Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 198534               July 3, 2013

JENNY F. PECKSON, Petitioner,
vs.
ROBINSONS SUPERMARKET CORPORATION, JODY GADIA, ROENA SARTE, and
RUBY ALEX, Respondents.

DECISIO N

REYES, J.:

For resolution is the Petition for Review on Certiorari 1 of the Decision2 dated June 8, 2011 of the
Court of Appeals (CA) in CA-G.R. SP No. 109604 affirming the Decision 3 dated February 25,
2009 of the National Labor Relations Commission (NLRC) in NLRC NCR Case No. 00-11-
09316-06/NLRC LAC No. 002020-07, which upheld the Dismissal 4 by the Labor Arbiter (LA)
on May 30, 2007 of Jenny F. Peckson's (petitioner) complaint for constructive dismissal.

Antecedent Facts and Proceedings

The petitioner first joined the Robinsons Supermarket Corporation (RSC) as a Sales Clerk on
November 3, 1987. On October 26, 2006, she was holding the position of Category Buyer when
respondent Roena Sarte (Sarte), RSC’s Assistant Vice-President for Merchandising, reassigned
her to the position of Provincial Coordinator, effective November 1, 2006. Claiming that her new
assignment was a demotion because it was non-supervisory and clerical in nature, the petitioner
refused to turn over her responsibilities to the new Category Buyer, or to accept her new
responsibilities as Provincial Coordinator. Jody Gadia (Gadia) and Ruby Alex (Alex) were
impleaded because they were corporate officers of the RSC.

In a memorandum to the petitioner dated November 13, 2006, 6 the RSC, through Sarte,
demanded an explanation from her within 48 hours for her refusal to accept her new assignment
despite written and verbal demands. Sarte cited a company rule, Offenses Subject to Disciplinary
Action No. 4.07, which provided that "[d]isobedience, refusal or failure to do assigned task or to
obey superior’s/official’s orders/instructions, or to follow established procedures or practices
without valid reason" would be meted the penalty of suspension.
The petitioner ignored the 48-hour deadline to explain imposed by Sarte. On November 23,
2006, Sarte issued her another memorandum,7 reiterating her demand to explain in writing within
48 hours why she persistently refused to assume her new position, and warning her that this
could be her final chance to present her side or be deemed to have waived her right to be heard.

In her one-paragraph reply submitted on November 27, 2006,8 the petitioner stated that she could
not accept the position of Provincial Coordinator since she saw it as a demotion. As it turned out,
however, on November 9, 2006, the petitioner had already filed a complaint for constructive
dismissal9 against RSC, Sarte, Gadia and Alex (respondents).

On November 30, 2006, Sarte issued an instruction to the petitioner to report to RSC’s Metroeast
Depot to help prepare all shipping manifests for Cagayan de Oro and Bacolod, but as witnessed
by RSC employees Raquel Torrechua and Alex, she did not obey as instructed. 10 Again on
December 8, 2006, Sarte issued a similar instruction, citing the need for certain tasks from the
petitioner in preparation for the coming Christmas holidays, but the petitioner again refused to
heed.11

As culled from the assailed appellate court decision,12 the petitioner argued before the LA that
the true organizational chart of the RSC showed that the position of Category Buyer was one
level above that of the Provincial Coordinator, and that moreover, the job description of a
Provincial Coordinator was largely clerical and did not require her to analyze stock levels and
order points, or source new local and international suppliers, or monitor stock level per store and
recommend items for replenishment, or negotiate better items and discounts from suppliers,
duties which only a Category Buyer could perform. She also claimed that she was instructed to
file a courtesy resignation in exchange for a separation pay of one-half salary per year of service.

The respondents in their position paper denied the correctness of the organizational chart
presented by the petitioner. They maintained that her transfer was not a demotion since the
Provincial Coordinator occupied a "Level 5" position like the Category Buyer, with the same
work conditions, salary and benefits. But while both positions had no significant disparity in the
required skill, experience and aptitude, the position of Category Buyer demanded the traits of
punctuality, diligence and attentiveness because it is a frontline position in the day-to-day
business operations of RSC which the petitioner, unfortunately, did not possess.

The respondents also raised the petitioner’s record of habitual tardiness as far back as 1999, as
well as poor performance rating in 2005. In addition to her performance rating of "2.8" out of
"4.0" in 2005 equivalent to "below expectation," the petitioner was found to be tardy in June and
July 2005, 13 times, and for the entire 2005, 57 times; that she was suspended twice in 2006 for
20 instances of tardiness and absences from July to September 2006 alone. 13 We also note that
the petitioner was suspended for seven (7) days in September and October 2005 for deliberately
violating a company policy after she was seen having lunch with a company supplier.14
In her affidavit,15 respondent Sarte denied that the reassignment of the petitioner as Provincial
Coordinator was motivated by a desire to besmirch the name of the latter. She asserted that it was
made in the exercise of management prerogative and sound discretion, in view of the nsitive
position occupied by the Category Buyer in RSC’s daily operations, vis-à-vis the petitioner’s
"below expectation" performance rating and habitual tardiness.

In dismissing the petitioner’s complaint, the LA in its Decision 16 dated May 30, 2007 ruled that
job reassignment or classification is a strict prerogative of the employer, and that the petitioner
cannot refuse her transfer from Category Buyer to Provincial Coordinator since both positions
commanded the same salary structure, high degree of responsibility and impeccable honesty and
integrity. Upholding the employer’s right not to retain an employee in a particular position to
prevent losses or to promote profitability, the LA found no showing of any illegal motive on the
part of the respondents in reassigning the petitioner. The transfer was dictated by the need for
punctuality, diligence and attentiveness in the position of Category Buyer, which the petitioner
clearly lacked. Moreover, the LA ruled that her persistent refusal to accept her new position
amounted to insubordination, entitling the RSC to dismiss her from employment.

A month after the above ruling, or on June 22, 2007, the petitioner tendered her written "forced"
resignation,17 wherein she complained that she was being subjected to ridicule by clients and co-
employees alike on account of her floating status since the time she refused to accept her
transfer. She likewise claimed that she was being compelled to accept the position of Provincial
Coordinator without due process.

On appeal, the NLRC in its Decision 18 dated February 25, 2009 sustained the findings of the LA.
It agreed that the lateral transfer of the petitioner from Category Buyer to Provincial Coordinator
was not a demotion amounting to constructive dismissal, since both positions belonged to Job
Level 5 and between them there is no significant disparity in terms of the requirements of skill,
experience and aptitude. Contrary to the petitioner’s assertion, the NLRC found that the position
of Provincial Coordinator is not a rank-and-file position but in fact requires the exercise of
discretion and independent judgment, as well as appropriate recommendations to management to
ensure the faithful implementation of its policies and programs; that it even exercises influence
over the Category Buyer in that it includes performing a recommendatory function to guide the
Category Buyer in making decisions on the right assortment, price and quantity of the items,
articles or merchandise to be sold by the store.

The NLRC then reiterated the settled rule that management may transfer an employee from one
office to another within the business establishment, provided there is no demotion in rank or
diminution of salary, benefits, and other privileges, and the action is not motivated by
discrimination or bad faith or effected as a form of punishment without sufficient cause. It ruled
that the respondents were able to show that the petitioner’s transfer was not unreasonable,
inconvenient or prejudicial, but was prompted by her failure to meet the demands of punctuality,
diligence, and personal attention of the position of Category Buyer; that management wanted to
give the petitioner a chance to improve her work ethic, but her obstinate refusal to assume her
new position has prejudiced respondent RSC, even while she continued to receive her salaries
and benefits as Provincial Coordinator.

On petition for certiorari to the CA, the petitioner insisted that her transfer from Category Buyer
to Provincial Coordinator was a form of demotion without due process, and that the respondents
unjustifiably depicted her as remiss in her duties, flawed in her character, and unduly obstinate in
her refusal to accept her new post.

In its Decision19 dated June 8, 2011, the CA found no basis to deviate from the oft-repeated tenet
that the findings of fact and conclusions of the NLRC when supported by substantial evidence
are generally accorded not only great weight and respect but even finality, and are thus deemed
binding.20

Petition for Review in the Supreme Court

Now on petition for review to this Court, the petitioner maintains that her lateral transfer from
Category Buyer to Provincial Coordinator was a demotion amounting to constructive dismissal
because her reassignment was not a valid exercise of management prerogative, but was done in
bad faith and without due process. She claims that the respondents manipulated the facts to show
that she was tardy; that they even surreptitiously drew up a new organizational chart of the
Merchandising Department of RSC, soon after she filed her complaint for illegal dismissal, to
show that the position of Provincial Coordinator belonged to Job Level 5 as the Category Buyer,
and not one level below; that the company deliberately embarrassed her when it cut off her email
access; that they sent memoranda to her clients that she was no longer a Category Buyer, and to
the various Robinsons branches that she was now a Provincial Coordinator, while Milo Padilla
(Padilla) was taking over her former position as Category Buyer; that for seven (7) months, they
placed her on floating status and subjected her to mockery and ridicule by the suppliers and her
co-employees; that not only was there no justification for her transfer, but the respondents clearly
acted in bad faith and with discrimination, insensibility and disdain to make her stay with the
company intolerable for her.

Our Ruling

We find no merit in the petition.

This Court has consistently refused to interfere with the exercise by management of its
prerogative to regulate the employees’ work assignments, the working methods and the place and
manner of work.
As we all know, there are various laws imposing all kinds of burdens and obligations upon the
employer in relation to his employees, and yet as a rule this Court has always upheld the
employer’s prerogative to regulate all aspects of employment relating to the employees’ work
assignment, the working methods and the place and manner of work. Indeed, labor laws
discourage interference with an employer’s judgment in the conduct of his business.21

In Rural Bank of Cantilan, Inc. v. Julve,22 the Court had occasion to summarize the general
jurisprudential guidelines affecting the right of the employer to regulate employment, including
the transfer of its employees:

Under the doctrine of management prerogative, every employer has the inherent right to regulate,
according to his own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, the time, place and manner of work, work supervision, transfer
of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only
limitations to the exercise of this prerogative are those imposed by labor laws and the principles
of equity and substantial justice.

While the law imposes many obligations upon the employer, nonetheless, it also protects the
employer’s right to expect from its employees not only good performance, adequate work, and
diligence, but also good conduct and loyalty. In fact, the Labor Code does not excuse employees
from complying with valid company policies and reasonable regulations for their governance and
guidance.

Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a
transfer is a movement from one position to another of equivalent rank, level or salary without
break in the service or a lateral movement from one position to another of equivalent rank or
salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate
business purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or
bad faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the
employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial
to the employee.23 (Citations omitted)

In Philippine Japan Active Carbon Corporation v. NLRC,24 it was held that the exercise of
management’s prerogative concerning the employees’ work assignments is based on its
assessment of the qualifications, aptitudes and competence of its employees, and by moving
them around in the various areas of its business operations it can ascertain where they will
function with maximum benefit to the company.1âwphi1

It is the employer’s prerogative, based on its assessment and perception of its employees’
qualifications, aptitudes, and competence, to move them around in the various areas of its
business operations in order to ascertain where they will function with maximum benefit to the
company. An employee’s right to security of tenure does not give him such a vested right in his
position as would deprive the company of its prerogative to change his assignment or transfer
him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor
prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries,
benefits, and other privileges, the employee may not complain that it amounts to a constructive
dismissal.25

As a privilege inherent in the employer’s right to control and manage its enterprise effectively,
its freedom to conduct its business operations to achieve its purpose cannot be denied. 26 We
agree with the appellate court that the respondents are justified in moving the petitioner to
another equivalent position, which presumably would be less affected by her habitual tardiness
or inconsistent attendance than if she continued as a Category Buyer, a "frontline position" in the
day-to-day business operations of a supermarket such as Robinsons.

If the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it

does not involve a demotion in rank or a diminution of his salaries, benefits and other privileges,
the employee may not complain that it amounts to a constructive dismissal.

As we have already noted, the respondents had the burden of proof that the transfer of the
petitioner was not tantamount to constructive dismissal, which as defined in Blue Dairy
Corporation v. NLRC,27 is a quitting because continued employment is rendered impossible,
unreasonable or unlikely, or an offer involving a demotion in rank and diminution of pay:

The managerial prerogative to transfer personnel must be exercised without grave abuse of
discretion, bearing in mind the basic elements of justice and fair play. Having the right should
not be confused with the manner in which that right is exercised. Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer
must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the
employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. Should the employer fail to overcome this burden of proof, the employee’s
transfer shall be tantamount to constructive dismissal, which has been defined as a quitting
because continued employment is rendered impossible, unreasonable or unlikely; as an offer
involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists
when an act of clear discrimination, insensibility or disdain by an employer has become so
unbearable to the employee leaving him with no option but to forego with his continued
employment.

Thus, as further held in Philippine Japan Active Carbon Corporation, 28 when the transfer of an
employee is not unreasonable, or inconvenient, or prejudicial to him, and it does not involve a
demotion in rank or a diminution of his salaries, benefits and other privileges, the employee may
not complain that it amounts to a constructive dismissal.29
But like all other rights, there are limits to the exercise of managerial prerogative to transfer
personnel, and on the employer is laid the burden to show that the same is without grave abuse of
discretion, bearing in mind the basic elements of justice and fair play. 30 Indeed, management
prerogative may not be used as a subterfuge by the employer to rid himself of an undesirable
worker.31

Interestingly, although the petitioner claims that she was constructively dismissed, yet until the
unfavorable decision of the LA on May 30, 2007, for seven (7) months she continued to collect
her salary while also adamantly refusing to heed the order of Sarte to report to the Metroeast
Depot. It was only on June 22, 2007, after the LA’s decision, that she filed her "forced"
resignation. Her deliberate and unjustified refusal to assume her new assignment is a form of
neglect of duty, and according to the LA, an act of insubordination. We saw how the company
sought every chance to hear her out on her grievances and how she ignored the memoranda of
Sarte asking her to explain her refusal to accept her transfer. All that the petitioner could say was
that it was a demotion and that her floating status embarrassed her before the suppliers and her
co-employees.

