Age Graphics Inc.
The company dismissed him on the ground of repeated violations of company’s rules and regulations, namely: insubordination, deliberate
slowdown of work, habitual tardiness, absence without official leave and inefficiency.
Furthermore, private respondent’s refusal to render overtime work when required upon him, contributed to losses incurred by the petitioner.
Nonetheless, while the CA recognized the existence of just causes for petitioner’s dismissal, it found that the petitioner is entitled to nominal
damages due to Graphics, Inc.’s failure to observe the procedural requirements of due process.
Issue: Whether or not the petitioner exhibited willful disobedience to a reasonable order from his employer thus making his dismissal valid
Held: Yes, the dismissal is valid but there is a lack of due process.
Ratio: In the present case, the company’s business is a printing press whose production schedule is sometimes flexible and varying. It is only
reasonable that workers are sometimes asked to render overtime work in order to meet production deadlines.
The petitioner’s arbitrary defiance to Graphics, Inc.’s order for him to render overtime work constitutes willful disobedience.
Security of tenure is guaranteed by the Constitution but it is not an absolute rule and cannot be used as a legal shield by an employee who has
exhibited habitual tardiness and absenteeism, and willful disobedience.
In Merin v. National Labor Relations Commission, this Court expounded on the principle of totality of infractions as follows:
The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to
be imposed upon an erring employee. The offenses committed by petitioner should not be taken singly and separately. Fitness for continued
employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each
other. While it may be true that petitioner was penalized for his previous infractions, this does not and should not mean that his employment
record would be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the penalty that
should be meted out since an employee's past misconduct and present behavior must be taken together in determining the proper imposable
penalty.
But, the employer, is not exempt from observing due process for every infraction. The Supreme Court found the memorandum asking for a written
explanation within 24 hours to be unreasonable.
Also, there is no indication that Graphics, Inc. issued a second notice, informing the petitioner of his dismissal. The respondents admit that
Graphics, Inc. decided to terminate the petitioner’s employment after he ceased reporting for work from the time he received the memorandum
requiring him to explain and subsequent to his failure to submit a written explanation. However, there is nothing on record showing that Graphics,
Inc. placed its decision to dismiss in writing and that a copy thereof was sent to the petitioner.
Dispositive: The petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 106928 is AFFIRMED with MODIFICATION in
that respondent New Age Graphics, Inc. is hereby ordered to pay petitioner Billy M. Realda nominal damages in the amount of Thirty Thousand
Pesos (P30,000.00) because such dismissal was for a just cause but there is a lack of due process.
KAKAMPI and ITS MEMBERS, VICTOR PANUELOS, et al., represented by DAVID DAYALO, KAKAMPI VICE PRESIDENT and
ATTORNEY-IN-FACT, petitioners, vs. KINGSPOINT EXPRESS and LOGISTIC and/or MARY ANN CO, respondents.
[G.R. No. 194813. April 25, 2012.]
Facts:
Petitioners were former drivers of the respondent Kingspoint Express, a sole proprietorship under the name of Co which is engaged in the business
of transporting 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.
Kingspoint Express issued separate notices to explain to the individual petitioners on January 16, 2006 the charges of dishonesty, serious
misconduct and loss of confidence by filing with the NLRC false, malicious and fabricated cases against the company, and their allegedly
unwarranted refusal to undergo drug testing. They were required to submit their answer to the charges within forty-eight (48) hours from receipt of
the notices with a warning that failure to do so would mean waiver of their answer. They were also placed under preventive suspension in the
meantime.
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 for the abovementioned charges based on the following acts:
fabrication of baseless money claims against the company, misleading fellow co-workers to sign the malicious complaint for money claims against
the company, refusal to undergo the company's general drug test, and extorting money from co-workers to fund activities that they were never fully
informed of. Also, petitioner Dacara was dismissed for consummating his sexual relations with Co’s helper inside her residence and thus
impregnating the help.
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. The Labor Arbiter ruled in favor of the petitioners as the charges are
purportedly mere unsubstantiated allegations. This was affirmed by the NLRC on appeal but the latter reversed itself on a subsequent MR filed by
Kingspoint. The CA initially reversed the NLRC’s ruling but on an MR, they too reversed their earlier ruling and favored Kingspoint. Thus, this
petition for certiorari before the SC.
Issue:
WON the dismissal was valid.
Ruling:
Yes, the dismissal was valid. 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.
As to the substantive requirements of due process, the employees' refusal to submit themselves to drug test is a just cause for their dismissal. An
employer may terminate an employment on the ground of serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work. Willful disobedience requires the concurrence of two elements: (1) the employee's assailed
conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and, (2) the order violated must have been reasonable,
lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. Both elements are present in this
case.
As to the first element, the dismissed employees did not deny their refusal to undergo drug testing nor did they explain their refusal. 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, the subject order is relevant 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. Nonetheless, while Kingspoint Express had reason to sever their employment relations, this Court finds its supposed
observance of the requirements of procedural due process pretentious. While Kingspoint Express required the dismissed employees to explain their
refusal to submit to a drug test, the two (2) days afforded to them to do so cannot qualify as "reasonable opportunity", which the Court construed in
King of Kings Transport, Inc. v. Mamac as a period of at least five (5) calendar days from receipt of the notice.
Thus, even if Kingspoint Express' defective attempt to comply with procedural due process does not negate the existence of a just cause for their
dismissal, Kingspoint Express is still liable to indemnify the dismissed employees, with the exception of Panuelos, Dizon and Dimabayao, who did
not appeal the dismissal of their complaints, with nominal damages in the amount of P30,000.00.
EVELYN J. GARCIA, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, THIRD DIVISION, HOLY TRINITY ACADEMY, and
MSGR. MANUEL GABRIEL, Respondents.
DECISION
ROMERO, J.:
How much is the price of trust? For petitioner Evelyn Garcia, the loss of trust in her by her employer resulted in her dismissal after nineteen years
of faithful service. She claims the penalty was too harsh for a single mistake. On the other hand, her employer avers that her services were
terminated only after an investigation revealed that she had committed several infractions in the past which put in question her very honesty and
trustworthiness as an employee.
Petitioner served as school cashier for private respondent Holy Trinity Academy (the school) from June 1974 until her dismissal on October 5,
1993 for alleged loss of confidence, gross negligence of duty, gross inefficiency, and dishonesty. As school cashier, she was the custodian of all
school funds, including tuition fees, the petty cash and canteen cash receipts. In her position paper, she alleged that her termination was brought
about by an incident which occurred on June 15, 1993. There appeared to be a discrepancy in one of the deposits she made where the amount
indicated in the deposit slip and the money actually received by the bank did not tally. A sum of P50,000.00 was missing and such loss was blamed
exclusively on her by the private respondents, after considering the separate reports of the National Bureau of Investigation and the Diaz Murillo
Dalupan Auditing Firm.
The school administration, on the other hand, relied on audit and fact-finding reports which showed irregularities in the handling of school funds,
such as delays in making deposits, infidelity and lack of control and inventory over official receipts, accommodation of checks from cash
collections, non-use of the bank armored car in the pick-up of large deposits and shortages in collections from the school canteen, not the least of
which was the incident of June 15, 1993.
Prior to her dismissal on October 5, 1993, petitioner was suspended for a total of 90 days. On December 23, 1993, she filed a complaint for illegal
dismissal, non-payment of overtime pay and damages. In the decision of Labor Arbiter Nieves V. de Castro on June 30, 1994, the school was
ordered to pay petitioner P45,500.00 as separation pay. She opined that petitioner’s dismissal was not for a valid or authorized cause and that she
was denied due process as she was not given prior written notice of the charges against her. Both parties appealed to the National Labor Relations
Commission.
On November 21, 1994, the Commission promulgated its decision. Reversing the Labor Arbiter, it found that petitioner was validly dismissed for
gross negligence and for loss of trust and confidence but it directed private respondents to indemnify petitioner in the amount of P10,000.00 for
their failure to comply with the requisites of due process prior to her termination. Petitioner’s motion for reconsideration was likewise denied in the
Commission’s resolution of January 31, 1995.
In this petition for certiorari, petitioner anchors her arguments on the presupposition that she was dismissed solely on the basis of the June 15, 1993
incident. An examination of the records of the case reveals, however, that said incident was merely one of several acts of dishonesty discovered by
the auditing firm and the fact-finding committee formed by the school.
Bearing in mind that the position of cashier is a highly sensitive position, requiring as it does the attributes of absolute trust and honesty because of
the temptations attendant to the daily handling of money, petitioner’s acts could not help but sow mistrust and loss of confidence on the part of
respondent employer. The Court agrees with the Commission that the resulting breach of trust constitutes a valid cause for the dismissal of
petitioner.
The Court likewise concludes that due process was not observed by the school in terminating the services of petitioner. After the June 15, 1993
incident, petitioner was put under preventive suspension for a total of 90 days. Within that period, an on-the-spot audit was conducted by an
auditing firm and an investigation was conducted by a fact-finding committee. The findings of these two groups, though impartial, were reached
without hearing petitioner’s side. In short, there was never an opportunity for petitioner to defend herself against the charges hurled against her.
Public respondent Commission did not err in penalizing the school for non-observance of due process even if it had a valid ground to dismiss its
erring employee. The Court, however, in line with past jurisprudence reduces the indemnity from P10,000.00 to P1,000.00.
WHEREFORE, the assailed decision dated November 21, 1994 is hereby AFFIRMED with the MODIFICATION that the indemnification awarded
by the public respondent Commission to petitioner be reduced from P10,000.00 to P1,000.00, in keeping with the Court’s policy regarding the
same. The instant petition for certiorari is hereby DISMISSED without costs to petitioner.
SO ORDERED.
CHALLENGE SOCKS VS. CA DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
TOPIC: GROSS AND HABITUAL NEGLECT OF DUTY (ART. 282[B])
CHALLENGE SOCKS VS. CA
G.R. No. 165268
November 8, 2005
FACTS: Respondent Buguat was hired by petitioner Challenge Socks Corporation as knitting operator. In the course of her employment, she
incurred absences and tardiness without prior approval and had been neglectful of her duties:
One time, she failed to check the socks she was working on causing excess use of yarn and damage to the socks’ design. She was suspended for 5
days and warned that a repetition of the same act would mean dismissal from the service.
Later, she committed the same infraction and was given a warning. Despite the previous warnings, Buguat continued to be habitually absent and
inattentive to her task.
Later on she again failed to properly count the bundle of socks assigned to her.
Thus petitioner terminated her services on grounds of habitual absenteeism without prior leave, tardiness and neglect of work.
Thereafter, Buguat filed a complaint for illegal dismissal.
ISSUE: is the termination valid?
HELD: YES
In the instant case, there is no doubt that Buguat was habitually absent, tardy and neglectful of her duties. Habitual neglect implies repeated failure
to perform one’s duties for a period of time. Buguat’s repeated acts of absences without leave and her frequent tardiness reflect her indifferent
attitude to and lack of motivation in her work. Her repeated and habitual infractions, committed despite several warnings, constitute gross
misconduct. Habitual absenteeism without leave constitute gross negligence and is sufficient to justify termination of an employee.
We find the penalty of dismissal from the service reasonable and appropriate to Buguat’s infraction. Her repeated negligence is not tolerable;
neither should it merit the penalty of suspension only. Buguat committed several infractions in the past and despite the warnings and suspension,
she continued to display a neglectful attitude towards her work. An employee’s past misconduct and present behavior must be taken together in
determining the proper imposable penalty. The totality of infractions or the number of violations committed during the period of employment shall
be considered in determining the penalty to be imposed upon an erring employee. The offenses committed by him should not be taken singly and
separately but in their totality. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character,
conduct, and ability separate and independent of each other. It is the totality, not the compartmentalization, of such company infractions that
Buguat had consistently committed which justified her dismissal.
NOTES: due process
The employer has the burden of proving that the dismissed worker has been served two notices:
(1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and
(2) the other to inform him of his employer’s decision to dismiss him.
As found by the CA, petitioner failed to comply with this requirement, thus:
A review of the records shows that private respondent was served a written termination notice on the very day she was actually dismissed from the
service. The case records are bereft of any showing that Challenge Socks Corporation notified Elvie in advance of the charge or charges against
her. Likewise, she was not given an opportunity to refute the charges made against her, thus, depriving her of the right to defend herself. In other
words, petitioner fell short in observing the two-notice rule required by law.
In Agabon v. NLRC, we upheld as valid the dismissal for just cause although it did not comply with the requirements of procedural due process.
We ruled that while the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable
for non-compliance with the procedural requirements of due process. The violation of Buguat’s right to statutory due process by the petitioner
warrants the payment of indemnity in the form of nominal damages.

