Article 296 (formerly 282) of the Labor Code allows an employer to dismiss an

employee for gross and habitual neglect of duties. Particularly, jurisprudence provides
that poor performance or unsatisfactory work may fall under gross and habitual neglect
of duties under Article 296 (b) of the Code or may constitute gross inefficiency. 1
The failure to reach a standard set by an employer or other work goals may be
considered a ground for the dismissal of an employee. This management prerogative of
requiring standards can be availed of so long as they are exercised in good faith for the
advancement of the employer's interest. 2
However, sufficient proof of the allegedly inefficient work done by an
employee needs to be produced before dismissal may be deemed valid. Such proof
can be gleaned from several requisite such as:
1. the employer must have set standards of conduct and workmanship against
which the employee will be judged;
2. the standards of conduct and workmanship must have been communicated to
the employee; and
3. the communication was made at a reasonable time prior to the employee's
performance assessment. 3
In the case of First Glory Philippines, Inc. vs. Lumantao 4, wherein the
Supreme Court ruled the employee was illegally dismissal due the failure of the
employer to properly communicate the standard to the dismissed employee, to wit:
“These requisites are wanting in Lumantao's case. While FGPI
properly set standards of conduct and workmanship, the evidence is
lacking to show that these standards were duly communicated to the
respondent, especially during the times he had already alleged to be guilty
of poor performance. There is no record that Lumantao was even warned
about his work, or apprised as to what he had to do to improve the same.
In fact, in Lumantao's 201 File, there was no mention of his failure to
achieve the requisite performance standard, shown by FGPI in its petition.
A perusal of Lumantao's file shows that there is not even a record
of the supposed failure to meet the performance standards, lending
credence to the assertion that FGPI failed to properly apprise Lumantao
regarding the same. As such, this takes away from the sincerity of FGPI in
informing Lumantao about his supposed failing grade, and in helping him
1
First Glory Philippines, Inc. vs. Lumantao, G.R. No. 237166, March 6, 2019
2
Citing Buiser, et al. v. Hon. Leogardo, etc., et al 216 Phil. 144 (1984).
3
Sameer Overseas Placement Agency, Inc. v. Cabiles, 740 Phil. 403 (2014).
4
.R. No. 237166, March 6, 2019
 reach an acceptable standard, as well as FGPI's allegation that Lumantao
was previously dismissed for prior offenses he committed.
As mentioned, the Court has almost invariably upheld an
employer's management prerogative to dismiss an employee for gross
negligence and carelessness so long as it is exercised in good faith for the
advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws
or under valid agreements. The Court finds lack of good faith and absence
of valid cause on the part of FGPI in this regard, so as to properly state
that Lumantao was illegally dismissed.”

As a general concept, poor performance is tantamount to inefficiency and

incompetence in the performance of official duties. An unsatisfactory rating can be a just
cause for dismissal only if it amounts to gross and habitual neglect of duties. However,
poor or unsatisfactory performance per se of an employee does not necessarily mean
that he is guilty of gross and habitual neglect of duties. 5
To ascribe gross neglect, there must be lack of or failure to exercise slight care or
diligence, or the total absence of care in the performance of duties. In other words,
there is gross neglect when the employee exhibits thoughtless disregard of
consequences without exerting effort to avoid them. On the other hand, habitual neglect
involves repeated failure to perform duties for a certain period of time, depending upon
the circumstances, and not mere failure to perform duties in a single or isolated
instance.6
It is important that the alleged gross neglect should be properly documented and
proven. There must be specific acts that would establish the employee’s alleged poor
performance, or his want of even slight care in the performance of his official tasks for a
certain period of time. 7

Telephilippines, Inc. v. Jacolbe, G.R. No. 233999, February 18, 2019.