The respondents have discharged the burden of proof that the transfer of the petitioner was not
tantamount to constructive dismissal.

In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, 32 a machinist who had been employed
with the petitioner company for 16 years was reduced to the service job of transporting filling
materials after he failed to report for work for one (1) day on account of an urgent family matter.
This is one instance where the employee’s demotion was rightly held to be an unlawful
constructive dismissal because the employer failed to show substantial proof that the employee’s
demotion was for a valid and just cause:

In case of a constructive dismissal, the employer has the burden of proving that the transfer and
demotion of an employee are for valid and legitimate grounds such as genuine business
necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer
must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the
employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. Failure of the employer to overcome this burden of proof, the employee’s
demotion shall no doubt be tantamount to unlawful constructive dismissal. x x x. 33 (Citation
omitted)

In the case at bar, we agree with the appellate court that there is substantial showing that
the transfer of the petitioner from Category Buyer to Provincial Coordinator was not
unreasonable, inconvenient, or prejudicial to her. The petitioner failed to dispute that the
job classifications of Category Buyer and Provincial Coordinator are similar, or that they
command a similar salary structure and responsibilities. We agree with the NLRC that the
Provincial Coordinator’s position does not involve mere clerical functions but requires the
exercise of discretion from time to time, as well as independent judgment, since the
Provincial Coordinator gives appropriate recommendations to management and ensures
the faithful implementation of policies and programs of the company. It even has influence
over a Category Buyer because of its recommendatory function that enables the Category
Buyer to make right decisions on assortment, price and quantity of the items to be sold by
the store.34

We also cannot sustain the petitioner’s claim that she was not accorded due process and that the
respondents acted toward her with discrimination, insensibility, or disdain as to force her to
forego her continued employment. In addition to verbal reminders from Sarte, the petitioner was
asked in writing twice to explain within 48 hours her refusal to accept her transfer. In the first,
she completely remained silent, and in the second, she took four (4) days to file a mere one-
paragraph reply, wherein she simply said that she saw the Provincial Coordinator position as a
demotion, hence she could not accept it. Worse, she may even be said to have committed
insubordination when she refused to turn over her responsibilities to the new Category Buyer,
Padilla, and to assume her new responsibilities as Provincial Coordinator and report to the
Metroeast Depot as directed. This was precisely the reason why the petitioner was kept on
floating status. To her discredit, her defiance constituted a neglect of duty, or an act of
insubordination, per the LA.

Neither can we consider tenable the petitioner’s contention that the respondents deliberately held
her up to mockery and ridicule when they cut off her email access, sent memoranda to her clients
that she was no longer a Category Buyer, and to the various Robinsons branches that she was
now a Provincial Coordinator on floating status and that Padilla was taking over her position as
the new Category Buyer. It suffices to state that these measures are the logical steps to take for
the petitioner’s unjustified resistance to her transfer, and were not intended to subject her to
public embarrassment.

Judicial review of labor cases does not go beyond the evaluation of the sufficiency of the
evidence upon which labor officials’ findings rest.

Finally, as reiterated in Acebedo Optical, 35 this Court is not a trier of facts, and only errors of law
are generally reviewed in petitions for review on certiorari criticizing decisions of the CA.
Questions of fact are not entertained, and in labor cases, this doctrine applies with greater force.

Factual questions are for labor tribunals to resolve.36 Thus:

Judicial Review or labor cases does not go beyond the evaluation of the sufficiency of the
evidence upon which its labor officials' findings rest. As such, the findings of facts and
conclusion of the NLRC are generally accorded not only great weight and respect but even
clothed with finality and deemed binding on this Court as long as they are supported by
substantial evidence. This Court finds no basis for deviating from said doctrine without any clear
showing that the findings of the Labor Arbiter, as affirmed by the NLRC, are bereft of
substantiation. Particularly when passed upon and upheld by the Court of Appeals, they are
binding and conclusive upon the Supreme Court and will not normally be disturbed.

xxxx

As earlier stated, we find no basis for deviating from the oft espoused legal tenet that findings of
facts and conclusion of the labor arbiter are generally accorded not only great weight and respect
but even clothed with finality and deemed binding on this Court as long as they are supported by
substantial evidence, without any clear showing that such findings of fact, as affirmed by the
NLRC, are bereft of substantiation. More so, when passed upon and upheld by the Com1 of
Appeals, they are binding and conclusive upon us and will not normally be disturbed; x x
x.37 (Citations omitted)

It is our ruling, that the findings of fact and conclusion of the LA, as affirmed by the NLRC, are
supported by substantial evidence, as found by the CA.

WHEREFORE, the premises considered, the Decision of the Court of Appeals dated June 8,
2011 in CA-G.R. SP No. 109604 is AFFIRMED.

SO ORDERED.
PHILIPPINE NATIONAL BANK, PETITIONER, VS. JUMELITO T. DALMACIO,
RESPONDENT.

[G.R. No. 202357]

JUMELITO T. DALMACIO, PETITIONER, VS. PHILIPPINE NATIONAL BANK AND/OR

MS. CYNTHIA JAVIER, RESPONDENTS.

DECISION
TIJAM, J.:

Assailed in these consolidated Petitions for Review on Certiorari is the Decision[1] dated

September 21, 2011 of the Court of Appeals (CA), in CA-G.R. SP. No. 115493. The CA
Decision affirmed in part the National Labor Relations Commission's (NLRC) March 30, 2010
Resolution,[2] which in turn affirmed the Labor Arbiter's (LA) June 30, 2009 Decision [3] finding
that the Philippine National Bank (PNB) effected a valid redundancy program.

The case stemmed from a complaint for illegal dismissal, under payment of separation pay
and retirement benefits, illegal deduction, nonpayment of provident fund with prayer for
damages and attorney's fees filed by Jumelito T. Dalmacio (Dalmacio) and Emma R. Martinez
(Martinez)[4] as a result of their separation from PNB way back September 15, 2005 due to PNB's
implemention of its redundany program. Dalmacio and Martinez were hired as utility worker and
communication equipment operator, respectively, by the National Service Corporation, a
subsidiary of PNB. Years later, Dalmacio became an Information Technology (IT) officer of
PNB, while Martinez became a Junior IT Field Analyst.

In her June 30, 2009 Decision,[5] LA Romelita N. Rioflorido ruled that PNB complied with the
law and jurisprudence in terminating the services of the complainants on the ground of
redundancy.

On appeal, the NLRC, in its March 30, 2010 Resolution, [6] affirmed the LA's Decision, and ruled
that there is no showing of bad faith on PNB's part in undertaking the redundancy
program.
Dalmacio and Martinez's Motion for Reconsideration having been denied by the NLRC,
Dalmacio filed a Petition for Certiorari with the CA.

In its September 21, 2011 Decision,[7] the CA affirmed in part the · March 30, 2010
Resolution of the NLRC, and ruled, among others, that, "principles of justice and fair play call
for the modification of the separation package already received by herein petitioner. x x x the
subtraction of the GSIS Gratuity Pay is inappropriate, therefore the same should be returned to
the petitioner."

Aggrieved, both parties appealed the Decision of the CA.

In his appeal,[8] Dalmacio argues that: the CA erred in (1) upholding the validity of PNB's
redundancy program; (2) failing to rule that PNB's computation of his separation pay is
erroneous; and, (3) ruling that the Deed of Quitclaim and Release which he signed militates
against his reinstatement.

For its part, PNB argues that:[9] (1) The CA erred in the exercise of its equity jurisdiction despite
the clear and limited scope of its jurisdiction in a special civil action of certiorari; and, (2) it was
baseless for the CA to order the return to Dalmacio of his GSIS Gratuity Pay.

Both Petitions are denied.

Essentially, the issues to be resolved in this case are: (1) Whether or not PNB validly
implemented its redundancy program; and, (2) Whether or not the CA correctly ordered
PNB to return Dalmacio's GSIS Gratuity Pay.

This Court resolves only questions of law; it does not try facts or examine testimonial or
documentary evidence on record.[10] We may have at times opted for the relaxation of the
application of procedural rules, but we have resorted to this option only under exceptional
circumstances.[11] This Court, however, finds no justification to warrant the application of any
exception to the general rule in this case.

It bears stressing that the LA, the NLRC, and the CA, all ruled that PNB validly effected
its redundancy program. The CA held that:

[A]s aptly found by the labor tribunals, the redundancy program was an exercise of a sound
business judgment which We ought to respect and is beyond the ambit of Our review powers
absent any showing that it is violative of the Labor Code provisions or the general principles of
fair play and justice.[12]
Such being the case, factual findings of quasi-judicial bodies like the NLRC, particularly when
they coincide with those of the LA and, if supported by substantial evidence, are accorded
respect and even finality by this Court.[13] Thus, absent a showing of an error of law committed
by the court or tribunal below, or of a whimsical or capricious exercise of judgment, or a
demonstrable lack of basis for its conclusions, this Court may not disturb its factual findings.

However, at the risk of being repetitive, We make short shrift of Dalmacio's insistence that
PNB's redundancy program was not valid. We cannot subscribe to his claim that PNB did not
apply fair and reasonable criteria in concluding that Dalmacio's position had become redundant.

One of the authorized causes[14] for the dismissal of an employee is redundancy. [15] It exists when
the service capability of the workforce is in excess of what is reasonably needed to meet the
demands of the business enterprise. [16] A position is redundant when it is superfluous, and
superfluity of a position or positions could be the result of a number of factors, such as the
overhiring of workers, a decrease in the volume of business or the dropping of a particular line or
service previously manufactured or undertaken by the enterprise.[17] Time and again, it has been
ruled that an employer has no legal obligation to keep more employees than are necessary for the
operation of its business.[18] For the implementation of a redundancy program to be valid,
however, the employer must comply with the following requisites: (1) written notice served on
both the employees and the Department of Labor and Employment (DOLE) at least one month
prior to the intended date of termination of employment; (2) payment of separation pay
equivalent to at least one month pay for every year of service; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to
be declared redundant and accordingly abolished,[19] taking into consideration such factors as
(a) preferred status; (b) efficiency; and (c) seniority, among others. [20]

In the case at bar, PNB was upfront with its employees about its plan to implement its
redundancy program. The LA correctly observed that:
[I]t is undisputed that the outsourcing of the service and maintenance of the Bank's computer
hardware and equipment to Technopaq, Inc. was devised and/or implemented after consultation
with the affected employees in the presence of their union officers between July 29 and August
5, 2005.[21]
This was echoed by the NLRC, thus:
Respondents were able to show substantial proof that it underwent redundancy program and that
complainants herein voluntarily accepted the Special Redundancy Package offered by respondent
bank to its employees. In fact, they were officially notified of the management's decision to
terminate their employment as early as August 15, 2005 x x x; and Complainants and their union
officers were even consulted of the respondent's decision to terminate its employees on [the]
ground of redundancy between July 29 and August 5, 2005. Complainants agreed and accepted
the decision. x x x.[22]
Even the CA intoned that:
Even after he ceased working with private respondent PNB, petitioner was not left jobless as he
readily accepted a job offer with Technopaq who employed him for three years. Only after he
ceased working with Technopaq that he conveniently filed a case for illegal dismissal against
PNB claiming other monetary benefits allegedly due him and after receiving substantial amount
of separation pay. Hence this Court suspects the timing and intention of petitioner in filing the
complaint for illegal dismissal.[23]
Likewise, PNB's redundancy program was neither unfair nor unreasonable considering that it
was within the ambit of its management prerogative. As the CA observed:
PNB's action is within the ambit of "management prerogative" to upgrade and enhance the
computer system of the bank. Petitioner, being an IT officer whose job is to maintain the
computer system of PNB, his position has become patently redundant upon PNB's engagement
of the contract service with Technopaq. x x x he was appositely informed of PNB's move to
contract the services of Technopaq and as a result thereof, there were positions that were
declared redundant including that of herein petitioner. x x x PNB conducted series of meetings
with herein petitioner and other affected employees to purposely look for placement of the
displaced employees to other positions suited for them. Finding no other alternative, PNB was
constrained to terminate herein petitioner who thereafter posed no objection thereto, consented to
and willingly received the hefty separation pay given to him. Moreover, records have it that PNB
faithfully complied with the legal procedures provided under Article 283 of the Labor Code as
evidenced by the individual notices of termination served and received by the petitioner as well
as the Establishment Termination Report filed by PNB with the Department of Labor. x x x.[24]
These factual findings evidently rule out Dalmacio's claim that PNB's redundancy program was
unfair and unreasonable and that PNB acted in bad faith in the implementation of the same.

Likewise, records show that PNB complied with the procedural requirements. PNB served
Dalmacio and Martinez Notices of Termination dated August 15, 2005, informing them that their
termination due to redundancy shall be effective September 15, 2005. PNB also filed an
Establishment Termination Report dated August 16, 2005 with the Regional Office of the
DOLE, in order to report complainants' termination.

Contrary to Dalmacio's claim, the CA did not err in ruling that the Deed of Quitclaim and
Release he signed militates against his reinstatement.

