G.R. No. 120969 January 22, 1998 salary, as his services were no longer needed.
Anent petitioner Enero,
ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO, Petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION)
composed of Presiding Commissioner RAUL T. AQUINO,
Commissioner ROGELIO I. RAYALA and Commissioner VICTORIANO R.
CALAYCAY (Ponente), VIC DEL ROSARIO and VIVA FIMS, Respondents.
DAVIDE, JR., J.:
By way of this special civil action for certiorari under Rule 65 of the
Rules of Court, petitioners seek to annul the 10 February 1995
Decision 1 of the National Labor Relations Commission (hereafter
NLRC), and its 6 April 1995 Resolution 2 denying the motion to
reconsider the former in NLRC-NCR-CA No. 006195-94. The decision
reversed that of the Labor Arbiter in NLRC-NCR-Case No. 00-07-03994-
92.
The parties present conflicting sets of facts.
Petitioner Alejandro Maraguinot, Jr. maintains that he was employed
by private respondents on 18 July 1989 as part of the filming crew with
a salary of P375.00 per week. About four months later, he was
designated Assistant Electrician with a weekly salary of P400.00, which
was increased to P450.00 in May 1990. In June 1991, he was promoted
to the rank of Electrician with a weekly salary of P475.00, which was
increased to P539.00 in September 1991.
Petitioner Paulino Enero, on his part, claims that private respondents
employed him in June 1990 as a member of the shooting crew with a
weekly salary of P375.00, which was increased to P425.00 in May
1991, then to P475.00 on 21 December 1991. 3
Petitioners' tasks consisted of loading, unloading and arranging movie
equipment in the shooting area as instructed by the cameraman,
returning the equipment to Viva Films' warehouse, assisting in the
"fixing" of the lighting system, and performing other tasks that the
cameraman and/or director may assign. 4
Sometime in May 1992, petitioners sought the assistance of their
supervisors, Mrs. Alejandria Cesario, to facilitate their request that
private respondents adjust their salary in accordance with the
minimum wage law. In June 1992, Mrs. Cesario informed petitioners
that Mr. Vic del Rosario would agree to increase their salary only if
they signed a blank employment contract. As petitioners refused to
sign, private respondents forced Enero to go on leave in June 1992,
then refused to take him back when he reported for work on 20 July
1992. Meanwhile, Maraguinot was dropped from the company payroll
from 8 to 21 June 1992, but was returned on 22 June 1992. He was
again asked to sign a blank employment contract, and when he still
refused, private respondents terminated his services on 20 July
1992. 5 Petitioners thus sued for illegal dismissal 6 before the Labor
Arbiter.
On the other hand, private respondents claim that Viva Films
(hereafter VIVA) is the trade name of Viva Productions, Inc., and that it
is primarily engaged in the distribution and exhibition of movies - but
not in the business of making movies; in the same vein, private
respondent Vic del Rosario is merely an executive producer, i.e., the
financier who invests a certain sum of money for the production of
movies distributed and exhibited by VIVA. 7
Private respondents assert that they contract persons called
"producers" - also referred to as "associate producers"  8 - to "produce"
or make movies for private respondents; and contend that petitioners
are project employees of the association producers who, in turn, act
as independent contractors. As such, there is no employer-employee
relationship between petitioners and private respondents.
Private respondents further contend that it was the associate
producer of the film "Mahirap Maging Pogi," who hired petitioner
Maraguinot. The movie shot from 2 July up to 22 July 1992, and it was
only then that Maraguinot was released upon payment of his last
he was hired for the movie entitled "Sigaw ng Puso," later re-tired
"Narito and Puso." He went on vacation on 8 June 1992, and by the
time he reported for work on 20 July 1992, shooting for the movie had
already been completed. 9
After considering both versions of the facts, the Labor Arbiter found as
follows:
On the first issue, this Office rules that
complainants are the employees of the
respondents. The producer cannot be considered
as an independent contractor but should be
considered only as a labor-only contractor and as
such, acts as a mere agent of the real employer,
the herein respondent. Respondents even failed to
name and specify who are the producers. Also, it is
an admitted fact that the complainants received
their salaries from the respondents. The case cited
by the respondents, Rosario Brothers, Inc. v. Ople,
131 SCRA 72 does not apply in this case.
It is very clear also that complainants are doing
activities which are necessary and essential to the
business of the respondents, that of movie-
making. Complainant Maraguinot worked as an
electrician while complainant Enero worked as a
crew [member]. 10
Hence, the Labor Arbiter, in his decision of 20 December 1993,
decreed as follows:
WHEREFORE, judgment is hereby rendered
declaring that complainants were illegally
dismissed.
Respondents are hereby ordered to reinstate
complainant to their former positions without loss
[of] seniority rights and pay their backwages
starting July 21, 1992 to December 31, 1993
temporarily computed in the amount of
P38,000.00 for complainant Paulino Enero and
P46,000.00 for complainant Alejandro Maraguinot,
Jr. and thereafter until actually reinstated.
Respondents are ordered to pay also attorney's
fees equivalent to ten (10%) and/or P8,400.00 on
top of the award. 11
Private respondents appealed to the NLRC (docketed as NLRC NCR-CA
No. 006195-94). In its decision 12 of 10 February 1995, the NLRC found
the following circumstances of petitioners' work "clearly established:"
1. Complainants [petitioners herein] were hired for
specific movie projects and their employment
was co-terminus with each movie project the
completion/termination of which are pre-
determined, such fact being made known to
complainants at the time of their engagement.
xxx xxx xxx
2 Each shooting unit works on one movie project
at a time. And the work of the shooting units,
which work independently from each other, are
not continuous in nature but depends on the
availability of movie projects.
3. As a consequence of the non-continuous work
of the shooting units, the total working hours
logged by complainants in a month show extreme
variations. . . For instance, complainant
Maraguinot worked for only 1.45 hours in June
1991 but logged a total of 183.25 hours in January
1992. Complainant Enero logged a total of
 only 31.57 hours in September 1991 but worked
for 183.35 hours the next month, October 1991.
4. Further shown by respondents is the irregular
work schedule of complainants on a daily basis.
Complainant Maraguinot was supposed to report
on 05 August 1991 but reported only on 30 August
1991, or a gap of 25 days. Complainant Enero
worked on 10 September 1991 and his next
scheduled working day was 28 September 1991, a
gap of 18 days.
5. The extremely irregular working days and hours
of complainants' work explain the lump sum
payment for complainants' services for each movie
project. Hence, complainants were paid a standard
weekly salary regardless of the number of working
days and hours they logged in. Otherwise, if the
principle of "no work no pay" was strictly applied,
complainants' earnings for certain weeks would be
very negligible.
6. Respondents also alleged that complainants
were not prohibited from working with such movie
companies like Regal, Seiko and FPJ Productions
whenever they are not working for the
independent movie producers engaged by
respondents . . . This allegation was never rebutted
by complainants and should be deemed admitted.
The NLRC, in reversing the Labor Arbiter, then concluded that these
circumstances, taken together, indicated that complainants (herein
petitioners) were "project employees."
After their motion for reconsideration was denied by the NLRC in its
Resolution 13 of 6 April 1995, petitioners filed the instant petition,
claiming that the NLRC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in: (1) finding that
petitioners were project employees; (2) ruling that petitioners were
not illegally dismissed; and (3) reversing the decision of the Labor
Arbiter.
To support their claim that they were regular (and not project)
employees of private respondents, petitioners cited their performance
of activities that were necessary or desirable in the usual trade or
business of private respondents and added that their work was
continuous, i.e., after one project was completed they were assigned
to another project. Petitioners thus considered themselves part of a
work pool from which private respondents drew workers for
assignment to different projects. Petitioners lamented that there was
no basis for the NLRC's conclusion that they were project employees,
while the associate producers were independent contractors; and thus
reasoned that as regular employees, their dismissal was illegal since
the same was premised on a "false cause," namely, the completion of
a project, which was not among the causes for dismissal allowed by
the Labor Code.
Private respondents reiterate their version of the facts and stress that
their evidence supports the view that petitioners are project
employees; point to petitioners' irregular work load and work
schedule; emphasize the NLRC's finding that petitioners never
controverted the allegation that they were not prohibited from
working with other movie companies; and ask that the facts be viewed
in the context of the peculiar characteristics of the movie industry.
The Office of the Solicitor General (OSG) is convinced that this petition
is improper since petitioners raise questions of fact, particularly, the
NLRC's finding that petitioners were project employees, a finding
supported by substantial evidence; and submits that petitioners'
reliance on Article 280 of the Labor Code to support their contention
that they should be deemed regular employees is misplaced, as said
section "merely distinguishes between two types of employees, i.e.,
regular employees and casual employees, for purposes of determining
the right of an employee to certain benefits."
The OSG likewise rejects petitioners' contention that since they were
hired not for one project, but for a series of projects, they should be
deemed regular employees. Citing Mamansag v. NLRC, 14 the OSG
asserts that what matters is that there was a time-frame for each
movie project made known to petitioners at the time of their hiring. In
closing, the OSG disagrees with petitioners' claim that the NLRC's
classification of the movie producers as independent contractors had
no basis in fact and in law, since, on the contrary, the NLRC "took pains
in explaining its basis" for its decision.
As regards the propriety of this action, which the Office of the Solicitor
General takes issue with, we rule that a special civil action
for certiorari under Rule 65 of the Rules of Court is the proper remedy
for one who complains that the NLRC acted in total disregard of
evidence material to or decisive of the controversy. 15 In the instant
case, petitioners allege that the NLRC's conclusions have no basis in
fact and in law, hence the petition may not be dismissed on
procedural or jurisdictional grounds.
The judicious resolution of this case hinges upon, first, the
determination of whether an employer-employee relationship existed
between petitioners and private respondents or any one of private
respondents. If there was none, then this petition has no merit;
conversely, if the relationship existed, then petitioners could have
been unjustly dismissed.
A related question is whether private respondents are engaged in the
business of making motion pictures. Del Rosario is necessarily engaged
in such business as he finances the production of movies. VIVA, on the
other hand, alleges that it does not "make" movies, but merely
distributes and exhibits motion pictures. There being no further proof
to this effect, we cannot rely on this self-serving denial. At any rate,
and as will be discussed below, private respondents' evidence even
supports the view that VIVA is engaged in the business of making
movies.
We now turn to the critical issues. Private respondents insist that
petitioners are project employees of associate producers who, in turn,
act as independent contractors. It is settled that the contracting out of
labor is allowed only in case of job contracting. Section 8, Rule VIII,
Book III of the Omnibus Rules Implementing the Labor Code describes
permissible job contracting in this wise:
Sec. 8. Job contracting. - There is job contracting
permissible under the Code if the following
conditions are met:
(1) The contractor carries on an
independent business and undertakes the
contract work on his own account under
his own responsibility according to his own
manner and method, free from the control
and direction of his employer or principal in
all matters connected with the
performance of the work except as to the
results thereof; and
(2) The contractor has substantial capital or
investment in the form of tools,
equipment, machineries, work premises,
and other materials which are necessary in
the conduct of his business.
Assuming that the associate producers are job contractors, they must
then be engaged in the business of making motion pictures. As such,
and to be a job contractor under the preceding description, associate
producers must have tools, equipment, machinery, work premises,
and other materials necessary to make motion pictures. However, the
associate producers here have none of these. Private respondents'
evidence reveals that the movie-making equipment are supplied to
the producers and owned by VIVA. These include generators, 16 cables
and wooden platforms, 17 cameras and "shooting equipment;" 18 in
fact, VIVA likewise owns the trucks used to transport the
equipment. 19 It is thus clear that the associate producer merely leases
the equipment from VIVA. 20 Indeed, private respondents' Formal Offer
of Documentary Evidence stated one of the purposes of Exhibit "148"
as:
To prove further that the independent Producers
rented Shooting Unit No. 2 from Viva to finish their
films. 21
While the purpose of Exhibits "149," "149-A" and "149-B" was:
[T]o prove that the movies of Viva Films were
contracted out to the different independent
Producers who rented Shooting Unit No. 3 with a
fixed budget and time-frame of at least 30
shooting days or 45 days whichever comes first. 22
Private respondent further narrated that VIVA's generators broke
down during petitioners' last movie project, which forced the
associate producer concerned to rent generators, equipment and crew
from another company. 23 This only shows that the associate producer
did not have substantial capital nor investment in the form of tools,
equipment and other materials necessary for making a movie. Private
respondents in effect admit that their producers, especially
petitioners' last producer, are not engaged in permissible job
contracting.
If private respondents insist that the associate producers are labor
contractors, then these producers can only be "labor-only"
contractors, defined by the Labor Code as follows:
Art. 106. Contractor or subcontractor. - . . .
There is "labor-only" contracting where the person
supplying workers to an employer does not have
substantial capital or investment in the form of
tools, equipment, machineries, work premises,
among others, and the workers recruited and
placed by such persons are performing activities
which are directly related to the principal business
of such employer. In such cases, the person or
intermediary shall be considered merely as an
agent of the employer who shall be responsible to
the workers in the same manner and extent as if
the latter were directly employed by him.
A more detailed description is provided by Section 9, Rule VIII, Book III
of the Omnibus Rules Implementing the Labor Code:
Sec. 9. Labor-only contracting. - (a) Any person
who undertakes to supply workers to an employer
shall be deemed to be engaged in labor-only
contracting where such person:
(1) Does not have substantial capital or
investment in the form of tools, equipment,
machineries, work premises and other
materials; and
(2) The workers recruited and placed by such
person are performing activities which are
directly related to the principal business or
operations of the employer in which workers
are habitually employed.
(b) Labor-only contracting as defined
herein is hereby prohibited and the
person acting as contractor shall be
considered merely as an agent or
intermediary of the employer who shall
be responsible to the workers in the
same manner and extent as if the latter
were directly employed by him.
(c) For cases not falling under this
Article, the Secretary of Labor shall
determine through appropriate orders
whether or not the contracting out of
labor is permissible in the light of the
circumstances of each case and after
considering the operating needs of the
employer and the rights of the workers
involved. In such case, he may prescribe
conditions and restrictions to insure the
protection and welfare of the workers.
As labor-only contracting is prohibited, the law considers the person or
entity engaged in the same a mere agent or intermediary of the direct
employer. But even by the preceding standards, the associate
producers of VIVA cannot be considered labor-only contractors as they
did not supply, recruit nor hire the workers. In the instant case, it was
Juanita Cesario, Shooting Unit Supervisor and an employee of VIVA,
who recruited crew members from an "available group of free-lance
workers which includes the complainants Maraguinot and
Enero." 24 And in their Memorandum, private respondents declared
that the associate producer "hires the services of . . . 6) camera crew
which includes (a) cameraman; (b) the utility crew; (c) the technical
staff; (d) generator man and electrician; (e) clapper; etc. . . . ." 25 This
clearly showed that the associate producers did not supply the
workers required by the movie project.
The relationship between VIVA and its producers or associate
producers seems to be that of agency, 26 as the latter make movies on
behalf of VIVA, whose business is to "make" movies. As such, the
employment relationship between petitioners and producers is
actually one between petitioners and VIVA, with the latter being the
direct employer.
The employer-employee relationship between petitioners and VIVA
can further be established by the "control test." While four elements
are usually considered in determining the existence of an employment
relationship, namely: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer's power to control of the employee's conduct, the
most important element is the employer's control of the employee's
conduct, not only as to the result of the work to be done but also as to
the means and methods to accomplish the same. 27 These four
elements are present here. In their position paper submitted to the
Labor Arbiter, private respondents narrated the following
circumstances:
[T]he PRODUCER has to work within the limits of
the budget he is given by the company, for as long
as the ultimate finish[ed] product is acceptable to
the company . . .
The ensure that qualify films are produced by the
PRODUCER who is an independent contractor, the
company likewise employs a Supervising
PRODUCER, a Project accountant and a Shooting
unit supervisor. The Company's Supervising
PRODUCER is Mr. Eric Cuatico, the Project
accountant varies from time to time, and the
Shooting Unit Supervisor is Ms. Alejandria Cesario.
The Supervising PRODUCER acts as the eyes and
ears of the company and of the Executive Producer
to monitor the progress of the PRODUCER's work
accomplishment. He is there usually in the field
doing the rounds of inspection to see if there is
any problem that the PRODUCER is encountering
and to assist in threshing out the same so that the
film project will be finished on schedule. He
supervises about 3 to 7 movie projects
simultaneously [at] any given time by coordinating
with each film "PRODUCER". The Project
Accountant on the other hand assists the
PRODUCER in monitoring the actual expenses
incurred because the company wants to insure
that any additional budget requested by the
 PRODUCER is really justified and warranted _________________
especially when there is a change of original plans
to suit the tast[e] of the company on how a certain Name of appointee
scene must be presented to make the film more
interesting and more commercially viable.
Signed in the presence of:
(emphasis supplied).

___________________
VIVA's control is evident in its mandate that the end result must be a
"quality film acceptable to the company." The means and methods to
accomplish the result are likewise controlled by VIVA, viz., the movie Notably, nowhere in the appointment slip does it appear that it was
project must be finished within schedule without exceeding the the producer or associate producer who hired the crew members;
budget, and additional expenses must be justified; certain scenes are moreover, it is VIVA's corporate name which appears on the heading
subject to change to suit the taste of the company; and the of the appointment slip. What likewise tells against VIVA is that it paid
Supervising Producer, the "eyes and ears" of VIVA and del Rosario, petitioners' salaries as evidenced by vouchers, containing VIVA's
intervenes in the movie-making process by assisting the associate letterhead, for that purpose. 30
producer in solving problems encountered in making the film.
All the circumstances indicate an employment relationship between
It may not be validly argued then that petitioners are actually subject petitioners and VIVA alone, thus the inevitable conclusion is that
to the movie director's control, and not VIVA's direction. The director petitioners are employees only of VIVA.
merely instructs petitioners on how to better comply with VIVA's
requirements to ensure that a quality film is completed within The next issue is whether petitioners were illegally dismissed. Private
schedule and without exceeding the budget. At bottom, the director is respondents contend that petitioners were project employees whose
akin to a supervisor who merely oversees the activities of rank-and-file employment was automatically terminated with the completion of
employees with control ultimately resting on the employer. their respective projects. Petitioners assert that they were regular
employees who were illegally dismissed.
Moreover, appointment slips 28 issued to all crew members state:
It may not be ignored, however, that private respondents expressly
During the term of this appointment you shall admitted that petitioners were part of a work pool; 31 and, while
comply with the duties and responsibilities of your petitioners were initially hired possibly as project employees, they had
position as well as observe the rules and attained the status of regular employees in view if VIVA's conduct.
regulations promulgated by your superiors and by
Top Management. A project employee or a member of a work pool may acquire the
status of a regular employee when the following concur:
The words "supervisors" and "Top Management" can only refer to the
"supervisors" and "Top Management" of VIVA. By commanding crew 1) There is a continuous rehiring of project employees even after
members to observe the rules and regulations promulgated by VIVA, cessation of a project; 32 and
the appointment slips only emphasize VIVA's control over petitioners.
2) The tasks performed by the alleged "project employee" are vital,
Aside from control, the element of selection and engagement is necessary and indispensable to the usual business or trade of the
likewise present in the instant case and exercised by VIVA. A sample employer. 33
appointment slip offered by private respondents "to prove that
members of the shooting crew except the driver are project However, the length of time during which the
employees of the Independent Producers" 29 reads as follows: employee was continuously re-hired is not
controlling, but merely serves as a badge of regular
VIVA PRODUCTIONS, INC. employment. 34
16 Sct. Albano St.
Diliman, Quezon City In the instant case, the evidence on record shows that petitioner
Enero was employed for a total of two (2) years and engaged in at
PEDRO NICOLAS Date: June 15, 1992 least eighteen (18) projects, while petitioner Maraguinot was
employed for some three (3) years and worked on at least twenty-
APPOINTMENT SLIP three (23) projects. 35 Moreover, as petitioners' tasks involved, among
other chores, the loading, unloading and
You are hereby appointed as SOUNDMAN for the
film project entitled "MANAMBIT". This FILM DATE DATE ASSOCIATE
appointment shall be effective upon the STARTED COMPLETED PRODUCER
commencement of the said project and shall
continue to be effective until the completion of the
LOVE AT FIRST SIGHT 1/3/90 2/16/90 MARIVIC ONG
same.
PAIKOT-IKOT 1/26/90 3/11/90 EDITH
For your services you shall receive the MANUEL
daily/weekly/monthly compensation of P812.50.
ROCKY & ROLLY 2/13/90 3/29/90 M. ONG
During the term of this appointment you shall
comply with the duties and responsibilities of your PAIKOT-IKOT (addl. 1/2) 3/12/90 4/3/90 E. MANUEL
position as well as observe the rules and
regulations promulgated by your superiors and by ROCKY & ROLLY (2nd 4/6/90 5/20/90 M. ONG
Top Management. contract)

NARDONG TOOTHPICK 4/4/90 5/18/90 JUN CHING

Very truly yours,
BAKIT KAY TAGAL NG 6/26/90 10/20/90 E. MANUEL
(an illegible signature) SANDALI

CONFORME: BAKIT KAY TAGAL (2nd 8/10/90 9/23/90 E. MANUEL

contract)
HINUKAY KO NA ANG 9/6/90 10/20/90 JUN CHING UTOL KONG HOODLUM 3/22/92 5/6/92 B. GRIMALT
LIBINGAN MO (part 2)
UTOL (addl. 1/2 contract) 5/7/92 5/29/92 B. GRIMALT
MAGING SINO KA MAN 10/25/90 12/8/90 SANDY STA. MANDURUGAS (2nd 5/25/92 7/8/92 JERRY OHARA
MARIA contract)
MAHIRAP MAGING POGI 7/2/92 8/15/92 M. ONG
M. SINO KA MAN (2nd 12/9/90 1/22/91 SANDY S
contract)
arranging of movie equipment in the shooting area
NOEL JUICO 1/29/91 3/14/90 JUN CHING as instructed by the cameramen, returning the
equipment to the Viva Films' warehouse, and
NOEL JUICO (2nd 3/15/91 4/6/91 JUN CHING assisting in the "fixing" of the lighting system, it
contract) may not be gainsaid that these tasks were vital,
necessary and indispensable to the usual business
ROBIN GOOD 5/7/91 6/20/91 M. ONG or trade of the employer. As regards the
underscored phrase, it has been held that this is
UTOL KONG HOODLUM # 6/23/91 8/6/91 JUN CHING ascertained by considering the nature of the work
1 performed and its relation to the scheme of the
particular business or trade in its entirety. 36
KAPUTOL NG ISANG 8/18/91 10/2/91 SANDY S.
AWIT
A recent pronouncement of this Court anent project or work pool
employees who had attained the status of regular employees proves
DARNA 10/4/91 11/18/91 E. MANUEL
most instructive:
DARNA (addl. 1/2) 11/20/91 12/12/91 E. MANUEL
The denial by petitioners of the existence of a work
MAGNONG REHAS 12/13/91 1/27/92 BOBBY pool in the company because their projects were
GRIMALT not continuous is amply belied by petitioners
themselves who admit that: . . .
