PAST OFFENSES: CENTURY CANNING CORPORATION, RICARDO
PO,JR AND AMANCIO RONQUILLO VS. VICENTE RANDY RAMIL; GR
NO. 171630, AUGUST 8, 2010
FACTS:
Petitioner Century Canning Corporation, a company engaged in canned food
manufacturing, employed respondent Vicente Randy Ramil in August 1993
as technical specialist. Prior to his dismissal his job included the preparation
of the purchase requisition (PR) forms and capital expenditure (CAPEX)
forms, as well as the coordination with the purchasing department regarding
technical inquiries on needed products and services of petitioner's different
departments.
On March 3, 1999, respondent prepared a CAPEX form for external fax
modems and terminal server, per order of Technical Operations Manager
Jaime Garcia, Jr. and endorsed it to Marivic Villanueva, Secretary of
Executive Vice-President Ricardo T. Po, for the latter's signature. The
CAPEX form, however, did not have the complete details and some required
signatures. The following day, with the form apparently signed by Po,
respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main
Office. Paz processed the paper and found that some details in the CAPEX
form were left blank. She also doubted the genuineness of the signature of
Po, as appearing in the form. Paz then transmitted the CAPEX form to
Purchasing Manager Virgie Garcia and informed her of the questionable
signature of Po. Consequently, the request for the equipment was put on
hold due to Po's forged signature. However, due to the urgency of
purchasing badly needed equipment, respondent was ordered to make
another CAPEX form, which was immediately transmitted to the Purchasing
Department.
Suspecting him to have committed forgery, respondent was asked to explain
in writing the events surrounding the incident. He vehemently denied the
alleged forgery. Respondent was, thereafter, suspended on April 21, 1999.
Subsequently, he received a Notice of Termination on May 20, 1999, for loss
of trust and confidence.
Respondent filed a Complaint for illegal dismissal, non-payment of overtime
pay, separation pay, moral and exemplary damages and attorney's fees
against petitioner and its officers before the Labor Arbiter. LA Potenciano S.
Canizares rendered a Decision dismissing the complaint for lack of merit.
Aggrieved by the LA's finding, respondent appealed to the National Labor
Relations Commission. Upon recommendation of LA Cristeta D. Tamayo,
who reviewed the case, the NLRC First Division set aside the ruling of LA
Canizares. The NLRC declared respondent's dismissal to be illegal and
directed petitioner to reinstate respondent with full backwages and seniority
rights and privileges. It found that petitioner failed to show clear and
convincing evidence that respondent was responsible for the forgery of the
signature of Po in the CAPEX form.
NLRC reversed itself and upheld LA Canizares' dismissal of his complaint.
The CA ordered petitioner to reinstate respondent, without loss of seniority
rights and privileges, and to pay respondent full backwages from the time his
employment was terminated on May 20, 1999 up to the time of the finality of
its decision.
ISSUE:
W.O.N. MERE EXISTENCE OF A BASIS FOR BELIEVING THAT SUCH
EMPLOYEE HAS BREACHED THE TRUST AND CONFIDENCE OF HIS
EMPLOYER SUFFICES FOR HIS DISMISSAL.
HELD:
The rule is that high respect is accorded to the findings of fact of quasi-
judicial agencies, more so in the case at bar where both the LA and the
NLRC share the same findings. The rule is not, however, without exceptions
one of which is when the findings of fact of the labor officials on which the
conclusion was based are not supported by substantial evidence. The same
holds true when it is perceived that far too much is concluded, inferred or
deduced from bare facts adduced in evidence. In the case at bar, the
NLRC's findings of fact upon which its conclusion was based are not
supported by substantial evidence, that is, the amount of relevant evidence,
which a reasonable mind might accept as adequate to justify a conclusion.
Further, as correctly found by the NLRC, if respondent was the one who
forged the signature of Po in the CAPEX form, there was no need for him to
endorse the same to Villanueva and transmit it the next day. He could have
easily forged the signature of Po on the same day that he prepared the
CAPEX form and submitted it on the very same day to petitioner's main
office without passing through any officer of petitioner.
The law mandates that the burden of proving the validity of the termination of
employment rests with the employer. Failure to discharge this evidentiary
burden would necessarily mean that the dismissal was not justified and,
therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions
of employers do not provide for legal justification for dismissing employees.
In case of doubt, such cases should be resolved in favor of labor, pursuant
to the social justice policy of labor laws and the Constitution.
Lastly, while We have previously held that employers are allowed a wider
latitude of discretion in terminating the services of employees who perform
functions which by their nature require the employers' full trust and
confidence and the mere existence of basis for believing that the employee
has breached the trust of the employer is sufficient, this does not mean that
the said basis may be arbitrary and unfounded. The right of an employer to
dismiss an employee on the ground that it has lost its trust and confidence in
him must not be exercised arbitrarily and without just cause. 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. It must rest on substantial grounds and
not on the employer's arbitrariness, whim, caprice or suspicion; otherwise,
the employee would eternally remain at the mercy of the employer. There is
neither direct evidence nor substantial documentary evidence pointing to
respondent as the one liable for the forgery of the signature of Po.
Respondent's illegal dismissal carries the legal consequences defined under
Article 279 of the Labor Code, that is, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges, and to the payment of his full
backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent, computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
However, the Court finds that it would be best to award separation pay
instead of reinstatement, in view of the strained relations between petitioner
and respondent. Respondent was dismissed due to loss of trust and
confidence and it would be impractical to reinstate an employee whom the
employer does not trust, and whose task is to handle and prepare delicate
documents.
Under the doctrine of strained relations, the payment of separation pay has
been considered an acceptable alternative to reinstatement when the latter
option is no longer desirable or viable. On the one hand, such payment
liberates the employee from what could be a highly oppressive work
environment. On the other hand, the payment releases the employer from
the grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust.
In view of the foregoing, respondent is entitled to the payment of full
backwages, inclusive of allowances, and other benefits or their monetary
equivalent, computed from the date of his dismissal on May 20, 1999 up to
the finality of this decision, and separation pay in lieu of reinstatement
equivalent to one month salary for every year of service, computed from the
time of his engagement by petitioner on August 1993 up to the finality of the
decision.
The case is, therefore, remanded to the Labor Arbiter for the purpose of
computing the proper monetary award due to the respondent.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 86939, dated December 1, 2005 and
February 17, 2006, respectively, are AFFIRMED with MODIFICATION that
the order of reinstatement is deleted, and in lieu thereof, Petitioner Century
Canning Corporation is DIRECTED to pay respondent separation pay.
IMMORALITY: JOSE SANTOS,JR. VS. NLRC, HAGONOY INSTITUTE INC
, ETAL.; GR.NO. 115795, MARCH 6, 1998
QR:Jose Santos, a married man, was allegedly having illicit
relationship with Arlene Martin, also married. Both worked as teachers in
Hagonoy Institute. Earlier, the school prohibited Martin from further
teaching due to the alleged relationship. Martin filed an illegal dismissal
case which she won due to failure of the school to accord due process.
Learning from its mistake, the school set up a committee to investigate
Santos, this time following the proper procedure of twin notice and hearing.
The school committee found the allegations of illicit relationship between
Santos and Martin to be true, and Santos was dismissed from the
school. Santos filed a case of illegal dismissal. Court held that
dismissal was proper. Under, Section 94 of the Manual of Regulations
for Private Schools, teachers may be dismissed for disgraceful and immoral
conduct, in addition to those instances provided in the Labor Code.
Take-away from this case: The list of just cause for dismissal
in the LC is not exclusive(besides the fact that it provides for analogous
circumstances), and valid causes of dismissal may be found in other
regulations, e.g. Manual of Regulations for Private Schools.
Facts: Petitioner, a married man, was employed as a teacher by the
private respondent Hagonoy Institute Inc. from June 1980 until his
dismissal on June 1, 1991. Likewise working as a teacher for the private
respondent was Mrs. Arlene T. Martin, also married.
In the course of their employment, the couple fell in love. Thereafter, rumors
regarding the couple’s relationship spread, especially among the faculty
members and school officials.
Concerned about the rumors, the private respondent advised Mrs.
Martin to take a leave of absence which she ignored, as she
continued to report for work.
Consequently, on November 9, 1990, she was barred from reporting for
work and was not allowed to enter the private respondent’s premises,
effectively dismissing her from her employment. She then filed
NLRC reversed on the ground the school, in dismissing her, failed to
accord her due process.
Meanwhile, private respondent set up a committee to investigate the
veracity of the rumors. After two weeks of inquiry, the committee
rendered its report confirming the illicit relationship between the petitioner
and Mrs. Martin.In view of the committee’s finding, petitioner was charged
administratively for immorality and was required to present his side on
the controversy. Five months later or in May 1991, petitioner was
informed by the private respondent’s Board of Directors of his dismissal
effective June 1, 1991. Unable to accept such verdict, petitioner filed
a complaint for illegal dismissal.
Issue: 1. WON Santos was validly dismissed on the grounds of
immorality.YES.
2. Whether or not the private respondents were constructively dismissed
Held: 1. It is to state the obvious that schools, next only to the home,
wield a weighty influence upon the students, especially during the
latters’ formative years, for it instills in them the values and mores
which shall prepare them to discharge their rightful responsibilities as
mature individuals in society. At the vanguard in nurturing their growth are
the teachers who are directly charged with rearingand educating
them. As such, ateacher serves as a role model for his students.
Corollarily, he must not bring the teaching profession into public disrespect
or disgrace. For failure to live up to the exacting moral standards
demanded by his profession, petitioner Jose Santos was dism
issed from his employment on the ground of immorality. We uphold his
dismissal.
We have consistently held that in order to constitute a valid dismissal, two
requisites must concur: (a) the dismissal must be for any of the causes
expressed in Art. 282 of the Labor Code, and (b) the employee must be
accorded due process, basic of which are the opportunity to be heard and
defend himself.Under Article 282 of the Labor Code, as amended, the
following are deemed just causes to terminate an employee:
(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 willfull 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 authorize representative; and
(e)Other causes analogous to the foregoing.”