Generally, deeds of release, waiver or quitclaims cannot bar employees from demanding benefits
to which they are legally entitled or from contesting the legality of their dismissal since
quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy.
[25]
 Where, however, the person making the waiver has done so voluntarily, with a full
understanding thereof, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as being a valid and binding undertaking. [26]

The requisites for a valid quitclaim are: (1) that there was no fraud or. deceit on the part of any of
the parties; (2) that the consideration for the quitclaim is credible and reasonable; and (3) that the
contract is not contrary to law, public order, public policy, morals or good customs or prejudicial
to a third person with a right recognized by law. [27]

Not having sufficiently proved that he was forced to sign said Deed of Quitclaim and Release,
Dalmacio cannot expediently argue that quitclaims are looked upon with disfavor and considered
ineffective to bar claims for the full measure of a worker's legal rights. Indeed, it cannot even be
said that Dalmacio did not fully understand the consequences of signing the Deed of Quitclaim
and Release. He is not an illiterate person who needs special protection. He held a responsible
position at PNB as an IT officer. It is thus safe to say that he understood the contents of the Deed
of Quitclaim and Release. There is also no showing that the execution thereof. was tainted with
deceit or coercion. Although he claims that he was "forced to sign"[28] the quitclaim, he
nonetheless signed it. In doing so, Dalmacio was compelled by his own personal circumstances,
not by an act attributable to PNB.

Having settled the foregoing, this Court shall now address the issue on Dalmacio's GSIS Gratuity
Pay.

A cursory reading of PNB's computation as regards Dalmacio's separation package appearing in

its Petition would clearly show that, indeed, his GSIS Gratuity Pay has been deducted from· his
separation pay. This should not be countenanced.

As correctly pointed out by the CA:

[U]nder the GSIS law, a government employee is required to take off a small part of his income
and remit the same to the GSIS as his monthly contributions. Considering such mandatory
deductions, it is but fitting that such gratuity pay is deemed separate and distinct from his
separation package and should not be deducted therefrom. x x x.[29]
Clearly, Dalmacio is entitled to his GSIS Gratuity Pay. Contrary to PNB's assertion, giving
Dalmacio what is due him under the law is not unjust enrichment. [30]

The inflexible rule in our jurisdiction is that social legislation must be liberally construed in
favor of the beneficiaries.[31] Retirement laws, in particular, are liberally construed in favor of the
retiree because their objective is to provide for the retiree's sustenance and, hopefully, even
comfort, when he no longer has the capability to earn a livelihood. [32] The liberal approach aims
to achieve the humanitarian purposes of the law in order that efficiency, security, and well-being
of government employees may be enhanced. [33] Indeed, retirement laws are liberally construed
and administered in favor of the persons intended to be benefited, and all doubts are resolved in
favor of the retiree to achieve their humanitarian purpose. [34]

WHEREFORE, the petitions are DENIED. The September 21, 2011 Decision of the Court of
Appeals in CA-G.R. SP. No. 115493, is AFFIRMED in toto.

SO ORDERED.
CENTRAL AZUCARERA DE BAIS AND ANTONIO STEVEN L. CHAN, PETITIONERS,
VS. HEIRS OF ZUELO APOSTOL, RESPONDENTS.

DECISION
REYES, JR., J:

Time and again, the Court has put emphasis on the right of an employer to exercise its
management prerogative in dealing with its company Is affairs, including the right to dismiss
erring employees. It is a general principle of labor law to discourage interference with an
employer's judgment in the conduct of his business. Even as the law is solicitous of the welfare of
the employees, it also recognizes employers exercise of management prerogatives. As long as the
company's exercise of judgment is in good faith to advance its interest and not for the purpose of
defeating or circumventing the rights of employees under the laws or valid agreements, such
exercise will be upheld.[1]

The Case

Challenged before the Court via this Petition for Review on Certiorari under Rule 45 of the
Rules of Court is the Decision [2] of the Court of Appeals (CA) in CA G.R. SP No. 06906,
promulgated on May 22, 2013, which affirmed the Decision [3] and Resolution[4] of the National
Labor Relations Commission (NLRC) in NLRC Case No. V-000451-2002, dated October 28,
2011 and February 27, 2012, respectively. Likewise challenged is the subsequent Resolution [5] of
the CA promulgated on October 29, 2014, which upheld the earlier decision.

The Antecedent Facts

The respondent Zuelo Apostol, now deceased and represented herein by his heirs, commenced
his 20 years of employment with petitioner Central Azucarera de Bais (CAB) on March 1, 1982
when he was hired as the latter's Motor Pool Over-All Repairs Supervisor. [6] According to the
petitioners, the respondent, as a supervisor, was in charge of repairing company vehicles, which
necessarily included the responsibilities of (a) assigning the personnel and equipment for each
and every repair job, and (b) taking custody of all repair equipment and materials owned by
CAB.[7] Likewise, as a supervisor, one of the pre-requisites accorded to the respondent was the
enjoyment of a company house where the respondent could live so long as he remains as a CAB
employee.
On February 2, 2002, the parties' harmonious working relationship was disturbed when, during
the inspection of Tomasito A. Rosel (Rosel), one of CAB's security guards, it was discovered
that the respondent "was using his company house, as well as other company equipment to repair
privately owned vehicles."[8] As reported by Rosel, he saw:
That the right side of the house was brightly lighted (sic) and the light came from an electrical
line (trouble light with a 100W bulb) extension coming from the house. The lighting connection
was hanging some distance from the house to the left side of the LANCER car, color white,
which was parked after a pick-up vehicle, color black. The LANCER CAR was undergoing
repairs on its left side. That Mr. Francisco Sabanal whom 1 personally know to be one of the
regular workers of C.A.B. MOTOR POOL DEPARTMENT, hired as automotive mechanic, was
the one actually doing the repair work on the LANCER CAR mentioned above. During the
twenty minutes that I stayed in the premises of the house assigned to Mr. Apostol, I saw Mr.
Sabanal cutting with scissors metal sheets from the sheets that were there at the place, to repair
the LANCER CAR. He had with him on site, flattening tools and there was also an oxygen-
acetylene outfit, which he also used.[9]
This then triggered the CAB management, through its resident manager, Roberty Y. Dela Rosa,
to issue a memorandum addressed to the respondent for violating Rule 9 of CAB's Rules of
Discipline, viz:
You will submit to this Office within 24 hours from receipt hereof your explanation in writing
(to be placed on the space indicated at the bottom of the enclosed duplicate hereof) why you
should not be subjected to our Rules of Discipline for the following acts:

For violating Rule 9 of the Rules of Discipline — for Utilizing material or equipment of the
Company, including power for doing private work without permission. Inspection by Security
has disclosed that you were having repairs done in CAB housing unit area assigned to you in
Paper Village one car and one pick-up for body repairs using oxygen and acetylene tanks with
cutting accessories as well as steel plates for the repairs, all of which are assumed to be company
property there being no clearance or permit obtained form the Company to bring in personal
equipment to undertake repairs in CAB village.

Bais Central, February 4, 2002

Note: While giving you a chance to explain your side, within 24 hours from receipt hereof, you
are put on preventive suspension effective immediately.

(Sgd.)
ROBERTO Y. DELA ROSA
Resident Manager[10]
In response, the respondent submitted a handwritten explanation in the local dialect, which when
translated reads:
Dear Nonoy Steven,

First of all, I am asking for a thousand apologies because I undertook the repair of my personal
vehicle without securing your permission.

Noy, I did not use electric welding, compressor and grinder. What I used was a trouble light and
my personal acetylene and oxygen.

Noy, I am reiterating my asking for apology and excuse from you and I am really sorry that I
have violated your rules.

Sincerely yours,
Sgd. Zuelo Apostol[11]
On February 9, 2002, the respondent received a copy of the termination letter dated February 8,
2002, which was signed by CAB's president, herein petitioner Antonio Steven L. Tan.

Thereafter, the respondent vacated the company house assigned to him, and on February 12,
2002, filed a Complaint before the Sub-Regional Arbitration Branch No. VII of Dumaguete City
against the petitioners for constructive dismissal, illegal suspension, unfair labor practice,
underpayment of overtime pay, premium pay for holiday, separation pay, holiday pay, service
incentive leave, vacation/sick leave, recovery of actual, moral, and exemplary damages, and
attorney's fees.

The Ruling of the Labor Arbiter

On May 30, 2002, the Labor Arbiter dismissed the respondent's submissions on the following
ratiocinations: (1) the allegations of unfair labor practice was not discussed in the respondent's
position paper, let alone substantiated; (2) CAB was well within its rights to impose preventive
suspension upon the respondent; (3) on the substantive aspect, CAB has reasonably shown that
the complainant violated company rules for utilizing company-owned materials and equipment;
and (4) on the procedural aspect, CAB complied with the twin requirements of notice. [12] Thus,
the fallo of the decision states:
WHEREFORE, the complaint dated February 12, 2002 is dismissed for lack of merit.

SO ORDERED.[13]
The Ruling of the National Labor Relations Commission
Aggrieved, the respondent appealed the Labor Arbiter decision to the NLRC, which, after proper
consideration, reversed the same. The NLRC ruled that: (1) the respondent should have been
given the opportunity to be heard and to defend himself through a hearing; [14] (2) the respondent
did not commit serious misconduct because his "contrite and remorseful explanation belies any
willfulness and wrongful intent to violate the rules;"[15] and (3) while the respondent did indeed
violate the company rules, the ultimate penalty of dismissal should not have been meted out to
him.[16]

The dispositive portion of the NLRC decision reads:

WHEREFORE, PREMISES CONSIDERED, the decision of the Labor Arbiter is,
hereby, SET ASIDE and VACATED and a new one entered finding [herein respondent] to have
been illegally dismissed. [Herein petitioner] Central Azucarera de Bais is, hereby, ordered to pay
complainant the following:

Backwages P323,784.95  
Separation
P230,345.00  
Pay
TOTAL P554,129.00  

SO ORDERED.[17]
The Ruling of the Court of Appeals

From the NLRC's reversal of the Labor Arbiter's decision, the petitioners elevated the case to the
CA, which later on denied the petition and affirmed the NLRC decision. The CA averred that,
while CAB was compliant with the twin notice requirement, the respondent's violation "cannot
be considered as so grave as to be characterized either as serious misconduct or could lead to a
loss of trust and confidence."[18] Thus, the CA concluded:
WHEREFORE, in view of the foregoing premises, the Petition for Certiorari is DENIED. The
NLRC's Decision dated October 28. 2011 and its Resolution dated February 27, 2012,
respectively, are hereby AFFIRMED. Costs on petitioners.

SO ORDERED.[19]
The Issues

After the CA's denial of the petitioners' motion for reconsideration, the latter now comes before
 the Court seeking the reversal of the assailed CA decision and resolution on the following
grounds:
I. CONTRARY TO LAW AND JURISPRUDENCE, THE [CA] SERIOUSLY ERRED IN
FINDING CAB GUILTY OF ILLEGAL DISMISSAL BECAUSE SUBSTANTIVE AND
PROCEDURAL DUE PROCESS REQUIREMENTS WERE DULY COMPLIED WHEN
MR. APOSTOL WAS TERMINATED.

II. CONTRARY TO LAW AND JURISPRUDENCE, THE [CA] USURPED

PETITIONERS' MANAGEMENT PREROGATIVE TO DETERMINE THE PENALTY
COMMENSURATE TO THE OFFENSE COMMITTED, WHICH HAD BEEN THE
SUBJECT OF PRIOR NOTICE TO MR. APOSTOL, WHO KNEW THE CONSEQUENCES
OF HIS VIOLATION.

III. SINCE MR. APOSTOL WAS DISMISSED FOR JUST CAUSE AND IN
COMPLIANCE WITH THE REQUIREMENTS OF PROCEDURAL DUE PROCESS HE IS
NOT ENTITLED TO BACKWAGES AND SEPARATION PAY. IN ANY CASE,
JURISPRUDENCE PROVIDES THAT IN A WRONGFUL TERMINATION, GOOD
FAITH MAY MITIGATE OR ABSOLVE THE PAYMENT OF BACKWAGES. [20]
In sum, the petitioners put forth the following issues for the resolution of the Court: (1) whether
or not procedural and substantive due process was observed in the termination of the
respondent's employment with CAB; (2) whether or not the penalty meted out was
commensurate to the violation; and consequently, (3) whether or not the respondent is entitled to
the payment of backwages and separation pay.

The Court's Ruling

After a careful perusal of the arguments presented and the evidence submitted, the Court finds
merit in the petition.

The general rule is that only questions of law are revievvable by the Court. This is because it is
not a trier of facts;[21] it is not duty-bound to analyze, review, and weigh the evidence all over
again in the absence of any showing of any arbitrariness, capriciousness, or palpable error.
[22]
 Thus, factual findings of administrative or quasi-judicial bodies, including labor tribunals, are
accorded much respect by the Court as they are specialized to rule on matters falling within their
jurisdiction especially when these are supported by substantial evidence.[23] In labor cases, this
doctrine applies with greater force as questions of fact presented therein are for the labor
tribunals to resolve.[24]

The Court, however, permitted a relaxation of this rule whenever any of the following
circumstances is present:
(1) [W]hen the findings are grounded entirely on speculations, surmises or conjectures;

(2) when the inference made is manifestly mistaken, absurd or impossible;

(3) when there is grave abuse of discretion;

(4) when the judgment is based on a misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when in making its findings, the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;

(7) when the findings are contrary to that of the trial court;

(8) when the findings are conclusions without citation of specific evidence on which they are
based;

(9) when the facts set forth in the petition, as well as in the petitioner's main and reply briefs, are
not disputed by the respondent;

(10) when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or

(11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion.[25]
Thus, in instances when the Labor Arbiter, the NLRC, and the CA made conflicting findings of
fact, the Court is justified—nay, the Court is compelled—to issue its own determination.