Neglect of Duty; Dismissal as a harsh penalty
G.R. No. 176287 January 31, 2011
HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA vs. HOSPITAL MANAGEMENT SERVICES, INC. –
MEDICAL CENTER MANILA EMPLOYEES ASSOCIATION-AFW and EDNA R. DE CASTRO
Facts: Respondent De Castro started working as a staff nurse at petitioner hospital since September 28, 1990, until she was dismissed on July 20,
1999.
While respondent De Castro and ward-clerk orientee were at the nurse station on night duty, one Rufina Causaren, an 81-year-old
patient fell from the right side of the bed as she was trying to reach for the bedpan. Because of what happened, the niece of patient sought
assistance from the nurse station. Instead of personally seeing the patient, respondent De Castro directed ward-clerk orientee to check the patient.
The vital signs of the patient were normal.
Chief Nurse Josefina M. Villanueva requested for a formal investigation.The legal counsel of petitioner hospital directed respondent
De Castro and three other nurses on duty to appear before the Investigation Committee . During the committee investigation, respondent De Castro
explained that at that time she was attending to a newly-admitted patient and, because of this, she instructed Nursing Assistant Tatad to check the
vital signs with ward-clerk orientee.
The committee recommended that despite her more than seven years of service, respondent De Castro should be terminated from
employment for her lapse in responding to the incident and for trying to manipulate and influence her staff to cover-up the incident
HRD Officer of petitioner hospital, issued a notice of termination upon respondent De Castro, effective at the close of office hours of
July 20, 1999, for alleged violation of company rules and regulations, particularly paragraph 16 (a), Item 3, Chapter XI of the Employee's
Handbook and Policy Manual of 1996 (Employee's Handbook).
Respondent De Castro, with the assistance of respondent Hospital Management Services Inc.-Medical Center Manila Employees
Association-AFW, filed a Complaint for illegal dismissal against petitioners.
Labor Arbiter: reinstate respondent De Castro to her former position or by payroll reinstatement, at the option of the former, without loss of
seniority rights, but without backwages. The Labor Arbiter concluded that although respondent De Castro committed the act complained of, being
her first offense, the penalty to be meted should not be dismissal from the service, but merely 7 to 14 days suspension as the same was classified as
a less serious offense under the Employee’s Handbook.
NLRC: Reversed. It observed that respondent De Castro lacked diligence and prudence in carrying out her duties.
CA: reversed and set aside the Decision of the NLRC and reinstated the Decision of the Labor Arbiter, with modification that respondent De
Castro should be entitled to payment of full backwages and other benefits, or their monetary equivalent; while respondent De Castro's failure to
personally attend to patient Causeran amounted to misconduct, however, being her first offense, such misconduct could not be categorized as
serious or grave that would warrant the extreme penalty of termination from the service after having been employed for almost 9 years.
Issue: Whether or not respondent was illegally dismissed.
Held: YES. Petitioners anchor respondent De Castro’s termination of employment on the ground of serious misconduct for failure to personally
attend to patient. Based on her evaluation of the situation, respondent De Castro saw no necessity to record in the chart of patient Causaren the fact
that she fell from the bed as the patient did not suffer any injury and her vital signs were normal. She surmised that the incident was not of a
magnitude that would require medical intervention as even the patient and her niece did not press charges against her by reason of the subject
incident.
Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the
performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the
circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Despite our finding of
culpability against respondent De Castro; however, we do not see any wrongful intent, deliberate refusal, or bad faith on her part when, instead of
personally attending to patient Causaren. It was her judgment call, albeit an error of judgment, being the staff nurse with presumably more work
experience and better learning curve, to send Nursing Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of the
patient, as she deemed it best, under the given situation, to attend to a newly-admitted patient who had more concerns that needed to be addressed
accordingly. Being her first offense, respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment.
Moreover, petitioners’ allegation, that respondent De Castro exerted undue pressure upon her co-nurses to alter the actual time of the incident so as
to exculpate her from any liability, was not clearly substantiated.
The Court had ruled that sanctioning an erring employee with suspension would suffice as the extreme penalty of dismissal would be
too harsh. Considering that this was the first offense of respondent De Castro in her nine (9) years of employment with petitioner hospital as a staff
nurse without any previous derogatory record and, further, as her lapse was not characterized by any wrongful motive or deceitful conduct, the
Court deems it appropriate that, instead of the harsh penalty of dismissal, she would be suspended for a period of six (6) months without pay,
inclusive of the suspension for a period of 14 days which she had earlier served.
NISSAN MOTORS PHILS., INC. v. VICTORINO ANGELO
[G.R. No. 164181, September 14, 2011]
Facts:
Victorino Angelo, a payroll staff of the respondent company, NISSAN, filed for illegal suspension with the DOLE. Petitioner conducted an
investigation and concluded that respondent's explanation was untrue and insufficient. Thus, petitioner issued a Notice of Termination.
Respondent amended his previous complaint against petitioner to include the
charge of illegal dismissal. The Labor Arbiter dismissed the complaint for lack of merit. NLRC sustained. CA reversed directing reinstatement of
Angelo and ordered the company to pay him backwages from the time of his illegal dismissal.
Thus this petition.
Petitioner argues that the factual findings of the Labor Arbiter and the NLRC should have been accorded respect by the CA as they are based on
substantial evidence. They claimed that the language used by respondent in his Letter-Explanation is akin to a manifest refusal to cooperate with
company officers, and resorted to conduct which smacks of outright disrespect and willful defiance of authority or insubordination.
Issue:
1) Was the termination just?
2) Is a justly terminated employee entitled to separation pay?
Held:
1) YES. The dismissal of respondent was legal or for a just cause based on substantial evidence presented by petitioner. Substantial evidence,
which is the quantum of proof required in labor cases, is that amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.
The just causes enumerated in the Labor Code namely serious misconduct, willful disobedience and gross neglect were duly substantiated by the
petitioner.
- For misconduct or improper behavior to be a just cause for dismissal,
(a) it must be serious; (b) it must relate to the performance of the employees duties; and (c) it must show that the employee has become unfit to
continue working for the employer.
In this case, the letter-explanation was found to be grossly discourteous in content and tenor. Jurisprudence shows accusatory and inflammatory
language used by an
employee to the employer or superior can be a ground for dismissal or termination.
- For the allegation of willful or intentional disobedience, there is just dismissal only where such rule, order or instruction is (1) reasonable
and lawful, (2) sufficiently known to the employee, and (3) connected with the duties which the employee has been engaged to discharge.
The allegations can still be adduced and proven in the same Letter--Explanation.
- The allegation of gross negligence was also substantiated as shown in Angelo’s failure to turn over his functions to someone capable of
performing the vital tasks which he could not effectively perform or undertake because of his heart ailment or condition.
2) YES. By way of exception, the grant of separation pay or some other financial assistance may be allowed to an employee dismissed for just
causes on the basis of equity. Although the dismissal was legal, respondent is still entitled to a separation pay as a measure of financial assistance,
considering his length of service and his poor physical condition which was one of the reasons he filed a leave of absence.
NISSAN MOTORS PHILS., INC. vs. VICTORINO ANGELO G.R. No. 164181, 14 September 2011
FACTS:
Angelo was employed by Nissan as one of its payroll staff. His sick leave and vacation leave resulted in the non-preparation of the payroll for that
particular period.
He then received a Memorandum informing him that the company is considering his dismissal from employment on the grounds of serious
misconduct, willful disobedience and gross neglect of duties. He was then placed on preventive suspension effective immediately. Unsatisfied with
his answer, they then issued a Notice of Termination.
ISSUE:
Whether or not an employee dismissed on just cause may be entitled to separation pay.
RULING:
Yes. Although the dismissal was legal, respondent is still entitled to a separation pay as a measure of financial assistance, considering his length of
service and his poor physical condition which was one of the reasons he filed a leave of absence. As a general rule, an employee who has been
dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay. Although by way of
exception, the grant of separation pay or some other financial assistance may be allowed to an employee dismissed for just causes on the basis of
equity, inspired by compassionate and social justice.
CASE DIGEST: PNB V. PADAO
G.R. Nos. 180849 and 187143
PHILIPPINE NATIONAL BANK, Petitioner, v. DAN PADAO, Respondent.
MENDOZA, J.:
FACTS:
On August 21, 1981, Padao was hired by PNB as a clerk at its Dipolog City Branch. He was later designated as a credit investigator in an acting
capacity on November 9, 1993. He was ultimately promoted to the position of Loan and Credit Officer IV.
In 1994, PNB became embroiled in a scandal involving "behest loans" as anomalous loans were being granted by its officers. In line with this,
Padao was administratively charged with Dishonesty, Grave Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best Interest of the
Service, and violation of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act). The case against Padao was grounded on his having allegedly
presented a deceptively positive status of the business, credit standing/rating and financial capability of 13 loan applicants. After due investigation,
PNB found Padao guilty of gross and habitual neglect of duty and ordered him dismissed from the bank. Padao appealed to the banks Board of
Directors. Velasco, Padaos colleague, was also held guilty of the offenses charged, and was similarly meted the penalty of dismissal. Her motion
for reconsideration, however, was later granted by the bank, and she was reinstated.
ISSUES
I. Whether the position of a credit investigator is one imbued with the trust and confidence of the employer
II. Whether the act of falsifying the credit and appraisal reports and that of affixing ones signature in a false report by another is one and the same
degree of misconduct which warrants the same penalty
HELD:
While it is an employers basic right to freely select or discharge its employees, if only as a measure of self-protection against acts inimical to its
interest, the law sets the valid grounds for termination as well as the proper procedure to be followed when terminating the services of an
employee.
Thus, in cases of regular employment, the employer is prohibited from terminating the services of an employee except for a just or authorized
cause. Such just causes for which an employer may terminate an employee are enumerated in Article 282 of the Labor Code: (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 family
member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. Further, due process requires that
employers follow the procedure set by the Labor Code. Under Art. 277, workers may be dismissed only for a just cause and enjoy the right of due
process which includes notice and the ample opportunity to be heard and to defend his or her side.
In this case, Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b) of the Labor Code. Gross negligence
connotes want of care in the performance of ones duties, while habitual neglect implies repeated failure to perform ones duties for a period of time,
depending on the circumstances. Padao was accused of having presented a fraudulently positive evaluation of the business, credit standing/rating
and financial capability 13 loan applicants.
The role that a credit investigator plays in the conduct of a banks business cannot be overestimated. The amount of loans to be extended by a bank
depends upon the report of the credit investigator on the collateral being offered. If a loan is not fairly secured, the bank is at the mercy of the
borrower who may just opt to have the collateral foreclosed. If the scheme is repeated a hundredfold, it may lead to the collapse of the bank.
Padao's repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual neglect of duties under Article
282 (b) of the Labor Code. He not only failed to perform what he was employed to do, but also did so repetitively and habitually, causing millions
of pesos in damage to PNB. Thus, PNB acted within the bounds of the law by meting out the penalty of dismissal, which it deemed appropriate
given the circumstances.
The CA was correct in stating that when the violation of company policy or breach of company rules and regulations is tolerated by management, it
cannot serve as a basis for termination. Such ruling, however, does not apply here. The principle only applies when the breach or violation is one
which neither amounts to nor involves fraud or illegal activities. In such a case, one cannot evade liability or culpability based on obedience to the
corporate chain of command.
Padao, in affixing his signature on the fraudulent reports, attested to the falsehoods contained therein. Moreover, by doing so, he repeatedly failed
to perform his duties as a credit investigator.
CASE DIGEST: MANSION PRINTING V. BITARA
G.R. No. 168120 : January 25, 2012
MANSION PRINTING CENTER and CLEMENT CHENG, Petitioners, v. DIOSDADO BITARA, JR., Respondent.
PEREZ,J.:
FACTS:
Petitioners engaged the services of respondent as a helper (kargador). Respondent was later promoted as the companys sole driver tasked to pick-up
raw materials for the printing business, collect account receivables and deliver the products to the clients within the delivery schedules.
Petitioners aver that the timely delivery of the products to the clients is one of the foremost considerations material to the operation of the
business.It being so, they closely monitored the attendance of respondent. They noted his habitual tardiness and absenteeism.
Thus, petitioners issued a Memorandumrequiring respondent to submit a written explanation why no administrative sanction should be imposed on
him for his habitual tardiness.
Despite respondents undertaking to report on time, however, he continued to disregard attendance policies.
Consequently, Davis Cheng, General Manager of the company and son of petitioner Cheng, issued another Memorandum(Notice to Explain)
requiring respondent to explain why his services should not be terminated. He personally handed the Notice to Explain to respondent but the latter,
after reading the directive, refused to acknowledge receipt thereof.He did not submit any explanation and, thereafter, never reported for work.
Davis Cheng personally served another Memorandum(Notice of Termination) upon him informing him that the company found him grossly
negligent of his duties, for which reason, his services were terminated.
On even date, respondent met with the management requesting for reconsideration of his termination from the service. However, after hearing his
position, the management decided to implement the Memorandum. Nevertheless, the management, out of generosity, offered respondent financial
assistance in the amount ofP6,110.00 equivalent to his one month salary. Respondent demanded that he be given the amount equivalent to two (2)
months salary but the management declined as it believed it would, in effect, reward respondent for being negligent of his duties.
Respondent filed a complaintfor illegal dismissal against the petitioners before the Labor Arbiter.
Labor Arbiter dismissed the complaint for lack of merit.
On appeal to the National Labor Relations Commission, the findings of the Labor Arbiter was AFFIRMEDen toto.
Before the Court of Appeals, respondent sought the annulment of the Commissions Resolution on the ground that they were rendered with grave
abuse of discretion and/or without or in excess of jurisdiction.
The Court of Appeals found for the respondent and reversed the findings of the Commission.
ISSUE: Whether or not respondent is illegally dismissed?
HELD: NLRC's decision is reinstated.
LABOR LAW
In order to validly dismiss an employee, the employer is required to observe both substantive and procedural aspects the termination of
employment must be based on a just or authorized cause of dismissal and the dismissal must be effected after due notice and hearing.
We, therefore, agree with the Labor Arbiters findings, to wit:
The imputed absence and tardiness of the complainant are documented. He faltered on his attendance 38 times of the 66 working days. His last
absences on 11, 13, 14, 15 and 16 March 2000 were undertaken without even notice/permission from management. These attendance delinquencies
may be characterized as habitual and are sufficient justifications to terminate the complainants employment.
On this score,Valiao v. Court of Appealsis instructive:
xxx It bears stressing that petitioners absences and tardiness were not isolated incidents but manifested a pattern of habituality. xxx The totality of
infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed
upon an erring employee. The offenses committed by him should not be taken singly and separately but in their totality. Fitness for continued
employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each
other.
InValiao,we definedgross negligenceas want of care in the performance of ones dutiesandhabitual neglectas repeated failure to perform ones duties
for a period of time, depending upon the circumstances.51 These are not overly technical terms, which, in the first place, are expressly sanctioned
by the Labor Code of the Philippines, to wit:
ART. 282.Termination by employer.- An employer may terminate an employment for any of the following causes:
(a) xxx
(b)Gross and habitual neglect by the employee of his duties;
xxx
Clearly, even in the absence of a written company rule defining gross and habitual neglect of duties, respondents omissions qualify as such
warranting his dismissal from the service.
We cannot simply tolerate injustice to employers if only to protect the welfare of undeserving employees. As aptly put by then Associate Justice
Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the managements
prerogative xxx to terminate his employment. Even as the law is solicitous of the welfare of employees, it must also protect the rights of an
employer to exercise what are clearly management prerogatives. As long as the companys exercise of those rights and prerogative is in good faith
to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such
exercise will be upheld.
Procedural due process entails compliance with the two-notice rule in dismissing an employee, to wit: (1) the employer must inform the employee
of the specific acts or omissions for which his dismissal is sought; and (2) after the employee has been given the opportunity to be heard, the
employer must inform him of the decision to terminate his employment.
REMANDED
San Miguel Corporation v. NLRC, G.R. No. 82467 June 29, 1989
Petitioner San Miguel Corporation (SMC) sponsored an Innovation Program which grants cash rewards to all “SMC employees who submit to the
corporation ideas and suggestions found to beneficial to the corporation.
Private Respondent Rustico Vega, who is a mechanic in the Bottling Department of the SMC submitted an innovation proposal which supposed to
eliminate certain defects in the quality and taste of the product “San Miguel Beer Grande.”
Petitioner Corporation did not accept the said proposal and refused Mr. Vega’s subsequentdemands for cash award under the innovation program.
Hence, Vega filed a complaint with the then Ministry of Labor and Employment in Cebu. He argued that his proposal had been accepted by the
methods analyst and was implemented by the SMC and it finally solved the problem of the Corporation in the production of Beer Grande.
Petitioner denied of having approved Vega’s proposal. It stated that said proposal was turned down for “lack of originality” and the same, even
if implemented, could not achieve the desire result.Further, petitioner Corporation alleged that theLabor Arbiter had no jurisdiction.
The Labor Arbiter dismissed the complaint for lack of jurisdiction because the claim of Vega is “not a necessary incident of his employment” and
does not fall under Article 217 of the Labor Code. However, in a gesture of compassion and to show the government’s concern for
the working man, the Labor Arbiter ordered petitioner to pay Vega P2, 000 as “financial assistance.” Both parties
assailed said decision of the Labor Arbiter. The NLRC set aside the decision of the Labor Arbiter and ordered SMC to pay complainant the amount
of P60, 000
Issue:
Whether the Labor Arbiter and the Commission has jurisdiction over the money claim filed by private respondent
HELD:
NO
The Labor Arbiter and the Commission has no jurisdiction over the money claim of Vega. The court ruled that the money claim of private
respondent Vega arose out of or in connection with his employment with petitioner. However, it is not enough to bring Vega’s money claim within
the original and exclusive jurisdiction of Labor Arbiters. In the CAB, the undertaking of petitioner SMC to
grantcash awards to employees could ripen into anenforceable contractual obligation on the part of petitioner SMC under certain
circumstances. Hence, the issue whether an enforceable contract had arisen between SMC and Vega, and whether it has been breached, are
legal questions that labor legislations cannot resolved because it’s recourse is the law on contracts. Where the claim is to be resolved not by
reference to the Labor Code or other labor relations statute or a collective bargaining agreement BUT by the general civil law, the jurisdiction over
the dispute belongs to the regular courts of justice and not to the Labor Arbiter and NLRC.
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NBSR
SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Facts:
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates
three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of the
NASUREFCO Batangas Sugar Refinery.
In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. We glean from the
records that for about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rank-and file
employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code
as amended.
With the implementation of the JE Program, members of respondent union were re-classified under levels S-5 to S-8 which are considered
managerial staff for purposes of compensation and benefits.
In May 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to Republic Act NO. 6715 allowing
supervisory employees to form their own unions, as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas
Sugar Refinery.
In June 1990, the members of herein respondent union filed a complainant with the executive labor arbiter for non-payment of overtime, rest day
and holiday pay allegedly in violation of Article 100 of the Labor Code.
In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages complained of.
On appeal, in a decision promulgated on July 1991, respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor
arbiter on the ground that the members of respondent union are not managerial employees, and, therefore, they are entitled to overtime, rest day and
holiday pay. Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the
evaluation, review and final action by their department heads.
Issue:
W/N the Supervisors are considered Managerial Employees and should no longer receive overtime, rest day and holiday pay.
Ruling:
Yes
Ratio:
"Art. 82 Coverage. — The provisions of this title shall apply to employees in all establishments and undertakings whether for profit or not, but not
to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in
Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other officers or members of the managerial staff." (Emphasis supplied.)
It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying managerial positions, they are
clearly officers or members of the managerial staff because they meet all the conditions prescribed by law and, hence, they are not entitled to
overtime, rest day.
Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach and pertain exclusively to their
positions. Entitlement to the benefits provided for by law requires prior compliance with the conditions set forth therein. With the promotion of the
members of respondent union, they occupied positions which no longer met the requirements imposed by law. Their assumption of these positions
removed them from the coverage of the law, ergo, their exemption therefrom.
As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which attach to their former positions,
there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. As the saying goes by, they could not,
as a simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO.
Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management, provided it is done in good faith. In
the case at bar, private respondent union has miserably failed to convince this Court that the petitioner acted implementing the JE Program. There is
no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to
receive.

G.R. No. 114848 December 14, 1995
ALEX A. FALGUERA, petitioner,
vs.
HON. LABOR ARBITER CORNELIO L. LINSANGAN, NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE REFINING CO.
(PRC) or UNILEVER-PRC, and JESUS JAVELONA, respondents.
DAVIDE, JR., J.:
This is a special civil action for certiorari seeking the reversal of the decision 1 of public respondent National Labor Relations Commission
(NLRC) in NLRC NCR Case No. 00-10-05993-91, which affirmed in toto the decision2 of public respondent Labor Arbiter Cornelio L. Linsangan
dismissing the petitioner's complaint but awarding him the sum of P7,000.00 which is equivalent to his one-month salary as a sanction against the
private respondent.
The pleadings disclose the following factual and procedural antecedent.
The petitioner was an employee of private respondent Philippine Refining Co., Inc., now known as Unilever Philippines (PRC), Inc. (hereinafter
Company). He was hired in 1977 as a craftsman helper. During his employment, he was twice promoted — first, as mechanic and then as
warehouseman, which was his position at the time he was terminated from employment. As a warehouseman, he received a salary of P340.00 a day
and reported to work five times a week.3
Among his duties and responsibilities were the custody and safekeeping of the engineering stores' stock of materials for the exclusive use of the
Company; the signing of the materials and requisition forms (hereinafter MRs); the release of materials duly requisitioned; the forwarding of the
original MRs to the accounting department; and the acceptance of new stocks in replenishment of those which have been requisitioned.4
The normal procedure5 in the requisition of materials is as follows:
1) An MR is filled up and approved by the department manager of the requisitioning department for the release of supplies or materials. The MR
comes in triplicate copies: the white, which is the original and is eventually forwarded to the accounting department; the green, which is retained by
the requisitioning department; and the yellow, which is given to the issuing department, the engineering stores.
(2) The MR, in triplicate, is presented to the engineering storeman of the engineering stores for the release of the requisitioned materials as
specified therein. He and the representative of the requisitioning department duly sign the MR to confirm the release of the materials, with the latter
retaining the green copy of the MR for the files of the requisitioning department.
(3) The engineering storeman retains the yellow copy for the files of the engineering stores and, thereafter, delivers the original white copy of the
MR to the accounting department, which in turn places an order of the materials requisitioned with the Company supplier. The original MR is
separately filed and recorded in the stock cards of the accounting department.
(4) The ordered materials are directly delivered by the Company supplier to the engineering storeman, who acknowledges receipt thereof.
Sometime in August, 1991, the assistant soapery engineer of the Company observed an unusual increase in the reported requisitions by the soapery
department of Parker packing materials for the month of June. Upon his examination of the green copies of the MRs of the soapery department, he
discovered that P27,025.00 worth of Parker packing materials chargeable to his department could not be accounted for and were not reflected in the
said copies. He therefore sought the original white copies of the MRs from the accounting department. A meticulous scrutiny disclosed that while
the original MRs contained entries of the packing items worth P27,050.00, they, however, showed alterations, superimpositions, and erasures.6
The anomaly was duly reported to the Company's engineering department manager, herein private respondent Jesus Javelona. Upon his request, an
investigation was conducted by the Company's internal audit section. Two particular MRs were in question: (1) MR No. 449727, which had an
erasure and contained an insertion of 5 kgs. of 5/8" Parker packing materials worth P12,075.00 in the original copy; and (2) MR No. 449748, which
contained an insertion of 5 kgs. of 5/16" Parker packing materials worth P14,950.00, also in the original copy.7 The audit team concluded that the
insertions were made with the connivance of at least two employees after the approval of the MRs by the manager of the soapery department.
A second investigation was made, wherein MRs issued from January to June 1991 were examined and certain employees were interviewed,
specifically the issuing engineering storemen and the area mechanics who had received the requisitions recorded in the questioned MRs.8
On 22 August 1991, the petitioner was placed under preventive suspension pending the investigation of the anomaly.9
On 26 August 1991, the audit team submitted its memorandum which contained its findings and conclusion. In summary, it found that eight
original MRs 10 were tampered by two engineering storemen, in particular, the petitioner and Felipe Viado. The latter admitted having tampered
one MR and offered to testify against the petitioner in case the matter would be brought to court. The total loss suffered by the Company amounted
to P104,225.00. 11
The following month, the petitioner was summoned by private respondent Javelona and the Company's Industrial Relations Manager, Bernardo
Jambolos III. He was informed that the Company was filing charges against him for tampering with its documents, resulting in its loss of
P105,225.00. The petitioner was shown the file on the investigation and was asked to explain his side. In his defense, he claimed that he only
released what were written in the original copy of the MRs in question.12
On 23 September 1991, the petitioner received a letter signed by private respondent Javelona informing him that the Company was terminating his
employment for loss of confidence and breach of trust, effective as of the time he was placed under preventive suspension. 13
On 2 October 1991, the Company's rank-and-file union, Bisig ng Manggagawa, intervened. But, after being apprised of the evidence against the
petitioner and Felipe Viado, the union requested that in lieu of dismissal, the said employees be allowed to avail of retirement benefits, considering
their length of service. 14
On 10 October 1991, the petitioner filed with the NLRC Regional Arbitration Branch a complaint for illegal dismissal and damages with prayer for
attorney's fees against the Company, private respondent Javelona, and the Company's president, Cesar Bautista. 15 The complaint was docketed as
NLRC-NCR-Case No. 00-10-05993-91.
After a full-blown trial, respondent Labor Arbiter Cornelio L. Linsangan rendered on 25 June 1993 a decision 16 disposing as follows:
WHEREFORE, judgment is hereby rendered dismissing the above-entitled complaint for lack of merit. However, by way of sanction the
respondent is ordered to pay complainant the sum of P7,000.00 which is equivalent to his one month salary. 17
The Labor Arbiter held that the petitioner occupied a position of trust and confidence, as he had in his custody and care certain company properties.
The loss of goods in the amount of P105,225.00 while in the petitioner's custody was sufficient basis for the Company to lose its trust and
confidence in the petitioner. His dismissal was, therefore, justified. 18
Nevertheless, the Labor Arbiter found that the Company "did not observe the procedure for terminating employment as provided for in paragraph
(b) of Article 272 [sic] of the Labor Code." 19 Accordingly, and pursuant to this Court's ruling in Wenphil Corporation vs. National Labor
Relations Commission, 20 reiterated in subsequent cases, the Labor Arbiter resolved to impose upon the Company a sanction, in an amount
equivalent to the petitioner's one-month salary, for its failure to observe the due process requirements of notice and hearing.
The petitioner appealed the decision to the NLRC which, however, sustained the Labor Arbiter in its 29 October 1993 decision.
Hence, this petition wherein the petitioner contends that the public respondents committed grave abuse of discretion and serious error in law (a) in
finding just cause for his dismissal on mere allegation of loss of trust and confidence, (b) in applying the Wenphil case, and (c) in not awarding him
damages. 21
The petitioner submits that he was dismissed on mere suspicion as there was even no proof that the Company actually suffered loss of goods worth
P105,225.00 or that he actually tampered with the questioned MRs. In support of this contention, he cites portions of the transcripts of stenographic
notes where: (1) Teodoro Lopez, manager of the Internal Audit Section of the Company, admitted that the actual physical count of the inventory
tallied with the stock records and that the tampering of the original MRs resulted in overusage of the materials; 22 (2) private respondent Javelona
admitted that no theft or pilferage in the warehouse where the petitioner worked was reported by the Company security; 23 and (3) Crismon Castro
Igtiben, a Company auditor, disclosed that the original recommendation of the investigating committee was the petitioner's retirement or transfer.
24
The petitioner also claims that he was a mere rank-and-file employee whose position was not reposed with trust and confidence. And considering
that he had rendered fourteen years of service to the company, dismissal was too harsh a penalty. Moreover, he was virtually deprived of his
retirement benefits.
It is further asserted that the assailed decision went beyond what was originally claimed by the private respondents. The loss originally imputed to
him was only P69,000.00, yet he was ultimately blamed for the alleged loss of P105,225.00.
For their part, the private respondents contend that the petitioner raises questions of fact which may no longer be entertained by this Court. In any
event, he was entrusted with the issuance, receipt, and custody of the lost materials. His position required a high degree of trust and confidence, and
his breach thereof justified his dismissal.
The Solicitor General debunks the petitioner's claim that there was no evidence of loss. The two investigations undeniably disclosed the petitioner's
active participation in the questioned MRs. Also, the lengthy testimonies cited by the petitioner were all taken out of context. The physical count or
inventory of the packing items tallied with the stock records because the latter were based on the tampered MRs. 25 No theft was reported by the
security force, since the loss was attributed to an inside job. And the fact that the investigating team recommended either the petitioner's retirement
or transfer instead of dismissal bolstered the claim that the petitioner had indeed committed the anomalies.
We see no merit in the instant petition.
The petitioner's basic grievance is the findings of fact of the public respondents. It is settled that the factual findings of quasi-judicial agencies, such
as the NLRC, which have acquired expertise in the matters entrusted to their jurisdiction are accorded by this Court not only respect but even
finality if they are supported by substantial evidence, 26 or that amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion. 27