Sometime in May 2009, TP assigned Jacolbe to its Priceline account. For TP to properly
assess his work performance, Jacolbe was required to meet the key performance metric
targets 10 of, among others, an Average Handle Time (AHT) of 7.0 minutes or below.
11 The AHT refers to the average time spent by a CSR with the customer on the phone;

5
Inc Shipmanagement, Inc. vs. Camporedondo [G.R. No. 199931. September 7, 2015.
6
Ibid.
7
Ibid.
it is computed using the formula: (Average Talk Time + Hold Time)/Number of Calls =
AHT, and is recorded on a daily and weekly basis. 12
On January 22, 2013, Jacolbe's supervisor, Mr. Philip Charles Go, issued an Incident
Report 13 for failure of Jacolbe to hit the 7-minute AHT goal agreed upon for the 3rd
week of January while he was under TP's Performance Improvement Plan (PIP). 14
Records show that Jacolbe was placed under the PIP after he failed to meet the 7-
minute AHT target in two (2) previous instances, i.e., January 5 and 12, 2013. 15
Subsequently, TP's Human Resources Department (HRD) sent Jacolbe a letter 16
dated February 13, 2013 (Notice to Explain) informing him of its receipt of the Incident
Report, and further stating that his "work performance for the last 6 months is
unsatisfactory due to [his] consistent failure to meet the [AHT] Goal in spite of being
enrolled in [its PIP]," 17 which, if proven true, would constitute as an offense against its
code of conduct warranting the termination of his employment. The Notice also directed
him to explain, in writing, why he should not be subjected to appropriate corrective
action.
In compliance with the directive, Jacolbe submitted letters 18 dated February 19 and 25,
2013, explaining that since he was hired in 2007, he had never intentionally
disconnected a call to meet the prescribed AHT mark. Unsatisfied with his explanations,
TP issued Jacolbe a Letter 19 dated March 18, 2013 (Notice of Termination) dismissing
him from work for failure to meet account specific performance metrics or certification
requirements under Section V.B.4 of its Code of Conduct and Zero Tolerance Policy.
In its defense, TP argued that Jacolbe's actual AHT scores 24 from January 2012 up to
his dismissal in March 2013 were consistently beyond the 7-minute AHT mark, despite
his enrollment in its PIP and SMART Action Plan programs. 25 TP explained that the
PIP and SMART Action Plan programs are the company's tools designed to help "poor
performing" CSRs improve their work performance. 26 Under these programs, the
enrolled CSRs are given "step goals" or targets that are considerably lower (or higher,
as the case may be) than the prescribed metrics which are then gradually increased (or
decreased) until they meet the same. Thus, under these circumstances, TP argued that
Jacolbe's consistent failure to meet the 7-minute AHT mark over a prolonged period of
time undoubtedly showed inefficient and poor call handling justifying his dismissal under
its code of conduct.

A valid dismissal necessitates compliance with both substantive and procedural due
process requirements. Substantive due process mandates that an employee may be
dismissed based only on just or authorized causes under Articles 297, 298, and 299
(formerly Articles 282, 283, and 284) of the Labor Code, as amended. On the other
hand, procedural due process requires the employer to comply with the requirements of
notice and hearing before effecting the dismissal. In all cases involving termination of
employment, the burden of proving the existence of the above valid causes rests upon
the employer. The quantum of proof required in these cases is substantial evidence as
discussed above.

In this relation, jurisprudence instructs that gross inefficiency is analogous to gross and
habitual neglect of duty under Article 297 (e) in relation to Article 297 (b) of the Labor
Code, as amended, for both involve specific acts of omission on the part of the
employee resulting in damage to the employer or to his business, and constituting,
therefore, just cause to dismiss an employee, thus:

"[G]ross inefficiency" falls within the purview of "other causes analogous to the
foregoing," [and] constitutes, therefore, just cause to terminate an employee under
Article 282 [now under Article 297] of the Labor Code[, as amended]. One is analogous
to another if it is susceptible of comparison with the latter either in general or in some
specific detail; or has a close relationship with the latter. "Gross inefficiency" is
closely related to "gross neglect," for both involve specific acts of omission on
the part of the employee resulting in damage to the employer or to his business.
(Emphasis supplied)

