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Mercado v. AMA Computer College, G.R. No.

183572, April 13, 2010 FACTS: Five former faculty members of AMA Computer College in Paraaque City executed individual Teachers Contracts for each of the trimesters they were engaged to teach. For the school year 2000-2001, when AMACC implemented new faculty screening guidelines, the petitioners failed to obtain a passing rating based on the performance standards. Thus, AMACC did not give them any salary increase. Due to this, they filed a complaint for underpayment of wages. Consequently, they were dismissed as their contracts have expired & were not renewed. The Labor Arbiter ruled that they had been illegally dismissed. The NLRC affirmed the LAs decision. In addition, however, it observed that the applicable law is Section 92 of the Manual of Regulations for Private Schools (which mandates a probationary period of nine consecutive trimesters of satisfactory service for academic personnel in the tertiary level where collegiate courses are offered on a trimester basis), not Article 281 of the Labor Code (which prescribes a probationary period of six months) as the LA ruled. Despite this, the NLRC still affirmed the LAs finding of illegal dismissal on the basis of standards that were only introduced near the end of their probationary period and not at the time of engagement. The CA dismissed the action for illegal dismissal ruling that under the Manual for Regulations for Private Schools, a teaching personnel in a private educational institution (1) must be a full time teacher; (2) must have rendered three consecutive years of service; and (3) such service must be satisfactory before he or she can acquire permanent status. Since they had not completed three (3) consecutive years of service (i.e. six regular semesters or nine consecutive trimesters of satisfactory service) and were still within their probationary period, then they cannot acquire permanent status. The non-renewal of contract is a valid management prerogative. ISSUE: Whether or not the dismissal is valid. RULING: AMACC failed to prove by substantial evidence that there was just cause for the non-renewal of the petitioners contracts. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. On the matter of probationary period, Section 92 of these regulations provides: Section 92. Probationary Period. Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. Other than on the period, the following quoted portion of Article 281 of the Labor Code still fully applies: The services of an employee who has been engaged on a probationary basis may be terminated for a just cause when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teachers performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties

may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year since it would be the third school year of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. The school, however, cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Article 281 of the Labor Code. Given the clear constitutional and statutory intents, we cannot but conclude that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. While we can grant that the standards were duly communicated to the petitioners and could be applied beginning the 1st trimester of the school year 2000-2001, glaring and very basic gaps in the schools evidence still exist. The exact terms of the standards were never introduced as evidence; neither does the evidence show how these standards were applied to the petitioners. Hence, the dismissal was illegal.

57. Pantoja vs. SCA Hygiene Products Corp., G.R. No. 163554, April 23, 2010 Facts: SCA Hygiene Products Corp. ( SCA Hygiene for short), a corporation engaged in sale, making and distribution of tissue products and industrial paper, hired Pantoja on March 1987 as back tender taking charge of operations in one of SCA Hygienes mill ( Paper Mill No.4).On March 1999, Pantoja received a Notice of Transfer offering him a position at Paper Mill No. 5 under the same terms and conditions of employment for an anticipated shutdown of Paper Mill No.4 to streamline and phase out the companys industrial paper manufacturing operations in Paper Mill No.4 due to financial difficulties brought about by the low volume of sales and orders for industrial paper products. But Pantoja (and some others offered with transfers ) refused to be transferred of which his services were terminated by reason of redundancy of position. Pantoja then received separation pay (which was handsomely over and above what was provided by law) and executed a release and quitclaim in the corps favor. However, on June 2000, Pantoja filed a complaint for illegal dismissal against SCA Hygiene for lack of valid cause. Pantoja interposed that no permanent shutdown of Paper Mill No. 4 due to its continuous operation since his termination, presenting in evidence Paper Mill Personnel Schedule for Mill No.4 for June, July and August 2000; thus, corp. was in bad faith trying to circumvent his tenurial security when no substantial reason exist. Labor Arbiter dismissed Pantojas complaint stating his rejection of transfer and receipt of the separation pay belie Pantojas illegal dismissal. On appeal by Pantoja, NLRC reversed the Arbiters decision stating the redundancy program is legally infirm on feigned shutdown of operations. On reconsideration by SCA Hygiene asseverating that on 1999 when Mill No.4 was shut down due to low production output, there was a necessity to occasionally run from time to time the machines only for the purpose of maintaining and preserving the same and does not mean that Paper Mill No. 4 continued to be operational. Yet, NLRC remain unpersuaded. On appeal by SCA Hygiene, CA reinstated Labor Arbiters decision. Issue: 1. Whether or not Pantoja was illegally dismissed