Moreover, it is provided inter alia under Section 94 of the Manual of
Regulations for
Private Schools:“Section 94. Causes of Terminating Employment. In
addition to the just cases enumerated in the Labor Code, the
employment of school personnels, including faculty, may be terminated for
any of the following causes:xxx
E. Disgraceful or immoral conduct.”
Private respondent, in justifying the termination of the petitioner,
contends that being a teacher, he “must live up to the high moral
standards required of his position.” In other words, it asserts that its
purpose in dismissing the petitioner was to preserve the respect of the
community towards the teachers and to strengthen the educational
system. On the other hand, petitioner merely argues that the alleged illicit
relationship was not substantially proven by convincing
evidence by the private respondent as to justify his dismissal.
We cannot overemphasize that having an extra
-marital affair is an affront to the sanctity of marriage, which is a basic
institution of society. Even our Family Code provides that husband
and wife must live together, observe mutual love, respect and fidelity.
This is rooted in the fact that both our Constitution and our laws
cherish the validity of marriageand unity of the family.
Undoubtedly, the question of immorality by the petitioner is factual in
nature. Thus, we reiterate the well
-settled rule that factual findings by the NLRC, particularly when it
coincides with those by the Labor Arbiter, are accorded respect, even
finality, and will not be disturbed for as long as such findings are
supported by substantial evidence. A scrutiny of the records of the instant
petition leads us to concur with the NLRC’s finding that petitioner indeed
entered into an illicit relationship with his coteacher. This fact was attested
to by the testimonies of nine witnesses (a fourth year student, a security
guard, a janitor and six coteachers) which petitioner failed to rebut.
2. While it may be true that the private respondents had chosen to go on
leave for one month, the choice was not of their complete free will because
the other alternative given by the petitioner was suspension. The threat of
suspension thus became the proximate cause of the “leave.” It was a
coerced option imposed by the petitioner. That the petitioner had in fact in
mind private respondents’ suspension was finally made evident by its refusal
to take them back after the expiration of the leave. LABOR STANDARDS
AND SOCIAL LEGISLATION ARELLANO UNIVERSITY SCHOOL OF LAW
LSSL CASE DIGESTS Page 505 The petitioner extended their leave for
another month with a promise to pay them salaries. After the expiration of
the "extended” leave, the petitioner still refused to accept them back. Thus,
the private respondents were constructively dismissed from 16 October
1992. The petition is dismissed.
CONSTRUCTIVE DISMISSAL: DUSIT HOTEL NIKKO AND PHILIPPINE
HOTELIERS, INC. VS. NATIONAL UNION OF WORKERS IN HOTEL,
RESTAURANT AND ALLIED INDUSTRIES - DUSIT HOTEL NIKKO
CHAPTER AND ROWENA AGONCILLO; GR.NO. 160391, AUGUST 9,
2005
TRANSFER/REASSIGNMENT OF WORK: BEST WEAR GARMENTS AND
ARREN PARDILLA VS. ADELAIDA DE LEMOS AND CICILE OCUBILLO;
GR. NO. 191281, DECEMBER 5, 2012
FACTS:
Respondents Adelaida De Lemos and Cecile Ocubillo were employees of
Best Wear Garments (Best Wear) owned by Warren Pardilla. In 2004, De
Lemos and Ocubillo filed a case for illegal dismissal. Both alleged that they
were arbitrarily transferred to other areas of operation of Pardilla’s garments
company, which they said amounted to constructive dismissal as it resulted
in less earnings for them. They also claimed that the reason for their transfer
is their refusal to render overtime work until 7:00 p.m.
Best wear countered that De Lemos and Ocubillo are piece-rate workers and
hence they are not paid according to the number of hours worked. Best
Wear also averred that the two were not illegally terminated; rather, they
were the ones who resigned.
The Labor Arbiter ruled that De Lemos and Ocubillo were constructively
dismissed from employment. On appeal, the NLRC found no basis for the exercised, as in this case, courts will decline to interfere.
charge of constructive dismissal. Aggrieved, De Lemos and Ocubillo
appealed to the Court of Appeals. The CA reinstated the LA’s decision. Petition is GRANTED.
Hence, this instant petition.

ISSUE: Whether or not the Court of Appeals erred in ruling that De Lemos RESIDENCY TRAINING: ALFREDO FELIX VS. DR. BRIGIDA
and Ocubillo were constructively dismissed? BUENASEDA,ETAL AND THE CIVIL SERVICE; GR. NO. 109704,
JANUARY 17, 1995
HELD: De Lemos and Ocubillo were not constructively dismissed.
Nature of the Case: A direct appeal seeking to annul the Resolution issued
LABOR LAW: transfer; management prerogative; piece-rate workers by the Civil Service Commission (CSC) which Felix claims to be in violation
of his constitutional right to security of tenure.
The right of employees to security of tenure does not give them vested rights
Facts: Felix worked as Medical Specialist I for the government [National
to their positions to the extent of depriving management of its prerogative to
Center of Mental Health (NCMH)]. He started as a Resident Physician with
change their assignments or to transfer them. Thus, an employer may
an annual salary. Later he got promoted to Senior Resident Physician
transfer or assign employees from one office or area of operation to another,
[permanent], which he held for some time, and thereafter accepted the
provided there is no demotion in rank or diminution of salary, benefits, and
appointment as Medical Specialist I [temporary] – which Felix held for three
other privileges, and the action is not motivated by discrimination, made in
years without remonstrations. Pursuant to an Executive Order [EO No. 119]
bad faith, or effected as a form of punishment or demotion without sufficient
a general reorganization in the government ensued. In view of this, DoH
cause.
effected a reorganization, and one of the guidelines [DoH DO No. 478] made
Felix unfit for the position [he was not yet accredited by the Psychiatry
Being piece-rate workers assigned to individual sewing machines, their
Specilaty Board]. His appointment was extended pending review of the
earnings depended on the quality and quantity of finished products. That
Medical Committee [of NCMH], which eventually recommended non-renewal
their work output might have been affected by the change in their specific
of Felix’s appointment and informed him of the same. Nevertheless, Felix
work assignments does not necessarily imply that any resulting reduction in
was still allowed to continue his service even after he was informed of his
pay is tantamount to constructive dismissal. Workers under piece-rate
termination. The Chief of Service [of NCMH] conducted an emergency to
employment have no fixed salaries and their compensation is computed on
discuss, inter alia, Felix’s performance. The overall consensus expressed
the basis of accomplished tasks. The constitutional policy of providing full
nonrenewal of Felix’s contract [due to poor performance, frequent tardiness
protection to labor is not intended to oppress or destroy management. While
and inflexibility]. The matter was referred to CSC which ruled that
the Constitution is committed to the policy of social justice and the protection
appointment of Felix can be terminated at any time and that renewal was
of the working class, it should not be supposed that every labor dispute will
within the discretion of the appointing authority [NCMH] by virtue of the
be automatically decided in favor of labor. Management also has its rights
incidental power of the power to appoint [the power to renew a temporary
which are entitled to respect and enforcement in the interest of simple fair
appointment] and further. The removal of Felix has thus been affirmed by
play. Thus, where management prerogative to transfer employees is validly
CSC. Felix’s appeal was dismissed and his subsequent motion for
reconsideration has been denied by CSC. Petitioner now questions the
validity of such removal. Hence, this direct appeal.
Issue(s) (1). Is the position held by Felix as Resident Physician a permanent
one? (2). Is an employee, after not challenging his appointment from a
permanent to a temporary position within a reasonable period, deemed to
have accepted his appointment?
Held (1). No. Residency is never meant to be a permanent position. It is a
step taken by a physician right after post-graduate internship (and after
hurdling the Medical Licensure Examinations) prior to his recognition as a
specialist or sub-specialist in a given field. To specialize on a medical field
[be it Psychiatry or Cardiology], one has to go through a stringent process.
This process is to guarantee the specialist’s minimum standards and skills –
which is an assurance to the community that a specialist is not set loose
without the basic knowledge and skills of his specialty as lives are ultimately
at stake. The purpose is thus geared towards training the resident physician.
(2). Yes. Felix’s acceptance as temporary Medical Specialist I for three years
was subject to peer and superior evaluation, for which Felix fell short.
Regardless, Felix never questioned his temporary assignment [for three
years] until DoH, as a result of his performance evaluation, ordered non-
renewal of his temporary position. In view of his silence to question his
appointment from permanent to temporary, warrants the presumption that
Felix has either given up his claim or that he has already settled into the new
position, which is the concept of laches, which therefore estops him from
questioning the same [three years later]. Stated otherwise, Felix has
abandoned his right to claim to question his conversion from permanent
employee to temporary employee through laches, and henceforth, is
deemed to have accepted his appointment from permanent to temporary
position.
BUSINESS RELATED - RETRENCHMENT: SANOH FULTON
PHILIPPINES; INC, AND MR. EDDIE JOSE VS. EMMANUEL BERNARDO
AND SAMUEL TAGHOY; GR NO. 187214, AUGUST 14, 2013
Facts:
Sanoh is a domestic corporation engaged in the manufacture of automotive
parts and wire condensers for home appliances. Its Wire Condenser
Department employed 61 employees. Respondents belonged to this
department.
In view of job order cancellations relating to the manufacture of wire
condensers by Matsushita, Sanyo and National Panasonic, Sanoh decided
to phase out the Wire Condenser Department. On 22 December 2003, the
Human Resources Manager of Sanoh informed the 17 employees, 16 of
whom belonged to the Wire Condenser Department, of retrenchment
effective 22 January 2004. All 17 employees are union members.
A grievance conference was held where the affected employees were
informed of the following grounds for retrenchment:1) Lack of local market.2)
Competition from imported products.3) Phasing out of Wire Condenser
Department.Two succeeding conciliation conferences were likewise held but
the parties failed to reach an amicable settlement. Thus, two (2) separate
complaints for illegal dismissal,Sanoh on its part, filed a petition for
declaration of the partial closure of its Wire Condenser Department and valid
retrenchment of the 17 employees,during the course of the proceedings
before the Labor Arbiter, 14 of the 17 employees executed individual
quitclaims. Hence, their interest in the cases was dismissed with prejudice.