The case at hand calls for the resolution of several issues concerning the factual determination of
the court a quo.

First, on the matter of procedural due process, the Labor Arbiter and the CA were one in
asseverating that CAB complied with the procedure required of it by the Labor Code, its
implementing rules and regulations, and relevant jurisprudence. According to the Labor Arbiter,
[T]he documents which are admitted by both parties clearly show that CAB complied with the
twin requirements of due process by furnishing the [respondent] two written notices: first, a
notice apprising the complainant of the particular acts for which his dismissal is sought xxx and
second, a subsequent notice informing the complainant of the decision to dismiss him.
[26]
 (Emphasis and underscoring supplied)
Likewise, the CA was categorical when it asserted that CAB complied with the twin notice
requirement. It said:
Here, the twin notice requirement was substantially complied with by the petitioners. It is
undisputed that Apostol received two notices. The first notice informed him of his violation and
required him to submit his written explanation on the matter. Thereafter, he received another
notice communicating to him that his employment with CAB was being severed by the company
due to his violation of its company's Rules of Discipline. [27] (Emphasis and underscoring
supplied)
On the other hand, and contrary to the findings of both the Labor Arbiter and the CA, the NLRC
found that procedural due process was not properly observed when CAB terminated the
respondent. In ruling thus, the NLRC emphasized that, while there were actually two notices sent
to the respondent, the lack of actual hearing on the violations of the latter prior to his termination
constituted a ground by which the dismissal should be reversed. Thus,
[W]hile as a general rule a hearing is not required to satisfy the demands of procedural due
process, we feel that the circumstances of this case required that a hearing should have been
conducted to determine the ownership of the materials and equipment used. That to us is
vital in determining the gravity of [respondent's] violation. That would have been more in accord
with the employer's duty "to afford the worker ample opportunity to be heard and defend himself
with the assistance of his representative if he so desires, in accordance with company rules and
regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment."[28] (Emphasis and underscoring supplied)
In the backdrop of this contradiction among the decisions, the Court is of the opinion that the
Labor Arbiter and the CA's findings are more in accord with established jurisprudence. The
rights of the respondent to procedural due process was observed by CAB.

As early as 2009, in the case of Perez vs. Philippine Telegraph and Telephone Company,[29] the
Court has already laid down the guidelines in complying with the proper procedure in instances
when termination of employees is called for. In reconciling the Labor Code and its Implementing
Rules and Regulations, and in concluding that actual or formal hearing is not an absolute
requirement, the Court interpreted and directed that:
The test for the fair procedure guaranteed under Article 277(b) [now, Article 292(b)] cannot be
whether there has been a formal pretermination confrontation between the employer and the
employee. The "ample opportunity to be heard" standard is neither synonymous nor similar to a
formal hearing. To confine the employee's right to be heard to a solitary form narrows down that
right. It deprives him of other equally effective forms of adducing evidence in his defense.
Certainly, such an exclusivist and absolutist interpretation is overly restrictive. The "very nature
of due process negates any concept of inflexible procedures universally applicable to every
imaginable situation."
x x x x

An employee's right to be heard in termination cases under Article 277(b) [now, Article 292(b)]
as implemented by Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code
should be interpreted in broad strokes. It is satisfied not only by a formal face to face
confrontation but by any meaningful opportunity to controvert the charges against him
and to submit evidence in support thereof.[30] (Emphasis and underscoring supplied)
Thus, in Perez, the Court formulated the following guiding principles in connection with the
hearing requirement in dismissal cases:
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written)
given to the employee to answer the charges against him and submit evidence in support of
his defense, whether in a hearing, conference or some other fair, just and reasonable way.

(b) a formal hearing or conference becomes mandatory only when requested by the employee in
writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when
similar circumstances justify it.

(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or
conference" requirement in the implementing rules and regulations. [31] (Emphasis and
underscoring supplied)
In the present case, the petitioners furnished the respondent with two notices: one, the
memorandum dated February 4, 2002 issued by CAB's resident manager [32] which informed the
respondent of the charges against him; and two, the letter of termination which, this time,
notified the respondent of CAB's decision to dismiss him. [33] In the interim, CAB, through the
memorandum issued by its resident manager, sought the respondent's explanation on the
incident.

The confluence of these facts, in the Court's opinion, sufficiently complies with the respondent's
right to be accorded ample opportunity to be heard.

Second, on the matter of substantive due process, the Court accedes to the uniform findings of
the Labor Arbiter, NLRC, and CA that the respondent did indeed violate company rules and
regulations when he used company equipment and materials for his personal vehicles. According
to the records of this case, this much is undisputed.

In ruling this way, the Labor Arbiter averred that "'the [respondent] violated CAB's company
rules for utilizing material or equipment of the company as well as the housing unit assigned to
him in an improper manner, i.e., for the repair of privately owned vehicles to the expense and
damage of the company."[34] The NLRC itself affirmed this finding by categorically saying that
"it is not disputed that the complainant did violate the company rules." [35] More, interspersed in
the CA decision are statements revealing this violation by the respondent. Hence, the certainty by
which the Labor Arbiter, NLRC, and CA pronounced this fact requires no further disturbance—
not even by the Court.

What is disputed, however, which the Court must rule upon, concerns the crux of the current
controversy: whether or not the respondent's act, which is violative of CAB's rules and
regulations, warrants the imposition of the ultimate penalty of dismissal. In this regard, the Court
scoured once again the records of the case, and after a judicious study thereof, favors the
submission of the petitioners.

Article 297(c) [formerly Article 282(c)] of the Labor Code provides that an employer may
terminate the services of an employee for fraud or willful breach of the trust reposed in him.
[36]
 According to the case of Top Form Mfg. Co., Inc. vs. NLRC,[37] an employer has a distinct
prerogative to dismiss an employee if the former has ample reason to distrust the latter or if there
is sufficient evidence to show that the employee has been guilty of breach of trust. This authority
of the employer to dismiss an employee cannot be denied whenever acts of violation are noted by
the employer.[38]

In ruling that employers have a right to impose a penalty of dismissal on supervisors or personnel
occupying positions of responsibility on the basis of loss of trust and confidence, the case
of Moya vs. First Solid Rubber Industries, Inc.[39] stated thus:
Following the ruling in The Coca-Cola Export Corporation v. Gacayan, the employers have a
right to impose a penalty of dismissal on employees by reason of loss of trust and
confidence. More so, in the case of supervisors or personnel occupying positions of
responsibility, loss of trust, justifies termination of employment. Loss of confidence as a just
cause for termination of employment is premised on the fact that an employee concerned holds a
position of trust and confidence. This situation holds where a person is entrusted with
confidence on delicate matters, such as the custody, handling, or care and protection of the
employer's property.[40] (Emphasis and underscoring supplied, citations omitted)
This discourse is further clarified in the recent case of Alaska Milk Corporation, and the Estate
of Wilfred Uytengsu vs. Ernesto L. Ponce[41] where the Court ruled that, in order to invoke this
cause, certain requirements must be complied with, namely: (1) the employee concerned must be
holding a position of trust and confidence; and (2) there must be an act that would justify the loss
of trust and confidence. [42] In addition to these, the case of Juliet B. Sta. Ana vs. Manila Jockey
Club, Inc.[43] included, as a requirement, that such loss of trust relates to the employee's
performance of duties.

In the case at hand, a perusal of the entirety of the records would reveal that all the requirements
for the valid dismissal of the respondent exist.

To begin with, there is no doubt that the respondent, as CAB's motor pool over-all repairs
supervisor, is in a position of trust and confidence. He was in charge of repairing company
vehicles, and was designated with the responsibility of (a) assigning the personnel and equipment
for each and every repair job, and (b) taking custody of all repair equipment and materials owned
by CAB.[44] In the language of Moya, the respondent herein occupies a position of responsibility,
where he is entrusted with confidence on delicate matters, such as the custody, handling, or care
and protection of CAB's properties.

Secondly, the respondent's violation of CAB's rules and regulations relating to the use of
company property for personal purposes was consistently held and upheld not only by the Labor
Arbiter and the NLRC, respectively, but also by the CA itself. That the respondent committed
this act could not be denied. What's more is that the respondent himself admitted to it. [45]

Finally, the respondent's action was successfully conducted precisely because of his position in
the company. As CAB's motor pool over-all repairs supervisor, he was in the position to effect
the repairs of his personal property in the company house which was assigned to him. It could
not be emphasized further that this violation of company rules—from a supervisor no less—
carries with it an impact to the operations and management of a company, and a company's
decision to terminate an employee for these purposes is a decision that should be respected.

To be sure, the petitioners herein validly dismissed their erring employee.

Having thus ruled on the validity of the dismissal of the respondent, then it necessarily follows
that he is not entitled to both backwages and separation pay.

The Court has reiterated that the policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the
penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of
every humane society but only when the recipient is not a rascal claiming an undeserved
privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity
be an impediment to the punishment of the guilty. Those who invoke social justice may do so
only if their hands are clean and their motives blameless and not simply because they happen to
be poor. This great policy of our Constitution is not meant for the protection of those who have
proved they are not worthy of it, like the workers who have tainted the cause of labor with the
blemishes of their own character.[46]

WHEREFORE, premises considered, the Decision of the Court of Appeals in CA G.R. SP No.
06906, dated May 22, 2013 and the subsequent Resolution dated October 29, 2014, as well as the
Decision and Resolution of the National Labor Relations Commission in NLRC Case No. V-
000451-2002, dated October 28, 2011 and February 27, 2012 respectively, are
hereby REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated May 30, 2002
in SUB-RAB- VII-02-003 9-2002-D is hereby REINSTATED.

SO ORDERED.

THIRD DIVISION

July 20, 2016

G.R. No. 183934

ERNESTO GALANG and MA. OLGA JASMIN CHAN, Petitioners,

vs
BOIE TAKEDA CHEMICALS, INC. and/or KAZUHIKO NOMURA, Respondents.

DECISION

JARDELEZA, J.:

This is a petition for review on certiorari1under Rule 45 of the Revised Rules of Court filed by
Ernesto M. Galang and Ma. Olga Jasmin Chan (petitioners) from the Court of Appeals' (CA)
Decision2 dated February 26, 2008 (CA Decision) and the Resolution 3 dated July 28, 2008
(collectively, Assailed Decision) in CA-G.R. SP No. 96861. In the Assailed Decision, the CA
affirmed the National Labor Relations Commission (NLRC) Decision 4 dated March 7, 2006
reversing the Labor Arbiter's ruling that petitioners were illegally dismissed, viz:
WHEREFORE, premises considered, the instant Petition is hereby DENIED. Accordingly, the
assailed March 7, 2006 Decision of the NLRC as well as the October 25, 2006 Resolution
denying Petitioners' Motion for Reconsideration are AFFIRMED.

SO ORDERED.5(Emphases in the original.)

Statement of Facts

Respondent pharmaceutical company Boie Takeda Chemicals, Inc. (BTCI) hired petitioners
Ernesto Galang and Ma. Olga Jasmin Chan in August 28, 1975 and July 20, 1983,
respectively.6 Through the years, petitioners rose from the ranks and were promoted to Regional
Sales Managers in 2000. Petitioners held these positions until their separation from BTCI on
May 1, 2004.7

As Regional Sales Managers, they belong to the sales department of BTCI. They primarily
managed regional sales budget and target, and were responsible for market share and company
growth within their respective regions. Within the organizational hierarchy, they reported to the
National Sales Director.8 In 2002, when the National Sales Director position became vacant
(after the retirement of Melchor Barretto), petitioners assumed and shared (with the general
manager) the functions and responsibilities of this higher position, and reported directly to the
General Manager.9

In February 2003, the new General Manager, Kazuhiko Nomura (Nomura), asked petitioners to
apply for the position of National Sales Director.10 Simultaneously, Nomura also asked Edwin
Villanueva (Villanueva) and Mimi Escarte, both Group Product Managers in the marketing
depatiment, to apply for the position of Marketing Director. All four employees submitted
themselves to interviews with the management. In the end, Nomura hired an outsider from
Novartis Company as Marketing Director, while the position of National Sales Director
remained vacant.11

Later, however, petitioners were informed that BTCI promoted Villanueva as National Sales
Director effective May 1,2004.12 BTCI explained that the appointment was pursuant to its
management prerogative, and that it arrived at such decision only "after careful assessment of the
situation, the needs of the position and the qualifications of the respective candidates." 13 The
promotion of Villanueva as the National Sales Director caused ill-feelings on petitioners'
part.14 They believed that Villanueva did not apply for the position; has only three years of
experience in sales; and was reportedly responsible for losses in the marketing
depmiment.15 Petitioners further resented Villanueva's appointment because they heard that the
appointment was made only because he threatened to leave the office along with the company's
top cardio-medical doctors.16
After Villanueva's promotion, petitioners claimed that Nomura threatened to dismiss them from
office if they failed to perform well under the newly appointed National Sales Director. 17 This
prompted petitioners to inquire if they could avail of early retirement package due to health
reasons. Specifically, they requested Nomura if they could avail of the early retirement package
of 150% plus 120% of monthly salary for every year of service tax free, and full ownership of
service vehicle tax free.18 They claimed that this is the same retirement package given to
previous retirees namely, former Regional Sales Director Jose Sarmiento, Jr. (Sarmiento), and
former National Sales Director Melchor Barretto. 19 Nomura, however, insisted that such
retirement package does not exist20 and Sarmiento's case was exceptional since he was just a few
years shy from the normal retirement age.21