As disclosed in the decision of respondent Labor Arbiter, the search for the facts in this case was not solely confined within the position papers of
the parties. He conducted "a full-blown trial" 28 with the petitioner presenting as hostile witnesses respondent Jesus Javelona, Teodoro Lopez, and
Crismon Castro Igtiben, who are, respectively, the Manager of the Engineering Department, Manager of the Internal Audit Section, and Auditor of
the latter section of the Company. The petitioner found it convenient not to testify. On the other hand, the Company presented Teodoro Lopez and
submitted the affidavits of private respondent Jesus Javelona and the other officials of the Company, namely, Renato Amancio, Manager of the Oil
Mill Engineering Department; Jerry Casino, Manager of the NSD Powder Engineering Department; Gerardo Parungao, Manager of the Soapery
Engineering Department; and Antonio Ronquillo, Manager of Foods Engineering Department. 29 The Labor Arbiter had the further advantage of
personally observing the deportment of the witnesses while they were testifying. It is doctrinally entrenched that the evaluation of the testimony of
witnesses by the one who personally receives the testimony and has the direct opportunity to observe them on the witness stand is received by an
appellate court with the highest respect and is even binding upon that court in the absence of a clear showing that the evaluation was reached
arbitrarily. 30
It is not disputed that the petitioner is a rank-and-file employee. Ordinarily, a rank-and-file employee is not reposed with a high degree of trust and
confidence expected of a supervisory or managerial employee. It must, however, be noted that the petitioner served as a warehouseman and was in
charge of the custody, safekeeping, and release of the Company's materials. The nature of his work and the scope and special character of his
duties, therefore, involved utmost trust and confidence.
The Labor Arbiter found that the evidence sufficiently established the following:
(1) Petitioner signed all copies of the questioned MRs 449727 and 449748;
(2) Petitioner released the items covered by the said MRs;
(3) There were discrepancies in the MRs — the quantity indicated in the white (original) copy exceeded that in the green and yellow copies;
(4) The white copies contained erasures and insertions;
(5) The discrepancies amounted to P27,025.00; and
(6) The total amount of discrepancies of the MRs issued from January to July, 1991 amounted to P105,225.00. 31
The two detailed audit reports by the Internal Audit Section 32 were made the basis for the conclusions of the Labor Arbiter, which were likewise
adopted by the NLRC. The reports indicated that there were eight questionable MRs with erasures and insertions and that the petitioner was the
issuing warehouseman in five of these tampered MRs as shown by his signature therein. The interviews conducted with the personnel in the
Company's different divisions revealed that the recipients received less than what were stated in the tampered MRs.
It must be emphasized that the petitioner did not deny his signatures in the questioned MRs. And when confronted with the reports of the
anomalies, he offered no explanation or theory which could account for the loss. What remains significant is that the warehousemen involved in the
said MRs were either the petitioner or Felipe Viado, with the former answerable to five of eight tampered MRs. The loss to which the petitioner is
accountable to is in the amount of P69,000.00. This is too much of a coincidence to ignore, considering that his position is one reposed with trust
and confidence.
This case is analogous to Segismundo vs. National Labor Relations Commission 33 where the charge of pilferage against two rank-and-file
employees was supported by the thorough investigation conducted by the employer. We ruled that the dismissal of the employees was with just
cause. In the said case, the documentary evidence pointed to the culpability of the dismissed employees and prevailed over the latter's self-serving
denials. While there was no direct evidence to prove that they actually committed the pilferage, we nonetheless ruled that substantial proof and not
clear and convincing evidence or proof beyond reasonable doubt is sufficient as basis for their dismissal. The standard of substantial evidence is
satisfied where "the employer has reasonable ground to believe that the employee is responsible for the misconduct, and his participation therein
renders him unworthy of the trust and confidence demanded by his position." 34
Among the just causes or valid grounds for termination of employment by the employer is "fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative." 35 Ordinary breach will not suffice; it must be willful and without justifiable
excuse; there must be basis therefor, and it must be supported by substantial evidence and not merely by the whims or caprice of the employer. 36
In the instant case, we find no difficulty in agreeing with the public respondents that the petitioner committed willful breach of the trust and
confidence reposed in him by the Company.
We also uphold the finding of both the Labor Arbiter and the NLRC that the petitioner was not accorded the due process requirements prescribed in
paragraph (b), Article 277 of the Labor Code. It is not enough that the petitioner was apprised of the results of the investigations and asked to
explain his side. This, definitely, is not the kind of notice contemplated by the Labor Code.
The twin requirements of notice and hearing are indispensable for a dismissal to be validly effected. 37 Failure to observe these requirements does
not, however, operate to invalidate or nullify the dismissal for a just and valid cause. A distinction should be made between the legality of the act of
dismissal and the legality of the manner by which the act of dismissal was performed. The first refers to dismissal under the grounds provided for
under Article 282 38 of the Labor Code. The second involves the observance of the procedural due process requirements. 39 It is now settled that
where the dismissal of an employee is proven to be for a just and valid cause but he is not accorded his right to procedural due process, the
dismissal shall be upheld but the employer must be sanctioned for non-compliance with the requirements of due process. The sanction, which is in
the nature of indemnification or penalty, depends on the facts of each case and the gravity of the omission committed by the employer and ranges
from P1,000.00 40 to P10,000.00. 41 More recently, in Worldwide Papermills, Inc. vs. National Labor Relations Commission,42 the sum of
P5,000.00 was awarded to the employee as indemnification for the employer's failure to comply with the requirements of procedural due process.
That the Company must be sanctioned and ordered to indemnify the petitioner is inevitable. However, the indemnity must be in conformity with
the above decisions. We thus reduce it from P7,000.00 to P5,000.00.
WHEREFORE, the decision of the Rational Labor Relations Commission in NLRC NCR Case No. 00-10-05993-91 is hereby AFFIRMED subject
to the modification of the sanction for the violation of the due process requirements of notice and hearing by private respondent Philippine Refining
Co., Inc. or Unilever Philippines (PRC), Inc., which is hereby reduced from P7,000.00 to P5,000.00.
SO ORDERED.
AMES BEN L. JERUSALEM PETITIONER, VS. KEPPEL MONTE BANK, HOE ENG HOCK, SUNNY YAP AND JOSEFINA
PICART, RESPONDENTS.
DECISION
DEL CASTILLO, J.:
For breach of trust and confidence to become a valid ground for the dismissal of an employee, the cause of loss of trust and confidence must be
related to the performance of the employee's duties.
This Petition for Review on Certiorari[1] assails the Decision[2] dated June 22, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 86988, which
granted the petition for certiorari and reversed and set aside the Decision[3] dated June 25, 2004 of the National Labor Relations Commission
(NLRC) in NLRC NCR CA No. 029793-01 (NCR-00-10-05292-00). Also assailed is the CA Resolution[4] dated August 31, 2005 denying the
Motion for Reconsideration thereto.
Factual Antecedents
James Ben L. Jerusalem (James) was employed by Keppel Monte Bank (Keppel) on May 25, 1998 as Assistant Vice-President. On June 1, 1998,
he was assigned as Head of the newly created VISA Credit Card Department. The bank subsequently re-organized the VISA Credit Card
Department and reduced it to a mere unit. On April 5, 1999, carrying the same rank, James was reassigned as Head of the Marketing and
Operations of the Jewelry Department. The VISA Credit Card Unit was then headed by Senior Vice President Roberto Borromeo (Roberto) and
supported by Marciana C. Gerena (Marciana), Rosario R. Ronquillo (Rosario), and Aileen Alcantara as Unit Head, Processor and Bookkeeper,
respectively.
In or about May 1999, James received from Jorge Javier (Jorge) a sealed envelope said to be containing VISA Card application forms. Jorge is a
Keppel Visa Card Holder since December 1998. James immediately handed over the envelope with accomplished application forms to the VISA
Credit Card Unit. All in all, the VISA credit card applications referred by Jorge which James forwarded to the VISA Credit Card Unit numbered
67, all of which were subsequently approved. As it turned out, all the accounts under these approved applications became past due.
On July 20, 2000, Marciana sent a letter[5] to Jorge asking the latter to assist the bank in the collection of his referred VISA accounts which have
already an accumulated principal balance of P6,281,443.90 excluding interest and service fees in the amount of P1,157,490.08. On the same date,
James upon knowing the status of the accounts referred by Jorge, sent a Memorandum[6] to Roberto recommending the filing of a criminal case for
estafa against Jorge. He further recommended that a coordination with the other banks where Jorge has deposits should be made promptly so that
they can ask said banks to freeze Jorge's accounts. James even warned Keppel that immediate action should be taken while Jorge is still in the
country.
On July 31, 2000, Jorge arranged a meeting with bank officials. The said meeting was attended by James and Marciana.
On August 9, 2000, James sent a Memorandum[7] to Napoleon Jamer (Napoleon), Vice-President of Audit Department, and to Atty. Rowena
Wilwayco, Senior Manager of Legal Department. He summarized in the said Memorandum the events that transpired during the July 31, 2000
meeting with Jorge and reiterated his suggestion for Keppel to file a case against Jorge. He further suggested that Keppel look into the inside job
angle of the approval of the VISA cards and that all key officers and staff should be probed for possible involvement.
On August 14, 2000, Napoleon issued a Memorandum[8] in reply to the August 9, 2000 Memorandum of James, advising the latter to coordinate
with Roberto and not with him. Furthermore, James was requested not to interfere with the audit process being undertaken by the Audit
Department.
On August 18, 2000, James received a Notice to Explain[9] from Keppel's Vice President for Operations, Sunny Yap (Sunny), why no disciplinary
action should be taken against him for referring/endorsing fictitious VISA card applicants. The said referrals resulted in substantial financial losses
to Keppel.
[10]
On August 23, 2000, James submitted his written explanation to Sunny. He pointed out that he had no participation in the processing of the
VISA card applications since he was no longer connected with the VISA Credit Card Unit at the time of such transactions. He explained that he
can only endorse the applications referred by Jorge to the VISA Credit Card Unit because he was already transferred to Jewelry Department, as
Head.
On September 26, 2000, the Manager for Human Resources Department, Josefina Picart, handed to James a Notice of Termination [11] informing the
latter that he was found guilty of breach of trust and confidence for knowingly and maliciously referring, endorsing and vouching for VISA card
applicants who later turned out to be impostors resulting in financial loss to Keppel. This prompted James to file before the Labor Arbiter a
complaint for illegal dismissal, illegal confiscation of car with prayer for the payment of vacation/sick leaves, 13 th month pay, damages, attorney's
fees and full backwages against Keppel on October 9, 2000.
Ruling of the Labor Arbiter
On August 15, 2001, Labor Arbiter Daisy G. Cauton-Barcelona rendered a Decision[12] finding Keppel guilty of illegal dismissal.
The dispositive portion of the Labor Arbiter's Decision reads:
VIEWED IN THE LIGHT OF THE FOREGOING, the dismissal being illegal, the complainant should be paid his backwages from the time of his
illegal termination up to the date of this decision in the amount of P584,204.54; in lieu of reinstatement, the complainant is further ordered paid his
separation pay equivalent to one (1) month pay for every year of service, in the amount of P150,000.00; the amounts of P100,000.00 and
P50,000.00 pesos as payment for moral and exemplary damages respectively; and ten (10%) percent of the total monetary award as and for
attorney's fees, or the aggregate amount of P957,624.99.
Respondents are further ordered to deliver to complainant his car, Toyota Corona with plate number THE 735 without prejudice to the payment of
the remaining balance thereon.
SO ORDERED.[13]
Ruling of the National Labor Relations Commission
Keppel sought recourse to the NLRC which issued a Decision[14] dated June 25, 2004 affirming the Decision of the Labor Arbiter with the
modification that the award of moral and exemplary damages be deleted and that the attorney's fees be based on the 13 th month pay and service
incentive leave pay.
Keppel filed a Motion for Reconsideration[15] which was denied by the NLRC in a Resolution[16] dated July 30, 2004.
Aggrieved, Keppel filed with the CA a Petition for Certiorari.[17]
Ruling of the Court of Appeals
The CA found merit in the petition and granted the same through a Decision[18] dated June 22, 2005, the dispositve portion of which reads:
WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the public respondent are hereby SET ASIDE, and a new
judgment is entered DISMISSING the private respondent's complaint for lack of merit.
[19]
SO ORDERED.
Petitioner moved for reconsideration[20] but to no avail.[21] Hence, this appeal raising the following issues:
Issues
A. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT REVERSED THE CONCURRING FINDINGS OF THE LABOR
ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION THAT RESPONDENTS' DISMISSAL OF PETITIONER
BASED ON ALLEGED LOSS OF TRUST AND CONFIDENCE HAS NO BASIS AT ALL AND THEREBY DECLARING THE
DISMISSAL OF PETITIONER AS JUSTIFIED.
B. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING PETITIONER'S DISMISSAL AS LEGAL AND
EFFECTIVELY DELETING THE MONETARY AWARDS BY THE LABOR ARBITER AND NLRC.
C. THE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE DECISION OF THE LABOR ARBITER AND X X X
[THE] RESOLUTION OF THE NATIONAL LABOR RELATIONS COMMISSION BY USING A SUPREME COURT RULING
WHICH IS NOT APPLICABLE TO THE INSTANT CASE.[22]
The above issues can be summed up to the sole issue of whether Keppel legally terminated James's employment on the ground of willful breach of
trust and confidence.
Petitioner's Arguments
Petitioner believes that the Labor Arbiter and the NLRC, who are deemed to have acquired expertise in matters within their respective jurisdictions,
correctly held that there was no basis to justify the alleged loss of trust and confidence of respondents on petitioner.
He avers that a dismissal based on loss of trust and confidence should be proven by substantial evidence and founded on clearly established
facts. As culled from the records and as correctly cited by the lower tribunals, respondents have not been able to show any
concrete proof that petitioner had participated in the
approval of the subject credit cards and that his only participation was his act of forwarding the applications to the VISA Credit Card Unit of which
he is no longer the head.
Furthermore, the loss of trust and confidence in addition to being willful and without justifiable excuse must also be work-related rendering the
employee concerned unfit to continue working. In this case, petitioner points out that he was not anymore connected with the VISA Credit Card
Unit when the alleged credit card scam happened and claims that he had nothing to do with the approval of the said card applications. Hence, he
should not be made answerable for the erroneous judgment of the officers of the VISA Credit Card Unit.
Respondents' Arguments
Loss of trust and confidence is a valid ground for dismissing an employee, provided that same arises from proven facts. Termination of
employment on this ground does not require proof beyond reasonable doubt of the employee's conduct. It is sufficient that there is some basis for
the loss of trust or that the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him
unworthy of the trust and confidence demanded of his position.
In this case, respondents believe that the testimonies of Marciana and Rosario who were former subordinates of James in the VISA Credit Card
Unit deserve full faith and credence in the absence of any evidence that they were impelled by improper motives. The two corroborated each other
in saying that no credit investigation and residence checking were conducted on the applications endorsed by Jorge because there was a specific
instruction from James for them not to conduct the said investigations and validation as he was personally vouching for the existence and validity
of the said accounts.
The dismissal of James is therefore valid in view of the overwhelming and unrebutted evidence presented against him. It is the prerogative of
management to dismiss petitioner, who is a managerial employee, for loss of trust and confidence.
Our Ruling
The petition is impressed with merit.
Article 282 of the Labor Code states:
ART. 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.
Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of employment, namely: (1) fraud; or (2) willful
breach by the employee of the trust reposed in him by his employer or duly authorized representative.
"Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence."[23] As
provided for in Article 282, an employer may terminate an employee's employment for fraud or willful breach of trust reposed in him. "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."[24]
Keppel has the burden of proof to
discharge its allegations.
"Unlike in other cases where the complainant has the burden of proof to discharge its allegations, the burden of establishing facts as bases for an
employer's loss of confidence in an employee - facts which reasonably generate belief by the employer that the employee was connected with some
misconduct and the nature of his participation therein is such as to render him unworthy of trust and confidence demanded of his position - is on the
employer."[25]
While it is true that loss of trust and confidence is one of the just causes for termination, such loss of trust and confidence must, however, have
some basis. Proof beyond reasonable doubt is not required. It is sufficient that there must only be some basis for such loss of confidence or that
there is reasonable ground to believe, if not to entertain, the moral conviction that the concerned employee is responsible for the misconduct and
that the nature of his participation therein rendered him absolutely unworthy of trust and confidence demanded by his position.[26]
Keppel failed in discharging the burden
of proof that the dismissal of James
is for a just cause.
The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and
confidence. In this case, there is no doubt that James held a position of trust and confidence as Assistant Vice-President of the Jewelry Department.
"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." [27] Keppel's evidence against James fails to meet this standard.
Worthy to note is the pertinent portion of the Decision of Labor Arbiter Daisy G. Cauton-Barcelona, to wit:
Looking closely at the circumstances obtaining herein, we note that respondent bank has not been able to show any concrete proof that indeed
complainant had participated in the approval of the questioned VISA CARD accounts. The records [are] bereft of any concrete showing that
complainant directed Ms. Gerena to approve the applications without passing through the process. The alleged marginal notations in the
applications were admittedly scribbled by Ms. Gerena. Even assuming that there are such notations on the applications i.e., "c/o James Jerusalem",
still, such notations to us can not be construed as a directive coming from complainant to specifically do away with existing policy on the approval
of applications for VISA Card.
Of course, we concede to the fact that respondent had sustained losses on account of the so-called "credit card scam" in the amount of
P7,961,619.82 all coming from the accounts referred x x x by Mr. Jorge Javier, but no amount of mind boggling can we infer that the mere act of
handing the already accomplished forms for VISA CREDIT Card could be interpreted as "Favorable endorsement" with instructions not to conduct
the usual credit investigation/verification of applicants. To lay the blame upon the complainant would be at the height of injustice considering that
at that time, he no longer has the authority to pass upon such applications. To attribute such huge financial losses to one who is no longer connected
with the VISA Card department would be stretching too far, the import of the term "some basis." We simply could not see our way through how
respondent bank could have inferred that complainant made such instruction upon Ms. Gerena to forego the usual process and have the applications
approved without any direct evidence showing to be so. [28]
Also significant is the findings of the NLRC that petitioner had not committed any acts inimical to the interest of Keppel. The NLRC stated, viz:
The lines having been drawn between the VISA Card Unit and the Jewelry Department, the complainant who is assigned with the latter as Vice-
President can not be made responsible for the misdeeds of those in the former. Moreover, the act of betrayal of trust if any, must have been
committed by the employee in connection with the performance of his function or position. Verily, in this case, complainant who has nothing to do
with the approval of VISA Cards, should not be made answerable to the imprudence and indiscretion of Ms. Gerena and Ms. Ronquillo. [29]
"Loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of
responsibility or trust and confidence. He must be invested with confidence on delicate matters, such as custody handling or care and protection of
the property and assets of the employer. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and
shows that the employee concerned is unfit to continue to work for the employer." [30]
From the findings of both the Labor Arbiter and the NLRC it is clear that James did nothing wrong when he handed over to Marciana the envelope
containing the applications of persons under the referred accounts of Jorge who were later found to be fictitious. As the records now stand, James
was no longer connected with the VISA Credit Card Unit when the 67 applications for VISA card were approved. At such time, he was already the
Head of the Marketing and Operations of the Jewelry Department. His act therefore of forwarding the already accomplished applications to the
VISA Credit Card Unit is proper as he is not in any position to act on them. The processing and verification of the identities of the applicants
would have been done by the proper department, which is the VISA Credit Card Unit. Therefore, it is incumbent upon Marciana as Unit Head to
have performed her duties. As correctly observed by the Labor Arbiter, Keppel had gone too far in blaming James for the shortcomings and
imprudence of Marciana. The invocation of Keppel of the loss of trust and confidence as ground for James's termination has therefore no basis at
all.
Having shown that Keppel failed to discharge its burden of proving that James's dismissal is for a just cause, we have no other recourse but to
declare that such dismissal based on the ground of loss of trust and confidence was illegal. This is in consonance with the constitutional guarantee
of security of tenure.
WHEREFORE, the instant Petition for Review on Certiorari is GRANTED. The Decision dated June 22, 2005 and the Resolution dated August
31, 2005 of the Court of Appeals in CA-G.R. SP No. 86988 are REVERSED and SET ASIDE and the Decision dated June 25, 2004 and
Resolution dated July 30, 2004 of the National Labor Relations Commission are REINSTATED.
SO ORDERED.
ELMER LOPEZ, PETITIONER, VS. KEPPEL BANK PHILIPPINES, INC., MANUEL BOSANO III AND STEFAN TONG WAI MUN,
RESPONDENTS.
DECISION
BRION, J.:
We resolve the present petition for review on certiorari[1] seeking the nullification of the decision[2] and the resolution[3] of the Court of Appeals
(CA), dated December 19, 2006 and February 7, 2007, respectively, rendered in CA-G.R. CEB-SP. No. 01754.
The Antecedents
The facts, as set out in the assailed CA decision, are summarized below.
Petitioner Elmer Lopez was the Branch Manager of the respondent Keppel Bank Philippines, Inc. (bank) in Iloilo City. Allegedly, through his
efforts, Hertz Exclusive Cars, Inc. (Hertz) became a client of the bank.
By notice dated August 12, 2003,[4] the bank asked Lopez to explain in writing why he should not be disciplined for issuing, without authority,
two purchase orders (POs) for the Hertz account amounting to a total of P6,493,000.00, representing the purchase price of 13 Suzuki Bravo and
two Nissan Exalta vehicles.
Lopez submitted his written explanation on the same day,[5] but the bank refused to give it credit. Through respondents Manuel Bosano III (Vice-
President and Head of Retail Banking Division/Consumer Banking Division) and Stefan Tong Wai Mun (Vice-President/Comptroller), the bank
terminated Lopez's employment effective immediately.[6]
Lopez asked the bank for reconsideration.[7] In response, the bank, through the respondent officers, met with Lopez at its headquarters in Cubao,
Quezon City on September 25, 2003. Lopez came with his lawyer (Atty. Edmundo V. Buensuceso) and a military man (one Col. Flordeliza). After
the meeting, the bank found no reason to reconsider and reiterated its decision to dismiss Lopez.[8]
Lopez filed a complaint for illegal dismissal and money claims against the bank, Bosano and Tong.
The Compulsory Arbitration Proceedings
Lopez alleged before the labor arbiter that he issued the POs as part of his strategy to enhance the bank's business, in line with his duty as branch