In Buiser v. Leogardo, Jr., the Court explained that such inefficiency is understood to
mean failure to attain work goals or work quotas, either by failing to complete the same
within the allotted reasonable period, or by producing unsatisfactory results. Further,
in San Miguel Corporation v. NLRC, the Court held that an employer is entitled to
prescribe reasonable work standards, rules, and regulations necessary for the conduct
of its business, to provide certain disciplinary measures in order to implement them, and
to assure that the same would be complied with. This management prerogative of
requiring standards may be availed of so long as they are exercised in good faith for the
advancement of the employer's interest.

In this case, records reveal that Jacolbe's AHT scores for 62 consecutive weeks, or
from January 2012 up to his dismissal in March 2013, were well above the 7 minutes or
lower AHT mark. As he had been having difficulty meeting the same, TP allowed him to
continue in its employ and even enrolled him in its SMART Action and Performance
Improvement Planstwice – in July to August 2012 and again in January 2013 – to help
him improve his AHT scores. This notwithstanding, Jacolbe's AHT scores remained well
above the 7-minute AHT mark. Undoubtedly, Jacolbe's repeated and consistent failure
to meet the prescribed AHT mark over a prolonged period of time falls squarely under
the concept of gross inefficiency and is analogous to gross and habitual neglect of duty
under Article 297 of the Labor Code which justified his dismissal.

G.R. No. 214399

Puncia alleged that since 2004, he worked as a messenger/collector for Toyota and was
later on appointed on March 2, 2011 as a Marketing Professional 7 tasked to sell seven
(7) vehicles as monthly quota. 8 However, Puncia failed to comply and sold only one (1)
vehicle for the month of July and none for August, 9 prompting Toyota to send him a
Notice to Explain.

It is settled that "for a dismissal to be valid, the rule is that the employer must comply with both
substantive and procedural due process requirements. Substantive due process requires that the
dismissal must be pursuant to either a just or an authorized cause under Articles 297, 298 or 299
(formerly Articles 282, 283, and 284)65 of the Labor Code. Procedural due process, on the other
hand, mandates that the employer must observe the twin requirements of notice and hearing before
a dismissal can be effected."66 Thus, to determine the validity of Puncia' s dismissal, there is a need
to discuss whether there was indeed just cause for his termination.

In the instant case, records reveal that as a Marketing Professional for Toyota, Puncia had a monthly
sales quota of seven (7) vehicles from March 2011 to June 2011. As he was having trouble
complying with said quota, Toyota even extended him a modicum of leniency by lowering his
monthly sales quota to just three (3) vehicles for the months of July and August 2011; but even then,
he still failed to comply.67 In that six (6)-month span, Puncia miserably failed in satisfying his
monthly sales quota, only selling a measly five (5) vehicles out of the 34 he was required to sell over
the course of said period. Verily, Puncia's repeated failure to perform his duties - i.e., reaching his
monthly sales quota - for such a period of time falls under the concept of gross inefficiency. In this
regard, case law instructs that "gross inefficiency" is analogous to "gross neglect of duty," a just
cause of dismissal under Article 297 of the Labor Code, for both involve specific acts of omission on
the part of the employee resulting in damage to the employer or to his

business.68 In Aliling v. Feliciano,69 the Court held that an employer is entitled to impose productivity

standards for its employees, and the latter's non-compliance therewith can lead to his termination
from work, viz.:

[T]he practice of a company in laying off workers because they failed to make the
work quota has been recognized in this jurisdiction. x x x. In the case at bar, the
petitioners' failure to meet the sales quota assigned to each of them constitute
a just cause of their dismissal, regardless of the permanent or probationary status
of their employment. Failure to observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean failure to attain work goals
or work quotas, either by failing to complete the same within the allotted
reasonable period, or by producing unsatisfactory results.70 (Emphases and
underscoring supplied)

[G.R. No. 223082. June 26, 2019.]