Only 3 employees, respondents Emmanuel Bernardo and Samuel Taghoy,
and Manny Santos persisted.The complainants alleged that there was no
valid cause for retrenchment and in effecting retrenchment, there was a
violation of the "first in-last out" and "last in-first out" (LIFO) policy embodied
in the Collective Bargaining Agreement.Sanoh, on the other hand, asserted
that retrenchment was a valid exercise of management prerogative. Sanoh
averred that some employees who were hired much later were either
assigned to other departments or were bound by the terms of their job
training agreement to stay with the company for 3 years.
On 18 July 2005, the Labor Arbiter rendered a Decision 5 dismissing the
complaint for illegal dismissal,On appeal, the National Labor Relations
Commission (NLRC) affirmed in toto the decision of the Labor Arbiter,the
Court of Appeals overturned the findings of the Labor Arbiter and the NLRC,
and ruled that Sanoh failed to prove the existence of substantial losses that
would justify a valid retrenchment. The Court of Appeals also upheld the
quitclaim executed by complainant Manny Santos, thus he was deemed to
have released Sanoh from his monetary claims.  Case Doctrine:
Issue:
Whether or not the termination of the employees under the authorized cause
of retrenchment was valid.
Held:
The termination of the employees on the ground of retrenchment was not
valid.
Ratio:
For retrenchment, the three (3) basic requirements are: (a) proof that the
retrenchment is necessary to prevent losses or impending losses; (b) service
of written notices to the employees and to the Department of Labor and
Employment at least one (1) month prior to the intended date of
retrenchment; and (c) payment of separation pay equivalent to one (1)
month pay, or at least one-half (1/2) month pay for every year of service,
whichever is higher.14In addition, jurisprudence has set the standards for
losses which may justify retrenchment, thus:
(1) the losses incurred are substantial and not de minimis; (2) the losses are
actual or reasonably imminent; (3) the retrenchment is reasonably necessary
and is likely to be effective in preventing the expected losses; and (4) the
alleged losses, if already incurred, or the expected imminent losses sought
to be forestalled, are proven by sufficient and convincing evidence.
the losses must be supported by sufficient and convincing evidence and the
normal method of discharging this is by the submission of financial
statements duly audited by independent external auditors. 21 It was aptly
observed by the appellate court that no financial statements or documents
were presented to substantiate Sanoh’s claim of loss of P7 million per
month.1âwphi1And a business lull caused by lack of orders which could
have justified retrenchment was not shown by petitioner. As observed once
more by the Court of Appeals, petitioner failed to present proof of the extent
of the reduced order and its contribution to the sustainability of its business.
REDUNDANCY: SPI TECHNOLOGIES,INC. AND LEA VILLANUEVA VS.
VICTORIA MAPUA; GR. NO. 191154, APRIL 7, 2014
It is not the job title but the actual work that the employee performs. Also,
change in the job title is not synonymous to a change in the functions. A
position cannot be abolished by a mere change of job title. In cases of
redundancy, the management should adduce evidence and prove that a
position which was created in place of a previous one should pertain to
functions which are dissimilar and incongruous to the abolished office.
Facts:
Victoria K. Mapua (Mapua) was the Corporate Development’s
Research/Business Intelligence Unit Head and Manager
InSPITechnologies,Ic. (SPI).Sometime in October 2006, the hard disk on
Mapua’s laptop crashed, causing her to lose files and data. Mapua informed
Nolan,her supervisor and her colleagues that she was working on recovering
the lost data and asked for their patience for any possible delay on her part
in meeting deadlines. On November 13, 2006 Mapuaretrieved the lost data
with the assistance of National Bureau of Investigation Anti-Fraud and
Computer Crimes Division. Yet, Nolan informed Mapua that she was
realigning Mapua’s position to become a subordinate of co-manager Sameer
Raina (Raina) due to her missing a work deadline.
On February 28, 2007, Mapua allegedly saw the new table of organization of
the Corporate Development Division which would be renamed as the
Marketing Division. The new structure showed that Mapua’s level will be
again downgraded because a new manager will be hired and positioned
between her rank and Raina’s.On March 21, 2007, Raina informed Mapua
over the phone that her position was considered redundant and that she is
terminated from employment effective immediately. Villanueva notified
Mapua that she should cease reporting for work the next day. Her laptop
computer and company mobile phone were taken right away and her office
phone ceased to function.
In her Reply and Rejoinder, Mapua submitted an affidavit and alleged that
on July 16, 2007, Prime Manpower Resources Development (Prime
Manpower) posted an advertisement on the website of Jobstreet Philippines
for the employment of a Corporate Development Manager in an unnamed
Business Process Outsourcing (BPO) company located in Parañaque City.
Mapua suspected that this advertisement was for SPI because the writing
style used was similar to Raina’s. She also claimed that SPI is the only BPO
office in Parañaque City at that time. Thereafter, she applied for the position
under the pseudonym of "Jeanne Tesoro". On the day of her interview with
Prime Manpower’s consultant, Ms. Portia Dimatulac (Dimatulac), the latter
allegedly revealed to Mapua that SPI contracted Prime Manpower’s services
to search for applicants for the Corporate Development Manager
position.Because of these developments, Mapua was convinced that her
former position is not redundant.
The Labor arbiter rendered a decision stating that there was illegal
dismissal. But the NLRC reversed the said decision. While the CA on the
other hand, reinstated LA’s decision and set aside the NLRC’s decision.
Thus, SPI filed a petition for certiorari regarding the said decision.
Issue:
Whether or not Mapua was validly separated from service on the ground of
redundancy?
Ruling:
No. ART. 283. Closure of establishment and reduction of personnel.
Anent the first requirement which is written notice served on both the
employee and the DOLE at least one month prior to the intended date of
termination, SPI had discharged the burden of proving that it submitted a
notice to the DOLE on March 21, 2007, stating therein that the effective date
of termination is on April 21, 2007. It is, however, quite peculiar that two
kinds of notices were served to Mapua. One termination letter stated that its
date of effectivity is on the same day, March 21, 2007. The other termination
letter sent through mail to Mapua’s residence stated that the effective date of
her termination is on April 21, 2007.Explaining the discrepancy, SPI alleged
that the company served a notice to Mapua on March 21, 2007, which stated
that the effective date of termination is on April 21, 2007. However she
refused to acknowledge or accept the letter. Later on, Mapua requested for a
copy of the said letter but due to inadvertence and oversight, a draft of the
termination letter bearing a wrong effectivity date was given to her. To
correct the oversight, a copy of the original letter was sent to her through
mail.Our question is, after Mapua initially refused to accept the letter, why
did SPI make a new letter instead of just giving her the first one – which the
Court notes was already signed and witnessed by other employees?
Curiously, there was neither allegation nor proof that the original letter was
misplaced or lost which would necessitate the drafting of a new one. SPI did
not even explain in the second letter that the same was being sent in lieu of
the one given to her. Hence, SPI must shoulder the consequence of causing
the confusion brought by the variations of termination letters given to Mapua.
On the matter of separation pay, there is no question that SPI indeed offered
separation pay to Mapua, but the offer must be accompanied with good faith
in the abolishment of the redundant position and fair and reasonable criteria
in ascertaining the redundant position. It is insignificant that the amount
offered to Mapua is higher than what the law requires because the Court has
previously noted that "a job is more than the salary that it carries. There is a
psychological effect or a stigma in immediately finding one’s self laid off from
work."
As to the evidence negating redundancy was SPI’s publication of job
vacancies after Mapua was terminated from employment. SPI maintained
that the CA erred when it considered Mapua’s self-serving affidavit as
regards the Prime Manpower advertisement because the allegations therein
were based on Mapua’s unfounded suspicions. Also, the failure of Mapua to
present a sworn statement of Dimatulac renders the former’s statements
hearsay.Even if we disregard Mapua’s affidavit as regards the Prime
Manpower advertisement, SPI admitted that it caused the Inquirer
advertisement for a Marketing Communications Manager position. Mapua
alleged that this advertisement belied the claim of SPI that her position is
redundant because the Corporate Development division was only renamed
to Marketing division. Instead of explaining how the functions of a Marketing
Communications Manager differ from a Corporate Development Manager,
SPI hardly disputedMapua when it stated that, "judging from the titles or
designation of the positions, it is obvious that the functions of one are
entirely different from that of the other." SPI, being the employer, has
possession of valuable information concerning the functions of the offices
within its organization. Nevertheless, it did not even bother to differentiate
the two positions.
It is not the job title but the actual work that the employee performs. Also,
change in the job title is not synonymous to a change in the functions. A
position cannot be abolished by a mere change of job title. In cases of
redundancy, the management should adduce evidence and prove that a
position which was created in place of a previous one should pertain to
functions which are dissimilar and incongruous to the abolished office.
TEMPORARY CLOSURE: SKM ART CRAFT CORPORATION VS. EFREN
BAUCA ETAL.; GR.NO. 171282, NOVEMBER 27, 2013
FACTS:
The 23 respondents were employed by petitioner SKM Art Craft Corporation
which is engaged in the handicraft business. On April 18, 2000, around 1:12
a.m., a fire occurred at the inspection and receiving/repair/packing area of
petitioner’s premises in Intramuros, Manila. The fire investigation
report stated that the structure and the beach rubber building were totally
damaged. Also burned were four container vans and a trailer truck. The
estimated damage was P22 million.
On May 8, 2000, petitioner informed respondents that it will suspend its
operations for six months, effective May 9, 2000. On May 16, 2000, only
eight days after receiving notice of the suspension of petitioner’s operations,
the 23 respondents (and other co-workers) filed a complaint for illegal
dismissal. They alleged that there was discrimination in choosing the
workers to be laid off and that petitioner had discovered that most of them
were members of a newly-organized union.
Petitioner denied the claim of illegal dismissal and said that Article 286of the
Labor Code allows the bona fide suspension of a business or undertaking for
a period not exceeding six months. Petitioner claimed that the fire cost it
millions in losses and that it is impossible to resume its normal operations for
a significant period of time.
