G.R. No.
194813               April 25, 2012
Kakampi and its Members, Victor Panuelos, et al., represented by
David Dayalo, Kakampi Vice President and Attorney-in-
Fact, Petitioner,
vs.
Kingspoint Express and Logistic and/or MARY Ann
Co, Respondents.
DECISION
REYES, J.:
This is a petition for review under Rule 45 of the Rules of Court of the
Amended Decision1 dated March 16, 2010 and Resolution 2 dated
December 16, 2010 of the Court of Appeals (CA) in CA-G.R. SP No.
106591.
Victor Pañuelos (Pañuelos), Bobby Dacara (Dacara), Alson Dizon
(Dizon), Saldy Dimabayao (Dimabayao), Fernando Lupangco, Jr.
(Lupangco), Sandy Pazi (Pazi), Camilo Tabarangao, Jr. (Tabarangao),
Eduardo Hizole (Hizole) and Reginald Carillo (Carillo) were the former
drivers of Kingspoint Express and Logistic (Kingspoint Express), a sole
proprietorship registered in the name of Mary Ann Co (Co) and
engaged in the business of transport of goods. They were dismissed
from service on January 20, 2006 on the grounds of serious
misconduct, dishonesty, loss of trust and confidence and commission
of acts inimical to the interest of Kingspoint Express.
Prior thereto, Kingspoint Express issued separate notices to explain to
the individual petitioners on January 16, 2006, uniformly stating that:
RE: CHARGES OF DISHONESTY
SERIOUS MISCONDUCT
LOSS OF CONFIDENCE
Dear Mr. Dacara:
You are hereby formally charged with DISHONESTY, SERIOUS
MISCONDUCT, LOSS OF CONFIDENCE, and acts inimical to the
company, by filing with the National Labor Relations Commission
(NLRC) false, malicious, and fabricated cases against the company.
Further, your refusal to undergo drug testing is unwarranted and
against company policy.
Please submit your answer or explanation to the foregoing charges
within forty-eight (48) hours [from] receipt hereof. Your failure to do so
would mean that you waive your right to submit your answer.
You may likewise opt for a formal investigation with the assistance of
counsel, or proceed with the investigation as you may choose.
In the meantime, you are place[d] under preventive suspension for
thirty (30) days effective on January 16, 2006. You are physically
barred from company premises while the preventive suspension
exists[.]3
The individual petitioners failed to submit their written explanation
within the stated period. Subsequently, Kingspoint Express issued to
them separate yet uniformly worded notices on January 20, 2006,
informing them of their dismissal. Kingspoint Express expressed its
decision in this wise:
On January 16, 2006, you were formally charged with DISHONESTY,
SERIOUS MISCONDUCT and LOSS OF CONFIDENCE and ACTS
INIMICAL TO THE COMPANY based on the following acts:
1
1. FABRICATION OF BASELESS MONEY CLAIMS against
the company;
2. MISLEADING FELLOW CO-WORKERS to sign the
MALICIOUS COMPLAINT FOR MONEY CLAIMS against
the company;
3. REFUSAL TO UNDERGO THE COMPANY’S GENERAL
DRUG TEST[;]
4. EXTORTING MONEY FROM CO-WORKERS TO FUND
ACTIVITIES THAT THEY WERE NEVER FULLY
INFORMED OF;
You were given two (2) days to respond to these charges, but you
failed to do [so].4
In addition to the foregoing, Dacara was dismissed for consummating
his sexual relations with one of Co’s household helpers inside Co’s
residence thus impregnating her.5
A complaint for illegal dismissal was subsequently filed, alleging that
the charges against them were fabricated and that their dismissal was
prompted by Kingspoint Express’ aversion to their union activities.
In a Decision6 dated April 23, 2007, Labor Arbiter Cresencio G. Ramos,
Jr. (LA Ramos) found Dacara, Lupangco, Pazi, Tabarangao, Hizole
and Carillo illegally dismissed. On the other hand, the complaint was
dismissed insofar as Panuelos, Dizon and Dimabayao are concerned
as they were deemed not to have filed their position papers. While the
allegation of anti-unionism as the primordial motivation for the
dismissal is considered unfounded, the respondents failed to prove that
the dismissal was for a just cause. The pertinent portion of the decision
& reads:
From a perusal and examination of the pieces of evidence adduced by
the respondents in support of their defense, this Office finds the same
as not being sufficient and substantial to establish the charges of
serious misconduct and breach of trust. Consider the following:
On the complainants’ alleged refusal to undergo the company’s
general drug testing, the same is explicitly nothing but an
unsubstantiated allegation, therefore, undeserving of judicial and
quasi-judicial cognizance.
On the alleged act of the complainants in extorting money from co-
workers to fund activities that they were not fully informed of as well as
the alleged misleading of co-workers to sign "malicious money claims"
against the company, it is to be noticed that respondents’ support or
evidence thereto are the joint affidavit of drivers and helpers as well as
that of one Ronie Dizon. On said pieces of evidence, this Office could
not give much probative or evidentiary value and weight thereto as said
sworn statements may definitely not be said to have genuinely
emanated from the affiants (sic) drivers and helpers. To be precise, the
joint-affidavit of the drivers and helpers (annex "B", respondents’
position paper) obviously was "tailor-made", so to speak, to conform
with the respondents’ position or defense in the instant case. Said joint-
affidavit in fact is couched in english, thus, tremendously lowering the
probability that the statements therein really came from the "hearts and
souls" of the lowly-educated drivers and helpers.
On the breach of trust allegedly committed by Bobby Dacara with
respect to the alleged act of repeatedly sneaking in the household of
respondent Mary Ann Co and thereafter impregnating one of the
latter’s househelps, the same is nothing but an unsubstantiated
allegation and therefore, undeserving of judicial and quasi-judicial
cognizance. Jurisprudence definitely is explicit on this point that an
affirmative allegation made by a party must duly be proven to merit
acceptance (People vs. Calayca, 301 SCRA 192).7
On appeal, the National Labor Relations Commission (NLRC) affirmed
LA Ramos’ Decision dated April 23, 2007 in its Resolution 8 dated April
30, 2008, thus:
In the case at bar, We are persuaded to agree with the findings of the
Labor Arbiter that "the pieces of evidence adduced by the respondents
in support of their defense x x x not being sufficient and substantial to
establish the charges of serious misconduct and breach of trust"
(Records, p. 96).9
In addition, the NLRC ruled that the respondents failed to comply with
the procedural requirements of due process. Specifically:
It is also observed that much is to be desired insofar as the observance
of the procedural due process aspect is concerned. Firstly, there was
no compliance with the due process requirement of the law considering
that the uniformly worded first notice, all dated January 16, 2006, sent
by respondents-appellants to the complainants-appellees, did not
apprise them of the particular acts or omission for which their dismissal
were sought. As clearly shown by the said individual notices, each of
the complainants-appellees was merely informed that he or she is
"formally charged with DISHONESTY, SERIOUS MISCONDUCT,
LOSS OF CONFIDENCE and acts inimical to the Company" x x x
without specifying the particular or specific acts or omissions
constituting the grounds for their dismissal.
The purpose of the first notice is to sufficiently apprise the employee of
the acts complained of and to enable the employee to prepare his
defense. In this case, though, the said first notice did not identify the
particular acts or omissions committed by each of the complainants-
appellees. The extent of their knowledge and participation in the
generally described charges were not specified in the said first notice,
hence, the complainants-appellee could not be expected to intelligently
and adequately prepare their defense. The first notice should neither
be pro-forma nor vague; that it should set out clearly what each of the
employees is being held liable for. They should be given ample
opportunity to be heard and not mere opportunity. Ample opportunity
means that each of the complainants-appellees should be specifically
informed of the charges in order to give each of them, an opportunity to
refute such accusations. Since, the said first notices are inadequate,
their dismissal could not be in accordance with due process x x x.
Secondly, there was no just or authorized cause for the respondents-
appellants to terminate the complainants-appellees’ services. It is
observed that the Notices of Termination, all dated January 20, 2006,
merely mentioned the ground relied upon, to wit:
xxxx
Placing side by side the first (1st) notices and the Notice of
Termination, We can easily notice the wide disparity between them. In
the first (1st) notices, the alleged charges leveled against each of
complainants-appellees were couched in general terms, such as:
DISHONESTY, SERIOUS MISCONDUCT, LOSS OF CONFIDENCE
and ACTS INIMICAL TO THE COMPANY, such that the complainants-
appellees could not be expected to prepare their responsive pleadings;
while the uniformly worded Notices of Termination, as earlier quoted,
the charges leveled against of (sic) them are more specific.10
Respondents moved for reconsideration and in a Decision 11 dated July
17, 2008, the NLRC reversed itself and declared the individual
petitioners legally dismissed:
Respondent company is an entity engaged in the delivery of goods
called "door-to-door" business. As such, respondents are in custody of
goods and moneys belonging to customers. Thus, respondents want to
ensure that their drivers are drug-free and honest. It is undeniable that
persons taking prohibited drugs tend to commit criminal activities when
they are "high", as most of them are out of their minds. Complainants
are drivers and are on the road most of the time. Thus, they must see
2
to it that they do not cause damage to other motor vehicles and
pedestrians.
Likewise, when delivering goods and money, it is not impossible that
they could commit acts inimical to the respondents’ interest, like failure
to deliver the money or goods to the right person or do a "hold-up me"
scenario.
Thus, to guarantee complainants-drivers’ safety and effective
performance of their assigned tasks, respondents ordered
complainants to undergo drug testing. However, they refused to follow
the directive. Neither did they give a clear explanation for their refusal
to the respondents. This shows complainants’ wrongful attitude to defy
the reasonable orders which undoubtedly pertain to their duties as
drivers of the respondents. Such act is tantamount to willful
disobedience of a lawful order, a valid ground for dismissal under the
Labor Code, as amended.
Furthermore, employees who are not complainants in this case, in a
sworn statement attested to the fact that complainants tricked them to
sign papers which turned out to be a complaint for money claims. They
also accused them of abusing their trust in order to achieve their selfish
motives. Complainants even convinced them to shell out part of their
salaries without authorization and consent, as "panggatos para sa
papeles, transportasyon ng abugado" but said money was used for the
Union’s purposes. Worse, complainants even threatened them to file
criminal charges against them if they did not follow the complainants’
evil plans. x x x
In their Rejoinder, respondents also mentioned about the loss of
cargoes to be delivered to Pampanga and Nueva Ecija. Complainants
failed to refute the allegations nor comment on the matter. This led to
respondents’ loss of trust and confidence reposed in them. Considering
that the drivers have in their possession money and goods to be
delivered, the continuance of their employment depends on the trust
and confidence in them. Undeniably, trust, once lost is hard to regain.
xxxx
We disagree.
On January 16, 2006, respondents sent each of the complainants a
letter stating the infractions committed by them. They directed them to
explain the said infractions with a warning that failure to do so would
mean waiver of their right to submit their answer. They further advised
them to "opt for a formal investigation with assistance of the counsel,
or proceed with the investigation you may choose".
However, complainants failed to answer. Neither did they do any act to
dispute the charges. They remained silent on the infractions which a
person would not normally do if he is not guilty of the said charges. If
they were really innocent, immediately, even without any notice, they
should have reacted and did everything to dispute the charges. But
they failed, despite the notice to explain. This would lead to the
conclusion that they were guilty of the charges imputed against them.
As a consequence thereof, the complainants are considered to have
waived their right to defend themselves.12
Petitioners moved for reconsideration but the same was denied in a
Resolution13 dated September 30, 2008.
Subsequently, the petitioners filed a petition for certiorari with the CA.
In a Decision14 dated July 17, 2009, the CA reversed and set aside the
NLRC Decision dated July 17, 2008 and Resolution dated September
30, 2008. Thus:
Initially, this Court must determine whether the petitioners violated the the employer is discharged from the need to prove the offenses
Company Policies as would warrant their dismissal from the service. charged. It is well-settled that in any forum, whether judicial or
However, a painstaking review of the records of this case negate[s] a administrative, a party need not prove what is admitted. 17 (Citations
finding of such culpability on the part of the petitioners. omitted)

The charges of dishonesty, serious misconduct and loss of confidence The CA also held that the individual petitioners performed acts, which
against the petitioners are nothing more than bare allegations as constitute serious misconduct:
neither the show cause orders nor the termination letters specify in
clear and unmistakable manner, the specific acts committed by the
The assailed Decision admits what constitutes serious misconduct.
petitioners as would amount to dishonesty, serious misconduct or loss
of confidence. Neither of these notices even contain any averments as
to how and when the alleged infractions were committed by the Here, except for Bobby Dacara, each of the three petitioners conceded
petitioners. the existence of the following bases for their dismissal: (1)
complainants’ refusal to undergo mandatory drug-testing; (2) creating
disharmony and distrust among the workers and misleading them to go
xxx
against the employer; and (3) losing cargo with a value of P250,000.00
entrusted to respondent company for door-to-door delivery.
In this case, respondent company had not been able to identify an act
of dishonesty, serious misconduct or any illicit act, which the petitioners
Verily, each of the aforestated grounds independently constitute[s]
may have committed in connection with their work, except the
serious misconduct. Each of them were (sic) committed in relation to
allegation that petitioners filed false, malicious, and fabricated cases
petitioners’ work. And again, the commission of said infractions
against the company which, under the Labor Code, is not a valid
constitutes a ground to dismiss under Art. 282(a) of the Code. The
ground for termination of employment. There is even no mention of any
Court, therefore, gravely erred when it held that no serious misconduct
company policy or rule violated by any of the petitioners to warrant
was committed by petitioners in this case.
their dismissal. The charges are clearly unfounded.

xxxx
The superficial compliance with two notices and a hearing in this case
cannot be considered valid where the notices to explain where issued
four (4) days before the petitioners were terminated. The termination
was obviously hurriedly effected, as the respondent failed to give the
petitioners the avenue to contradict the charges against them either by
submission of their answer or by the conduct of an actual investigation
in order to give spirit to the requirement of due process. Petitioners
were thus robbed of their rights to explain their side, to present
evidence and rebut what was presented against them, rights ensured
by the proper observance of procedural due process. 15
On the other hand, in the case of Bobby Dacara, records show that he
committed breach of trust and confidence by sneaking into the house
of private respondent Co and engaging one of Co’s helpers in repeated
sexual congress leading to her pregnancy. As held in Santos, Jr. vs.
NLRC, such behavior amounts to immorality which is a case of serious
misconduct; a just cause to dismiss an employee.18 (Citation omitted)
Petitioners moved for reconsideration but this was denied by the CA in
its Resolution19 dated December 16, 2010.
The lone issue for the disposition of this Court is the validity of the
individual petitioners’ dismissal.