In the case at bar, the explanations proffered by Reyes showed that he was not
animated by any wrongful intent when he committed the infractions complained of.
Moreover, the finding that he was guilty of serious misconduct was incompatible with
the charges for negligence which, by definition, requires lack of wrongful intent.
AaCTcI
The Court cannot also consider negligence as a valid ground for Reyes' dismissal. To
be a valid ground for dismissal, the neglect of duty must be both gross and habitual.
Gross negligence implies want of care in the performance of one's duties. Habitual
neglect, on the other hand, implies repeated failure to perform one's duties for a period
of time. 62
Under the circumstances obtaining in the case, the Court finds that, although Reyes'
negligence was habitual, they could in no way be considered gross in nature. It cannot
be said that Reyes was wanting in care. For, based on his explanations, his infractions
were the result of either simple negligence or errors in judgment.
Nevertheless, the Court rules that there was still just cause for Reyes' termination —
gross inefficiency.
In the leading case of Lim v. National Labor Relations Commission, 63 the Court
considered inefficiency as an analogous just cause for termination of employment under
Article 282 of the Labor Code. The Court held:
We cannot but agree with PEPSI that gross inefficiency falls within
the purview of 'other causes analogous to the foregoing,' and constitutes,
therefore, just cause to terminate an employee under Article 282 of the
Labor Code. One is analogous to another if it is susceptible of comparison
with the latter either in general or in some specific detail; or has a close
relationship with the latter. 'Gross inefficiency' is closely related to 'gross
neglect,' for both involve specific acts of omission on the part of the
employee resulting in damage to the employer or to his business. In
Buiser v. Leogardo, this Court ruled that failure to observe prescribed
standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal64
This doctrine had been applied in International School Manila v. International School
Alliance of Educators 65 when this Court held:
What can be gathered from a thorough review of the records of this
case is that the inadequacies of Santos as a teacher did not stem from a
reckless disregard of the welfare of her students or of the issues raised by
the School regarding her teaching. Far from being tainted with bad faith,
Santos's failings appeared to have resulted from her lack of necessary
skills, in-depth knowledge, and expertise to teach the Filipino language at
the standards required of her by the School.
Be that as it may, we find that the petitioners had sufficiently proved
the charge of gross inefficiency, which warranted the dismissal of Santos
from the School. acEHCD
 The Court enunciated in Peña v. National Labor Relations
Commission that 'it is the prerogative of the school to set high standards of
efficiency for its teachers since quality education is a mandate of the
Constitution. As long as the standards fixed are reasonable and not
arbitrary, courts are not at liberty to set them aside.' x x x
xxx xxx xxx
Contrary to the ruling of the Labor Arbiter, it is not accurate to state
that Santos was dismissed by the School for inefficiency on account of the
fact that she was caught only once without a lesson plan. The
documentary evidence submitted by petitioners, the contents of which we
laid down in detail in our statement of facts, pointed to the numerous
instances when Santos failed to observe the prescribed standards of
performance set by the School in several areas of concern, not the least of
which was her lack of adequate planning for her Filipino classes. Said
evidence established that the School administrators informed Santos of
her inadequacies as soon as they became apparent; that they provided
constructive criticism of her planning process and teaching performance;
and that regular conferences were held between Santos and the
administrators in order to address the latter's concerns. In view of her slow
progress, the School required her to undergo the remediation phase of the
evaluation process through a Professional Growth Plan. Despite the
efforts of the School administrators, Santos failed to show any substantial
improvement in her planning process. Having failed to exit the remediation
process successfully, the School was left with no choice but to terminate
her employment.
The Court finds that, not only did the petitioners' documentary
evidence sufficiently prove Santos's inefficient performance of duties, but
the same also remained unrebutted by respondents' own evidence. On the
contrary, Santos admits in her pleadings that her performance as a
teacher of Filipino had not been satisfactory but she prays for leniency on
account of her prior good record as a Spanish teacher at the School.
Indeed, even the Labor Arbiter, the NLRC and the Court of Appeals
agreed that Santos was not without fault but the lower tribunals deemed
that termination was too harsh a penalty.
The ruling in International School Manila is squarely applicable herein. As with any
private corporation, CMP Federal had the prerogative to set standards, within legal
bounds, to be observed by its employees. In the exercise of this right, CMP Federal
promulgated a Table of Offenses, Administrative Charges and Penalties, which
prescribed a norm of conduct at work. 67 Based on the admissions of Reyes in his
Written Explanations, he was repeatedly remiss in complying with the standards set
therein. In view of his repeated unsatisfactory performance, CMP Federal had justifiable
reasons to terminate Reyes from its employ.
The CA thus erred in ruling that the NLRC did not act with grave abuse of discretion in
invalidating Reyes' dismissal for lack of just cause. The NLRC and the CA should not
have fixated itself with the designation of the offense as serious misconduct when it is
clear from the complaints and Reply by Indorsement that Reyes was actually being
made to answer for his violation of company policies and standards. Compounded with
the earlier finding that the NLRC similarly gravely abused its discretion in finding that the
procedural due process requirements were not complied with, the Court is constrained
to reverse the ruling of the CA. The reinstatement of the Labor Arbiter's ruling is
therefore in order.