LA: respondents were illegally dismissed and ordered petitioner to reinstate
them and pay them back wages. The Labor Arbiter ruled that the fire that
burned a part of petitioner’s premises may validate the suspension of
respondents’ employment, but the suspension must not exceed six months.
Since petitioner failed to recall respondents after the lapse of six months, the
Labor Arbiter held that respondents were illegally dismissed.
NLRC: set aside the Labor Arbiter’s Decision and ruled that there was no
illegal dismissal.
CA: set aside the NLRC Decision and Resolution and reinstated the Labor
Arbiter’s Decision. The CA ruled that petitioner failed to prove that its
suspension of operations is bona fide . The CA noted that the proof of
alleged losses – the list of items and materials allegedly burned – was not
even certified or signed by petitioner’s accountant or comptroller. And even if
the suspension of operations is considered bona fide, the CA said that
respondents were not reinstated after six months.
ISSUE:Whether respondents were illegally dismissed.
HELD:While we agree with the NLRC that the suspension of petitioner’s
operation is valid, the Labor Arbiter and the CA are correct that respondents
were illegally dismissed since they were not recalled after six months, after
the bona fide suspension of petitioner’s operations.
We agree with the Labor Arbiter and the CA that respondents were already
considered illegally dismissed since petitioner failed to recall them after six
months, when its bona fide suspension of operations lapsed. We stress that
under Article 286 of the Labor Code, the employment will not be deemed
terminated if the bona fide suspension of operations does not exceed six
months. But if the suspension of operations exceeds six months, the
employment will be considered terminated.
Under Article 286 of the Labor Code, the bona fide suspension of the
operation of a business or undertaking for a period not exceeding six months
shall not terminate employment. Consequently, when the bona fide
suspension of the operation of a business or undertaking exceeds six
months, then the employment of the employee shall be deemed terminated.
By the same token and applying said rule by analogy, if the employee was
forced to remain without work or assignment for a period exceeding six
months, then he is in effect constructively dismissed.
Indeed, petitioner’s manifestationdated October 2, 2001 that it is willing to
admit respondents if they return to work was belatedly made, almost one
year after petitioner’s suspension of operations expired in November 2000.
We find that petitioner no longer recalled, nor wanted to recall, respondents
after six months.
HENCE, THE RESPONDENTS WERE ILLEGALLY DISMISSED
(This case was submitted for settlement. Wherein respondents herein signed
a Release, Waiver and Quitclaim; the court upheld the settlement. But for the
purpose of determining whether there was illegal dismissal in the case at
bar, mention the ruling above. )
CLOSURE OF BUSINESS: SANGWOO PHILIPPINES, INC, ETAL. VS.
SANGWOO PHILIPPINES ,INC., EMPLOYEE UNION; GR. NO. 173154/GR
NO. 173229, DECEMBER 9, 2013
Facts:On July 25, 2003, during the collective bargaining agreement (CBA)
negotiations between Sangwoo Philippines, Inc. Employees Union – Olalia
(SPEU) and Sangwoo Philippines, Inc.(SPI), the latter filed with the
Department of Labor and Employment (DOLE) a letter-notice of temporary
suspension of operations for one (1) month, beginning September 15, 2003,
due to lack of orders from its buyers. SPEU was furnished a copy of the said
letter. Negotiations on the CBA, however, continued and on September 10,
2003, the parties signed a handwritten Memorandum of Agreement, which,
among others, specified the employees’ wages and benefits for the next two
(2) years, and that in the event of a temporary shutdown, all machineries
and raw materials would not be taken out of the SPI premises.
On September 15, 2003,SPI temporarily ceased operations. Thereafter, it
successively filed two (2) letters with the DOLE, copy furnished SPEU, for
the extension of the temporary shutdown until March 15, 2004. Meanwhile,
on October 28, 2003, SPEU filed a complaint for unfair labor practice, illegal
closure, illegal dismissal, damages and attorney’s fees before the Regional
Arbitration Branch IV of the NLRC. Subsequently, or on February 12, 2004,
SPI posted, in conspicuous places within the company premises, notices of
its permanent closure and cessation of business operations, effective March
16, 2004, due to serious economic losses and financial reverses. The DOLE
was furnished a copy of said notice on February 13, 2004, together with a
separate letter notifying it of the company’s permanent closure. SPEU was
also furnished with a copy of the notice of permanent closure. Forthwith, SPI
offered separation benefits of one-half (½) month pay for every year of
service to each of its employees. 234 employees of SPI accepted the offer,
received the said sums and executed quitclaims. Those who refused the
offer, i.e., the minority employees, were nevertheless given until March 25,
2004 to accept their checks and correspondingly, execute quitclaims.
However, the minority employees did not claim the said checks.
ISSUES:
a) whether or not the minority employees are entitled to separation pay; and
b) whether or not SPI complied with the notice requirement of Article 297
(formerly Article 283) of the Labor Code..
A. Non-entitlement to Separation Benefits.
Article [297] of the Labor Code does not obligate an employer to pay
separation benefits when the closure is due to serious losses. To require an
employer to be generous when it is no longer in a position to do so, in our
view, would be unduly oppressive, unjust, and unfair to the employer. Ours
is a system of laws, and the law in protecting the rights of the working man,
authorizes neither the oppression nor the self-destruction of the employer.
In this case, the LA, NLRC, and the CA all consistently found that SPI indeed
suffered from serious business losses which resulted in its permanent
shutdown and accordingly, held the company’s closure to be valid. It is a rule
that absent any showing that the findings of fact of the labor tribunals and
the appellate court are not supported by evidence on record or the judgment
is based on a misapprehension of facts, the Court shall not examine a new
the evidence submitted by the parties. Perforce, without any cogent reason
to deviate from the findings on the validity of SPI’s closure, the Court thus
holds that SPI is not obliged to give separation benefits to the minority
employees pursuant to Article 297 of the Labor Code as interpreted in the
case of Galaxie. As such, SPI should not be directed to give financial
assistance amounting to P15,000.00 to each of the minority employees
based on the Formal Offer of Settlement. If at all, such formal offer should be
deemed only as a calculated move on SPI’s part to further minimize the
expenses that it will be bound to incur should litigation drag on, and not as
an indication that it was still financially sustainable. However, since SPEU
chose not to accept, said offer did not ripen into an enforceable obligation on
the part of SPI from which financial assistance could have been realized by
the minority employees.  Petitioner Crayons Processing, Inc. (Crayons) employed respondent Felipe
B.Insufficient Notice of Closure.
Article 297 of the Labor Code provides that before any employee is
terminated due to closure of business, it must give a one (1) month prior
written notice to the employee and to the DOLE. In this relation, case law
instructs that it is the personal right of the employee to be personally
informed of his proposed dismissal as well as the reasons therefor; and such
requirement of notice is not a mere technicality or formality which the
employer may dispense with. Since the purpose of previous notice is to,
among others, give the employee some time to prepare for the eventual loss
of his job, the employer has the positive duty to inform each and every
employee of their impending termination of employment. To this end,
jurisprudence states that an employer’s act of posting notices to this effect in
conspicuous areas in the workplace is not enough. Verily, for something as
significant as the involuntary loss of one’s employment, nothing less than an
individually-addressed notice of dismissal supplied to each worker is proper.
As enunciated in the case of Galaxie:
Finally, with regard to the notice requirement, the Labor Arbiter found, and it
was upheld by the NLRC and the Court of Appeals, that the written notice of
closure or cessation of Galaxie’s business operations was posted on the
company bulletin board one month prior to its effectivity. The mere posting
on the company bulletin board does not, however, meet the
requirement under Article [297] of "serving a written notice on the
workers."The purpose of the written notice is to inform the employees of the
specific date of termination or closure of business operations, and must be
served upon them at least one month before the date of effectivity to give
them sufficient time to make the necessary arrangement. In order to meet
the foregoing purpose, service of the written notice must be made
individually upon each and every employee of the company
DISEASE: CRAYONS PROCESSING, INC. VS. FELIPE PULA AND CA;
GR. NO. 167727, JULY 30, 2007
Pula (Pula) as a Preparation Machine Operator beginning June 1993. On 27
November 1999, Pula, then aged 34, suffered a heart attack and was rushed
to the hospital, where he was confined for around a week. Pulas wife duly
notified Crayons of her husbands medical condition. Subsequently, on 25
February 2000, Pula underwent an Angiogram Test at the Philippine Heart
Center under the supervision of a Dr. Recto, who advised him to take a two-
week leave from work. Following the angiogram procedure, respondent was
certified as fit to work by Dr. Recto. On 11 April 2000, Pula returned to work,
but 13 days later, he was taken to the company clinic after complaining of
dizziness. Diagnosed as having suffered a relapse, he was advised by his
physician to take a leave of absence from work for one (1) month. Pula
reported back for work on 13 June 2000, armed with a certification from his
physician that he was fit to work. However, Pula claimed that he was not
given any post or assignment, but instead, on 20 June 2000, he was asked
to resign with an offer from Crayons of P12, 000 as financial assistance.
Pula refused the offer and instead filed a complaint for illegal dismissal.
ISSUE:Whether or not the dismissal without certification issued by a
competent public health authority was proper
HELD No. For a dismissal on the ground of disease to be considered valid,
two requisites must concur: (a) the employee must be suffering from a
disease which cannot be cured within six months and his continued 128
employment is prohibited by law or prejudicial to his health or to the health of
his co-employees; and (b) a certification to that effect must be issued by a
competent public health authority. The burden falls upon the employer to
establish these requisites, and in the absence of such certification, the
dismissal must necessarily be declared illegal. As succinctly stressed in Tan
v. NLRC, it is only where there is a prior certification from a competent public
authority that the disease afflicting the employee sought to be dismissed is
of such nature or at such stage that it cannot be cured within six (6) months
even with proper medical treatment that the latter could be validly terminated
from his job. Without the required certification, the characterization or even
diagnosis of the disease would primarily be shaped according to the
interests of the parties rather than the studied analysis of the appropriate
medical professionals. The requirement of a medical certificate under Article
284 cannot be dispensed with; otherwise, it would sanction the unilateral and
arbitrary determination by the employer of the gravity or extent of the
employee's illness and thus defeat the public policy in the protection of labor.
