1. ART. 277 NEW PUERTO COMMERCIAL VS.

LOPEZ
FACTS:
New Puerto Commercial hired respondent Felix
Gavan (Gavan) as a delivery panel driver and
respondent Rodel Lopez (Lopez) as roving
salesman.
Petitioner Richard Lim is the operations manager of
New Puerto Commercial.
Under a rolling store scheme, petitioners assigned
respondents to sell goods stocked in a van on cash
or credit to the sari-sari stores of far-flung barangays
and municipalities outside Puerto Princesa City,
Palawan. Respondents were duty-bound to collect
the accounts receivables and remit the same upon
their return to petitioners store on a weekly basis.
Respondents filed a complaint for illegal dismissal
and non-payment of monetary benefits against
petitioners with the RD of DOLE.

4. petitioner failed to prove that they paid the 13mo pay

due to respondents. (pay respondents)
NLRC: AFFIRMED
1. gross misconduct: misappropriating
2. It noted that respondents never denied that
(1) they failed to surrender their collections to
petitioners, and (2) they stopped reporting
for work during the last week of October
2000
3. resp admitted misapp before the hearing officer
during concialiation conference.
CA: AFFIRMED
1. respondents were denied procedural due process
2. formal
investigation
of
respondents
for
misappropriation of company funds was a mere
afterthought
3. entitled to nominal damages for failure to comply with
twin reqts

Conciliation conference was held but the parties

failed to reach an amicable settlement

ISSUE
WON respondents were denied procedural due process
justifying the award of nominal damages

complaint was endorsed for compulsory arbitration at

the Regional Arbitration Branch of the NLRC

HELD:
YES

Nov 28, 2000- petitioners sent respondents notices

to explain why they should not be dismissed for
gross misconduct based on (1) the alleged
misappropriation of their sales collections, and (2)
their absence without leave for more than a month.
The notice also required respondents to appear
before petitioners lawyer on December 2, 2000 to
give their side with regard to the foregoing charges.
Respondents refused to attend said hearing.
Dec 6, 2000- Petitioners filed a complaint for 3
counts of estafa against respondents
Dec 7, 2000- Petitioners sent another set of notices
to attend hearing but resp failed to attend.
Dec 18, 2000- petitioners served notices of
termination on respondents on the grounds of gross
misconduct and absence without leave for more than
one month.
Feb 5, 2001- an info for estafa was filed
LA: DISMISSED (illegal dismissal)
1. there is substantial evidence tending to establish that
respondents committed the misappropriation of their
sales collections from the rolling store business
2. These acts constituted serious misconduct and
formed sufficient bases for loss of confidence which
are just causes for termination.
1. 3.The records also showed that respondents were
given opportunities to explain their side
3. substantive and procedural due process both
complied. dismisall is valid.

When the requirements of procedural due process

are satisfied, the award of nominal damages is
improper.
the dismissal was valid because it was based on just
causes (i.e., grave misconduct and loss of trust and
confidence) due to respondents misappropriation of
their sales collections.

In termination proceedings of employees, procedural due

process consists of the twin requirements of notice and
hearing. The employer must furnish the employee with two
written notices before the termination of employment can be
effected:
(1) the first apprises the employee of the particular acts or
omissions for which his dismissal is sought; and
(2) the second informs the employee of the employers
decision to dismiss him. The requirement of a hearing is
complied with as long as there was an opportunity to be
heard, and not necessarily that an actual hearing was
conducted
An employees right to be heard in termination cases under
Article 277 (b) as implemented by Section 2 (d), Rule I of the
Implementing Rules of Book VI of the Labor Code should be
interpreted in broad strokes. It is satisfied not only by a formal
face to face confrontation but by any meaningful opportunity
to controvert the charges against him and to submit evidence
in support thereof.
A hearing means that a party should be given a chance to
adduce his evidence to support his side of the case and that
the evidence should be taken into account in the adjudication
of the controversy. To be heard does not mean verbal

argumentation alone inasmuch as one may be heard just as

effectively through written explanations, submissions or
pleadings. Therefore, while the phrase ample opportunity to
be heard [in Article 277 of the Labor Code] may in fact
include an actual hearing, it is not limited to a formal hearing
only. In other words, the existence of an actual, formal trialtype hearing, although preferred, is not absolutely
necessary to satisfy the employee's right to be heard
The mere fact that the notices were sent to respondents after
the filing of the labor complaint does not, by itself, establish
that the same was a mere afterthought.
The surrounding circumstances of this case adequately
explain why the requirements of procedural due process
were satisfied only after the filing of the labor complaint.
Sometime in the third week of October 2000, petitioners
received information that respondents were not remitting
their sales collections to the company.
Thereafter,
petitioners initiated an investigation by sending one of their
trusted salesmen, Bagasala, in the route being serviced by
respondents. To prevent a possible cover up, respondents
were temporarily reassigned to a new route to service.
Subsequently, respondents stopped reporting for work after
they got wind of the fact that they were being investigated for
misappropriation of their sales collection
respondents filed the subject illegal dismissal case to preempt the outcome of the ongoing investigation.

Bagasala returned from his month-long investigation in the

far-flung areas previously serviced by respondents and
reported that respondents indeed failed to remit P2,257.03 in
sales collections.
As a result, on November 28, 2000, termination proceedings
were commenced against respondents by sending notices to
explain with a notice of hearing scheduled on December 2,
2000. As narrated earlier, respondents failed to give their
side despite receipt of said notices. Petitioners sent another
set of notices to respondents on December 7, 2000 to attend
a hearing on December 15, 2000 but respondents again
refused to attend. Thus, on December 18, 2000, petitioners
served notices of termination on respondents for gross
misconduct in misappropriating their sales collections and
absence without leave for more than a month.
the award of nominal damages by the appellate court is
improper.
it cannot be concluded that the sending of the notices and
setting of hearings were a mere afterthought because
petitioners were still awaiting the report from Bagasala when
respondents pre-empted the results of the ongoing
investigation by filing the subject labor complaint. For this
reason, there was sufficient compliance with the twin
requirements of notice and hearing even if the notices were
sent and the hearing conducted after the filing of the labor
complaint.
SC: REVERSED AND SET ASIDE

.2. ART. 279 UNITED LABORATORIES VS. DOMINGO

FACTS:
Unilab is a prominent domestic corporation engaged in the
manufacture, sale, marketing and distribution of
pharmaceutical products
Respondents were former employees of Unilab assigned to
the Distribution Accounting Department (DAD) servicing all
the accounting requirements of Unilabs sixteen (16)
provincial depotsfourteen (14) distribution centers and two
(2) area officesspread nationwide.
2001, under a Physical Distribution Master Plan
(PDMP), Unilab consolidated its finished goods
inventories and logistics activities (warehousing,
order processing and shipping) into one distribution
center located in Metro Manila.
As a result, Unilab closed down its sixteen (16)
provincial depots.
The job functions of the employees working thereat
were declared redundant and their positions were
abolished.
Unilab gave the redundant employees a separation
package of two and a half (2) months pay for every
year of service.
7 January 2002: respondents REQUESTED for their
separation or retirement from service under a separation
PACKAGE SIMILAR OR EQUIVALENT to that of the
redundant employees in the provincial depots. (Bagong Sibol
Program)
Respondents were keen on retiring and receiving 2 months
pay for every year of service, and all the other benefits which
Unilab had extended to the redundant employees in the
provincial depots.
their positions are similarly situated [to] the retired
employees of [Unilabs] distribution centers under
the principle that things that are alike should be
treated alike since they also hold the position of
distribution personnel.
UNILAB contentions: DENIED
1. The PDMP is not a retirement program but a cost
restructuring measure which resulted in the
redundancy of the job functions of the employees
working in the provincial depots
2. No Bagong Sibol Program, United Retirement Plan
(URP)
3. Unilab implemented a Shared Services Policy (SSP)
o -which consolidated and centralized all
accounting functions of the UNILAB Group
of Companies
o -accounting services and requirements of
the UNILAB Group of Companies, were
merged into a single pool, and performed in
Unilabs main office.
o After the closure of the provincial depots,
respondents were transferred and reassigned to the accounting work pool
pursuant to the SSP

RESP:
1. Constructive Dismissal nonpayment/underpayment
of separation pay, damages and attorneys fees
against Unilab
2. availment of retirement benefits equivalent to the
separation package of the redundant employees.
3. BUT Cortez
AND respondents Domingo and
Remigio remained working at UNILAB.
LA: DISMISSED
1. pay separation pay
NLRC: AFFIRMED
*Remegio and Cortez
-amicable settlement (full settlement and quitclaim)
CA: REVERSED
1. Constructively dismissed
2. reinstate or sep pay
3. full backwages from abolition up to finality
4. did not drop Remegio
ISSUE: WON there is constructive dismissal
HELD:
NO
The closing of the provincial depots did not result in the
abolition of respondents position as accountants. While
they had assignments pertaining to the provincial depots,
they did not perform goods distribution or warehousing
functions. They were accountants and their work as such
was appropriately covered by the SSP that transferred all
accounting functions to the Finance Division of Unilab.
PDMP was a cost restructuring strategy program
and that the SSP was a recognized management
prerogative.
the legitimacy of Unilabs plan and policy was not
questioned by the respondents.
They wanted to avail of the separation package for
employees declared redundant because of the
PDMP. They refused their transfer to the centralized
Financial Division as planned under the SSP.
When they were not included among those
considered as redundant employees, they wanted
their transfer to the Financial Division declared as
constructive dismissal, and Unilab pronounced
liable for damages and attorneys fees, aside from
non-payment of separation pay.
CONSTRUCTIVE DISMISSAL
Constructive dismissal is a derivative of dismissal
without cause; an involuntary resignation, nay, a
dismissal in disguise.
It occurs when there is cessation of work because
continued employment is rendered impossible,
unreasonable, or unlikely as when there is a
demotion in rank or diminution in pay or when a clear
discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee
leaving the latter with no other option but to quit.
dismissal without cause is prohibited because of the
Constitutional security of tenure of workers.

 It should be remembered, however, that the

entitlement of workers to security of tenure is
correlative to the right of enterprises to reasonable
returns on investments
The right of employees to security of tenure does not
give them vested rights to their positions to the
extent of depriving management of its prerogative to
change their assignments or to transfer them.
Managerial prerogatives, on the other hand, are
subject to limitations provided by law, collective
bargaining agreements, and general principles of
fair play and justice.
Simply put, security of tenure from which springs the concept
of constructive dismissal is not an absolute right. It cannot
be pleaded to avoid the transfer or assignment of employees
according to the requirements of the employers business.
Such transfer or assignment becomes objectionable only
when it is not for reasonable returns on investments, and
for expansion and growth which are constitutionally
recognized employers rights, but is sought merely as a
convenient cover for oppression.
Unilab instituted a cost restructuring strategy program called
the Physical Distribution Master Plan (PDMP) which resulted
in the closure of [Unilabs] provincial depots
As a necessary consequence of the closure of [Unilabs]
provincial depots, the positions affected became redundant
and were declared to be so
the personnel affected by the redundancy were separated
from the service and paid a generous separation pay, i.e., 2.5
months pay for every year of service.

The resp were all accountants and/or performing accounting

functions who, with the sole exception of complainant Cortez
and prior to the implementation of the PDMP, were all
assigned to the Distribution Division.
the abolition of departments or positions in the
company is one of the recognized management
prerogatives.
it is the prerogative of the employer to transfer and
reassign employees for valid reasons and according
to the requirements of its business. There is
therefore nothing irregular or illegal in the transfer of
[respondents] to the Finance Division after [Unilab]
came up with its Shared Services Policy.
Retirement and redundancy, while both resulting in
the cessation of employment relations, are two
entirely different things
Petitioner has an elaborate Retirement Plan that lists
all possible benefits for retiring and resigning
employees, and, significantly to this case, a separate
article on involuntary separation due to redundancy
The requirements for, and the benefits from, the several and
different manners of termination of employment are,
naturally, also distinct and different. The employees cannot
mix and match rights and obligations which are set and
settled by law or agreement of the parties. This is particularly
evident in this case where respondents demanded either the
redundancy of their services in the face of the employees
continuing need for such services, or the benefits from
redundancy upon their retirement or resignation
SC SETASIDE

3. ART. 279 NATIONWIDE SECURITY VS. VALDERAMA

FACTS:
Valderama was hired by petitioner as security guard
on April 18, 2002.
He was assigned at the Philippine Heart Center
(PHC), Quezon City, until his relief on January 30,
2006
Valderama was not given any assignment thereafter
August 2, 2006, he filed a complaint for constructive
dismissal and nonpayment of 13th month pay, with
prayer for damages against petitioner and Romeo
Nolasco.
PETITIONER
alleged voluntary resignation
committed serious violations of the security rules in
the workplace.
was charged with conduct unbecoming for which he
was required to explain.
failed to attend a mandatory seminar.
suspended for 7 days
were made to explain their failure to report for duty
without informing the office despite the instruction
during their formation day but resp challenged him
abandonment
RESPONDENT
relieved from employment

terminated

nor

did

The onus of proving that there is no post available to

which the security guard can be assigned rests on
the employer
When a security guard is placed on a "floating
status," he does not receive any salary or financial
benefit provided by law.
Due to the grim economic consequences to the employee,
the employer should bear the burden of proving that there are
no posts available to which the employee temporarily out of
work can be assigned.
floating status for more than 6 months.
relieved from January until August
temporary inactivity or floating status of security
guards should continue only for six months.
Otherwise, the security agency concerned could be
liable for constructive dismissal.
The failure of petitioner to give respondent a work
assignment beyond the reasonable six-month period makes
it liable for constructive dismissal.

LA: CONSTRUCTIVE DISMISSAL

1. involuntary resignation
2. burden of proof: employer failed to discharge
3. retraining course
4. reinstatement plus backwages plus 13mo pay
NLRC: MODIFIED
1. neither constructively
voluntarily resign.
2. deleted backwages

An employee has the right to security of tenure, but

this does not give him a vested right to his position
as would deprive the company of its prerogative to
change his assignment or transfer him where his
service, as security guard, will be most beneficial to
the client.

he

CA: REVERESED AND SET ASIDE

1. constructive dismissal
2. floating status for more than six (6) months
3. retraining course
5. backwages
ISSUE: WON there is constructive dismissal
HELD:
YES
In cases involving security guards, a relief and
transfer order in itself does not sever employment
relationship between a security guard and his
agency.

If there is a surplus of security guards caused by lack of

clients or projects, the security agency may resort to
retrenchment upon compliance with the requirements set
forth in the Labor Code. In this way, the security agency will
not to be held liable for constructive dismissal and be
burdened with the payment of backwages.
did not present resignation letter
March 2006: required resp to report for reassignment
Feb 2006: alleged resignation

Petitioner capitalizes on the withdrawal of the cash and

firearm bonds by respondent. It contends that the withdrawal
of bonds sufficiently proved respondents intention to
terminate his employment contract with petitioner.
cash bond and firearm bond are never withdrawable for as
long as the security guard intends to remain an employee of
the security agency.=not binding/not applicable

SC AFFIRMED

4. ART. 279 (BACKWAGES VS. SEPARATION PAY) BORDOMEO VS. CA

FACTS:
IPI Employees Union-Associated Labor Union (Union),
representing the workers, had a bargaining deadlock with the
IPI management. This deadlock resulted in the Union staging a
strike and IPI ordering a lockout.
after assuming jurisdiction over the dispute, DOLE Secretary
Ruben D. Torres
No ULP, NO illegal strike, enter into new CBA, union =SEBA
MR
Ordering the International Pharmaceutical Inc. to reinstate to
their former positions with full backwages reckoned from 8
December 1989 until actually reinstated without loss of seniority
rights and other benefits the "affected workers"
IP filed a petition for certiorari
--> dismissed
no grave abuse of discretion had attended the issuance of
the assailed decisions
--> became final
Union moved in the National Conciliation and Mediation
Board in DOLE for their execution.