Bañas' self-serving and unsubstantiated denials cannot defeat the concrete and
overwhelming evidence submitted by the petitioners. The evidence on record shows
that Bañas committed numerous infractions in his one year and eleven-month stay in
Century Iron. On October 27, 2000, Century Iron gave Bañas a warning for failing to
check the right quantity of materials subject of his inventory. 40 On December 29, 2000,
Bañas went undertime. 41 On January 2, 2001, Bañas incurred an absence without
asking for prior leave. 42 On August 11, 2001, he was warned for failure to implement
proper warehousing and housekeeping procedures. 43 On August 21, 2001, he failed to
ensure sufficient supplies of oxygen-acetylene gases during business hours. 44 On
November 15, 2001, Bañas was again warned for failing to secure prior permission
before going on leave. 45 In May 2002, Century Iron's accounting department found out
that Bañas made double and wrong entries in his inventory. 46
Article 282 of the Labor Code provides that one of the just causes for terminating an
employment is the employee's gross and habitual neglect of his duties. This cause
includes gross inefficiency, negligence and carelessness. 47 "Gross negligence
connotes want or absence of or failure to exercise slight care or diligence, or the entire
absence of care. It evinces a thoughtless disregard of consequences without exerting
any effort to avoid them. Fraud and willful neglect of duties imply bad faith of the
employee in failing to perform his job, to the detriment of the employer and the latter's
business. Habitual neglect, on the other hand, implies repeated failure to perform one's
duties for a period of time, depending upon the circumstances." 48 AHcCDI
To our mind, such numerous infractions are sufficient to hold him grossly and habitually
negligent. His repeated negligence is not tolerable. The totality of infractions or the
number of violations he committed during his employment merits his dismissal.
Moreover, gross and habitual negligence includes unauthorized absences and
tardiness, 49 as well as gross inefficiency, negligence and carelessness. 50 As
pronounced in Valiao v. Court of Appeals, 51 "[f]itness for continued employment cannot
be compartmentalized into tight little cubicles of aspects of character, conduct, and
ability separate and independent of each other."
Besides, the determination of who to keep in employment and who to dismiss for cause
is one of Century Iron's prerogatives. Time and again, we have recognized that the
employer has the right to regulate, according to its discretion and best judgment, all
aspects of employment, including work assignment, working methods, processes to be
followed, working regulations, transfer of employees, work supervision, lay-off of
workers and the discipline, dismissal and recall of workers. 52 It would be the height of
injustice if we force an employer to retain the services of an employee who does not
value his work.