Respondents promptly filed a motion for reconsideration. Similar to the
NLRC, the CA reversed itself and retracted its earlier finding that the
individual petitioners were illegally dismissed. In its Amended
Decision16 dated March 16, 2010, the CA concluded that the two (2)
notices issued by Kingspoint Express complied with the requirements
of the law:
In the assailed Decision, We conceded that all the petitioners were
actually furnished with a letter dated 16 January 2006. In each letter,
petitioners were individually charged with "dishonesty, serious
misconduct, loss of confidence for performing acts inimical to the
company by filing with the NLRC false, malicious and fabricated cases
against the company and their refusal to undergo drug testing." They
were directed to submit an answer or explanation within forty-eight (48)
hours and were even given the option to avail of a formal investigation
with the assistance of counsel. They were further advised that failure to
submit said answer/explanation would mean waiver on their part. Thus,
when they failed to submit an explanation/Answer, and failed to inform
their employer that they wanted a formal investigation on the matter,
their employer was constrained to serve upon them on 20 January
2006, or four (4) days later, separate notices of termination stating the
offenses they committed, viz.:
xxxx
Show-cause letters/memoranda create a burden on the employees to
explain their innocence. In turn, it is from such explanation that the
employer will be obliged to prove his case in an investigation. Since the
petitioners did not explain, much less invoke their right to investigation,
it follows that they are deemed to have waived their rights under Art.
277(b) of the Labor Code. Technically, the law on evidence considers
them to have admitted the charges against them. With such admission,
It is fundamental that in order to validly dismiss an employee, the
employer is required to observe both substantive and procedural due
process – the termination of employment must be based on a just or
authorized cause and the dismissal must be effected after due notice
and hearing.20
As to whether Kingspoint Express complied with the substantive
requirements of due process, this Court agrees with the CA that the
concerned employees’ refusal to submit themselves to drug test is a
just cause for their dismissal.
An employer may terminate an employment on the ground of serious
misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work. Willful
disobedience requires the concurrence of two elements: (1) the
employee's assailed conduct must have been willful, that is,
characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the
employee, and must pertain to the duties which he had been engaged
to discharge. Both elements are present in this case.
As to the first element, that at no point did the dismissed employees
deny Kingspoint Express’ claim that they refused to comply with the
directive for them to submit to a drug test or, at the very least, explain
their refusal gives rise to the impression that their non-compliance is
deliberate. The utter lack of reason or justification for their
insubordination indicates that it was prompted by mere obstinacy,
hence, willful and warranting of dismissal.
It involves little difficulty to accuse Kingspoint Express of anti-unionism
and allege that this was what motivated the dismissal of the petitioners,

3
but the duty to prove such an accusation is altogether different. That
the petitioners failed at the level of substantiation only goes to show
that their claim of unfair labor practice is a mere subterfuge for their
willful disobedience.

As to the second element, no belabored and extensive discussion is

necessary to recognize the relevance of the subject order in the
performance of their functions as drivers of Kingspoint Express. As the
NLRC correctly pointed out, drivers are indispensable to Kingspoint
Express’ primary business of rendering door-to-door delivery services.
It is common knowledge that the use of dangerous drugs has adverse
effects on driving abilities that may render the dismissed employees
incapable of performing their duties to Kingspoint Express and acting
against its interests, in addition to the threat they pose to the public.

The existence of a single just cause is enough to order their dismissal

and it is now inconsequential if the other charges against them do not
merit their dismissal from service. It is therefore unnecessary to
discuss whether the other acts enumerated in the notices of
termination issued by Kingspoint Express may be considered as any of
the just causes.1âwphi1

Nonetheless, while Kingspoint Express had reason to sever their

employment relations, this Court finds its supposed observance of the
requirements of procedural due process pretentious. While Kingspoint
Express required the dismissed employees to explain their refusal to
submit to a drug test, the two (2) days afforded to them to do so cannot
qualify as "reasonable opportunity", which the Court construed in King
of Kings Transport, Inc. v. Mamac 21 as a period of at least five (5)
calendar days from receipt of the notice.

Thus, even if Kingspoint Express’ defective attempt to comply with

procedural due process does not negate the existence of a just cause
for their dismissal, Kingspoint Express is still liable to indemnify the
dismissed employees, with the exception of Panuelos, Dizon and
Dimabayao, who did not appeal the dismissal of their complaints, with
nominal damages in the amount of ₱30,000.00.

WHEREFORE, premises considered, the Decision dated March 16,

2010 and Resolution dated December 16, 2010 of the Court of Appeals
are AFFIRMED with MODIFICATION in that respondent Kingspoint
Express and Logistic is hereby held liable for the payment of nominal
damage, in the amount of ₱30,000.00 each to petitioners Bobby
Dacara, Fernando Lupangco, Jr., Sandy Pazi, Camilo Tabarangao, Jr.,
Eduardo Hizole and Reginaldo Carillo, for non-observance of
procedural due process required in terminating employment.

SO ORDERED.

4
G.R. No. 144899             February 5, 2004
ELIZABETH C. BASCON and NOEMI V. COLE, petitioners
vs.
HONORABLE COURT OF APPEALS, METRO CEBU COMMUNITY
HOSPITAL, INC., and GREGORIO IYOY, respondents.
DECISION
QUISUMBING, J.:
This petition for review on certiorari assails the Court of Appeals’
Decision1 in CA-G.R. SP No. 51690, dated March 13, 2000, which set
aside the decision of the National Labor Relations Commission
(NLRC), 4th Division, dated November 25, 1998, in NLRC Case No. V-
00234-97. The NLRC had reversed the judgment of the Labor Arbiter,
dated April 24, 1997, in NLRC-RAB-VII Case No. 07-0828-96, which
held valid herein petitioners’ dismissal from employment. Petitioners
also challenge the appellate court’s Resolution, 2 dated August 9, 2000,
which denied their motion for reconsideration.
The petitioners in the instant case were employees of private
respondent Metro Cebu Community Hospital, Inc. (MCCH) and
members of the Nagkahiusang Mamumuo sa Metro Cebu Community
Hospital (NAMA-MCCH), a labor union of MCCH employees. Petitioner
Elizabeth C. Bascon had been employed as a nurse by respondent
MCCH since May 1984. At the time of her termination from
employment in April 1996, she already held the position of Head
Nurse. The other petitioner, Noemi V. Cole, had been working as a
nursing aide with MCCH since August 1974. Both petitioners were
dismissed by the respondent hospital for allegedly participating in an
illegal strike.
The instant controversy arose from an intra-union conflict between the
NAMA-MCCH and the National Labor Federation (NFL), the mother
federation of NAMA-MCCH. In November 1995, NAMA-MCCH asked
MCCH to renew their Collective Bargaining Agreement (CBA), which
was set to expire on December 31, 1995. NFL, however, opposed this
move by its local affiliate. Mindful of the apparent intra-union dispute,
MCCH decided to defer the CBA negotiations until there was a
determination as to which of said unions had the right to negotiate a
new CBA.
Believing that their union was the certified collective bargaining agent,
the members and officers of NAMA-MCCH staged a series of mass
actions inside MCCH’s premises starting February 27, 1996. They
marched around the hospital putting up streamers, placards and
posters.
On March 13 and 19, 1996, the Department of Labor and Employment
(DOLE) office in Region 7 issued two (2) certifications stating that
NAMA-MCCH was not a registered labor organization. This finding,
however, did not deter NAMA-MCCH from filing a notice of strike with
the Region 7 Office of the National Conciliation and Mediation Board
(NCMB). Said notice was, however, disregarded by the NCMB for want
of legal personality of the union.
Meanwhile, the MCCH management received reports that petitioners
participated in NAMA-MCCH’s mass actions. Consequently, notices
were served on all union members, petitioners included, asking them to
explain in writing why they were wearing red and black ribbons and
roaming around the hospital with placards. In their collective response
dated March 18, 1996, the union members, including petitioners,
explained that wearing armbands and putting up placards was their
answer to MCCH’s illegal refusal to negotiate with NAMA-MCCH.
Subsequently, on March 28, 1996, MCCH notified the petitioners that
they were to be investigated for their activities in the mass actions, with
5
the hearings being scheduled on March 28, 1996 and April 1, 1996.
Petitioners, however, denied receiving said notices. In a notice dated
April 8, 1996, MCCH ordered petitioners to desist from participating in
the mass actions conducted in the hospital premises with a warning
that non-compliance therewith would result in the imposition of
disciplinary measures. Petitioners again claimed they did not receive
said order. Petitioners Bascon and Cole were then served notices
terminating their employment effective April 12, 1996 and April 19,
1996, respectively.
The dismissal of petitioners did not deter NAMA-MCCH from staging
more mass actions. The means of ingress to and egress from the
hospital were blocked. Employees and patients, including emergency
cases, were harassed, according to MCCH management, which also
complained that mass actions held inside the hospital had created an
atmosphere of animosity and violence, aggravating the condition of
ailing patients. Furthermore, the hospital also suffered heavy losses
brought about by a notable decline in the patient admission rates and
the refusal of suppliers to extend credit. To address its labor problems,
MCCH sought an injunction from the NLRC on July 9, 1996 in
Injunction Case No. V-0006-96.
Meanwhile, on July 1, 1996, Bascon and Cole filed a complaint for
illegal dismissal, docketed as NLRC-RAB-VII Case No. 07-0828-96.
They denied having participated in said mass actions or having
received the notices (1) enjoining them from wearing armbands and
putting up placards, with warning that disciplinary measure would be
imposed, and (2) informing them of the schedule of hearing. They
admit, however, to wearing armbands for union identity while nursing
patients as per instruction of their union leaders.
On July 16, 1996, a Temporary Restraining Order (TRO) was duly
issued in Injunction Case No. V-0006-96.
On August 27, 1996, the local government of Cebu City ordered the
demolition of the picket staged by the members of NAMA-MCCH for
being both a public nuisance and a nuisance per se.
On September 18, 1996, the injunction was made permanent by an
NLRC Resolution in Injunction Case No. V-0006-96, the fallo of which
reads:
WHEREFORE, premises considered, the petition for injunction is
hereby GRANTED enjoining respondents in the course of their
strike/picket from committing the illegal acts mentioned in Article 264
(e) of the Labor Code more particularly the blocking of the free ingress
to and egress from petitioner hospital and from committing threats,
coercion and intimidation of the non-striking/picketing
employees/workers reporting for work, vehicles/patients desiring to
enter for the purpose of seeking admission/confinement in petitioner
hospital and for such other lawful purpose.
SO ORDERED.3
In a Decision4 dated April 24, 1997, the Labor Arbiter found the
termination complained of in NLRC-RAB-VII Case No. 07-0828-96 to
be valid and legal, and dismissed the complaint. The Labor Arbiter held
that petitioners were justly dismissed because they actually
participated in the illegal mass action. It also concluded that petitioners
received the notices of hearing, but deliberately refused to attend the
scheduled investigation.
Petitioners then appealed the Labor Arbiter’s ruling to the NLRC, 4th
Division, which docketed the appeal as NLRC Case No. V-00234-97.
In its Decision5 dated November 25, 1998, the NLRC, 4th Division
reversed the ruling of the Labor Arbiter and ordered the reinstatement
of petitioners with full backwages. First, it found that petitioners merely
wore armbands for union identity, per instruction of their union officials. 2) The order was connected with the duties, which the
Said wearing of armbands while nursing patients, is a constitutional petitioners had been engaged to discharge.
right, which cannot be curtailed if peacefully carried out. Second, it
ruled that the placards complained of by MCCH did not contain
3) Said order was sufficiently made known to petitioners as
scurrilous, indecent or libelous remarks. Finally, it concluded that, in a
receipt of the same by the latter was convincingly
belated but crude attempt to camouflage the illegal dismissal of
substantiated by hard evidence.
petitioners, MCCH merely fabricated the notices allegedly sent to
petitioners.
The appellate court stressed that petitioners’ gross insubordination
constituted unlawful acts undertaken in conjunction with an illegal mass
Anent the charge of gross insubordination, the NLRC ruled that
concerted action akin to an illegal strike. Finally, the Court of Appeals
petitioners were not guilty thereof, because the elements thereof had
ruled that petitioners’ union activities violated the rights of patients and
not been sufficiently proven, to wit: (1) reasonableness and lawfulness
third parties such that they were outside the ambit of legality and
of the order or directive, (2) sufficiency of knowledge on the part of the
beyond the mantle of protection of the freedom of speech.
employee of such order, and (3) the connection of the order with the
duties which the employee had been engaged to discharge.
Hence, the instant case, with the petitioners submitting for resolution
the following issues:
Unconvinced of the correctness of the NLRC decision, MCCH filed a
motion for reconsideration presenting the following documentary
evidence: I

1) Affidavits of Paz Velasco, Luciano Quitoy, Joseph CAN THE HONORABLE COURT OF APPEALS SUPPLANT ITS
Dagatan, and Gina Jumao-as to show that petitioners were FINDINGS OF FACTS WITH THAT OF THE COMMISSION?
duly served the notices in question;
II
2) Letter reply of NAMA-MCCH dated March 18, 1996
wherein petitioners, together with the rest of the union
CAN THE HONORABLE COURT OF APPEALS REVERSE THE
members, collectively acknowledged receipt of the March 15,
DECISION OF THE COMMISSION ALTHOUGH THERE IS NO
1996 directive;
FINDING OF GRAVE ABUSE OF DISCRETION OR LACK OF
JURISDICTION?
3) Position Paper of terminated co-employees where the
receipt of the subject notices were admitted as well as the
III
commission of the aforementioned protest mass actions; and

CAN AN EMPLOYEE BE TERMINATED FOR INSUBORDINATION

4) Appeal of private respondents, who did not join the protest
mass action, to the Board of Trustees of MCCH to show that
reinstatement is no longer feasible in view of strained
relationship.
On February 4, 1999, the NLRC denied the plea for reconsideration of
MCCH.
Undeterred, MCCH filed a special civil action for certiorari under Rule
65 of the 1997 Rules of Civil Procedure before the Court of Appeals,
docketed as CA-G.R. SP No. 51690.
In its Decision6 dated March 13, 2000, the Court of Appeals decided
CA-G.R. SP No. 51690 as follows:
WHEREFORE, the petition is granted. The Decision of public
respondent NLRC 4th Division dated November 25, 1998 in NLRC
Case No. V-00234-97 is hereby REVERSED and the complaint of
private respondents is dismissed for lack of merit. Petitioner Metro
Cebu Community Hospital (MCCH) is however ordered to pay the
private respondents separation pay equivalent to one-half month for
every year of service in the interest of equity.
No costs.
SO ORDERED.7
The appellate court held that Bascon and Cole were validly terminated
for their gross insubordination or willful disobedience as:
1) The order for petitioners to refrain from wearing armbands
and putting up placards was legal, fair and reasonable.
FOR IPSO FACTO NOT SHOWING UP FOR THE INVESTIGATION?8
Anent the first and second issues, as a general rule, the findings of
facts of the NLRC are deemed binding and conclusive upon the Court.
We have repeatedly said that the Court is not a trier of facts. Thus,
resort to judicial review of the decisions of the NLRC in a special civil
action for certiorari under Rule 65 of the Rules of Court is generally
limited to the question of grave abuse of discretion amounting to lack
or excess of jurisdiction.9 However, where, as in the instant case, the
findings of facts of the NLRC contradict those of the Labor Arbiter, a
departure from the general rule is warranted. Thus, the Court may look
into the records of the case and reexamine the questioned
findings.10 Where the NLRC and the Labor Arbiter disagree on their
finding of facts, the Court can review the records to determine which
findings should be preferred as more conformable to the evidentiary
facts.11
In St. Martin Funeral Home v. NLRC, 12 we held that the special civil
action of certiorari is the mode of judicial review of the decisions of the
NLRC either by this Court or the Court of Appeals, but the latter court
is the more appropriate forum in strict observance of the doctrine on
the hierarchy of courts and that, in the exercise of this power, the Court
of Appeals can review the factual findings or the legal conclusions of
the NLRC.13
With regard to the third issue, note that petitioners were terminated for
allegedly participating in an illegal strike and gross insubordination to
the order prohibiting them from wearing armbands and putting up
placards, not for ipso facto failing to show up in the scheduled
investigation. Thus, the real issue is whether or not petitioners were
validly terminated for (1) allegedly participating in an illegal strike
and/or (2) gross insubordination to the order to stop wearing armbands
and putting up placards.
As to the first ground, Article 264 (a) of the Labor Code provides in part
that:

6
…Any union officer who knowingly participates in illegal strike and any
worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his
employment status… (Emphasis ours)
Thus, while a union officer can be terminated for mere participation in
an illegal strike, an ordinary striking employee, like petitioners herein,
must have participated in the commission of illegal acts during the
strike (underscoring supplied). There must be proof that they
committed illegal acts during the strike.14 But proof beyond reasonable
doubt is not required. Substantial evidence, which may justify the
imposition of the penalty of dismissal, may suffice.
In this case, the Court of Appeals found that petitioners’ actual
participation in the illegal strike was limited to wearing armbands and
putting up placards. There was no finding that the armbands or the
placards contained offensive words or symbols. Thus, neither such
wearing of armbands nor said putting up of placards can be construed
as an illegal act. In fact, per se, they are within the mantle of
constitutional protection under freedom of speech.
Evidence on record shows that various illegal acts were committed by
unidentified union members in the course of the protracted mass
action. And we commiserate with MCCH, patients, and third parties for
the damage they suffered. But we cannot hold petitioners responsible
for acts they did not commit. The law, obviously solicitous of the
welfare of the common worker, requires, before termination may be
considered, that an ordinary union member must have knowingly
participated in the commission of illegal acts during a strike.
As regards the appellate court’s finding that petitioners were justly
terminated for gross insubordination or willful disobedience, Article 282
of the Labor Code provides in part:
An employer may terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work.
However, willful disobedience of the employer’s lawful orders, as a just
cause for dismissal of an employee, envisages the concurrence of at
least two requisites: (1) the employee's assailed conduct must have
been willful, that is, characterized by a wrongful and perverse attitude;
and (2) the order violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties which he had
been engaged to discharge.15
In this case, we find lacking the element of willfulness characterized by
a perverse mental attitude on the part of petitioners in disobeying their
employer’s order as to warrant the ultimate penalty of dismissal.
Wearing armbands and putting up placards to express one’s views
without violating the rights of third parties, are legal per se and even
constitutionally protected. Thus, MCCH could have done well to
respect petitioners’ right to freedom of speech instead of threatening
them with disciplinary action and eventually terminating them.
Neither are we convinced that petitioners’ exercise of the right to
freedom of speech should be taken in conjunction with the illegal acts
committed by other union members in the course of the series of mass
actions. It bears stressing that said illegal acts were committed by
other union members after petitioners were already terminated, not
during the time that the latter wore armbands and put up placards.
Finally, even if willful disobedience may be properly appreciated, still,
the penalty of dismissal is too harsh. Not every case of willful
disobedience by an employee of a lawful work-connected order of the
employer may be penalized with dismissal. There must be reasonable
7
proportionality between, on the one hand, the willful disobedience by
the employee and, on the other hand, the penalty imposed
therefor.16 In this case, evidence is wanting on the depravity of conduct
and willfulness of the disobedience on the part of petitioners, as
contemplated by law. Wearing armbands to signify union membership
and putting up placards to express their views cannot be of such great
dimension as to warrant the extreme penalty of dismissal, especially
considering the long years of service rendered by petitioners and the
fact that they have not heretofore been subject of any disciplinary
action in the course of their employment with MCCH.
The termination of petitioners’ employment not being for any of the just
or authorized causes, it constitutes illegal dismissal. Article 279 of the
Labor Code, as amended, provides that:
…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.
Hence, illegally dismissed employees are entitled to both reinstatement
and full backwages as a matter of course. MCCH alleges that due to
strained relations, reinstatement is no longer possible. We disagree.
In Quijano v. Mercury Drug Corporation,17 we stated that the doctrine of
"strained relations" is inapplicable to a situation where the employee
has no say in the operation of the employer’s business. Petitioners
herein are nurse and nursing aide, respectively in MCCH and thus,
have no prerogative in the operation of the business. As also held in
the Mercury Drug case:
To protect labor’s security of tenure, we emphasize that the doctrine of
"strained relations" should be strictly applied so as not to deprive an
illegally dismissed employee of his right to reinstatement. Every labor
dispute almost always results in "strained relations," and the phrase
cannot be given an overarching interpretation, otherwise, an unjustly
dismissed employee can never be reinstated. 18
We cannot in our conscience allow MCCH to unjustly deny petitioners
their lawful occupation, especially at this late point in their lives when it
would be a near impossibility for them to find another employment. The
employer’s power to dismiss must be tempered with the employee’s
right to security of tenure. Time and again we have said that the
preservation of the lifeblood of the toiling laborer comes before concern
for business profits. Employers must be reminded to exercise the
power to dismiss with great caution, for the State will not hesitate to
come to the succor of workers wrongly dismissed by capricious
employers.
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals in CA-G.R. SP No. 51690 dated March 13, 2000 is
REVERSED. Private respondent Metro Cebu Community Hospital is
hereby ordered to reinstate petitioners Noemi V. Cole and Elizabeth C.
Bascon without loss of seniority rights and other privileges and to pay
them full backwages, inclusive of allowances, and other benefits
computed from the time they were dismissed up to the time of their
actual reinstatement.
No pronouncement as to costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr. and Tinga, JJ.,
concur.
G.R. No. 155279 October 11, 2005 and to pay them full backwages, plus ten percent (10%) attorney’s
fees, computed as follows:
MICRO SALES OPERATION NETWORK and WILLY
BENDOL, Petitioners, LARRY HERMOSA
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (SECOND
From January 9, 1999 to Feb. 21, 2000
DIVISION), LARRY HERMOSA, LEONARDO G. DE CASTRO and
RAMIL BASINILLO, Respondents.
= 1 yr. 1 mo. & 12 days or 13.36 mos.
DECISION
₱220.00 x 26 x 13.36 = ₱76,419.20
QUISUMBING, J.:
₱76,419.20/12 = 6,368.27
1
For review on certiorari are the Resolutions  dated November 28,
2001 and September 3, 2002, respectively, of the Court of Appeals, in ₱220.00 x 5 = 1,100.00 ₱83,887.47
CA-G.R. SP No. 67755. The said Resolutions dismissed petitioners’
special civil action for certiorari against the National Labor Relations
----------------
Commission (NLRC) Resolution, 2 which affirmed the Labor Arbiter’s
Decision3 finding petitioners herein liable for illegal dismissal.
LEONARDO DE CASTRO
The antecedent facts are as follows:
From Dec. 12, 1998 to Feb. 21, 2000
Petitioner Micro Sales Operation Network ("company" for brevity) is a
domestic corporation engaged in local transportation of goods by land. = 1 yr. 2 mos. & 9 days or 14.30 mos.
Petitioner Willy4 Bendol was the company’s operations manager at the
time of the controversy.
₱7,280.00 x 14.30 = ₱104,104.00

Private respondents Larry Hermosa, Leonardo de Castro, and Ramil

Basinillo were employed by the company as driver, warehouseman, ₱104,104.00/12 = 8,675.33
and helper, respectively. Hermosa was hired on November 17, 1997,
de Castro on February 1, 1996, and Basinillo on February 4, 1998. ₱7,280.00/26 x 5 = 1,400.00 ₱114,179.33

Hermosa failed to promptly surrender the ignition key of the company’s ----------------
vehicle after discharging his duties. Such failure was allegedly contrary
to the company’s standard operating procedure. Thus, he was asked to
explain within 24 hours why disciplinary action should not be meted on RAMIL BASINILLO
him. He explained that he kept the ignition key because the vehicle
was stalled when its battery broke down. 5 Unsatisfied with Hermosa’s From Oct. 17, 1998 to Feb. 21, 2000
explanation, the company dismissed him on January 9, 1999.
= 1 yr., 4 mos. & 4 days or 16.13 mos.
De Castro was suspected of firing a gun during the blessing of the
company’s warehouse on December 10, 1998. The next day, he was
placed under preventive suspension and temporarily banned from ₱200.00 x 26 x 16.13 = ₱83,876.00
entering the company’s premises. He was also asked to explain within
24 hours why he should not be terminated. He explained that he had ₱83,876.00/12 = 6,989.67
no knowledge of the said incident. 6 As his suspension was indefinite
and he received no recall order from petitioners, he no longer reported
for work. ₱200.00 x 5 = 1,000.00 ₱ 91,865.67

Basinillo alleged that sometime in September 1998, the company’s ---------------- ---------------
security guard scolded him for not wearing the employee ID. On
October 17, 1998, he was dismissed. Total Full Backwages = ₱289,932.47

Thus, on February 10, 1999, Hermosa, de Castro, and Basinillo Plus 10% Attorney’s Fees = 28,993.25
collectively filed a Complaint 7 for illegal dismissal before the Regional
Arbitration Branch No. IV, docketed as NLRC Case No. RAB-IV-2-
10765-99-C. ---------------

In his Decision8 dated February 21, 2000, Labor Arbiter Antonio R. GRAND TOTAL = ₱318,925.72
Macam found that private respondents were illegally dismissed.
The fallo of the decision reads: SO ORDERED.9

WHEREFORE, premises considered, judgment is hereby rendered On appeal, the NLRC affirmed the Labor Arbiter’s decision. It also
declaring the dismissal of all complainants herein illegal and ordering denied petitioners’ motion for reconsideration.
respondents to reinstate them to their former or equivalent positions

8
Undaunted, petitioners filed with the Court of Appeals a special civil
action for certiorari. However, the appellate court dismissed the petition
for being defective in form. It found that only the company signed the
verification and certification on non-forum shopping. Petitioner Willy
Bendol did not sign the same.
Petitioners’ motion for reconsideration was denied. The appellate court
reasoned that even if petitioner Willy Bendol was not impleaded as a
real party in interest, records showed that he was impleaded as a co-
respondent before the Labor Arbiter. Thus, the appellate court ruled,
his failure to sign the verification and certification on non-forum
shopping is a ground for the dismissal of the petition.
Hence, the instant petition anchored on the following grounds:
A. THE HONORABLE COURT OF APPEALS PLAINLY ERRED AND
ACTED CONTRARY TO EXISTING LAW AND JURISPRUDENCE IN
DISMISSING THE PETITION FOR CERTIORARI ON A MERE
TECHNICALITY CONSIDERING THAT WILLY BENDOL WAS
JOINED MERELY AS A NOMINAL PARTY TO THE PETITION.
B. MORE IMPORTANTLY, JUSTICE WOULD BE BEST SERVED IF
THE PETITION WAS GIVEN DUE COURSE CONSIDERING THAT
THE PUBLIC RESPONDENT COMMISSION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT AFFIRMED THE DECISION OF LABOR
ARBITER MACAM CONSIDERING THAT:
1. THERE IS NO FACTUAL OR EVIDENTIARY BASIS TO SUPPORT
THE FINDING OF ILLEGAL DISMISSAL. DUE PROCESS AND FAIR
PLAY DICTATE THAT THE PUBLIC RESPONDENT COMMISSION
POINT OUT THE PARTICULAR FACTUAL FINDING OF THE LABOR
ARBITER WHICH JUSTIFIED THE FINDING OF ILLEGAL
DISMISSAL.
2. THE PUBLIC RESPONDENT COMMISSION IGNORED THE FACT
THAT THE LABOR ARBITER’S FINDING OF ILLEGAL DISMISSAL
RESTS ON PURE SPECULATION, CONJECTURE AND SURMISES.
3. PRIVATE RESPONDENT BASINILLO HIMSELF DENIED THAT HE
WAS DISMISSED BY PETITIONERS.
4. THE ACTS OF HERMOSA CONSTITUTE WILLFUL
DISOBEDIENCE JUSTIFYING HIS DISMISSAL.
5. THE HONORABLE COMMISSION COMPLETELY IGNORED THE
FACT THAT PRIVATE RESPONDENTS’ SINGULAR CAUSE OF
ACTION IS THAT FOR ILLEGAL DISMISSAL. THUS, THE LABOR
ARBITER’S AWARD OF SEPARATION PAY AND ATTORNEY’S
FEES WAS UTTERLY WITHOUT BASIS. 10
Petitioners insist Willy Bendol was impleaded merely because he was
the immediate supervisor of private respondents. They argue that the
real party in interest in this case is the company. In any case,
petitioners point out that Bendol was no longer connected with the
company when the special civil action for certiorari was filed.
Private respondents, however, maintain that formal requirements must
be strictly complied with. Thus, they posit, the Court of Appeals
correctly dismissed the petition for failure of one of the petitioners to
sign the verification and certification on non-forum shopping.
Further, petitioners contend that Hermosa’s omission constituted willful
disobedience justifying his dismissal. With respect to de Castro,
petitioners claim that he was merely suspended. As for Basinillo,
petitioners point to an unsworn statement, 11 where he denied filing any
complaint for illegal dismissal against the company.
9
Private respondents, however, counter that petitioners failed to prove
willful disobedience as a just cause for Hermosa’s termination.
Moreover, they posit that de Castro’s preventive suspension
constituted constructive dismissal because it was for an indefinite
period and no recall order was issued by the company. Private
respondents also argue that Basinillo’s purported unsworn statement
has no probative value.
Lastly, petitioners contend the Labor Arbiter erroneously awarded
separation pay and attorney’s fees not prayed for. On this point, private
respondents quickly point out that, contrary to petitioners’ claim,
separation pay was not awarded at all. They also claim that the award
of attorney’s fees was in accordance with law.
We resolve to give due course to the petition.
The requirement regarding verification of a pleading is not
jurisdictional. Such requirement is simply a condition affecting the form
of the pleading, non-compliance with which does not necessarily
render the pleading fatally defective. 12
The Court of Appeals relied on Loquias v. Office of the
Ombudsman,13 which held that a certification on non-forum shopping
signed by only one of two or more petitioners is defective, unless he
was duly authorized by his co-petitioner. However, the said ruling
applies when the co-parties are being sued in their individual
capacities. Note that the petitioners in Loquias14 are the mayor, vice-
mayor, and three members of the municipal board of San Miguel,
Zamboanga del Sur. The said co-parties were charged with violation of
Republic Act No. 301915 in their various capacities.
In the instant case, the petitioners are the company and its operations
manager, Willy Bendol. The latter was impleaded simply because he
was a co-respondent in the illegal dismissal complaint. He has no
interest in this case separate and distinct from the company, which was
the direct employer of private respondents. Any award of
reinstatement, backwages, and attorney’s fees in favor of private
respondents will be enforced against the company as the real party in
interest in an illegal dismissal case. Petitioner Bendol is clearly a mere
nominal party in the case. His failure to sign the verification and
certification on non-forum shopping is not a ground for the dismissal of
the petition. The appellate court erred in dismissing outright petitioners’
special civil action for certiorari solely on that ground.
The logical course of action now is to direct the Court of Appeals to
give due course to the special civil action for certiorari. However, to
obviate further delay in the resolution of this case, we shall bring the
present controversy to rest.
After weighing the parties’ arguments and carefully reviewing the
records of this case, we agree with the findings and conclusions of the
Labor Arbiter as affirmed by the NLRC.
Hermosa was unjustly dismissed. For willful disobedience to be a valid
cause for dismissal, the following twin elements must concur: (1) the
employee's assailed conduct must have been willful, that is,
characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the
employee and must pertain to the duties which he had been engaged
to discharge.16
Both elements are lacking. We find no hint of perverse attitude in
Hermosa’s written explanation. 17 On the contrary, it appears that the
alleged company procedure for leaving the ignition key of the
company’s vehicles within office premises was not even made known
to him.18 Petitioners failed to prove Hermosa willfully disobeyed the
said company procedure. At any rate, dismissal was too harsh a
penalty for the omission imputed to him.
De Castro was likewise unlawfully terminated. Contrary to petitioner’s
claim, records show that de Castro was not merely suspended. He was
dismissed for alleged abandonment of work.19 To constitute
abandonment as a just cause for dismissal, there must be: (a) absence
without justifiable reason; and (b) a clear intention, as manifested by
some overt act, to sever the employer-employee relationship.20

Petitioners failed to prove that de Castro abandoned his job. A clear

intention to end the employer-employee relationship is missing. He did
not report for work simply because he was indefinitely suspended.
Moreover, the fact that de Castro filed a case for illegal dismissal
against petitioners belies abandonment. 21

In the case of Basinillo, petitioners rely solely on his purported unsworn

statement alleging he was never dismissed. However, not having been
sworn to, the said document has no probative value. While the Court is
liberal in the conduct of proceedings for labor cases, proof of
authenticity as a condition for the admission of documents is
nonetheless required.22

Petitioners failed to present evidence of Basinillo’s continuous

contribution to SSS or uninterrupted pay slips to prove he remained
under the company’s employ. Hence, the complaint 23 for illegal
dismissal filed by Basinillo stands and speaks for itself. Once a case
for illegal dismissal is filed, the burden is on the employer to prove that
the termination was for valid cause. 24 Petitioners failed to discharge
this burden persuasively.