manager to promote the growth of the bank. He claimed that the bank honored the first PO for P1.8M from which the bank derived an income of
P142,000.00. He added that the second PO did not materialize because Mr. James Puyat Concepcion, a Hertz incorporator and director who opened
the Hertz account, stopped depositing with the bank because of the negative credit rating he received from the bank's credit committee. Allegedly,
the committee discovered that James Puyat Concepcion had several pending court cases.
For its part, the bank denied approving the first PO, arguing that Lopez did not have the authority to issue the POs for the Hertz account as there
was a standing advice that no Hertz loan application was to be approved. It stressed that Lopez committed a serious violation of company rules
when he issued the POs.
In a decision dated April 28, 2004,[9] Labor Arbiter Cesar D. Sideño ruled that Lopez was illegally dismissed. Accordingly, the labor arbiter
ordered Lopez's immediate reinstatement, and awarded him backwages of P392,000.00, moral and exemplary damages of P8M, and P550,000.00 --
the purchase price of a Toyota Revo which Lopez allegedly brought over from his stint with Global Bank (now Metrobank). The labor arbiter
found that contrary to the bank's claim, the evidence showed that Lopez had been issuing POs which the bank had paid, including the first of the
two POs that led to his dismissal.[10]
On appeal by the bank, the National Labor Relations Commission (NLRC) rendered a decision on October 11, 2005[11] reversing the labor
arbiter's ruling. It dismissed the complaint for lack of merit. The NLRC found merit in the bank's submission that by issuing the questioned POs
without authority and against the bank's express orders, Lopez thereby committed a willful disobedience against his superiors -- a sufficient basis
for the bank to lose its trust and confidence in him as branch manager. It thus found that Lopez had been dismissed for cause after the observance
of due process. Lopez moved for reconsideration, but the NLRC denied the motion in its resolution of January 25, 2006.[12] Lopez sought relief
from the CA through a petition for certiorari, charging the NLRC with grave abuse of discretion for setting aside the labor arbiter's decision.
The CA Decision
On December 19, 2006, the CA rendered its now assailed decision,[13] denying the petition and affirming the October 11, 2005 decision of the
NLRC. It fully agreed with the NLRC finding that Lopez had not been illegally dismissed.
Lopez moved for, but failed to obtain, a reconsideration of the CA decision. The CA denied the motion on February 7, 2007.[14]
The Case for Lopez
Through the present petition,[15] the reply to the bank's comment dated February 11, 2008,[16] and the memorandum dated September 22,
2008,[17] Lopez entreats the Court to nullify the CA decision, contending that the CA erred in: (1) not ruling that the bank's appeal with the NLRC
should have been dismissed on the ground of non-perfection; and (2) affirming the decision of the NLRC that he was dismissed for a just cause
(loss of trust and confidence) and that he was afforded due process.
Lopez argues, with respect to the first assignment of error, that the bank failed to comply with Sections 4 and 6, Rule VI, of the 2002 Rules of
Procedure of the NLRC.[18] He points out that the bank did not file a notice of appeal together with its memorandum of appeal, which in turn was
not supported by a certificate of non-forum shopping; and neither did the bank furnish him, as appellee, a certified copy of the appeal bond.
On the substantive aspect of the case, Lopez posits that the bank failed to justify his dismissal on the ground of loss of trust and confidence. He
insists that, as branch manager, he had the authority to issue POs as in fact he issued several of them in the past, which POs were honored and paid
by the bank. The labor arbiter properly relied on the past transactions in his decision. These included, he reiterates, the first PO for the Hertz
account which was paid by the bank on July 18, 2003, a transaction where the bank even earned a substantial income (P142,000.00). He maintains
that the bank failed to substantiate its position that he was not authorized to issue the POs. He adds that the bank's claim that his issuance of the
POs exposed the bank to financial loss is a lame excuse to justify the termination of his employment.
Lopez argues that his dismissal was a mere afterthought on the part of the bank management, particularly Bosano, to cover up its embarrassment
when he (Lopez) made inquiries and discovered that Hertz's James Puyat Concepcion had no pending court cases and was therefore credit worthy.
He adds that assuming that he did not have the authority to issue POs, still, he cannot be held guilty of willful disobedience; even if he had been
guilty, dismissal was a very harsh penalty.
Finally, Lopez submits that the bank failed to accord him due process because the bank did not give him the opportunity to prepare for his defense.
He points out that his written explanation (dated August 12, 2003)[19] preceded the bank's letter (of the same date)[20] that required him to explain
why he issued the POs in question. Lopez contends in this regard that on August 12, 2003, he went to Bosano's office in Quezon City all the way
from Iloilo City and there, he was cornered by Bosano who verbally instructed him to immediately write down his explanation even before he was
served with the bank's August 12, 2003 letter. He maintains that Bosano's preemptive move deprived him of the opportunity to secure the services
of a counsel.
While Lopez believes his dismissal to be illegal, he does not seek reinstatement due to the antagonism that has developed between him, and the
bank and its officers, due to the present case. He only asks for separation pay of one month pay for every year of service, full backwages,
allowances and other benefits. Additionally, he prays for moral and exemplary damages, as well as attorney's fees, to compensate him for a
dismissal that was attended by bad faith and effected in a wanton, oppressive and malevolent manner.
The Case for the Bank and its Officers,
Through its comment to the petition[21] and memorandum,[22] the bank submits that the CA committed no reversible error in denying Lopez's
petition for certiorari, and in affirming the ruling of the NLRC that Lopez was dismissed for a just cause and after due process.
The bank is puzzled why Lopez is standing firm on his position that he did nothing wrong when he issued the questioned POs despite the express
directive not to proceed with the Hertz loan application unless its adverse credit investigation report is explained to the bank's credit committee. It
posits that no bank would gamble to maintain as branch manager a person who dares to supplant a major decision of the bank's top leadership with
his personal decision. It argues that in this situation, the law (Labor Code) provides protection to the employer through its management prerogative
rights and the right to dismiss employees on just and valid grounds.
The bank refutes Lopez's contention that there was no willful disobedience that warranted his dismissal. It points out that there was an order for
him not to proceed with the Hertz loan application. The order was very reasonable as it is the standard policy of every bank to conduct an
investigation on the credit worthiness of any loan applicant. Since it appeared from the investigation of its credit committee that James Puyat
Concepcion of Hertz had various court cases, it was only proper for the bank to put on hold the loan application of Hertz until the adverse finding
could be cleared. It insists that Lopez willfully and knowingly disobeyed this order.
Further, the bank questions Lopez's submission, through a supplemental addendum to his position paper, of evidence that it honored and paid POs
issued by Lopez in the past. It maintains that it was not furnished a copy of this submission; hence, it was unable to controvert this evidence.
On the procedural due process issue, the bank denies Lopez's allegation that he was not given the opportunity to defend himself. It points out that
both the NLRC and the CA confirmed that Lopez was not deprived the opportunity to be heard; the opportunity commenced with: (1) the notice for
him to explain his side regarding his unauthorized issuance of POs; (2) the notice of his termination from employment; and (3) the hearing called in
response to his motion for reconsideration where he was assisted by his lawyer and his soldier friend.
The Court's Ruling
The procedural issue
Lopez faults the CA for not ruling that the bank's appeal to the NLRC should have been dismissed for non-perfection. He argues that no notice of
appeal accompanied the memorandum of appeal; neither was there a certificate of non-forum shopping nor any copy furnished to him of the
certified true copy of the appeal bond.
The procedural question is a non-issue. Lopez did not raise it before the CA; in fact, he challenged the NLRC decision of October 11, 2005[23] on
its merits and not on its form. We, therefore, see no need to further discuss this argument.
The merits of the case
On the substantive aspect of the case, we note that Lopez was dismissed from the service by reason of loss of trust and confidence, a just cause for
an employee's dismissal under the law.[24] Lopez insists though that the act which triggered the dismissal action does not justify his separation
from the service.
Is Lopez liable for loss of trust and confidence for issuing the two disputed POs?
The right of an employer to freely select or discharge his employee is a recognized prerogative of management; an employer cannot be compelled
to continue employing one who has been guilty of acts inimical to its interests. When this happens, the employer can dismiss the employee for loss
of confidence.[25]
At the same time, loss of confidence as a just cause of dismissal was never intended to provide employers with a blank check for terminating
employment. Loss of confidence should ideally apply only (1) to cases involving employees occupying positions of trust and confidence, or (2) to
situations where the employee is routinely charged with the care and custody of the employer's money or property. To the first class belong
managerial employees, i.e., those vested with the powers and prerogatives to lay down management polices and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees, or effectively recommend such managerial actions. To the second class belong cashiers,
auditors, property custodians, or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or
property.[26]
As branch manager, Lopez clearly occupies a "position of trust." His hold on his position and his stay in the service depend on the employer's trust
and confidence in him and on his managerial services.[27] According to the bank, Lopez betrayed this trust and confidence when he issued the
subject POs without authority and despite the express directive to put the client's application on hold. In response, Lopez insists that he had
sufficient authority to act as he did, as this authority is inherent in his position as bank manager. He points to his record in the past when he issued
POs which were honored and paid by the bank and which constituted the arbiter's "overwhelming evidence"[28] in support of the finding that
"complainant's dismissal from work was without just cause, hence, illegal."[29]
We disagree with Lopez's contention. Despite evidence of his past exercise of authority (as found by the labor arbiter), we cannot disregard
evidence showing that in August 2003, the bank specifically instructed Lopez not to proceed with the Hertz loan application because of the
negative credit rating issued by the bank's credit committee. We find it undisputed that Lopez processed the loan despite the adverse credit rating.
In fact, he admitted that he overlooked the "control aspects" of the transaction as far as the bank was concerned because of his eagerness to get a
bigger share of the market.[30]
Lopez's good intentions, assuming them to be true, are beside the point for, ultimately, what comes out is his defiance of a direct order of the bank
on a matter of business judgment. He went over the heads of the bank officers, including the credit committee, when, based on inquiries he made
on his own regarding the credit worthiness of James Puyat Concepcion, he simply proceeded to act on the basis of his own judgment. Evident in his
written explanation[31] was his failure to inform the credit committee of his own efforts to check on the committee's adverse findings against Hertz
and his independent action based solely on his own authority.
As a bank official, the petitioner must have been aware that it is basic in every sound management that people under one's supervision and direction
are bound to follow instructions or to inform their superior of what is going on in their respective areas of concern, especially regarding matters of
vital interest to the enterprise. Under these facts, we find it undisputed that Lopez disobeyed the bank's directive to put the Hertz loan application
on hold, and did not wait until its negative credit rating was cleared before proceeding to act. That he might have been proven right is immaterial.
Neither does the submission that the bank honored and paid the first PO and even realized a profit from the transaction, mitigate the gravity of
Lopez's defiance of the directive of higher authority on a business judgment. What appears clear is that the bank cannot in the future trust the
petitioner as a manager who would follow directives from higher authorities on business policy and directions. The bank can be placed at risk if
this kind of managerial attitude will be repeated, especially if it becomes an accepted rule among lower managers.
In Nokom v. NLRC,[32] we reiterated the guidelines for the application of loss of confidence as follows: (1) loss of confidence, should not be
simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (3) it may not be arbitrarily asserted in the
face of overwhelming evidence to the contrary; and (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith.
Under the circumstances of this case, we are convinced that the bank was justified in terminating Lopez's employment by reason of loss of trust and
confidence. He admitted issuing the two POs, claiming merely that he had the requisite authority. He could not present any proof in this regard,
however, except to say that it was part of his inherent duty as bank manager. He also claimed that the bank acquiesced to the issuance of the POs as
it paid the first PO and the POs he issued in the past. This submission flies in the face of the bank's directive for him not to proceed unless matters
are cleared with the bank's credit committee. The bank had a genuine concern over the issue as it found through its credit committee that Hertz was
a credit risk. Whether the credit committee was correct or not is immaterial as the bank's direct order left Lopez without any authority to clear the
loan application on his own. After this defiance, we cannot blame the bank for losing its confidence in Lopez and in separating him from the
service.
The due process issue
As the NLRC and the CA did, we find Lopez to have been afforded due process when he was dismissed. He was given the required notices. More
importantly, he was actually given the opportunity to be heard; when he moved for reconsideration of the bank's decision to terminate his
employment, it scheduled a hearing where he appeared together with his lawyer and a military man. This was an opportunity to be heard that the
law recognizes.
In fine, we find no merit in the petition.
WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. The assailed decision and resolution of the Court of Appeals
are AFFIRMED. Costs against petitioner Elmer Lopez.
SO ORDERED.
Aliviado vs. Procter and Gamble DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
Aliviado vs. Procter and Gamble
G.R. No. 160506 June 6, 2011
Facts:
Petitioners worked as merchandisers of P&G. They all individually signed employment contracts with either Promm-Gem or SAPS. They were
assigned at different outlets, supermarkets and stores where they handled all the products of P&G. They received their wages from Promm-Gem or
SAPS.
SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such as habitual absenteeism, dishonesty or changing
day-off without prior notice.
To enhance consumer awareness and acceptance of the products, P&G entered into contracts with Promm-Gem and SAPS for the promotion and
merchandising of its products.
In December 1991, petitioners filed a complaint against P&G for regularization, service incentive leave pay and other benefits with damages.
Issue: WON P&G is the employer of petitioners.
Held:
In order to resolve the issue of whether P&G is the employer of petitioners, it is necessary to first determine whether Promm-Gem and SAPS are
labor-only contractors or legitimate job contractors
.Clearly, the law and its implementing rules allow contracting arrangements for the performance of specific jobs, works or services. However, in
order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules expressly prohibit labor-only
contracting.
To emphasize, there is labor-only contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job,
work or service for a principal and any of the following elements are present:
i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed andthe
employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main
business of the principal; or
ii) The contractor does not exercise the right to control over the performance of the work of the contractual
Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find that it is a legitimate independent contractor.
Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to
the principal business of P&G, we find that the former is engaged in “labor-only contracting”.
Where labor-only contracting exists, the Labor Code itself establishes an employer-employee relationship between the employer and the employees
of the labor-only contractor. The statute establishes this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The
contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if
such employees had been directly employed by the principal employer.
Petition Granted
NOTE:
Respondent filed MR, which was denied.
In its resolution, the Court upheld its decision declaring SAPS has no substantial capital, therefore, labor-only contractor.
Grand Asian Shipping Lines v. Galvez
G.R. No. 178184; January 29, 2014
FACTS:
Petitioner Grand Asian Shipping Lines, Inc (GASLI) is a domestic corporation engaged in transporting liquified petroleum gas (LPG)
from Petron’s refinery in Bataan to Pasig and Cavite while respondents are crewmembers of one of GASLI’s vessels, M/T Dorothy Uno. Some
time afterwards, “one of the vessel’s Oilers, Abis (Abis), reported to GASLI’s Office and Crewing Manager, an alleged illegal activity being
committed by respondents aboard the vessel. Abis revealed that after about four to five voyages a week, a substantial volume of fuel oil is
unconsumed and stored in the vessel’s fuel tanks. However, Gruta would misdeclare it as consumed fuel in the Engineer’s Voyage Reports. Then,
the saved fuel oil is siphoned and sold to other vessels out at sea usually at nighttime. Respondents would then divide among themselves the
proceeds of the sale. Abis added that he was hesitant at first to report respondents’ illegal activities for fear for his life.” After an audit and
investigation, GASLI’s internal auditor issued a Certification of Overstatement of Fuel Oil Consumption for M/T Dorothy stating that fuel oil
consumption was overstated Thus, a criminal complaint for qualified theft was filed against complainants. It was subsequently filed in court.
Throughout, GASLI placed complainants in preventive suspension. After conducting administrative hearings, defendants terminated the
employment of complainants. Respondents filed with the NLRC separate complaint for illegal suspension and dismissal, among others, against
petitioner. the Labor Arbiter rendered decision finding the dismissal of 21 complainants to be illegal. The petitioners then filed an appeal and
NLRC ruled for the petitioners. However, when the case was elevated to the CA, the latter ruled in favor of respondents.
ISSUE: Whether or not the dismissal is illegal.
HELD:
Yes. “In termination disputes, the burden of proving that the dismissal is for a just or valid cause rests on the employers. Failure on
their part to discharge such burden will render the dismissal illegal.” The CA did not commit any error in finding that respondent’s were illegally
dismissed. According to the termination notice, respondents were dismissed based on the grounds of (a) serious misconduct (b) engaging in
pilferage wile navigating at sea (c) willful breach of the trust reposed by the company (d) commission of a crime against their employer. After
examination of the evidence, the court finds that petitioners failed to substantiate the charges of pilferage against respondents. The quantum of
proof that should be presented is substantial evidence. Mere filing of formal charge does not automatically make dismissal valid. The affidavit
executed simply contained accusations while allegations remained uncorroborated. Also there is no sufficient evidence to show respondents
participation in the commission of the crime.
Respondent’s termination due to loss of trust and confidence should have a distinction between managerial and rank and file
employees. Rank-and-file employees require proof of involvement while managerial employees mere existence of a basis for belief is sufficient.
Given that Galvez and Gruta have managerial positions there is some basis for the loss of employer’s confidence—regarding the overstatement of
fuel consumption without any evidence to the contrary. While the others, who are ordinary rank and file employees, were not proven to have any
involvement in the loss of the vessel’s fuel. Rendering their dismissals illegal. The employer bears the burden of proof in illegal dismissal cases
thus the employer must first establish by substantial evidence the fact of dismissal.
Lolita S. Concepcion v. Minex Import Corporation
G.R. No. 153569
January 24, 2012
Bersamin, J.
Case Doctrine:
The employer may validly dismiss for loss of trust and confidence an employee who commits an act of fraud prejudicial to the interest of the
employer. Neither a criminal prosecution nor a conviction beyond reasonable doubt for the crime is a requisite for the validity of the dismissal.
Nonetheless, the dismissal for a just or lawful cause must still be made upon compliance with the requirements of due process under the Labor
Code; otherwise, the employer is liable to pay nominal damages as indemnity to the dismissed employee.
Facts:
Respondent Minex Import-Export Corporation (Minex) employed the petitioner initially as a salesgirl, rotating her assignment among nearly all its
outlets. She was assigned at SM Harrison Plaza kiosk with the instruction to hold the keys of the kiosk. On November 9, 1997, the petitioner and
her salesgirls had sales of crystal items totaling P39,194.50. At the close of business that day, they conducted a cash-count of their sales proceeds,
including those from the preceding Friday and Saturday, and determined their total for the three days to be P50,912.00. The petitioner wrapped the
amount in a plastic bag and deposited it in the drawer of the locked wooden cabinet of the kiosk. At about 9:30 am of November 10, 1997, the
petitioner phoned Vina Mariano to report that the P50,912.00 was missing, explaining how she and her salesgirls had placed the wrapped amount at
the bottom of the cabinet the night before, and how she had found upon reporting to work that morning that the contents of the cabinet were in
disarray and the money already missing.
Later, while the petitioner was giving a detailed statement on the theft to the security investigator of Harrison Plaza, Vina and Sylvia Mariano, her
superiors, arrived with a policeman who immediately placed the petitioner under arrest and brought her to Precinct 9 of the Malate Police Station.
There, the police investigated her. She was detained for a day, from 11:30 am of November 10, 1997 until 11:30 am of November 11, 1997, being
released only because the inquest prosecutor instructed so. On November 12, 1997, the petitioner complained against the respondents for illegal
dismissal in the Department of Labor and Employment. On November 14, 1997, Minex, through Vina, filed a complaint for qualified theft against
the petitioner in the Office of the City Prosecutor in Manila.
Issue: Whether or not the employer denied the employee dismissed with due process and thu liable for damages?
Ruling:
Yes. To dismiss an employee, the law requires the existence of a just and valid cause. Article 282 of the Labor Code enumerates the just causes
for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the
latter’s representative in connection with the employee’s 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 his 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.
Indeed, the employer is not expected to be as strict and rigorous as a judge in a criminal trial in weighing all the probabilities of guilt before
terminating the employee. Unlike a criminal case, which necessitates a moral certainty of guilt due to the loss of the personal liberty of the accused
being the issue, a case concerning an employee suspected of wrongdoing leads only to his termination as a consequence. The quantum of proof
required for convicting an accused is thus higher – proof of guilt beyond reasonable doubt – than the quantum prescribed for dismissing an
employee – substantial evidence. In so stating, we are not diminishing the value of employment, but only noting that the loss of employment
occasions a consequence lesser than the loss of personal liberty, and may thus call for a lower degree of proof.
Yet, even as we now say that the respondents had a just or valid cause for terminating the petitioner, it becomes unavoidable to ask whether or not
they complied with the requirements of due process. The petitioner plainly demonstrated how quickly and summarily her dismissal was carried out
without first requiring her to explain anything in her defense as demanded under Section 2 (d) of Rule I of the Implementing Rules of Book VI of
the Labor Code. Instead, the respondents forthwith had her arrested and investigated by the police authorities for qualified theft. This, we think,
was a denial of her right to due process of law, consisting in the opportunity to be heard and to defend herself. In fact, their decision to dismiss her
was already final even before the police authority commenced an investigation of the theft, the finality being confirmed by no less than Sylvia