Regional Director Alan M. Macaraya of DOLE Region VII

issued a Notice of Computation/Execution
--> directed parties to submit computations
--> only the computation from complainants including those that
were not specifically mentioned in the Supreme Court decision
were submitted and received by this office.
Upon verification of the Computation
--> management is hereby directed to pay the employees
including those that were not specifically mentioned in the
decision but are similarly situated, the aggregate amount of
(P43,650,905.87) involving (962) employees
Regional Director Macaraya increased the number of the
workers to be benefitted to 962 employees classified into six
groups and allocated to each group a share in the
P43,650,905.87 award,
May 24, 1995 writ of execution was issued
for the amount of P4,162,361.50 (which covered monetary
claims corresponding to the period from January 1, 1989 to
March 15, 1995) in favor of the 15 employees represented by
Atty. Arnado,
another writ of execution
amount of P1,200,378.92 in favor of the second group of
employees. Objecting to the reduced computation for them,
however, the second group of employees filed a Motion
Declaring the Writ of Execution dated June 5, 1995 null and
void.
IPI challenged the May 24, 1995 writ of execution
DOLE Secretary Jose Brillante, recalled and quashed the
May 24, 1995 writ of execution, and declared and considered
the case closed and terminated.
15 employees appealed

DOLE secretary granted.

reinstated the May 24 writ of execution
--> subject to the deduction of the sum of P745,959.39 already
paid pursuant to quitclaims from the award of P4,162,361.50.22
Secretary Quisumbing declared the quitclaims executed by
the employees on December 2, 3, and 17, 1993 without the
assistance of the proper office of the DOLE unconscionable for
having been entered into under circumstances showing vitiation
of consent;
ruled that the execution of the quitclaims should not
prevent the employees from recovering their
monetary claims under the final and executory
decisions dated December 26, 1990 and
December 5, 1991, less the amounts received
under the quitclaims.
IPI moved for a reconsideration.
Pending IPI MR
--> Regional Director Macaraya issued a writ of execution in
favor of the 15 employees represented by Atty. Arnado to
recover P3,416,402.10 pursuant to the order dated August 27,
1996 of Secretary Quisumbing.
--> sheriff garnished the amount of P3,416,402.10 out of the
funds of IPI with China Banking Corporation, which released the
amount.
--> Hence, on September 11, 1996, the 15 employees
represented by Atty. Arnado executed a Satisfaction of
Judgment and Quitclaim/Release upon receipt of their
respective portions of the award, subject to the reservation of
their right to claim "unsatisfied amounts of separation pay as
well as backwages reckoned from the date after 15 March 1995
and up to the present, or until separation pay is fully paid."
Notwithstanding the execution of the satisfaction of judgment
and quitclaim/release
-Atty. Arnado still filed an omnibus motion not only in behalf of
the 15 employees but also in behalf of other employees named
in the notice of computation/execution, with the exception of the
second group, seeking another writ of execution to recover the
further sum of P58,546,767.83.27
The employees belonging to the second group reiterated their
Motion Declaring the Writ of Execution dated June 5, 1995 null
and void, and filed on May 15, 1996 a Motion for Issuance of
Writ, praying for another writ of execution based on the
computation by Regional Director Macaraya.
Secretary Quisumbing, affirming his August 27, 1996 order
-denied IPIs Motion for Reconsideration for being rendered
moot and academic by the full satisfaction of the May 24, 1995
writ of execution.
-denied Atty. Arnados omnibus motion for lack of merit; and
dealt with the issue involving the June 5, 1995 writ of execution
issued in favor of the second group of employees, which the
Court eventually resolved
Atty. Arnado filed a Motion for Execution with the DOLE
Regional Office demanding the following amounts from IPI, to
wit:

For Roberto Bordomeo and 14 others P4,990,401.00

The rest of complainants 33,824,820.41
Total P 38,815,221.41

DOLE Secretary Patricia Sto. Tomas Order

affirming the order issued on March 27, 1998, and
declaring that the full execution of the order of March
27, 1998 "completely CLOSED and TERMINATED this
case."
Petitioners Appealed to CA
--> dismissed = case between petitioners and private
respondent IPI have long attained finality.
PETITIONERS
six groups of employees classified under the April 12, 1995
notice of computation/execution issued by Regional Director
Macaraya, only the first two groups, that is, the 15 employees
initially represented by Atty. Arnado; and the nine salesmen led
by Geronimo S. Banquirigo, had been granted a writ of
execution.
May 24, 1995 writ of execution issued in favor of the first
group of employee partially satisfied because no backwages
or separation pay from March 16, 1995 onwards had yet been
paid to them;
that the reduced award granted to the second group of
employees was in violation of the April 12, 1995 notice of
computation/execution;
that no writ of execution had been issued in favor of the other
groups of employees; and that DOLE Secretary Sto. Tomas
thus committed grave abuse of discretion in refusing to fully
execute the December 26, 1990 and December 5, 1991 orders.
IPI
--> petition for certiorari not proper remedy
--> the more appropriate remedy being a petition for review on
certiorari; that a petition for review on certiorari should have
been filed within 15 days from receipt of the denial of the motion
for reconsideration, as provided in Section 1 and Section 2 of
Rule 45; -->and that the petition must also be outrightly
dismissed for being filed out of time.
ISSUE: WON THE PETITIONERS ARE STILL ENTITLED TO
SEPARATION PAY AND BACKWAGES (WRIT OF
EXECUTION PARTIALLY SATISIFED?)
HELD: NO. THEIR DEMAND HAS BEEN FULLY COMPLIED
WITH.
SC
--> appeal by petition for review on certiorari under Rule 45 of
the Rules of Court, to be taken to this Court within 15 days from
notice of the judgment or final order raising only questions of
law = PROPER REMEDY
*two writs of execution were NOT only partially satisfied.
the two writs of execution issued were the one for
P4,162,361.50, later reduced to P3,416,402.10, in
favor of the 15 employees represented by Atty. Arnado,
and that for P1,200,378.92 in favor of the second group
of employees led by Banquerigo.

15 EMPLOYEES received P3,416,402.10 through the release

of the garnished deposit of IPI at China Banking Corporation.
--> then they executed satisfaction of judgment and
quitclaim/release
--> DOLE secretary basis for the decision that writ of
execution was fully satisfied case completed and terminated.
BUT STILL
--> 15 employees demand payment of their separation pay and
backwages from March 16, 1995 onwards pursuant to their
reservation reflected in the satisfaction of judgment and
quitclaim/release they executed
SC DEMAND OF 15 EMPLOYEE LACKED BASIS
DECISION OF DOLE SEC --> required IPI to reinstate the
affected workers to their former positions with full backwages
reckoned from December 8, 1989 until actually reinstated
without loss of seniority rights and other benefits
--> REINSTATEMENT NO LONGER POSSIBLE - separation
pay was instead paid
-- "separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the
parties. Separation pay in lieu of reinstatement may likewise be
awarded if the employee decides not to be reinstated.
the employment of the 15 employees or the possibility of
their reinstatement terminated by March 15, 1995
claim for separation pay and backwages beyond March 15,
1995 would be unwarranted.
--> The computation of separation pay and backwages should
not go beyond the date when they were deemed to have been
actually separated from their employment, or beyond the date
when their reinstatement was rendered impossible.
"The basis for the payment of backwages is different from that
for the award of separation pay. Separation pay is granted
where reinstatement is no longer advisable because of strained
relations between the employee and the employer. Backwages
represent compensation that should have been earned but
were not collected because of the unjust dismissal. The basis
for computing backwages is usually the length of the
employees service while that for separation pay is the actual
period when the employee was unlawfully prevented from
working."
THUS
an illegally dismissed employee is entitled to two
reliefs:
backwages and reinstatement. - SEPARATE AND DISTINCT
SEPARATION PAY GRANTED WHEN
--reinstatement is no longer feasible because of strained
relations between the employee and the employerIn effect, an
The normal consequences of respondents illegal
dismissal
--> reinstatement without loss of seniority rights, and payment
of backwages computed from the time compensation was
withheld up to the date of actual reinstatement.
--> Where reinstatement is no longer viable as an option,
separation pay equivalent to one (1) month salary for every year
of service should be awarded as an alternative. The payment
of separation pay is in addition to payment of backwages.

THUS, petitioner IS ENTITLED TO BACKWAGES AND

SEPARATION PAY (reinstatement rendered impossible due to
strained relations)
COMPUTATION
computed from the time he was unjustly dismissed until his
actual reinstatement, or from February 1999 until June 30, 2005
when his reinstatement was rendered impossible without fault
on his part

CA- only 8 years

SC--> Petitioner was hired in 1990, however, and he must be
considered to have been in the service not only until 1999, when
he was unjustly dismissed, but until June 30, 2005, the day he
is deemed to have been actually separated (his reinstatement
having been rendered impossible) from petitioner company or
for a total of 15 years.
SC dismissed petition

CA computation incorrect

5. ART. 280 ATOK BIG WEDGE COMPANY, INC. VS. GISON

FACTS:
RESP Jesus Gison part time consultant retainer basis by Atok
Big Wedge Co.
assisted petitioner's retained legal counsel with matters
pertaining to the prosecution of cases against illegal surface
occupants within the area covered by the company's mineral
claims.
tasked to perform liaison work with several government
agencies, which he said was his expertise.
--required to report to its office on a regular basis, except when
occasionally requested by the management to discuss matters
needing his expertise as a consultant.
As payment for his services, respondent received a retainer
fee of P3,000.00 a month, which was delivered to him either at
his residence or in a local restaurant.
The parties executed a retainer agreement, but such
agreement was misplaced and can no longer be found. -->
continued for 11 years
RESP getting old, requested pet to register him with SSS
-- PET refused since RESP was only retainer or consultant
PET filed complaint with SSS for pet refusal to cause his
registration
Resident manager of Pet issued a Memo advising resp that
within 30 days from receipt his retainer contract will be
terminated; services not necessary
RESP filed a Complaint for illegal dismissal, unfair labor
practice, underpayment of wages, non-payment of 13th month
pay, vacation pay, and sick leave pay
RESP allegations
resident manager (Torres) approached him and asked him if
he can help the companys problem involving the 700 million
pesos crop damage claims of the residents living at the minesite
of Atok.
participated in a series of dialogues conducted with the
residents. Mr. Torres offered to pay him P3,000.00 per month
plus representation expenses.
AGREED that his participation in resolving the problem was
temporary and there will be no employer-employee relationship
between him and Atok.
his compensation, allowances and other expenses will be
paid through disbursement vouchers.
He joined Atok. After a week the aggrieved crop damage
claimants barricaded the only passage to and from the
minesite. a dialogue was made by Atok and the crop damage
claimants. They were virtually held hostage by the irate
claimants who demanded on the spot payment of their claims.
He was able to convince the claimants to release the company
representatives pending referral of the issue to higher
management.
Another case erupted. Involved Atok's partner, benguet
Corporation, Controversy was resolved. Atok received its share
of 5Mworth of equipment and condonation of its accountabilities
900k.
Crop damage claimants didi not pursue their claims

After the crop damage claims and the controversy were

resolved, he was permanently assigned by Atok to take charge
of some liaison matters and public relations in Baguio and
Benguet Province, and to report regularly to Atoks office in
Manila to attend meetings and so he had to stay in Manila at
least one week a month.
his length of service invited the attention of the top officers of
the company that he is already entitled to the benefits due an
employee under the law, but management ignored his requests.
BUT he continued to avail of his representation expenses and
reimbursement of company-related expenses.
also enjoyed the privilege of securing interest free salary loans
payable in one year through salary deduction.
RESP getting older (56y/o), requested to cause his
registration. IGNORED. So he filed a complaint with SSS.
RESP then terminated his services.
LA
in favor of PET. NO EE. DISMISSED COMPLAINT
NLRC
affirmed
CA
IN FAVOR of RESP
set aside NLRC
ORDERED to reinstate petitioner Jesus P. Gison to his
former or equivalent position without loss of seniority rights and
to pay him full backwages, inclusive of allowances and other
benefits or their monetary equivalent computed from the time
these were withheld from him up to the time of his actual and
effective reinstatement
remanded to LA for proper computation
--> NLRC may have overlooked Article 280 or the provision
which distinguishes between two kinds of employees, i.e.,
regular and casual employees.
--> respondent= regular after the lapse of 1 yr from his
employment
=worked for 11 years. Entitled to right and privileges of a regular
employee
=even if with agreement that employment is temporary,
petitioner disregarded it by repeatedly giving RESP several
tasks.
=although respondent may have waived his right to attain a
regular status of employment when he agreed to perform these
tasks on a temporary employment status, still, it was the law
that recognized and considered him a regular employee after
his first year of rendering service to petitioner. WAIVER INEFFECTIVE
PETITIONER
= petition for review under RUle 65 --> CA should have limited
the issue on whether or not there was grave abuse of discretion
on the part of the NLRC
when existence of EE in dispute, ART 280 not applicable

=article only set the distinction between a casual employee from

a regular employee for purposes of determining the rights of an
employee to be entitled to certain benefits.
=respondent is not a regular employee and not entitled to
reinstatement.

AGREEMENT
-services temporary. NO EE
-complainant's compensations, allowances, representation
expenses and reimbursement of company- related expenses
will be processed and paid through disbursement vouchers

RESPONDENT
=maintains that he is an employee of the petitioner and that the
CA did not err in ruling in his favor.

RESP aware that he is temporary

respondent anchors his claim that he became a regular
employee of the petitioner based on his contention that the
temporary aspect of his job and its limited nature could not
have lasted for eleven years unless some time during that
period, he became a regular employee of the petitioner by
continually performing services for the company.

ISSUE: whether or not an employer-employee relationship

exists between petitioner and respondent.
Whether or not respondent is a regular employee (ART 280
applicable?) NO
HELD:
NO.
FOUR FOLD TEST
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employee's conduct, or the socalled "control test." most important.
The so-called control test is commonly regarded as the most
crucial and determinative indicator of the presence or absence
of an employer-employee relationship. Under the control test,
an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control
not only the end achieved, but also the manner and means to
be used in reaching that end
NO EE
respondent was not required to report everyday during
regular office hours of petitioner.
monthly retainer fees were paid to him either at his residence
or a local restaurant.
petitioner did not prescribe the manner in which respondent
would accomplish any of the tasks in which his expertise as a
liaison officer was needed;
respondent was left alone and given the freedom to
accomplish the tasks using his own means and method.
Respondent was assigned tasks to perform, but petitioner did
not control the manner and methods by which respondent
performed these tasks.