Finally, petitioners lament that the Labor Arbiter erred in granting

respondents separation pay and attorney’s fees. We note, however,
that separation pay was not awarded at all; thus, any discussion on this
matter would be futile. On the other hand, the award of attorneys’ fees,
though not prayed for, is sanctioned by law25 and must be upheld.

WHEREFORE, the assailed Resolutions dated November 28, 2001

and September 3, 2002, respectively, of the Court of Appeals, in CA-
G.R. SP No. 67755, are SET ASIDE. The NLRC Resolution affirming
the Labor Arbiter’s Decision, finding petitioners liable for illegal
dismissal, is AFFIRMED. Costs against petitioners.

SO ORDERED.

10
G.R. No. 172044               February 06, 2013
CAVITE APPAREL, INCORPORATED and ADRIANO
TIMOTEO, Petitioners,
vs.
MICHELLE MARQUEZ, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1filed by petitioners
Cavite Apparel, Incorporated ( Cavite Apparel) and Adriano Timoteo to
nullify the decision2 dated January 23, 2006 and the resolution3 dated
March 23, 2006 of the Court of Appeals ( CA) in C.A.-G.R. SP No.
89819 insofar as it affirmed the disposition 4 of the National Labor
Relations Commission (NLRC) in NLRC CA No. 029726-01. The
NLRC set aside the decision 5 of Labor Arbiter (LA) Cresencio G.
Ramos in NLRC NCR Case No. RAB-IV-7-12613-00-C dismissing the
complaint for illegal dismissal filed by respondent Michelle Marquez
against the petitioners.
The Factual Antecedents
Cavite Apparel is a domestic corporation engaged in the manufacture
of garments for export. On August 22, 1994, it hired Michelle as a
regular employee in its Finishing Department. Michelle enjoyed, among
other benefits, vacation and sick leaves of seven (7) days each
per annum. Prior to her dismissal on June 8, 2000, Michelle committed
the following infractions (with their corresponding penalties):
a. First Offense: Absence without leave (AWOL) on
December 6, 1999 – written warning
b. Second Offense: AWOL on January 12, 2000 – stern
warning with three (3) days suspension
c. Third Offense: AWOL on April 27, 2000 – suspension for
six (6) days.6
On May 8, 2000, Michelle got sick and did not report for work. When
she returned, she submitted a medical certificate. Cavite Apparel,
however, denied receipt of the certificate. 7 Michelle did not report for
work on May 15-27, 2000 due to illness. When she reported back to
work, she submitted the necessary medical certificates. Nonetheless,
Cavite Apparel suspended Michelle for six (6) days (June 1-7, 2000).
When Michelle returned on June 8, 2000, Cavite Apparel terminated
her employment for habitual absenteeism.
On July 4, 2000, Michelle filed a complaint for illegal dismissal with
prayer for reinstatement, backwages and attorney’s fees with the
NLRC, Regional Arbitration Branch No. IV.
The LA Ruling
In a decision dated April 28, 2001, 8 LA Ramos dismissed the
complaint. He noted that punctuality and good attendance are required
of employees in the company’s Finishing Department. For this reason,
LA Ramos considered Michelle’s four absences without official leave
as habitual and constitutive of gross neglect of duty, a just ground for
termination of employment. LA Ramos also declared that due process
had been observed in Michelle’s dismissal, noting that in each of her
absences, Cavite Apparel afforded Michelle an opportunity to explain
her side and dismissed her only after her fourth absence. LA Ramos
concluded that Michelle’s dismissal was valid.9
11
The NLRC Decision
On appeal by Michelle, the NLRC referred the case to Executive LA
Vito C. Bose for review, hearing and report. 10 Adopting LA Bose’s
report, the NLRC rendered a decision 11 dated May 7, 2003 reversing
LA Ramos’ decision. The NLRC noted that for Michelle’s first three
absences, she had already been penalized ranging from a written
warning to six days suspension. These, the NLRC declared, should
have precluded Cavite Apparel from using Michelle’s past absences as
bases to impose on her the penalty of dismissal, considering her six
years of service with the company. It likewise considered the penalty of
dismissal too severe. The NLRC thus concluded that Michelle had
been illegally dismissed and ordered her reinstatement with
backwages.12 When the NLRC denied Cavite Apparel’s motion for
reconsideration in a resolution 13 dated March 30, 2005, Cavite Apparel
filed a petition for certiorari with the CA to assail the NLRC ruling.
The CA Ruling
Cavite Apparel charged the NLRC with grave abuse of discretion when
it set aside the LA’s findings and ordered Michelle’s reinstatement. It
disagreed with the NLRC’s opinion that Michell’s past infractions could
no longer be used to justify her dismissal since these infractions had
already been penalized and the corresponding penalties had been
imposed.
The CA found no grave abuse of discretion on the part of the NLRC
and accordingly dismissed Cavite Apparel’s petition on January 23,
2006.14 While it agreed that habitual absenteeism without official leave,
in violation of company rules, is sufficient reason to dismiss an
employee, it nevertheless did not consider Michelle’s four absences as
habitual. It especially noted that Michelle submitted a medical
certificate for her May 8, 2000 absence, and thus disregarded Cavite
Apparel’s contrary assertion. The CA explained that Michelle’s failure
to attach a copy of the medical certificate in her initiatory pleading did
not disprove her claim.
The CA agreed with the NLRC that since Cavite Apparel had already
penalized Michelle for her three prior absences, to dismiss her for the
same infractions and for her May 8, 2000 absence was unjust. Citing
jurisprudence, The CA concluded that her dismissal was too harsh,
considering her six years of employment with Cavite Apparel; it was
also a disproportionate penalty as her fourth infraction appeared
excusable.
In its March 23, 2006 resolution, 15 the CA denied Cavite Apparel’s
motion for reconsideration; hence, Cavite Apparel’s present recourse.
The Petition
Cavite Apparel imputes grave abuse of discretion against the CA
when:
1. it did not find that the NLRC committed grave abuse of
disretion in setting aside the decision of the CA;
2. it failed to consider Michelle’s four (4) AWOLs over a
period of six months, from December 1999 to May 2000,
habitual; and
3. it ruled that the series of violations of company rules
committed by Michelle were already meted with the
corresponding penalties.16
Cavite Apparel argues that it is its prerogative to discipline its
employees. It thus maintains that when Michelle, in patent violation of
the company’s rules of discipline, deliberately, habitually, and without
prior authorization and despite warning did not report for work on May
8, 2000, she committed serious misconduct and gross neglect of duty.
It submits that dismissal for violation of company rules and regulations
is a dismissal for cause as the Court stressed in Northern Motors, Inc.,
v. National Labor Union, et al.17
The Case for the Respondent
Michelle asserts that her dismissal was arbitrary and unreasonable.
For one, she had only four absences in her six (6) years of
employment with Cavite Apparel. She explains that her absence on
May 8, 2000 was justified as she was sick and had sick leave benefits
against which Cavite Apparel could have charged her absences. Also,
it had already sanctioned her for the three prior infractions. Under the
circumstances, the penalty of dismissal for her fourth infraction was
very harsh. Finally, as the CA correctly noted, Cavite Apparel
terminated her services on the fourth infraction, without affording her
prior opportunity to explain.
The Court’s Ruling
The case poses for us the issue of whether the CA correctly found no
grave abuse of discretion when the NLRC ruled that Cavite Apparel
illegally terminated Michelle’s employment.
We stress at the outset that, as a rule, the Court does not review
questions of fact, but only questions of law in an appeal
by certiorari under Rule 45 of the Rules of Court. 18 The Court is not a
trier of facts and will not review the factual findings of the lower
tribunals as these are generally binding and conclusive. 19 The rule
though is not absolute as the Court may review the facts in labor cases
where the findings of the CA and of the labor tribunals are
contradictory.20 Given the factual backdrop of this case, we find
sufficient basis for a review as the factual findings of the LA, on the one
hand, and those of the CA and the NLRC, on the other hand, are
conflicting.
After a careful review of the merits of the case, particularly the
evidence adduced, we find no reversible error committed by the CA
when it found no grave abuse of discretion in the NLRC ruling that
Michelle had been illegally dismissed.
Michelle’s four absences were not habitual; "totality
infractions" doctrine not applicable
Cavite Apparel argues that Michelle’s penchant for incurring
unauthorized and unexcused absences despite its warning constituted
gross and habitual neglect of duty prejudicial to its business
operations. It insists that by going on absence without official leave four
times, Michelle disregarded company rules and regulations; if
condoned, these violations would render the rules ineffectual and
would erode employee discipline.
Cavite Apparel disputes the CA’s conclusion that Michelle’s four
absences without official leave were not habitual since she was able to
submit a medical certificate for her May 8, 2000 absence. It asserts
that, on the contrary, no evidence exists on record to support this
conclusion. It maintains that it was in the exercise of its management
prerogative that it dismissed Michelle; thus, it is not barred from
dismissing her for her fourth offense, although it may have previously
punished her for the first three offenses. Citing the Court’s ruling
in Mendoza v. NLRC,21 it contends that the totality of Michelle’s
infractions justifies her dismissal.
We disagree and accordingly consider the company’s position
unmeritorious.
Neglect of duty, to be a ground for dismissal under Article 282 of the
Labor Code, must be both gross and habitual. 22 Gross negligence
12
implies want of care in the performance of one’s duties. Habitual
neglect imparts repeated failure to perform one’s duties for a period of
time, depending on the circumstances. 23 Under these standards and
the circumstances obtaining in the case, we agree with the CA that
Michelle is not guilty of gross and habitual neglect of duties.
Cavite Apparel faults the CA for giving credit to Michelle’s argument
that she submitted a medical certificate to support her absence on May
8, 2000; there was in fact no such submission, except for her bare
allegations. It thus argues that the CA erred in holding that since doubt
exists between the evidence presented by the employee and that
presented by the employer, the doubt should be resolved in favor of
the employee. The principle, it contends, finds no application in this
case as Michelle never presented a copy of the medical certificate. It
insists that there was no evidence on record supporting Michelle’s
claim, thereby removing the doubt on her being on absence without
official leave for the fourth time, an infraction punishable with dismissal
under the company rules and regulations.
Cavite Apparel’s position fails to convince us. Based on what we see in
the records, there simply cannot be a case of gross and habitual
neglect of duty against Michelle. Even assuming that she failed to
present a medical certificate for her sick leave on May 8, 2000, the
records are bereft of any indication that apart from the four occasions
when she did not report for work, Michelle had been cited for any
infraction since she started her employment with the company in 1994.
Four absences in her six years of service, to our mind, cannot be
considered gross and habitual neglect of duty, especially so since the
absences were spread out over a six-month period.
Michelle’s penalty of dismissal too harsh or not proportionate to
the infractions she commited
Although Michelle was fully aware of the company rules regarding
leaves of absence, and her dismissal might have been in accordance
with the rules, it is well to stress that we are not bound by such rules.
In Caltex Refinery Employees Association v. NLRC24 and in the
subsequent case of Gutierrez v. Singer Sewing Machine
Company,25 we held that "[e]ven when there exist some rules agreed
upon between the employer and employee on the subject of dismissal,
x x x the same cannot preclude the State from inquiring on whether
[their] rigid application would work too harshly on the employee." This
Court will not hesitate to disregard a penalty that is manifestly
disproportionate to the infraction committed.
of
Michelle might have been guilty of violating company rules on leaves of
absence and employee discipline, still we find the penalty of dismissal
imposed on her unjustified under the circumstances. As earlier
mentioned, Michelle had been in Cavite Apparel’s employ for six years,
with no derogatory record other than the four absences without official
leave in question, not to mention that she had already been penalized
for the first three absences, the most serious penalty being a six-day
suspension for her third absence on April 27, 2000.
While previous infractions may be used to support an employee’s
dismissal from work in connection with a subsequent similar
offense,26 we cautioned employers in an earlier case that although they
enjoy a wide latitude of discretion in the formulation of work-related
policies, rules and regulations, their directives and the implemtation of
their policies must be fair and reasonable; at the very least, penalties
must be commensurate to the offense involved and to the degree of
the infraction.27
As we earlier expressed, we do not consider Michelle’s dismissal to be
commensurate to the four absences she incurred for her six years of
service with the company, even granting that she failed to submit on
time a medical certificate for her May 8, 2000 absence. We note that
she again did not report for work on May 15 to 27, 2000 due to illness.
When she reported back for work, she submitted the necessary
medical certificates. The reason for her absence on May 8, 2000 – due
to illness and not for her personal convenience – all the more rendered
her dismissal unreasonable as it is clearly disproportionate to the
infraction she committed.

Finally, we find no evidence supporting Cavite Apparel’s claim that

Michelle’s absences prejudiced its operations; there is no indication in
the records of any damage it sustained because of Michelle’s
absences. Also, we are not convinced that allowing Michelle to remain
in employment even after her fourth absence or the imposition of a
lighter penalty would result in a breakdown of discipline in the
employee ranks. What the company fails to grasp is that, given the
unreasonableness of Michelle’s dismissal – i.e., one made after she
had already been penalized for her three previous absences, with the
fourth absence imputed to illness – confirming the validity of her
dismissal could possibly have the opposite effect. It could give rise to
belief that the company is heavy-handed and may only give rise to
sentiments against it.1âwphi1

In fine, we hold that Cavite Apparel failed to discharge the burden of

proving that Michelle’s dismissal was for a lawful cause. 28 We,
therefore, find her to have been illegally dismissed.

As a final point, we reiterate that while we recognize management’s

prerogative to discipline its employees, the exercise of this prerogative
should at all times be reasonable and should be tempered with
compassion and understanding. 29 Dismissal is the ultimate penalty that
can be imposed on an employee. Where a penalty less punitive may
suffice, whatever missteps may be committed by labor ought not to be
visited with a consequence so severe for what is at stake is not merely
the employee’s position but his very livelihood and perhaps the life and
subsistence of his family.30

WHEREFORE, premises considered, the petition is DENIED. The

assailed January 23, 2006 decision and March 23, 2006 resolution of
the Court of Appeals in CA-G.R. SP No. 89819 are AFFIRMED. Costs
against Cavite Apparel, Incorporated.

SO ORDERED.