The NLRCs conclusion that no such certification was required since Pula
had effectively been absented due to illness for more than six (6) months is
unsupported by jurisprudence and plainly contrary to the language of the
Implementing Rules. The indefensibility of such conclusion is further
heightened by the fact that Pula was able to obtain two different medical
certifications attesting to his fitness to resume work. Assuming that the
burden did fall on Pula to establish that he was fit to return to work, those
two medical certifications stand as incontestable in the absence of contrary
evidence of similar nature from Crayons. Then again, the burden lies solely
on Crayons to prove that Pula was unfit to return to work.[32] Even absent
the certifications favorable to Pula, Crayons would still be unable to justify
his dismissal on the ground of ill health or disease, without the necessary
certificate from a competent public health authority.
ENFORCEMENT OF UNION SECURITY CLAUSE IN THE CBA:
HEMINIGILDO INGUILLO AND ZENAIDA BERGANTE VS. FIRST
PHILIPPINE SCALES AND AMPARO POLICARPIO; GR. NO. 165407,
JUNE 5, 2009
FACTS: In 1991, FPSI and First Philippine Scales Industries Labor Union (FPSILU) entered into a
Collective Bargaining Agreement (CBA) for a period of five (5) years in a document
entitled RATIPIKASYON NG KASUNDUAN.Bergante and Inguillo, who were members of FPSILU,
signed the said document. Bergante, Inguillo and several FPSI employees joined another union,
the NagkakaisangLakas ng Manggagawa (NLM). [The latter] filed with the Department of Labor and
Employment (DOLE) an intra-union dispute against FPSILU and FPSI. Meanwhile, on March 29, 1996,
the executive board and members of the FPSILU addressed a document dated March 18, 1996
denominated as “Petisyon” to FPSI's general manager, Amparo Policarpio (Policarpio), seeking the
termination of the services of [several employees, including herein petitioners. This was granted
upon by FPSI, which terminated, among others, herein petitioners.] In their Petition, Bergante and
Inguillo assail the legality of their termination based on the Union Security Clause in the CBA
between FPSI and FPSILU.
ISSUE: [(1) Was there a valid ground for termination?(2) Was there compliance with the procedural
due process to the termination?]
Held: (1) Yes. The Labor Code of the Philippines has several provisions under which an
employee may be validly terminated, namely: (1) just causes under Article 282; (2)
authorized causes under Article 283; (3) termination due to disease under Article
284; and (4) termination by the employee or resignation under Article 285. While the
said provisions did not mention as ground the enforcement of the Union Security
Clause in the CBA, the dismissal from employment based on the same is recognized
and accepted in our jurisdiction.
“Union security” is a generic term, which is applied to and comprehends “closed shop,”
“union shop,”  “maintenance of membership” or any other form of agreement which
imposes upon employees the obligation to acquire or retain union membership as a
condition affecting employment. There is union shop when all new regular employees
are required to join the union within a certain period as a condition for their continued
employment.   There is maintenance of membership shop when employees, who are
union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued employment
until they are promoted or transferred out of the bargaining unit or the agreement is
[40]
terminated.  A closed-shop, on the other hand, may be defined as an enterprise in
which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of a union entirely comprised of or of which the
[ (CREA) v. Brillantes, the Court expounded on the effectiveness of union security clause
employees in interest are a part.
Bergante and Inguillo assail the legality of their termination based on the Union
[42]
Security Clause in the CBA between FPSI and FPSILU.   Article II  of the CBA pertains
to Union Security and Representatives, which provides:
“The Company hereby agrees to a UNION SECURITY [CLAUSE] with
the following terms:
 
1.            All bonafide union members x xx xshall, as a condition to their
continued employment, maintain their membership with the
UNION;
x xx
5.                   Any employee/union member who fails to retain union
membership in good standing may be recommended for
suspension or dismissal by the Union Directorate and/or FPSILU
Executive Council x xx”
Verily, the aforesaid provision requires all members to maintain their membership with
FPSILU during the lifetime of the CBA.   Failing so, and for any of the causes
enumerated therein, the Union Directorate and/or FPSILU Executive Council may
recommend to FPSI an employee/union member's suspension or dismissal.  Records
show that Bergante and Inguillo were former members of FPSILU based on their
signatures in the document which ratified the CBA.   It can also be inferred that they
disaffiliated from FPSILU when the CBA was still in force and subsisting, as can be
gleaned from the documents relative to the intra-union dispute between FPSILU and
NLM-KATIPUNAN.   In view of their disaffiliation, as well as other acts allegedly
detrimental to the interest of both FPSILU and FPSI, a “Petisyon” was submitted to
Policarpio, asking for the termination of the services of employees who failed to
maintain their Union membership.
In terminating the employment of an employee by enforcing the Union Security
Clause, the employer needs only to determine and prove that: (1) the union security
clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the union's
decision to expel the employee from the union or company. All the requisites have
been sufficiently met and FPSI was justified in enforcing the Union Security Clause.
The stipulations in the CBA authorizing the dismissal of employees are of equal import
as the statutory provisions on dismissal under the Labor Code, since a CBA is the law
between the company and the Union, and compliance therewith is mandated by the
express policy to give protection to labor. In Caltex Refinery Employees Association
when it held that it is one intended to strengthen the contracting union and to protect
it from the fickleness or perfidy of its own members.   For without such safeguards,
group solidarity becomes uncertain; the union becomes gradually weakened and
increasingly vulnerable to company machinations.   In this security clause lies the
strength of the union during the enforcement of the collective bargaining
agreement.   It is this clause that provides labor with substantial power in collective
bargaining.  
(2) No. Nonetheless, while We uphold dismissal pursuant to a union security clause,
the same is not without a condition or restriction. The enforcement of union security
clauses is authorized by law, provided such enforcement is not characterized by
arbitrariness, and always with due process. There are two (2) aspects which
characterize the concept of due process under the Labor Code: one is substantive––
whether the termination of employment was based on the provisions of the Labor
Code or in accordance with the prevailing jurisprudence; the other is procedural - the
manner in which the dismissal was effected.
Procedural due process in the dismissal of employees requires notice and
hearing.   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.  The requirement of a hearing, on
the other hand, is complied with as long as there was an opportunity to be heard, and
not necessarily that an actual hearing was conducted.
In the present case, the required two notices that must be given to herein petitioners
Bergante and Inguillo were lacking. Respondents, however, aver that they had
furnished the employees concerned, including petitioners, with a copy of FPSILU's
“Petisyon.”While the “Petisyon” enumerated the several grounds that would justify the
termination of the employees mentioned therein, yet such document is only a
recommendation by the Union upon which the employer may base its decision.   It
cannot be considered a notice of termination. A perusal of each of [the grounds stated
therein] leads Us to conclude that what was stated were general descriptions, which in
no way would enable the employees to intelligently prepare their explanation and
defenses.

Policarpio's allegations are self-serving.   Except for her claim as stated in the
respondent's Position Paper, nowhere from the records can We find that Bergante and
Inguillo were accorded the opportunity to present evidence in support of their
defenses.   Policarpio relied heavily on the “Petisyon” of  FPSILU.   She failed to
convince Us that during the dialogue, she was able to ascertain the validity of the
charges mentioned in the “Petisyon.”   In her futile attempt to prove compliance with
the procedural requirement, she reiterated that the objective of the dialogue was to
provide the employees “the opportunity to receive the act of grace of FPSI by giving
them an amount equivalent to one-half (½) month of their salary for every year of
service.”   We are not convinced.   We cannot even consider the demand and counter-
offer for the payment of the employees as an amicable settlement between the parties
because what took place was merely a discussion only of the amount which the
employees are willing to accept and the amount which the respondents are willing to
give.   Such non-compliance is also corroborated by Bergante and Inguillo in their
pleadings denouncing their unjustified dismissal.   In fine, We hold that the dialogue is
not tantamount to the hearing or conference prescribed by law.
PROCEDURAL REQUIREMENTS: JAKA FOOD PROCESSING
CORPORATION GS. DARWIN PACOT, ETAL.; GR.NO. 151378, MARCH
28, 2005
FACTS: Respondents Darwin Pacot, Robert Parohinog, David Bisnar,
Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab were earlier hired
by petitioner JAKA Foods Processing Corporation (JAKA, for short) until the
latter terminated their employment on August 29, 1997 because the
corporation was "in dire financial straits". It is not disputed, however, that the
termination was effected without JAKA complying with the requirement under
Article 283 of the Labor Code regarding the service of a written notice upon
the employees and the Department of Labor and Employment at least one
(1) month before the intended date of termination. In time, respondents
separately filed with the regional Arbitration Branch of the National Labor
Relations Commission (NLRC) complaints for illegal dismissal,
underpayment of wages and nonpayment of service incentive leave and
13th month pay against JAKA and its HRD Manager, Rosana Castelo. After
due proceedings, the Labor Arbiter rendered a decision declaring the
termination illegal and ordering JAKA and its HRD Manager to reinstate
respondents with full backwages, and separation pay if reinstatement is not
possible.