Mariano herself telling the petitioner during their phone conversation following the latter’s release from police custody on November 11, 1997 that
she (Sylvia) “no longer wanted to see” her.
The fair and reasonable opportunity required to be given to the employee before dismissal encompassed not only the giving to the employee of
notice of the cause and the ability of the employee to explain, but also the chance to defend against the accusation. This was our thrust in Philippine
Pizza, Inc. v. Bungabong, where we held that the employee was not afforded due process despite the dismissal being upon a just cause, considering
that he was not given a fair and reasonable opportunity to confront his accusers and to defend himself against the charge of theft notwithstanding
his having submitted his explanation denying that he had stolen beer from the company dispenser. The termination letter was issued a day before
the employee could go to the HRD Office for the investigation, which made it clear to him that the decision to terminate was already final even
before he could submit his side and refute the charges against him. Nothing that he could say or do at that point would have changed the decision to
dismiss him. Such omission to give the employee the benefit of a hearing and investigation before his termination constituted an infringement of
his constitutional right to due process by the employer.
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal,
or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor
Relations Commission. The indemnity to be imposed should be stiffer to discourage the abhorrent practice of “dismiss now, pay later,” which we
sought to deter in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each
case, taking into special consideration the gravity of the due process violation of the employer.
The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal
damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant
circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of
damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a
vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.
CASE DIGEST: BLUE SKY V. BLAS
G.R. No. 190559 : March 7, 2012
BLUE SKY TRADING COMPANY, INC. and/or JOSE TANTIANSU and LINDA TANTIANSU, Petitioners, v. ARLENE P. BLAS and
JOSEPH D. SILVANO, Respondents.
REYES, J.:
FACTS:
The respondents Arlene P. Blas (Arlene) and Joseph D. Silvano (Joseph) were regular employees of petitioner Blue Sky and they respectively held
the positions of stock clerk and warehouse helper before they were dismissed from service. Blue Sky issued to Arlene, Joseph, Jayde and Wilfredo
notices of dismissal for cause stating therein that evidence reveal that they had conspired with each other to commit theft against company
property. Blue Sky had lost its trust and confidence on them and as an act of self-preservation, their termination from service was in order. Arlene,
Joseph, Helario, Jayde and Wilfredo filed with the National Labor Relations Commission (NLRC) a complaint for illegal dismissal. Meanwhile, an
entrapment operation was conducted by the police during which Jayde and Helario were caught allegedly attempting to sell to an operative an
ultrasound probe worth around P400,000.00 belonging to Blue Sky. On April 22, 2005, Quezon City Inquest Prosecutor Arleen Tagaban issued a
resolution recommending the filing in court of criminal charges against Jayde and Helario. The Labor Arbiter dismissed the complaint relative to
Helario, Jayde and Wilfredo as a consequence of their filing of the affidavits of desistance. As to Arlene and Joseph, the LA denied their claims of
illegal suspension and dismissal. The NLRC affirmed the LAs decision. On appeal by Arlene and Joseph, the CA reversed the decision of the
NLRC.
ISSUE: Whether or not proof beyond reasonable doubt of the employee's misconduct or dishonesty is required to justify loss of confidence as a
valid cause for dismissal.
HELD: Court of Appeals decision is affirmed.
LABOR LAW
In illegal dismissal cases, the burden of proof is upon the employer to show that the employees termination from service is for a just and valid
cause. The employers case succeeds or fails on the strength of its evidence and not on 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.
For there to be a valid dismissal based on loss of trust and confidence, the breach of trust must be willful, meaning it must be done intentionally,
knowingly, and purposely, without justifiable excuse. In the case at bar, mere substantial evidence and not proof beyond reasonable doubt is
required to justify the dismissal from service of an employee charged with theft of company property. However, there is no error in the CA's
findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the
commission of theft relative to the six missing intensifying screens so as to justify the latter's termination from employment on the ground of loss
of trust and confidence.
DENIED
MERALCO vs. BELTRAN DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
G.R. No. 173774 January 30, 2012
MANILA ELECTRIC COMPANY, Petitioner,
vs.
MA. LUISA BELTRAN, Respondent.
FACTS: Beltran was employed by MERALCO on December 16, 1987. At the time material to this case, she was holding the position of Senior
Branch Clerk at MERALCO’s Pasig branch. While rendering overtime work on September 28, 1996, a Saturday, Beltran accepted P15,164.48 from
Collection Route Supervisor Berlin Marcos (Marcos), which the latter received from customer Andy Chang (Chang). The cash payment was being
made in lieu of a returned check earlier issued as payment for Chang’s electric bill.
Beltran was at first hesitant as it was not part of her regular duties to accept payments from customers but was later on persuaded by Marcos’
persistence. Hence, Beltran received the payment and issued Auxiliary Receipt No. 879646 which she dated September 30, 1996, a Monday,
instead of September 28, 1996. This was done to show that it was an accommodation, an accepted practice in the office. She thereafter placed the
money and the original auxiliary receipt and other documents pertinent to the returned check underneath her other files inside the drawer of her
table.
Beltran, however, was only able to remit Chang’s payment on January 13, 1997. Thus, in Memorandum7 dated January 16, 1997, she was placed
under preventive suspension, pending completion of an investigation. MERALCO considered as misappropriation or withholding of company
funds her failure to immediately remit said payment in violation of its Code on Employee Discipline. Investigation thereafter ensued.
In her Sinumpaang Salaysay,9 Beltran admitted receipt of Chang’s payment. Beltran nevertheless explained the circumstances which caused the
delay of the turn-over of Chang’s payment. She recounted that on the day following her receipt of the money, she had a huge fight with her
husband which led to their separation; that subsequent marital woes coupled with her worries for her ailing child distracted her into forgetting
Chang’s payment. Beltran claimed that after Garcia approached her regarding the unremitted payment of Chang, she immediately looked for the
money in her drawer and right there and then handed it over to Garcia together with the other pertinent documents. Beltran denied having
personally used the money.
The investigator found Beltran guilty of misappropriating and withholding Chang’s payment of P15,164.48 and recommended her dismissal from
service. By virtue thereof, Beltran was terminated effective March 13, 1997.
Beltran filed a complaint for illegal dismissal14 against MERALCO. She argued that she had no intention to withhold company funds. Besides, it
was not her customary duty to collect and remit payments from customers. She claimed good faith, believing that her acceptance of Chang’s
payment is considered goodwill in favor of both MERALCO and its customer. If at all, her only violation was a simple delay in remitting the
payment, which caused no considerable harm to the company. Further, her nine years of unblemished service to the company should be taken into
account such that the penalty of dismissal is not a commensurate penalty for the unintentional act committed.
Development of the Case: Labor Arbiter regarded the penalty of dismissal as not commensurate to the degree of infraction committed as there was
no adequate proof of misappropriation on the part of Beltran; NLRC reversed stating that Beltran’s assertion of family problems as the same cannot
be used as an excuse for committing a serious misconduct in violation of the trust reposed on her; MR denied; CA instead agreed with the findings
of the Labor Arbiter that there were no serious grounds to warrant Beltran’s dismissal; MR by petitioner MERALCO Denied. Hence, this Petition
for Review on Certiorari.
ISSUE: WON Beltran should be dismissed on the ground of gross and habitual neglect of duty.
HELD: NO
We do not agree. On the contrary, we support the CA’s finding that there are no sufficient grounds to warrant Beltran’s dismissal.
For loss of trust and confidence to be a valid ground for dismissal, it 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. In addition, loss of trust and confidence must rest on substantial grounds and not on the
employer’s arbitrariness, whims, caprices or suspicion.
In the case at bench, Beltran attributed her delay in turning over Chang’s payment to her difficult family situation as she and her husband were
having marital problems and her child was suffering from an illness. Admittedly, she was reminded of Chang’s payment by her supervisor on
January 7, 1997 but denied having been ordered to remit the money on that day. She then reasoned that her continued delay was caused by an
inevitable need to take a leave of absence for her to attend to the needs of her child who was suffering from asthma.
MERALCO still has the burden of proof to show clearly that such act of negligence is sufficient to justify termination from employment.
Moreover, we find that Beltran’s delay does not clearly and convincingly establish a willful breach on her part, that is, which is done “intentionally,
knowingly and purposely, without any justifiable excuse.”
Undoubtedly, Beltran was remiss in her duties for her failure to immediately turn over Chang’s payment to the company. Such negligence,
however, is not sufficient to warrant separation from employment. To justify removal from service, the negligence should be gross and habitual.29
“Gross negligence x x x is the want of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but
willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be affected.”30 Habitual neglect, on the
other hand, connotes repeated failure to perform one’s duties for a period of time, depending upon the circumstances.
No concrete evidence was presented by MERALCO to show that Beltran’s delay in remitting the funds was done intentionally. Neither was it
shown that same is willful, unlawful and felonious contrary to MERALCO’s finging as stated in the letter of termination it sent to Beltran.32
Surely, Beltran’s single and isolated act of negligence cannot justify her dismissal from service. Moreover, Beltran’s simple negligence did not
result in any loss.
Under the circumstances, MERALCO’s sanction of dismissal will not be commensurate to Beltran’s inadvertence not only because there was no
clear showing of bad faith and malice but also in consideration of her untainted record of long and dedicated service to MERALCO.
The magnitude of the infraction committed by an employee must be weighed and equated with the penalty prescribed and must be commensurate
thereto, in view of the gravity of the penalty of dismissal or termination from the service. The employer should bear in mind that in termination
cases, what is at stake is not simply the employee’s job or position but [her] very livelihood.
The forfeiture of her salary is an equitable punishment for the simple negligence committed.
Petition Denied.
DOLORES T. ESGUERRA, Petitioner, v. VALLE VERDE COUNTRY CLUB, INC. and ERNESTO VILLALUNA,Respondents.
FACTS: On January 15, 2000, the Couples for Christ held a seminar at the country club. Esguerra, as the Cost Control Supervisor, was tasked to
oversee the seminar held in the two function rooms the Ballroom and the Tanay Room. The arrangement was that the food shall be served in the
form of pre-paid buffet, while the drinks shall be paid in a "pay as you order" basis.
The Valle Verde Management found out the following day that only the proceeds from the Tanay Room had been remitted to the accounting
department. To resolve the issue, Valle Verde conducted an investigation; the employees who were assigned in the two function rooms were
summoned and made to explain, in writing, what had transpired.
On March 6, 2000, Valle Verde sent a memorandum to Esguerra requiring her to show cause as to why no disciplinary action should be taken
against her for the non-remittance of the Ballroom sales. Esguerra was placed under preventive suspension with pay, pending investigation.
In her letter-response, Esguerra denied having committed any misappropriation. She explained that it had been her daughter (who was assigned as a
food checker) who lost the money. To settle the matter, Esguerra paid the unaccounted amount as soon as her daughter informed her about it.
Valle Verde found Esguerra explanation unsatisfactory and, on July 26, 2000, issued a second memorandum terminating Esguerra employment.
Esguerra filed a complaint for illegal dismissal. In April 5, 2002, the Labor Arbiter dismissed the complaint for lack of merit. Esguerra appealed the
case to the NLRC. In its December 27, 2002 decision, the NLRC affirmed with modification the ruling of the Labor Arbiter.
Esguerra filed a partial motion for reconsideration, while Valle Verde filed its own motion for reconsideration.The NLRC denied Esguerra motion,
but granted Valle Verde motion. Thus, it set aside its December 27, 2002 decision and affirmed the April 5, 2002 decision of the labor arbiter.
Aggrieved, Esguerra elevated her case to the CA via a Rule 65 petition for certiorari. In its February 7, 2006 decision, the CA denied Esguerra
petition for certiorari.
ISSUE:
Did the Court of Appeals err in affirming the NLRC decision and resolution?
HELD: Procedural aspect of Esguerra dismissal - The Court failed to find any irregularities in the service of notice to Esguerra. The memorandum
dated March 6, 2000 informed her of the charges, and clearly directed her to show cause, in writing, why no disciplinary action should be imposed
against her. Esguerra allegation that the notice was insufficient since it failed to contain any intention to terminate her is incorrect.
In Perez v. Philippine Telegraph and Telephone Company, the Court underscored the significance of the two-notice rule in dismissing an
employee:
To meet the requirements of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a
written notice specifying the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another
written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employer decision to
dismiss the employee.
Contrary to Esguerra allegation, the law does not require that an intention to terminate one employment should be included in the first notice. It is
enough that employees are properly apprised of the charges brought against them so they can properly prepare their defenses; it is only during the
second notice that the intention to terminate one employment should be explicitly stated.
There is also no basis to question the absence of a proper hearing. The existence of an actual, formal "trial-type" hearing, although preferred, is not
absolutely necessary to satisfy the employee's right to be heard. Esguerra was able to present her defenses; and only upon proper consideration of it
did Valle Verde send the second memorandum terminating her employment. Since Valle Verde complied with the two-notice requirement, no
procedural defect exists in Esguerra termination.
Substantive aspect of Esguerra dismissal - There are two (2) classes of positions of trust the first class consists of managerial employees, or those
vested with the power to lay down management policies; and the second class consists of cashiers, auditors, property custodians or those who, in
the normal and routine exercise of their functions, regularly handle significant amounts of money or property.
Esguerra held the position of Cost Control Supervisor and had the duty to remit to the accounting department the cash sales proceeds from every
transaction she was assigned to.This is not a routine task that a regular employee may perform; it is related to the handling of business expenditures
or finances. For this reason, Esguerra occupies a position of trust and confidence a position enumerated in the second class of positions of trust.
Any breach of the trust imposed upon her can be a valid cause for dismissal.
In Jardine Davies, Inc. v. National Labor Relations Commission, it was held that loss of confidence as a just cause for termination of employment
can be invoked when an employee holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act
complained of must be related to the performance of the duties of the dismissed employee and must show that he or she is unfit to continue
working for the employer for violation of the trust reposed in him or her.
There is no merit in the allegation that it was Esguerra daughter who should be held liable. She had no custody of the cash sales since it was not
part of her duties as a food checker. It was Esguerra responsibility to account for the cash proceeds; in case of problems, she should have promptly
reported it, regardless of who was at fault. Esguerra failure to make the proper report reflects on her irresponsibility in the custody of cash for
which she was accountable, it was her duty to account for the sales proceeds, and she should have known about the missing amount immediately
after the event.
DENIED
MANILA ELECTRIC COMPANY (MERALCO), Petitioner, vs. HERMINIGILDO H. DEJAN, Respondent.
BRION, J.:
FACTS:
Respondent Herminigildo Dejan is employed with the Manila Electric Company as Meralco's branch representative. The security guard on duty at
the branch noticed the private electrician, take out from the branch premises 20 pieces of meter sockets which were then loaded into a parked
Meralco contracted jeep belonging to one Cesar Reyes. Dejan was asked to explain the incident.
In his letter-explanation, Dejan admitted that he released the meter sockets in question because the deposit fees had already been paid.
Dejan received a letter from Marcelino Rosario, head of Meralco's Investigation-Paralegal Services, charging him with the unauthorized taking of
20 meter sockets, in violation of Section 7, paragraphs 4 and 11 of the Company Code of Employee Discipline, in relation to Article 282 of the
Labor Code. Meralco conducted a formal investigation where Dejan admitted issuing the meter sockets without the authorization of the applicants
for electric connection. He alleged that he released the items even without authorization as it had been the accepted practice in the office, provided
the deposit fee had been paid.
Unconvinced with Dejan's explanation, Meralco served Dejan a letter terminating his employment effective the following day, with forfeiture of all
rights and privileges. Dejan filed his complaint with the National Labor Relations Commission (NLRC).
Labor Arbiter Antonio R. Macam dismissed the complaint for lack of merit, holding that Dejan "undoubtedly transgressed the company rules on
unauthorized taking of the company property[.]" Labor Arbiter Macam declared Dejan's dismissal as a valid exercise of Meralco's management
prerogative.
Dejan appealed the labor arbiter's decision to the NLRC. NLRC rendered a decision reversing the labor arbiter. Both Meralco and Dejan moved for
reconsideration, but the NLRC denied the motions.
CA affirmed, with modification, the NLRC dispositions. It found no grave abuse of discretion in the NLRC ruling that Dejan is not guilty of
unauthorized taking or of stealing of company property. The CA, however, found irregular the NLRC's failure to award Dejan backwages
considering that it declared him to have been illegally dismissed. Accordingly, it awarded Dejan backwages from the time he was separated from
the service until his actual reinstatement, less the amount corresponding to his one-month suspension for simple negligence.
ISSUE: Whether or not Dejan is liable only for simple negligence?
HELD: Court of Appeals decision is SET ASIDE.
LABOR LAW
Dejan is liable as charged. More specifically, he is liable for violation of Section 7, paragraphs 4 and 11 of the Company Code of Employee
Discipline, constituting serious misconduct, fraud and willful breach of trust of the employer, just causes for termination of employment under the
law. The facts and the evidence on record clearly bear this out and we wonder how the CA could have missed the seriousness or gravity of Dejan's
transgressions.
There is no dispute about the release of the meter sockets. Also, the persons involved were clearly identified - Dejan; Gozarin or Mang Islao, a
private electrician who received the meter sockets; Reyes, the owner of the jeep where the meter sockets were loaded by Gozarin; Duenas, a
Meralco field representative; and Depante, another private electrician who purportedly owned the meter sockets.
There is also no question that Dejan released the meter sockets to Gozarin without the written authority or SPA from the customer or customers
who applied for electric connection (as a matter of company policy). Dejan released the meter sockets to Gozarin on the mere say-so of Depante, as
he claimed, through a call to Duenas' cell phone, and justified his act to be in accord with accepted company practice.
We cannot blame Meralco for losing its trust and confidence in Dejan. He is no ordinary employee. As branch representative, "he was principally
charged with the function and responsibility to accept payment of fees required for the installation of electric service and facilitate issuance of
meter sockets." The duties of his position require him to always act with the highest degree of honesty, integrity and sincerity, as the company puts
it. In light of his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be compelled to continue Dejan's employment, as it
would be inimical to its interest. Needless to say, "[t]he law, in protecting the rights of the laborer, authorizes neither oppression nor self-
destruction of the employer." For sure, Dejan was validly dismissed for serious misconduct, and loss of trust and confidence.
FACTS:
Dejan was then Meralco’s branch representative in its San Pedro, Laguna branch. His work consisted of accepting payments of the required fees fro
m applicants for electric service installation and issuing the corresponding meter sockets/bases after payment of a deposit, preceded by an inspectio
n of the premises to be energized by a Meralco field personnel.
One afternoon, 20 pieces of meter sockets take out from the branch and was in possession of a Meralco field representative. Dejan was asked to exp
lain the incident.
Dejan received a letter charging him with the unauthorized taking of 20 meter sockets, in violation of Section 7, paragraphs 4 and 11 of the Compa
ny Code of Employee Discipline, in relation to Article 282 of the Labor Code. In the Formal investigation, Dejan alleged that he released the items
even without authorization as it had been the accepted practice in the office, provided the deposit fee had been paid. Unconvinced, his employment
was terminated. NLRC and CA both ordered his reinstatement.
ISSUE:
Whether or not an employee dismissed on the ground of loss of trust and confidence should be reinstated as judicially ordered.
RULING:
No. Meralco cannot be blamed for losing its trust and confidence in Dejan. He is no ordinary employee. As branch representative, “he was principa
lly charged with the function and responsibility to accept payment of fees required for the installation of electric service and facilitate issuance of m
eter sockets.” The duties of his position require him to always act with the highest degree of honesty, integrity and sincerity, as the company puts it.
In light of his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be compelled to continue Dejan’s employment, as it would
be inimical to its interest. Needless to say, “the law, in protecting the rights of the laborer, authorizes neither oppression nor self-
destruction of the employer.” For sure, Dejan was validly dismissed for serious misconduct, and loss of trust and confidence.
ROMEO E. PAULINO vs. NLRC and PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INCORPORATED G.R. No. 176184, 13
June 2012
FACTS:
Members of the PNP, armed with a search warrant, searched the house of Paulino, Cable Splicer III of PLDT, found items belonging to PLDT
which was in there for 1 month and 11 days. Petitioner did not present any documents or requisition slips that would justify his possession of the
materials. Consequently, PLDT caused the filing of an Information for qualified theft against him. PLDT then received a security report stating
that petitioner had engaged in the illicit disposal of its plant materials, which were recovered during the search conducted at his residence. He was
then terminated.Three years later, after the criminal case for qualified theft had been terminated for failure of the prosecution to prove his guilt
beyond reasonable doubt, petitioner filed a Complaint for Illegal Dismissal which the Labor Arbiter .
ISSUE:
Whether or not an employee acquitted of the criminal charge arising from the same incident which caused his dismissal, can be reinstated.
RULING:
No. The LA, the NLRC and the CA all acknowledged that, notwithstanding petitioner’s acquittal in the criminal case for qualified theft, respondent
PLDT had adequately established the basis for the company’s loss of confidence as a just cause to terminate petitioner. Since proof beyond
reasonable doubt of an employee’s misconduct is not required in dismissing an employee. Rather, as opposed to the “proof beyond reasonable
doubt” standard of evidence required in criminal cases, labor suits require only substantial evidence to prove the validity of the dismissal.
However, assuming that he lawfully possessed the materials, PLDT still had ample reason or basis to already distrust petitioner. For more than a
month, he did not even inform PLDT of the whereabouts of the plant materials. Instead, he stocked these materials at his residence even if they
were needed in the daily operations of the company. In keeping with the honesty and integrity demanded by his position, he should have turned
over these materials to the plant’s warehouse.
It would have been unfair for PLDT to keep petitioner in its employ. Petitioner displayed actions that made him untrustworthy. Thus, as a measure
of self-protection, PLDT validly terminated his services for serious misconduct and loss of confidence.