On April 28, 2004, petitioners intimated their intention to retire in a joint written letter of
resignation22 dated April 28, 2002 (sic) to Nomura, effective on April 30, 2004. Thereafter,
petitioners received their retirement package and other monetary pay from BTCI. Chan received
two checks23 in the total amount of P2, 187,236.6424 computed as follows:

1) Retirement pay (P70,000.00 x 120% x 21years) = P1,764,000.00

2) Salaries from May to December 2004 (P70,000.00 x 8
P560,000.00
mos.) =
3) Allowances (from May to December 2004) = P69,328.00
4) Rice Subsidy (April-December) = P6,000.00
5) Conversion of Leave Credits (138 days) = P461,833.00
6) 13th month pay (pro-rata) = P35,000.00

[Gross Amount] P2,896,161.00

Less: Accountabilities P595,952.76
Taxes P110,971.00

[Net Amount] P2, 187,236.6425

Galang received checks26 in the total amount of P3,754,306.5627 computed as follows:

1) Retirement Pay (P70,000 x 160% x 29 years)= P3,248,000.00

2) Salaries ffrom] May [to] Dec. 2004 = P560,000.00
3) Allowances (May to December 2004) = P69,328.00
4) Rice Subsidy (April to December)= P6,000.00
5) Conversion of Leave Credits (35 days) = P117,131.00
 6) 13th month pay (pro-rata) = P35,000.00

Gross Amount P4,035,459.00

Less: Accountabilities P275.553.63
Taxes P5,598.81

[Net Amount] P3, 754,306.5628

Upon petitioners' retirement, the positions of Regional Sales Manager were abolished, and a new
position of Operations Manager was created.29

On October 20, 2004, petitioners filed the complaint for constructive dismissal and money
claims before the NLRC Regional Arbitration Branch.30

In a Decision dated May 16, 2005 (LA Decision), 31 the Labor Arbiter ruled that petitioners were
constructively dismissed.32 The Labor Arbiter explained that petitioners were forced to retire
because Villanueva's appointment constituted an abuse of exercise of management prerogative;
and that subsequent events, such as the abolition of the positions of Regional Sales Managers and
the creation of the position of the Operations Manager show that petitioners' easing out from
service were orchestrated. It also found that petitioners were discriminated as to their retirement
package. The dispositive pmiion of the decision stated, thus:

WHEREFORE, premises considered, judgment is hereby rendered, declaring complainants'

dismissal from their employment to be illegal.1âwphi1 Accordingly, respondents are jointly and
severally liable:

1) To pay complainants the amounts opposite their respective names:

  Backwagcs Separation Pay/ Salary Differentials

Differential Pay
E. Galang P398,854.16 189,000.00 830,000.00

3045,000.00 680,000.00
Ma. OJ Chan 398,954.16 189,000.00 830,000.00

2,205,000.00 680,000.00

2) To pay complainants, the amount P227, 164.10 for Olga Chan and the sum of P27,374.85 for
Ernesto Galang, representing the refund of the deducted car loan;
3) To pay complainants the amount of P500,000.00 each, representing moral damages, and the
amount of P500.000.00 each, as for exemplary damages;

4) To pay complainant the amount equivalent to ten (10%) percent of the total judgment award,
as and for attorney's fees.

SO ORDERED.33

On June 30, 2005, BTCI appealed the LA Decision with the NLRC.34

Petitioners allegedly received a Notice of Decision35 dated March l0, 2006 from the NLRC. The
notice informed petitioners that a decision was promulgated by the NLRC on February 7, 2006.
The attached decision in the notice, however, was dated March 7, 2006. The decision dated
March 7, 200636 (March Decision) reversed and set aside  the LA Decision, and dismissed the
complaint. In said decision, the NLRC ruled that petitioners failed to prove that they were
constructively dismissed.

Petitioners filed a motion to declare the March Decision null and void by way of motion for
reconsideration37 dated March 22, 2006. Petitioners alleged that prior to the Notice of Decision,
they personally received a decision allegedly promulgated on February 7, 2006 38 (February
Decision) which affirmed the LA Decision, but with modification as to the amount of moral and
exemplary damages. Petitioners pointed out that the March Decision: (1) lacked one signature in
page 19; (2) contained two different specimens signature for Commissioner Gacutan; (3) had
pages which do not contain the initials of the one preparing it; (4) was printed in higher quality
paper; (4) merely lifted the arguments of BTCI in contrast to the NLRC's February Decision
which directly reviewed the findings of the Labor Arbiter; and (5) was attached to a notice
signed by merely a Labor Arbiter Associate, and not by the Executive Clerk of the
Division.39 Petitioners also reiterated that BTCI dismissed them under the guise of management
prerogative, and that Villanueva's appointment as National Sales Director was an abuse of
exercise of such prerogative. They also claimed that their departure from the office was not
voluntary but was prompted by the circumstances after the BTCI preferred Villanueva's
application over theirs.40

On October 25, 2006, the NLRC issued a Resolution 41 which denied petitioners' motion for
reconsideration, and therefore upheld the NLRC's March Decision. The NLRC clarified that the
official decision is the March Decision, and that the February Decision cannot be considered as
the official decision because it was merely a draft decision.

Petitioners filed a petition for certiorari42under Rule 65 of the Revised Rules of Court with the
CA, which denied the petition in the Assailed Decision. The CA said that the "NLRC having
thus chosen to uphold its Decision dated March 7, 2006 as the authentic one, this Court must
therefore, consider the same as the version herein submitted for review." 43 The CA also found
that the March Decision was more in tune with law and jurisprudence. 44 It reviewed and
reassessed the facts and evidence on record and made a finding that the NLRC did not commit
grave abuse of discretion.

Thus, petitioners filed before this Court a petition for review on certiorari under Rule 45 of the
Revised Rules of Court. They allege that the CA erred in sustaining the decision of the NLRC.

The Arguments

Petitioners argue that they were constructively dismissed because of the acts of BTCI 's General
Manager Nomura. They claim that they were forced into resigning because instead of promoting
them to the position of National Sales Directors, BTCI hired Villanueva who only had three
years of service in the company, who has no background or experience in sales to speak of and
who was allegedly responsible for almost the bankruptcy of the company. They allege that
Nomura threatened to dismiss them if they do not perform well under the newly-appointed
National Sales Director.

Petitioners also argue that the retirement package given to them is lower compared to others who
were holding the similar position at the time of their retirement. By way of example, petitioners
cite the case of one Sarmiento, who was promoted with them to the same position, and who
opted for early retirement in 2001. Sarmiento allegedly received a more generous package of
150% of his monthly salary for every year of service on top of the 120% retirement package for
his 22 years of service. Petitioners contend that this was the same retirement package given to
other employees such as Anita Ducay, Marcielo Rafael, Rolando Arada, Sarmiento, and Melchor
Barretto.45

For its part, BCTI claims that the complaint is only an attempt to extort additional benefits from
the company.

BTCI denies having constructively dismissed petitioners. It argues that no constructive dismissal
can occur because there was no movement or transfer of position or diminution of salaries or
benefits. Neither was there any circumstance that would make petitioners' continued employment
unreasonable or impossible.46 The appointment of Villanueva was within the sphere of
management's prerogatives, and was arrived at after careful consideration. It did not have any
adverse effect on petitioners' positions as Regional Sales Managers. According to BTCI,
petitioner's decision to retire was voluntary and of their own volition.47

As to the payment of retirement benefits, BTCI insists that petitioners have been paid according
to the Collective Bargaining Agreement (CBA) between BTCI and BTCI Supervisory Union.
Although petitioners are managers (and are not covered by the CBA), BTCI by practice grants
the same retirement benefits to managers. BTCI admits that it gave Sarmiento additional
financial assistance because of serious health problems, and because he was merely three years
away from normal retirement. Other employees cited by petitioners all received retirement
benefits computed on the CBA provisions.48

Issues

Thus, the issues before this Court are the following:

I. Whether petitioners were constructively dismissed from service; and

II. Whether petitioners are entitled to a higher retirement package.

Our Ruling

We deny the petition.

In its Resolution dated October 25, 2006, the NLRC denied petitioners' motion for
reconsideration, and declared the March Decision as the official decision. It ruled that the
February Decision (in petitioners' possession) is merely a draft decision. 49 This Court recognizes
that it is common practice that more than one decision may be drafted because more often,
members of a collegiate body change their positions during deliberations. 50 This finding of the
NLRC, coupled by the fact that the March Decision is complete in form and substance pursuant
to Section 4(c) and Section 13 of Rule VII of the 2005 NLRC Rules of Procedure, cannot be
characterized as an exercise of grave abuse of discretion amounting to lack or excess of
jurisdiction. The issue of which between the two decisions is the correct one delves into the
substantive arguments of the case, which the CA has already decided after review and
reassessment of the facts and evidence of the entire records.

I. Petitioners voluntarily
retired from the service, thus
were not constructively
dismissed.

Constructive dismissal has often been defined as a "dismissal in disguise" or "an act amounting
to dismissal but made to appear as if it were not." 51 It exists where there is cessation of work
because continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank and a diminution in pay. In some cases, while no demotion in rank
or diminution in pay may be attendant, constructive dismissal may still exist when continued
employment has become so unbearable because of acts of clear discrimination, insensibility or
disdain by the employer, that the employee has no choice but to resign. 52 Under these two
definitions, what is essentially lacking is the voluntariness in the employee's separation from
employment.

In this case, petitioners were neither demoted nor did they receive a diminution in pay and
benefits. Petitioners also failed to show that employment is rendered impossible, unreasonable or
unlikely.

Petitioners admitted that they have previously intended to retire and were actually the ones who
requested to avail of an early retirement. 53 More, the circumstances which petitioners claim to
have forced them into early retirement are not of such character that rendered their continued
employment with BTCI as impossible.

Petitioners allege that Nomura appointed Villanueva in order to ease them out from the
company. Petitioners claim that Villanueva was unqualified for the position compared to their
experiences; that Villanueva did not apply for the position of National Sales Director; and that he
lacked the experience for the job. Such arguments only affirm the NLRC and CA's finding that
petitioners' resignation was prompted by their general disagreement with the appointment of
Villanueva, and not by the acts of discrimination by the management.

Our labor laws respect the employer's inherent right to control and manage effectively its
enterprise and do not normally allow interference with the employer's judgment in the conduct of
his business.54 Management has exclusive prerogatives to determine the qualifications and fitness
of workers for hiring and firing, promotion or reassignment. 55 It is only in instances of unlawful
discrimination, limitations imposed by law and collective bargaining agreement can this
prerogative of management be reviewed.56

The reluctance to interfere with management's prerogative in determining who to promote all the
more applies when we consider that the position of National Sales Director is a managerial
position. Managerial positions are offices which can only be held by persons who have the trust
of the corporation and its officers.57 The promotion of employees to managerial or executive
positions rests upon the discretion of management.58 Thus, we have repeatedly reminded that the
Labor Arbiters, the different Divisions of the NLRC, and even courts, are not vested with
managerial authority.59 The employer's exercise of management prerogatives, with or without
reason, does not per se constitute unjust discrimination, unless there is a showing of grave abuse
of discretion.60 In this case, there is none.

Petitioners did not present any evidence showing BTCI's adopted rules and policies laying out
the standards of promotion of an employee to National Sales Director. They did not present the
qualification standards (which BTCl did not allegedly follow) needed for the position. Petitioners
merely assumed that one of them was better for the job compared to Villanueva. Mere
allegations without proof cannot sustain petitioners' claim. In any case, a perusal of Villanueva's
resume shows that he has combined experiences in both sales and marketing. 61 The NLRC also
found that an independent consulting agency, K Search Asia Consulting, was engaged by BTCI
to determine who to appoint as National Sales Director.62 The consulting agency recommended
Villanueva to the position.63 In the absence of any qualification standards that BTCI allegedly
gravely abused to refuse to follow, we cannot substitute our own judgment on the qualifications
of Villanueva.

Petitioners' allegation that Villanueva was appointed only because of the threats the latter made
to management militates against their claim. If BTCI management was merely forced to appoint
Villanueva, petitioners cannot claim that BTCI intentionally and maliciously orchestrated their
easement from the company.

Petitioners cannot also argue that BTCI's caution to dismiss them if they do not perform well
under the newly-appointed National Sales Director constituted a threat to their employment. This
is merely a warning for them to cooperate with the new National Sales Director. Such warning is
expected of management as part of its supervision and disciplining power over petitioners given
their unwelcoming reactions to Villanueva's appointment.

The other acts of discrimination complained of by petitioners refer to post-employment matters,

or those that transpired after their retirement. These include payment of alleged "lesser"
retirement package, and the abolition of the positions of Regional Sales Manager. These events
transpired only after they voluntary availed of the early retirement. We stress, however, that the
circumstances contemplated in constructive dismissal cases are clear acts of discrimination,
insensibility or disdain which necessarily precedes the apparent "voluntary" separation from
work. If they happened after the fact of separation, it could not be said to have contributed to
employee's decision to involuntary resign, or in this case, retire.

It is true that in constructive dismissal cases, the employer is charged with the burden of proving
that its conduct and action or the transfer of an employee are for valid and legitimate grounds
such as genuine business necessity.64 However, it is likewise true that in constructive dismissal
cases, the employee has the burden to prove first the fact of dismissal by substantial
evidence.65 Only then when the dismissal is established that the burden shifts to the employer to
prove that the dismissal was for just and/or authorized causc. 66 The logic is simple-if there is no
dismissal, there can be no question as to its legality or illegality.67

In Portuguez v. GSIS Family Bank (Comsavings Bank),68 we were confronted with the same facts
where an employee who opted for voluntary retirement claimed that he was constructively
dismissed. In that case, we ruled that it is the employee who has the onus to prove his allegation
that his availment of the early voluntary retirement program was, in fact, done involuntarily:
Again, we are not persuaded. We are not unaware of the statutory rule that in illegal dismissal
cases, the employer has the onus prohandi to show that the employee's separation from
employment is not motivated by discrimination, made in bad faith, or cffocled as a form of
punishment or demotion without sufficient cause. It bears stressing, however, that this legal
principle presupposes that there is indeed an involuntary separation from employment and the
facts attendant to such forced separation was clearly established.