SC- RESP not an employee; not regular

appellate court's premise that regular employees are those who
perform activities which are desirable and necessary for the
business of the employer is not determinative in this case.
any agreement may provide that one party shall render
services for and in behalf of another, no matter how necessary
for the latter's business, even without being hired as an
employee.
--> respondent's length of service (11 YEARS) and petitioner's
repeated act of assigning respondent some tasks to be
performed DID NOT result to respondent's entitlement to the
rights and privileges of a regular employee
Article 280 NOT APPLICABLE
(the lower court used to buttress its findings that respondent
became a regular employee of the petitioner)
=Not the yardstick for determining the existence of an
employment relationship because it merely distinguishes
between two kinds of employees, i.e., regular employees and
casual employees, for purposes of determining the right of an
employee to certain benefits, to join or form a union, or to
security of tenure; it does not apply where the existence of an
employment relationship is in dispute.
SC= NO ILLEGAL DISMISSAL.CA DECISION REVERSED
AND SET ASIDE

6. ART 281 ROBINSONS GALLERIA VS. RANCHEZ

FACTS:
RESP probationary employee of Robinsons for 5 months.
underwent 6 weeks of training as a cashier before she was
hired.
2 weeks after she was hired, she reported the loss of 20,
299 which she placed in the company locker
PET ordered that she be strip-searched =nothing was found
RESP acknowledged her responsibility to settle and pay the
amount.
PET still reported her to the police.
An information for qualified theft was filed.
She was jailed for two weeks,
RESP filed a complaint for Illegal dismissal and damages.
PET sent to respondent by mail a notice of termination and/or
notice of expiration of probationary employment dated March
9, 1998
LA
no illegal dismissal
Respondents are ordered to accept complainant to her
former or equivalent work without prejudice to any action they
may take in the premises in connection with the missing
money of P20,299.00.
at the time respondent filed the complaint for illegal
dismissal, she was not yet dismissed by petitioners.
When she was strip- searched by the security personnel of
petitioner Supermarket, the guards were merely conducting
an investigation.
The subsequent referral of the loss to the police authorities
might be considered routine.
Respondents non-reporting for work after her release from
detention could be taken against her in the investigation that
petitioner supermarket would conduct
NLRC
reversed LA
respondent was denied due process by petitioners.
Strip-searching respondent and sending her to jail for two
weeks certainly amounted to constructive dismissal because
continued employment had been rendered impossible,
unreasonable, and unlikely. The wedge that had been driven
between the parties was impossible to ignore.
Although respondent was only a probationary employee,
the subsequent lapse of her probationary contract of
employment did not have the effect of validly terminating her
employment because constructive dismissal had already
been effected earlier by petitioners
CA
affirmed NLRC

PETITIONERS
assailed the reinstatement
RESP only probationary employee. probationary contract of
employment
lapsed
on
March
14,
1998.
Reinstatement=moot and academic

even if her probationary contract had not yet expired, the

offense that she committed would nonetheless militate
against her regularization
RESPONDENT
alleged that she was constructively dismissed
when she was strip-searched, divested of her
dignity, and summarily thrown in jail. She could not have
been expected to go back to work after being allowed to post
bail because her continued employment had been rendered
impossible, unreasonable, and unlikely.
at the time the money was discovered missing, it
was not with her but locked in the company locker. The
company failed to provide its cashiers with strong locks and
proper security in the work place.
she was not caught in the act and even reported
that the money was missing.
denied due process
ISSUE: whether respondent was illegally terminated from
employment by petitioners.
HELD:
YES
There is probationary employment when the employee upon
his engagement is made to undergo a trial period during
which the employer determines his fitness to qualify for
regular employment based on reasonable standards made
known to him at the time of engagement
A probationary employee, like a regular employee, enjoys
security of tenure. However, in cases of probationary
employment, aside from just or authorized causes of
termination, an additional ground is provided under Article
281 of the Labor Code, i.e., the probationary employee may
also be terminated for failure to qualify as a regular employee
in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement.
Thus, the services of an employee who has been engaged
on probationary basis may be terminated for any of the
following:
(1) a just or
(2) an authorized cause; and
(3) when he fails to qualify as a regular employee in
accordance with reasonable standards prescribed by the
employer.
Article 277(b) of the Labor Code mandates that subject to the
constitutional right of workers to security of tenure and their
right to be protected against dismissal, except for just and
authorized cause and without prejudice to the requirement of
notice under Article 283 of the same Code, the employer
shall furnish the worker, whose employment is sought to be
terminated, a written notice containing a statement of the
causes of termination, and shall afford the latter ample
opportunity to be heard and to defend himself with the
assistance of a representative if he so desires, in accordance
with company rules and regulations pursuant to the
guidelines set by the Department of Labor and Employment.

petitioners failed to accord respondent substantive and

procedural due process.
The haphazard manner in the investigation of the missing
cash, which was left to the determination of the police
authorities and the Prosecutors Office, left respondent with
no choice but to cry foul.
Administrative investigation was not conducted by
petitioner Supermarket. On the same day that the missing
money was reported by respondent to her immediate
superior, the company already pre-judged her guilt without
proper investigation, and instantly reported her to the police
as the suspected thief, which resulted in her languishing in
jail for two weeks.
the due process requirements under the Labor Code are
mandatory and may not be supplanted by police investigation
or court proceedings. The criminal aspect of the case is
considered independent of the administrative aspect.
employers should not rely solely on the findings of the
Prosecutors Office. They are mandated to conduct their own
separate investigation, and to accord the employee every
opportunity to defend himself.
respondent was not represented by counsel when she was
strip-searched inside the company premises or during the
police investigation, and in the preliminary investigation
before the Prosecutors Office.
Respondent was constructively dismissed
unreasonable to charge her with abandonment for not
reporting for work upon her release in jail.
It would be the height of callousness to expect her to return
to work after suffering in jail for two weeks. Work had been
rendered unreasonable, unlikely, and definitely impossible,
considering the treatment that was accorded respondent by
petitioners.
RESPONDENTS MONETARY CLAIMS
Article 279 of the Labor Code provides that an employee who
is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other
privileges, to full backwages, inclusive of allowances, and to
other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the
time of his actual reinstatement.
BUT DUE TO STRAINED relations
separation pay has been considered an acceptable
alternative to reinstatement

such payment liberates the employee from what could be

a highly oppressive work environment. On the other, the
payment releases the employer from the grossly unpalatable
obligation of maintaining in its employ a worker it could no
longer trust.
illegally or constructively dismissed employee, entitled
to: (1) either reinstatement, if viable, or separation pay, if
reinstatement is no longer viable; and (2) backwages. These
two reliefs are separate and distinct from each other and are
awarded conjunctively
RESP entitled to separation pay and backwages
reckoned from the time of her constructive dismissal until
the date of the termination of her employment, i.e., from
October 30, 1997 to March 14, 1998. The computation
should not cover the entire period from the time her
compensation was withheld up to the time of her actual
reinstatement.
because respondent was a probationary employee, and
the lapse of her probationary employment without her
appointment as a regular employee of petitioner
Supermarket effectively severed the employer-employee
relationship between the parties.
PROBATIONARY EMPLOYMENT
In all cases involving employees engaged on probationary
basis, the employer shall make known to its employees the
standards under which they will qualify as regular employees
at the time of their engagement.
Where no standards are made known to an employee at the
time, he shall be deemed a regular employee, unless the job
is self-descriptive, like maid, cook, driver, or messenger.
However, the constitutional policy of providing full protection
to labor is not intended to oppress or destroy management.
Naturally, petitioner Supermarket cannot be expected to
retain respondent as a regular employee considering that she
lost P20,299.00 while acting as a cashier during the
probationary period.
The rules on probationary employment should not be used to
exculpate a probationary employee who acts in a manner
contrary to basic knowledge and common sense, in regard to
which, there is no need to spell out a policy or standard to be
met.
SC- CA affirmed.

7. RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES
CORPORATION/FRANK THOMAS, XAVIER G. PEA and TRIFONA F. MAMARADLO, respondents.

LA, NLRC, CA- dismissed the complaint of Radin

Acira for illegal dismissal with prayer for
reinstatement, back wages, moral damages,
exemplary damages and attorneys fees.

Facts:

Petitioner Radin Alcira- hired as engineering

support services supervisor of a probationary basis
for 6 mos.
Respondent Middleby hilipppines Corporations
(Middleby)- terminated R.Alciras services. Reason:
unhappy with the performance of the petitioner.
Parties both showed a copy of appointment paper
presenting conflicting starting dates.
o Alcira- May 20, 1996. Middledby- May 27,
1996
o Status: probationary after 5 mos his
performance must be evaluated and any
adjustment with his salary shall depend on
his work performance.
Nov 20, 1996- petitioner asserts that a senior officer
of respondent Middleby in bad faith withheld his
time card and did not allow him to work.
Nov 21, 1996- R. Alcira filed a complaint in NLRC.
he contended that he was illegally dismissed and
that he already became a regular employee
because his probationary status had lapsed

Defense
of
Middlebyduring
petitioners
probationary employment, he showed poor
performance in his assigned tasks, incurred ten
absences, was late several times and violated
company rules on the wearing of uniform. Since he
failed to meet company standards, petitioners
application to become a regular employee was
disapproved and his employment was terminated.

Ruling of Labor Arbiter- dismissed the complaint.

Ground: (1) respondents were able to prove that
petitioner was apprised of the standards for
becoming a regular employee; (2) respondent
Mamaradlos affidavit showed that petitioner did not
perform well in his assigned work and his attitude
was below par compared to the companys standard
required of him and (3) petitioners dismissal on
November 20, 1996 was before his regularization,
considering that, counting from May 20, 1996, the
six-month probationary period ended on November
20, 1996.

Ruling of NLRC and CA affirmed.

CA: no
termination only expiration of contact. Probationary
employment only, contractual in nature and
employment is within a definite period. At the
expiration of the contract his appointment was
deemed terminated and no notice of non-renewal in
necessary. Security of tenure can only be invoked
during the period of probationary period. Upon

expiration of the probationary period the

constitutional protection of security of tenure could
no longer be invoked.
Supreme Court 3 issues

ART.
281. PROBATIONARY
EMPLOYMENT.
Probationary employment shall not exceed six (6)
months from the date the employee started working,
unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an
employee who has been engaged on a probationary
basis may be terminated for a just cause or 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.
1st issue: WON Petitioner became a regular
employee. NO

Petitioner claimed that his probationary period is only

5 mos. Because of the provision that he will be
evaluated after 5 mos.

SC: petitioners argument lacks merit because it is

stated in his appointment paper that his employment
status was probationary (6mos). The five month
period he was referring was for the evaluation of his
work.

Alcira(petitioner) insisted that he was already a

regular employee- Petitioner insists that he already
attained the status of a regular employee when he
was dismissed on November 20, 1996 because,
having started work on May 20, 1996, the six-month
probationary period ended on November 16, 1996.
According to petitioners computation, since Article
13 of the Civil Code provides that one month is
composed of thirty days, six months total one
hundred eighty days. As the appointment provided
that petitioners status was probationary (6 mos.)
without any specific date of termination, the
180th day fell on November 16, 1996. Thus, when he
was dismissed on November 20, 1996, he was
already a regular employee.

SC: Alcira is incorrect. SCs computation of 6-month

probationary period is reckoned from the date of
appointment up to the same calendar date of the 6th
month following.
o

The number of days of each month is

irrelevant. He is still a probationary
employee when Middleby opted not to
regularized him on Nov 20, 1996

2nd issue: WON the respondent informed the petitioner of the

standards for regularization at the start of his employment.
YES

Section 6 (d) of Rule 1 of the Implementing Rules of

Book VI of the Labor Code (Department Order No.
10, Series of 1997) provides that: (d) In all cases of
probationary employment, the employer shall make
known to the employee the standards under which
he will qualify as a regular employee at the time of
his engagement. Where no standards are made
known to the employee at that time, he shall be
deemed a regular employee.

It is settled that even if probationary employees do

not enjoy permanent status, they are accorded the
constitutional protection of security of tenure. This
means they may only be terminated for just cause or
when they otherwise fail to qualify as regular
employees in accordance with reasonable standards
made known to them by the employer at the time of
their engagement.

But we have also ruled in Manlimos, et. al. vs.

National Labor Relations Commission [15] that this
constitutional protection ends on the expiration of the
probationary period. On that date, the parties are
free to either renew or terminate their contract of
employment. Manlimos concluded
that
(t)his
development has rendered moot the question of
whether there was a just cause for the dismissal of
the petitioners xxx.[16] In the case at bar, respondent
Middleby exercised its option not to renew the
contract when it informed petitioner on the last day
of his probationary employment that it did not intend
to grant him a regular status.

As found by the labor arbiter, the NLRC and the

Court of Appeals, petitioner (1) incurred ten
absences (2) was tardy several times (3) failed to
wear the proper uniform many times and (4) showed
inferior supervisory skills. Petitioner failed to
satisfactorily refute these substantiated allegations.
Taking all this in its entirety, respondent Middleby
was clearly justified to end its employment
relationship with petitioner.

SC held yes: Middleby substantially notified

petitioner of the standards to qualify as a regular
employee when it apprised him, at the start of his
employment, that it would evaluate his supervisory
skills after five months.
o

an employer is deemed to substantially

comply with the rule on notification of
standards if he apprises the employee that
he will be subjected to a performance
evaluation on a particular date after his
hiring.

SC agreed with the LA in saying that

petitioner cannot claim that the respondent
did not inform him of the standards, because
it is clear in their agreement that after 5 mos
his performance would be evaluated.

3rd issue: WON petitioner was illegally dismissed when

respondent opted not to renew his contract on the last day of
his probationary employment. NO

SC: the dismissal cannot be deemed illegal.

8. CALS POULTRY SUPPLY CORPORATION and DANILO YAP, petitioners, vs. ALFREDO ROCO and CANDELARIA
ROCO, respondents.
Facts:

Petitioner - CALS Poultry Supply Corporation is

engaged in the business of selling dressed chicken
and other related products and managed by Danilo
Yap.
Respondent/s: Alfredo Roco- was hired as driver
and Edna Roco(sister) as helper in the dressing
room of CALS both hired on March 15, 1984.
Candelaria Roco, another sister, was hired on March
16, 1984 as helper, also at its chicken dressing plant
on a probationary basis.

Mach 5, 1996- Alfredo and Candeleria filed a

complaint for illegal dismissal against CALS and D.
Yap. They allege that they were illegally dismissed
on Jan 20, 1996 and November 5, 1996. They both
claimed to be underpaid.

Edna also filed a complaint for illegal dismissal- she

allege that that on June 26, 1996, she was
reassigned to the task of washing dirty sacks and for
this reason, in addition to her being transferred from
night shift to day time duties, which she considered
as management act of harassment, she did not
report for work.

Alfredo- claimed that he was dismissed for refusing

to accept the 30000 php offered to him by the lawyer
of CALS, in exchange for his executing a letter of
voluntary resignation.

Candelaria Roco- averred that she was terminated

without cause from her job as helper after serving
more than six (6) months as probationary employee.