M. REHAS (2nd contract) 1/28/92 3/12/92 B. GRIMALT
A work pool may exist although the workers in the
HIRAM NA MUKHA 3/15/92 4/29/92 M. ONG pool do not receive salaries and are free to seek
other employment during temporary breaks in the
HIRAM (2nd contract) 5/1/92 6/14/92 M. ONG business, provided that the worker shall be
available when called to report of a
KAHIT AKO'Y BUSABOS 5/28/92 7/7/92 JERRY OHARA project. Although primarily applicable to regular
seasonal workers, this set-up can likewise be
SIGAW NG PUSO 7/1/92 8/4/92 M. ONG applied to project workers insofar as the effect of
temporary cessation of work is concerned. This is
SIGAW (addl. 1/2) 8/15/92 9/5/92 M. ONG
beneficial to both the employer and employee for
it prevents the unjust situation of "coddling labor
NGAYON AT KAILANMAN 9/6/92 10/20/92 SANDY STA.
at the expense of capital" and at the same time
MARIA
enables the workers to attain the status of regular
employees. Clearly, the continuous rehiring of the
While Maraguinot was a member of Shooting Unit III, which made the same set of employees within the framework of
following movies (Annex "4-A" of Respondents' Position Paper; OR, the Lao Group of Companies is strongly indicative
29): that private respondents were an integral part of a
work pool from which petitioners drew its workers
for its various projects.
FILM DATE DATE ASSOCIATE
STARTED COMPLETED PRODUCER
In a final attempt to convince the Court that
GUMAPANG KA SA LUSAK 1/27/90 3/12/90 JUN CHING private respondents were indeed project
PETRANG KABAYO 2/19/90 4/4/90 RUTH GRUTA employees, petitioners point out that the workers
LUSAK (2nd contract) 3/14/90 4/27/90 JUN CHING were not regularly maintained in the payroll and
were free to offer their services to other
P. KABAYO (Addl 1/2 4/21/90 5/13/90 RUTH GRUTA
companies when there were no on-going projects.
contract)
This argument however cannot defeat the
BADBOY 6/15/90 7/29/90 EDITH MANUEL workers' status of regularity. We apply by analogy
BADBOY (2nd contract) 7/30/90 8/21/90 E. MANUEL the vase of Industrial-Commercial-Agricultural
ANAK NI BABY AMA 9/2/90 10/16/90 RUTH GRUTA Workers Organization v. CIR [16 SCRA 526, 567-
568 (1966)] which deals with regular seasonal
A.B. AMA (addl 1/2) 10/17/90 11/8/90 RUTH GRUTA employees. There we held: . . .
A.B. AMA (addl 2nd 1/2) 11/9/90 12/1/90 R. GRUTA
BOYONG MANALAC 11/30/90 1/14/91 MARIVIC ONG Truly, the cessation of construction activities at the
HUMANAP KA NG PANGET 1/20/91 3/5/91 EDITH MANUEL end of every project is a foreseeable suspension of
work. Of course, no compensation can be
H. PANGET(2nd contract) 3/10/91 4/23/91 E. MANUEL
demanded from the employer because the
B. MANALAC (2nd contract) 5/22/91 7/5/91 M. ONG stoppage of operations at the end of a project and
ROBIN GOOD (2nd 7/7/91 8/20/91 M. ONG before the start of a new one is regular and
contract) expected by both parties to the labor
PITONG GAMOL 8/30/91 10/13/91 M. ONG relations. Similar to the case of regular seasonal
employees, the employment relation is not
P. GAMOL (2nd contract) 10/14/91 11/27/91 M. ONG
severed by merely being suspended. [citing Manila
GREASE GUN GANG 12/28/91 2/10/92 E. MANUEL Hotel Co. v. CIR, 9 SCRA 186 (1963)] The
ALABANG GIRLS (1/2 3/4/92 3/26/92 M. ONG employees are, strictly speaking, not separated
contract) from services but merely on leave of absence
BATANG RILES 3/9/92 3/30/92 BOBBY GRIMALT without pay until they are reemployed. Thus we
 cannot affirm the argument that non-payment of
salary or non-inclusion in the payroll and the
opportunity to seek other employment denote
project employment. 37 (emphasis supplied)
While Lao admittedly involved the construction industry, to which
Policy Instruction No. 20/Department Order No. 19 38 regarding work
pools specifically applies, there seems to be no impediment to
applying the underlying principles to industries other than the
construction industry. 39 Neither may it be argued that a substantial
distinction exists between the projects undertaken in the construction
industry and the motion picture industry. On the contrary, the raison
d' etre of both industries concern projects with a foreseeable
suspension of work.
At this time, we wish to allay any fears that this decision unduly
burdens an employer by imposing a duty to re-hire a project employee
even after completion of the project for which he was hired. The
import of this decision is not to impose a positive and sweeping
obligation upon the employer to re-hire project employees. What this
decision merely accomplishes is a judicial recognition of the
employment status of a project or work pool employee in accordance
with what is fait accompli, i.e., the continuous re-hiring by the
employer of project or work pool employees who perform tasks
necessary or desirable to the employer's usual business or trade. Let it
not be said that this decision "coddles" labor, for as Lao has ruled,
project or work pool employees who have gained the status of regular
employees are subject to the "no work-no pay" principle, to repeat:
A work pool may exist although the workers in the pool do not receive
salaries and are free to seek other employment during temporary
breaks in the business, provided that the worker shall be available
when called to report for a project. Although primarily applicable to
regular seasonal workers, this set-up can likewise be applied to project
workers insofar as the effect of temporary cessation of work is
concerned. This is beneficial to both the employer and employee for it
prevents the unjust situation of "coddling labor at the expense of
capital" and at the same time enables the workers to attain the status
of regular employees.
The Court's ruling here is meant precisely to give life to the
constitutional policy of strengthening the labor sector, 40 but, we
stress, not at the expense of management. Lest it be misunderstood,
this ruling does not mean that simply because an employee is a
project or work pool employee even outside the construction industry,
he is deemed, ipso jure, a regular employee. All that we hold today is
that once a project or work pool employee has been: (1) continuously,
as opposed to intermittently, re-hired by the same employer for the
same tasks or nature of tasks; and (2) these tasks are vital, necessary
and indispensable to the usual business or trade of the employer, then
the employee must be deemed a regular employee, pursuant to
Article 280 of the Labor Code and jurisprudence. To rule otherwise
would allow circumvention of labor laws in industries not falling within
the ambit of Policy Instruction No. 20/Department Order No. 19,
hence allowing the prevention of acquisition of tenurial security by
project or work pool employees who have already gained the status of
regular employees by the employer's conduct.
In closing then, as petitioners had already gained the status of regular
employees, their dismissal was unwarranted, for the cause invoked by
private respondents for petitioners' dismissal, viz.: completion of
project, was not, as to them, a valid cause for dismissal under Article
282 of the Labor Code. As such, petitioners are now entitled to back
wages and reinstatement, without loss of seniority rights and other
benefits that may have accrued. 41 Nevertheless, following the
principles of "suspension of work" and "no pay" between the end of
one project and the start of a new one, in computing petitioners' back
wages, the amounts corresponding to what could have been earned
during the periods from the date petitioners were dismissed until their
reinstatement when petitioners' respective Shooting Units were not
undertaking any movie projects, should be deducted.
Petitioners were dismissed on 20 July 1992, at a time when Republic
Act No. 6715 was already in effect. Pursuant to Section 34 thereof
which amended Section 279 of the Labor Code of the Philippines
and Bustamante v. NLRC, 42 petitioners are entitled to receive full back
wages from the date of their dismissal up to the time of their
reinstatement, without deducting whatever earnings derived
elsewhere during the period of illegal dismissal, subject however, to
the above observations.
WHEREFORE, the instant petition is GRANTED. The assailed decision of
the National Labor Relations Commission in NLRC NCR CA No. 006195-
94 dated 01 February 1995, as well as its Resolution dated 6 April
1995, are hereby ANNULLED and SET ASIDE for having been rendered
with grave abuse of discretion, and the decision of the Labor Arbiter in
NLRC NCR Case No. 00-07-03994-92 is REINSTATED, subject, however,
to the modification above mentioned in the computation of back
wages.
No pronouncement as to costs.
SO ORDERED.
[G.R. NO. 150198 : March 6, 2006]
DOMINADOR S. PEREZ and CELINE CAMPOS, Petitioners, v. THE
MEDICAL CITY GENERAL HOSPITAL, ALFREDO BENGZON, BENITA
MACALAGAY and MARIANNE FRANCISCO, Respondents.
DECISION
AZCUNA, J.:
The present case arose from the dismissal of two orderlies of
respondent Medical City General Hospital (the Hospital) for allegedly
pilfering hospital property. As follows are the antecedent facts:1
Prompted by reports of missing medicines and supplies in the
Emergency Room/Trauma Room (ER/TR) and upon the suggestion of
one of the Hospital's staff nurses, the Hospital, on September 9, 1999,
opened 22 lockers of employees assigned to the ER/TR. The Hospital
found four lockers with items belonging to it. The employees
corresponding to the lockers and the items found are as follows:
Four rolls of micropore
One ovum forcep
Dominador Perez adson forceps
laryngoscope ear pieces
monkey wrench
Two berodual
Celine Campos Two ventolin nebules
Two tongue depressors
nulain (a regulated drug)
Lailanie Espiritu
Ventolin nebules
micropore
bath towel
Mateo Butardo
PIMS (prescription manual)
white linen
Dominador Perez, Celine Campos, Lailanie Espiritu and Mateo Butardo
were directed to submit written explanations as to why these items
were inside their lockers. Perez, Campos and Butardo submitted their
written explanations, while Espiritu opted to resign. An administrative
hearing was held where the three employees who responded were
represented by a union counsel. At the end of the proceedings, the
charge against Butardo was dismissed while Perez and Campos, herein
petitioners, were found to have violated category seven of the
company rules, a serious infraction meriting dismissal. The Hospital
offered them the opportunity to voluntarily resign with separation
pay, under a clause provided in the Collective Bargaining Agreement.
They refused and the Hospital dismissed them from the service.
On January 19, 2000, petitioners filed a complaint for illegal dismissal
with the National Labor Relations Commission (NLRC).2 On August 29,
2000, after the submission of position papers, the Labor Arbiter found
respondents guilty of illegal dismissal and ordered the reinstatement
of petitioners with backwages and without loss of seniority rights.3 On
appeal to the NLRC,4 the Labor Arbiter's decision was reversed and the
complaint was dismissed.5 Petitioners then went to the Court of
Appeals (CA) on a petition for certiorari .6 On August 7, 2001, the CA
issued the assailed decision, denying the petition and affirming the
decision of the NLRC.7 Hence, petitioners have filed the present
Petition for Review on Certiorari under Rule 45 of the Rules of Court,
asking the Court to reinstate the decision of the Labor Arbiter.
In attempting to account for the presence of the items inside their
lockers, petitioners gave the following explanations:
Perez maintained that on the day before the lockers were opened, he
was replacing the bed sheets in the ER and found a monkey wrench
tucked under one of the bed cushions. Not finding any proper person
to hand over the wrench, and wanting to go home already, he decided
to keep the wrench inside his locker for purposes of safekeeping until
he could turn it over at his next shift. As for the ovum and adson
forceps, he took these instruments on September 2, 1999 because he
noticed that they were already due for evaluation and subsequent
condemnation. He claimed that he placed them inside his locker with
the intention of eventually endorsing them to his supervisor. Lastly, he
explained that the micropore plastics were instruments used by him
while on duty and the laryngoscope ear piece was kept by him with
the consent of his supervisor.
Campos asserted that it has been her practice to carry nebules in her
pocket whenever she was on duty as a matter of convenience for
patients who suffer from sudden asthma attacks. On September 5,
1999, being tired and in a hurry to get home, she just left these in her
locker and simply forgot to endorse them to the proper person. They
were eventually abandoned inside the locker after she moved out her
stuff when she transferred from the ER to Pediatrics.
Petitioners, in essence, maintain that they have sufficiently accounted
for the presence of these items inside their lockers and that the
evidence presented against them is insufficient to show that they are
guilty of misappropriating company property. Moreover, assuming ex
gratia argumenti that there was violation of company rules, the
penalty of dismissal would be too harsh considering their long years of
dedicated service to the Hospital.
The Court is not a trier of facts, and this rule applies with greater force
in labor cases. Hence, the factual findings of the NLRC are generally
accorded not only respect but even finality if supported by substantial
evidence and especially when affirmed by the CA. However, a
disharmony between the factual findings of the Labor Arbiter and the
NLRC opens the door to a review by this Court.8
The Labor Arbiter ruled, as follows:
We disagree with the respondent company's contention that the
complainants were found guilty of misappropriation considering that
there was no taking of property for the purpose of depriving the
respondents of ownership and possession of the same. The hospital
did not incur losses on the alleged misappropriated items since they
were placed in the lockers for temporary safekeeping. Undoubtedly,
the imputation of misappropriation of company properties entirely
rests on speculative inferences, which according to the Supreme Court
in Pilipinas Bank v. NLRC. 215 SCRA 756, can never be the basis of
illegal dismissal on the ground of dishonesty. The complainants gave
valid explanations and justifications on the questioned items found in
their lockers, but respondents ignored their explanations and decided
to terminate their services x x x.
In reversing the Labor Arbiter, the NLRC concluded:
The hospital has convincingly established that all employees, including
the herein complainants, are not allowed to place hospital items in
their respective lockers as this is contrary to the rules and procedures
of the hospital. In the case of the monkey wrench allegedly found by
complainant Perez, he should have placed this item in the ER
(emergency room) drawer where the instruments are placed in
accordance with the Hospital's rules and procedure and not in his
locker. The other instruments should be endorsed to the next staff on
duty and should not be kept as what Perez did (Annex "B,"
respondent's position paper). With respect to the items for evaluation
as well as items to be condemned[,] the same should be submitted to
a ward clerk who will endorse it to the Physical Pleat for evaluation.
The clerks are the only authorized personnel to keep condemned
items and nobody else and these condemned items are to be placed
inside the supplies locker. The procedure was attested to by Ms.
Imelda M. Lloren, E[R]-TR Supervisor in her latter dated November 19,
1999 (Annex "13," respondent's position paper). In the same manner,
all staffs in the ER-TR of the hospital are not allowed to put medicines
in their pockets. All medicines are placed and should be made
accessible in the hospital['s] E-Cart so that in cases of emergency, the
said medicines are easily accessible for patients' use (Annex "14,"
respondents['] position paper) x x x.
Contrary to the position taken by the Labor Arbiter, the Hospital's
dismissal of petitioners did not rest on speculative inferences.
Petitioners themselves have admitted that properties belonging to the
Hospital were found inside their lockers. As to how these items got
inside the lockers, petitioners acknowledged having placed them there
against company rules. In view of these admissions, there is ample
evidence to support a charge for pilferage unless petitioners can
satisfactorily explain their possession.
Perez contends that he had the wrench and the forceps inside his
lockers for safekeeping with every intention of turning them over.
While this may be considered to explain the presence of the wrench,
since he claims he found it only a day before the lockers were opened,
it does not fully account for the forceps. Perez alleged that he took
these instruments on September 2, 1999 after noticing that they were
already due for evaluation and condemnation and was going to
endorse them to the supervisor. If this were the case, why was he not
able to endorse them at his next shift? Instead, the instruments
remained inside his locker for more than a week until the Hospital
discovered them when it conducted a search. Secondly, as stated in
the December 19, 1999 letter of the ER-TR Supervisor,9 Perez's
responsibility is limited to checking and recommending defective or
non-functional equipment. He is not allowed to keep the items but is
required to deliver them to the ward clerk who, in turn, will keep them
in the supplies locker until their delivery to the scrap officer on the last
Friday of the month. It was made clear to all hospital staff that hospital
equipment should only be kept in the supplies locker. Plainly, Perez
had no business taking instruments into his locker, even if these were
already defective. As for the micropore and laryngoscope ear piece,
Perez claims that the former is used by him while on duty while the
latter was kept by him with the consent of his supervisor. According to
the Hospital, micropore is a supply charged to the patient and is not
issued to orderlies, while a laryngoscope ear piece is a doctor's
instrument.10 The Court sees no reason why Perez needed to have
such items. As an orderly, he was not charged with giving out
micropores nor did his job entail the use of a laryngoscope ear piece.
For her part, Campos claims that it has been her practice to put
nebules inside her pocket for emergencies. Similarly, the Court cannot
comprehend the need for her to keep them in her pocket when she
can easily get hold of them from the emergency cart. Also, keeping
nebules inside her pocket does not explain why she had to keep two at
a time, as two were found inside her locker. Even assuming that she
found it convenient to have nebules in her pocket, this does not
explain the need to also keep it in her locker as she could, without
much effort, return it to the emergency cart at the end of every shift.
Lastly, there were other items found in her locker (the berodual and
tongue depressors) for which Campos failed to account.
Based on the foregoing consideration, the Court finds there was
sufficient basis to hold that petitioners misappropriated hospital
property. The next issue is whether dismissal was the appropriate
penalty.
The power to dismiss an employee is a recognized prerogative that is
inherent in the employer's right to freely manage and regulate his
business. An employer cannot be expected to retain an employee
whose lack of morals, respect and loyalty to his employer or regard for
his employer's rules and appreciation of the dignity and responsibility
of his office has so plainly and completely been bared. An employer
may not be compelled to continue to employ a person whose
continuance in service will patently be inimical to his interest. The
dismissal of an employee, in a way, is a measure of self-protection.
Nevertheless, whatever acknowledged right the employer has to
discipline his employee, it is still subject to reasonable regulation by
the State in the exercise of its police power. 11 Thus, it is within the
power of this Court not only to scrutinize the basis for dismissal but
also to determine if the penalty is commensurate to the offense,
notwithstanding the company rules.
In this case, the Court agrees with the Labor Arbiter that dismissal
would not be proportionate to the gravity of the offense considering
the circumstances present in this case. Perez has been an employee of
the Hospital for 19 consecutive years. Campos, while not employed
with the Hospital as long as Perez, can lay claim to seven consecutive
years. During their long tenure with the Hospital, it does not appear
that they have been the subject of disciplinary sanctions and they have
kept their records unblemished. Moreover, the Court also takes into
account the fact that petitioners are not managerial or confidential
employees in whom greater trust is placed by management and from
whom greater fidelity to duty is correspondingly expected.12 This can
be gleaned from the supervisor's letter explaining that orderlies' duties
are limited to checking equipment and recommending their
condemnation.13
Furthermore, in previous cases decided by this Court, a number of
employees were granted reinstatement after a determination that
their dismissals were not proportionate to the offense
committed.14 In Associated Labor Unions-TUCP v. NLRC,15 cited by
petitioners, the involved employee was dismissed after being caught
pilfering a pair of boots, an aluminum container and 15 hamburger
patties. This Court took into account the value of the articles taken, his
two years of unblemished service and his position as a rank and file,
and ordered his reinstatement without backwages.
The reinstatement of petitioners is in line with the social justice
mandate of the Constitution. Nevertheless, the Court does not
countenance the wrongful act of pilferage but simply maintains that
the extreme penalty of dismissal is not justified and a lesser penalty
would suffice. Under the facts of this case, suspension would be
adequate. Without making any doctrinal pronouncement on the
length of the suspension in cases similar to this, the Court holds that
considering petitioners' non-employment since January 2000, they
may be deemed to have already served their period of suspension.
Consequently, the Labor Arbiter's order of reinstatement is upheld,
with the deletion of the award of backwages, so as not to put a
premium on acts of dishonesty.
WHEREFORE, the petition is PARTIALLY GRANTED and the assailed
Decision dated August 7, 2001 rendered by the Court of Appeals is SET
ASIDE. Petitioners Dominador Perez and Celine Campos are
ordered REINSTATED WITHOUT BACKWAGES BUT WITHOUT LOSS OF
SENIORITY. No pronouncement as to costs.
SO ORDERED
[G.R. No. 169564, April 06 : 2011]
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.
On August 23, 2000, James submitted his written explanation[10] 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, 13th 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 13th 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.
SO ORDERED.[19]
Petitioner moved for reconsideration[20] but to no avail.[21]  Hence, this
appeal raising the following issues:
Issues
1. 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.
2. 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.
3. 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.
 [G.R. NO. 161305 : February 9, 2007]
MILAGROS PANUNCILLO, Petitioner, v. CAP PHILIPPINES,
INC., Respondent.
DECISION
CARPIO MORALES, J.:
Assailed via Petition for Review1 are the Decision dated May 16,
20032 and Resolution dated November 17, 20033 of the Court of
Appeals in CA-G.R. SP No. 74665 which declared valid the dismissal of
Milagros Panuncillo (petitioner) by CAP Philippines, Inc. (respondent).
Petitioner was hired on August 28, 1980 as Office Senior Clerk by
respondent. At the time of her questioned separation from
respondent on April 23, 1999, she was receiving a monthly salary
of P16,180.60.
In order to secure the education of her son, petitioner procured an
educational plan (the plan) from respondent which she had fully paid
but which she later sold to Josefina Pernes (Josefina) for P37,000.
Before the actual transfer of the plan could be effected, however,
petitioner pledged it for P50,000 to John Chua who, however, sold it
to Benito Bonghanoy. Bonghanoy in turn sold the plan to Gaudioso R.
Uy for P60,000.
Having gotten wind of the transactions subsequent to her purchase of
the plan, Josefina, by letter of February 10, 1999, 4 informed
respondent that petitioner had "swindled" her but that she was willing
to settle the case amicably as long as petitioner pay the amount
involved and the interest. She expressed her appreciation "if
[respondent] could help her in anyway."
Acting on Josefina's letter, the Integrated Internal Audit Operations
(IIAO) of respondent required petitioner to explain in writing why the
plan had not been transferred to Josefina and was instead sold to
another. Complying, petitioner proffered the following explanation:
Because of extreme need of money, I was constrained to sell my CAP
plan of my son to J. Pernes last July, 1996, in the amount of Thirty
Seven Thousand Pesos (P37,000.) The plan was not transferred right
away because of lacking requirement on the part of the buyer (birth
certificate). The birth certificate came a month later. While waiting for
the birth certificate, again because of extreme need of money, I was
tempted to pawned [sic] the plan, believing I can redeemed [sic] it
later when the birth certificate will come.
Last year, I was already pressured by J. Pernes for the transfer of the
plan. But before hand, she already knew the present situation. I was
trying to find means to redeemed [sic] the plan but to no avail. I
cannot borrow anymore from my creditors because of outstanding
loans which remains unpaid. As of the present, I am heavily debtladen
and I don't know where to run.
I can't blame the person whom I pawned the plan if he had sold it. I
can't redeemed [sic] it anymore. Everybody needs money and besides,
I have given them my papers.
I admit, I had defrauded Ms. J. Pernes, but I didn't do it
intentionally. At first, I believe I can redeem the plan hoping I can still
borrow from somebody.