13
G.R. No. 184116               June 19, 2013
CENTURY IRON WORKS, INC. and BENITO CHUA, Petitioners,
vs.
ELETO B. BANAS, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari 1 filed by petitioners
Century Iron Works, Inc. (Century Iron) and Benito Chua to challenge
the January 31, 2008 decision2 and the August 8, 2008 resolution3 of
the Court of Appeals (CA) in CA-G.R. SP No. 98632.
The Factual Antecedents
Respondent Eleto B. Banas worked at petitioner Century Iron
beginning July 5, 20004 until his dismissal on June 18, 2002. 5 Bañas
responded to his dismissal by filing a complaint for illegal dismissal
with prayer for reinstatement and money claims.6
According to Century Iron, Bañas worked as an inventory comptroller
whose duties are to: (1) train newly hired warehouseman; (2) initiate
analysis on the discrepancies concerning records and inventories; (3)
check and confirm warehouseman’s report; (4) check the accuracy of
materials requisition before issuance to the respective warehouseman
at the jobsite; (5) monitor and maintain records; and (6) recommend
and initiate corrective or preventive action as may be warranted. 7
Sometime in 2002, Century Iron received letters of complaint from its
gas suppliers regarding alleged massive shortage of empty gas
cylinders.8 In the investigation that Century Iron conducted in response
to the letters, it found that Bañas failed to make a report of the missing
cylinders. On May 14, 2002, Century Iron required Bañas to explain
within forty-eight (48) hours from receipt of its letter why no disciplinary
action should be taken against him for loss of trust and confidence and
for gross and habitual neglect of duty. 9 On May 31, 2002, Century Iron
issued a Memorandum requiring Bañas to attend a hearing regarding
the missing cylinders.10 Bañas subsequently appeared at the hearing to
air his side.
On June 17, 2002, Century Iron, through Personnel Officer Mr. Virgilio
T. Bañaga, terminated Bañas’ services on grounds of loss of trust and
confidence, and habitual and gross neglect of duty.11 The termination
was effective June 18, 2002.
In his defense, Bañas alleged that he merely worked as an inventory
clerk who is not responsible for the lost cylinders. He pointed out that
his tasks were limited to conducting periodic and yearly inventories,
and submitting his findings to the personnel officer. He maintained that
unlike a supervisory employee, he was not required to post a bond and
he did not have the authority to receive and/or release cylinders in the
way that a warehouseman does. Therefore, he cannot be terminated
on the ground of loss of confidence.12
On the other hand, the petitioners asserted that Bañas was a
supervisory employee who was responsible for the lost cylinders. They
maintained that Bañas committed numerous infractions during his
tenure amounting to gross and habitual neglect of duty. These included
absences without leave, unauthorized under time, failure to implement
proper standard warehousing and housekeeping procedure,
negligence in making inventories of materials, and failure to ensure
sufficient supplies of oxygen-acetylene gases.13
The Labor Arbitration Rulings
14
In a decision14 dated January 31, 2005, Labor Arbiter (LA) Joel S.
Lustria ruled that Bañas was illegally dismissed. The LA did not believe
Century Iron’s assertions that Bañas worked as an inventory
comptroller and that he was grossly and habitually neglectful of his
duties. The evidence on record shows that Bañas was an inventory
clerk whose duties were merely to conduct inventory and to submit his
report to the personnel officer. As an inventory clerk, it was not his duty
to receive the missing items. The LA also ruled that Century Iron
deprived Bañas of due process because the purpose of the hearing
was to investigate the lost cylinders and not to give Bañas an
opportunity to explain his side.
On appeal by Century Iron, the National Labor Relations Commission
(NLRC) affirmed the LA’s ruling in toto. 15 It ruled that the various
memoranda issued by Century Iron explicitly show that Bañas was an
inventory clerk. It noted that Century Iron unequivocally stated in its
termination report dated July 29, 2002 that Bañas was an inventory
clerk. It also pointed out that Century Iron failed to present the Contract
of Employment or the Appointment Letter which was the best evidence
that Bañas was an inventory comptroller.
The NLRC denied16 the motion for reconsideration17 that Century Iron
subsequently filed, prompting the employer company to seek relief
from the CA through a petition for certiorari under Rule 65 of the Rules
of Court.18
The CA Ruling
On January 31, 2008, the CA affirmed with modification the NLRC
decision. It agreed with the lower tribunals’ finding that Bañas was
merely an inventory clerk. It, however, ruled that Bañas was afforded
due process. It held that Bañas had been given ample opportunity to
air his side during the hearing, pointing out that the essence of due
process is simply an opportunity to be heard.19
Century Iron filed the present petition20 after the CA denied21 its motion
for reconsideration.22
The Petition
The petitioners impute the following errors committed by the appellate
court:
1) The CA erred in holding that the factual findings of the
NLRC may not be inquired into considering that only
questions of law may be brought in an original action for
certiorari;
2) The CA erred in finding that Bañas was not a supervisory
employee; and
3) The CA erred in not holding that Bañas’ termination from
his employment was for valid and just causes.23
The petitioners argue that the CA erred when it did not disturb the
NLRC’s finding that Bañas was merely a rank-and-file employee. Citing
Capitol Medical Center, Inc. v. Dr. Meris,24 they contend that for factual
findings of the NLRC to be accorded respect, these must be sufficiently
supported by the evidence on record. The petitioners assert that Bañas
was a supervisory employee who, in the interest of the employer,
effectively recommended managerial actions using his independent
judgment. They point out that one of Bañas’ duties as an inventory
comptroller was to recommend and initiate corrective or preventive
action as may be warranted.
The petitioners also maintain that Bañas was dismissed for just and
valid causes. They reiterate that since Bañas was a supervisory
employee, he could be dismissed on the ground of loss of confidence.
Finally, the petitioners claim that Bañas was grossly and habitually
negligent in his duty which further justified his termination.
The Respondent’s Position
In his Comment,25 Bañas posits that the petition raises purely
questions of fact which a petition for review on certiorari under Rule 45
of the Rules of Courts does not allow. He additionally submits that the
petitioners’ arguments have been fully passed upon and found
unmeritorious by the lower tribunals and the CA.
The Issues
This case presents to us the following issues:
1) Whether or not questions of fact may be inquired into in a petition for
certiorari under Rule 65 of the Rules of Court;
2) Whether or not Bañas occupied a position of trust and confidence,
or was routinely charged with the care and custody of Century Iron’s
money or property; and
3) Whether or not Century Iron terminated Bañas for just and valid
causes.
As part of the third issue, the following questions are raised:
a) Whether or not loss of confidence is a ground for terminating a rank-
and-file employee who is not routinely charged with the care and
custody of the employer’s money or property; and
b) Whether or not Bañas was grossly and habitually neglectful of his
duties.
The Court’s Ruling
We reverse the CA’s decision.
In a petition for review on certiorari
under Rule 45, only questions of
may be put into issue while in
petition for certiorari under Rule
only questions of jurisdiction may
inquired into
On the first issue, the CA relied on Cebu Shipyard & Eng’g Works, Inc.
v. William Lines, Inc.26 in affirming the lower tribunals’ finding that
Bañas worked as an inventory clerk. According to the CA, this Court
has ruled in Cebu Shipyard that in petitions for certiorari, only
questions of law may be put into issue and questions of fact cannot be
entertained. Not noticing such glaring error, the petitioners agree to
such disquisition.They, however, assert that there is an exception to
the rule that only questions of law may be brought in an original action
for certiorari, such as when the lower court’s findings of facts are not
supported by sufficient evidence or that the same was based on
misapprehension or erroneous appreciation of facts.27
A revisit of Cebu Shipyard shows that the CA has inadvertently
misquoted this Court. In the said case, we held: 28
In petitions for review on certiorari, only questions of law may be put
into issue. Questions of fact cannot be entertained. The finding of
negligence by the Court of Appeals is a question which this Court
cannot look into as it would entail going into factual matters on which
the finding of negligence was based. [emphasis ours; italics supplied]
15
We clarify that the petitioners filed a petition for certiorari under Rule 65
of the Rules of Court before the CA. Both the petitioners and the CA
have confused Rule 45 and Rule 65. In several Supreme Court
cases,29 we have clearly differentiated between a petition for review on
certiorari under Rule 45 and a petition for certiorari under Rule 65. A
petition for review on certiorari under Rule 45 is an appeal from a ruling
of a lower tribunal on pure questions of law. 30 It is only in exceptional
circumstances31 that we admit and review questions of fact.
A question of law arises when there is doubt as to what the law is on a
certain state of facts, while there is a question of fact when the doubt
arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the question must not involve an examination of the
probative value of the evidence presented by the litigants or any of
them. The resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is clear that the
issue invites a review of the evidence presented, the question posed is
one of fact.32
Thus, the test of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the same;
rather, it is whether the appellate court can determine the issue raised
without reviewing or evaluating the evidence, in which case, it is a
question of law; otherwise it is a question of fact.33
On the other hand, a petition for certiorari under Rule 65 is a special
civil action, an original petition confined solely to questions of
jurisdiction because a tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without jurisdiction or in excess of
jurisdiction or with grave abuse of discretion amounting to lack of
jurisdiction.34
The petition before us involves mixed questions of fact and law. The
issues of whether Bañas occupied a position of trust and confidence,
or was routinely charged with the care and custody of the employer’s
money or property, and whether Bañas was grossly and habitually
neglectful of his duties involve questions of fact which are necessary in
determining the legal question of whether Bañas’ termination was in
accordance with Article 282 of the Labor Code.
We will only touch these factual issues in the course of determining
whether the CA correctly ruled whether or not the NLRC committed
grave abuse of discretion in the process of deducing its conclusions
from the evidence proffered by the parties. In reviewing in this Rule 45
law petition the CA’s decision on a Rule 65 petition, we will answer the
a question: Did the CA correctly determine whether the NLRC committed
65, grave abuse of discretion in ruling on this case? 35
be
Bañas did not occupy a position of
trust and confidence nor was he in
charge of the care and custody of
Century Iron’s money or property
The CA properly affirmed the NLRC’s ruling that Bañas was a rank-
and-file employee who was not charged with the care and custody of
Century Iron’s money or property. The ruling of the CA, finding no
grave abuse of discretion in the LA and the NLRC rulings and are
supported by substantial evidence, is, to our mind, correct. The
evidence on record supports the holding that Bañas was an ordinary
employee. There is no indication that the NLRC’s decision was unfair
or arbitrary. It properly relied on Century Iron’s numerous
memoranda36 where Bañas was identified as an inventory clerk. It
correctly observed that Century Iron unequivocably declared that
Bañas was an inventory clerk in its July 29, 2002 termination report
with the Department of Labor and Employment.37 Moreover, as the
NLRC judiciously pointed out, Century Iron failed to present the
Contract of Employment or the Appointment Letter, the best evidence
that would show that Bañas was an inventory comptroller.
Since Bañas was an ordinary rank- gross and habitual negligence includes unauthorized absences and
and-file employee, his termination tardiness,49 as well as gross inefficiency, negligence and
on the ground of loss of confidence carelessness.50 As pronounced in Valiao v. Court of Appeals,51 "fitness
was illegal for continued employment cannot be compartmentalized into tight little
cubicles of aspects of character, conduct, and ability separate and
independent of each other."
Since Bañas did not occupy a position of trust and confidence nor was
he routinely in charge with the care and custody of Century Iron’s
money or property, his termination on the ground of loss of confidence Besides, the determination of who to keep in employment and who to
was misplaced. 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, ell aspects of
We point out in this respect that loss of confidence applies to: (1)
employment, including work assignment, working methods, processes
employees occupying positions of trust and confidence, the managerial
to be followed, working regulations, transfer of employees, work
employees; and (2) employees who are routinely charged with the care
supervision, lay-off of workers and the discipline, dismissal and recall
and custody of the employer’s money or property which may include
of workers.52 It would be the height of injustice if we force an employer
rank-and-file employees. Examples of rank-and-file employees who
to retain the services of an employee who does not value his work.
may be dismissed for loss of confidence are cashiers, auditors,
property custodians, or those who, in the normal routine exercise of
their functions, regularly handle significant amounts of money or In view of all the foregoing, we find the petition meritorious.
property.38 Thus, the phrasing of the petitioners’ second assignment of
error is inaccurate because a rank-and-file employee who is routinely
WHEREFORE, premises considered, we hereby GRANT the petition.
charged with the care and custody of the employer’s money or property
The assailed decision and resolution of the Court of Appeals are
may be dismissed on the ground of loss of confidence.
REVERSED and SET ASIDE. The complaint for illegal dismissal is
DISMISSED for lack of merit. Costs against respondent Eleto B.
Bañas was grossly and habitually Bañas.
neglectful of his duties
SO ORDERED.
With respect to Century Iron’s assertion that Bañas was grossly and
habitually neglectful of his duties, the CA erred in ruling that the NLRC
did not commit grave abuse of discretion in concluding that the
dismissal was illegal. The NLRC’s finding that there was illegal
dismissal on the ground of gross and habitual neglect of duties is not
supported by the evidence on record. It believed in Bañas’ bare and
unsubstantiated denial that he was not grossly and habitually neglectful
of his duties when the record is replete with pieces of evidence
showing the contrary. Consequently, the NLRC capriciously and
whimsically exercised its judgment by failing to consider all material
evidence presented to it by the petitioners and in giving credence to
Bañas’ claim which is unsupported by the evidence on record.39

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

To our mind, such numerous infractions are sufficient to hold him

grossly and habitually negligent.1âwphi1 His repeated negligence is
not tolerable. The totality of infractions or the number of violations he
committed during his employment merits his dismissal. Moreover,

16
G.R. No. 83433 November 12, 1992 Finding the explanation unsatisfactory, the petitioners, on 25 January
1986, issued an inter-office memorandum 1 to the private respondent
informing her that pending the result of an over all evaluation of the
CONRADO TIU and/or CONTI PAWNSHOP, petitioner,
charge against her, she is to be placed under suspension from 27
vs.
January 1986 until 25 February 1986 or for a total of thirty (30) days.
NATIONAL LABOR RELATIONS COMMISSION and CARMEN L.
ANCHETA, respondents.
Subsequently, on 27 January 1986, barely two (2) days after the
issuance of the aforesaid memorandum, and on the day she was to
DAVIDE, JR., J.:
start serving the suspension, private respondent received a letter from
the petitioners informing her of her termination from employment
This is a special civil action for certiorari seeking the reversal of the 28 effective 25 February 1986. The letter, quoted verbatim, follows:
January 1988 decision of public respondent National Labor Relations
Commission (NLRC), in NLRC Case No. RAB III-5-2673-86, which
In connection with the unauthorized purchases of
ordered the petitioners to pay the private respondent backwages for a
jewelry items, and after the audit and inspection by
period of two (2) years and separation pay equivalent to one (1) month
the Internal Auditor; subsequent investigation
pay for every year of service, a fraction of at least six (6) months to be
clearly and sufficiently proves that:
considered one (1) year.

1) You are (sic) properly and

Briefly, the following are the antecedent facts:
thoroughly informed of all
company rules and policies
Private respondent Carmen L. Ancheta was the petitioners' employee yet you not only violated but
from April 1970 until 25 February 1986 when she was dismissed on the abused them just the same by
alleged ground of loss of trust and confidence. She started as an purchasing a considerable
appraiser in the CONTI PAWNSHOP and ended up as a pawnshop number of jewelry items;
supervisor by the time she was dismissed.
2) When asked to present
As an appraiser, she had the following duties: (1) to accept jewelry and said items, it was found that
other articles offered as pledge; (2) to test and appraise such jewelry they were purchased for
and other articles for genuineness; and (3) to weigh and appraise the persons not within your
articles and assess the amounts for which they could be pledged. As immediate family, of which
pawnshop supervisor, she not only performed the functions of an only three (3) out of the
appraiser, but supervised the business and personnel of the petitioners fourteen (14) were shown, of
as well. The supervisor aspect of the job entailed the training of which (sic);
personnel on how to appraise pieces of jewelry.
3) You sought to cover up for
Sometime in December of 1985, petitioners received an anonymous the act by presenting
letter informing them that the private respondent was involves in additional piece (sic) of
certain anomalies in the pawnshop. This letter specifically cited the jewelry which when checked
private respondent's false claim that certain pawnshop equipment against the records,
issued to her were lost; the letter alleged that the latter' version is mere description was not included
fabrication, as he was using such equipments in her personal business in the unauthorized purchases
dealings which involved the buying and selling of jewelry. made. This alone was a very
clear act of dishonesty.
By virtue thereof, petitioners conducted an investigation and came out
with the finding that while private respondent was not guilty of the 4) That it was one of your
wrong alleged in the letter, she violated certain company policies. responsibility (sic) to purchase
These discovered infractions pertain to the policy of allowing items sold by individuals to
employees to purchase jewelry at a discounted rate or agent's price the company, yet further
provided the same is for the personal use of the employee himself or investigation was made and it
his immediate family. Petitioners established this policy to give their was learned that your were
employees the opportunity to buy jewelry for themselves at the lowest buying jewelries (sic) from
price possible. Conti customers for your
personal purpose right in the
premises of Conti Pawnshop
In their letter of 10 January 1986 to the private respondent, petitioners during business hours.
required the latter to explain why she should not be dismissed for
violating the said company policy in the face of a well-founded belief
that the jewelry she bought at a discounted price was being sold by her 5) Your explanation on these
to parties other than the members of the immediate family. She was matters has been found
given until the end of the same day to give her explanation. unsatisfactory.

Within this short span of time, private respondent submitted a 6) Summing up all the above
handwritten answer wherein she admitted that some of her relatives and considering the reports
who are not members of her immediate family bought jewelry form the and records contained on file
said pawnshop at the agent's price. However, this was done with the (indicating activities in-conflict
approval of the petitioners' salesgirls who thought that there was with the interest of the
nothing wrong with selling the same at a discounted rate to relatives of company) — that the
their co-employee. Private respondent emphasized that it was her violations are serious
relatives who personally went to the pawnshop to buy for themselves infractions to (sic) the existing
and that there was nothing clandestine about it.