G.R. No. 176893 June 13, 2012
VICENTE VILLANUEVA, JR., Petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION THIRD DIVISION, MANILA ELECTRIC COMPANY, MANUEL LOPEZ,
Chairman and CEO, and FRANCISCO COLLANTES, Manager, Respondents.
Facts:
Since 1990, Villanueva had been employed with Meralco as bill collector, teller and branch representative. Sometime in June 2002, Francisco
Collantes, Manager of Meralco Branch Office, Novaliches, Quezon City, referred to the company’s Investigation Office a report dated June 10,
2002 regarding "unusual contract modifications" in the transactions handled by Villanueva. The report claimed that there were customers who were
issued Contracts for Electric Service by Villanueva which indicated their payment of P 930.00 (service deposit of P 520.00 and meter deposit of P
410.00) as deposit payment when they actually gave him a total amount of P 1,240.00. The discrepancy amounting to P 310.00 was not covered by
any receipt. Pursuant to the complaints, a field investigation was conducted by the company-designated investigator who was able to obtain sworn
statements from nine (9) out of twenty four (24) complaining customers. 4 In a letter5 dated August 1, 2002, Villanueva was informed of the
investigation to be conducted by the company. On the date of the scheduled hearing indicated in the letter, Villanueva appeared with counsel who
requested for time within which to submit a responsive paper. In his counter-affidavit,6 he denied demanding payment in excess of the minimum
deposit charged from applicants for electric service connection. He admitted that there were times that "Modification of Contract" was done
because of the recommendations of a Meralco fieldman who, upon inspection, approved a higher load of electricity than that applied for. On
January 9, 2003, Villanueva received the Notice of Termination.
Issue IS the termination of Villanueva valid?
Held: Yes. As a safeguard against employers who indiscriminately use "loss of trust and confidence" to justify arbitrary dismissal of employees, the
Court, in addition to the above elements, came up with the following guidelines for the application of the doctrine: (1) loss of confidence should
not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (3) it may not be arbitrarily asserted
in the face of overwhelming evidence to the contrary; and (4) it must be genuine, not a mere afterthought, to justify an earlier action taken in bad
faith.21
In this case, the above requisites have been met. Meralco’s loss of trust and confidence arising out of Villanueva’s act of misappropriation of
company funds in the course of processing customer applications has been proven by substantial evidence, thus, justified. Verily, the issuance of
additional receipts for excessive payments exacted from customers is a willful breach of the trust reposed in him by the company.
CASE DIGEST: VILLANUEVA, JR. V. NLRC, ET AL.
G.R. No. 176893 : June 13, 2012
VICENTE VILLANUEVA, JR., Petitioner, v. THE NATIONAL LABOR RELATIONS COMMISSION THIRD DIVISION, MANILA
ELECTRIC COMPANY, MANUEL LOPEZ, Chairman and CEO, and FRANCISCO COLLANTES, Manager, Respondents.
MENDOZA, J.:
FACTS:
Villanueva had been employed with Meralco as bill collector, teller and branch representative. On June 10, 2002, a report was received by
Francisco Collantes, Manager of Meralco Novaliches Branch claiming that there were customers who were issued Contracts for Electric Service by
Villanueva which indicated their payment ofP 930.00 as deposit payment when they actually gave him a total amount of P 1,240.00. The
discrepancy amounting to P 310.00 was not covered by any receipt.
Pursuant to the complaints, a field investigation was conducted by the company-designated investigator who was able to obtain sworn statements
from nine (9) out of twenty four (24) complaining customers.The said complainants identified Villanueva as the person they have transacted with,
from a line-up of pictures of several individuals.
In a letterdated August 1, 2002, Villanueva was informed of the investigation to be conducted by the company. On the date of the scheduled
hearing indicated in the letter, Villanueva appeared with counsel who requested for time within which to submit a responsive paper. In his counter-
affidavit,he denied demanding payment in excess of the minimum deposit charged from applicants for electric service connection. Villanueva
explained that if ever there was any error or discrepancy in the preparation of the contract, this would have to be balanced at the end of the day. He
claimed that there were instances when initial entries of applied loads were erroneous prompting him to modify the contract in order that the
customersdeposit payment could be entered. In cases when the customer was no longer in the office premises, he would just record them as pre-
payment so as to reflect the same in their billing upon installation of the electric meter.
In a letter dated August 28, 2002, Meralco denied the request of Villanueva counsel to cross-examine the witnesses (complaining customers) who
were not Meralco employees. Management maintained that it was not the proper place to grill a witness on cross-examination which should be
done in an appropriate proceeding. Villanueva was then advised that the case would be considered submitted for decision as the issues had already
been joined with the submission of his counter-affidavit.
On January 9, 2003, Villanueva received the Notice of Termination.
On January 21, 2003, Villanueva filed a complaint for illegal dismissal before the Regional Arbitration Branch. He alleged that he was denied both
substantive and procedural due process because there was no formal charge yet when Meralco effected his termination. Anent the charge of
misappropriation of company funds, Villanueva claimed that the amount was intact with the office and it was only during the preparation of forms
that sometimes confusion would occur, but this was promptly corrected upon discovery to reflect the correct amount for the kind of service paid
for. He further claimed that even assuming that the error was committed, the offense could not have warranted a penalty of dismissal because the
Company Code of Employee Discipline failed to make mention of his case in a specific manner. At most, his case was one of simple negligence
because the company was not prejudiced financially.
On June 30, 2004, the Labor Arbiter rendered a decision in favor of Villanueva ordering his reinstatement with backwages. In its Resolution dated
November 30, 2004, the NLRC Third Division reversed the ruling of the LA and declared Villanueva dismissal as valid.
After having filed his Motion for Reconsideration, Villanueva moved for the execution of the LA decision alleging that while he had been
reinstated in the payroll of Meralco effective July 16, 2004, he was not given the full benefits to which he was entitled prior to his dismissal, like
one (1) sack of rice per month and bonuses for two (2) months. Consequently, the LA ordered the issuance of a Writ of Execution and Alias Writ of
Execution on February 15, 2005. On June 20, 2006, the NLRC denied Villanueva motion for reconsideration rendering its decision as final.
On appeal to the CA, Villanueva petition was dismissed. The CA ruled that Meralco had established just cause for the dismissal of Villanueva by
substantial evidence of his fraudulent and dishonest acts resulting in the loss of trust and confidence that Meralco had reposed on him.
ISSUE: Whether or not the Court of Appeals erred in reversing the decision of the Labor Arbiter and declaring petitioner dismissal as valid and
justified?
HELD: The petition is without merit.
Dismissal from employment has two aspects:
(1) the legality of the act of dismissal per se, which constitutes substantive due process, and
(2) the legality of the manner of dismissal, which constitutes procedural due process.
As to the first, the legal provision in point is Article 282 of the Labor Code which provides:
Art. 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.
In the case of Cruz v. Court of Appeals, the Court had the occasion to enumerate the essential elements for "willful breach by the employee of the
trust reposed in him by his employer":
Xxx the loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. 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. Moreover, it must be based on substantial evidence and not on the employer whims or caprices or suspicions otherwise,
the employee would eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the
employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained
of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a
just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, such as handling or case and protection of
the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized.
As a safeguard against employers who indiscriminately use "loss of trust and confidence" to justify arbitrary dismissal of employees, the Court, in
addition to the above elements, came up with the following guidelines for the application of the doctrine:
(1) loss of confidence should not be simulated;
(2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified;
(3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and
(4) it must be genuine, not a mere afterthought, to justify an earlier action taken in bad faith.
In this case, the above requisites have been met. Meralco loss of trust and confidence arising out of Villanueva act of misappropriation of company
funds in the course of processing customer applications has been proven by substantial evidence, thus, justified. Verily, the issuance of additional
receipts for excessive payments exacted from customers is a willful breach of the trust reposed in him by the company.
One. Villanueva worked for Meralco as a Branch Representative whose tasks included the issuance of Contracts for Electric Service after receipt of
the amount due for service connection from customers. Obviously, he was entrusted not only with the responsibility of handling company funds but
also to cater to customers who intended to avail of Meralco services. This is nothing but an indication that trust and confidence were reposed in him
by the company, although his position was not strictly managerial by nature.
Two. Villanueva acts of issuing contracts indicating therein an amount less than the actual payment made by the customers and, thereafter, issuing
a receipt in an attempt to document the discrepancy are certainly work-related. This is, in fact, the core of his position as a Branch Representative.
Three. Meralco charge against Villanueva was adequately proven by substantial evidence. The records provide an extensive showing of evidence
against Villanueva. The affidavits of co-employees and, more especially those of the customers themselves, bear weight in establishing the specific
acts constituting the charge against him. In fact, no inconsistencies among these statements were found. Villanueva likewise failed to pose a
plausible defense
Four. The breach of the company trust in Villanueva was shown to have been committed knowingly and willfully. Although the amount of
discrepancy or money misappropriated may be considered minimal and even inconsequential to an established company such as Meralco, it is the
anomalous practice of requiring applicants for electric service connection to pay amounts higher than required that is the crux of Villanueva
offense. The conscious design of issuing another receipt to make it appear that there was a mistake in the initial transaction with the customers
exhibits a culpable act bordering on dishonesty and deceit. If not for personal gain, why did Villanueva exact from customers amounts in excess of
what was required by the company?
Villanueva insistence, that the act which triggered his dismissal did not justify his separation from the service because the Company Code of
Employee Discipline failed to make mention of his case in a specific manner, fails to persuade the Court. The established facts do not constitute a
mere case of simple negligence. The acts performed were without the slightest connotation of inadvertence which Villanueva could have
demonstrated during the proceedings a quo.
Besides, the Court is not unmindful of the prerogatives available to Meralco as an employer. Management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.So long as they are exercised in good
faith for the advancement of the employer interest and not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, the employer exercise of its management prerogative must be upheld.
In his case, no indication of bad faith can be attributed to Meralco as there was no dispute that it had lost trust and confidence in Villanueva and his
abilities to perform his tasks with utmost efficiency and honesty expected of an employee trusted to handle customers and funds. With substantial
evidence presented and Villanueva failure to proffer plausible explanation denying the charges against him, there can be no other conclusion for the
Court but to affirm his dismissal.
Lastly, Villanueva argued that management committed a grievous error for not giving him a chance to confront the customers who stood as
witnesses against him. To this, the Court disagrees. As the NLRC and the CA found, Villanueva was afforded due process when he was given the
required notices. More importantly, he was actually given the opportunity to be heard. On the date of the scheduled hearing, Villanueva was
assisted by counsel who requested for time within which to submit a counter-affidavit. He was able to submit it, where he denied the charges
against him. Undoubtedly, Villanueva was afforded procedural due process even if the cross-examination of the witnesses was not permitted by
Meralco.
Petition is DENIED.
CARLOS G. LIBRES, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL STEEL CORPORATION, OSMUNDO G.
WAGA, JR., ANTOINE D. SEVA, PETER J. LOQUILLANO, SATURNINO P. MEJORADA and ISIDRO F. HYNSON, JR., Respondents.
DECISION
BELLOSILLO, J.:
This petition for certiorari seeks to annul the decision of public respondent National Labor Relations Commission (NLRC) sustaining the Labor
Arbiters finding that petitioner was validly suspended by private respondents, as well as the NLRC resolution denying petitioners motion to
reconsider its decision.
Petitioner Carlos G. Libres, an electrical engineer, was holding a managerial position with National Steel Corporation (NSC) as Assistant Manager.
On 3 August 1993 he received a Notice of Investigation from Assistant Vice President Isidro F. Hynson Jr., his immediate superior, requesting him
to submit a written explanation relative to the charge of sexual harassment made by Susan D. Capiral, Hynsons secretary, allegedly committed by
Libres sometime in May 1992, and subsequently to answer clarificatory questions on the matter. The notice also warned him that failure to file his
written explanation would be construed as a waiver of his right to be heard. On 14 August 1993 petitioner submitted his written explanation
denying the accusation against him and offering to submit himself for clarificatory interrogation.
Subsequently, Hynson Jr. conducted an internal investigation to which Libres and Capiral were invited to ventilate their respective sides of the
issue. They readily responded. Thereafter, Hynson Jr. submitted his report to the Management Evaluation Committee (MEC).
The MEC, after deliberation, concluded that the charges against petitioner constituted a violation of Item 2, Table V, of the Plants Rules and
Regulations.1 It opined that touching a female subordinates hand and shoulder, caressing her nape and telling other people that Capiral was the one
who hugged and kissed or that she responded to the sexual advances are unauthorized acts that damaged her honor.2 Referring to the Manual of the
Philippine Daily Inquirer in defining sexual harassment,3 the MEC finally concluded that petitioners acts clearly constituted sexual harassment as
charged and recommended petitioners suspension for thirty (30) days without pay.
On 5 January 1994 petitioner wrote Melchor Q. Villamor, Vice President for Manufacturing, requesting reconsideration of his suspension, but the
same was denied. On 12 February 1994 the suspension order was finally implemented.
Seeking to reverse his misfortune, Libres filed a complaint for illegal suspension and unjust discrimination against respondent NSC and its officers,
private respondents herein, before the Labor Arbiter. Citing the failure of the MEC to grant him audience despite his offer to answer clarificatory
questions, petitioner claimed denial of due process. Labor Arbiter Nicodemus G. Palangan however ruled that due process was properly observed
and that there was a positive finding of sexual harassment to justify petitioners suspension. He pointed out that there was no substantial
inconsistency between the narration of complainant Capiral and petitioner regarding the incident in the evening of May 1992. The Labor Arbiter
found that aside from a few facts which were controverted by Capiral in her complaint-affidavit, petitioners admissions approximated the truth;
consequently, he ruled that the MEC was correct in including that sexual harassment had indeed transpired. The Labor Arbiter observed that
petitioner should welcome that his penalty was only for suspension of thirty (30) days as opposed to termination imposed in Villarama v. NLRC
and Golden Donuts.4 In this recourse petitioner maintains that public respondent grievously erred amounting to lack or excess of jurisdiction in
finding that he committed sexual harassment justifying his suspension, and in concluding that he was afforded due process.
Petitioner argues that the issue of sexual harassment was not adequately considered as he noted that the finding of the NLRC was made without
proper basis in fact and in law. He maintains that the NLRC merely adopted the conclusions of the Labor Arbiter which in turn were simply
derived from the report of the MEC. Petitioner primarily disputes the failure of the NLRC to apply RA No. 7877, An Act Declaring Sexual
Harassment Unlawful in the Employment, Education or Training Environment and for Other Purposes, in determining whether he actually
committed sexual harassment. He asserts that his acts did not fall within the definition and criteria of sexual harassment as laid down in Sec. 3 of
the law.5 Specifically, he cites public respondents failure to show that his acts of fondling the hand and massaging the shoulders of Capiral
discriminated against her continued employment, impaired her rights and privileges under the Labor Code, or created a hostile, intimidating or
offensive environment.6cräläwvirtualibräry
Petitioner also contends that public respondents reliance on Villarama v. NLRC and Golden Donuts7 was misplaced. He draws attention to victim
Divina Gonzagas immediate filing of her letter of resignation in the Villarama case as opposed to the one year delay of Capiral in filing her
complaint against him. He now surmises that the filing of the case against him was merely an afterthought and not borne out of a valid complaint,
hence, the Villarama case should have no bearing on the instant case.
As regards his assertion that he was not afforded due process, petitioner would point to his demand for personal confrontation which was brushed
aside by the MEC. He argues strongly that in rejecting his plea, the MEC clearly denied him an opportunity to be heard and present his side.
The issues raised in this petition require this Court to delve into the findings of fact by the public respondent. We have ruled in a litany of cases that
resort to judicial review of the decisions of the NLRC under Rule 65 of the Rules of Court is confined only to issues of want or excess of
jurisdiction and grave abuse of discretion on the part of the tribunal rendering them. It does not include an inquiry on the correctness of the
evaluation of evidence, which served as basis for the labor official in determining his conclusion. Findings of fact of administrative officers are
generally given finality.8 Nonetheless, the Court shall discuss the matter if only to emphasize that the contentions of petitioner are definitely
without merit.
Petitioner assails the failure of the NLRC to strictly apply RA No. 7877 to the instant case. We note however, that petitioner never raised the
applicability of the law in his appeal to the NLRC nor in his motion for reconsideration. Issues or arguments must chiefly be raised before the court
or agency concerned so as to allow it to pass upon and correct its mistakes without the intervention of a higher court. Having failed to indicate his
effort along this line, petitioner cannot now belatedly raise its application in this petition.
Republic Act No. 7877 was not yet in effect at the time of the occurrence of the act complained of. It was still being deliberated upon in Congress
when petitioners case was decided by the Labor Arbiter. As a rule, laws shall have no retroactive effect unless otherwise provided, or except in a
criminal case when their application will favor the accused.9 Hence, the Labor Arbiter have to rely on the MEC report and the common
connotation of sexual harassment as it is generally understood by the public. Faced with the same predicament, the NLRC had to agree with the
Labor Arbiter. In so doing, the NLRC did not commit any abuse of discretion in affirming the decision of the Labor Arbiter.
Petitioner next trains his gun on the reliance by the NLRC on Villarama and claims it was erroneous. We rule otherwise and hold that it was both
fitting and appropriate since it singularly addressed the issue of a managerial employee committing sexual harassment on a subordinate. The
disparity in the periods of filing the complaints in the two (2) cases did not in any way reduce this case into insignificance. On the contrary, it even
invited the attention of the Court to focus on sexual harassment as a just and valid cause for termination. Whereas petitioner Libres was only meted
a 30-day suspension by the NLRC, Villarama, in the other case was penalized with termination. As Mr. Justice Puno elucidated, As a managerial
employee, petitioner is bound by more exacting work ethics. He failed to live up to his higher standard of responsibility when he succumbed to his
moral perversity. And when such moral perversity is perpetrated against his subordinate, he provides a justifiable ground for his dismissal for lack
of trust and confidence. It is the right, nay, the duty of every employer to protect its employees from oversexed superiors.10 Public respondent
therefore is correct in its observation that the Labor Arbiter was in fact lenient in his application of the law and jurisprudence for which petitioner
must be grateful and not gripe against.
Petitioner further claims that the delay in instituting the complaint shows that it was only an afterthought. We disagree. As pointed out by the
Solicitor General, it could be expected since Libres was Capirals immediate superior. Fear of retaliation and backlash, not to forget the social
humiliation and embarrassment that victims of this human frailty usually suffer, are all realities that Capiral had to contend with. Moreover, the
delay did not detract from the truth derived from the facts. Petitioner Libres never questioned the veracity of Capirals allegations. In fact his
narration even corroborated the latters assertion in several material points. He only raised issue on the complaints protracted filing.
On the question of due process, we find that the requirements thereof were sufficiently complied with. Due process as a constitutional precept does
not always and in all situations require a trial type proceeding. Due process is satisfied when a person is notified of the charge against him and
given an opportunity to explain or defend himself. The essence of due process is simply to be heard, or as applied to administrative proceedings, an
opportunity to explain ones side, or an opportunity to seek a reconsideration of the action or ruling complained of.11 It is undeniable that petitioner
was given a Notice of Investigation informing him of the charge of sexual harassment as well as advising him to submit a written explanation
regarding the matter; that he submitted his written explanation to his superior, Isidro F. Hynson Jr.; that Hynson Jr. further allowed him to air his
grievance in a private session; and, that upon release of the suspension order made by the MEC petitioner requested its reconsideration but was
denied. From the foregoing it can be gleaned that petitioner was given more than adequate opportunity to explain his side and air his grievances.
The personal confrontation with the MEC officers, which he requested, was not necessary. The parties had already exhaustively presented their
claims and defenses in different fora. As stated in Homeowners Savings and Loan Association v. NLRC, litigants may be heard through pleadings,
written explanations, position papers, memoranda or oral arguments.12 Petitioner has been afforded all of the above means to air his side. Due
process was therefore properly observed.
WHEREFORE, the petition is DISMISSED, no grave abuse of discretion having been committed by public respondent National Labor Relations
Commission in upholding the suspension of petitioner Carlos G. Libres as justified and in accordance with due process. Consequently, its decision
of 28 August 1995 as well as its resolution of 31 October 1995 is AFFIRMED.
SO ORDERED.
Puno, Mendoza, Quisumbing, and Buena, JJ., concur.
G.R. No. 106341 September 2, 1994
DELFIN G. VILLARAMA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND GOLDEN DONUTS, INC., respondents.
Rogelio R. Udarbe for petitioner.
Armando V. Ampil for private respondent.
PUNO, J.:
Sexual harassment abounds in all sick societies. It is reprehensible enough but more so when inflicted by those with moral ascendancy over their
victims. We rule that it is a valid cause for separation from service.
First, the facts. On November 16, 1987, petitioner DELFIN VILLARAMA was employed by private respondent GOLDEN DONUTS, INC., as its
Materials Manager. His starting salary was P6,500.00 per month, later increased to P8,500.00.
On July 15, 1989, petitioner Villarama was charged with sexual harassment by Divina Gonzaga, a clerk-typist assigned in his department. The
humiliating experience compelled her to resign from work. Her letter-resignation, dated July 15, 1989, reads:
MR. LEOPOLDO H. PRIETO
President
Golden Donuts, Inc.
Dear Sir:
I would like to tender my resignation from my post as Clerk Typist of Materials Department effective immediately.
It is really my regret to leave this company which has given me all the opportunity I long desired. My five (5) months stay in the company have
been very gratifying professionally and financially and I would not entertain the idea of resigning except for the most shocking experience I have
had in my whole life.
Last Friday, July 7, 1989, Mr. Delfin Villarama and Mr. Jess de Jesus invited all the girls of Materials Department for a dinner when in (sic) the
last minute the other three (3) girls decided not to join the groupp anymore. I do (sic) not have second thought(s) in accepting their invitation for
they are my colle(a)gues and I had nothing in mind that would in any manner prompt me to refuse to what appeared to me as a simple and cordial
invitation. We went to a restaurant along Makati Avenue where we ate our dinner. Mr. Villarama, Mr. Olaybar and Mr. Jess de Jesus were drinking
while we were eating and (they) even offered me a few drinks and when we were finished, they decided to bring me home. While on my way, I
found out that Mr. Villarama was not driving the way to my house. I was wondering why we were taking the wrong way until I found out that we
were entering a motel. I was really shock(ed). I did not expect that a somewhat reputable person like Mr. Villarama could do such a thing to any of
his subordinates. I should have left the company without any word but I feel that I would be unfair to those who might be similarly situated. I hope
that you would find time to investigate the veracity of my allegations and make each (sic) responsible for is own deed. (emphasis ours)
Thank you very much and more power.
Very respectfully yours,
DIVINA GONZAGA
The letter prompted Mr. Leopoldo Prieto, President of Golden Donuts, Inc., to call petitioner to a meeting on August 4, 1989. Petitioner was then
required to explain the letter against him. It appears that petitioner agreed to tender his resignation. Private respondent moved swiftly to separate
petitioner. Thus, private respondent approved petitioner's application for leave of absence with pay from August 5-28, 1989. It also issued an inter-
office memorandum, dated August 4, 1989, advising "all concerned" that petitioner was no longer connected with the company effective August 5,
1989. 1 Two (2) days later, or on August 7, 1989, Mr. Prieto sent a letter to petitioner confirming their agreement that petitioner would be officially
separated from the private respondent. The letter reads:
Dear Mr. Villarama:
This is to officially confirm our discussion last Friday, August 4, 1989, regarding your employment with us. As per our agreement, you will be
officially separated from the company effective August 23, 1989.
May I, therefore, request you to please submit or send us your resignation letter on or before the close of business hours of August 22, 1989.
Please see the Personnel & Industrial Relations Office for your clearance.
Very truly yours,
(SGD). LEOPOLDO H. PRIETO, JR.
President
In the interim, petitioner had a change of mind. In a letter dated August 16, 1989, petitioner sought reconsideration of the management's decision to
terminate him, viz.:
DEAR SIR:
MAY I REQUEST FOR A RECONSIDERATION ON THE DECISION HANDED DURING OUR MEETING OF AUGUST 4, 1989,
TERMINATING MY SERVICES WITH THE COMPANY EFFECTIVE AUGUST 5, 1989.
THE SIGNIFICANT CONTRIBUTION OF THE MATERIALS DEPARTMENT, WHICH I HAD BEEN HEADING FOR THE PAST 21
MONTHS, TO THE PERFORMANCE OF THE COMPANY FAR OUTWEIGHS THE ERROR THAT I HAD COMMITTED. AN ERROR
THAT MUST NOT BE A BASIS FOR SUCH A DRASTIC DECISION.
AS I AM STILL OFFICIALLY ON LEAVE UNTIL THE 29th, OF THIS MONTH, MAY I EXPECT THAT I WILL RESUME MY REGULAR
DUTY ON THE 29th?
ANTICIPATING YOUR FAVORABLE REPLY.
VERY TRULY YOURS,
(SGD.) DELFIN G. VILLARAMA
For his failure to tender his resignation, petitioner was dismissed by private respondent on August 23, 1989. Feeling aggrieved, petitioner filed an
illegal dismissal case 2 against private respondent.
In a decision dated January 23, 1991, Labor Arbiter Salimar V. Nambi held that due process was not observed in the dismissal of petitioner and
there was no valid cause for dismissal. Private respondent GOLDEN DONUTS, INC. was ordered to: (1) reinstate petitiner DELFIN G.
VILLARAMA to his former position, without loss of seniority rights, and pay his backwages at the rate of P8,500.00 per month from August 1989,
until actual reinstatement; (2) pay petitioner the amount of P24,866.66, representing his unused vacation leave and proportionate 13th month pay;
(3) pay petitioner P100,000.00, as moral damages, and P20,000.00, as exemplary damages; and (3) pay the attorney's fees equivalent to ten percent
of the entire monetary award.
Private respondent appealed to the National Labor Relations Commission. On July 16, 1992, public respondent reversed the decision of the labor
arbiter. The dispositive portion of its Resolution reads:
WHEREFORE, premises considered, the decision appealed from is hereby set aside and a new one entered declaring the cause of dismissal of
complainant as valid; however, for the procedural lapses, respondent (Golden Donuts, Inc.) is hereby ordered to indemnify complainant (petitioner)
in the form of separation pay equivalent to two month's (sic) pay (for his two years of service, as appears (sic) in the records), or the amount of
P17,000.00.
SO ORDERED.
Hence, this petition where the following arguments are raised:
THE ALLEGED IMMORALITY CHARGED AGAINST PETITIONER IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE ON RECORD.
THE MERE ADMISSION OF THE VIOLATION OF DUE PROCESS ENTITLES PETITIONER TO REINSTATEMENT.
IN ANY EVENT, PETITIONER IS ENTITLED TO HIS SALARIES FROM RECEIPT BY PRIVATE RESPONDENT OF THE DECISION OF
THE LABOR ARBITER ON 4 FEBRUARY 1991 TO (sic) AT LEAST THE PROMULGATION OF THE ASSAILED RESOLUTION ON (sic)
16 JULY 1992.
IN ANY EVENT, PETITIONER IS ALSO ENTITLED TO HIS UNUSED VACATION LEAVE AND PROPORTIONATE 13TH MONTH PAY
IN THE TOTAL AMOUNT OF P24,866.66, ADJUDGED BY THE LABOR ARBITER.
THE AWARD OF MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES BY THE LABOR ARBITER IS JUSTIFIED.
We affirm with modification the impugned Resolution.
At the outset, we note that the Petition was not accompanied by a certified true copy of the assailed July 16, 1992 NLRC Resolution, 3 in violation
of Revised Circular No. 1-88. Neither was there any certification under oath that "petitioner has not commenced any other action or proceeding
involving the same issues in the Supreme Court, the Court of Appeals or different Divisions thereof, or any other tribunal or agency, and that to the
best of his knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or different Divisions thereof or any
other tribunal or agency," as required under Circular No. 28-91. It is settled that non-compliance with the provisions of Revised Circular No. 1-88
and Circular No. 28-91, would result in the outright dismissal of the petition. 4
In addition, under Rule 65 of the Revised Rules of Court, the special civil action for certiorari is available in cases where the concerned "tribunal,
board or officer exercising judicial functions had acted without or in excess of its jurisdiction, or with grave abuse of discretion and there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law." In Antonio v. National Labor Relations Commission, 5 we held
that the plain and adequate remedy expressly provided by law is a motion for reconsideration of the assailed decision, and the resolution thereof,
which is not only expected to be but would actually have provided adequate and more speedy remedy than a petition for certiorari. The rationale for
this requirement is to enable the court or agency concerned to pass upon and correct its mistakes without the intervention of a higher court. 6 In this
case, the assailed July 16, 1992 Resolution of the National Labor Relations Commission was received by petitioner's counsel on July 23, 1992. 7
Petitioner did not file a motion for reconsideration, instead, he commenced this special civil action for certiorari. Be that as it may, we allowed the
petition to enable us to rule on the significant issues raised before us, viz.: (1) whether or not petitioner's right to procedural due process was
violated, and (2) whether or not he was dismissed for a valid or just cause.
The procedure for terminating an employee is found in Article 277 (b) of the Labor Code, viz.:
xxx xxx xxx
(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and
authorized cause and without prejudice to the requirement of notice under Article 283 of this Code 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 himself with the assistance of his counsel if he so desires in accordance with company rules and regulations
promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without
prejudice to the right of the worker to contest the validity or legality of his dismissal by filing 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 on the employer. . . .
(emphasis supplied)
This procedure protects not only rank-and-file employees but also managerial employees. Both have the right to security of tenure as provided for
in Section 3, Article XIII of the 1987 Constitution. In the case at bench, petitioner decided to seek reconsideration of the termination of his service
thru his August 16, 1989 letter. While admitting his error, he felt that its gravity did not justify his dismissal. Considering this stance, and in
conformity with the aforequoted Article 277 (b) of the Labor Code, petitioner should have been formally charged and given an opportunity to
refute the charges. Under the facts in field, we hold that petitioner was denied procedural due process.
We now come to the more important issue of whether there was valid cause to terminate petitioner.
Petitioner claims that his alleged immoral act was unsubstantiated, hence, he could not be dismissed. We hold otherwise. The records show that
petitioner was confronted with the charge against him. Initially, he voluntarily agreed to be separated from the company. He took a leave of
absence preparatory to this separation. This agreement was confirmed by the letter to him by Mr. Prieto dated August 7, 1989. A few days after,
petitioner reneged on the agreement. He refused to be terminated on the ground that the seriousness of his offense would not warrant his separation
from service. So he alleged in his letter to Mr. Prieto dated August 16, 1989. But even in this letter, petitioner admitted his "error" vis-a-vis Miss
Gonzaga. As a manager, petitioner should know the evidentiary value of his admissions. Needless to stress, he cannot complain there was no valid
cause for his separation.
Moreover, loss of trust and confidence is a good ground for dismissing a managerial employee. It can be proved by substantial evidence which is
present in the case at bench. As further observed by the Solicitor General:
. . . assuming arguendo that De Jesus and Gonzaga were sweethearts and that petitioner merely acceded to the request of the former to drop them in
the motel, petitioner acted in collusion with the immoral designs of De Jesus and did not give due regard to Gonzaga's feeling on the matter and
acted in chauvinistic disdain of her honor, thereby justifying public respondent's finding of sexual harassment. Thus, petitioner not only failed to
act accordingly as a good father of the family because he was not able to maintain his moral ascendancy and authority over the group in the matter
of morality and discipline of his subordinates, but he actively facilitated the commission of immoral conduct of his subordinates by driving his car
into the motel.
(Comment, April 29, 1993, p. 9)
As a managerial employee, petitioner is bound by a more exacting work ethics. He failed to live up to this higher standard of responsibility when he
succumbed to his moral perversity. And when such moral perversity is perpetrated against his subordinate, he provides justifiable ground for his
dismissal for lack of trust and confidence. It is the right, nay, the duty of every employer to protect its employees from over sexed superiors.
To be sure, employers are given wider latitude of discretion in terminating the employment of managerial employees on the ground of lack of trust
and confidence. 8
We next rule on the monetary awards due to petitioner. The public respondent erred in awarding separation pay of P17,000.00 as indemnity for his
dismissal without due process of law. The award of separation pay is proper in the cases enumerated under Articles 283 and 284 of the Labor Code,
9 and in cases where there is illegal dismissal (for lack of valid cause) and reinstatement is no longer feasible. But this is not to state that an
employer cannot be penalized for failure to give formal notice and conduct the necessary investigation before dismissing an employee. 10 Thus, in
Wenphil vs. NLRC 11 and Pacific Mills, Inc. vs. Alonzo, 12 this Court awarded P1,000.00 as penalty for non-observance of due process.
Petitioner is not also entitled to moral and exemplary damages. There was no bad faith or malice on the part of private respondent in terminating
the services of petitioner. 13
Petitioner is entitled, however, to his unused vacation/sick leave and proportionate 13th month pay, as held by the labor arbiter. These are monies
already earned by petitioner and should be unaffected by his separation from the service.
WHEREFORE, premises considered, the assailed resolution of public respondent is hereby AFFIRMED WITH MODIFICATION that the award
of separation pay is DELETED. Private respondent is ordered to pay petitioner the amount of P1,000.00 for non-observance of due process, and the
equivalent amount of his unused vacation/sick leave and proportionate 13th month pay. No pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado and Mendoza, J.J., concur.
ATTY. GRACE M. VELOSO AND MA. JOEYLYNN B. QUIONES
-versus-
JUDGE ANACLETO M. CAMINADE,
RTC, Branch 6, Cebu City,
A.M. No. RTJ- 01-1655 July 8, 2004
CORONA, J.:
FACTS:
Before this Court is an administrative complaint for sexual harassment separately filed by Atty. Grace Veloso and Ma. Joeylynn Quiones against
Judge Anacleto M. Caminade of the Regional Trial Court of Cebu City, Branch 6.