Ruling: Pantoja is not illegally dismissed. SCA Hygienes right of management prerogative was exercised in good faith. In International Harvester Macleod, Inc. v. Intermediate Appellate Court, the determination of the need to phase out a particular department and consequent reduction of personnel and reorganization as a labor and cost saving device is

a recognized management prerogative which the courts will not generally interfere with. Circumstances pointing good faith on SCA Hygienes part - the abolishment of Paper Mill No. 4 was a business judgment arrived at due to low demand for the production of industrial paper at the time. Despite an apparent reason to implement a retrenchment program as a cost-cutting measure, SCA Hygiene, did not outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an option to be transferred to posts of equal rank and pay. As can be seen, retrenchment was utilized by respondent only as an available option in case the affected employee would not want to be transferred. SCA Hygiene did not proceed directly to retrench. This, to our mind, is an indication of good faith on respondents part as it exhausted other possible measures other than retrenchment. Besides, the employers prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. Giving the workers an option to be transferred without any diminution in rank and pay specifically belie petitioners allegation that the alleged streamlining scheme was implemented as a ploy to ease out employees, thus, the absence of bad faith. No evidence, however, was presented to prove that there was continuous operation after the shutdown in the year 1999. On record, Paper Mill No. 4 resumed its operation in 2000 due to a more favorable business climate. The resumption of its industrial paper manufacturing operations does not, however, make respondents streamlining/reorganization plan illegal because, again, the abolishment of Paper Mill No. 4 in 1999 was a business judgment arrived at to prevent a possible financial drain at that time. As long as no arbitrary or malicious action on the part of an employer is shown, the wisdom of a business judgment to implement a cost saving device is beyond this courts determination. Work reassignment of an employee as a genuine business necessity is a valid management prerogative. Even though the transfer would not involve any diminution of rank and pay, still Pantoja refused the transfer and instead, accepted the separation pay voluntarily. The consideration for the quitclaim is credible and reasonable, the waiver represents a valid and binding undertaking. No force and duress attended in its execution. The corp. even gave Pantoja a separation pay more than what the law requires from respondent.

58. BPI v. NLRC, G.R. No. 179801, June 18, 2010 FACTS: Records show that respondent, Arambulo, was initially employed as Clerk in 1972 at Citytrust Banking Corporation, which eventually merged with the Bank of Philippine Islands (BPI). She later became Lead Teller, then as Sales Manager, and subsequently, as Bank Manager in BPI-San Pablo, Laguna Branch in 1996. On 4 October 2001, she was reprimanded for the improper handling and retention of a clients account. She was transferred to BPI Family Bank in Los Baos, Laguna on 21 November 2001. On 26 April 2002, a client of BPI-San Pablo, Laguna Branch requested for a certification of her savings account. Her balance reflected an amount less than the actual amount deposited. Hence, BPI conducted an investigation and discovered that its bank teller, Teotima Helen Azucena (Azucena) was making unauthorized withdrawals. A show cause memorandum was served to Azucena asking her to explain the unauthorized withdrawals. In her written response, Azucena implicated respondent, in that the latter, on many occasions, would make temporary cash borrowings and would return the money at the end of the day through withdrawals from her own or other clients accounts. There were times when respondent would fail to return the money withdrawn resulting in shortages on the part of Azucena. When respondent was transferred to Los Baos, Laguna, Azucena added that the same practice was continued by her son, Artie Arambulo. BPI conducted a thorough investigation and discovered that respondent had approved several withdrawals from various accounts of clients whose signatures were forged. The assistant branch manager of the said branch also imputed fault to Arambulo. Arambulo admitted that she prepared the unsigned withdrawal slips on the account of Mr. Vicente Amante (Mr. Amante) totalingP700,000.00 upon request of the latter. She also explained that she processed the withdrawal slips of