17
 rules and regulations with
intentions of personal gain.
These acts of unfaithfulness and abuse leads (sic)
management to LOSE ITS TRUST AND
CONFIDENCE ON (sic) YOU which is a requisite
in your position as appraiser thus deeming it
necessary that your employment be terminated
within 30 days from receipt of this letter and you
are (sic) placed under suspension without pay until
your termination which is on February 25, 1986. 2
Thereafter, on 13 February 1986, the petitioners' personnel manager
informed the Ministry of Labor of Olongapo City about the private
respondent's termination effective 25 February 1986.
On 15 April 1986, private respondent filed with the Olongapo District
Labor Office in Olongapo City a complaint for illegal dismissal against
the petitioners. The Labor Arbiter required the parties to submit their
respective position papers and other documentary evidence. On 29
July 1987, Labor Arbiter Vladimir PL. Sampang rendered a
decision 3 in favor of the private respondent (petitioner therein) and
ordered the petitioners as follows:
1. To pay the unpaid wages of Petitioner from
January 15, 1986 up to February 25, 1986 in the
sum of Two Thousand Eight Hundred Sixty Six
Pesos & Thirty Centavos (P2,866.30);
2. To immediately reinstate Petitioner to her former
or equivalent position without loss of seniority
rights and with full backwages and other benefits
from the date of her illegal dismissal until fully
reinstated, and should reinstatement become
impossible due to strained relationship, to pay the
separation pay of petitioner equivalent to her one
(1) month salary or one-half (1/2) month salary per
year of service whichever is higher, a fraction of at
least six (6) months service considered as one (1)
whole year in addition to backwages and other
benefits;
3. To pay Petitioner moral and exemplary
damages in the sum of Ten Thousand
(P10,000.00) Pesos.
Aggrieved by the said decision, petitioners interposed an appeal before
the public respondent NLRC. They alleged therein that the Labor
Arbiter committed grave abuse of discretion and serious errors in his
findings of fact which would cause them grave or irreparable damage
and injury.
On 28 January 1988, the NLRC promulgated the challenged
decision 4 affirming, with modification, the decision of the Labor Arbiter.
By way of modification, the NLRC decreed the removal of the order for
the reinstatement of the private respondent and deletion of the award
of moral and exemplary damages in favor of the latter. The NLRC
found it inappropriate to reinstate the private respondent because she
was occupying a sensitive position in the business of the petitioners.
Thus, to the latter, she had "ceased to be an effective tool in the
furtherance of" 5 their business. The dispositive portion of the said
decision reads:
WHEREFORE, premises considered, the decision
of the Labor Arbiter below is hereby modified as
follows:
1. Respondent Conti Pawnshop is hereby ordered
to pay complainant backwages equivalent on her
two (2) years salary; plus separation pay
computed at one (1) month's salary for every year
of service, a fraction of at least six (6) months to
be considered as one year.
2. The award for moral and exemplary damages is
deleted for lack of factual and legal basis.
SO ORDERED. 6
Their motion to reconsider the said decision having been denied in the
public respondent's Resolution of 14 March 1988, 7 petitioners filed the
instant special civil action for certiorari, raising therein this sole issue:
THE RESPONDENT COMMISSION COMMITTED
GRAVE ABUSE OF DISCRETION AND ERROR
IN AWARDING BACKWAGES AND
SEPARATION PAY THERE BEING A CLEAR
BASIS FOR THE DISMISSAL FROM
EMPLOYMENT OF THE PRIVATE
RESPONDENT. 8
Citing Article 283(c), now Article 282(c), of the Labor Code, 9 as
amended, petitioners contend that loss of trust and confidence is a
valid ground for terminating one's employment. The article reads:
Art. 283. Termination by employer. — An employer
may terminate an employment for any of the
following just causes:
xxx xxx xxx
(c) Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative.
In the Resolution of 22 February 1988, 10 this Court gave due course to
the petition after the filing by the public respondent, through the Office
of the Solicitor General, of its Comment, and by the petitioners of their
reply to the latter. The parties were then required to submit their
respective Memoranda.
Undoubtedly, an employer may terminate the services of an employees
due to loss of trust and confidence. However, there must be some
basis
therefor. 11 In the language of the aforequoted Article 283(c) of the
Labor Code, the same must be based on willful breach of the trust
reposed in the employee by his employer. Ordinary breach will not
suffice; it must be willful. Such breach is willful if it is done
internationally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. 12 Elsewise stated, it must be based on substantial
evidence and not on the employer's whims or caprices or suspicion;
otherwise, the employees would eternally remain at the mercy of the
employer. It should be genuine and not simulated; nor should it appear
as a mere afterthought to justify earlier action taken in bad faith or a
subterfuge for causes which are improper, illegal, or unjustified. 13 It
has never been intended to afford an occasion for abuse by the
employer of its prerogative, as it can easily be subject to abuse
because of its subjective nature. 14
In the case at bar, the Labor Arbiter found untenable the grounds relied
upon by the petitioners. He wrote:
Anent the issue of whether Petitioner was illegally
dismissed or not, we find that the defense of loss
of trust and confidence advanced by Respondent
is merely speculative, conjectural and devoid of