Atty. Veloso, a lawyer of the Public Attorneys Office (PAO) assigned to the RTC branch presided by Judge Caminade, alleged in her affidavit that,
on March 9, 2001, she went to the court to check on her work schedule for the following week. Judge Caminade was then having a conversation
with two men at the lawyers table. She was about to leave when Judge Caminade asked her to join them. She acceded to respondents request as she
considered him as her superior. After a few minutes, the two men and Atty. Veloso rose to leave but the judge told her to stay behind because they
needed to discuss a case. Judge Caminade then ushered her to his chambers. She was made to sit on the visitors chair which was just a foot away
from where the judge sat.
While discussing the case, she was stunned when Judge Caminade suddenly placed his hand on her right thigh and squeezed it. He then took her
hand and kissed it. She immediately stood up and headed towards the door leading to the staff room. He, however, caught up with her and placed
his hand on her shoulder. Before she could open the door, Judge Caminade told her Kiss ko bi (Let me kiss you). Atty. Veloso, who was so
shocked, retorted Kalo-od nimo Judge uy (You are so disgusting, Judge). She then opened the door and went out of his chambers.
At the staff room, respondent judge, acting as if nothing happened, ordered his researcher to show her certain court records. Although she was
trembling, she pretended to look at the records then ran out of the staff room and cried.
On the other hand, Joeylynn Quiones, Clerk III in the office of Judge Caminade, claimed that respondent judge squeezed her hand on three
different occasions in February 2001. She noticed that the judge would squeeze her hand whenever she gave him the case records. Although
offended by his actions, Joeylynn opted to remain silent out of deference to or fear of respondent judge.
Then, on February 14, 2001, Judge Caminade asked her to open a jar of sugar; he was unable to do so due to his disability of having only one hand.
Joeylynn entered the judges chambers and handed him the jar. Once inside, he greeted her Happy Valentines Day and asked Asa mo gabii? (Where
did you go last night?). She replied Sa balay (At home). To Joeylynns surprise, he suddenly grabbed her right hand and kissed her on the cheek.
She was so shocked that she could not react. Thereafter, Joeylynn left the chambers and cried.
Judge Caminade explained that he had a tendency to tease and play pranks on his friends, both male and female, because of his congenial nature. In
fact, even before his appointment to the judiciary, it had been his natural way of complimenting women for their physical attributes but he never
had any malice or lustful designs in his actuations.
The two administrative complaints were consolidated and referred to then Associate Justice Conchita Carpio Morales of the Court of Appeals for
investigation, report and recommendation. Justice Morales found Judge Caminade guilty of violating Canons of Judicial Ethics and recommended
that respondent be suspended for six months without pay.
ISSUE: Whether or not Judge Caminade of violating the Code of Judicial Conduct?
HELD:
Yes, Canons 3 and 4 of the new Code of Judicial Conduct mandate, respectively, that judges shall ensure that not only is their conduct above
reproach, but that it is perceived to be so in the view of the reasonable observer and that judges shall avoid improprieties and the appearance of
impropriety in all of their activities. These very stringent standards of decorum are demanded of all magistrates and employees of the courts.
Those who serve in the judiciary, particularly justices and judges, must not only know the law but must also possess the highest degree of integrity
and probity, and an unquestionable moral uprightness both in their public and private lives.
In this particular case, we are principally concerned with the moral fiber of Judge Caminade. His penchant for teasing and showing unwelcome
affection to women indicates a certain moral depravity and lack of respect towards his female employees. They were his subordinates and he
should have treated them like his own children. Instead, he took advantage of his superior position.
Judge Caminades behavior must be sanctioned. We are neither amused by his claims of innocent playfulness nor impressed by his excessive
display of congeniality. He acted beyond the bounds of decency, morality and propriety. He failed to meet the standard of conduct embodied in the
Code of Judicial Conduct. His abusive and distasteful acts unmistakably constituted sexual harassment because they resulted in an intimidating,
hostile, or offensive environment for his female subordinates.
WHEREFORE, respondent judge is found guilty of violating Canons 3 and 4 of the new Code of Judicial Conduct by committing sexual
harassment and is hereby SUSPENDED from office for a period of six months without pay effective immediately, with the warning that a
repetition of the same offense shall be punished with dismissal from the service.
SO ORDERED.
Atty. Susan M. Aquino vs. Hon. Ernesto D. Acosta
A.M. No. CTA-01-1. April 2, 2002
Facts: On November 21, 2000, she reported for work after her vacation in the U.S., bringing gifts for the three judges of the CTA, including
respondent. In the afternoon of the same day, he entered her room and greeted her by shaking her hand. Suddenly, he pulled her towards him and
kissed her on her cheek.
On December 28, 2000, while respondent was on official leave, he called complainant by phone, saying he will get something in her office. Shortly
thereafter, he entered her room, shook her hand and greeted her, "Merry Christmas." Thereupon, he embraced her and kissed her. She was able to
free herself by slightly pushing him away.
On the first working day in January, 2001, respondent phoned complainant, asking if she could see him in his chambers in order to discuss some
matters. When complainant arrived there, respondent tried to kiss her but she was able to evade his sexual attempt.
Weeks later, after the Senate approved the proposed bill expanding the jurisdiction of the CTA, while complainant and her companions were
congratulating and kissing each other, respondent suddenly placed his arms around her shoulders and kissed her.
In the morning of February 14, 2001, respondent called complainant, requesting her to go to his office. She then asked Ruby Lanuza, a clerk in the
Records Section, to accompany her. Fortunately, when they reached his chambers, respondent had left.
The last incident happened the next day. At around 8:30 a.m., respondent called complainant and asked her to see him in his office to discuss the
Senate bill on the CTA. She again requested Ruby to accompany her. The latter agreed but suggested that they should act as if they met by accident
in respondents office. Ruby then approached the secretarys table which was separated from respondents office by a transparent glass. For her part,
complainant sat in front of respondent's table and asked him what he wanted to know about the Senate bill. Respondent seemed to be at a loss for
words and kept glancing at Ruby who was searching for something at the secretary's desk. Forthwith, respondent approached Ruby, asked her what
she was looking for and stepped out of the office. When he returned, Ruby said she found what she was looking for and left. Respondent then
approached complainant saying, me gusto akong gawin sa iyo kahapon pa. Thereupon, he tried to grab her. Complainant instinctively raised her
hands to protect herself but respondent held her arms tightly, pulled her towards him and kissed her. She pushed him away, then slumped on a chair
trembling. Meantime, respondent sat on his chair and covered his face with his hands. Thereafter, complainant left crying and locked herself inside
a comfort room. After that incident, respondent went to her office and tossed a note stating, sorry, it wont happen again.
Issue: Whether or not Judge Acosta is guilty of sexually harassment.
Held: No, Judge Acosta is not guilty of sexual harassment. He is exonerated of the charges against him and is advised to be more circumspect in his
deportment.
Rationale: “A mere casual buss on the cheek is not a sexual conduct or favor and does not fall within the purview of sexual harassment under R.A.
No. 7877. Section 3 (a) thereof provides, to wit:
'Sec. 3. Work, Education or Training - related Sexual Harassment Defined. - Work, education or training-related sexual harassment is committed by
an employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any
sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of said Act.
a) In a work-related or employment environment, sexual harassment is committed when:
1) The sexual favor is made as a condition in the hiring or in the employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation, terms, conditions, promotions or privileges; or the refusal to grant sexual favor
results in limiting, segregating or classifying the employee which in anyway would discriminate, deprive or diminish employment opportunities or
otherwise adversely affect said employees;
2) The above acts would impair the employee's right or privileges under existing labor laws; or
3) The above acts would result in an intimidating, hostile, or offensive environment for the employee.'
"Clearly, under the foregoing provisions, the elements of sexual harassment are as follows:
1) The employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person
has authority, influence or moral ascendancy over another;
2) The authority, influence or moral ascendancy exists in a working environment;
3) The employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, or any other person having
authority, influence or moral ascendancy makes a demand, request or requirement of a sexual favor.”
Indeed, from the records on hand, there is no showing that respondent judge demanded, requested or required any sexual favor from complainant in this is not a valid excuse because the law mandates the twin notice requirements to the employee’s last known address. Thus, it should be held
exchange for favorable compensation, terms, conditions, promotion or privileges specified under Section 3 of R.A. 7877. Nor did he, by his liable for non-compliance with the procedural requirements of due process.
actuations, violate the Canons of Judicial Ethics or the Code of Professional Responsibility.
Petition denied. CA affirmed with modifications.