With my more than 18 years stay with the company, I don't have the
intention of ruining my image as well as the company's. I think I am
just a victim of circumstances.5 (Emphasis and underscoring
supplied)cralawlibrary
A show-cause memorandum6 dated February 23, 1999 was thereupon
sent to petitioner, giving her 48 hours from receipt thereof to explain
why she should not be disciplinarily dealt with. Petitioner did not
comply, however.
The IIAO of respondent thus conducted an investigation on the matter.
By Memorandum of April 5, 1999,7 the IIAO recommended that,
among other things, administrative action should be taken against
petitioner for violating Section 8.4 of respondent's Code of Discipline
reading:
Committing or dealing any act or conniving with co-employees or
anybody to defraud the company or customer/sales associates.
In the same memorandum, the IIAO reported other matters bearing
on petitioner's duties as an employee, to wit:
OTHERS:
We also received a copy of demand letter of a certain Evelia Casquejo
addressed to Ms. Panuncillo requiring the latter to pay the amount of
P54,870.00 for the supposed transfer of the lapsed plan of Subscriber
Corazon Lintag with SFA # 25-67-40-01-00392. Ms. Panuncillo received
the payment of P25,000.00 and P29,870.00 on July 17, 1997 and July
18, 1997 respectively (Exhibits L&M).
Ms. Panuncillo verbally admitted that she was the one who sold the
plan to Ms. Casquejo but with the authorization from Ms. Lintag.
However, the transfer was not effected because she
had misappropriated a portion of the money until the plan was
terminated. Ms. Casquejo, however, did not file a complaint because
Ms. Panuncillo executed a Special Power of Attorney authorizing the
former to receive P68,000 of Ms. Panuncillo's retirement pay (Exhibit
N).8 (Emphasis in the original; underscoring supplied))
On April 7, 1999, another show-cause memorandum was sent to
petitioner by Renato M. Daquiz (Daquiz), First Vice President of
respondent, giving her another 48 hours to explain why she should not
be disciplinarily dealt with in connection with the complaints of
Josefina and Evelia Casquejo (Evelia). Complying with the directive,
petitioner, by letter of April 10, 1999, on top of reiterating her
admission of having "defrauded" Josefina, admitted having received
from Evelia the payment for a lapsed plan, thus:
With regards to [Evelia's] case, yes its [sic] true I had received the
payment but it was accordingly given to the owner or Subscriber Ms.
C. Lintag. The plan was not transferred because it was already
forfeited and we, Ms. Lintag, [Evelia] and I already made settlement of
the case.
I think I have violated Sec. 8.4 of the company's Code of Discipline. I
admit it is my wrongdoing. I was only forced to do this because of
extreme needs to pay for my debts. I am open for whatever
disciplinary action that will be sanctioned againts [sic] me. I hope it is
not termination from my job. How can I pay for obligations if that will
happen to me.
As for [Josefina], I have the greatest desire to pay for my indebtedness
but my capability at the moment is nil. (space) I have been planning to
retire early just to pay my obligations. That is why I had written to you
last year inquiring tax exemption when retiring. I have been with the
company for almost 19 years already and I never intend [sic] to smear
its name as well as mine. I was only forced by circumstances. Although
it hurts to leave CAP, I will be retiring on April 30, 1999.
x x x x9 (Emphasis and underscoring supplied)cralawlibrary
Respondent thereupon terminated the services of petitioner by
Memorandum dated April 20, 1999.10
Petitioner sought reconsideration of her dismissal, by letter of April 23,
1999 addressed to Daquiz, imploring as follows:
. . . Please consider my retirement letter I sent to you. I would like to
avail [of] the retirement benefit of the company. The proceeds of my
retirement could help me pay some of my obligations as well as the
needs of my family. My husband is jobless and I am the breadwinner
of the family. If I will be terminated, I don't know what will happen to
us.
Sir, I am enclosing the affidavit of Ms. Evelia Casquejo proving that we
have already settled the case.
x x x x11 (Underscoring supplied)ςηαñrοblεš  Î½Î¹r†υαl  lαω
lιbrαrÿ
Pending resolution of petitioner's motion for reconsideration,
respondent received a letter dated April 28, 199912 from one
Gwendolyn N. Dinoro (Gwendolyn) who informed that she had been
paying her "quarterly dues" through petitioner but found out that
none had been remitted to respondent, on account of which she
(Gwendolyn) was being penalized with interest charges.
Acting on petitioner's motion for reconsideration, Daquiz, by letter-
memorandum of May 5, 1999, denied the same in this wise:
A review of your case was made per your request, and we note that it
was not just a single case but multiple cases, that of Ms. Casquejo,
Ms. Pernes, and newly reported Ms. Dinoro. Furthermore, the cases
happened way back in July 1996 and 1997, and were just discovered
recently. In addition, the misappropriation of money/or act to defraud
the company or customer was deliberate and intentional. There were
several payments received - over a period of time. While you plead for
your retirement benefit to help you pay some of your obligations, as
well as the need of your family (your husband being jobless and being
the breadwinner), these thoughts should have crossed your mind
before you committed the violations rather than now. To allow you to
retire with benefits, is to tolerate and encourage others to do the
same in the future, as it will be a precedent that will surely be invoked
in similar situations in the future, as it will be a precedent that will
surely be invoked in similar situations in the future. It is also unfair to
others who do their jobs faithfully and honestly. If we let you have
your way, it will appear that we let you scot-free and even reward
you with retirement - someone who deliberately violated trust and
confidence of the company and customers.
Premises considered, the decision to terminate your services for cause
stays and the request for reconsideration is denied.
x x x x13 (Emphasis and underscoring supplied)cralawlibrary
Petitioner thus filed a complaint14 for illegal dismissal, 13th month pay,
service incentive leave pay, damages and attorney's fees against
respondent.
The Labor Arbiter, while finding that the dismissal was for a valid
cause, found the same too harsh. He thus ordered the reinstatement
of petitioner to a position one rank lower than her previous position,
and disposed as follows:
WHEREFORE, the foregoing considered, judgement [sic] is hereby
rendered directing the respondent to pay complainant's 13th Month
pay and Service Incentive Leave Pay for 1999 in proportionate amount
computed as follows:
13th Month Pay
January 1, 1999 to April 1, 1999
= 3 months
= P16,180.60/12 mos. x 3 mos. P4,045.14
Service Incentive Leave
= P16,180.60/26 days
=P622.30 per day x 5 days/12 months. 777.87
TOTAL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-P4,823.01
Plus P482.30 ten (10%) Attorney's Fees or a total aggregate amount of
PESOS: FIVE THOUSAND THREE HUNDRED FIVE & 31/100 (P5,305.31).
Respondent is likewise, directed to reinstate the complainant to a
position one rank lower without backwages.15 (Underscoring
supplied)cralawlibrary
On appeal, the National Labor Relations Commission (NLRC), by
Decision of October 29, 2001, reversed that of the Labor Arbiter, it
finding that petitioner's dismissal was illegal and
accordingly ordering her reinstatement to her former position. Thus it
disposed:
WHEREFORE, the Decision in the main case dated February 18, 2000 of
the Labor Arbiter declaring the dismissal of the complainant valid, and
his Order dated June 26, 2000 declaring the Motion to Declare
Respondent-appellant in Contempt as prematurely filed and ordering
the issuance of an alias writ of execution are hereby SET ASIDE, and a
new one is rendered DECLARING the dismissal of the complainant
illegal, and ORDERING the respondent, CAP PHILIPPINES,
INCORPORATED, the following:
1. to reinstate the complainant MILAGROS B.
PANUNCILLO to her former position without loss of
seniority rights and with full backwages from the
date her compensation was withheld from her on
April 20, 1999 until her actual reinstatement;
2. to pay to the same complainant P4,045.14 as
13th month pay, and P777.89 as service incentive
leave pay;
3. to pay to the same complainant moral damages
of FIFTY THOUSAND PESOS (P50,000.00), and
exemplary damages of another FIFTY THOUSAND
PESOS (P50,000.00);
4. to pay attorney's fees equivalent to ten percent
(10%) of the total award exclusive of moral and
exemplary damages.
Further, the complainant's Motion to Declare Respondent in Contempt
dated May 3, 2000 is denied and rendered moot by virtue of this
Decision.
All other claims are dismissed for lack of merit.16 (Underscoring
supplied)cralawlibrary
In so deciding, the NLRC held that the transaction between petitioner
and Josefina was private in character and, therefore, respondent did
not suffer any damage, hence, it was error to apply Section 8.4 of
respondent's Code of Discipline.
Respondent challenged the NLRC Decision before the appellate court
via Petition for Certiorari.17 By Decision of May 16, 2003,18 the
appellate court reversed the NLRC Decision and held that the dismissal
was valid and that respondent complied with the procedural
requirements of due process before petitioner's services were
terminated.
Hence, the present petition, petitioner faulting the appellate court
I
x x x IN REVIEWING THE FINDINGS OF FACT OF THE
LABOR ARBITER AND THE NATIONAL LABOR
RELATIONS COMMISSION THAT RESPONDENT CAP
PHILIPPINES, INC., HAS NOT BEEN DEFRAUDED
NOR DAMAGED IN THE TRANSACTION/S ENTERED
INTO BY PETITIONER RELATING TO HER FULLY PAID
EDUCATIONAL PLAN.
II
 x x x IN HOLDING THAT RESPONDENT CAP
PHILIPPINES, INC. IS THE INSURER OF PETITIONER'S
FULLY PAID EDUCATIONAL PLAN UNDER THE
INSURANCE CODE.
III
x x x IN HOLDING THAT PETITIONER WAS DULY
AFFORDED DUE PROCESS BEFORE DISMISSAL[,]
and maintaining that she
IV
x x x IS ENTITLED TO HER FULL BACKWAGES FROM
THE DATE HER COMPENSATION WAS WITHHELD
FROM HER ON APRIL 20, 1999 PURSUANT TO THE
DECISION OF THE NLRC REINSTATING HER TO HER
PREVIOUS POSITION WITH FULL BACKWAGES AND
SETTING ASIDE THE DECISION OF THE LABOR
ARBITER REINSTATING HER TO A POSITION NEXT
LOWER IN RANK, UNTIL THE REVERSAL OF THE
NLRC DECISION BY THE HONORABLE COURT OF
APPEALS.19 (Emphasis and underscoring
supplied)cralawlibrary
The petition is not meritorious.
Whether respondent did not suffer any damage resulting from the
transactions entered into by petitioner, particularly that with Josefina,
is immaterial. As Lopez v. National Labor Relations Commission
instructs:
That the [employer] suffered no damage resulting from the acts of
[the employee] is inconsequential. In Glaxo Wellcome Philippines, Inc.
v. Nagkakaisang Empleyado ng Wellcome-DFA (NEW-DFA), we held
that deliberate disregard or disobedience of company rules could not
be countenanced, and any justification that the disobedient employee
might put forth would be deemed inconsequential. The lack of
resulting damage was unimportant, because "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." x x x20 (Italics in the
original; underscoring supplied)
The transaction with Josefina aside, there was this case of
misappropriation by petitioner of the amounts given to her by Evelia
representing payment for the lapsed plan of Corazon Lintag. While a
settlement of the case between the two may have eventually been
forged, that did not obliterate the misappropriation committed by
petitioner against a client of respondent.
Additionally, there was still another complaint lodged before
respondent by Gwendolyn against petitioner for failure to remit the
cash payments she had made to her, a complaint she was apprised of
but on which she was silent.
In fine, by petitioner's repeated violation of Section 8.4 of
respondent's Code of Discipline, she violated the trust and confidence
of respondent and its customers. To allow her to continue with her
employment puts respondent under the risk of being embroiled in
unnecessary lawsuits from customers similarly situated as Josefina, et
al. Clearly, respondent exercised its management prerogative when it
dismissed petitioner.
. . . [T]ime and again, this 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.
Deliberate disregard or disobedience of rules by the employees cannot
be countenanced. Whatever maybe the justification behind the
violations is immaterial at this point, because the fact still remains that
an infraction of the company rules has been committed.
Under the Labor Code, the 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. Infractions of company rules and regulations
have been declared to belong to this category and thus are valid
causes for termination of employment by the employer.
x    x    x
The employer cannot be compelled to continue the employment of a
person who was found guilty of maliciously committing acts which are
detrimental to his interests. It will be highly prejudicial to the interests
of the employer to impose on him the charges that warranted his
dismissal from employment. Indeed, it will demoralize the rank and
file if the undeserving, if not undesirable, remain in the service. It may
encourage him to do even worse and will render a mockery of the
rules of discipline that employees are required to observe. This Court
was more emphatic in holding that in protecting the rights of the
laborer, it cannot authorize the oppression or self-destruction of the
employer.21 x x x (Underscoring supplied)cralawlibrary
Petitioner nevertheless argues that she was not afforded due process
before her dismissal as she was merely required to answer a show-
cause memorandum dated April 7, 1999 and there was no actual
investigation conducted in which she could have been heard.
Before terminating the services of an employee, the law requires two
written 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 to the requirement
of a hearing, the essence of due process lies in an opportunity to be
heard, and not always and indispensably in an actual hearing.22
When respondent received the letter-complaint of Josefina, petitioner
was directed to comment and explain her side thereon. She did
comply, by letter of February 22, 1999 wherein she admitted that she
"had defrauded Ms. J. Pernes, but [that she] didn't do it intentionally."
Respondent subsequently sent petitioner a show-cause memorandum
giving her 48 hours from receipt why she should not be disciplinarily
sanctioned. Despite the 48-hour deadline, nothing was heard from her
until April 10, 1999 when she complied with the second show-cause
memorandum dated April 7, 1999.
On April 20, 1999, petitioner was informed of the termination of her
services to which she filed a motion for reconsideration.
There can thus be no doubt that petitioner was given ample
opportunity to explain her side. Parenthetically, when an employee
admits the acts complained of, as in petitioner's case, no formal
hearing is even necessary.23
Finally, petitioner argues that even if the order of reinstatement of the
NLRC was reversed on appeal, it is still obligatory on the part of an
employer to reinstate and pay the wages of a dismissed employee
during the period of appeal, citing Roquero v. Philippine
Airlines,24 the third paragraph of Article 22325 of the Labor Code, and
the last paragraph of Section 16,26 Rule V of the then 1990 New Rules
of Procedure of the NLRC.
Petitioner adds that respondent made "clever moves to frustrate [her]
from enjoying the reinstatement aspect of the decision starting from
that of the Labor Arbiter (although to a next lower rank), [to that] of
the NLRC to her previous position without loss of seniority rights until
it was caught up by the decision of the Honorable Court of Appeals
reversing the decision of the NLRC and declaring the dismissal of
petitioner as based on valid grounds."
Respondent, on the other hand, maintains that Roquero and the legal
provisions cited by petitioner are not applicable as they speak of
reinstatement on order of the Labor Arbiter and not of the NLRC.
The Labor Arbiter ordered the reinstatement of petitioner to a lower
position. The third paragraph of Article 223 of the Labor Code is clear,
however - the employee, who is ordered reinstated, must be accepted
back to work under the same terms and conditions prevailing prior to
his dismissal or separation.
Petitioner's being demoted to a position one rank lower than her
original position is certainly not in accordance with the said third
paragraph provision of Article 223. Besides, the provision
contemplates a finding that the employee was illegally dismissed or
there was no just cause for her dismissal. As priorly stated, in
petitioner's case, the Labor Arbiter found that there was just cause for
her dismissal, but that dismissal was too harsh, hence, his order for
her reinstatement to a lower position.
The order to reinstate is incompatible with a finding that the dismissal
is for a valid cause. Thus this Court declared in Colgate Palmolive
Philippines, Inc. v. Ople:
The order of the respondent Minister to reinstate the employees
despite a clear finding of guilt on their part is not in conformity with
law. Reinstatement is simply incompatible with a finding of
guilt. Where the totality of the evidence was sufficient to warrant the
dismissal of the employees the law warrants their dismissal without
making any distinction between a first offender and a habitual
delinquent. Under the law, respondent Minister is duly mandated to
equally protect and respect not only the labor or workers' side but
also the management and/or employers' side. The law, in protecting
the rights of the laborer, authorizes neither oppression nor self-
destruction of the employer. x x x As stated by Us in the case of San
Miguel Brewery v. National Labor Union, "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 interest."27 (Emphasis and underscoring
supplied)cralawlibrary
The NLRC was thus correct when it ruled that it was erroneous for the
Labor Arbiter to order the reinstatement of petitioner, even to a
position one rank lower than that which she formerly held.28
Now, on petitioner's argument that, following the third paragraph of
Article 223 of the Labor Code, the order of the NLRC to reinstate her
and to pay her wages was immediately executory even while the case
was on appeal before the higher courts: The third paragraph of Article
223 of the Labor Code directs that - "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."
In Roquero, the Labor Arbiter upheld the dismissal of Roquero,along
with another employee, albeit he found both the two and employer
Philippine Airlines (PAL) at fault. The Labor Arbiter thus ordered the
payment of separation pay and attorney's fees to the complainant. No
order for reinstatement was issued by the Labor Arbiter, precisely
because the dismissal was upheld.
On appeal, the NLRC ruled in favor of Roquero and his co-complainant
as it also found PAL guilty of instigation. The NLRC thus ordered
the reinstatement of Roquero and his co-complainant to their former
positions, but without backwages.
PAL appealed the NLRC decision via Petition for Review before this
Court. Roquero and his co-complainant did not. They instead filed
before the Labor Arbiter a Motion for Execution of the NLRC order for
their reinstatement which the Labor Arbiter granted.
Acting on PAL's Petition for Review, this Court referred it to the Court
of Appeals pursuant to St. Martin Funeral Home v. NLRC.29
The appellate court reversed the NLRC decision and ordered the
reinstatement of the decision of the Labor Arbiter but only insofar as it
upheld the dismissal of Roquero.
Back to this Court on Roquero's Petition for Review, the following
material issues were raised:
x    x    x
2. Can the executory nature of the decision, more
so the reinstatement aspect of a labor tribunal's
order be halted by a petition having been filed in
higher courts without any restraining order or
preliminary injunction having been ordered in the
meantime?cralaw library
3. Would the employer who refused to reinstate
an employee despite a writ duly issued be held
liable to pay the salary of the subject employee
from the time that he was ordered reinstated up
to the time that the reversed decision was handed
down?30
Resolving these issues, this Court held in Roquero:
Article 223 (3rd paragraph) of the Labor Code as amended by Section
12 of Republic Act No. 6715, and Section 2 of the NLRC Interim Rules
on Appeals under RA No. 6715, Amending the Labor Code, provide
that an order of reinstatement by the Labor Arbiter is immediately
executory even pending appeal. The rationale of the law has been
explained in Aris (Phil.) Inc. v. NLRC:
"In authorizing execution pending appeal of the reinstatement aspect
of a decision of the Labor Arbiter reinstating a dismissed or separated
employee, the law itself has laid down a compassionate policy which,
once more, vivifies and enhances the provisions of the 1987
Constitution on labor and the working man.
x    x    x
These duties and responsibilities of the State are imposed not so much
to express sympathy for the workingman as to forcefully and
meaningfully underscore labor as a primary social and economic force,
which the Constitution also expressly affirms with equal intensity.
Labor is an indispensable partner for the nation's progress and
stability.
x    x    x
The order of reinstatement is immediately executory. The unjustified
refusal of the employer to reinstate a dismissed employee entitles him
to payment of his salaries effective from the time the employer failed
to reinstate him despite the issuance of a writ of execution. Unless
there is a restraining order issued, it is ministerial upon the Labor
Arbiter to implement the order of reinstatement. In the case at bar, no
restraining order was granted. Thus, it was mandatory on PAL to
actually reinstate Roquero or reinstate him in the payroll. Having failed
to do so, PAL must pay Roquero the salary he is entitled to, as if he
was reinstated, from the time of the decision of the NLRC until the
finality of the decision of this Court.
We reiterate the rule that technicalities have no room in labor cases
where the Rules of Court are applied only in a suppletory manner and
only to effectuate the objectives of the Labor Code and not to defeat
them. Hence, even if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. On the other hand,
if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not
required to reimburse whatever salary he received for he is entitled to
such, more so if he actually rendered services during the
period.31 (Italics in the original, emphasis and underscoring supplied)
In the present case, since the NLRC found petitioner's dismissal illegal
and ordered her reinstatement, following the provision of the sixth
paragraph of Article 223, viz:
The [National Labor Relations] Commission shall decide all cases
within twenty (20) calendar days from receipt of the answer of the
appellee. The decision of the Commission shall be final and executory
after ten (10) calendar days from receipt thereof by the parties.
(Emphasis and underscoring supplied),
the NLRC decision became "final and executory after ten calendar days
from receipt of the decision by the parties" for reinstatement.
In view, however, of Article 224 of the Labor Code which provides:
ART. 224. Execution of decisions, orders or awards. - (a) The Secretary
of Labor and Employment or any Regional Director, the Commission or
any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu
proprio or on motion of any interested party, issue a writ of
execution on a judgment within five (5) years from the date it
becomes final and executory, requiring a sheriff or a duly deputized
officer to execute or enforce final decisions, orders or awards of the
Secretary of Labor and Employment or regional director, the
Commission, the Labor Arbiter or med-arbiter, or voluntary
arbitrators. In any case, it shall be the duty of the responsible officer to
separately furnish immediately the counsels of record and the parties
with copies of said decisions, orders or awards. Failure to comply with
the duty prescribed herein shall subject such responsible officer to
appropriate administrative sanctions.
x x x x (Emphasis and underscoring supplied),
there was still a need for the issuance of a writ of execution of the
NLRC decision.
Unlike then the order for reinstatement of a Labor Arbiter which is
self-executory, that of the NLRC is not. There is still a need for the
issuance of a writ of execution. Thus this Court held in Pioneer
Texturizing Corp. v. NLRC:32
x x x The provision of Article 223 is clear that an award [by the Labor
Arbiter] for reinstatement shall be immediately executory even
pending appeal and the posting of a bond by the employer shall not
stay the execution for reinstatement. The legislative intent is quite
obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and
issuance of a writ of execution as prerequisites for the execution of a
reinstatement award would certainly betray and run counter to the
very object and intent of Article 223, i.e., the immediate execution of a
reinstatement order. The reason is simple. An application for a writ of
execution and its issuance could be delayed for numerous reasons. A
mere continuance or postponement of a scheduled hearing, for
instance, or an inaction on the part of the Labor Arbiter or the NLRC
could easily delay the issuance of the writ thereby setting at naught
the strict mandate and noble purpose envisioned by Article 223. In
other words, if the requirements of Article 224 [including the issuance
of a writ of execution] were to govern, as we so declared
in Maranaw, then the executory nature of a reinstatement order or
award contemplated by Article 223 will be unduly circumscribed and
rendered ineffectual. In enacting the law, the legislature is presumed
to have ordained a valid and sensible law, one which operates no
further than may be necessary to achieve its specific purpose.