Labor Arbiter in favor of petitionero

Alfredo Rocos case- Ruling: dismissed the

complaint for Illegal dismissal for lack of
merit. Ground: he applied for leave of
absence and was granted. He never
returned for work. A notice to inquire was
sent to him if he still has intention of
resuming his work. He did not respond. he
was not dismissed; it was he who unilaterally
severed his relation with his employer.
Candelarias case- Ruling: upheld CALS
decision not to continue with her
probationary employment having been
found her unsuited for the work for which her
services were engaged. She was hired on
May 16, 1995 and her services were
terminated on November 15, 1995.
Edna Rocos case- according to the Labor
Arbiter, began absenting herself on June 25,
1996. She was sent a memo on July 1,
1996 requiring her to report for work
immediately, but she did not respond.

NLRC affirmed LA- in favor of CALS

Court of Appeals: in favor of respondents. Alfredo and

Candelaria to be reinstated etc. Except for EDNA she
abandoned her work
CA: Alfredo and Candelaria was illegally dismissed.
Supreme Court: in favor of CALS (petitioner)
1. WON Alfredo was illegally dismissed. NO

Alfredo was not able to establish convincingly

that he was dismissed. No notice of termination
was given to him by CALS.

private respondents failure to work was due to

the misunderstanding between the petitioners
management and private respondent. As
correctly observed by the Labor Arbiter, private
respondent must have construed the October 28
incident as his dismissal so that he opted not to
work for many days thereafter and instead filed
a complaint for illegal dismissal. On the other
hand, petitioner interpreted private respondents
failure to report for work as an intentional
abandonment. However, there was no intent to
dismiss private respondent since the petitioner is
willing to reinstate him. Nor was there an intent
to abandon on the part of private respondent
since he immediately filed a complaint for illegal
dismissal soon after the October 28 incident. It
would be illogical for private respondent to
abandon his work and then immediately file an
action seeking his reinstatement xxx. Under
these circumstances, it is but fair that each party
must bear his own loss, thus placing the parties
on equal footing.

2. WON CANDELRIAs termination of employment is

within the probationary period of her employment.
YES

Her employment was in a probationary basis.

She was hired on May 16, 1995 and her services

were terminated on November 15, 1995 due to poor
work performance. She did not measure up to the
work standards on the dressing of chicken. The
Labor Arbiter sustained CALS in terminating her
employment. The NLRC affirmed the Labor Arbiters
ruling.

She did not meet the required standards by the

National Meat Inspection Commission. (dressing
plants with Double AA Rating to which CALS
employee were brief and with regard to)

We agree with CALS contention as upheld by both

the Labor Arbiter and the NLRC that Candelarias
services was terminated within and not beyond the
6-month probationary period.

The computation of the 6-month probationary period

is reckoned from the date of appointment up to the
same calendar date of the 6th month following.

9. MITSUBISHI MOTORSPHILIPPINES CORPORATION vs. CHRYSLER PHILIPPINESLABOR UNION and NELSON PARAS

FACTS:

Mistsubishi(MMPC, petitioner)- domestic corporation

engaged in the assembly and distribution of
Mitsubishi motor vehicles.

Chrysler
Philippines
Labor
Union
(CPLU,
respondent)- legitimate labor organization and the
duly certified bargaining agent of the hourly-paid
regular rand and file employees of MMPC.

Nelson Paras(Respondent)- member of CPLU. His

wife Cecile Paras, was the President of t he CP
Salaried Employees Union (CPSU). Employment
history:
o

He worked at Saudi Arabia, 1982- 1993

He was re-hired as a welder- fabricator at

the MMPC tooling shop from Oct 3, 1994
Oct 31,1994. On oct 29, 1994,his contract
was renewed from Nov 1, 1994 up to march
3, 1995.

May of 1996, he was re-hired on a

probationary basis as a manufacturing
trainee
at
the
Plant
Engineering
Maintenance Department. They were given
orientation of may 15, 1996 re: companys
standards for regularizating etc.

Nelson was first employed as shuttle bus

driver on March 19, 1976. Resigned on June
16, 1982

On May 27, 1996 he started reporting for

work. He was evaluated by his immediate
supervisor after 6 months and received an
average rating. He was informed by his
immediate supervisor that based on his
performance rating he would be regularized.

The managers reviewed and unanimously agreed

with Paras immediate supervisors that Paras
performance was unsatisfactory. Paras was not
considered for regularization. (contradicting)

On November 26, 1996- paras received a notice of

termination dated Nov 25,1996 for failure to meet the
required company standards for regularization.

Grievance Machinery and Voluntary Arbitration: the

dismissal of Paras was valid for failure to pass the
probationary standards of MMPC. VA in favor or
Mistsubishi/ MMPC

The VA declared that hiring an employee on a

probationary basis to determine his or her fitness for
regular employment was in accord with the MMPCs
exercise of its management prerogative. The VA
pointed out that MMPC had complied with the
requirement of apprising Paras of the standards of
performance evaluation and regularization at the
inception of his probationary employment. The VA
agreed with the MMPC that the termination of Paras

employment was effected prior to the expiration of

the six-month probationary period. As to Paras
contention that he was already a regular employee
before he was dismissed in 1994 considering that he
had an accumulated service of eleven (11) months,
the VA ruled that Paras delay in filing a complaint for
regularization only in 1996, for services rendered in
October 1994 to March 1995, militated against
him. The VA stated that Paras dismissal was based
on the unsatisfactory performance rating given to
him by his direct supervisors Lito Lacambacal and
Wilfredo Lopez. The VA also found that the alleged
heated argument between Atty. Carlos S. Cao, the
Labor Relations Manager of MMPC, and Cecille
Paras, the President of CPSU, was irrelevant in the
termination of Paras services.[15]

Court of Appeals- Paras and CPLU filed a petitioner

for review under rule 45

OSG- his employment was terminated within the 6

months probationary period. Expiration Nov 27,
1996. The notice was served on Nov 25,1996. And
that failure of Paras to get a satisfactory performance
rating justified the termination. Inclusion of his 5
months contractual employment as welder fabricator
did not qualify him for regular employment.
Appointment of a probationary employee to a regular
status is voluntary and discretionary on the part of
the employer.

Ruling of CA- used the computation of Civil code,

agreed with Paras and CPLU that 6 months is
equivalent to 180 days, may 27, 1996 to November
23, 1996. Therefore when he received his notice on
November 26, 1996, it was already on his 183 rd day
or after the expiration of the 6 months probationary
period. Therefore he became a regular employee
and he was illegally dismissed for non compliant of
2-notice requirement. CA ordered reinstatement.
Issues:

(a) whether or not respondent Paras was already a

regular employee on November 26, 1996; YES
(b) whether or not he was legally dismissed; NO. he
was Illegally dismissed
Held:
a. Regularization of employment Yes already a
regular employee

Indeed, an employer, in the exercise of its

management prerogative, may hire an employee
on a probationary basis in order to determine his
fitness to perform work.[29] Under Article 281 of
the Labor Code, the employer must inform the
employee of the standards for which his
employment
may
be
considered
for
regularization. Such
probationary
period,
unless covered by an apprenticeship agreement,
shall not exceed six (6) months from the date the

employee started working. The employees

services may be terminated for just cause or for
his failure to qualify as a regular employee based
on reasonable standards made known to him. [30]

Respondent Paras was employed as a

management trainee on a probationary basis.
During the orientation conducted on May 15,
1996, he was apprised of the standards upon
which his regularization would be based. He
reported for work on May 27, 1996. As per the
companys
policy,
the
probationary period was from three (3) months
to a maximum of six (6) months.
Applying Article 13 of the Civil Code, [31] the
probationary period of six (6) months consists of
one hundred eighty (180) days.[32] This is in
conformity with paragraph one, Article 13 of the
Civil Code, which provides that the months
which are not designated by their names shall be
understood as consisting of thirty (30) days
each. The number of months in the probationary
period, six (6), should then be multiplied by the
number of days within a month, thirty (30);
hence, the period of one hundred eighty (180)
days.
As clearly provided for in the last paragraph of
Article 13, in computing a period, the first day
shall be excluded and the last day
included. Thus, the one hundred eighty (180)
days commenced on May 27, 1996, and ended
on November 23, 1996. The termination letter
dated November 25, 1996 was served on
respondent Paras only at 3:00 a.m. of November
26, 1996. He was, by then, already a regular
employee of the petitioner under Article 281 of
the Labor Code

b. Legality of the Dismissal the ground of his

dismissal was not under the enumeration given by
labor code
An employee cannot be dismissed except for just or
authorized cause as found in the Labor Code and
after due process. The following grounds would
justify the dismissal of an employee:
(a)
Serious misconduct or willful
disobedience by the employee of the lawful
orders of the employer or representative in
connection with his work;
(b)
Gross and habitual neglect by the
employee of his duties;

(c)
Fraud or willful breach by the
employee of the trust reposed in him by his
employer or duly authorized representative;
(d)
Commission of a crime or offense
by the employee against the person of his
employer or of any immediate member of his
family or his duly authorized representative;
and
(e)
Other causes analogous to the
foregoing.

The ground of his dismissal was alleged

unsatisfactory rating arising from poor
performance. The company has the burden
of proof to prove the legality of the dismissal
and the validity must be clearly established
in a manner consistent with due process.

Under Article 282 of the Labor Code, an

unsatisfactory rating can be a just cause for
dismissal only if it amounts to gross and habitual
neglect of duties. Gross negligence has been
defined to be the want or absence of even slight care
or diligence as to amount to a reckless disregard of
the safety of person or property. Grossly negligent in
the performance of his duties was not proved.

It was stated in their company policy that after the

evaluation they must discussed the results with the
employee and the department heads. There was no
compliance with the company policy. At first the
immediate supervisor of Paras informed him that he
was average and that he will be regularize. However,
in a complete turn around, the petitioner made it
appear that after the performance evaluation of
respondent Paras was reviewed by the department
and division heads, it was unanimously agreed that
the
respondents performance
rating was
unsatisfactory, making him unfit for regularization.

Considering that respondent Paras was not

dismissed for a just or authorized cause, his
dismissal
from
employment
was
illegal. Furthermore, the petitioners failure to inform
him of any charges against him deprived him of due
process. Clearly, the termination of his employment
based on his alleged unsatisfactory performance
rating was effected merely to cover up and
deodorize the illegality of his dismissal.

c. Reinstatement and Backwages there was retrenchment,

the unafavorable financial conditions of the petitioner may not
justify reinstatement. Paras is entitled to backwages.

10. GRANDTEQ INDUSTRIAL v ANNALIZA ESTRELLA

-

Sometime in January 2004, Grandteq and Estrella

entered into a Purchase/Assignment of Car
Agreement, whereby the former undertook to
purchase a car for Estrella, who would in turn refund
the purchase price to Grandteq in 100 monthly
installments. The agreement likewise stated that the
"company shall retain the ownership of the car until
the car loan is fully paid." To complement the terms
of the agreement, Estrella executed a Promissory
Note.
When she defaulted in her payments Grandteq
instructed her to leave the car in the office premisies
(Sept. 15, 2004)
Estrella failed to abide
Sept. 18, 2004, Grandteq sent her another
memorandum requiring her to explain he
insubordination
In her reply memorandum, she asserted that she had
already paid the 50,000 DP, and Grandteq has no
valid cause to deman its surrender.
Estrella also filed a complaint for recovery of sales
commissions, allowances, and other benefits before
the LA (Sept 17, 2004)
On Sept. 20, 2004 she filed for leave of absence and
submitted a medical certificate recommending that
she go on rest for 3 weeks.
Grandteq denied the request, nonetheless, she still
went on leave effective Sept 22 Oct 14.
On Oct 1, she tries to withdraw her salary but to her
dismay it was not remitted.
On Oct 4, 2004 she amended her complaint to
include non-payment of wages
On Oct 15 Estrella returned to work but the security
guard refused her entry upon order of the VP De
Leon
Estrella thus amended her complaint to include
illegal dismissal and likewise demanded for moral
damages and attorneys fees
Traversing the complaint, Grandteq averred that
Estrella was validly dismissed because:
o
she abandoned her job when she did not
report for work for three weeks despite the
disapproval of her leave application;
o that she committed insubordination when
she failed to obey an official order directing
her to return a company vehicle;
o that she violated the confidence and trust
reposed in her by the company when she
negotiated in her personal capacity with a
client, Philex Mining Corporation, at the time
when she was allegedly sick; and
o that she failed to attend the administrative
hearing initiated by the company on October
29, 2004;
o thus, Grandteq deemed her to have waived
her right to be heard. Estrella was furnished
with a Notice of Termination22 on November
12, 2004, indicating that she was being

dismissed for gross and habitual neglect of

duty and fraud or willful breach of trust.
Grandteq denied any outstanding sales
commissions or incentives due Estrella.23
- La ruled in favor of Strella
NLRC ruled in favor of Gradteq, held that there was
a valid cause for dismissing Estrella
On appeal to CA, CA reinstated LA decision
A judicious review of the records discloses that
Grandteq failed to prove that Estrella was justifiably
dismissed due to lack of trust and confidence and
gross and habitual neglect of duty.
Grandteq attributes loss of trust and confidence to
the following acts:
(1) insubordination when Estrella disobeyed
a company directive ordering her to return a
company vehicle; and
(2) transacting, in her personal capacity, with
a client of Grandteq.

Insubordination, as a just cause for the dismissal of

an employee, necessitates 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.

Facts of the case do not show presence of the

second requisite.
The failure to return the vehicle and the
Purchase/Assignment of Car Agreement, from which
Grandteq derives its claim of ownership over the car,
had no relation at all to the discharge of respondents
duties as a sales engineer.
There is likewise no basis for a finding of legitimate
loss of confidence because Grandteq failed to show
that Estrella held a position of trust and confidence
Firm is the rule that loss of confidence as a just cause
for termination of employment is premised on the fact
that the employee concerned holds a position of trust
and confidence, where greater trust is placed by
management and from whom greater fidelity to duty
is correspondingly expected. The betrayal of this
trust is the essence of the offense for which an
employee is penalized
There was no showing that she betrayed the trust
reposed to her or that she holds a position of trust
and confidence.
As to GROSS NEGLIGENCE, it connotes want of
care in the performance of one's duties, while
habitual neglect implies repeated failure to perform
one's duties for a period of time, depending on the

circumstances. The single or isolated act of

negligence does not constitute a just cause for the
dismissal of an employee.
SC found no gross and habitual neglect in this case
As to ABANDONMENT, abandonment, as a just and
valid ground for termination, means the deliberate,
unjustified refusal of an employee to resume his
employment. For abandonment to be a valid ground
for dismissal, two (2) elements must be proved:
o
the intention of an employee to abandon,
o
coupled with an overt act from which it may
be inferred that the employee has no more
intention to resume his work.

Burden of proof is with the employer to show a clear

and deliberate intent on the part of the employee to
discontinue employment.

Estrellas actions after her absences negate an intent

to abandon her job. Estrellas application for sick
leave, the Medical Certificate she secured, and the
letter from her lawyer that she was going on sick
leave and more importantly, her going back to the
company premises on October 15, 2004 all
indicate her intention to resume work after the lapse
of the period of her leave of absence. It would be the
height of inequity and injustice to declare Estrella to
have abandoned her job on the mere pretext that her
sick leave application was not approved. Especially

so that prior to her dismissal, she had no record of

infraction of company rules for which she could have
been sanctioned by either warning, reprimand or
suspension. Besides, her filing of an illegal dismissal
case clearly contradicts Grandteqs allegation that
she abandoned her job.40
Employer has the burden of proof of establishing that
the termination was based on a just cause.
As t money claims, there is firther need to adduce
evidence to establish the amout hence case was
remanded to Labor Arbiter.
As to liability of Officers. A corporation, being a
juridical entity, may act only through its directors,
officers and employees. Obligations incurred by
them, acting as such corporate agents, are not theirs
but the direct accountabilities of the corporation they
represent. True, solidary liabilities may at times be
incurred but only when exceptional circumstances
warrant such as, generally, in the following cases:
the Court has held corporate directors and officers
solidarily liable with the corporation for the
termination of employment of employees done
with malice or in bad faith.
nnns there is no indication that Estrellas dismissal
was effected with malice or bad faith on the part of
Grandteqs officers. Their liability for Estrellas illegal
dismissal, the consequential monetary award arising
from such dismissal and the other money claims
awarded in the LAs decision, as correctly affirmed
by the CA, could thus only be joint, not solidary.

11. LORES REALTY ENTERPRISES INC v PACIA

-

Pacia was hired as assistant manager and officer in

charge of LREIs accounting department under
Finance Administrative Division.
October 28, 1998, LREIs acting general manager,
petitioner Sumulong, through Ms. Julie Ontal,
directed Pacia to prepare Check Voucher No. 16477
worth P150,000.00 as partial payment for LREIs
outstanding obligation to the Bank of the Philippine
Islands-Family Bank (BPI-FB). Pacia did not
immediately comply with the instruction. After two
repeated directives, Pacia eventually prepared
Check No. 0000737526 in the amount of
P150,000.00. Later, Sumulong again directed Pacia
to prepare Check Voucher No. 16478 in the amount
of P175,000.00 to settle the balance of LREIs
outstanding indebtedness with BPI-FB. Pacia once
again was slow in obeying the order. Due to the
insistence of Sumulong, however, Pacia eventually
prepared Check No. 0000737527 in the amount of
P175,000.00.
To explain her refusal to immediately follow the
directive, Pacia reasoned out that the funds in LREIs
account were not sufficient to cover the amounts to
be indicated in the checks.
October
29,
1998,
Sumulong
issued
a
memorandum3 ordering Pacia to explain in writing
why she refused to follow a clear and lawful directive.
On the same day, Pacia replied in writing and
explained that her initial refusal to prepare the
checks was due to the unavailability of funds to cover
the amounts and that she only wanted to protect
LREI from liability under the Bouncing Checks Law.
On November 6, 1998, Pacia received a notice of
termination5 stating, among others, that she was
being dismissed because of her willful disobedience
and their loss of trust and confidence in her.
Pacia then filed a Complaint for Unfair Labor Practice
due to Harassment, Constructive Dismissal, Moral
and Exemplary Damages6 against LREI and
Sumulong. Subsequently, Pacia filed an Amended
Complaint7 to include the charges of illegal dismissal
and non-payment of salaries.
the Labor Arbiter (LA) rendered a decision8 finding
that the dismissal of Pacia was for a just and valid
cause but ordering payment of what was due her.
On appeal, the NLRC in its March 31, 2000 Decision 9
reversed the LAs Decision and found LREI and
Sumulong guilty of illegal dismissal.
On November 25, 2005, the CA found no merit in the
petition and dismissed it.

SC finds no merit in the petition.

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;
(b) Gross and habitual neglect by the
employee of his duties;
(c) Fraud or willful breach by the employee
of the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the
employee against the person of his
employer or any immediate member of his
family or his duly authorized representative;
and
(e) Other causes analogous to the foregoing.

Pacias initial reluctance to prepare the checks,

however, which was seemingly an act of disrespect
and defiance, was for honest and well intentioned
reasons. Protecting LREI and Sumulong from liability
under the Bouncing Checks Law18 was foremost in
her mind. It was not wrongful or willful. Neither can it
be considered an obstinate defiance of company
authority. The Court takes into consideration that
Pacia, despite her initial reluctance, eventually did
prepare the checks on the same day she was tasked
to do it.
Pacias apprehension was justified when the check
was dishonored. This clearly affirms her assertion
that she was just being cautious and circumspect for
the companys sake. Thus, her actuation should not
be construed as improper conduct.
the Court is guided by the time-honored principle that
if doubt exists between the evidence presented by
the employer and the employee, the scales of justice
must be tilted in favor of the latter. The rule in
controversies between a laborer and his master
distinctly states that doubts reasonably arising from
the evidence, or in the interpretation of agreements
and writing, should be resolved in the former's favor.

12. SAMAHAN NG MGA MANGGAGAWA SA HYATT v VOLUNTARY ARBITRATOR MAGSALIN and HOTEL
ENTERPRISES OF THE PHILS. INC.
-

On January 31, 2001, Hyatts General Manager,

David C. Pacey, issued a Memorandum5 informing
all hotel employees that hotel security have been
instructed to conduct a thorough bag inspection and
body frisking in every entrance and exit of the hotel.
He enjoined employees to comply therewith. Copies
of the Memorandum were furnished petitioner.
February 3, 2001, Angelito Caragdag, a waiter at the
hotels Cafe Al Fresco restaurant and a director of
the union, refused to be frisked by the security
personnel. The incident was reported to the hotels
Human Resources Department (HRD), which issued
a Memorandum6 to Caragdag on February 5, 2001,
requiring him to explain in writing within forty-eight
(48) hours from notice why no disciplinary action
should be taken against him. The following day, on
February 6, 2001, Caragdag again refused to be
frisked by the security personnel. Thus, on February
8, 2001, the HRD issued another Memorandum7
requiring him to explain.
On February 14, 2001, the HRD imposed on
Caragdag the penalty of reprimand for the February
3, 2001 incident, which was considered a first
offense, and suspended him for three days for the
February 6, 2001 incident, which was considered as
a second offense.8 Both penalties were in
accordance with the hotels Code of Discipline.
February 22, 2001, when Mike Moral, the manager
of Hyatts Cafe Al Fresco and Caragdags immediate
superior, was about to counsel two staff members,
Larry Lacambacal and Allan Alvaro, at the training
room, Caragdag suddenly opened the door and
yelled at the two with an enraged look. In a disturbing
voice he said, "Ang titigas talaga ng ulo nyo. Sinabi
ko na sa inyo na huwag kayong makikipagusap sa
management habang ongoing pa ang kaso!" (You
are very stubborn. I told you not to speak to
management while the case is ongoing!) Moral
asked Caragdag what the problem was and informed
him that he was simply talking to his staff. Moral also
told Caragdag that he did not have the right to
interrupt and intimidate him during his counseling
session with his staff.
February 23, 2001, Moral issued a Memorandum9
requiring Caragdag to explain his actions in the
training room. Caragdag submitted his written
explanation on February 25, 200110 narrating that he
was informed by someone that Lacambacal and
Alvaro were requesting for his assistance because
Moral had invited them to the training room.
Believing that he should advise the two that they
should be accompanied by a union officer to any
inquisition, he went to the training room. However,
before he could enter the door, Moral blocked him.
Thus, he told Lacambacal and Alvaro that they
should be assisted by a union representative before
giving any statement to management. Caragdag
also prayed that Moral be investigated for harassing
union officers and union members.
February 28, 2001, Moral found the explanations
unsatisfactory. In a Memorandum11 issued on the

same date, Moral held Caragdag liable for Offenses

Subject to Disciplinary Action (OSDA) 3.01 of the
hotels Code of Discipline, i.e., "threatening,
intimidating, coercing, and provoking to a fight your
superior for reasons directly connected with his
discharge of official duty." Thus, Caragdag was
imposed the penalty of seven days suspension in
accordance with the hotels Code of Discipline.
March 2, 2001, Caragdag committed another
infraction. At 9:35 a.m. on the said date, Caragdag
left his work assignment during official hours without
prior permission from his Department Head. He was
required to submit an explanation, but the
explanation12
he
submitted
was
found
unsatisfactory. On March 17, 2001, Moral found
Caragdag liable for violating OSDA 3.07, i.e.,
"leaving work assignment during official working
hours without prior permission from the department
head or immediate superior," and suspended him for
three days.
Because of the succession of infractions he
committed, the HRD also required Caragdag to
explain on May 11, 2001 why the hotels OSDA 4.32
(Committing offenses which are penalized with three
[3] suspensions during a 12-month period) should
not be enforced against him.14 An investigation board
was formed after receipt of Caragdags written
explanation, and the matter was set for hearing on
May 19, 2001. However, despite notice of the
scheduled hearing, both Caragdag and the Union
President failed to attend. Thereafter, the
investigating board resolved on the said date to
dismiss Caragdag for violation of OSDA 4.32. 15
Caragdag appealed but the investigating board
affirmed its resolution after hearing on May 24, 2001.
June 1, 2001, the hotel, through Atty. Juancho A.
Baltazar, sent Caragdag a Notice of Dismissal
Caragdags dismissal was questioned by petitioner,
and the dispute was referred to voluntary arbitration
upon agreement of the parties.
VA ruled that all the actions of HYATT were in
accordance with law but granted financial assiatnce
in the maount of 100,000
Petitioner assailed the decision through an appeal
before the CA thorugh a petition for certiorari which
was outrightly dismissed being an improper remedy.
Rule 43 is the proper remedy and should be filed
within the 15-day reglementary period.
They filed another petition for review of Vas order
based on grave abuse of discretion.
CA rendered decision deleting the award for financial
assistance and affirming VA decision.
SC held that proper recourse for appeal from
judgment of VA is via rule 43
As to financial assistance/severance pay, SC held
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. Where the reason for the valid dismissal
is, for example, habitual intoxication or an offense

involving moral turpitude, like theft or illicit sexual

relations with a fellow worker, the employer may not
be required to give the dismissed employee
separation pay, or financial assistance, or whatever
other name it is called, on the ground of social
justice.
The policy of social justice is not intended to
countenance wrongdoing simply because it is
committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone
the offense. Compassion for the poor is an
imperative of every humane society but only when
the recipient is not a rascal claiming an undeserved
privilege.
Caragdags dismissal was due to several instances
of willful disobedience to the reasonable rules and
regulations prescribed by his employer. The
Voluntary Arbitrator pointed out that according to the
hotels Code of Discipline, an employee who
commits three different acts of misconduct within a
twelve (12)-month period commits serious
misconduct. He stressed that Caragdags infractions

were not even spread in a period of twelve (12)

months, but rather in a period of a little over a month.
Records show the various violations of the hotels
rules and regulations were committed by Caragdag.
o He was suspended for violating the hotel
policy on bag inspection and body frisking.
o He was likewise suspended for threatening
and intimidating a superior while the latter
was counseling his staff.
o He was again suspended for leaving his
work assignment without permission.
Evidently, Caragdags acts constitute serious
misconduct.
Caragdags dismissal being due to serious
misconduct, it follows that he should not be entitled
to financial assistance. To rule otherwise would be to
reward him for the grave misconduct he committed.
We must emphasize that social justice is extended
only to those who deserve its compassion
Petition denied, CA decision affirmed.

13. JERRY MAPILI vs. PHILIPPINE RABBIT BUS LINES, INC./NATIVIDAD NISCE
G.R. No. 172506, July 27, 2011
Facts:
Respondent Nisce, President of PRBLI, an entity engaged in
the transportation business hired petitioner as bus conductor.
However while on duty, petitioner was caught by PRBLIs
field inspector extending a free ride to a lady passenger.
Upon order of the field inspector, the lady passenger, who
happened to be the wife of Julio Ricardo, petitioners coemployee and one of PRBLIs drivers, was immediately
issued a passenger ticket for which she paid P50.00.
Because of the incident, petitioner was preventively
suspended and was directed to appear in an administrative
investigation. A formal hearing was conducted in which he
was given an opportunity to present and explain his side.
Consequently, through a memorandum, petitioner was
terminated from employment for committing a serious
irregularity by extending a free ride to a passenger in violation
of company rules. Notably, that was already the third time
that petitioner committed said violation.
Petitioner alleged that his two previous violations of the same
company regulation cannot be considered in the imposition
of the penalty of dismissal since those previous infractions
were not too serious. The first involved a police officer
supposedly on official duty who refused to pay for a
passenger ticket, while the second involved a former
employee of PRBLI who misrepresented himself to be a
current employee by virtue of a company ID duly presented.
Moreover, he has already been penalized for these previous
violations and to consider them anew would be tantamount
to penalizing him twice for the same offense.
LA held that petitioner had no intention to defraud the
company by his failure to issue a ticket to the wife of a coemployee as the same was done out of gratitude and under
the wrong impression that she is entitled to such privilege.
The NLRC set aside the findings of the LA.
CA affirmed the decision of the NLRC.
Issues:
Whether or not the petitioner has been validly dismissed from
employment because of repeated infractions.
Ruling:
Yes. Petitioners violation of company rules was intentional,
willful, serious and a just cause for dismissal. The provision
of Section 13, Article VIII of the CBA is clear and unequivocal
that free rides are available only to employees of PRBLI. The

benefit is not automatically extended to members of the

employees immediate family as passes must first be
requested for them. Petitioner should be conversant of this
provision considering his previous infractions of this same
provision for which he was duly penalized. Besides,
petitioners claim of good faith is belied by his testimony to
the effect that he extended a free ride out of gratitude to the
wife of a co-employee who assisted him in his financial
troubles. There was deliberate intent on the part of the
petitioner to commit the violation in order to repay a personal
debt at the expense of the company. Petitioner chose to
violate company rules for his benefit without regard to his
responsibilities to the company. Also, if not for the inspector
who discovered the incident, the company would have been
defrauded by the amount of fare. Moreover, since the
petitioner has been employed for more than 8 years, he
ought to know the specific company rules pertaining to his
line of work as a bus conductor. His length of service has
even aggravated the resulting consequences of his
transgressions. Also as a bus conductor whose duties
primarily include the collection of transportation fares, which
is the lifeblood of the PRBLI, petitioner should have exercised
the required diligence in the performance thereof. His
position is imbued with trust and confidence because it
involves handling of money and failure to collect the proper
fare from the riding public constitutes a grave offense which
justifies his dismissal. Moreover, petitioners "series of
irregularities when put together may constitute serious
misconduct."
Petitioners record of offenses of the same nature as
his present infraction justifies his dismissal. As petitioners
employment record shows, this is not the first time that
petitioner refused to collect fares from passengers. In fact,
this is already the third instance that he failed to collect fares
from the riding public. Although petitioner already suffered
the corresponding penalties for his past misconduct, those
infractions are still relevant and may be considered in
assessing his liability for his present infraction. We thus held
in Philippine Rabbit Bus Lines, Inc. v. National Labor
Relations Commission that:
Nor can it be plausibly argued that because the offenses
were already given the appropriate sanctions, they cannot be
taken against him. They are relevant in assessing private
respondents liability for the present violation for the purpose
of determining the appropriate penalty. To sustain private
respondents argument that the past violation should not be
considered is to disregard the warnings previously issued to
him.

14. CAVITE APPAREL, INCORPORATED and ADRIANO TIMOTEO vs. MICHELLE MARQUEZ
G.R. No. 172044, February 06, 2013
Facts:
Cavite Apparel is a domestic corporation engaged in
the manufacture of garments for export. Michelle was hired
as a regular employee in its Finishing Department. She
enjoyed, among other benefits, vacation and sick leaves of
seven (7) days each per annum. Prior to her dismissal,
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.