18
 factual basis, in fact and in law. The imputed
alleged violation by the Petitioner of a privilege
given to all employees wherein they are allowed to
make purchases of jewelries (sic) at Conti at
agent's price for their personal use and their
immediate families, in that the Petitioner allegedly
made purchases for her cousins, housemaid and
godchildren has not been fully established by the
Respondent, and except for the self-serving,
gratuitous and hearsay statement of Mrs. Rosario
Boquirin (sic), who is the Senior Technical
Assistant of Respondent Plaza Conti, not an iota
of proof has been presented to prove this
imputation. On the contrary, in the
Explanation/Reply submitted by Petitioner, it was
clearly shown that the purchases were personally
made by her relative (sic) directly from the sales
personnel of Respondent and not by the
Petitioner. Moreover, even granting that Petitioner
has indeed, made purchases of jewelries (sic) for
her distant relatives or who (sic) are not immediate
members of her family, we see no wrong at all
because the purchases were fully paid in
accordance with the prescribed agent's price.
Finally, assuming that the Petitioner has violated
this employee' privilege, we believe that the
penalty of dismissal is too severe, inhuman and
highly unjustified because violation of said
privilege has no direct relevancy or connection
with her works (sic) as an Appraiser. At most, the
privilege should have taken away from her, instead
of an outright and canibalistic (sic) dismissal from
her work.
Likewise, the imputation that her records reveal
that in the past, Petitioner has accepted fake five
(5) (sic) items of jewelries in (sic) four (4) separate
instances in a span of one (1) month with two (2)
transactions each, from only one (1) person, ant
that as a customer has allegedly told management
that Petitioner purchased from her jewelries (sic)
that she was going to sell, is too general, besides
being hearsay and more of a product of a senile
and moribund imagination, because if it were true,
where are the records referred to? Why were they
not presented in (sic) as evidenced? How, where
and when in the past were those items accepted
and from whom has Petitioner accepted those fake
items? Who was that customer who allegedly told
management that petitioner purchased jewelries
(sic) she was going to sell? If there is any truth to
this, why was not the Petitioner then immediately
investigated and dismissed? Finally, the
anonymous letter received by Respondent
sometime on (sic) December 1985 implicating the
Petitioner in buying jewelry Conti premises for her
own personal purpose and was (sic) not buying at
all for the Respondent Conti, thereby depriving the
latter of this particular business competing with it,
is done (sic) mere figments (sic) of a very fertile
halucination (sic) because such an anonymous
letter is but a (sic) hearsay evidence and therefore,
inadmissible. If there is any truth to this, again,
why was not the Petitioner right then and there
immediately investigated and dismissed if
warranted?15
The public respondent sustained this findings and conclusions of the
Labor Arbiter, thus:
After a careful scrutiny of the records of the case,
We find for the complainant. Indeed complainant
holds a sensitive position in respondent's
19
business, but it must be noted that dismissal of an
employee on the ground of loss of trust and
confidence must have some basis. All that the
respondent submitted with respect to the alleged
purchases of jewelries (sic) from a customer in the
pawnshop premises for her personal ends was the
anonymous letter that the respondent allegedly
received. Such evidence is clearly hearsay and
inadmissible. As to the alleged purchases of five
(5) fake jewelries (sic), nothing in the records
support (sic) such allegation except for the report
of respondent's Senior Technical Assistant
Rosario B. Boquirin. Granted such (sic) allegation
were true, respondent should have investigated
complainant upon discovery of the alleged offense.
Respondent should have immediately called
complainant's attention. Evidently, respondent
failed to do this. Moreover, nowhere in the records
of the case is there any indication that complainant
was ever reprimanded or investigated. With
respect to the lost equipments (sic), this charge
was likewise not proven. The accusation is at most
speculative and conjectural. On the matter of
complainant's alleged abuse of the privilege
extended to her by respondent, We believe that,
granting that there was such abuse, dismissal of
the complainant is severe penalty. We agree with
the Labor Arbiters confusion that:
. . . Assuming that petitioner
has violated this employee's
privilege, We believe that the
penalty of dismissal is to
severe, inhuman and highly
unjustified because violation
of said privilege has no direct
relevancy or connection with
her work as an appraiser. At
most, the privileged should
have been taken away from
her, instead of an outright and
canibalistic dismissal from her
work (sic).16
The above findings of fact by the Labor Arbiter and the public
respondents are supported not merely by the substantial, but by a clear
preponderance of evidence. We find no reason to disturb such
findings. Settled is the rule that findings of quasi-judicial agencies
which have acquired expertise in the specific matters entrusted to there
jurisdiction are accorded by this Court not only with respect but even
finality if they are supported by substantial evidence. 17 Petitioners
have not convinced Us that We should depart from this rule.
There is, however, something more in the conduct of the petitioners
which dilutes the merits of their claims and dims their hope for support
from this Court. They deprived the private respondents of her right to
due process — which is at the heart employee's right to security of
tenure and is fully guaranteed by both the 1973 and 1987
Constitutions. 18
Article 278, now Article 277, of the Labor Code of the Philippines, us
amended by Batas Pambansa Blg. 130, 19 implements this guaranty of
due process. The pertinent portions thereof reads:
xxx xxx xxx
(b) Subject to the constitutional rights of workers to
security of tenure and there right to be protected
against dismissal except for a just or authorized
cause and without prejudiced to the requirement of
notice Article 284 of this Code, the clearance to
 terminate employment shall no longer be
necessary.
However, the employer shall furnish the worker
whose employment is sought to be terminated a
written notice containing a statement of the causes
for termination and shall afford the latter ample
opportunity to be heard and to defend herself with
the assistance of his representative is he so
desires in accordance with company rules and
regulations promulgated pursuant to guidelines set
by the Ministry of Labor and Employment. Any
decision taken by the employer shall be not
prejudice to the right of the worker to contest the
validity or legality of his dismissal by filling a
complaint with the regional branch of the National
Labor Relations Commission. The burden of
proving that the termination was for a valid or
authorized cause shall rest of the employer. The
Ministry may suspend the effects of the
termination pending the resolution of the case of
the event of the prima facie finding by the Ministry
that the termination may cause a serious labor
disputes or is in implementation of a mass lay-off.
The same guaranty is likewise embodied in Sections 2 to 6,
Rule XIV, Book V of the Rules Implementing the Labor
Code, to wit:
xxx xxx xxx
Sec. 2. Notice of dismissal. — Any employer who
seeks to dismiss a worker shall furnish him a
written notice stating the particular acts or
omission constituting the grounds for dismissal. In
cases of abandonment of work, the notice shall be
served at the worker's last known address.
Sec. 3. Preventive suspension. — The employer
may place the worker concerned under preventive
suspension if his continued employment poses a
serious and imminent threat to the life or property
of the employer or of his co-workers.
Sec. 4. Period of suspension. — No preventive
suspension shall last longer than 30 days. The
employer shall thereafter reinstate the worker in
his former or in a substantially equivalent position
or the employer may extend the period of
suspension provided that during the period of
extension, he pays the wages and other benefits
due to the worker. In such case, the worker shall
not be bound to reimburse the amount paid to him
during the extension if the employer decides, after
completion of the hearing, to dismiss the worker.
Sec. 5. Answer and hearing. — The worker may
answer the allegations stated against him in the
notice of dismissal within a reasonable period from
receipt of such notice. The employer shall afford
the worker ample opportunity to be heard and to
defend himself with the assistance of his
representative, if he so desires.
Sec. 6. Decision to dismiss. — The employer shall
immediately notify a worker in writing of a decision
to dismiss him stating clearly the reasons thereof.
It is evident from the said provisions that the employer is
required to furnish an employee who is to be dismissed two
20
(2) written notices before such termination. The first is the
notice to apprise the employee of the particular acts or
omissions for which his dismissal is sought. This may be
loosely considered as the proper charge. The second is the
notice informing the employee of the employer's decision to
dismiss him. This decision, however, must come only after
the employee is given a reasonable period from receipt of
the first notice within which to answer the charge, and ample
opportunity to be heard and defend himself with the
assistance of his representative, if he so desires. This is in
consonance with the express provisions of law on the
protection to labor and the broader dictates of procedural
due process. Non-compliance therewith is fatal 20 because
this requirements are conditions sine qua non before
dismissal may be validly effected. 21
Although an employer has the right to dismissed an employee, the
former should not be careless in exercising such right. The manner of
dismissal should be in full accord with the law and cannot be left
entirely to the whims of the employer for at stake is not only the
employee's position, but also his means of livelihood. 22
In the instant case, petitioners violated the twin requirement of notice
and hearing. It is clear that the private respondent was not afforded a
reasonable time to answer the 10 January 1986 letter which was given
to her on the same date. This letter gave her until the end of the same
day to submit her explanation; she had, therefore, less than twenty-four
(24) hours to prepare and submit the explanation. She did not even
have the time to consult with a lawyer. Aside from this, she was not
even given the opportunity to be heard. Two (2) days after receiving
the notice of suspension, allegedly because petitioners were still
evaluating her case, she was served with a notice of dismissal. The
"suspension" was, therefore, a clever subterfuge to mask her
immediate dismissal which was obviously already decided upon. Even
the suspension has no basis since her continued employment posed
no "serious imminent threat to the life or property" of the petitioners or
the private respondent's co-workers. 23 Thus, the petitioners made a
mockery of the solemn guarantee of due process.
The dismissal then of the private respondent was wrong and illegal.
Ordinarily, reinstatement with backwages should be decreed. However,
the former relief may no longer feasible in this case. The antipathy and
antagonism existing between the petitioners and the private
respondent militate against the latter's reinstatement; 24 thus, such
reinstatement will no longer serve any prudent purpose. 25 Pursuant to
settled jurisprudence, an award for backwages for three (3) years
without qualification and deduction, and for separation pay at the rate
of one (1) month salary for every year of service, would be in
order. 26 The challenged decision pegged the award of backwages at
two (2) years only. It should be modified to three (3) years.
WHEREFORE, for lack of merit, the Petition is DISMISSED. The
appealed decision (NLRC Case No. RAB-III-5-2673-86) is hereby
AFFIRMED, subject to the modification as to backwages which shall be
for three (3) years without any qualification and deduction.
This Decision shall be immediately executory.
Costs against the petitioners.
SO ORDERED.
G.R. No. 149416            March 14, 2003
CARMELITA V. SANTOS, petitioner,
vs.
SAN MIGUEL CORPORATION, respondent.
SANDOVAL-GUTIERREZ, J.:
This petition for review on certiorari1 filed by Carmelita V. Santos
challenges the Decision of the Court of Appeals in CA-G.R. SP 64223
dated July 4, 2001 and its Resolution dated August 9, 2002. 2
The factual milieu is as follows:
On September 15, 1987, respondent San Miguel Corporation (SMC)
appointed petitioner Carmelita V. Santos as Finance Director of its
Beer Division for Luzon Operations.
On September 6, 1989, respondent's Cash Department issued a
Memorandum prohibiting the encashment of personal checks at
respondent's Plants and Sales Offices.3 The Memorandum reads:
"TO :     ALL DIVISION FINANCE OFFICERS
FROM :     E. E. NOEL
SUBJECT:     CHECK ENCASHMENTS AT PLANTS/SALES
OFFICES
"This is to reiterate our policy with regard to check
encashment at SMC Plants and Sales Offices. The following
are the only items accepted for such accommodation:
SMC checks payable to SMC employees;
RDBP checks payable to SMC employees;
Uncrossed dividend checks.
"Encashments must be made by the payees themselves.
The check must be endorsed by the payee by affixing his/her
signature at the back of the same.
"Other items such as SMCESALA, SSS, personal checks are
not accepted. x x x" (emphasis ours)
On January 10, 1991, respondent SMC, through its Cash Management
Department, noticed that petitioner encashed her three (3) personal
checks in various Metro Manila Sales Offices, thus:
1. On December 17, 1990, petitioner Carmelita Santos
encashed at respondent's Makati Sales Office her personal
check (UCPB Check No. 036716 dated December 15, 1990)
payable to respondent in the amount of P150,000.00. The
check was returned by the bank because it was drawn
against insufficient funds. Three days later, or on December
20, 1990, petitioner paid respondent in cash for the
dishonored check.
2. On January 2, 1991, petitioner encashed at respondent's
Pasig Sales Office another personal check (UCPB Check
No. 036718 dated December 20, 1990) payable to cash in
the amount of P140,045.00. When presented for payment,
the check was dishonored by the drawee bank due to
21
insufficient funds. Petitioner redeemed the check only on
January 19, 1991.
3. On January 19, 1991, petitioner encashed at respondent's
Diliman Sales Office another personal check (UCPB Check
No. 036737 dated January 19, 1990) in the amount of
P150,000.00. This check was accepted for payment.
On January 24, 1991, respondent commenced an audit investigation of
the personal checks encashed by petitioner at its sales offices.
Pending the audit investigation, petitioner agreed to take a fifteen-day
vacation leave from January 25 to February 14, 1991.
On January 29, 1991, petitioner received from respondent an inter-
office memorandum requiring her to explain in writing why no
disciplinary action should be taken against her in view of her
unauthorized encashment of her three personal checks at respondent's
sales offices.4
In a reply-memorandum dated January 31, 1991, petitioner admitted
that she encashed three personal checks at respondent's sales offices
but claimed that such act was not irregular since all personnel in
respondent's Beer Division were allowed to encash their personal
checks at any sales office upon clearance from the region
management concerned. She stated that her encashment of personal
checks had prior clearance. She further clarified that only two of the
three checks she encashed were dishonored for insufficiency of funds,
but she promptly funded the checks upon receipt of notice of such
dishonor, thereby causing no damage to respondent.5
Meanwhile, respondent obtained a copy of the audit results and
learned that aside from petitioner's reported encashment of three
personal checks, she had previously encashed fifty (50) personal
checks from June 13, 1989 to January 19, 1991 in varying amounts,
from P1,500.00 to P20,000.00, which were not endorsed by the Sales
Operations Manager or the Region Finance Officer. Additionally,
petitioner encashed two other personal checks in the amounts of
P150,000.00 on December 12, 1990, and P100,000.00 on December
27, 1990.6
After receiving such report, respondent SMC formed an Investigating
Panel to conduct a full-blown investigation of petitioner's encashment
of personal checks and to determine: (1) whether the region
management gave prior consent to the transactions; (2) whether the
person or persons who accepted or encashed the personal checks
were in fact authorized to do so; (3) if there is any policy, procedure
and/or accommodation for the encashment of personal checks and the
extent/amount and frequency of such; and (4) the loss or damage
accruing to respondent, if any. 7 The Investigating Panel was composed
of Ernesto S. Escalante, SMC Director of Human Resources and
Administration, as Chairman, and Jesus Domingo and Jo Christie
Punsalang, as members.
In the meantime, on or February 15, 1991, petitioner returned from her
vacation leave and reported for work. To her surprise, she found that
she had been transferred from her room on the 16th Floor of the
Pacific Star Building to a cubicle on the 19th Floor of the same
building. There, she shared a space with the secretary of respondent's
Quality Service Manager and spent each day doing nothing for no
assignment was given to her.
Subsequently, petitioner received two inter-office
memoranda8 informing her of the commencement of an administrative
investigation pertaining to her encashment of her personal checks and
that she was relieved of her present assignment/position until the
conclusion of the investigation.9
At the first investigative hearing on February 27, 1991, petitioner
appeared but requested a postponement of five days to enable her to
submit a supplemental letter to the Investigating Panel.
On March 5, 1991, petitioner submitted a letter-explanation accusing
respondent of prejudging her case. She claimed to have been
unceremoniously relieved of her duties and forced to go on vacation
leave effective January 25, 1991. She demanded that she be re-
assigned to her former position as Finance Director within three (3)
days from notice.10
At the next scheduled hearing on March 6, 1991, petitioner appeared
without her counsel. Considering her desire to be assisted by counsel
during the investigation, the hearing was reset to March 15, 1991.
On March 15, 1991, petitioner called the Investigating Panel by phone,
expressing her doubts on its impartiality. Despite notice, she refused to
attend subsequent hearings. The Investigating Panel considered her
refusal as a waiver of her right to be heard and thus continued the
investigation in her absence.
On March 21, 1991, the Investigating Panel reported its findings as
follows:
"xxx the Investigating Panel finds the encashment by Ms.
Santos of her personal checks with the region/sales offices
as highly irregular transactions to the detriment of the
Company.
"The audit made on the personal check encashments by Ms.
Santos at the Makati, Cubao and Diliman Sales Offices show
that she has been encashing personal checks as early as
June 1989 which were not endorsed by the sales operations
manager or the region finance officer. Four (4) of these
checks were dishonored for having been drawn against
insufficient funds but all were subsequently paid by Ms.
Santos in cash. Further, in addition to the December 15,
1990 and December 20, 1990 bouncing checks of Ms.
Santos, she encashed on December 12, 1990 a personal
check for P150,000.00, on December 27, 1990, for
P100,000.00, and on January 19, 1991, yet another personal
check for P150,000.00. In all, her personal check
encashments for that short period from December 12, 1990
to January 19, 1991 totalled P670,045.00.
"These encashments from December 12, 1990 to January
19, 1991 not only violated the policy reiterated in the Cash
Management Department Memo dated September 6, 1989,
but even the alleged practice permitting Payroll 2 personnel
to encash their personal checks. The Investigating Panel
does not think that the approval of the region finance officer
and the sales operations manager, who respectively allowed
the encashments of the December 15, 1990 and December
20, 1990 bouncing checks, would cure the irregularity of said
encashments. These managerial personnel are not only
lower in rank in relation to Ms. Santos in her capacity as
Finance Director, but their authority is limited by the alleged
practice itself: they cannot permit Ms. Santos' check
encashments beyond her monthly salary.
"At the worst, the council of the Investigating Panel finds the
facts to sustain prima facie that the personal check
encashments by Ms. Santos constitute estafa through
misappropriation or with abuse of confidence under Article
315, Paragraph 1(b) of the Revised Penal Code.
"xxx the Investigating Panel finds that Ms. Santos abused
her position thereby giving ground for the Company's loss of
trust and confidence upon her and her dismissal from the
Company. Ms. Santos is a managerial employee. As
22
Finance Director, Ms. Santos holds a position of trust and
confidence. She is entrusted with the custody, handling, care
and protection of Company funds. She is the highest ranking
managerial employee for the finance function of the Luzon
Beer Operations – third level from the Division Manager. She
has functional control over all the plant and region finance
officers, including cashiers within Luzon operations. As
Finance Director, prudence should have dictated upon Ms.
Santos caution and circumspection particularly as she
performs the delicate and sensitive task of handling the
finances of the Company. But this she did not do.
"Except for the two instances where the region finance
manager and sales operations manager separately allowed
the encashment by Ms. Santos of her personal checks, all
the other checks were encashed by Ms. Santos without
permission from the region management. In the two
instances where clearance was given, the regional finance
manager said that Ms. Santos is her superior that he just
complied with her request, while the manager for sales
operations said that he trusted Ms. Santos, she being a
Finance Director. Even then, these managers acted beyond
their authority in giving the permission to Ms. Santos in view
of the amounts involved."11
The Investigating Panel recommended that petitioner Santos be
terminated from employment. The Panel further advised the
management to reprimand the regional finance officer and sales
operations manager who permitted the encashment of petitioner's
personal checks.
In a memorandum dated April 5, 1991, respondent adopted the
findings of the Investigating Panel and informed petitioner of her
termination from employment for abuse of position as Finance Director,
engaging in highly irregular transactions to the detriment of the
company and employer's loss of trust and confidence. 12
Five days before the end of the administrative investigation, or on
March 15, 1991, petitioner filed with the Labor Arbiter a complaint for
constructive dismissal against respondent SMC and Ernesto S.
Escalante, Chairman of the Investigating Panel. The complaint was
later amended to illegal dismissal.13
On April 24, 1996, Labor Arbiter Dominador M. Cruz rendered
judgment dismissing the complaint for lack of merit,14 thus:
"WHEREFORE, judgment is hereby rendered, dismissing the
instant case for lack of merit.
"However, for humanitarian considerations, respondent is
directed to give complainant financial assistance equivalent
to one month pay.
"SO ORDERED."15
On June 10, 1996, petitioner interposed an appeal to the National
Labor Relations Commission (NLRC).16 Respondent, for its part, filed a
partial appeal.
On June 30, 1999, the NLRC promulgated a decision reversing that of
the Labor Arbiter.17 The NLRC held that respondent SMC was
estopped from questioning petitioner's encashment of personal checks,
having allowed such practice for several years prior to the present
case. Further, respondent deprived petitioner of due process by
belatedly including her prior encashments in the administrative
complaint, upgrading the charge to abuse of position. This effectively
deprived her of her right to be notified of a clear statement of the cause
for termination and prevented her from refuting a more serious charge.
The NLRC likewise doubted the impartiality of the Investigating Panel
considering that it was formed after she had been constructively
dismissed by demotion. The NLRC disposed of the case in this
manner:
"WHEREFORE, in the light of the foregoing, the Decision of
the Labor Arbiter dated 24 April 1996 is hereby REVERSED
and in view hereof, another judgment is entered:
1. Ordering respondents to pay complainant's
severance pay of one (1) month per year of
service, computed from date of hire on 1 January
1985 until finality of this Decision;
2. Ordering respondents to pay complainant's full
backwages based on her last basic monthly salary
of P34,000.00 per month, including allowances
and other benefits of their monetary equivalent
from date of her constructive dismissal on 24
January 1991 until finality of this Decision;
3. Ordering respondents to pay moral damages of
P500,000.00 and exemplary damages of
P500,000.00 and attorney's fees of 10% of the
total monetary award;
4. Dismissing respondents' appeal for utter lack of
merit.
"The Research and Examination Division of this Commission
is required to compute the foregoing for purposes of
execution.
"SO ORDERED."18
On September 8, 1999, respondent SMC filed with the NLRC a motion
for reconsideration19 but it was denied in a resolution dated December
29, 2000.20
On April 6, 2001, respondent filed with the Court of Appeals a petition
for certiorari under Rule 65 of the Revised Rules of Court, with prayer
for a temporary restraining order and/or preliminary injunction,
docketed as CA-G.R. SP No. 64223. 21
On July 4, 2001, the Court of Appeals rendered its Decision annulling
and setting aside that of the NLRC,22 thus:
"WHEREFORE, premises considered, the present petition is
hereby GIVEN DUE COURSE and the writ prayed for,
accordingly GRANTED. The Decision dated June 30, 1999
and Resolution dated December 29, 2000 of public
respondent National Labor Relations Commission in NLRC
NCR CA Case No. 010929-96 (NLRC Case No. 00-03-
01688-91) are hereby both ANNULLED and SET ASIDE and
a new one is hereby entered DISMISSING the Complaint for
utter lack of merit."
Petitioner filed with the Court of Appeals a motion for
reconsideration,23 but the same was denied on August 9, 2001.24
Hence, this recourse.
Petitioner basically raises the issue that respondent SMC dismissed
her from employment without just cause and violated her right to due
process.
The petition is bereft of merit.
23
Under the Labor Code, a valid dismissal from employment requires
that: (1) the dismissal must be for any of the causes expressed in
Article 282 of the Labor Code and (2) the employee must be given an
opportunity to be heard and to defend himself. 25 Article 282(c) of the
same Code provides that "willful breach by the employee of the trust
reposed in him by his employer" is a cause for the termination of
employment by an employer. 26 This ground should be duly
established.27 Substantial evidence is sufficient as long as such loss of
confidence is well-founded or if the employer has reasonable ground to
believe that the employee concerned is responsible for the misconduct
and her act rendered her unworthy of the trust and confidence
demanded of her position. 28 It must be shown, though, that the
employee concerned holds a position of trust.29 The betrayal of this
trust is the essence of the offense for which an employee is
penalized.30
Petitioner argues that her position as Finance Director of respondent's
Beer Division is not one of trust but one that is merely functional and
advisory in nature. She possesses no administrative control over the
plants and region finance officers, including cashiers. She reports to
two superiors.
Petitioner's argument is misplaced. As Finance Director, she is in
charge of the custody, handling, care and protection of respondent's
funds. The encashment of her personal checks and her private use of
such funds, albeit for short periods of time, are contrary to the fiduciary
nature of her duties.
Moreover, petitioner has functional control over all the plant and region
finance officers, including cashiers, within the Luzon Operations Area.
In fact, she is the highest ranking managerial employee for the finance
section of the Luzon Beer Division Operations. Obviously, her position
is a factor in abetting the encashment of her personal checks.
Indeed, we find substantial ground for respondent's loss of confidence
in petitioner. She does not deny encashing her personal checks at
respondent's sales offices and diverting for her own private use the
latter's resources. The audit investigation accounted for all the checks
she encashed, some of which were dishonored for insufficiency of
funds. The Investigating Panel concluded that petitioner not only
encashed her personal checks at respondent's sales offices, but also
used company funds to temporarily satisfy her insufficient accounts.
This Court has held that misappropriation of company funds, although
the shortages had been fully restituted, is a valid ground to terminate
the services of an employee of the company for loss of trust and
confidence.31
Petitioner contends that she was "singled out in this case" for refusing
to accede to the sexual advances of her superior, Francisco Gomez de
Liano. She also cites the prolonged practice of other payroll personnel,
including persons in managerial levels, who encashed personal checks
but remained unpunished by respondent. She asserts that her
administrative superiors even encouraged her to encash her checks at
the nearest sales office since her appearance at the bank for
encashment would entail undue digression from her daily work routine.
Prolonged practice of encashing personal checks among respondent's
payroll personnel does not excuse or justify petitioner's misdeeds. Her
willful and deliberate acts were in gross violation of respondent's policy
against encashment of personal checks of its personnel, embodied in
its Cash Department Memorandum dated September 6, 1989. She
cannot feign ignorance of such memorandum as she is duty-bound to
keep abreast of company policies related to financial matters within the
corporation. Equally unmeritorious are her claims that the acts
complained of are regular, being with the knowledge and consent of
her superiors, Francisco Gomez de Liano and Ben Jarmalala, and that
she is being charged because she resisted the sexual advances of her
superior. Suffice it to state that she could have proved these matters
during the investigation had she attended the proceedings.
On petitioner's contention that she was denied due process - To be
sure, an employee cannot be dismissed from employment without
according to him the constitutional right to due process whether he be
a rank and file or a managerial employee. 32 Failure to comply with the
procedural requirements for terminating one's employment taints the
dismissal with illegality. This procedure is mandatory and any judgment
reached by management without that compliance can be considered
void and inexistent.33
In this case, petitioner was required to explain in writing why no
disciplinary action should be taken against her. She was also notified
that a full-blown administrative investigation will be conducted and was
advised that she should be represented by counsel. She submitted to
the Investigating Panel a letter-explanation and a supplemental
response to the administrative complaint against her. At her request,
the investigation was postponed twice to enable her to procure the
services of counsel. Yet, she vehemently refused to participate in the
administrative investigation. She cannot now claim denial of due
process considering that she was afforded the opportunity to be
present (with counsel) during the investigation and to present her
evidence. The essence of due process is that a party be afforded a
reasonable opportunity to be heard and to submit any evidence he may
have in support of his defense.34
The Labor Code provides the following procedure to be observed in
terminating the services of an employee based on just causes as
defined in Article 282 of the Code:
(a) A written notice must be served on the employee
specifying the ground or grounds for termination and giving
him reasonable opportunity within which to explain his side;
(b) A hearing or conference shall be conducted during which
the employee concerned, with the assistance of counsel if he
so desires, is given an opportunity to respond to the charge,
present his evidence or rebut the evidence presented
against him; and
(c) A written notice of termination must be served on the
employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination.
Procedural due process requires the employer to give the employee
two notices. First is the notice apprising him of the particular acts or
omissions for which his dismissal is sought. Second is the subsequent
notice informing him of the employer's decision to dismiss him.35
Records show that the petitioner received the required twin notices.
The first notice states:
"TO: MS. CARMELITA V. SANTOS                                    Company to lose its trust and confidence in you, which
DATE: 01 Feb 1991
FROM: A.O. VILLA-ABRILLE, JR.
SUBJECT: LETTER/MEMO – Jan. 31, 1991
xxx           xxx           xxx
"What can be readily seen and as accepted by you is the
fact that your personal checks were encashed in the
region/sales office which were returned by the bank
concerned to SAN MIGUEL CORPORATION due to "DAIF".
"Since all other circumstances mitigating or aggravating are
not yet established and there are conflicting statements as to
"authorized or unauthorized encashments", I have requested
24
for a formal investigation to be undertaken so as due
process is allowed.
xxx           xxx           xxx"36
The above notice was followed by a more detailed supplemental
notice, thus:
"TO: MS. CARMELITA V. SANTOS                                   
DATE: Feb. 22, 1991
FROM: E. S. Escalante
SUBJECT:
"Further to the memo dated February 1, 1991 of Mr. Alberto
O. Villa-Abrille, Jr., please be informed that an administrative
investigation will be conducted on February 27, 2:00 p.m. at
the Workshop Room I, 5th Floor, Hanston Building.
"As discussed, we hereby confirm our agreement that while
the administrative investigation is pending, you will be
holding office at the 19th Floor, PSB (SMQMS staff unit).
"You will be investigated for 'abuse of position by engaging
in highly irregular transactions to the detriment of the
company tantamount to loss of trust and confidence'. In view
of the nature of the offense, we agreed that you shall be
given duties and assignments as circumstances warrant.
xxx           xxx           xxx"37
The second notice, given after the conclusion of the administrative
investigation, enumerates the administrative offenses committed by
petitioner and informs her that her employment is terminated "for just
and valid cause," thus:
"TO: MS. CARMELITA V. SANTOS                                   
DATE: APR. 5, 1991
FROM: A.O. VILLA-ABRILLE, JR.
SUBJECT:
"Please be informed that based on its investigation, the
Investigating Panel found that you abused your position as
Finance Director by engaging in highly irregular transactions
to the detriment of the Company, giving ground for the
constitutes just cause for your dismissal pursuant to our
Policies and Procedures on Employee Conduct in relation to
Article 282 of the Labor Code, as follows:
1. You encashed, without prior approval from
proper Management authority, your following
personal checks:
Check No. Date of Encashment
UCPB #036708 December 12, 1990
UCPB #036726 December 27, 1990
UCPB #036737 January 19, 1991
xxx           xxx           xxx
 "Your personal check encashments are in clear violation of
Company policy as reiterated in the Cash Management
Memorandum dated September 6, 1989 which prohibits such
encashments.