This legal principle has no application in the instant controversy for as we have succinctly
pointed above, petitioner failed to establish that indeed he was discriminated against and on
account of such discrimination, he was forced to sever his employment from the respondent
bank. What is undisputed is the fact that petitioner availed himself of respondent bank's
early voluntary retirement program and accordingly received his retirement pay in the amount of
P1.324 Million under such program. Consequently, the burden of proof will not vest on
respondent bank to prove the legality of petitioner's separation from employment but aptly
remains with the petitioner to prove his allegation that his availment of the early voluntary
retirement program was, in fact, done involuntarily.

As we have explicitly ruled in Machica v. Roosevelt Service Center, Inc.:

"The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were
burdened to prove their allegation that respondents dismissed them from their employment. It
must be stressed that the evidence to prove this fact must be clear, positive and
convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds
no application here because the respondents deny having dismissed the petitioners."

Verily, petitioner did not present any clear, positive or convincing evidence in the present case to
support his claims. Indeed, he never presented any evidence at all other than his own self-serving
declarations. We must bear in mind the legal dictum that, "he who asserts, not he who denies,
must prove."69 (Citations omitted, emphases in the original.)

Here, records show that petitioners failed to establish the fact of their dismissal when they failed
to prove that their decision to retire is involuntary. Consequently, no constructive dismissal can
be found.

II. Petitioners were not

discriminated against in
terms of their retirement
package.

The entitlement of employees to retirement benefits must specifically be granted under existing
laws, a collective bargaining agreement or employment contract, or an established employer
policy.70 Based on both parties' evidence, petitioners arc not covered by any agreement. There is
also no dispute that petitioners received more than what is mandated by Article 287 71 of the
Labor Code. Petitioners, however, claim that they should have received a larger pay because
BTCI has given more than what they received to previous retirees. In essence, they claim that
they were discriminated against because BTCI did not give them the package of 150% of
monthly salary for every year of service on top of the normal retirement package.

In Vergara v. Coca-Cola Bottlers Philippines, Inc.,72we explained that the burden of proof that
the benefit has ripened into company practice, i.e., giving of the benefit is done over a long
period of time, and that it has been made consistently and deliberately, rests with the employee:

To he considered as a regular company practice the employee must prove by substantial

evidence that the giving of the benefit is done over a long period of time, and that it has
been made consistently and deliberately. Jurisprudence has not laid down any hard-and-fast
rule as to the length of time that company practice should have been exercised in order to
constitute voluntary employer practice. The common denominator in previously decided cases
appears to be the regularity and deliberateness of the grant of benefits over a significant period of
time. It requires an indubitable showing that the employer agreed to continue giving the
benefit knowing fully well that the employees are not covered by any provision of the law
or agreement requiring payment thereof. In sum, the benefit must be characterized by
regularity, voluntary and deliberate intent of the employer to grant the benefit over a
considerable period of time.73 (Citations omitted, emphases supplied.)

We agree with the CA when it ruled that "[t]his concession given to such an employee was not
proved (sic) to be company practice or policy such that petitioners can demand of it over and
above what has been specified in the collective bargaining agreement."74

To prove that their claim on the additional grant of 150% of salary, petitioners presented
evidence showing that Anita Ducay,75 Rolando Arada,76 Marcielo Rafael,77 and
Sarmiento,78 received significantly larger retirement benefits. However, the cases of Ducay,
Arada, and Rafael cannot be used as precedents to prove this specific company practice because
these employees were not shown to be similarly situated in terms of rank, nor are the applicable
retirement packages corresponding to their ranks alike. Also, these employees, including
Sarmiento, all retired in the same year of 2001, or only within a one-year period. Definitely, a
year cannot be considered long enough to constitute the grant of retirement benefits to these
employees as company practice.

In fact, the affidavit79 of Anita Ducay affirms BTCI's position that in practice, the CBA
provisions govern the employees' retirement pay. And while it may also support petitioners'
allegation that in some cases, a more generous package is given to retiring employees higher than
that provided in the CBA, the affidavit candidly states that the retirement package given to
Sarmiento, Melchor Barreto, Marcielo Rafael, and Rolando Arada was not in accordance with
standard of merit or company practice.

It cannot therefore be disputed that petitioners already received the benefits as specified in the
CBA between BTCI and BTCI Supervisory Union. 80 Petitioner Chan, for her 21 years of service,
received a total of Pl,764,000.00 as retirement benefits following the formula of P70,000.00 x
120% x 21 years. Petitioner Galang, for his 29 years of service, received a total of P3,248,000.00
as retirement benefits following the formula of P70,000.00 x 160% x 29 years.

In sum, we hold that petitioners voluntarily retired from service and received their complete
retirement package and other monetary claims from BTCI.

WHEREFORE, the petition for review on certiorari is DENIED. No costs.

SO ORDERED.

DIWA ASIA PUBLISHING, INC. AND SATURNINO BELEN, PETITIONERS, V. MARY

GRACE U. DE LEON RESPONDENT.

DECISION
TIJAM, J.:
This is a petition for review [1] under Rule 45 of the Rules of Court filed by petitioners Diwa Asia
Publishing, Inc. (Diwa) and Saturnino Belen, assailing the Decision [2] dated July 2, 2012 and the
Resolution[3] dated September 20, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 99055,
which reversed and set aside the Decision [4] dated November 29, 2006 and the Resolution [5] dated
February 28, 2007 of the National Labor Relations Commission (NLRC) in NLRC NCR 06-
07521-04 (CA No. 046593-05) which, in turn, affirmed the Decision[6] dated October 7, 2005 of
the Labor Arbiter (LA) in NLRC NCR Case No. 06-07521-2004 dismissing the complaint filed
by Mary Grace U. De Leon (respondent) for constructive dismissal.
The Facts
Diwa Learning Systems, Inc. (DLSI) is a subsidiary of Diwa. [7] It is part of a conglomeration of
companies that include First Asia Ventures Company, Inc. (FAVCI) and Fastech Advanced.
Assembly, Inc. (Fastech).[8] Petitioner Saturnino Belen[9] is the Chairman of Diwa's Board of
Directors.[10]
Respondent was invited to join Fastech, but was not eventually hired due to a freeze order
against the corporation. Gemma P. Asuncion (Asuncion), then Vice-President (VP) of Fastech,
endorsed her to Diwa.[11]
Respondent was subsequently hired by DLSI and began working as its Human Resource (HR)
Manager on August 2, 2001, becoming a regular employee on February 2, 2002. Although her
contract was under DLSI, her work encompassed handling the HR Department of the other
companies in the conglomeration.[12]
On June 23, 2004, respondent filed a Complaint against petitioners for constructive dismissal,
docketed as NLRC NCR Case No. 06-07521-2004.[13]
Respondent's Averments
According to respondent, in March 2002, the employment status of Jayde Salvan (Salvan), an
editor who had been working for Diwa for two (2) continuous years, was converted into
"contractual status for the sole reason of 'incompetence.'" As HR Manager, she gave her opinion
on the matter. The management found her opinion unacceptable and even construed it as an
insult. From then on, her working relationship with the company turned sour. The management
even made imputations that she took part in inciting employees to file labor cases against Diwa.
[14]

In July 2003, respondent was informed that the FAVCI Executive Director for HR, Asuncion,
would forthwith be regularly present in the former's office to provide guidance for six (6) months
in the management of employees which was then perceived as pro-labor. On August 11, 2003,
Asuncion informed respondent that the former would assume the position of Diwa's President,
Amada J. Javellana (Javellana), as her immediate supervisor. However, the company's
hierarchical structure showed that she was under the supervision of no officer other than the
President, and such was the situation for the past two years, before the incident involving Salvan.
[15]

Respondent perceived that she was being demoted as Asuncion instructed her to submit all work
and decisions, which she previously had the liberty to handle and make, for Asuncion's review
and evaluation.[16]
Respondent nonetheless carried on with her job but management remained hostile towards her,
blowing even the smallest issue out of proportion, faulting her for situations she had nothing to
do with or beyond her control, and giving her directives which management would later deny.
[17]
 Furthermore, she was unfairly accused of failing to properly perform her job, bypassed in
important HR-related decisions, berated in front of her staff, and held accountable for the
mistakes of others. These incidents are allegedly well-outlined in the exchanges of electronic
mails (e-mails) among Asuncion, respondent and other parties. Respondent also averred that
Asuncion would shout at her and would more often than not give sarcastic comments for
everything she did and said.[18]
In support of her claim of a hostile and unbearable work environment, respondent submitted the
affidavit of one Mary Grace A. Lusterio (Lusterio), a former Diwa employee.[19]
On October 2, 2003, while respondent was on a five (5)-day authorized sick leave, Mary Ann
Noreen Dulig (Dulig), Fastech's Compensation and Information System Manager, was assigned
to Diwa's HR Department to help respondent with the completion of the job evaluation. When
respondent returned and even after the job evaluation was completed, Dulig continued to be
involved in, and performed, respondent's tasks.[20]
Respondent also claimed that Javellana tried to give her a failing mark in her performance
appraisal for June to December 2003. On March 15, 2004, Asuncion advised her that the
management wanted her out because things were "not working out," but it was willing to give
her separation pay. She rejected the offer, convinced she did nothing to warrant the termination
of her employment. Asuncion then told respondent that she could go on vacation leave to think
about the management's offer, but respondent declined.[21]
On March 15, 2004, respondent learned that the management was willing to give her P75,000.00
as separation pay, but because it did not give any justifiable reason to sever her employment, she
continued to work as HR Manager even as she experienced cold treatment and verbal abuse from
the management. In April 2004, she was bypassed when the company decided to terminate the
employment of two employees.[22]
On May 7, 2004, Asuncion once again made an offer of separation pay, this time in the amount
of P150,000.00, the additional P75,000.00 to be taken out of her own pocket, but respondent still
refused to quit her employment.[23]
On June 22, 2004, she was informed by Dulig that Asuncion would like to discuss some matters
with her and an IT personnel. When she arrived in Asuncion's office, nobody else was around
except for Asuncion who had been reading a list of names on her laptop. As respondent could not
recall all the names of the applicants set for interview, she leaned close to the laptop to have a
clearer view of the screen. Finding the letters too small, she intimated to Asuncion that she could
not read the names. Asuncion, however, rudely shoved the laptop to her and in an angry and
high-pitched tone said, "O sige, eto! Eto! Tingnan mo!" As she could no longer stand the
situation, she left the room while Asuncion angrily shouted for her to come back, saying that her
act amounted to insubordination. The following day, respondent filed her complaint.[24]
Petitioners' Counter-Averments
Petitioners countered that respondent was dismissed for cause, i.e., for her unauthorized
absences from June 23, 2004 to August 6, 2004, effective August 7, 2004.[25]
Petitioners argued that the e-mails submitted by respondent did not prove a hostile attitude of
management towards her. They described the communications as mere replies to queries,
opinions, advice, instructions, comments and a few reprimands couched in mild terms in
response to respondent's oversight in the course of her work as HR Manager. They asserted that
the occasional reprimands should be viewed as constructive criticisms that came with
respondent's position which commanded great responsibility.[26]
Petitioners denied that respondent was demoted when Asuncion became her supervisor as the
latter held a higher position in FAVCI and, in the exercise of management prerogative, was
merely seconded to Diwa to improve its HR's functions. They further averred that respondent
was never relegated to a lower position or suffered a diminution of benefits.[27]
Petitioners explained that Dulig was assigned to assist in the job evaluation project in Diwa
because of her similar work experience in Fastech. She never performed any of respondent's
tasks and was made to assume the functions of the HR Manager only after respondent left the
company.[28]
Petitioners offered a different account of the incidents cited in Lusterio's affidavit, indicating that
Lusterio's attack on Asuncion was too personal as to indicate that she had an axe to grind against
the latter.[29]
Petitioners denied that Asuncion shoved her laptop to respondent on June 22, 2004, alleging that
Asuncion merely turned the laptop "fronting" respondent so the latter could have a better view of
the screen.[30]
Petitioners also denied offering monetary consideration to respondent.[31] According to
petitioners, following the management's evaluation of her performance, respondent became
overly sensitive, with a propensity to blow issues out of proportion. Her hostile attitude towards
her work and co-employees affected the discharge of her functions, prompting Asuncion to call
her to a meeting to discuss these problems.[32]
During their conversation, respondent claimed that it had become difficult and unbearable for her
to work in such a hostile environment. Asuncion confirmed to her that the company was also not
happy with her performance but reassured her that the comments on her were not meant as a
direct and personal attack, but as an objective and well-meaning assessment of the problems
besetting her department. When respondent insisted that she would not tolerate the hostile work
environment, Asuncion told her that since both parties were no longer happy, parting ways was
always an option.[33]
Respondent then told Asuncion to make her an offer. After Asuncion advised respondent to
evaluate her financial requirements, respondent quoted the amount of P300,000.00 to represent
her guaranteed salary up to the end of the year as she expected that it would not be easy to find
another job. Asuncion told her that there was no basis for the amount as respondent merely
speculated that her employment had been intolerable. Asuncion, however, stated that she could
give respondent something from her personal funds as she felt "morally responsible" for the fact
that respondent resigned from her previous job after she invited the latter to join Fastech but was
not hired for economic reasons.[34]
Asuncion eventually informed respondent that the management refused to accede to her demand.
From then on, respondent became even more defensive when dealing with the management.[35]
On June 23, 2004, respondent took flight from the office and no longer reported for work.[36]
Ruling of the LA
On October 7, 2005, the LA dismissed respondent's complaint for constructive dismissal for lack
of merit.[37] She sustained petitioners' argument that if negative feedbacks and reprimand were a
form of harassment, an employer would virtually be powerless to call the attention of and correct
their officers.[38]
Ruling of the NLRC
Respondent's appeal, docketed as NLRC NCR 06-07521-04 (CA No. 046593-05), was initially
granted in the NLRC Decision[39] dated August 22, 2006, the dispositive portion of the Decision
reads:
WHEREFORE, premises considered, the decision under review is hereby REVERSED and SET
ASIDE, and another entered, declaring the complainant ILLEGALLY DISMISSED from her
employment.