Statutes, as a rule, are to be construed in the light of the purpose to
be achieved and the evil sought to be remedied. x x x In introducing a
new rule on the reinstatement aspect of a labor decision under
Republic Act No. 6715, Congress should not be considered to be
indulging in mere semantic exercise. On appeal, however, the
appellate tribunal concerned may enjoin or suspend the reinstatement
order in the exercise of its sound discretion.33 (Italics in the original,
emphasis and underscoring supplied)
If a Labor Arbiter does not issue a writ of execution of the NLRC order
for the reinstatement of an employee even if there is no restraining
order, he could probably be merely observing judicial courtesy, which
is advisable "if there is a strong probability that the issues before the
higher court would be rendered moot and moribund as a result of the
continuation of the proceedings in the lower court." 34 In such a case, it
is as if a temporary restraining order was issued, the effect of
which Zamboanga City Water District v. Buhat explains:
The issuance of the temporary restraining order - did not nullify the
rights of private respondents to their reinstatement and to collect
their wages during the period of the effectivity of the order but
merely suspended the implementation thereof pending the
determination of the validity of the NLRC resolutions subject of the
petition. Naturally, a finding of this Court that private respondents
were not entitled to reinstatement would mean that they had no right
to collect any back wages. On the other hand, where the Court
affirmed the decision of the NLRC and recognized the right of private
respondents to reinstatement,' private respondents are entitled to the
wages accruing during the effectivity of the temporary restraining
order.35 (Emphasis and underscoring supplied)cralawlibrary
While Zamboanga was decided prior to St. Martin Funeral and,
therefore, the NLRC decisions were at the time passed upon by this
Court to the exclusion of the appellate court, it is still applicable.
Since this Court is now affirming the challenged decision of the Court
of Appeals finding that petitioner was validly dismissed and
accordingly reversing the NLRC Decision that petitioner was illegally
dismissed and should be reinstated, petitioner is not entitled to collect
any backwages from the time the NLRC decision became final and
executory up to the time the Court of Appeals reversed said decision.
It does not appear that a writ of execution was issued for the
implementation of the NLRC order for reinstatement. Had one been
issued, respondent would have been obliged to reinstate petitioner
and pay her salary until the said order of the NLRC for her
reinstatement was reversed by the Court of Appeals, and following
Roquero, petitioner would not have been obliged to reimburse
respondent for whatever salary she received in the interim.
In sum, while under the sixth paragraph of Article 223 of the Labor
Code, the decision of the NLRC becomes final and executory after the
lapse of ten calendar days from receipt thereof by the parties, the
adverse party is not precluded from assailing it via Petition
for Certiorari under Rule 65 before the Court of Appeals and then to
this Court via a Petition for Review under Rule 45. If during the
pendency of the review no order is issued by the courts enjoining the
execution of a decision of the Labor Arbiter or NLRC which is favorable
to an employee, the Labor Arbiter or the NLRC must exercise extreme
prudence and observe judicial courtesy when the circumstances so
warrant if we are to heed the injunction of the Court in Philippine
Geothermal, Inc v. NLRC:
While it is true that compassion and human consideration should
guide the disposition of cases involving termination of employment
since it affects one's source or means of livelihood, it should not be
overlooked that the benefits accorded to labor do not include
compelling an employer to retain the services of an employee who has
been shown to be a gross liability to the employer. The law in
protecting the rights of the employees authorizes neither oppression
nor self-destruction of the employer. It should be made clear that
when the law tilts the scale of justice in favor of labor, it is but a
recognition of the inherent economic inequality between labor and
management. The intent is to balance the scale of justice; to put the
two parties on relatively equal positions. There may be cases where
the circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the result is an
injustice to the employer. Justitia nemini neganda est (Justice is to be
denied to none).36 (Italics in the original; emphasis and underscoring
supplied)
WHEREFORE, the petition is DENIED. The assailed Court of Appeals
Decision dated May 16, 2003 and Resolution dated November 17,
2003 are AFFIRMED.
SO ORDERED.
[G.R. NO. 163505 : August 14, 2009]
GUALBERTO AGUANZA, Petitioner, v. ASIAN TERMINAL, INC., KEITH
JAMES, RICHARD BARCLAY, and ATTY. RODOLFO
CORVITE, Respondents.
DECISION
CARPIO, J.:
The Case
This is a Petition for Review 1 assailing the Decision2 promulgated on 9
January 2004 of the Court of Appeals (appellate court) as well as the
Resolution3 promulgated on 5 May 2004 in CA-G.R. SP No. 74626. The
appellate court denied Gualberto Aguanza's (Aguanza) petition
for certiorari and ruled that the National Labor Relations Commission
(NLRC) was correct when it held that the transfer of the base of Asian
Terminal, Inc.'s (ATI) Bismark IV from Manila to Bataan was a valid
exercise of management prerogative. Thus, Aguanza was no longer
entitled to receive out-of-port allowance and meal allowance for work
done in Bataan.
The Facts
The appellate court narrated the facts as follows:
Petitioner Gualberto Aguanza was employed with respondent
company Asian Terminal, Inc. from April 15, 1989 to October 1997. He
was initially employed as Derickman or Crane Operator and was
assigned as such aboard Bismark IV, a floating crane barge owned by
Asian Terminals, Inc. based at the port of Manila.
As of October 1997, he was receiving the following salaries and
benefits from [ATI]:
A. Basic salary - P8,303.30;
b. Meal allowance - P1,800 a month;
c. Fixed overtime pay of 16 hours when the barge
is assigned outside Metro Manila;
d. P260.00 per day as out of port allowance when
the barge is assigned outside Manila.
Sometime in September 1997, the Bismark IV, together with its crew,
was temporarily assigned at the Mariveles Grains Terminal in
Mariveles, Bataan.
On October 20, 1997, respondent James Keith issued a memo to the
crew of Bismark IV stating that the barge had been permanently
transferred to the Mariveles Grains terminal beginning October 1,
1997 and because of that, its crew would no longer be entitled to out
of port benefits of 16 hours overtime and P200 a day allowance.
[Aguanza], with four other members of the crew, stated that they did
not object to the transfer of Bismark IV to Mariveles, Bataan, but they
objected to the reduction of their benefits.
When they objected to the reduction of their benefits, they were told
by James Keith to report to the Manila office only to be told to report
back to Bataan. On both occasions, [Aguanza] was not given any work
assignment.
After being shuttled between Manila and Bataan, [Aguanza] was
constrained to write respondent Atty. Corvite for clarification of his
status, at the same time informing the latter of his willingness to work
either in Manila or Bataan.
While he did not agree with private respondents' terms and
conditions, he was nonetheless willing to continue working without
prejudice to taking appropriate action to protect his rights.
Because of private respondents' refusal to give him any work
assignment and pay his salary, [Aguanza] filed a complaint for illegal
dismissal against respondents.
On the other hand, private respondents claim that:
[Aguanza] was employed by [ATI] on February 1, 1996 as a Derickman
in Bismark IV, one of the floating crane barges of [ATI] based in the
port of Manila. In 1997, [ATI] started operation at the Mariveles Grains
Terminals, Mariveles, Bataan. Beginning October 1, 1997, Bismark IV
including its crew was transferred to Mariveles. For their transfer,
[ATI] offered the crew the following:
"I am asking you to reply to me by the 31st October 1997 if you wish
to be transferred to Mariveles under the following salary conditions:
- regular 40-hour duty Monday to Friday
- overtime paid in excess of 8 hours/day
- overtime paid on Saturdays and Sundays
- no additional allowance
- no transportation"
By way of reply to the memorandum, [Aguanza] along with all the
members of the crew of Bismark IV namely: Rodrigo Cayabyab,
Wilfredo Alamo, Eulogio Toling, Jonathan Pereno, Marcelito Vargas,
Erwin Greyblas and Christian Paul Almario (crew member Nestor
Resuello did not sign the said letter) answered through an undated
letter, to wit:
"We used to receive the following whenever we are assigned out of
town.
1) P200.00 a day allowance
2) P60.00 per day food allowance
3) 16 hours per day fixed overtime
We have been receiving this [sic] compensation and benefits
whenever we are assigned to Bataan. x x x"
They asserted that they have no objection to their assignment in
Mariveles, Bataan but on the former terms and conditions.
Eventually, the other members of the crew of Bismark IV accepted the
transfer and it was only [Aguanza] who refused the transfer.
On November 12, 1997, [Aguanza] wrote the company asserting that
he did not request his transfer "to Manila from Mariveles." He
stressed that he was willing to be assigned to Mariveles so long that
there is no diminution of his benefits while assigned to Mariveles,
which meant, even if he was permanently based in Mariveles, Bataan,
he should be paid 24 hours a day - 8 hours regular work and 16 hours
overtime everyday plus P200.00 per day allowance and P60.00 daily
food allowance.
[Aguanza] insisted on reporting to work in Manila although his barge,
Bismark IV, and its other crew were already permanently based in
Mariveles, Bataan. [Aguanza] was not allowed to time in in Manila
because his work was in Mariveles, Bataan.
In [Aguanza]'s appointment paper, [Aguanza] agreed to the following
conditions printed and which reads in part:
"That in the interest of the service, I hereby declare, agree and bind
myself to work in such place of work as ATI may assign or transfer me.
I further agree to work during rest day, holidays, night time or other
shifts or during emergency."4
The Labor Arbiter's Ruling
In his Decision dated 28 September 1998, the Labor Arbiter found that
respondents illegally dismissed Aguanza. Aguanza was willing to report
back to work despite the lack of agreement on his demands but
without prejudice to his claims. The Labor Arbiter also construed ATI's
offer of separation pay worth two months' salary for every year of
service as indicative of ATI's desire to terminate Aguanza's services.
ATI failed to justify its failure to allow Aguanza to work because of
Aguanza's continued insistence that he be paid his former salary and
benefits. ATI's refusal to pay the same amount to Aguanza violated the
rule against diminution of benefits. Although ATI had the prerogative
to transfer employees, the prerogative could not be exercised if the
result was demotion of rank or diminution of salary, benefits and
other prerogatives of the employee. The dispositive portion of the
Labor Arbiter's decision reads:
WHEREFORE, premises considered, this office is convinced that
complainant Aguanza was illegally dismissed by respondents.
Consequently, respondent is hereby ordered to immediately reinstate
complainant to his former position without loss of seniority rights and
to pay him full backwages and benefits from the time he was
dismissed effective November 1997 until he is actually reinstated.
Considering that it is clear from respondents' letters that their
intention is to assign complainant to Mariveles, Bataan, he is entitled
to all the salary and benefits due him if assigned to said place.
Anent the claim of complainant for the cash conversion of his vacation
and sick leave credits, respondents never denied their liability for the
same. Consequently, they are, likewise, also ordered to pay
complainant the cash equivalent of his unused vacation and sick leave
credits.
Considering that the respondents are obviously in bad faith in
effecting the dismissal as reflected in their ordering him to report back
for work but refusing to accept him back, complainant should be
awarded moral and exemplary damages in the amount of P50,000.00
and P100,000.00, respectively.
Further, respondents are ordered to pay complainant attorney's fees
equivalent to ten (10%) percent of the total amount awarded in favor
of the complainant.
SO ORDERED.5
Respondents appealed from the Labor Arbiter's judgment on 5 May
1999.
The Ruling of the NLRC
In its Decision promulgated on 11 February 2002, the NLRC dismissed
Aguanza's complaint and set aside the decision of the Labor Arbiter.
The NLRC adopted the report and recommendation of Labor Arbiter
Cristeta D. Tamayo (Arbiter Tamayo). Arbiter Tamayo recommended
that the appeal of respondents should be granted, and found that
Aguanza's insistence to be paid out-of-town benefits, despite the fact
that the crane to which he was assigned was already permanently
based outside Metro Manila, was unreasonable.
The NLRC denied Aguanza's motion for reconsideration in an Order
dated 23 September 2002.
The Decision of the Appellate Court
The appellate court affirmed the ruling of the NLRC and dismissed
Aguanza's petition in a Decision promulgated on 9 January 2004. The
appellate court stated that:
The fixed overtime of 16 hours, out-of-port allowance and meal
allowance previously granted to [Aguanza] were merely supplements
or employment benefits given under a certain condition, i.e., if
[Aguanza] will be temporarily assigned out-of-port. It is not fixed and is
contingent or dependent of [Aguanza's] out-of-port reassignment.
Hence, it is not made part of the wage or compensation.
This Court also finds utter bad faith on the part of [Aguanza].
[Aguanza] claims that he does not contest his permanent
reassignment to Mariveles, Bataan and yet he insisted on reporting to
Manila. If petitioner had only been sincere to his words, he would
have reported to Mariveles, Bataan where his work is, and in
compliance with the employment contract with [ATI].
There was no illegal dismissal since it was [Aguanza] who refused to
report to Mariveles, Bataan where he was assigned.
[Aguanza's] other claims have no basis and, accordingly, should be
denied.
WHEREFORE, premises considered, this petition is DENIED and
ORDERED DISMISSED.
SO ORDERED.6
In a Resolution promulgated on 5 May 2004, the appellate court
denied Aguanza's motion for reconsideration.
The Issues
In the present petition, Aguanza states that the appellate court
committed the following errors:
1. It was grievous error for the Court of Appeals to
uphold the decision of the NLRC in NLRC NCR CA
No. 021014-99 notwithstanding the fact that
respondents' appeal to the NLRC was never
perfected in view of the insufficiency of the
supersedeas bond posted by them.
2. There is no factual or legal basis for the
respondent Court of Appeals to hold that
respondents were correct in not allowing
petitioner to "time-in" in Manila.
3. The Court of Appeals likewise disregarded the
evidence on record and applicable laws in
declaring that the petitioner is not entitled to the
cash conversion of his vacation and sick leave
credits as well as in denying petitioner's claims for
moral and exemplary damages as well as
attorney's fees.7
The Ruling of the Court
The petition has no merit. We see no reason to overturn the rulings of
the NLRC and of the appellate court.
As a preliminary matter, we agree with the NLRC and the appellate
court that the alleged defect in the perfection of the appeal to the
NLRC because of the insufficiency of the supersedeas bond is a defect
in form which the NLRC may waive.8
Transfer of Operations is a Valid Exercise of Management Prerogative
Aguanza asserts that his transfer constituted constructive dismissal,
while ATI asserts that Aguanza's transfer was a valid exercise of
management prerogative. We agree with ATI.
ATI's transfer of Bismark IV's base from Manila to Bataan was, contrary
to Aguanza's assertions, a valid exercise of management prerogative.
The transfer of employees has been traditionally among the acts
identified as a management prerogative subject only to limitations
found in law, collective bargaining agreement, and general principles
of fair play and justice. Even as the law is solicitous of the welfare of
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.9
On the other hand, the transfer of an employee may constitute
constructive dismissal "when continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in rank
and/or a diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to the
employee."10
Aguanza's continued employment was not impossible, unreasonable
or unlikely; neither was there a clear discrimination against him.
Among the employees assigned to Bismark IV, it was only Aguanza
who did not report for work in Bataan. Aguanza's assertion that he
was not allowed to "time in" in Manila should be taken on its face:
Aguanza reported for work in Manila, where he wanted to work, and
not in Bataan, where he was supposed to work. There was no
demotion in rank, as Aguanza would continue his work as Crane
Operator. Furthermore, despite Aguanza's assertions, there was no
diminution in pay.
When Bismark IV was based in the port of Manila, Aguanza received
basic salary, meal allowance, and fixed overtime pay of 16 hours and
per diem allowance when the barge was assigned outside of Manila.
The last two items were given to Aguanza upon the condition that
Bismark IV was assigned outside of Manila. Aguanza was not entitled
to the fixed overtime pay and additional allowances when Bismark IV
was in Manila.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
When ATI transferred Bismark IV's operations to Bataan, ATI offered
Aguanza similar terms: basic pay for 40 hours of work from Monday to
Friday, overtime pay for work done in excess of eight hours per day,
overtime pay for work done on Saturdays and Sundays, no additional
allowance and no transportation for working in Bataan. The
circumstances of the case made no mention of the salary structure in
case Bismark IV being assigned work outside of Bataan; however, we
surmise that it would not be any different from the salary structure
applied for work done out-of-port. We, thus, agree with the NLRC and
the appellate court when they stated that the fixed overtime of 16
hours, out-of-port allowance and meal allowance previously granted
to Aguanza were merely supplements or employment benefits given
on condition that Aguanza's assignment was out-of-port. The fixed
overtime and allowances were not part of Aguanza's basic salary.
Aguanza's basic salary was not reduced; hence, there was no violation
of the rule against diminution of pay.11
Aguanza did not contest his transfer, but the reduction in his take-
home pay. Aguanza even asserted, contrary to his acts, that he bound
himself to work in such place where ATI might assign or transfer him.
ATI did not dismiss Aguanza; rather, Aguanza refused to report to his
proper workplace.
WHEREFORE, we DENY the petition. We AFFIRM the Decision of the
Court of Appeals promulgated on 9 January 2004 as well as the
Resolution promulgated on 5 May 2004 in CA-G.R. SP No. 74626.
SO ORDERED.
G.R. No. 140043               July 18, 2000
CARMELITA NOKOM, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, RENTOKIL (PHILS.) PAUL
STEARN AND RUSSEL HARRIS, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 and
Resolution2 of the Court of Appeals3 dated February 24, 1999, and
September 6, 1999, respectively, in its affirmance of the Decision 4 of
the NLRC5 dated September 30, 1997 finding petitioner Carmelita
Nokom as having been legally dismissed for loss of confidence from
her employment with private respondent Rentokil (Phils.).
The pertinent facts are as follows:
Petitioner Nokom was employed as a manager by private respondent
Rentokil (Phils.) for its Healthcare Division effective August 1, 1994. As
manager, she was responsible for managing the Healthcare Division in
accordance with the policies of Rentokil and she reported directly to
the General Manager, Framie Ong-dela Luna.
Sometime in April 1996, private respondents Paul Stern and Russel
Harris, Rentokil’s Area Director and Regional Finance Controller,
respectively, received information that fictitious invoices were sent to
Rentokil clients in the Healthcare Division whose contracts have
already been terminated. The fictitious invoices were allegedly made
to inflate the gross revenues of the Healthcare Division to make up for
the shortfall in its target revenues for the year 1995. Because initial
findings showed that petitioner Nokom, as Manager of the Healthcare
Division, was involved in the anomaly, private respondents placed her
on preventive suspension. Later on, it was found out that petitioner
knew of the fraudulent activities which, as discovered by the new
Finance Manager, continued in 1996. It was likewise discovered that
there were fraudulent activities in the Pest Control Division which was
also headed by Framie Ong-dela Luna. As a result of that discovery, the
local general manager, Framie Ong-dela Luna, was also placed on
preventive suspension and she was required to submit a written
explanation on the fraudulent activities.
Thereafter, private respondent Paul Stern informed petitioner of the
findings of their auditor. Petitioner admitted the irregularities and, in
her written explanation as required under the notice of preventive
suspension, petitioner told Stern that she had no explanation and said
that she was leaving her fate up to management. Petitioner also
complained about acts committed by private respondent Russel Harris
who allegedly forcibly opened and ransacked her office drawers
sometime on April 20, 1996 thereby causing her to lose some
valuables.
During the hearing conducted by Rentokil management on May 13,
1996 to investigate the anomalies, petitioner failed to appear despite
notice. After the investigation, it was found out that petitioner was
aware, tolerated and in fact participated in the production of fictitious
invoices.6 Thus, on May 15, 1996,7 petitioner’s employment was
terminated in a letter of that date which stated:
"Dear Carmelita,
As you are aware, the Company sent to you on 18th April 1996 a
memorandum relative to the fictitious invoices which were raised for
Rentokil clients. You were given the opportunity to submit your
written answer but you failed to do so. Moreover, you also failed to
attend the scheduled hearing.
The following were established:
1.....Fictitious invoices were sent to Rentokil clients in August and
December of 1995, to the value of ₱7,114K, with purpose to
fraudulently increasing the turnover and therefore the profit of the
Healthcare Division.
2.....The Healthcare turnover in the first quarter of 1996 was adjusted
manually to declare a higher turnover than had actually occurred by
some ₱3,019K.
3.....You were aware, tolerated and in fact participated in the
production of the fictitious invoices.
The above points are fraudulent and cannot be tolerated. Accordingly,
you are hereby terminated from your employment effective
immediately.
You are directed to return any company property that may still be in
your possession.
Yours faithfully,
(Sgd.) Paul C. Stearn
Area Director, Asia North"
In a letter dated June 6, 1996,8 Framie Ong-dela Luna was also given a
letter of termination of her employment and which reads:
"Dear MRS. DELA LUNA:
You will recall that on 7 May 1996, you were required to submit a
written explanation relative to report of Mr. David Stedman about the
lack of senior management control on subordinate managers giving
opportunity for the commission of fraud. In fact, fictitious invoices
were sent to Rentokil clients to fraudulently increase the turnover to
show profit for the Healthcare Division. The Healthcare turnover in the
first quarter of 1996 was adjusted manually to declare higher
turnover. In your written explanation dated 11 May 1996, you claim
that your name was not stated or the person directly responsible with
respect to the falsified invoices and others. Likewise, you claim that
the resulting fraudulent reports were not under your direct
supervision and control.
Hearings were conducted and the final report of Mr. Stedman was
shown to you and taking into account your explanation and the
matters taken up during the hearings, the following were established:
1.....As Executive Vice President and General Manager (EVP & GM),
you failed to oversee and ensure that all reports submitted to the
Head Office are accurate.
2.....As EVP & GM, you failed to effectively supervise your subordinate
managers resulting in their commission of fraud.
3.....The effect of the fraud was that the company under your control
declared to the Rentokil Group some ₱7,114K is fictitious turnover and
profit in the year of 1995. It also overdeclared its turnover in the first
quarter of 1996 by ₱3,332K and its profit by ₱4,044.
4.....The portfolio of Healthcare was also overdeclared in the
Management Account by potentially ₱15,181K.
5.....As a result of these actions, the trading result of 1996 will now be
less by some ₱500K sterling.
In view of the foregoing, you are hereby terminated from your
employment effective immediately on the ground of gross neglect of
duties resulting in the loss of trust and confidence.
You are directed to return company properties that may still be in your
possession.
<="" p="" style="color: rgb(0, 0, 128); font-family: arial, verdana; font-
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(Sgd.) Paul Stearn
Area Director, Asia North"
On June 11, 1996, petitioner filed a complaint9 for illegal suspension,
illegal dismissal and non-payment of salaries against Rentokil before
Labor Arbiter Eduardo J. Carpio and prayed for her reinstatement,
payment of backwages, damages and attorney’s fees. On the other
hand, Framie Ong-Dela Luna filed a separate complaint 10 for illegal
dismissal against Rentokil. On May 30, 1997, Labor Arbiter Carpio
rendered a joint decision11 in favor of petitioner and Framie Ong- Dela
Luna and held:
"WHEREFORE, judgment is hereby rendered declaring the
employment termination of both complainants as illegal and ordering
respondents to immediately reinstate them to their former position
(sic) with full backwages from the time of their employment
termination up to March 31, 1997 in the amount of:
1. CARMELITA NOKOM ---------- Php400,050.00
2. FRAMIE ONG-DELA LUNA-----Php682,366.38
which amounts of backwages are still subject to further adjustment,
until complainants’ payroll or physical reinstatement.
Respondent (Rentokil) is further ordered to pay each complainant the
sum of Php100,000.00 for moral damages and Php50,000.00 for
exemplary damages, plus 10% of the total judgment award by way of
attorney’s fees.
SO ORDERED."
On appeal to the NLRC, a Decision12 was rendered which reversed and
set aside the decision of Labor Arbiter Carpio and dismissed the
complaints for being without merit. In the case against Nokom, it held
that "one does not have to be endowed with an exceptional
intelligence to be convinced that the subject managerial employee
was directly involved in the uncovered fictitious invoicing in 1995 and
in the fraudulent adjustment of ‘Healthcare turnover in the first
quarter of 1996.’ When complainant refused to explain her side in
writing as well as in the hearing scheduled for said purpose, she not
only waived her right to due process as guaranteed by Article 277 (b)
of the Labor Code, worse, she raised the presumption that she was
guilty of the infractions she was asked to explain about. x x x"13
Anent the case against Dela Luna, the NLRC ratiocinated that Dela
Luna was dismissed not because of any evidence of her complicity or
culpability vis-à-vis the subject fraudulent transactions, but rather, it
was because as Executive Vice President and General Manager, she
failed to oversee and ensure that all reports submitted to the Head
Office are accurate and effectively supervise (her) subordinate
managers resulting in their commission of fraud. These matters not
only unquestionably serve as valid bases for an employer’s loss of trust
on a managerial employee but worse, they were factual charges that
complainant Dela Luna failed to seriously refute."14 Further, the NLRC
stated that it was not too late to entertain additional grounds
justifying the dismissal of complainants, i.e., committing misstatement
of trading expenses, abuse of personal expenses, appointment of
relatives, related party transaction, authorization of financial
documents, payroll and staff loans and misstatement of portfolio,
because such grounds were introduced in the proceedings before the
Labor Arbiter. The NLRC justified that if such grounds to dismiss can be
validly entertained by it on appeal on the ground that Article 221 of
the Labor Code provided that it was not bound by technical rules or
even in a petition for new trial or a petition for relief from judgment
after a decision has obtained finality, there is no reason why the Labor
Arbiter should ignore the infractions which were not disputed by
complainants.15
Petitioner Nokom then filed a petition for certiorari before the Court
of Appeals and, in a decision dated February 24, 1999, 16 the petition
was dismissed for lack of merit and the assailed decision of the NLRC
was affirmed. It held, among others, that "petitioner’s failure to detect
and report to the respondent company the fraudulent activities in her
division as well as her failure to give a satisfactory explanation on the
existence of the said irregularities constitute ‘fraud or willful breach’
of the trust reposed on her by her employer or duly authorized
representative" – one of the just causes in terminating employment as
provided for by paragraph c, Article 28317 of the Labor Code, as
amended."18 Further, it held that petitioner’s bare, unsubstantiated
and uncorroborated denial of her participation in the anomalies, and
her adamant refusal to cooperate with and explain her side to the
management of Rentokil is regrettable, thus, she not only waived her
right to due process as guaranteed by Article 277 (b) of the Labor Code
but worse, she raised the presumption that she was guilty of the
infraction she was asked to explain about. 19 All in all, it was held that
no grave abuse of discretion was committed by the NLRC in the
issuance of its assailed decision because substantial evidence existed
which supported the findings of the NLRC that, indeed, petitioner
Nokom was validly dismissed by private respondents for a legal and
just cause.20 Petitioner thereafter filed a Motion for Reconsideration
but the same was denied for lack of merit in a Resolution21 dated
September 6, 1999.
Hence, this petition.22
Petitioner Nokom raises two (2) issues, namely, (1) whether the Court
of Appeals committed grave abuse of discretion amounting to lack or
excess of jurisdiction correctible by certiorari in concluding that
petitioner was legally dismissed despite the overwhelming evidence to
the contrary, and (2) whether the Court of Appeals gravely abused its
discretion in denying the petitioner the reliefs sought by her.23
Private respondents interposed with this Court a Motion to Dismiss 24  that she manage, control and take responsibility over activities in her
the petition on the ground that the petition was filed out of time and
raised no question of law. In their Comment,25 private respondents
citing Martires vs. Court of Appeals, et al. 26 reiterated that the issues
raised by petitioner did not fall within the purview of "questions of
law" but rather, that they were allegations of "grave abuse of
discretion" which were not the proper office of appeal
by certiorari under Rule 45.27 Private respondents averred that the
Court of Appeals had already ruled that the NLRC did not commit any
grave abuse of discretion in upholding the validity of petitioner’s
dismissal from employment and that the NLRC correctly found more
than enough substantial evidence to justify its decision. 28 Further,
private respondents alleged that as gleaned from the issue raised by
petitioner, it is apparent that petitioner seeks the re-evaluation by this
Court of the sufficiency of evidence for petitioner’s dismissal from
employment which is not the function of appeal by certiorari inasmuch
as this Court is not a trier of facts. 29 They added that contrary to the
assertion of petitioner, she was not denied due process because the
fact was that she refused to explain the existence of the anomalies in
her division.30 Petitioner refused to submit her written explanation
and ignored the scheduled administrative hearing on May 13, 1996.31  fact to be as claimed by the opposing party.39 Considering the possible
Lastly, under the principle of command responsibility, private
respondents contend that as Manager of the Healthcare Division, she
exercised control and supervision on all transactions including the
fraudulent production of falsified invoices in her division and that her
unexplained failure to detect the anomalies and unjustified refusal to
give her explanation constitutes fraud and wilful breach of trust.32
Public respondent NLRC likewise filed its Comment33 where it stressed
that only questions of law may be raised in a petition for review
on certiorari and not questions on grave abuse of discretion. Even
assuming that such questions on abuse of discretion may be allowed,
such ground does not exist in the case at bar because even if
petitioner admitted that she had direct control and supervision over
the division where the anomalies occurred, she claimed that there was
no evidence establishing her guilt in the fraudulent issuance of
invoices.34 Anent the claim of petitioner that she was denied due
process because she was in Mindoro when the investigation was held
and that she was not given an opportunity to defend herself prior to
her dismissal, the NLRC found and declared that:
"Petitioner’s claim is without merit. The record reveals that as early as
May 1996, Rentokil’s Area Director private respondent Paul Stern met
with petitioner and informed her of the irregularities discovered in her
division. Stern had in fact, reminded petitioner to submit her written
explanation to these findings in the notice of preventive suspension
served upon her. Petitioner, however, opted to remain silent and did
not give any explanation. She actually hid in Mindoro while the
investigation was being conducted.35
At the outset, we must point out that while petitioner questions the
alleged grave abuse of discretion of the appellate court, an error
properly assignable only in a petition for certiorari under Rule 65 of
the Revised Rules of Court, a close scrutiny of petitioner’s arguments
reveal that, undisputably, at the core of the controversy is the legality
of the dismissal of petitioner.
The petition, not being meritorious, the same should be as it is hereby
denied.
To constitute a valid dismissal from employment, two requisites must
concur, namely: (a) the dismissal must be for any of the causes
provided for in Article 282 of the Labor Code36
and (b) the employee must be afforded an opportunity to be heard
and defend himself.37 In fine, prior to the dismissal of an employee by
an employer, the cause for termination must be duly proven and fall
under those enumerated in Article 282. Of equal importance is that
prior to the dismissal of an employee, the requirements of due
process must be met, that is, the employee concerned must be given
both due notice and the opportunity to be heard and present his side.
In the case at bar, petitioner held the position of Manager in the
Healthcare Division. Her duties, among others, were to detect
fraudulent activities and irregularities within her Division and
thereafter report the same to management. Her position demands
department. It requires a high degree of responsibility that necessarily
includes unearthing of fraudulent and irregular activities. This, she
failed to do. Her ‘bare, unsubstantiated and uncorroborated denial’ of
her participation in the anomalies does not prove her innocence nor
disprove her alleged guilt. On the contrary, such denial or failure to
rebut the serious accusations hurled against her militate against her
innocence and strengthened the adverse averments of private
respondents.
Indeed, it is a well-settled rule that when the evidence tends to prove
a material fact which imposes a liability on a party, and he has it in his
power to produce evidence which from its very nature must
overthrow the case made against him if it is not founded on fact, and
he refuses to produce such evidence, the presumption arises that the
evidence, if produced, would operate to his prejudice, and support the
case of his adversary.38 The ordinary rule is that one who has
knowledge peculiarly within his control, and refuses to divulge it,
cannot complain if the court puts the most unfavorable construction
upon his silence, and infers that a disclosure would have shown the
effects of the charges against her, petitioner nevertheless chose to
remain silent and deny the accusations hurled at her. She did not
present evidence in her behalf to prove her innocence.
To make matters worse, petitioner’s inaction or failure to submit her
written report and her non-attendance of the scheduled
administrative hearing do not speak well of her supposed innocence.
She cannot hide under the guise of management’s alleged failure to
apprise her of the hearings because she was informed of the
irregularities by private respondent Stern who also told her to submit
her written explanation. Hence, she has only herself to blame.
Time and again, this Court had occasion to reiterate the well-
established rule that findings of fact by the Court of Appeals are
conclusive on the parties and are not reviewable by this Court.40 We
find no compelling reason to disturb the factual findings of the Court
of Appeals in the absence of any showing that the present case falls
under the exceptions under this rule.41 When supported by sufficient
evidence, the findings of fact of the Court of Appeals affirming those
of the trial court, are not to be disturbed on appeal. The rationale
behind this doctrine is that review of the findings of fact of the Court
of Appeals is not a function that the Supreme Court normally
undertakes.42 In the case at bar, we subscribe to the findings of fact of
the Court of Appeals when it held:
"Indeed, petitioner’s failure to detect and report to the respondent
company [Rentokil] the fraudulent activities in her division as well as
her failure to give a satisfactory explanation on the existence of the
said irregularities constitute "fraud or willful breach of the trust
reposed on her by her employer or duly authorized representative" –
one of the just causes in terminating employment as provided for by
paragraph c, Article 283 of the Labor Code, as amended.
Concomitantly, petitioner’s actuations betrayed the utmost trust and
confidence reposed on her by the respondent company. We cannot,
therefore, compel private respondents to retain the employment of
herein petitioner who is shown to be lacking in candor, honesty and
efficiency required of her position.
Loss of confidence is a valid ground for dismissing an employee and
proof beyond reasonable doubt of the employee’s misconduct is not
required to dismiss him on this charge (Del Carmen v. NLRC, 203 SCRA
245[1991]). It is enough that there be ‘some basis’ for such loss of
confidence, or that the employer has reasonable grounds to believe, if
not entertain the moral conviction that the employee concerned is
responsible for the misconduct and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confidence
demanded of his position (Vallende v. National Labor Relations
Commission, 245 SCRA 662 [1995]).
 x....x....x"
As enunciated in the recent case of Vitarich Corporation et al. v.
National Labor Relations Commission et al.,43 the guidelines for the
application of the doctrine of loss of confidence are:
a.....loss of confidence should not be simulated;
b.....it should not be used as a subterfuge for causes which are
improper, illegal or unjustified;
c.....it may not be arbitrarily asserted in the face of overwhelming
evidence to the contrary; and
d.....it must be genuine, not a mere afterthought to justify earlier
action taken in bad faith.
Petitioner was holding a managerial position with Rentokil. As
manager of the Healthcare Division, petitioner was duty-bound to
perform her functions in accordance with company policies. During
her incumbency, fraudulent activities transpired for which she must be
held accountable. Petitioner has not presented any persuasive
evidence or argument to convince us otherwise. True it is that an
employer enjoys a wide latitude of discretion in the promulgation of
company rules and regulations that at times become the root of abuse
by management. In the present case, however, we find that the
policies of private respondent Rentokil are fair and reasonable, the
decision to terminate the employment of petitioner was justified and
appropriate in the light of the acts committed by her, and considering
that the requirements of the constitutional right to due process were
duly accorded to petitioner.
WHEREFORE, the petition is hereby DENIED. The Decision and the
Resolution dated February 24, 1999 and September 6, 1999,
respectively, of the Court of Appeals in CA-G.R. SP 50002, are
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 177816               August 3, 2011
NIPPON HOUSING PHIL. INC., and/or TADASHI OTA, HOROSHI
TAKADA, YUSUHIRO KAWATA, MR. NOBOYUSHI and JOEL
REYES Petitioners,
vs.
MAIAH ANGELA LEYNES, Respondent.
DECISION
PEREZ, J.:
Assailed in this petition for review on certiorari1 filed pursuant to Rule
45 of the 1997 Rules of Civil Procedure is the 23 November 2006
Decision rendered by the Sixteenth Division of the Court of Appeals
(CA) in CA-G.R. SP No. 84781,2 the decretal portion of which states:
WHEREFORE, the foregoing considered, the petition is GRANTED and
the assailed Decision and Resolution are REVERSED and SET ASIDE.
Accordingly, the Decision of the Labor Arbiter is REINSTATED.
SO ORDERED.3
The Facts
From its original business of providing building maintenance, it
appears that petitioner Nippon Housing Philippines, Inc. (NHPI)
ventured into building management, providing such services as
handling of the lease of condominium units, collection of dues and
compliance with government regulatory requirements. Having gained
the Bay Gardens Condominium Project (the Project) of the Bay
Gardens Condominium Corporation (BGCC) as its first and only
building maintenance client, NHPI hired respondent Maiah Angela
Leynes (Leynes) on 26 March 2001 for the position of Property
Manager, with a salary of ₱40,000.00 per month. Tasked with
surveying the requirements of the government and the client for said
project, the formulation of house rules and regulations and the
preparation of the annual operating and capital expenditure budget,
Leynes 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.4
On 6 February 2002, Leynes had a misunderstanding with Engr.
Honesto Cantuba (Cantuba), the Building Engineer assigned at the
Project, regarding the extension of the latter’s working hours. Aside
from instructing the security guards to bar Engr. Cantuba from entry
into the Project and to tell him to report to the NHPI’s main office in
Makati, Leynes also sent a letter dated 8 February 2002 by telefax to
Joel Reyes (Reyes), NHPI’s Human Resources Department (HRD) Head,
apprising the latter of said Building Engineer’s supposed
insubordination and disrespectful conduct.5 With Engr. Cantuba’s
submission of a reply in turn accusing Leynes of pride, conceit and
poor managerial skills,6 Hiroshi Takada (Takada), NHPI’s Vice President,
went on to issue the 12 February 2002 memorandum, attributing the
incident to "simple personal differences" and directing Leynes to allow
Engr. Cantuba to report back for work.7
Disappointed with the foregoing management decision, Leynes
submitted to Tadashi Ota, NHPI’s President, a letter dated 12 February
2002, asking for an emergency leave of absence for the supposed
purpose of coordinating with her lawyer regarding her resignation
letter.8 While NHPI offered the Property Manager position to Engr.
Carlos Jose on 13 February 20029 as a consequence Leynes’
signification of her intention to resign, it also appears that Leynes sent
another letter to Reyes by telefax on the same day, expressing her
intention to return to work on 15 February 2002 and to call off her
planned resignation upon the advice of her lawyer.10 Having
subsequently reported back for work and resumed performance of her
assigned functions, Leynes was constrained to send out a 20 February
2002 written protest regarding the verbal information she supposedly
received from Reyes that a substitute has already been hired for her
position.11 On 22 February 2002, Leynes was further served by
petitioner Yasuhiro Kawata and Noboyushi Hisada, NHPI’s Senior
Manager and Janitorial Manager,12 with a letter and memorandum
from Reyes, relieving her from her position and directing her to report
to NHPI’s main office while she was on floating status.13
Aggrieved, Leynes lost no time in filing against NHPI and its above-
named officers the 22 February 2002 complaint for illegal dismissal,
unpaid salaries, benefits, damages and attorney’s fees docketed
before the arbitral level of the National Labor Relations Commission
(NLRC) as NLRC-NCR South Sector Case No. 30-02-01119-02.14 Against
Leynes’ claim that her being relieved from her position without just
cause and replacement by one Carlos Jose amounted to an illegal
dismissal from employment,15 NHPI and its officers asserted that the
management’s 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 BGCC’s
request for her replacement.16 During the pendency of the case,
however, Reyes eventually served the Department of Labor and
Employment (DOLE)17 and 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.18 Leynes was offered by NHPI the sum of ₱28,188.16
representing her unpaid wages, proportionate 13th month pay, tax
refund and service incentive leave pay (SILP).
On 14 January 2003, Labor Arbiter Manuel Manansala rendered a
decision, finding that NHPI’s act of putting Leynes on floating status
was equivalent to termination from employment without just cause
and compliance with the twin requirements of notice and hearing.
Likewise finding that NHPI’s officers acted with bad faith in effecting
Leynes’ termination,19 the Labor Arbiter disposed of the case in the
following wise:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring respondent Nippon Housing Philippines, Inc. (NHPI) guilty
of illegal dismissal for the reasons above-discussed. Consequently, the
aforenamed respondent is hereby directed to reinstate complainant
Maiah Angela Leynes to her former position as Property Manager
without loss of seniority rights and with full backwages from the time
of her unjust dismissal up to the time of her actual reinstatement. The
backwages due to complainant Leynes is initially computed at
₱471,844.87 x x x subject to the finality of this Decision.
Be that as it may, on account of strained relationship between the
parties brought about by the institution of the instant case/complaint
plus the fact that complainant Leynes occupied a managerial position,
it is better for the parties to be separated. Thus, in lieu of
reinstatement, respondent NHPI is hereby directed to pay
complainant Leynes the sum of ₱80,000.00 representing the
latter’s initial separation pay subject to the finality of this Decision x x
x.
2. Declaring respondent NHPI and individual respondents Tadashi Ota
(President), Hirochi Takada (Vice President for Finance), Yasuhiro
Kawata (Senior Manager), Noboyushi [Hisada] (Janitorial Manager),
and Joel Reyes (HRD Manager) guilty of evident bad faith in effecting
the dismissal of complainant Leynes from the service. Consequently,
the aforenamed respondents are hereby directed to pay, jointly and
severally, complainant Leynes the sum of ₱20,000.00 for moral
damages and the sum of ₱20,000.00 for exemplary damages;
3. Directing respondent NHPI to pay complainant Leynes the total sum
of ₱56,888.44 representing her unpaid salary, proportionate 13th
month pay, and proportionate service incentive leave pay x x x
4. Directing the aforenamed respondent NHPI to pay complainant
Leynes ten (10%) percent attorney’s fees based on the total monetary
award for having been forced to prosecute and/or litigate the instant
case/complaint by hiring the services of legal counsel.
5. Dismissing the other mon[e]y claims and/or charges of complainant
Leynes for lack of merit.
SO ORDERED.20
On appeal, the foregoing decision was reversed and set aside in the 30
September 2003 decision rendered by the NLRC in NLRC NCR CA No.
035229. In ordering the dismissal of the complaint for lack of merit,
the NLRC ruled that NHPI’s placement of Leynes on floating status was
necessitated by the client’s contractually guaranteed right to request
for her relief.21 With Leynes’ elevation of the case to the CA on a Rule
65 petition for certiorari,22 the NLRC’s decision was, however, reversed
and set aside in the herein assailed 23 November 2006 decision, upon
the following findings and conclusions: (a) absent showing that there
was a bona fide suspension of NHPI’s business operations, Leynes’
relief from her position – even though requested by the client – was
tantamount to a constructive dismissal; (b) the bad faith of NHPI and
its officers is evident from the hiring of Engr. Jose as Leynes’
replacement on 13 February 2002 or prior to her being relieved from
her position on 22 February 2002; and, (c) the failure of NHPI and its
officers to prove a just cause for Leynes’ termination, the redundancy
of her services and their compliance with the requirements of due
process renders them liable for illegal dismissal.23
The motion for reconsideration of the foregoing decision filed by NHPI
and its officers24 was denied for lack of merit in the CA’s 8 May 2007
resolution, hence, this petition.25
The Issues
Petitioners NHPI and Kawata urge the grant of their petition on the
following grounds, to wit:
I. THE HONORABLE COURT OF APPEALS’ RULING THAT PETITIONERS’
DECISION TO PLACE RESPONDENT ON FLOATING STATUS IS
TANTAMOUNT TO CONSTRUCTIVE DISMISSAL IS CONTRARY TO LAW
AND SETTLED JURISPRUDENCE.
II. THE HONORABLE COURT OF APPEALS’ DECLARATION THAT NHPI’S
DECISION TO REDUNDATE RESPONDENT IS UNJUSTIFIED, IS CONTRARY
TO LAW AND SETTLED JURISPRUDENCE.26
The Court’s Ruling
We find the petition impressed with merit.
Petitioners argue that the CA erred in finding that Leynes was
constructively dismissed when she was placed on floating status prior
to her termination from employment on the ground of redundancy.
Maintaining that the employee’s right to security of tenure does not
give him a vested right thereto as would deprive the employer of its
prerogative to change his assignment or transfer him to where he will
be most useful, petitioners call our attention to the supposed fact that
Leynes was unacceptable to BGCC which had a contractually
guaranteed right to ask for her relief. Rather than outrightly
terminating Leynes’ employment as a consequence of her threats to
resign from her position, moreover, petitioners claim that she was
validly placed on floating status pursuant to Article 286 of the Labor
Code of the Philippines which provides as follows:
Art. 286. When employment not deemed terminated. – The bona fide
suspension of the operation of a business undertaking for a period not
exceeding six (6) months, or the fulfillment by the employee of a civic
duty shall not terminate employment. In all such cases the employer
shall reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not later
than one (1) month from the resumption of operations of his
employer or from his relief from the military or civic duty.
Although the CA correctly found that the record is bereft of any
showing that Leynes was unacceptable to BGCC, the evidence the
parties adduced a quo clearly indicates that petitioners were not in
bad faith when they placed the former under floating status.
Disgruntled by NHPI’s countermanding of her decision to bar Engr.
Cantuba from the Project, Leynes twice signified her intention to
resign from her position to Ota on 12 February 2002. Upon receiving
the copy of the memorandum issued for Engr. Cantuba’s return to
work, Leynes inscribed thereon the following handwritten note
addressed to Ota, "Good Morning! I’m sorry but I would like to report
to you my plan of resigning as your Prop. Manager. Thank You." 27 In
her application letter for an immediate emergency leave,28 Leynes also
distinctly expressed her dissatisfaction over NHPI’s resolution of her
dispute with Engr. Cantuba and announced her plan of coordinating
with her lawyer regarding her resignation letter, to wit:
This is in line with the Management decision re: Return to work order
of Mr. Honesto Cantuba at Bay Gardens. I would like to express my
deepest disappointed (sic) for having received this kind of decision
from Nippon Housing Philippines, Inc.
Mr. Ota, I have been working with NHPI, as your Building Property
Manager, for almost a year now. I had exerted all my effort to set-up
the Property Management, experienced each and every pain and
sacrifice[d] everything before we were able to get the Bay Gardens
project. Mr. Hiro Matsumoto, Hiroshi Takada and Yasuhiro Kawata had
witnessed these things.
Given your decision, I am respecting this. The most painful thing for
me is that the management did not value my effort for what I have
done to the Company.
I am therefore submitting my letter for emergency leave of absence
starting today, while I am still coordinating with my Lawyer re: my
resignation letter.1avvphi1
Thank you for your support.29
In view of the sensitive nature of Leynes’ position and the critical stage
of the Project’s business development, NHPI was constrained to relay
the situation to BGCC which, in turn, requested the immediate
adoption of remedial measures from Takada, including the
appointment of a new Property Manager for the Project. Upon BGCC’s
recommendation,30 NHPI consequently hired Engr. Jose on 13
February 2002 as Leynes’ replacement.31 Far from being the indication
of bad faith the CA construed the same to be, these factual
antecedents suggest that NHPI’s immediate hiring of Engr. Jose as the
new Property Manager for the Project was brought about by Leynes’
own rash announcement of her intention to resign from her position.
Although she subsequently changed her mind and sent Reyes a letter
by telefax on 13 February 2002 announcing the reconsideration of her
planned resignation and her intention to return to work on 15
February 2002,32 Leynes evidently had only herself to blame for
precipitately setting in motion the events which led to NHPI’s hiring of
her own replacement.
Acting on Leynes’ 20 February 2002 letter protesting against the hiring
of her replacement and reiterating her lack of intention to resign from
her position,33 the record, moreover, shows that NHPI simply placed
her on floating status "until such time that another project could be
secured" for her.34 Traditionally invoked by security agencies when
guards are temporarily sidelined from duty while waiting to be
transferred or assigned to a new post or client,35 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.36 In brushing
aside respondents’ reliance on said provision to justify the act of
putting Leynes on floating status, the CA ruled that no evidence was
adduced to show that there was a bona fide suspension of NHPI’s
business. What said court clearly overlooked, however, is the fact that
NHPI had belatedly ventured into building management and, with
BGCC as its only client in said undertaking, had no other Property
Manager position available to Leynes.
Considering that even labor laws discourage intrusion in the
employers’ judgment concerning the conduct of their business, courts
often decline to interfere in their legitimate business
decisions,37 absent showing of illegality, bad faith or arbitrariness.
Indeed, the right of employees to security of tenure does not give
them vested rights to their positions to the extent of depriving
management of its prerogative to change their assignments or to
transfer them.38 The record shows that Leynes filed the complaint for
actual illegal dismissal from which the case originated on 22 February
2002 or immediately upon being placed on floating status as a
consequence of NHPI’s hiring of a new Property Manager for the
Project. 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. 39 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.40
Viewed in the light of the foregoing factual antecedents, we find that
the CA reversibly erred in holding petitioners liable for constructively
dismissing Leynes from her employment. There is said to be
constructive dismissal when an act of clear discrimination, insensitivity
or disdain on the part of the employer has become so unbearable as
to leave an employee with no choice but to forego continued
employment.41 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 and
a diminution in pay.42 Stated otherwise, it is a dismissal in disguise or
an act amounting to dismissal but made to appear as if it were not. 43 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.44 To our mind, respondents have more than amply
discharged this burden with proof of the circumstances surrounding
Engr. Carlos’ employment as Property Manager for the Project and the
consequent unavailability of a similar position for Leynes.
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. 45 A redundant
position is one rendered superfluous by any number of factors, such as
overhiring of workers, decreased volume of business, dropping of a
particular product line previously manufactured by the company or
phasing out of service activity priorly undertaken by the business.46 It
has been held that the exercise of business judgment to characterize
an employee’s service as no longer necessary or sustainable is not
subject to discretionary review where, as here, it is exercised there is
no showing of violation of the law or arbitrariness or malice on the
part of the employer.47 An employer has no legal obligation to keep
more employees than are necessary for the operation of its business.48
Considering that Leynes was terminated from service upon an
authorized cause, we find that the CA likewise erred in faulting NHPI
for supposedly failing to notify said employee of the particular act or
omission leveled against her and the ground/s for which she was
dismissed from employment. Where dismissal, however, 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.49 Here,
NHPI specifically made Leynes’ termination from service effective 22
August 2002, but only informed said employee of the same on 8
August 200250 and filed with the DOLE the required Establishment
Termination Report only on 16 August 2002.51 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 ₱50,000.00. The penalty
should understandably be stiffer because the dismissal process was
initiated by the employer's exercise of its management prerogative.52
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.53 Hired by NHPI on 26 March 2001 and terminated
effective 22 August 2002, Leynes is entitled to a separation pay in the
sum of ₱40,000.00, in addition to her last pay which, taking into
consideration her proportionate 13th month pay, tax refund and SILP,
was computed by NHPI at ₱28,188.16. 54 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.55 For
lack of factual or legal bases, we find no cause to award attorney’s fees
in favor of Leynes. In the absence of the same showing insofar as
NHPI’s corporate officers are concerned, neither is there cause to hold
them jointly and severally liable for the above-discussed monetary
awards.
WHEREFORE, premises considered, the petition is GRANTED and the
assailed 23 November 2006 Decision is, accordingly, REVERSED and
SET ASIDE. In lieu thereof, another is entered ordering NHPI to pay
Leynes the following sums: (a) ₱40,000.00 as separation pay; (b)
₱28,188.16 representing her unpaid wages, proportionate 13th month
pay, tax refund and SILP; and (c) ₱50,000.00 by way of nominal
damages.
SO ORDERED.
[G.R. No. 164181 : September 14, 2011]
NISSAN MOTORS PHILS., INC., PETITIONER, VS. VICTORINO ANGELO,
RESPONDENT.
DECISION
PERALTA, J.:
This is to resolve the Petition for Review[1] dated July 10, 2004 of
petitioner Nissan Motors Phils., Inc. (Nissan) assailing the
Decision[2] dated March 24, 2004 of the Court of Appeals (CA) and the
latter's Resolution[3] dated June 9, 2004.
The records contain the following antecedent facts:
Respondent Victorino Angelo was employed by Nissan on March 11,
1989 as one of its payroll staff. On April 7 to 17, 2000, respondent was
on sick leave, thus, he was not able to prepare the payroll for the said
period. Again, on April 27 and 28, 2000, respondent was on an
approved vacation leave which again resulted in the non-preparation
of the payroll for that particular period.
On May 8, 2000, respondent received a Memorandum[4] from the
petitioner containing the following:
This is to inform you that the Company is
considering your dismissal from employment on
the grounds of serious misconduct, willful
disobedience and gross neglect of duties.
It appears that on April 10, 2000, Monday, which
was the supposed cut-off date for payroll purposes
for the April 15 payroll, you went home early
without finishing your work and requested for a
referral letter from the company clinic to E. Delos
Santos Hospital claiming that you are not feeling
well.
On April 11, Tuesday, you did not report for work,
without any notice to the company or to any of
your immediate superior section head,
department head and division head. A phone call
was made to your home, but the company could
not make any contact.
On April 12, Wednesday, you reported for work
but went home early claiming that you were again
not feeling well. You were reminded of the coming
payday on Friday, April 14, and you said you will be
able to finish it on time and that you will just
continue/finish your work the following day.
On April 13, Thursday, you again did not report for
work without any notice to the company just like
what you did last Tuesday. Your immediate
superior, sensing that you did not finish your task,
tried to contact you but to no avail, as you were
residing in Novaliches and your home phone was
not in order. So we decided to open your
computer thru the help of our IT people to access
the payroll program.
On April 14, Friday (payday), we were still doing
the payroll thru IT because we could not contact
you. Later in the day, the Company decided to
release the payroll of employees the following day
as we already ran out of time and the Company
just based the net pay of the employees on their
March 15 payroll. Naturally, the amount released
to the employees were not accurate as some got
more than (sic), while some got less than what
they were supposed to receive.
Consequently, many employees got angry, as the
Company paid on a Saturday, (in practice we do
not release salary on a Saturday as it is always
done in advance, i.e., Friday) and majority got
lesser amount than what they were supposed to
receive. In addition, the employees were not given
their payslip where they can base the net pay they
received.
When you reported for work on Tuesday, April 18,
we had a meeting and you were advised to
transfer your payroll task to your immediate
superior, which you agreed. The time table
agreement was 2 payroll period, meaning April 30
and May 15 payroll.
Still on April 18, Tuesday, you filed an application
for vacation leave due to your son's graduation on
April 27 and 28. Because it is again payroll time, we
advised that your leave will be approved on the
condition that you will ensure that the payroll is
finished on time and [you] will make a proper turn
over to your immediate superior before your
leave. You agreed and your leave was approved.
On April 24, Monday, you were reminded you
should start on your payroll task because you will
be on leave starting April 27, Thursday, you said
yes.
On April 25, Tuesday, you were again reminded on
finishing the payroll and the turn over again and
you said yes.
On April 26, Wednesday, you were again reminded
on the same matter and, in fact, Mr. AA del
Rosario reminded you also on the matter about
5:30 p.m. And you promised him that the task will
be finished by tomorrow (sic) and will just leave
the diskette in your open drawer. You were left in
the office until 6:00 p.m.
On April 27, Thursday, you were already on leave
and your superior, Mr. M. Panela, found out that
the diskette only contained the amount and name
of employees, but not the account number.
Likewise, the deductions from salaries was not
finished, the salaries of contractuals, apprentices
were also not finished. Since the bank only reads
account numbers of employees, we experienced
delay in the payroll processing. You even promised
to call the office i.e., M Panela to give additional
instructions not later than 12:00 noon on the same
day, but you did not do so. In fact, the direct
phone line of Mr. AA del Rosario was given to you
by your officemate so you can call the office
directly and not thru long distance.
On April 28, Friday, after exhaustive joint efforts
done by Welfare Management Section and IT
Division, we were able to finally release the payroll
thru the bank, but many employees got lower
amount than what they have expected, as in fact
at least 43 employees out of 360 got salaries below
P1,000.00, among them about 10 people got no
salary primarily due to wrong deduction and
computation done by you. Again, many people got
angry to the management's inefficient handling of
their payroll.
On May 2, Tuesday, you did not report for work,
again you said you are not feeling well, but the
information to us came very late at about noon
time.
On May 3, Wednesday, you reported for work, and
was instructed to finish the payslips for the payroll
periods April 15 and April 30. You said yes, and you
promised not to go home on that day without
finishing the payslips. Later, you decided on your
own to just compute the payslip on a monthly
basis instead of the usual semi-monthly basis as is
the customary thing to do. As a result thereof, an
error in the tax withholding happened and again
resulted in another confusion and anger among
employees, as in fact for two (2) consecutive days,
May 3 and May 4, the plant workers refused to
render overtime.
As a consequence of all these, the manufacturing
employees, numbering about 350 people or about
65% of [Nissan's total population], since April 16,
have started to decline rendering overtime work,
saying after their 15 days of work they received
only less than P200 while some even received only
P80.
The manufacturing operation was hampered
completely in the month of April and the first week
 of May because of these several incidents. In sum,
the company has suffered massive loss of
opportunity to sell because of failure to produce in
the production area due to non-availability of
workers rendering overtime, high absenteeism
rate among plant direct workers primarily due to
the payroll problem. It came at a time when NMPI
sales [are] just starting to pick up due to the
introduction of the new model Sentra Exalta. The
loss is simply too overwhelming.
Accordingly, you are hereby given a period of three
(3) days from receipt hereof to submit your written
answer.
In the meantime, you are hereby placed on
preventive suspension effective immediately.
A hearing will be conducted by Mr. AA del Rosario,
on May 13, 2000 at 9:00 a.m. at the Company's
conference room (Fairlady).
Respondent filed a Complaint[5] for illegal suspension with the
Department of Labor and Employment (DOLE) on May 12, 2000.
Petitioner conducted an investigation on May 13, 2000, and concluded
that respondent's explanation was untrue and insufficient. Thus, on
June 13, 2000, petitioner issued a Notice of Termination.[6]
Respondent amended his previous complaint against petitioner on
June 22, 2000, to include the charge of illegal dismissal. [7] On
September 29, 2000, the Labor Arbiter rendered a
Decision[8] dismissing respondent's complaint for lack of merit.
Undaunted, respondent brought the case to the National Labor
Relations Commission (NLRC), which eventually rendered a
Resolution[9] dated February 14, 2002 dismissing the appeal and
affirming the Labor Arbiter's Decision. Respondent's motion for
reconsideration of the NLRC resolution was subsequently denied on
May 13, 2002.[10]
Aggrieved, respondent filed a petition for certiorari[11] under Rule 65 of
the Rules of Court with the CA and the latter granted the same
petition in its Decision dated March 24, 2004, the dispositive portion
of which reads:
WHEREFORE, the petition is GRANTED. The
assailed resolutions dated February 14, 2002 and
May 13, 2002 are REVERSED and SET ASIDE. The
petitioner is hereby reinstated and the private
respondents are ordered to pay him backwages
from the time of his illegal dismissal.
SO ORDERED.
Unsatisfied with the decision of the CA, Nissan filed a motion for
reconsideration, which was denied by the same court in a Resolution
dated June 9, 2004.
Thus, the present petition, to which the petitioner cites the following
grounds:
A gumawa ng trabahong hindi ko naman dapat
THE COURT OF APPEALS
COMMITTED A SERIOUS ERROR
OF LAW WHEN IT
OVERTURNED THE FACTUAL
FINDINGS OF BOTH THE LABOR
ARBITER AND THE NLRC
WHICH ARE BASED ON
SUBSTANTIAL EVIDENCE.
B of the fundamental duties of an employee is to obey all reasonable
THE COURT OF APPEALS COMMITTED A SERIOUS
ERROR OF LAW WHEN IT DISREGARDED PRIVATE
RESPONDENT'S SERIOUS MISCONDUCT AND
INSUBORDINATION, AND DECIDED THE CASE ONLY
ON THE CHARGE OF GROSS AND HABITUAL
NEGLIGENCE.
C
THE COURT OF APPEALS COMMITTED SERIOUS
ERROR OF LAW IN IGNORING PRIVATE
RESPONDENT'S MISCONDUCT WHICH, IF EVER IT
DOES NOT JUSTIFY DISMISSAL BECAUSE OF HIS 11-
YEAR SERVICE NONETHELESS LIMITS THE AWARD
OF BACKWAGES.[12]
The petition is meritorious.
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. However, factual findings of administrative
agencies are not infallible and will be set aside if they fail the test of
arbitrariness. [13] In the present case, the findings of the CA differ from
those of the Labor Arbiter and the NLRC. The Court, in the exercise of
its equity jurisdiction, may look into the records of the case and re-
examine the questioned findings.[14]
The Labor Code provides that an employer may terminate the services
of an employee for a just cause.[15] Petitioner, the employer in the
present case, dismissed respondent based on allegations of serious
miscounduct, willful disobedience and gross neglect.
One of the just causes enumerated in the Labor Code is serious
misconduct. Misconduct is improper or wrong conduct.[16] 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 in judgment.[17] Such misconduct,
however serious, must nevertheless be in connection with the
employee's work to constitute just cause for his separation.[18] Thus,
for misconduct or improper behavior to be a just cause for dismissal,
(a) it must be serious; (b) it must relate to the performance of the
employee's duties; and (c) it must show that the employee has
become unfit to continue working for the employer.[19]
Going through the records, this Court found evidence to support the
allegation of serious misconduct or insubordination. Petitioner claims
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. The misconduct to be serious within the
meaning of the Labor Code must be of such a grave and aggravated
character and not merely trivial or unimportant. [20] The Letter-
Explanation[21] partly reads:
Again, it's not negligence on my part and I'm not
alone to be blamed. It's negligence on your part
[Perla Go] and A.A. Del Rosario kasi, noong pang
April 1999 ay alam ninyo na hindi ako ang dapat
may responsibilidad ng payroll kundi ang Section
Head eh bakit hindi ninyo pinahawak sa Section
Head noon pa. Pati kaming dalawa sa payroll,
kasama ko si Thelma. Tinanggal nyo si Thelma.
Hindi nyo ba naisip na kailangan dalawa ang tao sa
payroll para pag absent ang isa ay may gagawa.
Dapat noon nyo pa naisip iyan. Ang tagal kong
ginagawa.
This Court finds the above to be grossly discourteous in content and
tenor. The most appropriate thing he could have done was simply to
state his facts without resorting to such strong language. Past
decisions of this Court have been one in ruling that accusatory and
inflammatory language used by an employee to the employer or
superior can be a ground for dismissal or termination.[22]
Another just cause cited by the petitioner is willful disobedience. One
rules, orders and instructions of the employer. Disobedience, to be a
just cause for termination, must be willful or intentional, willfulness
being characterized by a wrongful and perverse mental attitude
rendering the employee's act inconsistent with proper subordination.
A willful or intentional disobedience of such rule, order or instruction
justifies 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.[23] This allegation of willful disobedience can still be adduced
and proven from the same Letter-Explanation cited earlier.
Petitioner also dismissed respondent because of gross or habitual
negligence. Neglect of duty, to be a ground for dismissal, must be both
gross and habitual.[24] In finding that petitioner was able to adduce
evidence that would justify its dismissal of respondent, the NLRC
correctly ruled that the latter'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 constitutes gross neglect. It stated that:
x x x Be it mentioned and emphasized that
complainant cannot be faulted for his absences
incurred on 10, 11, 13, 14, 17, 27 and 28 of April
2000 as he went on official leave on said dates.
Except for the last two dates mentioned (27 and
28 April 2000), health problem compelled
complainant to be on sick leave of absence on the
foregoing dates. It is not the complainant's liking,
in other words, to be afflicted with any form of
heart ailment which actually caused him to incur
such leave of absences. Complainant's pellucid
fault, however, lies on his failure to effect the
"much-needed" turn over of functions to someone
capable of performing the vital task(s) which he
could not effectively perform or undertake
because of his heart ailment or condition. Indeed,
the trouble(s) "felt" by management and the
employees concerned on the payday of 15 April
2000 may seem justified under the circumstances
as complainant indeed has gotten ill and in fact
went on sick leave of absence prior to said payday.
The same, however, certainly does not hold true as
to the trouble(s) and chaos felt and which
occurred on the payday of 30 April 2000 as
diligence and prudence logically and equitably
required complainant to have effected the
necessary turn over of his functions to someone
capable of taking over his assigned task(s) even
perhaps on a merely temporary basis. The
preparation of payroll, especially that of a big
business entity such as herein respondent
company, certainly involves serious, diligent, and
meticulous attention of the employee tasked of
performing such function and a company definitely
could not let either negligence or absence of the
employee concerned get in the way of the
performance of the undertaking of such,
otherwise, serious repercussion(s) would be the
logical and unavoidable consequences; such is
what befell the respondents. Be it mentioned at
this juncture that under the circumstances herein
then prevailing, it would seem just logical and in
keeping with the natural "reflexes," so to speak, of
a business entity, to require an incapable
employee tasked to perform a vital function, to
effect the necessary turn over of functions of such
employee to someone capable. Be it further
emphasized, however, that even assuming that no
formal directive was given by the company to the
employee concerned for the turn over of the
latter's functions, said employee should have taken
the initiative of so doing considering the
importance of the task(s) he is performing. Hence,
failure to do so would clearly be tantamount to
serious neglect of duty, a valid ground in
terminating employment relations.[25]
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. On the
other hand, fraud and willful neglect of duties imply bad faith on the
part of the employee in failing to perform his job to the detriment of
the employer and the latter's business.[26]
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.
[27]
 In this case, both the Labor Arbiter and the NLRC were not amiss in
finding that 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.[28]
However, 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[29] of the Labor Code is not entitled to separation pay.
[30]
 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.[31] This concept has been
thoroughly discussed in Solidbank Corporation v. NLRC,[32] thus:
The reason that the law does not statutorily grant
separation pay or financial assistance in instances
of termination due to a just cause is precisely
because the cause for termination is due to the
acts of the employee. In such instances,
however, this Court, inspired by compassionate
and social justice, has in the past awarded
financial assistance to dismissed employees when
circumstances warranted such an award.
In Central Philippines Bandag Retreaders, Inc. v.
Diasnes,[33] this Court discussed the parameters of
awarding separation pay to dismissed employees
as a measure of financial assistance, viz:
To reiterate our ruling in Toyota, labor
adjudicatory officials and the CA must
demur the award of separation pay
based on social justice when an
employee's dismissal is based on serious
misconduct or willful disobedience;
gross and habitual neglect of duty; fraud
or willful breach of trust; or commission
of a crime against the person of the
employer or his immediate family -
grounds under Art. 282 of the Labor
Code that sanction dismissals of
employees. 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.
The commitment of the Court to the
cause of 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 the liberality of the
law.[34]
Thus, in Philippine Commercial International Bank
v. Abad,[35] this Court, having considered the
circumstances present therein and as a measure of
social justice, awarded separation pay to a
dismissed employee for a just cause under Article
282. The same concession was given by this Court
in Aparente, Sr. v. National Labor Relations
Commission[36] and Tanala v. National Labor
Relations Commission.[37]
WHEREFORE, the Petition for Review dated July 10, 2004 of petitioner
Nissan Motors Phils., Inc. is hereby GRANTED. Consequently, the
Decision dated March 24, 2004 of the Court of Appeals and the latter's
Resolution dated June 9, 2004 are hereby REVERSED AND SET
ASIDE and the Decision dated September 29, 2000 of the Labor Arbiter
and its Resolution dated February 14, 2002 are
hereby REINSTATED with the MODIFICATION that petitioner shall
award respondent his separation pay, the computation of which shall
be based on the prevailing pertinent laws on the matter.
SO ORDERED.
[G.R. No. 187605 : April 13, 2010]
TECHNOL EIGHT PHILIPPINES CORPORATION, PETITIONER, VS.
NATIONAL LABOR RELATIONS COMMISSION AND DENNIS AMULAR,
RESPONDENTS.
DECISION
BRION, J.:
For resolution is the present Petition for Review
on Certiorari[1] addressing the decision[2] and resolution[3] of the Court
of Appeals (CA) of November 18, 2008 and April 17, 2009, respectively,
in CA-G.R. SP No. 100406.[4]
THE ANTECEDENTS
The facts are summarized below.
The petitioner Technol Eight Philippines Corporation (Technol), located
at 127 East Main Avenue, Laguna Technopark, Biñan, Laguna,
manufactures metal parts and motor vehicle components. It hired the
respondent Dennis Amular (Amular) in March 1998 and assigned him
to Technol's Shearing Line, together with Clarence P. Ducay (Ducay).
Rafael Mendoza (Mendoza) was the line's team leader.
On April 16, 2002 at about 5:30 p.m., Mendoza went to the Surf City
Internet Café in Balibago, Sta. Rosa, Laguna. As Mendoza was
leaving the establishment, he was confronted by Amular and Ducay
who engaged him in a heated argument regarding their work in the
shearing line, particularly Mendoza's report to Avelino S. De Leon, Jr.
(De Leon), Technol's Production Control and Delivery (PCD) assistant
supervisor, about Amular's and Ducay's questionable behavior at
work. The heated argument resulted in a fistfight that required the
intervention of the barangay tanods in the area.
Upon learning of the incident, Technol's management sent to Amular
and Ducay a notice of preventive suspension/notice of discharge dated
May 18, 2002[5] advising them that their fistfight with Mendoza
violated Section 1-k of Technol's Human Resource Department (HRD)
Manual. The two were given forty-eight (48) hours to explain why no
disciplinary action should be taken against them for the incident. They
were placed under preventive suspension for thirty (30) days, from
May 19, 2002 to June 17, 2002 for Ducay, and May 21, 2002 to June
20, 2002 for Amular. Amular submitted a written statement on May
20, 2002.[6]
Thereafter, Amular received a notice dated June 8, 2002[7] informing
him that Technol management will conduct an administrative hearing
on June 14, 2002. He was also given two (2) days to respond in writing
to the statements attached to and supporting the notice. A day before
the hearing or on June 13, 2002, Amular filed a complaint for illegal
suspension/constructive dismissal with a prayer for separation pay,
backwages and several money claims, against Technol. Amular failed
to attend the administrative hearing. On July 4, 2002, Technol sent him
a notice of dismissal.[8]
Before the Labor Arbiter, Amular alleged that in the afternoon of April
16, 2002, while he and his co-employee Ducay were walking around
the shopping mall in Balibago, Sta. Rosa, Laguna, they "incidentally"
saw Mendoza with whom they wanted to discuss some personal
matters. When they approached Mendoza, the latter raised his voice
and asked what they wanted from him; Amular asked Mendoza what
the problem was because Mendoza appeared to be always angry at
him (Amular). Mendoza instead challenged Amular and Ducay to a
fistfight and then punched Amular who punched Mendoza in return.
Thereafter, a full-blown fistfight ensued until the barangay tanods in
the area pacified the three.
Amular further alleged that he was asked by his immediate supervisor
to submit a report on the incident, which he did on April 18, 2002.
[9]
 Subsequently, Amular, Mendoza and Ducay were called by Technol
management to talk to each other and to settle their differences; they
agreed and settled their misunderstanding.
THE COMPULSORY ARBITRATION DECISIONS
On November 18, 2003, Executive Labor Arbiter Salvador V. Reyes
rendered a decision[10] finding that Amular's preventive suspension and
subsequent dismissal were illegal. He ruled that Amular's preventive
suspension was based solely on unsubscribed written statements
executed by Mendoza, Rogelio R. Garces and Mary Ann Palma
(subscribed only on August 8, 2002) and that Mendoza, Amular and
Ducay had settled their differences even before Amular was placed
under preventive suspension. With respect to Amular's dismissal, the
Arbiter held that Technol failed to afford him procedural due process
since he was not able to present his side because he had filed a case
before the National Labor Relations Commission (NLRC) at the time he
was called to a hearing; Technol also failed to substantiate its
allegations against Amular; the fistfight occurred around 200 to 300
meters away from the work area and it happened after office hours.
Arbiter Reyes awarded Amular separation pay (since he did not want
to be reinstated), backwages, 13th month pay, service incentive leave
pay and attorney's fees in the total amount of P158,987.70.
Technol appealed to the NLRC. In its decision promulgated on March
30, 2005,[11] the NLRC affirmed the labor arbiter's ruling. It found that
Amular was unfairly treated and subjected to discrimination because
he was the only one served with the notice to explain and placed
under preventive suspension; his co-employee Ducay who was also
involved in the incident was not. Technol moved for reconsideration,
but the NLRC denied the motion in a resolution rendered on May 30,
2007.[12] Technol thereafter sought relief from the CA through a
petition for certiorari under Rule 65 of the Rules of Court.[13]
THE CA DECISION
In its decision promulgated on November 18, 2008, the CA found no
grave abuse of discretion on the part of the NLRC when it affirmed the
labor arbiter's ruling that Amular was illegally dismissed. While the
appellate court noted that Amular was dismissed on the ground of
serious misconduct, a just cause for employee dismissal under the
Labor Code,[14] it opined that Technol failed to comply with the
jurisprudential guidelines that misconduct warranting a dismissal: (1)
must be serious; (2) must relate to the performance of the employees
duties; and (3) must show that the employee has become unfit to
continue working for the employer.[15]
The appellate court pointed out that the mauling incident occurred
outside the company premises and after office hours; it did not in any
manner disrupt company operations nor pose a threat to the safety or
peace of mind of Technol workers; neither did it cause substantial
prejudice to the company. It explained that although it was not
condoning Amular's misconduct, it found that "the penalty of
dismissal imposed by Technol on Amular was too harsh and evidently
disproportionate to the act committed."[16] The CA denied the motion
for reconsideration Technol subsequently filed;[17] hence, the present
petition.[18]
THE PETITION
Technol posits that the CA gravely erred in ruling that Amular was
illegally dismissed, contending that Amular was discharged for
violation of Section 1-k of its HRD Manual which penalizes the
commission of a crime against a co-employee. It submits that Section
1-k of the HRD Manual is a reasonable company rule issued pursuant
to its management prerogative. It maintains that the case should have
been examined from the perspective of whether the company rule is
reasonable and not on the basis of where and when the act was
committed, or even whether it caused damage to the company. It
adds that the manual does not distinguish whether the crime was
committed inside or outside work premises or during or after office
hours. It insists that if the rule were otherwise, any employee who
wishes to harm a co-employee can just wait until the co-employee is
outside the company premises to inflict harm upon him, and later
argue that the crime was committed outside work premises and after
office hours. It submits that the matter assumes special and utmost
significance in this case because Amular inflicted physical injuries on a
supervisor. In any event, Technol argues that even if the misconduct
was committed outside company premises, the perpetrator can still be
disciplined as long as the offense was work-related, citing Oania v.
NLRC[19] and Tanala v. NLRC[20] in support of its position.
Technol bewails the CA's appreciation of the implication of Amular's
misconduct in the workplace, especially the court's observation that it
did not cause damage to the company because it did not disrupt
company operation, that it did not create a hostile environment inside
the company, and that the fight was "nipped in the bud by the timely
intervention of those who saw the incident."[21] Technol insists that it
had to order Amular's dismissal in order to uphold the integrity of the
company rules and to avoid the erosion of discipline among its
employees. Also, it disputes the CA's conclusion that the fact that
Amular's liability should be mitigated because the fight "was nipped in
the bud." It submits that Mendoza had already sustained grave injuries
when the mauling was stopped.
Further, Technol maintains that the CA gravely erred in going beyond
the issues submitted to it, since the NLRC decision only declared
Amular's dismissal illegal on the ground that he was the only one
subjected to disciplinary action and that the company merely relied on
the written statements of Amular's co-employees.
On the rejection by the CA of the statements of Amular's co-
employees regarding the incident, Technol contends that the
statements of the witnesses, together with Amular's admission,
constitute substantial evidence of guilt. It points out that the
statement of Mendoza on the matter submitted during the company
investigation and before the labor arbiter was not a "stand alone"
statement; Mendoza's statement was corroborated by the statements
of Rogelio R. Garces and Mary Ann Palma, verified under oath in the
reply[22] it submitted to the arbiter. The statements were all in their
handwriting, indicating that they were not pro forma or prepared on
command; a medical certificate[23] and a barangay report[24] were
likewise submitted.
Technol likewise disputes the NLRC's conclusion that Amular was
discriminated against and unfairly treated because he was the only
one preventively suspended after the mauling incident. It maintains
that from the records of the case and as admitted by Amular himself in
his position paper,[25] his co-employee Ducay was also preventively
suspended.[26] That Mendoza was not similarly placed under
preventive suspension was considered by Technol as an exercise of its
management prerogative, since the circumstances surrounding the
incident indicated the existence of a reasonable threat to the safety of
Amular's co-employees and that Mendoza appeared to be the victim
of Amular's and Ducay's assault.
THE CASE FOR AMULAR
In his Comment filed on August 12, 2009, [27] Amular asks that the
petition be dismissed for "utter lack of merit." He admits that the
mauling incident happened, but claims however that on April 18,
2002, the Technol's management called Mendoza, Ducay, and him to a
meeting, asked them to explain their sides and thereafter requested
them to settle their differences; without hesitation, they agreed to
settle and even shook hands afterwards. He was therefore surprised
that on May 18, 2002, he received a memorandum from Technol's
HRD charging him and his co-employee Ducay for the incident.
Without waiting for an explanation, Technol's management placed
him under preventive suspension, but not Ducay. Adding insult to
injury, when Amular followed up his case while on preventive
suspension, he was advised by the HRD manager to simply resign and
accept management's offer of P22,000.00, which offer was reiterated
during the mandatory conference before the labor arbiter.
Amular particularly laments that his employment was terminated
while the constructive dismissal case he filed against the company was
still pending. He posits that his employment was terminated first
before he was informed of the accusations leveled against him - an
indication of bad faith on the part of Technol.
Amular asks: if it were true that the mauling incident was a serious
offense under company policy, why did it take Technol a month to give
him notice to explain the mauling incident? He submits that the
memorandum asking him to explain was a mere afterthought; he was
dismissed without giving him the benefit to be informed of the true
nature of his offense, thus denying him his right to be heard.
Finally, Amular questions the propriety of the present petition
contending that it only raises questions of fact, in contravention of the
rule that only questions of law may be raised in a petition for review
on certiorari.[28] He points out that the findings of facts of the labor
tribunals and the CA are all the same and therefore must be given
respect, if not finality.[29]
THE RULING OF THE COURT
The Procedural Issue
We find no procedural impediment to the petition. An objective
reading of the petition reveals that Technol largely assails the
correctness of the conclusions drawn by the CA from the set of facts it
considered. The question therefore is one of law and not of fact, as we
ruled in Cucueco v. Court of Appeals.[30] Thus, while there is no dispute
that a fight occurred between Amular and Ducay, on the one hand,
and Mendoza, on the other, the CA concluded that although Amular
committed a misconduct, it failed to satisfy jurisprudential standards
to qualify as a just cause for dismissal - the conclusion that Technol
now challenges. We see no legal problem, too, in wading into the
factual records, as the tribunals below clearly failed to properly
consider the evidence on record. This is grave abuse of discretion on
the part of the labor tribunals that the CA failed to appreciate.
The Merits of the Case
The CA misappreciated the true nature of Amular's involvement in
the mauling incident. Although it acknowledged that Amular
committed a misconduct, it did not consider the misconduct as work-
related and reflective of Amular's unfitness to continue working for
Technol. The appellate court's benign treatment of Amular's offense
was based largely on its observation that the incident happened
outside the company premises and after working hours; did not cause
a disruption of work operations; and did not result in a hostile
environment in the company. Significantly, it did not condone
Amular's infraction, but it considered that Amular's dismissal was a
harsh penalty that is disproportionate with his offense. It found
support for this liberal view from the pronouncement of the Court
in Almira v. B.F. Goodrich Philippines, Inc.,[31] that "where a penalty less
punitive would suffice, whatever missteps may be committed by labor
ought not to be visited with a consequence so severe."
The record of the case, however, gives us a different picture.
Contrary to the CA's perception, we find a work-connection in
Amular's and Ducay's assault on Mendoza. As the CA itself noted,
[32]
 the underlying reason why Amular and Ducay confronted Mendoza
was to question him about his report to De Leon - Technol's PCD
assistant supervisor - regarding the duo's questionable work behavior.
The motivation behind the confrontation, as we see it, was rooted on
workplace dynamics as Mendoza, Amular and Ducay interacted with
one another in the performance of their duties.
The incident revealed a disturbing strain in Amular's and Ducay's
characters - the urge to get even for a perceived wrong done to them
and, judging from the circumstances, regardless of the place and time.
The incident could very well have happened inside company premises
had the two employees found time to confront Mendoza in the
workplace as they intimated in their written statements.[33] Having
been the subject of a negative report regarding his work must have
rankled on Amular that he resolved to do something about it; thus, he
confronted Mendoza.
From the records, Ducay appeared to have cooperated with Amular in
the violent confrontation with Mendoza. Ducay, however, resigned on
June 7, 2002 a week before the filing of the complaint.[34] Hence,
Technol did not act against him - a move that is within its prerogative
to make.
In an obvious effort to mitigate his involvement in the mauling
incident, Amular claimed in the administrative proceedings that while
he and Ducay were walking around the shopping mall in Balibago, Sta.
Rosa, Laguna, they "incidentally" saw their co-employee Mendoza
"with whom they wanted to clear some personal matters."[35] We find
this claim a clear distortion of what actually happened. Again, based
on their written statements,[36] Amular and Ducay purposely set out for
the Balibago commercial area on April 16, 2002 looking for Mendoza.
It was not an incidental or casual encounter. They sought Mendoza
out and confronted him regarding what they perceived as Mendoza's
negative attitude towards them or "pamamarako" as Mendoza
described it.[37] Considering the subject Amular and Ducay raised with
Mendoza, it is not surprising that they had a heated verbal exchange
(mostly between Amular and Mendoza) that deteriorated into a
fistcuff fight, with Mendoza at the losing end as he suffered injuries
from the blows he received.
Amular and Ducay point to Mendoza as the proximate cause of the
fight because he challenged them to a one-on-one (isa-isa lang) bout.
[38]
 Looking back at the reason why Amular and Ducay were at the mall
in the first place, this attributed causation hardly makes sense. To
reiterate, they were purposely there to confront Mendoza about their
work-related problem. They waited for him at the place where they
expected him to be. When Mendoza appeared, they accosted him and
put into motion the entire sorry incident.
Under these circumstances, Amular undoubtedly committed a
misconduct or exhibited improper behavior that constituted a valid
cause for his dismissal under the law[39] and jurisprudential standards.
[40]
 The circumstances of his misdeed, to our mind, rendered him unfit
to continue working for Technol; guilt is not diminished by his claim
that Technol's management called the three of them to a meeting, and
asked them to explain their sides and settle their differences, which
they did.[41] Mendoza significantly denied the alleged settlement,
maintaining that while they were summoned by De Leon after the
incident, he could not shake hands and settle with Amular and Ducay
since they did not even apologize or ask forgiveness for what they did.
[42]
 We do not find Mendoza's denial of Amular's claim unusual as
Mendoza would not have stood his ground in this case if a settlement
had previously been reached. That a meeting had taken place does not
appear disputed, but a settlement cannot be inferred simply because a
meeting took place.
Neither do we believe that Amular was discriminated against because
he was not the only one preventively suspended. As the CA itself
acknowledged, Ducay received his notice of preventive
suspension/notice of charge[43] on May 19, 2002 while Amular received
his on May 21, 2002. These notices informed them that they were
being preventively suspended for 30 days from May 19, 2002 to June
17, 2002 for Ducay, and May 21, 2002 for Amular.[44]
Thus, Amular was not illegally dismissed; he was dismissed for cause.
The Due Process Issue
The labor arbiter ruled that Technol failed to afford Amular procedural
due process, since he was not able to present his side regarding the
incident; at the time he was called to a hearing, he had already filed
the illegal dismissal complaint.[45] The NLRC, on the other hand, held
that the memorandum terminating Amular's employment was a mere
formality, an afterthought designed to evade company liability since
Amular had already filed an illegal dismissal case against Technol.[46]
We disagree with these conclusions. The notice of preventive
suspension/notice of discharge served on Amular and Ducay required
them to explain within forty-eight (48) hours why no disciplinary
action should be taken against them for their involvement in the
mauling incident.[47] Amular submitted two written statements: the
first received by the company on May 19, 2002[48] and the other
received on May 20, 2002.[49] On June 8, 2002, Technol management
sent Amular a memorandum informing him of an administrative
hearing on June 14, 2002 at 10:00 a.m., regarding the charges against
him.[50] At the bottom left hand corner of the memorandum, the
following notation appears: "accept the copy of notice but refused to
receive, he will study first." A day before the administrative hearing or
on June 13, 2002, Amular filed the complaint for illegal
suspension/dismissal[51] and did not appear at the administrative
hearing. On July 4, 2002, the company sent Amular a notice of
dismissal.[52]
What we see in the records belie Amular's claim of denial of
procedural due process. He chose not to present his side at the
administrative hearing. In fact, he avoided the investigation into the
charges against him by filing his illegal dismissal complaint ahead of
the scheduled investigation. Under these facts, he was given the
opportunity to be heard and he cannot now come to us protesting
that he was denied this opportunity. To belabor a point the Court has
repeatedly made in employee dismissal cases, the essence of due
process is simply an opportunity to be heard; it is the denial of this
opportunity that constitutes violation of due process of law.[53]
In view of all the foregoing, we find the petition meritorious.
WHEREFORE, premises considered, we hereby GRANT the petition.
The assailed decision and resolution of the Court of Appeals
are REVERSED and SET ASIDE. The complaint for illegal dismissal
is DISMISSED for lack of merit. Costs against respondent AMULAR.
SO ORDERED.
G.R. No. 169712               March 14, 2008
MA. WENELITA TIRAZONA, Petitioner,
vs.
COURT OF APPEALS, PHILIPPINE EDS-TECHNO SERVICE INC. (PET INC.)
AND/OR KEN KUBOTA, MAMORU ONO and JUNICHI
HIROSE, Respondents.
DECISION
CHICO-NAZARIO, J.:
Assailed in this Special Civil Action for Certiorari1 under Rule 65 of the
Rules of Court are the Decision2 and Resolution3 of the Court of
Appeals dated 24 May 2005 and 7 September 2005, respectively, in
CA-G.R. SP No. 85065. The appellate court’s Decision dismissed
petitioner Ma. Wenelita Tirazona’s Special Civil Action
for Certiorari and affirmed the Decision4 dated 30 January 2004 of the
National Labor Relations Commission (NLRC) in NLRC CA No. 034872-
03, which ruled that petitioner’s dismissal from employment was legal;
and its Resolution which denied petitioner’s Motion for
Reconsideration.
The factual and procedural antecedents of the case are as follows:
Private respondent Philippine EDS-Techno Services Inc. (PET) is a
corporation duly registered under Philippine laws and is engaged in
the business of designing automotive wiring harnesses for automobile
manufacturers. Private respondents Ken Kubota, Mamoru Ono and
Junichi Hirose are all Japanese nationals, the first being the President
and the latter two being the directors of PET.
On 21 July 1999, PET employed Ma. Wenelita S. Tirazona (Tirazona) as
Administrative Manager. Being the top-ranking Filipino Manager, she
acted as the liaison between the Japanese management and the
Filipino staff.
On 15 January 2002, Fe Balonzo, a rank-and-file employee, wrote a
letter5 that was addressed to nobody in particular, but was later
acquired by PET management. In her letter, Balonzo complained that
Tirazona humiliated her while she was reporting back to work after
recuperating from a bout of tuberculosis. Balonzo explained that
Tirazona insinuated, in a manner loud enough to be heard from the
outside, that Balonzo still had the disease. This allegedly occurred
despite Balonzo’s possession of a medical clearance that proved her
fitness to return to work. Balonzo thus requested that the necessary
action be undertaken to address the said incident.
Upon receiving the letter, the PET management directed Tirazona to
file her comment. Tirazona replied accordingly in a letter 6 wherein she
denied the accusations against her. Tirazona stated that her only
intention was to orient Balonzo about the latter’s rights as a sick
employee, i.e., that under the law, if the latter planned to resign, the
company can give her separation pay. Tirazona likewise asked for an
independent investigation and threatened to file a libel case against
Balonzo for allegedly trying to destroy her reputation and credibility.
After weighing the situation, PET director Ono sent a memorandum to
Tirazona, which reads:
February 8, 2002
To: Mrs. W. Tirazona
Re: Letter-Complaint of Fe S. Balonzo
This is to advise you that Management is satisfied
that you did not intend to humiliate or embarrass
Ms. Balonzo during the incident on January 14,
2002. It also appreciates the concern you profess
for the welfare of PET employees.
Nonetheless, Management finds your handling of
the situation less than ideal. Considering the
sensitive nature of the issue, a little more
circumspection could have readily avoided the
incident which it cannot be denied caused
unnecessary discomfort and hurt feelings to Ms.
Balonzo. Certainly, you could have discussed the
matter in private and allowed her to first deliver
her piece rather than pre-empt her declaration. As
it turned out, your assumption (that Ms. Balonzo
would request for a leave extension) was in fact
wrong and she had a medical certificate attesting
her fitness to return to work.
Management therefore would like to remind you
of the high expectations of your position.
Management considers this matter closed, and
finds it appropriate to convey to you that it does
not view with favor your notice to file legal action.
Management believes that you share the idea that
issues regarding employee relations are best
threshed out within the Company. Resorting to
legal action is unlikely to solve but on the contrary
would only exacerbate such problems.
We trust that, after emotions have calmed down,
you would still see it that way.
(Sgd.)
Mamoru Ono
Director7
On 6 March 2002, Tirazona’s counsels sent demand letters8 to PET’s
business address, directed separately to Ono and Balonzo. The letter
to Ono states:
February 27, 2002
MR. MAMORU ONO
Director
PET, Inc.
20/F 6788 Ayala Avenue
Oledan Square, Makati City
Dear Mr. Ono:
We are writing in [sic] behalf of our client, Ms. MA.
WENELITA S. TIRAZONA, Administrative Manager
of your corporation.
We regret that on February 8, 2002, you delivered
to our client a letter containing among others, your
conclusion that Ms. Tirazona was guilty of the
unfounded and baseless charges presented by Ms.
Fe Balonzo in her letter-complaint dated January
15, 2002. You may please recall that in Ms.
Tirazona’s letter to Mr. Junichi Hirose, she
presented point by point, her side on the
allegations made by the complainant. In the same
letter, Ms. Tirazona requested for an independent
investigation of the case in order to thresh out all
issues, ferret out the truth and give her the
opportunity to be heard and confront her accuser.
These were all denied our client.
As a result of the foregoing, Ms. Tirazona’s
constitutional right to due process was violated
and judgment was rendered by you on mere
allegations expressed in a letter-complaint to an
unknown addressee.
Considering the position and stature of Mrs.
Tirazona in the community and business circles, we
are constrained to formally demand payment of
P2,000,000.00 in damages, injured feelings, serious
anxiety and besmirched reputation that she is now
suffering.
We are giving you five (5) days from receipt hereof
to make favorable response, otherwise, much to
our regret, we will institute legal procedures to
protect our client’s interests.
Please give this matter the attention it deserves.
Very truly yours,
PRINCIPE, VILLANO, VILLACORTA & CLEMENTE
By:
(Sgd.)
PEDRO S. PRINCIPE
(Sgd.)
GLICERIO E. VILLANO
The letter sent to Balonzo likewise sought the same amount of
damages for her allegedly baseless and unfounded accusations against
Tirazona.
Because of Tirazona’s obstinate demand for compensation, PET sent
her a Notice of Charge,9 which informed her that they were
considering her termination from employment by reason of serious
misconduct and breach of trust. According to the management, they
found her letter libelous, since it falsely accused the company of
finding her guilty of the charges of Balonzo and depriving her of due
process.
On 26 March 2002, Tirazona explained in a letter 10 that her counsels’
demand letter was brought about by the denial of her repeated
requests for reinvestigation of the Balonzo incident, and that the same
was personally addressed to Mamoru Ono and not to the company.
She also reiterated her request for an investigation and/or an open
hearing to be conducted on the matter.