ISSUE What are the legal implications of a situation where an employee is
dismissed for cause but such dismissal was effected without the employer’s
compliance with the notice requirement under the Labor Code
RULING We note that there are divergent implications of a dismissal for just
cause under Article 282, on one hand, and a dismissal for authorized cause
under Article 283, on the other. A dismissal for just cause under Article 282
implies that the employee concerned has committed, or is guilty of, some
violation against the employer, i.e. the employee has committed some
serious misconduct, is guilty of some fraud against the employer, or he has
neglected his duties. Thus, it can be said that the employee himself initiated
the dismissal process. On another breath, a dismissal for an authorized
cause under Article 283 does not necessarily imply delinquency or culpability
on the part of the employee. Instead, the dismissal process is initiated by the
employer’s exercise of his management prerogative, i.e. when the employer
opts to install labor saving devices, when he decides to cease business
operations or when, as in this case, he undertakes to implement a
retrenchment program. The clear-cut distinction between a dismissal for just
cause under Article 282 and a dismissal for authorized cause under Article
283 is further reinforced by the fact that in the first, payment of separation
pay, as a rule, is not required, while in the second, the law requires payment
of separation pay. For these reasons, there ought to be a difference in
treatment when the ground for dismissal is one of the just causes under
Article 282, and when based on one of the authorized causes under Article
283. Accordingly, it is wise to hold that: (1) if the dismissal is based on a just
cause under Article 282 but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered
because the dismissal process was, in effect, initiated by an act imputable to
the employee; and (2) if the dismissal is based on an authorized cause
under Article 283 but the employer failed to comply with the notice
requirement, the sanction should be stiffer because the dismissal process
was initiated by the employer’s exercise of his management prerogative. The
records before us reveal that, indeed, JAKA was suffering from serious
business losses at the time it terminated respondents’ employment. It is,
therefore, established that there was ground for respondents’ dismissal, i.e.,
retrenchment, which is one of the authorized causes enumerated under
Article 283 of the Labor Code. Likewise, it is established that JAKA failed to
comply with the notice requirement under the same Article. Considering the
factual circumstances in the instant case and the above ratiocination, we,
therefore, deem it proper to fix the indemnity at P50,000.00. NOTE: Not
related to the topic concerned, but still is a helpful piece of knowledge: We
likewise find the Court of Appeals to have been in error when it ordered
JAKA to pay respondents separation pay equivalent to one (1) month salary
for every year of service. This is because in Reahs Corporation vs. NLRC,
we made the following declaration: "The rule, therefore, is that in all cases of
business closure or cessation of operation or undertaking of the employer,
the affected employee is entitled to separation pay. This is consistent with
the state policy of treating labor as a primary social economic force,
affording full protection to its rights as well as its welfare. The exception is
when the closure of business or cessation of operations is due to serious
business losses or financial reverses; duly proved, in which case, the right of
affected employees to separation pay is lost for obvious reasons. xxx".
HEARING: TECHNOL EIGHT PHILIPPINES CORPORATION VS. NLRC
AND DENNIS AMULAR; GR. NO. 187605, APRIL 13, 2010
FACTS: The petitioner Technol Eight Philippines Corporation (Technol),
located at 127 East Main Avenue, Laguna Technopark, Bin, Laguna,
manufactures metal parts and motor vehicle components. It hired the
respondent Dennis Amular in March 1998 and assigned him to Technols
Shearing Line, together with Clarence P. Ducay. Rafael Mendoza was the
lines team leader. On April 16, 2002 at about 5:30 p.m., Mendoza went to
the Surf City Internet Cafin 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 Mendozas report to Avelino S. De Leon, Jr., Technols Production
Control and Delivery (PCD) assistant supervisor, about Amulars and Ducays
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, Technols management sent to Amular and Ducay a
notice of preventive suspension/notice of discharge advising them that their
fistfight with Mendoza violated Section 1-k of Technols 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,
thereafter, Amular received a notice informing him that Technol
management will conduct an administrative hearing. 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, 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. Technol sent him a notice of dismissal.
The Executive Labor Arbiter found Amulars preventive suspension and
subsequent dismissal were illegal. With respect to Amulars dismissal, the
Arbiter held that Technol failed to aord him procedural due process since he
was not able to present his side because he had filed a case before the
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 oce hours.
Arbiter Reyes awarded Amular separation pay (since he did not want to be
reinstated), backwages, 13th month pay, service incentive leave pay and
attorneys fees in the total amount of P158,987.70. Technol appealed to the
NLRC. It NLRC armed the labor arbiters ruling. On appeal, the Court of
Appeals armed the latters decision.
ISSUE: Whether or not respondent was illegally dismissed.
HELD: Court of Appeals decision is overruled. LABOR LAW Technol insists
that it had to order Amulars 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 CAs conclusion that the fact that Amulars 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. Amular undoubtedly committed a misconduct or exhibited improper
behavior that constituted a valid cause for his dismissal under the law and
jurisprudential standards. The circumstances of his misdeed, to our mind,
rendered him unfit to continue working for Technol; guilt is not diminished by
his claim that Technols management called the three of them to a meeting,
and asked them to explain their sides and settle their dierences, which they
did. 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. We do not find Mendozas
denial of Amulars 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. 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. Thus, Amular was not illegally
dismissed; he was dismissed for cause. LABOR LAW What we see in the
records belie Amulars 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. Solid Development Corporation
Workers Association v. Solid Development Corporation, G.R. No. 165995,
August 14, 2007. GRANTED
USE OF POSITION PAPER: SHOPPES MANILA, INC. VS.NLRC; GR. NO.
147125, JANUARY 14, 2004
NATURE: Petition for review RULE 45 assailing CA Decision and Resolution
FACTS: Shoppes Manila, Inc. (SMI) is a domestic corporation engaged in garments
manufacturing using the brand name “KAMISETA.”
On May 6, 1994, SMI employed Lorie Torno (respondent) as trimmer with a salary of
P80/day.In Sept 1995, Torno’s salary was increased to P110/day.
A year later (1996) it was increased to P165/day. In April 1997 her salary was increased
to P185/day. Torno and a co-employee, Maricar Buan, were tasked to handle the
inventory of finished products.
Upon receiving information from the head of its production department that Buan and
Torno had been stealing “KAMISETA” items from the factory, SMI conducted an
investigation involving Torno for being under suspicion of theft.
Witnesses gave testimonies:
1.) Susan Paligamba – that Torno encouraged her to steal a belt;
2.) Loly Dela Cruz – that she saw “KAMISETA” items in Torno’s house.
Torno’s house was inspected, her supervisor Ms. Myrasol O. Silva submitted a report that
she found:
1.) KAMISETA fabrics 1 & ¼ yards;
2.) 2 pcs of KAMISETA shirts made out of KAMISETA excess cuttings/ wrong cut
materials, with fabric damage;
3.) KAMISETA wallpapers – used and new: “NAUTICAL SHOP”
SMI charged Torno for violation of Company Rules and Regulations in their employee’s
handbook, Category 4, Article 12, which is punishable by termination.
ARTICLE 12
July 31, 1997, SMI issued a disciplinary action form suspending Torno indefinitely without
pay.
On Aug. 25, 1997, SMI addressed a notice of dismissal to Torno, calling her to the Head
Office on August 26, 1997 to give her an opportunity to explain herself further.
Torno failed to appear. SMI dismissed Torno from employment.
Torno filed a Complaint for illegal dismissal with prayer for reinstatement, payment of
backwages, non-payment of service incentive leave pay, and 13 th month pay against SMI
in the NLRC NCR Arbitration Branch.
The case was raffled to LA Tumanong. The parties did not reach an amicable settlement.
SMI filed a Motion for the LA to conduct a Formal Investigation on its claim that a Full
Blown Hearing during which the witness can be cross-examined by the opposing counsel
was necessary to ascertain the truth.
LA Tumanong granted the motion and set the case for hearing.
The hearing failed to materialize because of the absences of either private respondent
Torno or her counsel.In the meantime, LA Tumanong was replaced by LA Cuyuca, who
issued an order declaring the case submitted for decision.
LA Cuyuca ruled in favor of private respondent – deprived of due process and was
illegally dismissed.
- SMI did not comply with the 2 notice requirement:
(a.) Torno was not notified of the charges against her; and
(b.) the notice of dismissal was not sent to her.
- reinstatement was no longer possible because the relationship has been strained and
ruptured
- Claims for non-payment of service incentive leave and 13 th month pay were denied for
failure to specify the period covered
- Claim for underpayment of wages (wage differential) was denied, for not being included
in original complaint.
- LA directed SMI to pay P62,530 as backwages and P19,240 as separation pay to Torno.
NLRC affirmed LA Cuyuca.
- Formal hearing of cases is not mandatory in labor cases but is dependent on the
discretion of the LA who has the sole power to determine WON there is a need for
hearing.
CA affirmed the NLRC.
 Cited: New Rules of Procedure of the NLRC, RULE V,
SECTION 4: DETERMINATION OF NECESSITY OF HEARING – Immediately after the
submission by the parties of their position papers/ memorandum, the LA shall motu
propio determine whether there is a need for a formal trial or hearing.
At this stage, he may, at his discretion and for the purpose of making such
determination, ask clarificatory questions to further elicit facts or information, including
but not limited to the subpoena of relevant documentary evidence, if any from any party
or witness.
 In a petition for certiorari under RULE 65, CA cannot evaluate findings of fact of the
LA and NLRC.
 Its inquiry is limited to the determination of WON the public respondent acted with
GAD.
ISSUE/S: WON SMI had a vested right to a formal hearing because LA Tumanong
granted its motion and set the case for hearing
HELD: NO
RATIO: The order of LA Tumanong granting the petitioner’s motion for a hearing of the
case was not conclusive and binding on LA Cuyuca who had the discretion either to hear
the case before deciding it, or to forego with the hearing if under her view, there was no
longer a need therefor as the case could be resolved on the merits based on the records.
Pursuant to the New Rules of Procedure of the NLRC, RULE V, SECTION 4, the labor
arbiter has the authority to determine WON there is a necessity to conduct a formal
hearing in cases brought before him for adjudication.
The holding of a formal hearing or tiral is discretionary with the LA and is something that
the parties cannot demand as a matter of right.
It is entirely within his authority to decide a labor case before him, based on position
papers and supporting documents of the parties, without a trial or formal hearing. 1
The requirements of due process are satisfied when the parties are given the opportunity
to submit position papers wherein they are supposed to attach all the documents that
would prove their claim in case it be decided that no hearing should be conducted or was
necessary.2
RE ILLEGAL DISMISSA
1
Columbus Philippines Bus Corporation V NLRC 364 SCRA 606, 2001
2
Mark Roche International V NLRC 313 SCRA 356, 1999
- Finding of illegal dismissal affirmed
- requisites for valid dismissal:
(a.) there be a just and valid cause, provided under LABOR CODE
DECISION: RUBEN ANDRADA VS. AGEMAR MANNING AGENCY, INC.,
AND SHIPPING MALTA; GR. NO. 194758, OCTOBER 24, 2012
Seafarer was hired as chief cook on June 23, 2003. During the latter part of
his extended contract, he was diagnosed with umbilical hernia. He was then
repatriated and was referred to the company-designated physician for further
medical treatment. On March 2005, seafarer was certified fit to work and
signed the Deed of Release, Waiver and Quitclaim on April 2005. However,
seafarer filed a complaint for the recovery of disability benefits, sickness
allowance, and reimbursement of medical expenses, damages, and
attorney’s fees. He alleged that he could still feel the symptoms of his illness
and that his private physician concluded that he was unfit to resume work as
a seafarer in any capacity and was given a grade “7” disability.