Mr. Emeterio Dikitan, with the latter signing later on, to expedite his transaction with the bank. She denied any knowledge with regard to the unfunded checks of Mr. Amante that were supposedly deposited to other depositors account. She argued that the posting is done by the teller and only amounts over P150,000.00 pass through her. BPI conducted a hearing and on January 13, 2003, Arambulo was served with notice of termination on the ground of LOSS OF TRUST AND CONFIDENCE for gross violation of policies and procedures. Arambulo filed a complaint for illegal dismissal. The NLRC and CA ruled that respondents dismissal for cause in accordance with the law. It was established that respondent had approved withdrawals which were later proven to be forged but ordered the payment of separation pay. ISSUE: WON ARAMBULO IS ENTITLED TO SEPARATION PAY. RULING: NO. (Court applied its ruling in Toyota vs NLRC) While as a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay, the Court has allowed in numerous cases the grant of separation pay or some other financial assistance to an employee dismissed for just causes on the basis of equity. In the leading case of Philippine Long Distance Telephone Co. v. NLRC, the Court stated that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. In granting separation pay to respondent, the NLRC and Court of Appeals both adhered to this jurisprudential precept and cleared respondent of bad faith. However, the succeeding case of Toyota Motor Phils. Corp. Workers Association v. NLRC reaffirmed the general rule that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code. Verily, it may not be amiss to emphasize that if an employee has been dismissed for a just cause under Article 282 of the Labor Code, he is not entitled to separation pay. In the instant case, respondent was dismissed on the ground of loss of trust and confidence. It is significant to stress that for there to be a valid dismissal based on loss of trust and confidence: the breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold a position of trust and confidence. It is the breach of this trust that results in the employers loss of confidence in the employee. The case of Aromin v. NLRC is in all fours. In said case, Aromin was the assistant vice-president of BPI when he was validly dismissed for loss of trust and confidence. Invoking the pronouncement in Toyota, the Court disallowed the payment of separation pay on the ground that Aromin was found guilty of willful betrayal of trust, a serious offense akin to dishonesty.

59. Maribago Bluewater Beach Resort v. Dual, G.R. No. 180660, July 20, 2010

FACTS: Petitioner Maribago is a corporation operating a resort hotel and restaurant in Barangay Maribago, Lapu-Lapu City. In 19953, it hired respondent Dual as waiter and promoted him later as outlet cashier of its Poolbar/Allegro Restaurant. Sometime in 2005, a group of Japanese guests and their companions dined at Allegro. Captain waiter Hiyas took their dinner orders comprising of six (6) sets of lamb and six (6) sets of fish. As per company procedure, Hiyas forwarded one copy of the order slip to the kitchen and another copy to respondent. Pursuant to the order slip, fourteen (14) sets of dinner were prepared by the chef. Hiyas and waiter Genaro Mission, Jr. served twelve (12) set dinners to the guests, and another two (2) sets to their guides free of charge (total of 14 sets of dinner). After dinner, the guests asked for their bill. Since Hiyas was attending to other guests, he gave a signal to Mission to give the bill. Mission asked respondent Dual for the sales transaction receipt and presented this to the guests. The guests paid the amount indicated on the receipt and thereafter left in a hurry. The receipt printed at 10:40 p.m. shows that only P3,036.00 was remitted by cashier Dual corresponding to six (6) sets of dinner. In view of the discrepancy between the order slip and the receipt issued, petitioner Maribago, through its Human Resource Development (HRD) manager, issued memoranda, requiring respondent Dual, Alvin Hiyas, Ernesto Avenido and Basilio Alcoseba to explain why they should not be penalized for violating House Rule 4.1 (dishonesty in any nature). During the clarificatory hearing, butcher Alegrado testified that waiter Alcoseba went to the butchery looking for the order slip for table no. 113. At around 9:45 p.m., waiter Alcoseba caused the alteration of the order slip to reflect that six (6) orders were cancelled. Alegrado allegedly asked Alcoseba if the cook was already aware of the cancellation, to which the latter answered "oo, kahibaw na" (yes, he is already aware). Alcoseba stated that he was not privy to the cancellation of orders since he was busy attending to his room service duty. He claims that - he saw the cancelled food orders at the waiter's station but insists that - he did not have any part in the alteration of the order slip. During the clarificatory hearing, however, he admitted that he altered the order slip by cancelling six (6) set dinners. After the investigation, respondent Dual was found guilty of dishonesty for his fabricated statements and for asking one of the waiters (Mission) to corroborate his allegations. He was terminated per memorandum dated 22 January 2005. Alcoseba was also terminated for dishonesty based on his admission that he altered the order slip. Dual filed a complaint for unfair labor practice, illegal dismissal, non-payment of 13th month and separation pay, and damages. The Labor Arbiter found that respondent's termination was without valid cause and ruled that respondent is entitled to separation pay; The NLRC set aside the Labor Arbiter's decision and dismissed the complaint for lack of merit, saying that complainant's act of depriving respondent of its lawful revenue is tantamount to fraud against the company which warrants dismissal from the service. Falsification of commercial documents as a means to malverse company funds constitutes fraud against the company; The Court of Appeals reversed the decision and resolution of the NLRC. Finding no sufficient valid cause to justify respondent's dismissal, the Court of Appeals ordered petitioner to pay respondent full backwages and separation pay. Petitioner places - the crux of the controversy - on the proven tampering of the transaction receipt which happened in respondent's workstation. Respondent, on the other hand, reiterates his story that the order slip was already altered when Mission gave it to him; that he was able to confirm the cancellation of some orders from Alcoseba and Hiyas; that the receipt he printed was based on the order slip for six (6) sets of dinner; that Mission gave him P3,100.00 as payment and he returned P64.00 as change.