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. 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.
LA dismissed the complaint filed by Michelle for
illegal dismissal.
NLRC reversed the decision of LA Ramos and
concluded that Michelle had been illegally dismissed.
CA found no grave abuse of discretion on the part of
the NLRC and accordingly dismissed Cavite Apparels
petition.

Issue:
Whether or not Michelle has been validly dismissed
from employment based on totality of infractions.

Held:
No. Michelles four absences were not habitual;
"totality of infractions" doctrine not applicable. Neglect of

duty, to be a ground for dismissal under Article 282 of the

Labor Code, must be both gross and habitual. Gross
negligence implies want of care in the performance of ones
duties. Habitual neglect imparts repeated failure to perform
ones duties for a period of time, depending on the
circumstances. 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.
Michelles penalty of dismissal too harsh or not
proportionate to the infractions she commited. The court 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. 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 Apparels 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
employees dismissal from work in connection with a
subsequent similar offense, 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 implementation 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.
Finally, we find no evidence supporting Cavite
Apparels claim that Michelles absences prejudiced its
operations; there is no indication in the records of any
damage it sustained because of Michelles 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.
In fine, we hold that Cavite Apparel failed to
discharge the burden of proving that Michelles dismissal was
for a lawful cause. We, therefore, find her to have been
illegally dismissed.

15. E.G & I. CONSTRUCTION CORPORATION and Sato, et al, G.R. No. 182070
February 16, 2011
Facts: Sato was hired by petitioner as a grader operator,
which is considered as technical labor for more than thirteen
(13) years. However, Sato discovered that petitioner
corporation had not been remitting his premium
contributions to the Social Security System (SSS). When
Sato kept on telling petitioners to update his premium
contributions, he was removed as a grader operator and
made to perform manual labor, such as tilling the land in a
private cemetery and/or digging earthworks in petitioner
corporations construction projects. An inspection team from
the SSS went to petitioner corporations office to check its
compliance with the SSS law. Consequently, petitioners told
Sato that they could no longer afford to pay his wages, and
he was advised to look for employment in other construction
companies. Sato, however, found difficulty in finding a job
because he had been blacklisted in other construction
companies and was prevented from entering the project
sites of petitioners.
On the other hand, Berdin, Parantar, and Lacida
were hired by petitioners as a steelman/laborer, steelman,
and laborer respectively. At the start of their employment,
they were required to sign several documents purporting to
be employment contracts to which they immediately signed
without verifying their contents for fear of forfeiting their
employment. However in 2004, when the project engineer
instructed them to affix their signatures on various
documents, they refused to sign the same because they were
written in English, a language that they did not understand.
Irked by their disobedience, the project engineer terminated
their employment.
Respondents then filed their respective complaints
for illegal dismissal, underpayment of wages (wage
differentials), holiday pay, thirteenth (13th) month pay, and
service incentive leave pay.
Petitioners alleged that respondents abandoned
their work when they failed to report for work starting on July
22, 2004. Petitioner corporation sent letters advising
respondents to report for work, but they refused. They also
maintained that respondents are still welcome, if they desire
to work.
As to respondent Sato, petitioner corporation alleged
that it admonished respondent for having an illicit affair with
another woman; that, in retaliation, Sato complained to the
SSS for alleged non-remittance of his premium contributions;
that Satos work was substandard; and that he also incurred
unexplained absences and was constantly reprimanded for
habitual tardiness.
LA rendered decision finding that the respondents
were illegally dismissed from employment.

NLRC reversed the decision of the LA.

CA affirmed the decision of the LA.
Issue: Whether or not respondents has been validly
dismissed from employment on the ground of abandonment
of duty.
Held: No. Petitioner corporation failed to prove that
respondents were dismissed for just or authorized cause. In
an illegal dismissal case, the onus probandi rests on the
employer to prove that the dismissal of an employee is for a
valid cause. For abandonment to exist, it is essential (a) that
the employee must have failed to report for work or must
have been absent without valid or justifiable reason; and (b)
that there must have been a clear intention to sever the
employer-employee relationship manifested by some overt
acts. The employer has the burden of proof to show the
employee's deliberate and unjustified refusal to resume his
employment without any intention of returning. Mere absence
is not sufficient. There must be an unequivocal intent on the
part of the employee to discontinue his employment.
In this case, petitioner corporation claims that
respondent Sato committed unexplained absences on May
20, 24, and 25, 2004 and on June 7, 18, and 23, 2004.
However, based on the findings of fact of the CA, respondent
Sato worked on May 20, June 18 and 23, 2004. This was
based on the weekly time record and payroll of respondent
Sato that were presented by petitioner corporation in its
appeal before the NLRC. On respondent Satos alleged
absences on May 24 and 25 and on June 7, 2004, no time
record and payroll documents were presented by petitioner
corporation. With regard to respondents Berdin, Lacida, and
Parantar, petitioner corporation alleges that they failed to
report for work starting on July 22, 2004, and that petitioner
even sent them letters advising them to report for work, but
to no avail.
The reason why respondents failed to report for work
was because petitioner corporation barred them from
entering its construction sites. It is a settled rule that failure
to report for work after a notice to return to work has been
served does not necessarily constitute abandonment. The
intent to discontinue the employment must be shown by clear
proof that it was deliberate and unjustified. Petitioner
corporation failed to show overt acts committed by
respondents from which it may be deduced that they had no
more intention to work. Respondents filing of the case for
illegal dismissal barely four (4) days from their alleged
abandonment is totally inconsistent with our known concept
of what constitutes abandonment.

16. Hospital Management Services, Inc. - Medical Center Manila, vs. Hospital Management Services, Inc. - Medical
Center Manila Employees Association
G.R. No. 176287
January 31, 2011
FACTS:

Respondent De Castro started working as a staff

nurse at petitioner hospital since September 28,
1990, until she was dismissed on July 20, 1999
Rufina Causaren, an 81-year-old patient confined at
Room 724-1 of petitioner hospital for "gangrenous
wound on her right anterior leg and right forefoot"
and scheduled for operation, fell from the right side
of the bed as she was trying to reach for the
bedpan.
Instead of personally seeing the patient, respondent
De Castro directed ward-clerk orientee Guillergan
to check the patient. The vital signs of the patient
were normal.
The legal counsel of petitioner hospital directed
respondent De Castro and three other nurses on
duty, Staff Nurse Janith V. Paderes and Nursing
Assistants Marilou Respicio and Bertilla T. Tatad, to
appear before the Investigation Committee at the
conference room of petitioner hospital.
HRD Officer of petitioner hospital issued a notice of
termination, duly noted by Dr. Abaya-Morido, upon
respondent De Castro, effective at the close of
office hours of July 20, 1999, for alleged violation of
company rules and regulations, particularly
paragraph 16 (a), Item 3, Chapter XI of the
Employee's Handbook and Policy Manual of 1996
(Employee's Handbook):
(1) negligence to follow company policy on
what to do with patient Rufina Causaren
who fell from a hospital bed;
(2) failure to record and refer the incident to
the physician-[on- duty and] allow[ing] a
significant lapse of time before reporting the
incident;
(3) deliberately instructing the staff to follow
her version of the incident in order to cover
up the lapse; and
(4) negligence and carelessness in carrying
out her duty as staff nurse-on-duty when
the incident happened.
De Castro filed a Complaint for illegal dismissal
against petitioners.
LA decision: Hospital to reinstate respondent De
Castro to her former position or by payroll
reinstatement.
NLRC decision: Reversed the findings of the LA and
dismissing the complaint against the petitioners.
CA decision: Reversed and set aside the Decision of
the NLRC and reinstated the Decision of the LA, with
modification.

ISSUE:
WON the failure of De Castro to attend to patient
Causaren after the latter fell from the bed constitutes
gross negligence
HELD:

Article 282 (b) of the Labor Code provides that an

employer may terminate an employment for gross
and habitual neglect by the employee of his duties.
The CA ruled that per the Employees Handbook of
petitioner hospital, respondent De Castros
infraction is classified as a less serious offense for
"commission of negligent acts during working time"
as set forth in subparagraph 11, paragraph 3 (B) of
Chapter XI10 thereof. Petitioners anchor respondent
De Castros termination of employment on the
ground of serious misconduct for failure to
personally attend to patient Causaren who fell from
the bed as she was trying to reach for the bedpan.
Based on her evaluation of the situation,
respondent De Castro saw no necessity to record in
the chart of patient Causaren the fact that she fell
from the bed as the patient did not suffer any injury
and her vital signs were normal. She surmised that
the incident was not of a magnitude that would
require medical intervention as even the patient and
her niece did not press charges against her by
reason of the subject incident.
Neglect of duty, to be a ground for dismissal,
must be both gross and habitual. Gross
negligence connotes want of care in the
performance of one's duties. Habitual neglect
implies repeated failure to perform one's duties for a
period of time, depending upon the circumstances.
A single or isolated act of negligence does not
constitute a just cause for the dismissal of the
employee. Despite our finding of culpability against
respondent De Castro; however, we do not see any
wrongful intent, deliberate refusal, or bad faith on
her part when, instead of personally attending to
patient Causaren, she requested Nursing Assistant
Tatad and ward-clerk orientee Guillergan to see the
patient, as she was then attending to a newlyadmitted patient at Room 710. It was her judgment
call, albeit an error of judgment, being the staff
nurse with presumably more work experience and
better learning curve, to send Nursing Assistant
Tatad and ward-clerk orientee Guillergan to check
on the health condition of the patient, as she
deemed it best, under the given situation, to attend
to a newly-admitted patient who had more concerns
that needed to be addressed accordingly. Being her
first offense, respondent De Castro cannot be said
to be grossly negligent so as to justify her
termination of employment. Moreover, petitioners
allegation, that respondent De Castro exerted
undue pressure upon her co-nurses to alter the

actual time of the incident so as to exculpate her

from any liability, was not clearly substantiated.
Considering that this was the first offense of
respondent De Castro in her nine (9) years of
employment with petitioner hospital as a staff nurse
without any previous derogatory record and, further,

as her lapse was not characterized by any wrongful

motive or deceitful conduct, the Court deems it
appropriate that, instead of the harsh penalty of
dismissal, she would be suspended for a period of
six (6) months without pay, inclusive of the
suspension for a period of 14 days which she had
earlier served.

17. Nissan Motors Phils., Inc. vs Angelo

G.R. No. 164181,
September 14, 2011

FACTS:

Respondent Victorino Angelo was employed by

Nissan on March 11, 1989 as one of its payroll staff.
On April 7 to 17, 2000, respondent was on sick
leave, thus, he was not able to prepare the payroll
for the said period. Again, on April 27 and 28, 2000,
respondent was on an approved vacation leave
which again resulted in the non-preparation of the
payroll for that particular period.
On May 8, 2000, respondent received a
Memorandum from the petitioner to inform him that
the Company is considering his dismissal from
employment on the grounds of serious
misconduct, willful disobedience and gross
neglect of duties.
1. On April 11, Tuesday, you did not
report for work, without any notice to
the company
2. On April 12, Wednesday, you
reported for work but went home
early claiming that you were again
not feeling well.
3. On April 13, Thursday, you again did
not report for work without any
notice to the company just like what
you did last Tuesday
4. On April 14, Friday (payday), we
were still doing the payroll thru IT
because we could not contact you.
The amount released to the
employees were not accurate as
some got more than (sic), while
some got less than what they were
supposed to receive.
5. On April 18, Tuesday, you filed an
application for vacation leave due to
your son's graduation on April 27
and 28. Because it is again payroll
time, we advised that your leave will
be approved on the condition that
you will ensure that the payroll is
finished on time and [you] will make
a proper turn over to your immediate
superior before your leave. You
agreed and your leave was
approved.
6. On April 24 & 25 & 26, you were
reminded on finishing the payroll
and the turn over again and you said
yes.
7. On April 27, Thursday, you were
already on leave and your superior,
Mr. M. Panela, found out that the
diskette only contained the amount
and name of employees, but not the
account number.
8. On April 28, Friday, after exhaustive
joint efforts done by Welfare
Management Section and IT

Division, we were able to finally

release the payroll thru the bank, but
many employees got lower amount
than what they have expected, as in
fact at least 43 employees out of
360 got salaries below P1,000.00,
among them about 10 people got no
salary primarily due to wrong
deduction and computation done by
you. Again, many people got angry
to the management's inefficient
handling of their payroll.
9. On May 2, Tuesday, you did not
report for work, again you said you
are not feeling well, but the
information to us came very late at
about noon time.
10. On May 3, Wednesday, you
reported for work, and was
instructed to finish the payslips for
the payroll periods April 15 and April
30. Later, you decided on your own
to just compute the payslip on a
monthly basis instead of the usual
semi-monthly basis as is the
customary thing to do. As a result
thereof, an error in the tax
withholding happened and again
resulted in another confusion and
anger among employees.
As a consequence of all these, the
manufacturing employees, numbering about
350 people or about 65% of [Nissan's total
population], since April 16, have started to
decline rendering overtime work, saying
after their 15 days of work they received only
less than P200 while some even received
only P80.
Petitioner conducted an investigation and
concluded that respondent's explanation
was untrue and insufficient. Thus, petitioner
issued a Notice of Termination.

LA decision: Dismissed respondent's complaint for lack of

merit
NLRC decision: Dismissed the appeal and affirmed the LAs
Decision.
CA decision: Petition was granted.
ISSUE:
WON the Angelos non-preparation of payroll during the
specific period amounts to serious misconducts and
insubordination warranting dismissal
HELD:
One of the just causes enumerated in the Labor
Code is serious misconduct. Misconduct is improper
or wrong conduct. It is the 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. Such misconduct, however serious, must
nevertheless be in connection with the employee's
work to constitute just cause for his separation.
Thus, for misconduct or improper behavior to be
a just cause for dismissal, (a) it must be serious;
(b) it must relate to the performance of the
employees duties; and (c) it must show that the
employee has become unfit to continue working
for the employer.
The Court found evidence to support the allegation
of serious misconduct or insubordination. Petitioner
claims that the language used by respondent in his
Letter-Explanation is akin to a manifest refusal to
cooperate with company officers, and resorted to
conduct which smacks of outright disrespect and
willful defiance of authority or insubordination. The
misconduct to be serious within the meaning of the
Labor Code must be of such a grave and aggravated
character and not merely trivial or unimportant. The
Letter-Explanation partly reads:

Again, it's not negligence on my

part and I'm not alone to be blamed. It's
negligence on your part [Perla Go] and A.A.
Del Rosario kasi, noong pang April 1999 ay
alam ninyo na hindi ako ang dapat may
responsibilidad ng payroll kundi ang
Section Head
eh bakit hindi ninyo
pinahawak sa Section Head noon pa. Pati
kaming dalawa sa payroll, kasama ko si
Thelma. Tinanggal nyo si Thelma. Hindi
nyo ba naisip na kailangan dalawa ang tao
sa payroll para pag absent ang isa ay may
gagawa. Dapat noon nyo pa naisip iyan.
Ang tagal kong gumawa ng trabahong hindi
ko naman dapat ginagawa.