Note:

AGABON vs NLRC The Supreme Court reviewed and compared the Serrano and Wenphil cases.
DECEMBER 19, 2016 ~ VBDIAZ In doing so, they came up with a clear cut rule on employment termination and payment of separation pay, and if proper, with damages.
Agabon vs NLRC The said review is not included in the digest.
Ergo, just read it in the full text.
GR 158693

Facts:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It
employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when
they were dismissed for abandonment of work. Thus, Petitioners then filed a complaint for illegal dismissal and payment of money claims

Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing. Private respondent, on the other
hand, maintained that petitioners were not dismissed but had abandoned their work.

Issue: WON petitioners were illegally dismissed.

Held:

Accordingly, petitioners’ dismissal was for a just cause. They had abandoned their employment and were already working for another employer.

To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the
opportunity to be heard and to defend himself.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause
for termination of employment by the employer.

After establishing that the terminations were for a just and valid cause, we now determine if the procedures for dismissal were observed.

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code:

Standards of due process: requirements of notice. – In all cases of termination of employment, the following standards of due process shall be
substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Code:

A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity
within which to explain his side;
A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been
established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee’s last known address.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing
or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is
sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the
dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and
Employment written notices 30 days prior to the effectivity of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an
authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or
authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the
dismissal is for just or authorized cause but due process was not observed.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned
their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending
notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent,