Easycall Communications Phils., Inc vs.

Edward King

I. Facts:
Petitioner Easycall Communications Phils., Inc was a domestic corporation engaged in the
business of message handling. On May 1992, petitioner, through its general manager, Roberto
Malonzo, hired the services of respondent as assistant to the general manager. He was given the
responsibility of ensuring that the expansion plans outside Metro Manila and Metro Cebu were
achieved as soon as possible.
In an Memo dated Aug 14, Mr. RT Casas, respondent’s immediate superior, recommended
his promotion to assistant vice president for nationwide expansion. On December 22, respondent
was appointed to the even higher position. His promotion was based his performance for the
preceding 6 months of his appointment. As VP, he became responsible for the sales and rentals
of pager units in the expansion areas. He also coordinated with the dealers.
Sometime in March 1993, Malonzo reviewed King’s sales performance. He also scrutinized
status of petitioner’s Nationwide Expansion program (NEP) which was under King’s
responsibility. The management then confronted respondent. On April 1993, Rockwell Gohu,
petitioner’s deputy manager, talked to respondent and told him that Malonzo wanted
respondent’s resignation. He then wrote a letter confronting Malonzo.
On April 19 1993, he received a termination letter from Malonzo effective April 30 with the
reason that the management is no longer confident with him for the position he’s occupying.
Aggrieved, respondent filed a complaint for illegal dismissal with NLRC. LA found the
termination ground for loss of confidence valid. On appeal, NLRC affirmed that decision of LA
but ordered petitioner to indemnify respondent for lack of due process. MR dismissed. Filed
certiorari before CA.CA held NLRC lacked jurisdiction and that there was illegal dismissal.
Petitioner filed MR, denied. Hence, this petition.
II. Issue/s:
1. Whether or not NLRC had jurisdiction over the case of respondent’s illegal dismissal
2. Whether or not respondent Edward King was validly dismissed
III. Ruling:
SC ruled first with jurisdiction as it is decisive. If NLRC has no jurisdiction, then it would
be unnecessary to talk about the validity of dismissal.
Petitioner contends that it is SEC, and not the NLRC, who has jurisdiction since respondent
was a “corporate officer.” Is respondent a corporate officer? Here, petitioner failed to prove that
respondent was a corporate officer.
“Corporate officers” are those officers who are given that character under the Corporation
Code. Under Section 25 thereof, the “corporate officers” are the president, secretary,
treasurer and such other officers as may be provided by the by-laws.
Since petitioner failed to satisfy burden of proof that was required of it, we cannot
sanction its claim that respondent was a corporate officer whose removal was cognizable by the
SEC under PD 902-A and not by NLRC.
 An “office” is created by the charter of the corporation and the officer is elected by the
directors and stockholders. On the other hand, employee occupies no office and generally
is employed not by the action of the directors or stockholders but by the managing officer
of the corporation who also determines compensation of employee.
Respondent was appointed VP by Malonzo, petitioner’s manager, not by the board of
directors. It was also Malozo who determined respondent’s compensation package. Thus,
respondent was an employee, not a corporate officer. The CA was correct in ruling that
jurisdiction over the case was properly with NLRC, not with SEC.
Validity of the Dismissal
While loss of confidence is a valid ground for dismissing the employee, it should not be
simulated. It must not be indiscriminately used as a shield by the employer against a claim that
the dismissal was arbitrary.
Loss of trust and confidence must be based on a willful breach and founded on cleary
established facts. A breach is willful if it is done intentionally, knowingly and purposely,
without justifiable excuse as opposed to carelessness, thoughtlessness and heedlessness.
It cannot be from mere carelessness.
In this case, LA’s finding, was that sales record of respondent at the time he spent work
in the field were clear indications of complainant’s inefficiency and/or negligence. Inefficiency
implies incompetence, ignorance and carelessness. They were not sufficient to claim a loss of
confidence as a ground for dismissal.
Moreover, the promotion of the employee negates the employer’s claim that it has lost its
trust and confidence on the employee. The lack of cause in respondent’s dismissal was
aggravated by the absence of due process. The twin requirements of notice and hearing constitute
the essential elements of due process.
The law requires the employer to furnish the employee sought to be dismissed 2 written
notices before termination can be legally effected:
1. Written notice apprising the employee of the particular acts for which his dismissal is
sought to afford him an opportunity to be heard and defend himself
2. Subsequent notice informing employer’s decision.
The procedure above is MANDATORY and its absence taints the dismissal with
illegality. In the case at bar, respondent was only served with 1 notice – notice of his termination.
Petition is DENIED. CA is affirmed.