Accordingly, respondent Diwa Asia Publishing, Inc. is ordered to pay the complainant FULL
BACKWAGES from June 23, 2004 up to the finality of this decision, and SEPARATION PAY
at the rate of ONE MONTH for every year of complainant's service from August [2], 2001 until
finality of this decision.

SO ORDERED.[40] (Citation omitted)
Petitioners sought reconsideration[41] and on November 29, 2006, the NLRC rendered another
Decision[42] which set aside its August 22, 2006 ruling and affirmed the LA's dismissal of the
complaint.[43] Respondent's motion for reconsideration[44] was denied in the NLRC
Resolution[45] dated February 28, 2007.
Ruling of the CA
Respondent elevated the case to the CA via a petition for certiorari, docketed as CA-G.R. SP
No. 99055, which was granted in the assailed Decision [46] dated July 2, 2012, the dispositive
portion of the Decision reads:
WHEREFORE, premises considered, the present petition is hereby GRANTED. Accordingly,
the assailed Decision of the NLRC dated 29 November 2006 is hereby SET ASIDE and its
earlier Decision dated 22 August 2006 is ordered REINSTATED.
SO ORDERED.[47]
In a Resolution[48] dated September 20, 2012, the CA denied petitioners' motion for
reconsideration for lack of merit. The CA ratiocinated that:
[T]he evidence submitted proving the hostility brought about by the SALVA issue, the
[respondent's] humiliation by ASUNCION as corroborated by the sworn statement of
[respondent's] co-employee, the offer of separation pay to the [respondent], the conversation
threads in the electronic mails of the parties involved, the disregard of the [respondent's] input in
effecting policies despite being the human resource manager, and [petitioners'] allegation that the
[respondent] abandoned her work, without proving the requirements set forth by law and
jurisprudence, all point to no conclusion other than that reached in the NLRC Decision dated 22
August 2006.[49]
Hence, this petition, grounded on the following arguments: (1) the issuance of communications
to reprimand and/or correct an erring employee forms part of the employer's management
prerogatives and is not tantamount to harassment, let alone illegal dismissal; and (2) the award of
backwages should be deleted, if not minimized, given the company's good faith, or adjusted
since, because of the fire that gutted the CA's records, said amount has ballooned through the
years before the case could be resolved.[50]
Ruling of the Court
The petition lacks merit.

"[C]onstructive dismissal [is] a cessation of work because continued employment is rendered

impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or
both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee."[51] It is an act amounting to dismissal but made to appear as if it
were not. In other words, it is a dismissal in disguise.[52]
The test of constructive dismissal is whether a reasonable person in the employee's position
would have felt compelled to give up his position under the circumstances. [53] Considering the
facts of this case, the Court agrees with the CA that respondent was constructively dismissed.
Asuncion's e-mails
We begin with the e-mails received by respondent from Asuncion. Petitioners would have this
Court believe that they were mere replies, instructions and comments couched in "mild terms," to
be viewed as constructive criticisms, but the communications, both as to language and tone,
indicate a pattern of fault-finding and nitpicking, and an attitude of disdain. The correspondence
between respondent and Asuncion also reveals that Asuncion had purposely left respondent out
on HR matters.

When respondent at one time e-mailed a project manager, copy furnished (cc) Asuncion and
others, Asuncion directed her to observe proper protocol by discussing the matter with her first
because the project manager was also a VP of the company and respondent was merely a
manager.[54] When respondent explained that she communicated directly to the VP as project
manager because it was agreed in a meeting that all project concerns should be addressed
directly to the latter to ensure swift response,[55] Asuncion replied by accusing her of simply
"quibbling," thus:
JTT is a VP no matter what project he undertakes. Being called a Change Manager is just a
nomenclature. He is VP by virtue of his employment contract. You are quibbling Grace.
He is a VP therefore it should only be proper that you raise whatever concern you may have to
your immediate superior instead of addressing it to him. If time was a consideration then all you
had to do was pick up the phone and call me which you prefer not to do nowadays – you ask
your staff to ask me.[56] (Emphasis ours)
Answering the foregoing e-mail, respondent reiterated that it had been understood that anyone
could go directly to the project manager, adding that:

In fact, it was also discouraged to pass the concerns from one person to another as JDE is time
bounded. That's what others did before and there was no issue about it. After all, that was the
primary reason why the position of Change Manager was established.

On your remarks that I prefer not to call you nowadays and I asked my staff to call you directly
instead:

My staff were wondering why you sent and addressed your e-mail to them and not to me,
not even a cc, which you usually do. Specifically, after we talked of your offer of separation,
which left me uncertain (until this time, I have not received any updates from you), I allowed my
staff to go directly to you instead.
Honestly, communicating with you has become rather awkward. We are both from HR, and as
colleagues so we should be more better [sic] in our remarks. It does no good to hear blunt and
insensitive criticisms, instead of constructive ones.
I have no other purpose writing this reply but for clarification. I just hope that this would be
taken in good light.[57] (Emphasis ours)
Five days before the May 10 elections of 2004, respondent submitted to Asuncion a draft of a
memorandum regarding the "May 10 holiday," telling her that she had been hanging on to said
draft until the right announcement from Malacañang on whether it would be a legal or special
holiday and  indicating that HR had just inquired with Malacañang but still received no update.
In response, Asuncion faulted her, first for not indicating her name, and then for submitting the
memorandum knowing that it might be wrong, telling her to be more resourceful and proactive
by checking the DOLE or Malacanang's website and to ask HR practitioners. [58] Respondent
consequently replied that HR had in fact made the inquiries, thus:
Yesterday, DOLE referred us to Malacañang. Up to this time, Malacañang has no declaration
about the May 10 holiday. Also yesterday, I inquired to [sic] a number of HR practitioners.
Likewise, they have no exact information. Despite the lack of announcement, others already
declared May 10 as a special holiday, and others are still waiting for the exact announcement.[59]
Interestingly, petitioners, in arguing that Asuncion's comments were a mere reaction to
respondent's alleged failure to properly discharge her duties, omitted to indicate the above-
quoted e-mails in their petition.

On another occasion, Asuncion faulted respondent for not submitting two assigned tasks on time.
In reply, respondent "beg[ged] to disagree" and forwarded to Asuncion the work she previously
e-mailed, asking her to note that the tasks were submitted to her on the due date. [60] Despite this,
Asuncion insisted that respondent did not meet the deadline and accused respondent of
"quibbling." Asuncion wrote:
I am the sole recipient. I did not receive it.

As long as there is no proof that you sent it then you are considered not in compliance with the
Monday deadline.

Let us avoid quibbling since there is no proof that you sent it. Just begging to disagree is not
enough.[61]
It has not escaped this Court's attention that once again, petitioners failed to indicate in their
petition material portions of the e-mail thread, particularly the e-mails respondent forwarded to
correct Asuncion's claim that she failed to meet the deadline.[62]
We also note of another task assigned by Asuncion to respondent for accomplishment on a
particular date, June 15, 2004. The petition itself shows that respondent e-mailed the assignment
- a draft-memo on the attendance of managers and supervisors - on June 15, 2004 for Asuncion's
review. This notwithstanding, Asuncion claimed that the draft was given one day late.[63]
On yet another occasion, Asuncion faulted respondent for not submitting her performance
appraisal form, prompting respondent to point out that she had in fact e-mailed the form the day
before.[64]
At one point, too, Asuncion admonished respondent for delay in the submission of an assigned
work. Respondent explained that she had emailed her work on time but discovered the next day
that her e-mail had remained in her Outbox. Upon such discovery, she re-sent the e-mail to
Asuncion and asked another HR personnel, "Cholet," to do the same on her computer to be sure
that it was delivered. The same HR personnel, according to respondent, saw that her message to
Asuncion had still been in her Outbox. [65] Respondent's explanation, however, merited the
following response from Asuncion:
Well, what can I say? Again, you have an excuse.

But it is not acceptable. You know why? I suggest you go through a briefing with IT regarding
email use. If the message is in your Outbox and you turn your PC off then there is no way that
the message will be sent. I am assuming that you turned your PC off because we have a rule on
leaving PCs turned on.

Do you have to be told to wait for the message to pop up in your Sent Items to ensure that it was
indeed sent? If yes, then I may have erred in assuming that you know how to use the email.

Consider this a warning for not complying with a deadline. Please review how to use your email.
[66]

Not content with the foregoing reproof, Asuncion added:

P.S. I have to cc Cholet since you told me that she has been assigned to handle Records. I want
this filed in your 201 file.[67] (Emphasis ours)
There was also the instance where Asuncion e-mailed respondent, faulting her for proceeding
with the Job Evaluation without having the managers accomplish the Role Clarification. As it
turned out, however, Asuncion had sent an e-mail advising respondent to go on with the job
evaluation even without the role clarification requirements.[68]
Furthermore, when an HR consultant e-mailed respondent, cc Asuncion and other Diwa officers,
in part thanking respondent for "following up the slotting of non-benchmark positions" and
setting a revised timeline for the submission of evaluation forms, [69] Asuncion sent the following
e-mail to respondent:
I find Ethel's email funny. Are you giving her the impression that you are just supposed to follow
it up with me? Well, if this is true then we really have a problem. Me, and especially you are
"owners" of this project together with Mads and the DIWA officers. I think you better correct
this impression asap.

On the non-benchmark positions, please send me an update. How many are still pending? And,
please do not tell me that you are conducting an orientation or taking a break or have to go home
early. LFL and RMC said that they have already submitted everything. Try to email the update
within today. Let us discuss the details tomorrow.[70]
Asuncion's e-mail prompted respondent to reply:
Regarding Ethel's email to you following up the slotting of the non-benchmark positions, I have
not in any way given her the impression that you will be providing me or her with the evaluation
forms. She was advised by AJJ that you will be handling the slotting of the non-benchmark
position, thus her constant emails to you for updates. I have also forwarded her emails to you as
requested by her for reasons that her emails bounced back or that she has not been receiving
replies from you.

Furthermore, Ethel is also aware that I am the one following-up the submission of the evaluation
forms from all the officers. In fact, I have already submitted the forms of six departments to her
yesterday, Oct. 2. I will be sending you exchange of emails for your information.

If there are still other concerns that need further clarifications, I would be more than willing to
discuss them in a meeting at your convenience.[71]
On another occasion, Asuncion faulted respondent for sending her the same e-mail twice with
different attachments. It turned out, however, that respondent had been having difficulty with her
computer and the IT technician erroneously attached the wrong file to her first e-mail.
Respondent sent an SMS message to Asuncion precisely to inform her of the mistake and
subsequently e-mailed the correct attachment. Asuncion, however, saw only the mistake,
admonishing respondent and asking her which attachment was correct, despite the latter's prior
notice and rectification.[72]
Records also show Asuncion admonishing respondent for not requiring an approved "MRF" for
certain manpower requests, writing:

And, what is the remark, "as we have thought that all of ELR's manpower requirements are
urgent" for? All manpower requirements are deemed important and urgent. But there should
always be an approved MRF. It has to start with you.[73] (Italics in the original)
Asuncion's prior e-mail, however, clearly indicated that HR need not wait for an MRF for critical
positions:

Treat like RSS. There should be qualified applicants available all year round. We should not wait
for an MRF since it is a critical position.[74]
Furthermore, when respondent made a recommendation of penalties which did not sit well with
Asuncion, the latter sent her the following email:

Please. Are you not from HR? What would be the basis for the reprimand? Is it reasonable to
reprimand the employee for failing the exams? What did the employee violate?