"The investigating panel, therefore, found that your check

encashments are highly irregular transactions to the
detriment of the Company and which you perpetrated in
grave abuse of your position as Finance Director. It is the
recommendation of the Investigating Panel that you should
be dismissed from the service or terminated for just and valid
cause, with forfeiture of any and all benefits, including, but
not limited to, separation benefits.

"Conformably with the foregoing findings and

recommendations of the Investigating Panel, please be
informed that you are hereby terminated for just and valid
cause effective immediately, with forfeiture of any and all
benefits, including, but not limited to, separation benefits,
without prejudice to our right of filing criminal charges
against you.

(Sgd.)
A. O. VILLA-ABRILLE, JR."38

In sum, in dismissing petitioner, respondent SMC did not deprive her of

her right to due process. Her dismissal is with just cause. Her
encashment of her three personal checks at respondent's sales offices
violated respondent's trust and confidence reposed in her, even
without considering her other fifty personal checks she encashed at
respondent's sales offices. An employer cannot be compelled to retain
an employee who is guilty of acts inimical to the interests of the
employer.39 A company has the right to dismiss its employees as a
measure of protection, more so in the case of supervisors or personnel
occupying positions of responsibility. 40

WHEREFORE, the petition is DENIED. The assailed Decision of the

Court of Appeals in CA-G.R. SP 64223 dated July 4, 2001 and its
Resolution dated August 9, 2002 are AFFIRMED.

SO ORDERED.

Puno, (Chairman), Panganiban, Corona and Carpio-Morales,

JJ., concur.

25
G.R. No. 166379 October 20, 2005
LAKPUE DRUG, INC., LA CROESUS PHARMA, INC., TROPICAL
BIOLOGICAL PHILS., INC. (all known as LAKPUE GROUP OF
COMPANIES) and/or ENRIQUE CASTILLO, JR., Petitioners,
vs.
MA. LOURDES BELGA, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Before us is a petition for review of the July 28, 2004 Decision 1 of the
Court of Appeals in CA-G.R. SP No. 80616 which reversed and set
aside the April 14, 2003 Decision2 of the National Labor Relations
Commission (NLRC) in NLRC NCR 00-09-04981-01; and its December
17, 2004 Resolution3 denying the motion for reconsideration.
Petitioner Tropical Biological Phils., Inc. (Tropical), a subsidiary of
Lakpue Group of Companies, hired on March 1, 1995 respondent Ma.
Lourdes Belga (Belga) as bookkeeper and subsequently promoted as
assistant cashier. On March 19, 2001, Belga brought her daughter to
the Philippine General Hospital (PGH) for treatment of broncho-
pneumonia. On her way to the hospital, Belga dropped by the house of
Marylinda O. Vegafria, Technical Manager of Tropical, to hand over the
documents she worked on over the weekend and to give notice of her
emergency leave.
While at the PGH, Belga who was pregnant experienced labor pains
and gave birth on the same day. On March 22, 2001, or two days after
giving birth, Tropical summoned Belga to report for work but the latter
replied that she could not comply because of her situation. On March
30, 2001, Tropical sent Belga another memorandum ordering her to
report for work and also informing her of the clarificatory conference
scheduled on April 2, 2001. Belga requested that the conference be
moved to April 4, 2001 as her newborn was scheduled for check-up on
April 2, 2001. When Belga attended the clarificatory conference on
April 4, 2001, she was informed of her dismissal effective that day.
Belga thus filed a complaint with the Public Assistance and Complaint
Unit (PACU) of the Department of Labor and Employment (DOLE).
Attempts to settle the case failed, hence the parties brought the case
before the NLRC-NCR.
Tropical, for its part, averred that it hired Belga on March 1, 1995 as a
bookkeeper and later promoted to various positions the last of which
was as "Treasury Assistant". Tropical claimed that this position was not
merely clerical because it included duties such as assisting the cashier
in preparing deposit slips, bills purchased, withdrawal slips, provisional
receipts, incoming and outgoing bank transactions, postdated checks,
supplier’s checklist and issuance of checks, authorities to debit and
doing liaison work with banks.
Tropical also alleged that Belga concealed her pregnancy from the
company. She did not apply for leave and her absence disrupted
Tropical’s financial transactions. On March 21, 2001, it required Belga
to explain her unauthorized absence and on March 30, 2001, it
informed her of a conference scheduled on April 2, 2001. Tropical
claimed that Belga refused to receive the second memorandum and
did not attend the conference. She reported for work only on April 4,
2001 where she was given a chance to explain.
On April 17, 2001, Tropical terminated Belga on the following grounds:
(1) Absence without official leave for 16 days; (2) Dishonesty, for
deliberately concealing her pregnancy; (3) Insubordination, for her
deliberate refusal to heed and comply with the memoranda sent by the
Personnel Department on March 21 and 30, 2001 respectively.4
26
The Labor Arbiter ruled in favor of Belga and found that she was
illegally dismissed, thus:
WHEREFORE, the termination of complainant is hereby declared
illegal. ACCORDINGLY, she should be reinstated with full backwages,
which as of May 31, 2002, now amounts to P122, 248.71.
Ten (10%) percent of the total monetary award as attorney’s fees is
likewise ordered.
SO ORDERED.5
Tropical appealed to the NLRC, which reversed the findings of the
labor arbiter in its Decision dated April 14, 2003, thus:
WHEREFORE, in the light of the foregoing, the assailed Decision is
REVERSED and SET ASIDE. We thereby render judgment:
(1) declaring complainant-appellee’s dismissal valid; and
(2) nullifying complainant-appellee’s monetary claims.
SO ORDERED.6
Upon denial of the motion for reconsideration on September 24,
2003,7 Belga filed a petition for certiorari with the Court of Appeals
which found in favor of Belga, thus:
WHEREFORE, premises considered, the Decision promulgated on
April 14, 2003 and the Resolution promulgated on September 24, 2003
of the public respondent National Labor Relations Commission are
hereby REVERSED and SET ASIDE. The decision of the Labor Arbiter
dated June 15, 2002 is hereby REINSTATED.
SO ORDERED.8
Hence, Tropical filed the instant petition claiming that:
I.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR IN HOLDING THAT RESPONDENT WAS ILLEGALLY
DISMISSED.
II.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR IN DISREGARDING THE FINDINGS OF THE NATIONAL
LABOR RELATIONS COMMISSION.9
The petition lacks merit.
Tropical’s ground for terminating Belga is her alleged concealment of
pregnancy. It argues that such non-disclosure is tantamount to
dishonesty and impresses upon this Court the importance of Belga’s
position and the gravity of the disruption her unexpected absence
brought to the company. Tropical also charges Belga with
insubordination for refusing to comply with its directives to report for
work and to explain her absence.
Tropical cites the following paragraphs of Article 282 of the Labor Code
as legal basis for terminating Belga:
Article 282. Termination by employer. — An employer may terminate
an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work;
....
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative; ....
We have defined misconduct as a transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful
in character, and implies wrongful intent and not mere error in
judgment. The misconduct to be serious must be of such grave and
aggravated character and not merely trivial and unimportant. Such
misconduct, however serious, must, nevertheless, be in connection
with the employee’s work to constitute just cause for his separation. 10
In the instant case, the alleged misconduct of Belga barely falls within
the situation contemplated by the law. Her absence for 16 days was
justified considering that she had just delivered a child, which can
hardly be considered a forbidden act, a dereliction of duty; much less
does it imply wrongful intent on the part of Belga. Tropical harps on the
alleged concealment by Belga of her pregnancy. This argument,
however, begs the question as to how one can conceal a full-term
pregnancy. We agree with respondent’s position that it can hardly
escape notice how she grows bigger each day. While there may be
instances where the pregnancy may be inconspicuous, it has not been
sufficiently proven by Tropical that Belga’s case is such.
Belga’s failure to formally inform Tropical of her pregnancy can not be
considered as grave misconduct directly connected to her work as to
constitute just cause for her separation.
The charge of disobedience for Belga’s failure to comply with the
memoranda must likewise fail. Disobedience, as a just cause for
termination, must be willful or intentional. Willfulness is characterized
by a wrongful and perverse mental attitude rendering the employee’s
act inconsistent with proper subordination. 11 In the instant case, the
memoranda were given to Belga two days after she had given birth. It
was thus physically impossible for Belga to report for work and explain
her absence, as ordered.
Tropical avers that Belga’s job as Treasury Assistant is a position of
responsibility since she handles vital transactions for the company. It
adds that the nature of Belga’s work and the character of her duties
involved utmost trust and confidence.
Time and again, we have recognized the right of employers to dismiss
employees by reason of loss of trust and confidence. However, we
emphasize that such ground is premised on the fact that the employee
concerned holds a position of responsibility or trust and
confidence.12 In order to constitute a just cause for dismissal, the act
complained of must be "work-related" such as would show the
employee concerned to be unfit to continue working for the
employer.13 More importantly, the loss of trust and confidence must be
based on the willful breach of the trust reposed in the employee by his
employer. A breach of trust is willful if it is done intentionally, knowingly
and purposely, without justifiable excuse, as distinguished from an act
done carelessly, thoughtlessly, heedlessly or inadvertently. 14
Belga was an assistant cashier whose primary function was to assist
the cashier in such duties as preparation of deposit slips, provisional
receipts, post-dated checks, etc. As correctly observed by the Court of
Appeals, these functions are essentially clerical. For while ostensibly,
the documents that Belga prepares as Assistant Cashier pertain to her
employer’s property, her work does not call for independent judgment
27
or discretion. Belga simply prepares the documents as instructed by
her superiors subject to the latter’s verification or approval. Hence, her
position cannot be considered as one of responsibility or imbued with
trust and confidence.
Furthermore, Tropical has not satisfactorily shown how and to what
extent it had suffered damages because of Belga’s absences. For
while it may be true that the company was caught unprepared and
unable to hire a temporary replacement, we are not convinced that
Belga’s absence for 16 days has wreaked havoc on Tropical’s
business as to justify her termination from the company. On the other
hand, it is undisputed that Belga has worked for Tropical for 7 years
without any blemish on her service record. In fact, the company
admitted in its petition that she "has rendered seven (7) years of
service in compliance with [the company’s] rules". 15 And her fidelity to
her work is evident because even in the midst of an emergency, she
managed to transmit to the company the documents she worked on
over the weekend so that it would not cause any problem for the
company.
All told, we find that the penalty of dismissal was too harsh in light of
the circumstances obtaining in this case. While it may be true that
Belga ought to have formally informed the company of her impending
maternity leave so as to give the latter sufficient time to find a
temporary replacement, her termination from employment is not
commensurate to her lapse in judgment.
Even assuming that there was just cause for terminating Belga, her
dismissal is nonetheless invalid for failure of Tropical to observe the
twin-notice requirement. The March 21, 2001 memorandum merely
informed her to report for work and explain her absences. The March
30, 2001 memorandum demanded that she report for work and attend
a clarificatory conference. Belga received the first memorandum but
allegedly refused to receive the second.
In Electro System Industries Corporation v. National Labor Relations
Commission,16 we held that, in dismissing an employee, the employer
has the burden of proving that the worker has been served two notices:
(1) one to apprise him of the particular acts or omissions for which his
dismissal is sought, and (2) the other to inform him of his employer’s
decision to dismiss him. The first notice must state that the dismissal is
sought for the act or omission charged against the employee,
otherwise the notice cannot be considered sufficient compliance with
the rules. It must also inform outright that an investigation will be
conducted on the charges particularized therein which, if proven, will
result to his dismissal. Further, we held that a notation in the notice that
the employee refused to sign is not sufficient proof that the employer
attempted to serve the notice to the employee.
An employee who was illegally dismissed from work is 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.17 Thus, Belga is entitled to be reinstated to her former or
equivalent position and to the payment of full backwages from the time
she was illegally dismissed until her actual reinstatement.
WHEREFORE, the instant petition is DENIED. The July 28, 2004
Decision of the Court of Appeals in CA-G.R. SP No. 80616 and its
December 17, 2004 Resolution are AFFIRMED in toto.
SO ORDERED.