The Labor Arbiter ruled that seafarer was entitled to full disability benefits as
seafarer’s inability to perform his work for more than 120 days constituted
permanent total disability. The office also gave credence on the findings and
assessment of seafarer’s private physician.
The NLRC dismissed the complaint of the seafarer and gave credence to the
findings of the company-designated doctor. The NLRC ruling was affirmed
by the Court of Appeals.
ISSUE: Is Andrada entitled to disability benefits on account of his medical
condition?
The Supreme Court held that seafarer is not entitled to disability benefits.
The Court held that the assessment of the company-designated physician as
to seafarer’s medical condition deserved greater evidentiary weight than that
of seafarer’s private physician. The court said that the companydesignated
physician monitored seafarer’s health status from the beginning; thus, the
Court cannot simply throw out her certification. Further, the company-
designated physician was the one who performed the necessary medical
procedure and monitored the treatment of the seafarer. Certainly, this
enabled the company-designated physician to acquire detailed knowledge of
seafarer's medical condition and, thus, was in a better position to reach an
accurate evaluation of his health condition and his fitness for work
resumption. On the other hand, it is undisputed that the recommendation of
seafarer’s private physician was based on a single medical report which
outlined the alleged findings and medical history of the seafarer obtained
after the private doctor examined him only once. It is pristine clear that the
examination and treatment of the seafarer by the company-designated
physician had been more extensive than the examination conducted by
seafarer’s private physician.
Lastly, the Court ruled that seafarer already executed Deed of Release,
Waiver and Quitclaim. By doing this, the seafarer impliedly admitted the
correctness of the medical assessments and acknowledged to have
completely released and forever discharged the company from all actions,
claims, complaints and demand whatsoever.
APPEALS BOND: ANDREW JAMES MCBURNE VS. EULALIO GANZON,
ETAL. ; GR.NO. 178034 AND 178117 AND GR NOS. 186984-85, OCOBER
17, 2013
FACTS
Petition for review on certiorari under Rule 45 of a Court of Appeals decision
granting respondents Motion to Reduce Appeal Bond; directing them to post
a bond of P10 Million; and ordering the NLRC to give due course to their
appeal and to conduct further proceedings. Also assailed is a Resolution
denying a motion for reconsideration.Petitioner Andrew McBurnie, an
Australian national, signed a five-year employment contract as executive
vice-president of respondent EGI Managers through its president Eulalio
Ganzon. McBurnie later featured in an accident and while recuperating from
his injuries in Australia, he was informed by
Ganzon that his services were no longer needed. McBurnie filed a complaint
for illegal dismissal with prayer for the payment of his salary and benefits for
the unexpired term of the contract, damages and attorneys fees.
The Labor Arbiter declared petitioners dismissal illegal and ordering
respondents to pay salary and benefits for the unexpired term of the
contract, moral and exemplary damages, and attorneys fees. The
NLRC denied respondent’s motion to reduce bond and ordered respondents
to post an additional bond together with the other requirements under the
NLRC Rules of Procedure within a non-extendible period
of 10 days from receipt thereof, otherwise the appeal shall be dismissed.
Respondents moved for reconsideration but it was denied; respondents
were again ordered to post the additional appeal bond within another non-
extendible period of 10 days from receipt thereof.
Instead of complying, respondents filed a petition for certiorari and
prohibition with the CA with prayer for issuance of a preliminary injunction
and/or temporary restraining order. A TRO effective for 60 days
was issued enjoining the NLRC from enforcing its orders. After the TRO
expired and respondents still failed to post additional bond, the NLRC
dismissed their appeal. Following the denial of their MFR, respondents filed
with the CA a petition for certiorari with prayer for issuance of TRO and/or
writ of preliminary injunction.
The CA issued a TRO enjoining the NLRC from enforcing resolution
dismissing respondents appeal, and its resolution denying the MFR. It
issued a writ of preliminary injunction. Petitioner assailed the issuance of the
writ before the Supreme Court. However, it was dismissed for submitting an
affidavit of service which failed to show a competent evidence of affiants
identity. Meanwhile, the CA rendered the assailed decision granting
respondents motion to reduce appeal bond
and directing them to post an appeal bond of P10 million with the NLRC,
which was likewise ordered togive due course to the appeal and to conduct
further proceedings. Petitioners MFR was denied hence this petition for
review on certiorari.
POSITION OF PARTIES
Petitioner contends that the CA erred in holding that the NLRC committed
grave abuse of discretion when it out rightly dismissed the motion to reduce
appeal bond without fixing a reasonable amount
therefore, thus depriving the respondents their right to appeal the Labor
Arbiters decision; that the rules
on perfection of appeals must be strictly applied; that the period for posting
the bond cannot be made to depend on the discretion of the party; that
respondents not only refused to post appeal bond within the
prescribed period but the ground relied upon for the reduction thereof, to wit:
the awards were patent nullity and excessive, was not meritorious.
ISSUE: Whether or not McBurnie was illegally dismissed?
HELD: There was no employer-employee relationship.
PROCEDURAL ISSUES
WON the CA committed reversible error in finding that the NLRC committed
grave abuse of discretion when it implemented the provision of the Labor
Code, Art. 223 and Sec. 6, Rule VI of the NLRC Rules of Procedure. YES.
RULING
The petition is granted. The decision and resolution of the CA are reversed
and set aside. The resolutions of the NLRC are reinstated and affirmed.
Under Art. 223 of the Labor Code, the posting of a bond is indispensable to
the perfection of an appeal in cases involving monetary awards from the
decision of the Labor Arbiter. Moreover, the filing of the bond is not only
mandatory but a jurisdictional requirement as well, that must be complied
with in order to confer jurisdiction upon the NLRC. The jurisdictional principle
and the mandatory nature of the appeal bond posted within the 10-day
reglementary period are reaffirmed by the New Rules of
Procedure of the NLRC. While the bond may be reduced upon motion by the
employer, this is subject to the conditions that (1) the motion to reduce the
bond shall be based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant, otherwise the filing
of the motion to reduce bond shall not stop the running of the period to
perfect an appeal. Records show that respondents filed their memorandum
of appeal and motion to reduce appeal bond on
the 10th or last day of the reglementary period. Although they posted an
initial appeal bond, the same was grossly inadequate. Further, there is no
basis in respondents contention that the awards of the Labor Arbiter were
null and excessive, and with premeditated intention to render respondents
incapable of posting an appeal bond and deprive them of the right to appeal.
It also does not escape judicial notice that the cash/surety bond requirement
does not necessitate the employer to physically surrender the entire amount
of the monetary judgment. The usual procedure is for the employer to obtain
the services of a bonding company, which will then require the employer to
pay a percentage of the award in exchange for a bond securing the full
amount.
QUITCLAIM: HYPTIE AUJERO VS. PHILIPPINE COMMUNICATIONS
SATELLITE CORPORATION; GR. NO. 193484, JANUARY 18, 2012
SUMMARY. One paragraph, five to six sentences as much as possible.
Make sure that what you right is reciter-ready.
DOCTRINE. One paragraph, five to six sentences as much as possible. As
much as possible please copy what the Court exactly said.
FACTS.
 In 1967, petitioner started working for respondent Philippine
Communications Satellite Corporation (Philcomsat) as an
accountant in the latter’s Finance Department.
 After 34 years of service, the petitioner applied for early retirement.
 His application for retirement was approved entitling him to receive
retirement benefits at a rate equivalent to one and a half of his
monthly salary for every year of service.
 At that time, the petitioner was Philcomsat’s Senior Vice-President
with a monthly salary of P274,805.00.
 On September 12, 2001, the petitioner executed a Deed of Release
and Quitclaim in Philcomsat’s favor, following his receipt from the
latter of a check in the amount of P9,439,327.91.
 Almost three (3) years thereafter, the petitioner filed a complaint for
unpaid retirement benefits, claiming that the actual amount of his
retirement pay is P14,015,055.00
 Petitioner clained that the P9,439,327.91 he received from
Philcomsat as supposed settlement for all his claims is
unconscionable, which is more than enough reason to declare his
quitclaim as null and void.
 According to the petitioner, he had no choice but to accept a lesser
amount as he was in dire need thereof and was all set to return to
his hometown and he signed the quitclaim despite the considerable
deficiency as no single centavo would be released to him if he did
not execute a release and waiver in Philcomsat’s favor.
 The petitioner claims that his right to receive the full amount of his
retirement benefits, which is equivalent to one and a half of his
monthly salary for every year of service, is provided under the
Retirement Plan that Philcomsat created on January 1, 1977 for the
benefit of its employees.
ISSUES & RATIO.
1. WON the delay in the filing of Philcomsat’s appeal and posting of
surety bond is inexcusable-YES
Procedural rules may be relaxed to give way to the full determination of its
case on merits NLRC correctly prioritized substantial justice over the rigid
and stringent application of procedural rulesProcedural rules may be waived
or dispensed with in absolutely meritorious cases.
2. WON the quitclaim executed by the petitioner in Philcomsat’s
favor is valid thereby foreclosing his right so institute any claim
against Philcomsat-NO
The court used the ruling on Goodrich Manufacturing Corporation, vs.
Ativo, “It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the
person making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and
binding undertaking.”
The petitioner is not an ordinary laborer. He is mature, intelligent and
educated with a college degree, who cannot be easily duped or
tricked into performing an act against
his will.
As no proof was presented that the said quitclaim was entered into
through fraud, deception, misrepresentation, the same is valid and
binding.