The PET management replied11 that the Balonzo incident was already
deemed a closed matter, and that the only issue for consideration was
Tirazona’s "ill-advised response to the Management’s disposition to
the Fe Balonzo incident," for which an administrative hearing was
scheduled on 4 April 2002.
On 3 April 2002, Tirazona submitted a written demand 12 to PET that
the Balonzo incident be included in the scheduled hearing. She further
stated that since the management had already prejudged her case,
she would only participate in the proceedings if the investigating panel
would be composed of three employees, one each from the rank-and-
file, supervisory, and managerial levels, plus a representative from the
Department of Labor and Employment (DOLE).
The PET management rejected Tirazona’s demands in a letter 13 and
informed her that the hearing was reset to 10 April 2002, which would
be presided by PET’s external counsel.
On 10 April 2002, Tirazona and her counsel did not appear at the
administrative hearing. The PET management informed them through
a memorandum14 dated 12 April 2002 that the hearing was carried out
despite their absence. Nevertheless, Tirazona was granted a final
chance to submit a supplemental written explanation or additional
documents to substantiate her claims.
Tirazona’s written explanation15 dated 17 April 2002 merely reiterated,
without further details, her previous claims, to wit: that Balonzo’s
charges were unfounded and baseless; that she had been denied due
process; and that she would not submit herself to an investigating
panel that had already prejudged her case. Tirazona also stated that
her claim for damages would be justified at the proper forum, and that
she admitted to reading a confidential letter addressed to PET
directors Ono and Fukuoka, containing the legal opinion of PET’s
counsel regarding her case.
After finding the explanations unsatisfactory, PET sent Tirazona a
Notice of Termination,16 which found her guilty of serious misconduct
and breach of trust because of her demand against the company and
her invasion of PET’s right to privileged communication.
Tirazona then instituted with the NLRC a complaint for illegal
dismissal, non-payment of salaries, and damages against PET,
docketed as NLRC-CA No. 034872-03.
In the Decision17 dated 22 January 2003, Labor Arbiter Veneranda C.
Guerrero ruled in favor of Tirazona, holding that the latter’s
termination from employment was illegal.
The Arbiter declared that there was no breach of trust when Tirazona
sent the demand letter, as the same was against Ono in his personal
capacity, not against the company. The decision also ruled that PET
failed to discharge the burden of proving that the alleged breach of
trust was fraudulent and willful, and that the company was careless in
handling its communications. The Arbiter further stated that Tirazona
was deprived of her right to due process when she was denied a fair
hearing.
On appeal by PET, the NLRC reversed the rulings of the Labor Arbiter
in a Decision dated 30 January 2004, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered SETTING ASIDE the
Decision of the Labor Arbiter dated January 27, 2003 and a new one is
entered DISMISSING the complaint for lack of merit.18
Contrary to the Labor Arbiter’s findings, the NLRC concluded that
Tirazona’s termination from employment was in accordance with law.
It ruled that Tirazona’s demand letter addressed to Ono constituted a
just cause for dismissal, as the same was "an openly hostile act" by a
high-ranking managerial employee against the company. 19 The NLRC
likewise found that PET complied with the notice and hearing
requirements of due process, inasmuch as Tirazona’s demand for a
special panel was without any legal basis. Furthermore, petitioner
breached the company’s trust when she read the confidential legal
opinion of PET’s counsel without permission.
The Motion for Reconsideration filed by Tirazona was denied by the
NLRC in a Resolution dated 31 May 2004, the dispositive portion of
which reads:
WHEREFORE, in view of the foregoing, Complainant-Appellee’s Motion
for Reconsideration is hereby DISMISSED for lack of merit and our
Decision dated 30 January 2004 is thus AFFIRMED with finality.20
Aggrieved, Tirazona instituted with the Court of Appeals a Special Civil
Action for Certiorari under Rule 65, alleging grave abuse of discretion
on the part of the NLRC, docketed as CA-G.R. SP No. 85065.
In a Decision dated 24 May 2005, the appellate court affirmed the
NLRC and ruled thus:
WHEREFORE, in consideration of the foregoing, the petition is perforce
dismissed.21
Her Motion for Reconsideration having been denied by the appellate
court in a Resolution dated 7 September 2005, Tirazona now impugns
before this Court the Court of Appeals Decision dated 24 May 2005,
raising the following issues:
I.
WHETHER THERE WAS BREACH OF TRUST ON THE
PART OF PETITIONER TIRAZONA WHEN SHE
WROTE THE TWO MILLION PESO DEMAND LETTER
FOR DAMAGES, WARRANTING HER DISMISSAL
FROM EMPLOYMENT.
II.
WHETHER DUE PROCESS WAS SUFFICIENTLY AND
FAITHFULLY OBSERVED BY RESPONDENTS IN THE
DISMISSAL OF PETITIONER TIRAZONA FROM
EMPLOYMENT.
In essence, the issue that has been brought before this Court for
consideration is whether or not Tirazona was legally dismissed from
employment.
Prefatorily, the Court notes that Tirazona elevated her case to this
Court via a Petition for Certiorari under Rule 65 of the Rules of Court.
The appropriate remedy would have been for Tirazona to file an
appeal through a Petition for Review on Certiorari under Rule 45.
For a Petition for Certiorari under Rule 65 of the Rules of Court to
prosper, the following requisites must be present: (1) the writ is
directed against a tribunal, a board or an officer exercising judicial or
quasi-judicial functions: (2) such tribunal, board or officer has acted
without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal
or any plain, speedy and adequate remedy in the ordinary course of
law.22
There is grave abuse of discretion "when there is a capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction,
such as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and it must be so
patent and gross so as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in
contemplation of law."23
The Petition for Certiorari shall be filed not later than sixty (60) days
from notice of the judgment, order or resolution. In case a motion for
reconsideration is timely filed, the sixty (60)-day period shall be
counted from notice of the denial of the said motion.24
On the other hand, Rule 45 of the Rules of Court pertains to a Petition
for Review on Certiorari whereby "a party desiring to appeal
by certiorari from a judgment or final order or resolution of the Court
of Appeals x x x may file with the Supreme Court a verified petition for
review on certiorari. The petition shall raise only questions of law
which must be distinctly set forth."25
The petition shall be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or of the denial
of the petitioner’s motion for new trial or reconsideration filed in due
time after notice of the judgment.26
In the present case, the assailed Decision is the dismissal by the Court
of Appeals of Tirazona’s Petition for Certiorari under Rule 65. Said
Decision partakes of the nature of a judgment or final order, thus, is
reviewable only through an appeal by certiorari under Rule 45.
As aptly declared by the Court in National Irrigation Administration v.
Court of Appeals27:
[s]ince the Court of Appeals had jurisdiction over the petition under
Rule 65, any alleged errors committed by it in the exercise of its
jurisdiction would be errors of judgment which are reviewable by
timely appeal and not by a special civil action of certiorari . If the
aggrieved party fails to do so within the reglementary period, and the
decision accordingly becomes final and executory, he cannot avail
himself of the writ of certiorari, his predicament being the effect of his
deliberate inaction. [Emphasis ours.]
Even just a cursory glance at the issues raised by Tirazona before this
Court readily reveals that these pertain to purported errors of
judgment committed by the appellate court in its appreciation of the
allegations, evidence, and arguments presented by the parties. There
is no question here of the Court of Appeals acting on Tirazona’s
Petition in CA-G.R. No. 85065  without or in excess of jurisdiction or
with grave abuse of discretion amounting to lack or excess of
jurisdiction.
A review of the rollo of the Petition at bar divulges even further that
Tirazona’s resort to a wrong remedy was not an innocent mistake but
a deliberate choice.
On 5 October 2005, Tirazona filed with this Court a Petition for
Extension of Time to File a Petition for Review on Certiorari.28 Tirazona
stated therein that she received the notice of the Court of Appeals
Resolution denying her Motion for Reconsideration on 23 September
2005. Since she only had fifteen (15) days after the said date to file a
Petition for Review on Certiorari, or until 8 October 2005, Tirazona
prayed for an extension of thirty (30) days, with her counsel citing
extreme pressures of work.
In a Resolution29 dated 19 October 2005, the Court granted Tirazona’s
Motion for Extension. The extended period was to end on 7 November
2005. However, Tirazona failed to file a Petition for Review
on Certiorari within the said period. Instead, she filed the present
Petition for Certiorari on 5 December 2005, seventy-three (73) days
after notice of the Court of Appeals Resolution denying her Motion for
Reconsideration.
From the foregoing, it is fairly obvious that Tirazona was aware that
she was supposed to file an appeal through a Petition for Review
on Certiorari under Rule 45. That she filed the instant Petition
for Certiorari under Rule 65 and only after an inexplicably long period
of time leads to the inescapable conclusion that the same was merely
an afterthought, nothing more than a desperate attempt to revive a
lost appeal.
The special civil action of certiorari under Rule 65 is an independent
action that cannot be availed of as a substitute for the lost remedy of
an ordinary appeal, including that under Rule 45, especially if such loss
or lapse was occasioned by one’s own neglect or error in the choice of
remedies.30 It also bears to stress the well-settled principle that the
remedies of appeal and certiorari are mutually exclusive and not
alternative or successive. Under Rule 56, Sec. 5(f) of the Revised Rules
of Court, a wrong or inappropriate mode of appeal merits an outright
dismissal.31
Tirazona, in her Reply32 before this Court, even admits that although
the instant Petition is one of special civil action of certiorari under Rule
65, her petition is in reality an appeal under Rule 45 as her petition
raises pure questions of law. Tirazona herself acknowledges the formal
defects of her own Petition and attributes the same to the haste and
inadvertence of her former counsel, who allegedly prepared the
instant Petition without her participation.33 She thus urges this Court
to suspend the application of its own rules on grounds of equity and
substantial justice, considering that it is her employment that is at
stake in this case.
In this regard, it needs to be emphasized that before the Court may
treat the present petition as having been filed under Rule 45, the same
must comply with the reglementary period for filing an appeal. This
requirement is not only mandatory but also jurisdictional such that
failure to do so renders the assailed decision final and executory, and
deprives this Court of jurisdiction to alter the final judgment, much
less to entertain the appeal.34 Since the instant petition was filed after
the lapse of the extended period for filing an appeal, the same should
be dismissed outright.
Nevertheless, the Court finds it essential that we discuss the case on
its merits, bearing in mind that the paramount consideration in this
case is an employee’s right to security of tenure, and in order to
provide Tirazona the amplest opportunity to know how the Court
arrived at a proper and just determination of her case.
Even if the Court were to ignore the conspicuous procedural defects
committed by Tirazona and treat her Petition as an appeal under Rule
45, it still finds that the Petition must be denied for lack of merit.
Petitioner contends that, contrary to the findings of the Court of
Appeals, her dismissal from employment was illegal for having lacked
both a legal basis and the observance of due process.
In employee termination cases, the well-entrenched policy is that no
worker shall be dismissed except for a just or authorized cause
provided by law and after due process. Clearly, dismissals have two
facets: first, the legality of the act of dismissal, which constitutes
substantive due process; and second, the legality in the manner of
dismissal, which constitutes procedural due process.35
Under Article 282(c)36 of the Labor Code, loss of trust and confidence is
one of the just causes for dismissing an employee. It is an established
principle that loss of confidence must be premised on the fact that the
employee concerned holds a position of trust and confidence. This
situation obtains where a person is entrusted with confidence on
delicate matters, such as care and protection, handling or custody 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. Besides, for loss of confidence to be a valid ground for
dismissal, such loss of confidence must arise from particular proven
facts.37
Tirazona claims that her demand letter was merely an expression of
indignation by a disgruntled employee against a director, not against
the company and, by itself, cannot constitute a breach of trust and
confidence. The company’s notice of charge allegedly insinuated
Tirazona’s guilt in the Balonzo incident; hence, the need to defend
herself. Tirazona likewise asserts that she is an ordinary rank-and-file
employee as she is not vested with the powers and prerogatives
stated in Article 212(m)38 of the Labor Code. As such, her alleged
hostility towards her co-workers and the PET management is not a
violation of trust and confidence that would warrant her termination
from employment.
At the outset, the Court notes that the issues set forth above are
factual in nature. As the Court is asked to consider the instant Petition
as an appeal under Rule 45, then only pure questions of law will be
entertained.39
A question of law arises when there is doubt as to what the law is on a
certain state of facts, while there is a question of fact when the doubt
arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law provides on
the given set of circumstances. Once it is clear that the issue invites a
review of the evidence presented, the question posed is one of fact.40
In the instant case, Tirazona would have the Court examine the actual
wording, tenor, and contextual background of both her demand letter
and the PET’s notice of charge against her. Similarly, the
determination of whether Tirazona is a managerial or rank-and-file
employee would require the Court to review the evidence that
pertains to Tirazona’s duties and obligations in the company. Also, in
order to ascertain whether the breach of trust was clearly established
against Tirazona, the Court will have to sift through and evaluate the
respective evidence of the parties as well. These tasks are not for the
Court to accomplish.
The Court is not a trier of facts. It is not the function of this Court to
analyze or weigh evidence all over again, unless there is a showing
that the findings of the lower court are totally devoid of support or are
glaringly erroneous as to constitute palpable error or grave abuse of
discretion.41
In its assailed decision, the Court of Appeals affirmed the ruling of the
NLRC and adopted as its own the latter’s factual findings. Long
established is the doctrine that findings of fact of quasi-judicial bodies
like the NLRC are accorded with respect, even finality, if supported by
substantial evidence. When passed upon and upheld by the Court of
Appeals, they are binding and conclusive upon the Supreme Court and
will not normally be disturbed.42 Though this doctrine is not without
exceptions,43 the Court finds that none are applicable to the present
case.
Thus, on the matter of Tirazona’s demand letter, this Court is bound by
the following findings of the Court of Appeals:
Clearly, petitioner Tirazona’s letter to respondent Ono dated 27
February 2002, as DIRECTOR of PET was addressed to an officer and
representative of the corporation. The accusations in the aforesaid
demand letter were directed against respondent Ono’s official act as a
representative of respondent PET. Suffice it to stress, an attack on the
integrity of his (Ono) corporate act is necessarily aimed at respondent
PET because a corporation can only act through its officers, agents and
representatives.
xxxx
A thorough and judicious examination of the facts and evidence
obtaining in the instant case as could be found in the records, would
clearly show that petitioner Tirazona has absolutely no basis for a P2
million demand, coupled with lawsuit if the same was not paid within
the five (5) days [sic] period. Her justification for the demand of
money is that she was allegedly found by the respondent PET through
respondent Ono guilty of the charges filed by Ms. Balonzo. As the
records would indubitably show, petitioner Tirazona was never
charged of any offense with respect to the Fe Balonzo’s [sic] incident.
She was never issued a Notice of Charge, much less a Notice of
Disciplinary Action. What was issued to her by respondent Ono in his
letter x x x was a gentle and sound reminder to be more circumspect
in handling the incident or situation like this [sic]. As fully evidenced in
the last paragraph of the said letter, it states that:
xxxx
Management considers this matter closed, and finds it appropriate to
convey to you that it does not view with favor your notice to file legal
action. Management believes that you share the idea that issues
regarding employee relations are best threshed out within the
Company. Resorting to legal action is unlikely to solve but on the
contrary would only exacerbate such problems.
But for reasons only known to petitioner Tirazona, she treated
respondent Ono’s letter as an affront to her honor and dignity. This,
instead of seeking a dialogue with respondent PET on her felt
grievance, petitioner Tirazona through her lawyer sent the questioned
demand letter to respondent Ono. Suffice it to state, this act of
petitioner bared animosity in the company and was definitely not a
proper response of a top level manager like her over a trivial matter.
xxxx
In fine, the confluence of events and circumstances surrounding the
petitioner Tirazona’s actions or omissions affecting her employer’s
rights and interest, would undoubtedly show that she is no longer
worthy of being a recipient of the trust and confidence of her
employer. x x x.44
Likewise conclusive upon this Court is the Court of Appeals’
pronouncement that Tirazona is in fact a managerial employee, to wit:
The records would indubitably show that it is only now that petitioner
Tirazona is asserting that she is not a managerial employee of
respondent PET. From the very start, her dismissal was premised on
the fact that she is a managerial and confidential employee, and she
never denied that fact. It was never an issue at all before the Labor
Arbiter and the public respondent NLRC. Therefore, she is estopped to
claim now that she is [just a] rank and file employee of respondent
PET, especially that she herself admitted in her pleading that she is a
managerial employee:
xxxx
If the respondent Company has to protect Respondent Mamoru Ono,
the Complainant [petitioner] has also the right to be protected from
the baseless accusations of a Rank and File Employee for she
[petitioner] is a part of the management like Mr. Mamoru Ono" (par.
5, Complainant’s Rejoinder [to Respondent’s Reply] dated 2
September 2002 (note: unattached to the petitioner [sic]) [attached as
Annex "1" hereof]. (p. 263, Rollo).45
Tirazona next argues that she was deprived of procedural due process
as she was neither served with two written notices, nor was she
afforded a hearing with her participation prior to her dismissal.
Tirazona’s arguments are baseless.
Procedural due process is simply defined as giving an opportunity to
be heard before judgment is rendered. The twin requirements of
notice and hearing constitute the essential elements of due process,
and neither of those elements can be eliminated without running
afoul of the constitutional guaranty.46
The employer must furnish the employee two written notices before
termination may be effected. The first notice apprises the employee of
the particular acts or omissions for which his dismissal is sought, while
the second notice informs the employee of the employer’s decision to
dismiss him.47
It is fairly obvious in this case that Tirazona was served with the
required twin notices. The first was embodied in the Notice of Charge
dated 25 March 2002 where PET informed Tirazona that it was
considering her termination from employment and required her to
submit a written explanation. In the said Notice, PET apprised Tirazona
of the ground upon which it was considering her dismissal: (1) her
letter that contained false accusations against the company, and (2)
her demand for two million pesos in damages, with a threat of a
lawsuit if the said amount was not paid. The Notice of Termination
dated 22 April 2002 given to Tirazona constitutes the second notice
whereby the company informed her that it found her guilty of breach
of trust warranting her dismissal from service.
Equally bereft of merit is Tirazona’s allegation that she was not given
the benefit of a fair hearing before she was dismissed.
It needs to be pointed out that it was Tirazona herself and her counsel
who declined to take part in the administrative hearing set by PET 10
April 2002. Tirazona rejected the company’s appointment of its
external counsel as the investigating panel’s presiding officer, because
her own demands on the panel’s composition were denied. As
correctly held by the NLRC and the Court of Appeals, Tirazona’s stance
is without any legal basis. On the contrary, this Court’s ruling in Foster
Parents Plan International/Bicol v. Demetriou48 is controlling:
The right to dismiss or otherwise impose disciplinary sanctions upon
an employee for just and valid cause, pertains in the first place to the
employer, as well as the authority to determine the existence of said
cause in accordance with the norms of due process. In the very nature
of things, any investigation by the employer of any alleged cause for
disciplinary punishment of an employee will have to be conducted by
the employer himself or his duly designated representative; and the
investigation cannot be thwarted or nullified by arguing that it is the
employer who is accuser, prosecutor and judge at the same time. x x
x Of course, the decision of the employer meting out sanctions against
an employee and the evidentiary and procedural bases thereof may
subsequently be passed upon by the corresponding labor arbiter (and
the NLRC on appeal) upon the filing by the aggrieved employee of the
appropriate complaint. [Emphasis ours.]1avvphi1
This Court has held that there is no violation of due process even if no
hearing was conducted, where the party was given a chance to explain
his side of the controversy. What is frowned upon is the denial of the
opportunity to be heard.49 Tirazona in this case has been afforded a
number of opportunities to defend her actions. Even when Tirazona
failed to attend the scheduled hearing, PET still informed Tirazona
about what happened therein and gave her the chance to submit a
supplemental written explanation. Only when Tirazona again failed to
comply with the same did PET terminate her employment.
As a final plea for her case, Tirazona asserts that her dismissal from
employment was too harsh and arbitrary a penalty to mete out for
whatever violation that she has committed, if indeed there was one.
Tirazona ought to bear in mind this Court’s pronouncement in Metro
Drug Corporation v. NLRC50 that:
When an employee accepts a promotion to a managerial position or to
an office requiring full trust and confidence, she gives up some of the
rigid guaranties available to ordinary workers. Infractions which if
committed by others would be overlooked or condoned or penalties
mitigated may be visited with more severe disciplinary action. A
company’s resort to acts of self-defense would be more easily
justified. x x x.
Tirazona, in this case, has given PET more than enough reasons to
distrust her. The arrogance and hostility she has shown towards the
company and her stubborn, uncompromising stance in almost all
instances justify the company’s termination of her employment.
Moreover, Tirazona’s reading of what was supposed to be a
confidential letter between the counsel and directors of the PET, even
if it concerns her, only further supports her employer’s view that she
cannot be trusted. In fine, the Court cannot fault the actions of PET in
dismissing petitioner.
WHEREFORE, premises considered, the instant petition is hereby
DENIED for lack of merit and the Decision of the Court of Appeals
dated 24 May 2005 is hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
G.R. No. 176800               September 5, 2011
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 certiorari1 seeking the
nullification of the decision2 and the resolution3 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 ₱6,493,000.00, 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 ₱1.8M from which the bank derived
an income of ₱142,000.00. 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 ₱392,000.00, moral and exemplary damages of ₱8M,
and ₱550,000.00 — 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, 200511 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 (₱142,000.00). 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 petition21 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.1âwphi1 Lopez did not raise it
before the CA; in fact, he challenged the NLRC decision of October 11,
200523 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 the bank’s direct order left Lopez without any authority to clear the
property.26 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
As branch manager, Lopez clearly occupies a "position of trust." His service.
hold on his position and his stay in the service depend on the
employer’s trust and confidence in him and on his managerial The due process issue
services.27 According to the bank, Lopez betrayed this trust and
confidence when he issued the subject POs without authority and As the NLRC and the CA did, we find Lopez to have been afforded due
despite the express directive to put the client’s application on hold. In process when he was dismissed. He was given the required notices.
response, Lopez insists that he had sufficient authority to act as he did, More importantly, he was actually given the opportunity to be heard;
as this authority is inherent in his position as bank manager. He points when he moved for reconsideration of the bank’s decision to
to his record in the past when he issued POs which were honored and terminate his employment, it scheduled a hearing where he appeared
paid by the bank and which constituted the arbiter’s "overwhelming together with his lawyer and a military man. This was an opportunity
evidence"28 in support of the finding that "complainant’s dismissal to be heard that the law recognizes.
from work was without just cause, hence, illegal."29
In fine, we find no merit in the petition.
We disagree with Lopez’s contention. Despite evidence of his past
exercise of authority (as found by the labor arbiter), we cannot
WHEREFORE, premises considered, we hereby DENY the petition for
disregard evidence showing that in August 2003, the bank specifically
lack of merit. The assailed decision and resolution of the Court of
instructed Lopez not to proceed with the Hertz loan application
Appeals are AFFIRMED. Costs against petitioner Elmer Lopez.
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 SO ORDERED.
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.1avvphil

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