This Court finds the above to be grossly

discourteous in content and tenor. The most
appropriate thing he could have done was simply to
state his facts without resorting to such strong
language. Past decisions of this Court have been
one in ruling that accusatory and inflammatory
language used by an employee to the employer or
superior can be a ground for dismissal or
termination.
Another just cause cited by the petitioner is willful
disobedience. One of the fundamental duties of an
employee is to obey all reasonable rules, orders and
instructions of the employer. Disobedience, to be a
just cause for termination, must be willful or
intentional, willfulness being characterized by a
wrongful and perverse mental attitude rendering the
employees
act
inconsistent
with
proper
subordination.
A
willful
or
intentional
disobedience of such rule, order or instruction
justifies dismissal only where such rule, order or
instruction is (1) reasonable and lawful, (2)
sufficiently known to the employee, and (3)
connected with the duties which the employee
has been engaged to discharge.
Petitioner also dismissed respondent because of
gross or habitual negligence. Neglect of duty, to be
a ground for dismissal, must be both gross and
habitual. In finding that petitioner was able to adduce
evidence that would justify its dismissal of
respondent, the NLRC correctly ruled that the latter's
failure to turn over his functions to someone capable
of performing the vital tasks which he could not
effectively perform or undertake because of his heart
ailment or condition constitutes gross neglect.
However, although the dismissal was legal,
respondent is still entitled to a separation pay as a
measure of financial assistance, considering his
length of service and his poor physical condition
which was one of the reasons he filed a leave of
absence.

18. Lopez vs Keppel Bank Philippines

G.R. No. 176800, September 5, 2011
FACTS:
Petitioner Elmer Lopez was the Branch Manager of
the respondent Keppel Bank Philippines, Inc. (bank)
in Iloilo City. Allegedly, through his efforts, Hertz
Exclusive Cars, Inc. (Hertz) became a client of the
bank.
By notice dated August 12, 2003, the bank asked
Lopez to explain in writing why he should not be
disciplined for issuing, without authority, two
purchase orders (POs) for the Hertz account
amounting to a total of P6,493,000.00, representing
the purchase price of 13 Suzuki Bravo and two
Nissan Exalta vehicles.
Lopez alleged before the labor arbiter that he issued
the POs as part of his strategy to enhance the banks
business, in line with his duty as branch manager to
promote the growth of the bank. He claimed that the
bank honored the first PO for P1.8M from which the
bank derived an income of P142,000.00. He added
that the second PO did not materialize because Mr.
James Puyat Concepcion, a Hertz incorporator and
director who opened the Hertz account, stopped
depositing with the bank because of the negative
credit rating he received from the banks credit
committee. Allegedly, the committee discovered that
James Puyat Concepcion had several pending court
cases.
For its part, the bank denied approving the first PO,
arguing that Lopez did not have the authority to issue
the POs for the Hertz account as there was a
standing advice that no Hertz loan application was to
be approved. It stressed that Lopez committed a
serious violation of company rules when he issued
the POs.

HELD:
The right of an employer to freely select or discharge
his employee is a recognized prerogative of
management; an employer cannot be compelled to
continue employing one who has been guilty of acts
inimical to its interests. When this happens, the
employer can dismiss the employee for loss of
confidence.

Loss of confidence should ideally apply only (1)

to cases involving employees occupying
positions of trust and confidence, or (2) to
situations where the employee is routinely
charged with the care and custody of the
employers money or property. To the first class
belong managerial employees, i.e., those vested
with the powers and prerogatives to lay down
management polices and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees, or effectively recommend such
managerial actions. To the second class belong
cashiers, auditors, property custodians, or those
who, in the normal and routine exercise of their
functions, regularly handle significant amounts of
money or property.

Despite evidence of his past exercise of authority (as

found by the labor arbiter), we cannot disregard
evidence showing that in August 2003, the bank
specifically instructed Lopez not to proceed with the
Hertz loan application because of the negative credit
rating issued by the banks credit committee. We find
it undisputed that Lopez processed the loan despite
the adverse credit rating. In fact, he admitted that he
overlooked the control aspects of the transaction as
far as the bank was concerned because of his
eagerness to get a bigger share of the market.

As a bank official, the petitioner must have been

aware that it is basic in every sound management
that people under ones supervision and direction are
bound to follow instructions or to inform their superior
of what is going on in their respective areas of
concern, especially regarding matters of vital interest
to the enterprise. Under these facts, we find it
undisputed that Lopez disobeyed the banks
directive to put the Hertz loan application on hold,
and did not wait until its negative credit rating was
cleared before proceeding to act. That he might have
been proven right is immaterial.
Under the circumstances of this case, we are
convinced that the bank was justified in terminating
Lopezs employment by reason of loss of trust and
confidence.

LA decision: Lopez was illegally dismissed.

NLRC decision: The NLRC found merit in the banks
submission that by issuing the questioned POs without
authority and against the banks express orders, Lopez
thereby committed a willful disobedience against his
superiors a sufficient basis for the bank to lose its trust and
confidence in him as branch manager. It thus found that
Lopez had been dismissed for cause after the observance of
due process.
CA decision: It fully agreed with the NLRC finding that Lopez
had not been illegally dismissed.
ISSUE:
WON Lopez is liable for loss of trust and confidence for
issuing the two disputed POs

19. SANDEN AIRCON PHILIPPINES and ANTONIO ANG vs.LORESSA P. ROSALES, G.R. No. 169260 March 23, 2011
will directly point to Loressas having committed
"data sabotage" or (ii) that she absented herself
without leave.

Principle - An employer has the discretion to dismiss an

employee for loss of trust and confidence but the former
may not use the same to cloak an illegal dismissal.

Ruling of the National Labor Relations Commission

Facts

August 1992 - Sanden Aircon Philippines (Sanden)

employed Loressa as Management Information
System (MIS) Department Secretary.
December 26, 1996, she was promoted as Data
Custodian and Coordinator. Loressa had access to
all computer programs and marketing computer
data, including the Delivery Receipt Transaction
files.
May 16, 1997, Sanden discovered that the
marketing delivery receipt transactions computer
files were missing.
Technical investigation was conducted. Findings:
-Before the incident, Marketing Staff are still using
the said file until 12:00 noon, when they were
instructed by the Data Custodian (Ms. Loressa
Rosales) to log out from the system because a
back-up was to be conducted. Back-up activities
never took place

Ruling of the Court of Appeals

Ruling: petition is bereft of merit.

ART. 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;
(b) Gross and habitual neglect by the employee of
his duties;
(c) Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;

-The Data Custodian [has] all the rights of Add,

Edit, Delete on all the files found in the system.
-It is highly probable that Ms. Loressa Rosales was
the culprit in the said incident.

Loressa was charged of data sabotage and AWOL.

She was given 24 hours to explain.
Loressa denied the allegations of data sabotage.
According to her, only a computer programmer
equipped with the necessary expertise and not a
mere data custodian like her would be capable of
such an act.
Sanden notified Loressa that management is
terminating Loressas employment effective upon
receipt of the said communication. The reason cited
by Sanden was the loss of trust on her capability to
continue as its Coordinator and Data Custodian.
Loressa caused the deliberate sabotage of the
marketing data involving the Delivery Receipts.
September 9, 1997, Loressa filed a complaint12 for
illegal dismissal

Ruling of the Labor Arbiter

Sanden is guilty of illegal dismissal. There exists no

justifiable basis for Sandens act of terminating the
services of Loressa. Nowhere in the records can be
found evidence, documentary or otherwise (i) that

CA granted the petition and reversed and set aside

Resolution of the NLRC

Issue: whether Sanden legally terminated Loressas

employment on the ground of willful breach of trust and
confidence as Coordinator and Data Custodian.

-The incident can only happen when only one user

[was] using the file and found out that Loressa was
the only one log[ged] in on the system at 12:05
noon to 12:21 noon with 16 minutes of usage time

Affirmed then reversed, dismissed for lack of merit

(d) Commission of a crime or offense by the

employee against the person of his employer or any
immediate member of his family or his duly
authorized representative; and
(e) Other causes analogous to the foregoing.

Article 282(c) of the Labor Code prescribes two

separate and distinct grounds for termination of
employment, namely: (1) fraud or (2) willful breach
by the employee of the trust reposed in him by his
employer or duly authorized representative.
Breach of trust must be willful. Ordinary breach will
not suffice. "A breach is willful if it is done
intentionally and knowingly without any justifiable
excuse, as distinguished from an act done
carelessly, thoughtlessly or inadvertently."
"As firmly entrenched in our jurisprudence, loss of
trust and confidence as a just cause for termination
of employment is premised on the fact that an
employee concerned holds a position where greater
trust is placed by management and from whom
greater fidelity to duty is correspondingly
expected.""The betrayal of this trust is the essence
of the offense for which an employee is penalized."

Sanden has the burden of proof to prove its allegations.

the burden of establishing facts as bases for an

employers loss of confidence in an employee
facts which reasonably generate belief by the
employer that the employee was connected with
some misconduct and the nature of his participation
therein is such as to render him unworthy of trust
and confidence demanded of his position is on
the employer."
While it is true that loss of trust and confidence is
one of the just causes for termination, such loss of
trust and confidence must, however, have some
basis. Proof beyond reasonable doubt is not
required. It is sufficient that there must only be
some basis for such loss of confidence or that there
is reasonable ground to believe if not to entertain
the moral conviction that the concerned employee
is responsible for the misconduct and that the
nature of his participation therein rendered him
absolutely unworthy of trust and confidence
demanded by his position.

Sanden failed to discharge the burden of proof that the

dismissal of Loressa is for a just cause.

1st requisite for dismissal on the ground of loss of

trust and confidence -employee concerned must be
holding a position of trust and confidence. (Loressa
held a position of trust and confidence as
Coordinator and Data Custodian of the MIS
Department.)
2nd requisite - there must be an act that would justify
the loss of trust and confidence. Loss of trust and
confidence, to be a valid cause for dismissal, must
be based on a willful breach of trust and founded on
clearly established facts. The basis for the dismissal
must be clearly and convincingly established but
proof beyond reasonable doubt is not necessary."
(Sandens evidence against Loressa fails to meet
this standard.)
LA - nowhere in the records can be found evidence
that directly point to complainant as having
committed acts of sabotage. Also, during the
administrative investigation, the guilt of
complainant-appellee was based on mere
allegations not supported by documentary evidence
nor any factual basis. Even appellants cannot
directly pinpoint appellee as the culprit. They were
only thinking of her as the one probably responsible
thereto, considering that when she used the
computer, she told the other users to log out and
thereafter, used the computer for 16 minutes, with
only 1 minute as usage time. But these allegations
would not suffice (sic) termination of employment of

appellee. Note that security of tenure is protected

by constitutional mandate.
there was no evidence presented to prove that
Loressa indeed committed "data sabotage. It is
therefore a mere theory with no apparent factual
basis, testimonial or documentary evidence, that
would establish the guilt of Loressa for the charges
of "data sabotage."
Loressa was able to provide documentary evidence
to show that Sandens computer system was
experiencing some problems even before May 16,
1997.
problem of missing data already existed as early as
1995, when Loressa was still an MIS Secretary and
was not yet tasked to back up the Marketing
Delivery Receipt Transaction files.
It is not difficult to see that the imputed guilt of the
petitioner was based on mere allegations and
theories held by private respondents as possible
causes for the deletion of the subject files. In the
first place, if the subject delivery receipt files were
as crucial to the operations of the company as what
the private respondents claimed them to be, then
sound business judgment would dictate that it keep
a record or paper trail of all its delivery transactions
which could still be made available to the Finance
Department for its billing and collection activities. It
is common knowledge that no computer system is
absolutely crash proof" or "bug-free" and that a
total obliteration of a particular computer file could
be attributed to so many other causes other than
the deliberate deletion of the same. In the second
place, the deletion of the subject files could have
occurred at any one point or time and not
necessarily during the time at which the petitioner
was the only registered user in the system. In this
case, the private respondents failed to determine
with absolute certainty and to show proof of the
exact date or time when it occurred. Third and last,
while it may be true that the petitioner had access
to the subject files as well as the code to delete the
same, it is hardly believable that she would be the
sole person in the company who could access the
same. It is noted that the petitioner worked under
the supervision of an MIS Manager as well as other
company officers, who in all probability also had
access to the same files and codes available to the
petitioner.
Sanden failed in discharging the burden of proof
that the dismissal of Loressa is for a just cause, we
have no other recourse but to declare that she was
illegally dismissed based on the ground of loss of
trust and confidence. This is in consonance with the
constitutional guarantee of security of tenure.

20. G.R. No. 164662

February 18, 2013

MARIA LOURDES C. DE JESUS, Petitioner, vs.HON. RAUL T. AQUINO, PRESIDING COMMISSIONER, NATIONAL LABOR
RELATIONS COMMISSION, SECOND DIVISION, QUEZON CITY, and SUPERSONIC SERVICES, INC., Respondents.
G.R. No. 165787
SUPERSONIC SERVICES, INC., Petitioner vs. MARIA LOURDES C. DE JESUS, Respondent.
Principle - The dismissal of an employee for a just or
authorized cause is valid despite the employer's nonobservance of the due process of law the Labor Code has
guaranteed to the employee. The dismissal is effective
against the employee subject to the payment by the
employer of an indemnity.
Facts

February 20, 2002, De Jesus filed with LA a

complaint for illegal dismissal against Supersonic
for brevity, Pakistan Airlines, Gil Puyat, Jr. and
Divina Abad Santos
De Jesus allege-she was employed by Supersonic
since February 1976 until her illegal dismissal of
March 15, 2001; from 1976 to 1992, she held the
position of reservation staff, and from 1992 until her
illegal dismissal on March 15, 2001, she held the
position of Sales Promotion Officer where she
solicited clients for Supersonic and sold plane
tickets to various travel agencies on credit; on
March 12, 2001, she had an emergency
hysterectomy operation preceded by continuous
bleeding; she stayed at the Makati Medical Center
for three (3) days and applied for a sixty-(60) day
leave in the meantime; on June 1, 2001, she went
to Supersonic and found the drawers of her desk
opened and her personal belongings packed,
without her knowledge and consent; while there,
Abad Santos, general manager, asked her to sign a
promissory note and directed her secretary not to
allow her to leave unless she execute a promissory
note; she was later forced to execute a promissory
note which she merely copied from the draft
prepared by Santos and Malubay; she was also
forced to indorse to Supersonic her SSS check in
the amount of P25,000.00 which represents her
benefits from the hysterectomy operation; there was
no notice and hearing nor any opportunity given her
to explain her side prior to the termination of her
employment; Supersonic even filed a case for
Estafa against her for her alleged failure to remit
collections despite the fact that she had completely
remitted all her collections; and the termination was
done in bad faith and in violation of due process.
Supersonic said- as Sales Promotion Officer, De
Jesus was fully authorized to solicit clients and
receive payments for and in its behalf, and as such,
she occupied a highly confidential and financially
sensitive position in the company; based on the
company records, an outstanding balance of
U.S.$36,168.39 accumulated under the account of
De Jesus; after verifications with its clients, it
discovered that the amount of U.S.$36, 168.39

were already paid to De Jesus but this was not

turned over and duly accounted for by her; hence,
another memorandum was issued to De Jesus
directing her to explain in writing why she should
not be dismissed for cause for failure to account for
the total amount of U.S.$36, 168.39; De Jesus was
informed that her failure to explain in writing shall
be construed that she misappropriated said amount
for her own use and benefit to the damage of the
company; De Jesus was likewise verbally notified of
the companys intention to dismiss her for cause;
after due investigation and confrontation, De Jesus
admitted that she received the U.S.$36,168.39 from
their clients and even executed a promissory note
in her own handwriting acknowledging her
obligation; she was fully aware of her dismissal and
even obligated herself to offset her obligation with
any amount she would receive from her retirement;
when De Jesus failed to comply with her promise to
settle her obligation, a demand letter was sent to
her; because of her persistent failure to settle the
unremitted collections, it was constrained to
suspend her as a precautionary measure and to
protect its interests; despite demands, De Jesus
failed to fulfill her promise, hence, a criminal case
for estafa was filed against her; and in retaliation to
the criminal case filed against her, she filed this
illegal dismissal case.
LA Ruling
-ruled against De Jesus, declaring her dismissal to be
for just cause and finding that she had been accorded
due process of law.
NLRC Ruling
-Affirmed. Records show complainant was required
to explain in writing why she should not be dismissed from
employment for her failure to account for the cash
collections in her custody. Complainant acknowledged her
failure to effect a turn-over of the amount of US$36,168.39
to the respondent. More than this, she offered no
explanation for her failure to immediately account for her
collections. Further, her allegation of duress may not be
accorded credence, there being no evidence as to the
circumstances under which her consent was allegedly
vitiated. Having been given the opportunity to explain her
side, complainant may not successfully claim that she was
denied due process. Further, her admission and other
related evidence, particularly the finding of a prima facie
case for estafa against her, and corroborative statements
from respondents client, sufficiently controvert
complainants assertion that no just cause existed for the
dismissal.