3. WON the case should be dismissed due to procedural lapses-NO
Procedural rules may be relaxed to give way to the full determination of a
case on its merits.Far from having gravely abused its discretion,the
NLRC correctly prioritized substantial justice over the rigid and stringent
application of procedural rules. This, by
all means, is not a case of grave abuse of discretion callingfor the
issuance of a writ of certiorari.
DECISION.
Petition DENIED
NOTES.
Put here important stuff that you think the prof might ask.
When substantial justice dictates it, proceduralrules may be relaxed in order
to arrive at a just dispositionof a case. (Commission on Appointments vs.
Paler, 614SCRA 127 [2010])
PRESCRIPTION: UNIVERSITY OF THE EAST VS. UNIVERSITY OF THE
EAST EMPLOYEES ASSOCIATION; GR. NO. 179593, SEPTEMBER 14,
2011
The principle against diminution of benefits shall be applicable only if the
grant or benefit is founded on an express policy or has ripened into a
practice over a long period of time which is consistent and deliberate.
Prior to school year (SY) 1983-1984, a 70% incremental proceed from tuition
fee increases, as mandated by Presidential Decree No. 451 (PD No. 451) as
amended, was distributed by petitioner University of the East (UE) in
proportion to the average number of academic and non-academic personnel.
This distribution scheme was the subject of an agreement signed by the
management, faculty association and respondent University of the East
Employees’ Association (UEEA), being the duly registered labor union of the
rank-and-file employees of UE. However, starting SY 1994-1995, the 70%
incremental proceeds from the tuition fee increase was distributed only to
the covered employees of UE basing on a new formula of percentage of
salary. Respondent, through its president, questioned the validity of such
manner of distribution.
In a tripartite meeting, everybody, even the UEEA officers present in the
meeting agreed, that the new distribution scheme would now be based on
percentage of salary and not anymore on the average number of personnel.
However, UEEA filed a complaint against UE for non-
payment/underpayment of the rank-and-file employees’ share of the tuition
fee increases, consequences under the new distribution scheme. 
ISSUE:Whether or not UE’s revised employee distribution scheme for
proceeds of tuition fee increase is valid
HELD:Petition GRANTED.
The Supreme Court finds the distribution scheme for proceeds of tuition fee
increase to be valid. First and foremost, the new distribution scheme is in
accordance with the law. UE, being a private educational institution has the
full discretion on the disposition of the 70% incremental proceeds from
tuition fee increase, with the only condition imposed that the proceeds
should go to the salaries, wages and allowances and other benefits of
teachers and non-teaching personnel. Also, the distribution scheme is
clearly not a diminution of benefits, contrary to respondent’s claim. The
principle against diminution of benefits shall be applicable only if the grant or
benefit is founded on an express policy or has ripened into a practice over a
long period of time which is consistent and deliberate, both of which
conditions do not exist in the case. The revised distribution scheme is not a
product of an express policy nor has it ripened a consistent and deliberate
practice. UE also did not change the distribution scheme peremptorily, as
proven in the tripartite meeting that was held to settle the issue.
Moreover, it was erroneous on the part of the respondent to rely on the
October 18, 1983 Agreement which states the previous distribution scheme.
Such agreement was deemed to have been changed by the new agreement
settled during the tripartite meeting held on June 19, 1995, of which was
attended by representatives of UEEA. It is also further noted that the
respondents did not complain against the new distribution scheme during the
said meeting, and even signed the minutes of the meeting to signify their
conformity to it. Such action shows their adherence to the scheme and their
act of questioning it now also shows an act of estopping.   amount in a plastic bag and deposited it in the drawer of the locked wooden
Lastly, the new distribution scheme is valid also for the reason that the
complaint has also prescribed. It being a money claim arising from employer-
employee relationship, the complaint prescribes in three (3 years) as
provided for in Article 291 of the Labor Code. The respondent filed the
complaint on April 27, 1999, more than three years from the alleged violation
in 1994 and thus, it was clear that prescription has set in, making the
distribution scheme maintain its validity.
CRIMINAL CASES: LOLITA S. CONCEPCION VS. MINEX IMPORT
CORPORATION, ETA.;GR.NO. 153569, JANUARY 24, 2012
Case Doctrine:
The employer may validly dismiss for loss of trust and confidence an
employee who commits an act of fraud prejudicial to the interest of the
employer. Neither a criminal prosecution nor a conviction beyond reasonable
doubt for the crime is a requisite for the validity of the dismissal.
Nonetheless, the dismissal for a just or lawful cause must still be made upon
compliance with the requirements of due process under the Labor Code;
otherwise, the employer is liable to pay nominal damages as indemnity to
the dismissed employee.
Facts:
Respondent Minex Import-Export Corporation (Minex) employed the
petitioner initially as a salesgirl,rotating her assignment among nearly all its
outlets. She was assigned at SM Harrison Plaza kiosk with the instruction to
hold the keys of the kiosk. On November 9, 1997, the petitioner and her
salesgirls had sales of crystal items totaling P39,194.50. At the close of
business that day, they conducted a cash-count of their sales proceeds,
including those from the preceding Friday and Saturday, and determined
their total for the three days to be P50,912.00. The petitioner wrapped the
cabinet of the kiosk.At about 9:30 am of November 10, 1997, the petitioner
phoned Vina Mariano to report that the P50,912.00 was missing, explaining
how she and her salesgirls had placed the wrapped amount at the bottom of
the cabinet the night before, and how she had found upon reporting to work
that morning that the contents of the cabinet were in disarray and the money
already missing.
Later, while the petitioner was giving a detailed statement on the theft to the
security investigator of Harrison Plaza, Vina and Sylvia Mariano, her
superiors, arrived with a policeman who immediately placed the petitioner
under arrest and brought her to Precinct 9 of the Malate Police Station.
There, the police investigated her. She was detained for a day, from 11:30
am of November 10, 1997 until 11:30 am of November 11, 1997, being
released only because the inquest prosecutor instructed so.On November
12, 1997, the petitioner complained against the respondents for illegal
dismissal in the Department of Labor and Employment.On November 14,
1997, Minex, through Vina, filed a complaint for qualified theft against the
petitioner in the Office of the City Prosecutor in Manila.
Issue: Whether or not the employer denied the employee dismissed
with due process and thru liable for damages?
Ruling:
   Yes. To dismiss an employee, the law requires the existence of a just and
valid cause.  Article 282 of the Labor Code enumerates the just causes for
termination by the employer:  (a) serious misconduct or willful disobedience
by the employee of the lawful orders of his employer or the latter’s
representative in connection with the employee’s work; (b) gross and
habitual neglect by the employee of his duties; (c) fraud or willful breach by
the employee of the trust reposed in him by his employer or his duly
authorized representative; (d) commission of a crime or offense by the
employee against the person of his employer or any immediate member of
his family or his duly authorized representative; and (e) other causes
analogous to the foregoing.
Indeed, the employer is not expected to be as strict and rigorous as a judge
in a criminal trial in weighing all the probabilities of guilt before terminating
the employee. Unlike a criminal case, which necessitates a moral certainty of
guilt due to the loss of the personal liberty of the accused being the issue, a
case concerning an employee suspected of wrongdoing leads only to his
termination as a consequence. The quantum of proof required for convicting
an accused is thus higher – proof of guilt beyond reasonable doubt – than
the quantum prescribed for dismissing an employee – substantial evidence.
In so stating, we are not diminishing the value of employment, but only
noting that the loss of employment occasions a consequence lesser than the
loss of personal liberty, and may thus call for a lower degree of proof.
Yet, even as we now say that the respondents had a just or valid cause for
terminating the petitioner, it becomes unavoidable to ask whether or not they
complied with the requirements of due process. The petitioner plainly
demonstrated how quickly and summarily her dismissal was carried out
without first requiring her to explain anything in her defense as demanded
under Section 2 (d) of Rule I of the Implementing Rules of Book VI of the
Labor Code. Instead, the respondents forthwith had her arrested and
investigated by the police authorities for qualified theft. This, we think, was a
denial of her right to due process of law, consisting in the opportunity to be
heard and to defend herself. In fact, their decision to dismiss her was
already final even before the police authority commenced an investigation of
the theft, the finality being confirmed by no less than Sylvia Mariano herself
telling the petitioner during their phone conversation following the latter’s
release from police custody on November 11, 1997 that she (Sylvia) “no
longer wanted to see” her.
The fair and reasonable opportunity required to be given to the employee
before dismissal encompassed not only the giving to the employee of notice
of the cause and the ability of the employee to explain, but also the chance
to defend against the accusation. This was our thrust in Philippine Pizza,
Inc. v. Bungabong, where we held that the employee was not afforded due
process despite the dismissal being upon a just cause, considering that he
was not given a fair and reasonable opportunity to confront his accusers and
to defend himself against the charge of theft notwithstanding his having
submitted his explanation denying that he had stolen beer from the company
dispenser. The termination letter was issued a day before the employee
could go to the HRD Office for the investigation, which made it clear to him
that the decision to terminate was already final even before he could submit
his side and refute the charges against him. Nothing that he could say or do
at that point would have changed the decision to dismiss him. Such omission
to give the employee the benefit of a hearing and investigation before his
termination constituted an infringement of his constitutional right to due
process by the employer.
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal, or render it illegal, or
ineffectual.  However, the employer should indemnify the employee for the
violation of his statutory rights, as ruled in Reta v. National Labor Relations
Commission. The indemnity to be imposed should be stiffer to discourage
the abhorrent practice of “dismiss now, pay later,” which we sought to deter
in the Serrano ruling.  The sanction should be in the nature of
indemnification or penalty and should depend on the facts of each case,
taking into special consideration the gravity of the due process violation of
the employer.

 The violation of the petitioners’ right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal
damages.  The amount of such damages is addressed to the sound
discretion of the court, taking into account the relevant
circumstances.  Considering the prevailing circumstances in the case at bar,
we deem it proper to fix it at P30,000.00.  We believe this form of damages
would serve to deter employers from future violations of the statutory due
process rights of employees.  At the very least, it provides a vindication or
recognition of this fundamental right granted to the latter under the Labor
Code and its Implementing Rules.