ISSUE: Whether or not the court of appeals committed a grave and reversible error in reversing the national labor relations commission and directing petitioner to pay respondent full backwages from the time he was illegally dismissed, up to the finality of [its] decision and separation pay of one month salary for every year of service. In essence, the issue is whether the Court of Appeals erred in ruling that respondent was illegally dismissed. HELD: The law requires that an employer shall not terminate the services of an employee except for a just or authorized cause. Otherwise, an employee unjustly dismissed from work is entitled to reinstatement and full backwages. The law also requires the employer - to observe due process in termination cases. w In Agabon v. National Labor Relations Commission, 34cralaw we ruled that- violation of the employee's statutory right to due process makes the employer liable to pay indemnity in the form of nominal damages. The law further requires that the burden of proving the cause for termination rests with the employer.cra35 In this case, we are in agreement that petitioner's evidence proved that respondent is guilty of DISHONESTY and of stealing money entrusted to him as cashier. Instead of reporting P10,100.00 as payment by the guests for their dinner, respondent cashier only reported P3,036.00 as shown by the receipt which he admitted to have issued. The receipt which bears his name "NITO" was printed at "22:40" (10:40 p.m.) or 1 hour and 40 minutes after the guests had left at 9:00 p.m. Two other receipts were issued for the same amount at "22:39:55" and "22:40:01". Moreover, respondent's claim that - he received P3,100.00 only and gave Mission P64.00 as change is not shown by the receipt that he issued. The issued receipt does not show that change was given. In addition, the amount indicated in the receipt does not coincide with Dual's contention that only four (4) dishes were cancelled and two (2) dishes were given free of charge. If such were the case, then the amount charged to the guests should have been for eight (8) sets of dinner and not six (6) sets. As established during the clarificatory hearing, twelve (12) sets of dinner were served to guests and two (2) dinner sets were given to the tour guides free of charge. It is clearly indicated in the altered order slip that six (6) out of the twelve (12) sets of dinner were cancelled.

The allegation of Dual that - six (6) dinner sets were indeed cancelled as evidenced by the dishes he allegedly saw in the utensil station is negated by the testimonies of the kitchen staff (Chef Armand Galica, Butcher Alegrado and Dessert-in-charge John Marollano) that twelve (12) set meals were served and consumed. These testimonies coincide with the claim of waiters Hiyas and Mission that fourteen (14) sets of dinner were served. The serving of food eliminates the argument of cancellation. The alibi of cancellation has no leg to stand on. The standard operating procedure of Maribago dictates that in cases of cancellation, the order slip - has to be countersigned by the attending waiter (which in this case should have been Chief Waiter Hiyas) but such was not so in this case.

The foregoing facts - explain why Dual and Alcoseba tried twice to convince Mission to cover up their crime. They even asked Mission to take the fall by asking him to admit that he altered the order slip from twelve (12) sets of dinner to six (6) sets. In fine, what is damning to the cause of Dual - is the receipt which he admittedly issued. The receipt was issued long after the guests had left (9:00 p.m.) and after the alteration of the order slip (9:45 p.m.) was done. Such fact led us to the conclusion that - he consented to and participated in the anomaly. Respondent's acts constitute SERIOUS MISCONDUCT which is a just cause for termination under the law. THEFT committed by an employee is a valid reason for his dismissal by the employer. Although as a rule this Court leans over backwards to help workers and employees continue with their employment or to mitigate the penalties imposed on them, ACTS OF DISHONESTY - in the handling of company property, petitioner's income in this case, are a different matter.

Withal, the law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. The management also has its own rights, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined more often than not - toward the worker and upheld his cause - in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.

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