I hope I have triggered something in your thought process. Please review your recommendation
again.[75]
Notably, the penalty of reprimand was itself suggested by a VP of Diwa.[76]
Even when respondent has shown initiative at work, Asuncion could not contain her sarcasm,
stating in her e-mail: "Initiative is good. But it seems not worth highlighting." When respondent
correctly pointed out an error in the payroll adjustment, Asuncion retorted: "Yup. You are right.
Finally, you are able to contribute."[77]
Petitioners' efforts to discredit respondent are at once apparent in the foregoing e-mails. They are
made even more evident by petitioners' selective reference to the e-mail correspondence between
Asuncion and respondent. The above-cited circumstances clearly depict an atmosphere of "open
disdain and hostility"[78] towards respondent, which is further established by the Affidavit[79] of
respondent's co-employee, Lusterio, who corroborated respondent's assertion that the
management made work difficult and unbearable for her.
Lusterio's Affidavit
Lusterio, who cited three specific instances of mistreatment, prefaced her Affidavit [80] by stating
that there were other instances when Asuncion berated respondent in front of her or others; that
she knew how difficult it was for respondent to bear everything that Asuncion was doing to her;
and that Asuncion had been "cruel" to them.
Lusterio described an incident where Asuncion accused respondent of engaging the services of
an online job posting site (Jobstreet) without her knowledge. At the meeting where Asuncion
made the accusation in Lusterio's presence, respondent tried to explain to Asuncion that she
approved the engagement, but Asuncion refused to listen and interrupted respondent's every
sentence, telling respondent that she was a liar. Lusterio attested that Asuncion had, in fact, given
her approval and even revised Diwa's posting format and approved the positions to be posted.[81]
At another time, said Lusterio, Asuncion accused her and respondent of giving Diwa's password
to Jobstreet to an outsider. Asuncion also faulted respondent for posting a vacancy for a
Magazine Editor and for publishing the wrong job requirements on the site. Lusterio and
respondent denied disclosing the password to an outsider. Respondent also explained to
Asuncion that she had e-mailed her approval of the posting, but Asuncion retorted: "wala kang
pinadadala sa akin! And don't tell me that you don't know what's going on to [sic] your
department! You always twist the story!" Respondent tried to explain herself once more but
Asuncion interrupted her and instructed Lusterio to submit incident reports regarding the
password and the job posting. Lusterio conferred with Jobstreet on the password and in her
incident report explained that anyone could have seen the online posting as Jobstreet's website
was open to the public. Lusterio also reported that she had, in fact, seen Asuncion's e-mail
approving said posting.[82]
The third incident Lusterio described took place in the company's get-together party. Respondent
was tasked to give away the raffle prizes but the singing contest had taken a long time to finish.
Respondent told Lusterio that she would just go to the comfort room to urinate. Respondent had
been gone for about six minutes when the singing contest ended and the host called on her to do
the raffle. When respondent returned, Asuncion was already announcing the winners of the
raffle. When the raffle was over, Asuncion approached respondent asking why she was nowhere
to be found. Respondent apologized and told Asuncion that she had gone to the comfort room,
but the latter berated respondent in front of Lusterio and other employees, telling her "next time
pigilan mo pag punta mo sa CR."[83]
Petitioners argue that Lusterio was not credible because she supposedly had an axe to grind
against Asuncion. The Court does not agree.

Lusterio had been forthright in stating in her Affidavit that she resigned from Diwa because of
Asuncion whom she described as a "liar," a "back-passer" and "cruel." Her statements, however,
cannot be discredited simply for this reason. The Court notes that Lusterio's Affidavit was based
on her own knowledge of the incidents she described, having personally witnessed them.
Asuncion, in her own Affidavits, did not deny that Lusterio was privy to these incidents or that
she was present during the meetings alluded to. Furthermore, the Court notes that Lusterio's
statements, which were made under oath, were replete with consistent and positive details which
were not substantially refuted by Asuncion.

As regards the engagement of Jobstreet, Asuncion, in her October 20, 2004 Affidavit,[84] claimed
that she was merely clarifying some details with respondent in her e-mail, but she never
particularly denied that her meeting with respondent and Lusterio took place or that she behaved
towards respondent in the manner described by Lusterio.
Anent the password and online posting issues, Asuncion did not deny that she accused
respondent and Lusterio of improperly disclosing their Jobstreet password to an outsider. While
Asuncion denied berating respondent, claiming she merely told her and Lusterio that they could
all just move on and learn from their mistake, the Court notes that Lusterio had particularly
mentioned receiving Asuncion's instruction to submit separate explanations or incident reports
on the password and posting issues – a claim Asuncion never specifically denied. Requiring such
incident reports seems antithetical to the idea of simply moving on.

Asuncion averred that she did not shout at or berate respondent during the get-together party and
that she used a requesting tone when she told respondent: "Kung pwede next time pigilan mo
muna ang paninigarilyo mo at least while the awarding is going on." According to her,
respondent was nowhere to be found every time she would look for her, and other employees
informed her that respondent was smoking by the comfort room (CR). She claimed that she must
have spoken at the top of her voice considering that the music was being loudly played at the
time. The Court notes, however, that even as Asuncion claimed that "other employees told [her]
that [respondent] was near the CR puffing a cigarette," petitioners submitted no corroborating
statement from any of them.
"In constructive dismissal cases, the employer is, concededly, charged with the burden of
proving that its conduct and actions were for valid and legitimate grounds."[85] "[Petitioners] must
not rely on the weakness of [respondent's] evidence but must stand on the merits of [their] own
defense."[86]
Absent convincing evidence showing any cogent reason why Lusterio should falsely testify, her
testimony may be accorded full faith and credit. Besides, in judging the legality of an employee's
dismissal, proof beyond reasonable doubt is not required. Neither is preponderance of evidence
expected. It is sufficient that the finding of illegal dismissal is established by substantial evidence
which is such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.[87]
The talk about separation
Petitioners averred that in a conversation with respondent, Asuncion acknowledged that the
company was no longer happy with respondent and suggested parting ways. [88] By respondent's
account, however, the conversation dealt with not just an option to leave but "management's
decision of [her] separation from the company."[89] In either case, petitioners evidently preferred
that respondent no longer worked for Diwa. Whether or not there was in fact an offer of
separation pay which respondent refused, it is clear that respondent had then chosen to stay.
These circumstances, when viewed alongside petitioners' open disdain and hostility towards
respondent, confirm that petitioners had been impelled by a desire to ease her out of
employment.
Dulig's work at Diwa's HR
The Court also notes respondent's claim that when assigned to Diwa's HR, Dulig was performing
functions that properly belonged to her as HR Manager, including representing HR in company
meetings and handling the separation of Diwa employees.[90] Petitioners deny this, saying that
even the HR staff could attest that Dulig was not discharging respondent's duties. [91] Curiously,
however, not one testimony from such employees has been produced by petitioners. Not even a
statement from Dulig herself was presented to directly refute respondent's claim. The absence of
such corroborating statements despite the facility with which they could have been obtained, as
well as petitioners' professed dissatisfaction with respondent, and the fact that Dulig assumed the
position of HR Manager shortly after respondent left[92] serve to lend credence to respondent's
assertion that petitioners placed Dulig in Diwa's HR Department to carry out functions pertaining
to her position.
Respondent's demotion
Respondent was excluded from important HR decisions which she was expected not only to be
privy to, but also to have a say in, by virtue of her position in the company.

Records show that petitioners made the decision to terminate the services of two (2) employees,
Sheila Montemayor and Elline Pereys, without respondent's knowledge or participation. [93] The
Court cannot sustain petitioners' claim that respondent's act of signing the Notice of Termination
and her execution of affidavits for submission in the labor case, subsequently filed by said
employees, constitute proof that she was given "substantial participation" and was aware of the
facts and issues surrounding the termination. [94] Said actions were undertaken after the
management already reached its decision to terminate.
The signing or issuance of the Notice of Termination was thus a ministerial function that simply
conveyed said decision; it does not establish that respondent took part in the deliberation. In the
same vein, respondent's execution of the affidavits does not by itself prove that she had been part
of the decision-making process. In fact, petitioners have not pointed to any statement therein
indicating that respondent had been involved or consulted pre-termination. For all petitioners'
assertions that respondent knew of the facts and issues surrounding the termination, they never
categorically declared that she was included in the deliberation. Besides, mere knowledge of
such facts and issues does not equate to involvement in the decision as it could have been
derived from records or secondhand information.

When Diwa subsequently considered and decided to terminate the services of two (2) more
employees, respondent was once again excluded. This is clear from the following e-mail
correspondence[95] between Asuncion and respondent.
Respondent wrote:

Re: Termination of:

Serrano, Jacqueline- November 17, 2003 (Probi)

Nicolas, Nicole- November 01, 2003 (Probi)
Both employees were terminated.

Jacqueline approached me this morning and asked if HR was aware of her termination and its
procedures. Since I really have no idea and such was not discussed with me, I simply
answered "no" and advised her to talk to HVS, her supervisor, instead, FYI.[96] (Emphasis ours)
To this e-mail, Asuncion replied:

I am aware of it Grace and so is EAC. It seems that Meng preferred to just discuss it with the 2
of us.

So technically, someone in HR is aware of it. Not you, personally. You may want to check
with Cholet the copies of the termination letter Meng gave her for filing in the 201.
[97]
 (Emphasis ours)
Respondent e-mailed back to say:

It is not really a surprise, Miss. It's just an FYI anyway.[98] (Emphasis ours)

to which Asuncion's responded:

You just need to be careful about the statement that you issue.

Based on your email, her question was, "Is HR aware of it?" and that you said no.

Maybe it would have been better if you answered that you are not aware of it personally.
And that you will check if I or any other employee in HR is aware of it. Or, simply say that
you will look into it because you do not have personal knowledge of it.
Just a suggestion.[99] (Emphasis ours)
Respondent has likewise submitted evidence in the form of e-mails from Asuncion showing that
although her job designation remained the same, she was relegated to performing mundane or
clerical tasks such as preparing drafts of termination notices based on a standard format and
ensuring that the last pay of employees was released and that termination notices were received
by the Department of Labor and Employment.[100] As this Court previously held:
There is constructive dismissal when an employee's functions, which were originally supervisory
in nature, were reduced; and such reduction is not grounded on valid grounds such as genuine
business necessity.[101]
The reduction in respondent's duties and responsibilities as HR Manager amounted to a demotion
that was tantamount to constructive dismissal.[102]
The laptop-shoving incident
Respondent averred that Asuncion shoved her laptop to her when she leaned to have a better
view of the screen. Petitioners denied this, explaining that Asuncion merely turned the laptop
"fronting" respondent. Petitioners' explanation, however, is unsupported by any testimony or
evidence. Asuncion notably executed no less than two affidavits[103] but neither contained
petitioners' version of the incident. In the calibration of evidence, petitioners' bare denial cannot
outweigh respondent's sworn account. Respondent also filed her case for constructive dismissal
the day after the incident took place, which further persuades this Court to believe that it was of
such gravity as respondent described it to be.
The above-cited circumstances indubitably present a hostile and unbearable working
environment that reasonably compelled respondent to leave her employment. Respondent,
therefore, was constructively dismissed.

Granting, as petitioners claimed, that respondent's performance had been deficient or

unsatisfactory, the management's actuations cannot be excused. As this Court previously held, no
employee should be subjected to constant harassment and ridicule on the basis of management
prerogative or even for poor performance at work.[104]
The CA's award of full backwages and separation pay is sustained. Under Article 279 [105] of the
Labor Code, an employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. Furthermore,
inasmuch as reinstatement is no longer feasible given the strained relations between petitioners
and respondent, the award of separation pay equivalent to one (1) month's salary for every year
of service was just and reasonable as an alternative to reinstatement. As this Court previously
held:
[O]ver and again, this Court has recognized that strained relations between the employer and
employee is an exception to the rule requiring actual reinstatement for illegally dismissed
employees for the practical reason that the already existing antagonism will only fester and
deteriorate, and will only worsen with possible adverse effects on the parties if we shall compel
reinstatement; thus, the use of a viable substitute that protects the interests of both parties while
ensuring that the law is respected.[106]
Both the separation pay and backwages shall be computed up to the finality of the decision as it
is at that point that the employment relationship is effectively ended.[107]
Respondent's backwages shall be paid with interest at twelve percent (12%) per annum from
June 23, 2004 to June 30, 2013 and at six percent (6%) per annum from July 1, 2013 until their
full satisfaction.[108] Her separation pay, in lieu of reinstatement, shall earn interest at six percent
(6%) per annum from the finality of this Decision until full payment.[109]
Backwages are aimed to replenish the income that was lost by reason of the unlawful dismissal.
[110]
 Together with the remedy of reinstatement, they make the dismissed employee whole who
can then look forward to continued employment, thereby giving meaning and substance to the
constitutional right of labor to security of tenure. [111] For this reason, the Court cannot sustain
petitioners' argument that the award of backwages must be reduced owing to the period spent in
reconstituting the CA's records of the case. In Reyes v. NLRC, et al.,[112] the Court held:
One of the natural consequences of a finding that an employee has been illegally dismissed is the
payment of backwages corresponding to the period from his dismissal up to actual reinstatement.
The statutory intent of this matter is clearly discernible. The payment of backwages allows the
employee to recover from the employer that which he has lost by way of wages as a result of his
dismissal. Logically, it must be computed from the date of petitioners illegal dismissal up to the
time of actual reinstatement. There can be no gap or interruption, lest we defeat the very
reason of the law in granting the same. x x x.[113] (Citation omitted and emphasis ours)
Having caused the unlawful dismissal, petitioners must assume the consequences of the
application of the law and jurisprudence, no matter how unfavorable to them. The following
pronouncement in C.I.C.M. Mission Seminaries (Maryhurst, Maryheights, Maryshore and
Maryhill) School of Theology, Inc. v. Perez,[114] thus, finds relevance:
The petitioners, nonetheless, claim that it was not their fault why the amounts due ballooned to
the present level. They are mistaken. Suffice it to state that had they not illegally dismissed
respondent, they will not be where they are today. They took the risk and must suffer the
consequences.[115]
WHEREFORE, the petition is DENIED. The Decision dated July 2, 2012 and the Resolution
dated September 20, 2012 of the Court of Appeals in CA-G.R. SP No. 99055 are
hereby AFFIRMED with MODIFICATION, in that respondent Mary Grace U. De Leon's full
backwages shall be paid with interest at twelve percent (12%) per annum from June 23, 2004 to
June 30, 2013 and at six percent (6%) per annum from July 1, 2013 until their full satisfaction,
and her separation pay, in lieu of reinstatement, shall earn interest at six percent (6%) per
annum from the finality of this Decision until full payment.
SO ORDERED.