CA- partly meritorious

Issues: (1) Whether or not Supersonic was justified in
terminating De Jesus employment; (2) Whether or not
Supersonic complied with the two-written notice rule
Ruling
-

first issue, Supersonic substantially proved that De

Jesus had failed to remit and had misappropriated the
amounts she had collected in behalf of Supersonic. the
dismissal of De Jesus was valid.
Article 282 of the Labor Code enumerates the causes by
which the employer may validly terminate the employment
of the employee
Article 282.Termination by employer. - An employer may
terminate an employment for any of the following causes:
(c) Fraud or willful breach by the employee of
the trust reposed in him by his employer or duly
authorized representative;
The CA observed that De Jesus had not disputed her failure
to remit and account for some of her collections, for, in fact,
she herself had expressly admitted her failure to do so
through her letters dated April 5, 2001 and May 15, 2001
sent to Supersonics general manager.
She defrauded her employer or willfully violated the trust
reposed in her by Supersonic.
Proof beyond reasonable doubt of her violation of the trust
was not required, for it was sufficient that the employer had
"reasonable grounds to believe that the employee
concerned is responsible for the misconduct as to be
unworthy of the trust and confidence demanded by [her]
position."11
-

Second issue, affirm the decision of the CA holding that

Supersonic had not complied with the twowritten notice
rule.
the betrayal of the trust the employer reposed in De
Jesus was the essence of the offense for which she
was to be validly penalized with the supreme penalty of
dismissal. She was still entitled to due process in order
to effectively safeguard her security of tenure. The law
affording to her due process as an employee imposed
on Supersonic as the employer the obligation to send to
her two written notices before finally dismissing her.
This requirement of two written notices is enunciated in
Article 277of the Labor Code. The requirement was
mandatory.
The memoranda did not satisfy the requirement for the
two written notices under the law. The March 26, 2001
memorandum did not specify the grounds for which her
dismissal would be sought, and for that reason was at
best a mere reminder to De Jesus to submit her report
on the status of her accounts. The May 12, 2001
memorandum did not provide the notice of dismissal
under the law because it only directed her to explain
why she should not be dismissed for cause. The latter

memorandum was apparently only the first written

notice under the requirement. Insufficiency of the two
memoranda as compliance with the two-written notices
requirement of due process . The various memoranda
given her were not the same notices required by law, as
they were mere internal correspondences intended to
remind De Jesus of her outstanding accountabilities to
the company. Assuming for the sake of argument that
the memoranda furnished to De Jesus may have
satisfied the minimum requirements of due process,
still, the same did not satisfy the notice requirement
under the Labor Code because the intention to sever
the employees services must be made clear in the
notice. Such was not apparent from the memoranda.
- As the Supreme Court held in Serrano, the violation of
the notice requirement is not strictly a denial of due
process. This is because such notice is precisely
intended to enable the employee not only to prepare
himself for the legal battle to protect his tenure of
employment, but also to find other means of
employment and ease the impact of the loss of his job
and, necessarily, his income.
-The dismissal of De Jesus should therefore be struck
(down) as ineffectual.
-Under Agabon, the new doctrine is that the failure of the
employer to observe the requirements of due process in
favor of the dismissed employee (that is, the two-written
notices rule) should not invalidate or render ineffectual the
dismissal for just or authorized cause. The Agabon Court
plainly saw the likelihood of Serrano producing unfair butfarreaching consequences, such as, but not limited to,
encouraging frivolous suits where even the most notorious
violators of company policies would be rewarded by
invoking due process; to having the constitutional policy of
providing protection to labor be used as a sword to oppress
the employers; and to compelling the employers to continue
employing persons who were admittedly guilty of
misfeasance or malfeasance and whose continued
employment would be patently inimical to the interest of
employers.28
Even so, the Agabon Court still deplored the employer's
violation of the employee's right to statutory due process by
directing the payment of indemnity in the form of nominal
damages, the amount of which would be addressed to the
sound discretion of the labor tribunal upon taking into
account the relevant circumstances. Thus, the Agabon
Court designed such form of damages as a deterrent to
employers from committing in the future violations of the
statutory due process rights of employees, and, at the same
time, as at the very least a vindication or recognition of the
fundamental right granted to the employees under the Labor
Code and its implementing rules.29 Accordingly, consistent
with precedent30 the amount of P50,000.00 as nominal
damages is hereby fixed for the purpose of indemnifying De
Jesus for the violation of her right to due process.
WHEREFORE, the Court DECLARES the dismissal of
Maria Lourdes C. De Jesus for just or authorized cause as
valid and effectual; and ORDERS Supersonic Services, Inc.
to pay to Maria Lourdes C. De Jesus P50,000.00 as
nominal damages to indemnify her for the violation of her
right to due process. No pronouncements on costs of suit.

21. G.R. No. 187232

April 17, 2013

ZENAIDA D. MENDOZA, Petitioner, vs. HMS CREDIT CORPORATION and/or FELIPE R. DIEGO, MA. LUISA B. DIEGO,
HONDA MOTOR SPORTS CORPORATION and/or FELIPE R. DIEGO, MA. LUISA B. DIEGO, BETA MOTOR TRADING
INCORPORATED and/or FELIPE DIEGO, MA. LUISA B. DIEGO, JIANSHE CYCLE WORLD IN CORPORATED and/or JOSE
B. DIEGO, Respondents.
Facts:
-

(Mendoza) was the Chief Accountant of (HMS Credit)

beginning 1 August 1999.2 During her employment, she
simultaneously serviced three other respondent
companies, all part of the Honda Motor Sports Group
(HMS Group),
Respondent (Luisa) was the Managing Director of HMS
Credit, while respondent (Felipe) was the company
officer to whom Mendoza directly reported.
Mendoza avers that on 11 April 2002, after she
submitted to Luisa the audited financial statements,
Felipe summoned Mendoza to advise her of her
termination from service. She claims that she was even
told to leave the premises without being given the
opportunity to collect her personal belongings.
She was stopped by the security guards and barred
from entering the building
Respondents maintain that Mendoza was hired on the
basis of her qualification as a (CPA), which turned out
to be a misrepresentation.They likewise contend that
not only did she fail to disclose knowledge of the
resignations of two HMS Group officers, (Labasan) and
(de la Cruz), and their subsequent transfer to a
competitor company, but she also had a hand in
pirating them. Thus, on 12 April 2002, they supposedly
confronted her about these matters. In turn, she
allegedly told them that if they had lost their trust in her,
it would be best for them to part ways. 12 Accordingly,
they purportedly asked her to propose an amount
representing her entitlement to separation benefits.
Before she left that night, they allegedly handed her
P30,000 as payment for the external auditor she had
contracted to examine the books of the HMS Group.
Mendoza filed with the (NLRC) a Complaint for Illegal
Dismissal

LA Decision
-

Mendoza had been illegally dismissed, and that the

dismissal had been effected in violation of due process
requirements.

NLRC Decision
-

Reversed, declared that Mendoza had not been

summarily dismissed.

CA
-

There was no dismissal, as the parties had entered into

a compromise agreement whereby respondents offered
to pay Mendoza separation benefits in exchange for her
voluntary resignation.

ISSUE: W/N the CA erred in ruling that there was no illegal

dismissal.
Ruling:
Art. 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;
b. Gross and habitual neglect by the employee of
his duties;
c. Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;
d. Commission of a crime or offense by the
employee against the person of his employer or any
immediate member of his family or his duly
authorized representatives; and
e. Other causes analogous to the foregoing.
Art. 285. Termination by employee.
a. An employee may terminate without just cause
the employee-employer relationship by serving a
written notice on the employer at least one (1)
month in advance. The employer upon whom no
such notice was served may hold the employee
liable for damages.
b. An employee may put an end to the relationship
without serving any notice on the employer for any
of the following just causes:
1. Serious insult by the employer or his
representative on the honor and person of
the employee;
2. Inhuman and unbearable treatment
accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing.

In instances in which the termination of employment by the

employer is based on breach of trust, a distinction must be
made between rank-and-file employees and managerial
employees, thus:
The degree of proof required in labor cases is not as
stringent as in other types of cases. It must be noted,
however, that recent decisions of this Court have
distinguished the treatment of managerial employees from
that of rank-and-file personnel, insofar as the application of
the doctrine of loss of trust and confidence is concerned.
Thus, with respect to rank-and-file personnel, loss of trust
and confidence as ground for valid dismissal requires proof
of involvement in the alleged events in question, and that
mere uncorroborated assertions and accusations by the
employer will not be sufficient. But as regards a managerial
employee, the mere existence of a basis for believing that
such employee has breached the trust of his employer
would suffice for his dismissal. Hence, in the case of
managerial employees, proof beyond reasonable doubt is
not required, it being sufficient that there is some basis for
such loss of confidence, such as when the employer has
reasonable ground to believe that the employee concerned
is responsible for the purported misconduct, and the nature
of his participation therein renders him unworthy of the trust
and confidence demanded by his position.
Further, in the case of termination by the employer, it is not
enough that there exists a just cause therefor, as procedural
due process dictates compliance with the two-notice rule in
effecting a dismissal.
On the other hand, if the termination of employment is by
the employee, the resignation must show the concurrence
of the intent to relinquish and the overt act of
relinquishment.
She was a managerial employee. In securing this position,
she fraudulently misrepresented her professional
qualifications by stating in her Personal Information Sheet
that she was a CPA. Based on the records, she never
controverted this imputation of dishonesty or, at the very
least, provided any explanation therefor. Thus, this deceitful
action alone was sufficient basis for respondents loss of
confidence in her as a managerial employee.
In sum, the commission finds that Mendoza was not illegally
dismissed. Respondents could have validly dismissed her
for just cause because she had forfeited her employment by
having incurred breach of trust that they had reposed in her.

These were acts of disloyalty for which [they] would have

been justified in terminating her service on the ground of
loss of confidence.
However, despite the existence of a just cause for
termination, Mendoza was nevertheless dismissed from
service in violation of procedural due process, as
respondents failed to observe the two-notice requirement.
Respondents were unable to discharge their burden to
prove the contemporaneous existence of an intention on the
part of Mendoza to resign and an overt act of resignation.
Aside from their self-serving allegation that she had offered
to resign after they had expressed their loss of trust in her,
there is nothing in the records to show that she voluntarily
resigned from her position in their company. In this regard, it
is worthy to underscore the established rule that the filing of
a complaint for illegal dismissal is inconsistent with
resignation or abandonment.
Moreover, the conclusion of the NLRC and the CA that
Mendoza voluntarily resigned in consideration of
respondents supposed payment of a settlement is bereft of
any basis. The lower tribunals merely surmised that the
parties forged a compromise agreement despite
respondents own admission that they never decided
thereon. In fact, the records are clear that none of the
parties claimed the existence of any settlement in exchange
for her resignation.
From the foregoing discussion, it is evident that although
there was a just cause for terminating the services of
Mendoza, respondents were amiss in complying with the
two-notice requirement. Following the prevailing
jurisprudence on the matter, if the dismissal is based on a
just cause, then the non-compliance with procedural due
process should not render the termination from employment
illegal or ineffectual. Instead, the employer must indemnify
the employee in the form of nominal damages. Therefore,
the dismissal of Mendoza should be upheld, and
respondents cannot be held liable for the payment of either
backwages or separation pay. Considering all the
circumstances surrounding this case, this Courts finds the
award of nominal damages in the amount of P30,000 to be
in order.
-Petition DENIED. AFFIRMED WITH MODIFICATION: the
award of separation pay is deleted and nominal damages in
the amount of P30,000 is awarded to petitioner.

22. ROLANDO DS. TORRES, PETITIONER, VS. RURAL BANK OF SAN JUAN, INC., ANDRES CANO CHUA, JOBEL GO
CHUA, JESUS CANO CHUA, MEINRADO DALISAY, JOSE MANALANSAN ILL, OFELIA GINABE AND NATY ASTRERO,
RESPONDENTS.

The petitioner was initially hired by RBSJI as

Personnel and Marketing Manager in 1991.
Petitioner accepted the position of Vice-President
for RBSJIs newly created department, Allied
Business Ventures.
The vacancy created was filled by respondent Jobel
Petitioner was temporarily assigned as the manager
of RBSJIs N. Domingo branch
Jacinto requested the petitioner to sign a standard
employment clearance but declined his request.
Jacinto threw a fit and shouted foul invectives.
To pacify him, the petitioner bargained to issue a
clearance but only for Jacintos paid cash advances
and salary loan.
Jacinto was later found to have unliquidated cash
advances and was responsible for a questionable
transaction involving P11 million.
The petitioner submitted his explanation clarifying
that the clearance was limited only to Jacintos paid
cash advances and salary loan based on the
receipts presented by Lily, the cashier of N.
Domingo branch.
After conducting an investigation, RBSJIs Human
Resources Department recommended the
petitioners termination from employment.
RBSJIs Board of Directors adopted.
Petitioner filed the herein complaint for illegal
dismissal, illegal deduction, non-payment of service
incentive, leave pay and retirement benefits.
He claimed that he was deceived to accept a VicePresident position, which turned out to be a mere
clerical and menial work, so the respondents can
install Jobel, the son of a major stockholder of
RBSJI, as Personnel and Marketing Manager.
The petitioner further alleged that he was cunningly
assigned at N. Domingo branch so he can be
implicated in the anomalous transaction perpetrated
by Jacinto.
Accdg to RESPONDENTS:
Respondents maintained that the petitioner was
validly dismissed for loss of trust and confidence
precipitated by his unauthorized issuance of a
financial accountability clearance.
They averred that a copy of the clearance
mysteriously disappeared from RBSJIs records
hence, the petitioners claim that it pertained only to
Jacintos paid cash advances and salary loan
cannot stand for being uncorroborated.

Ruling of LA and NLRC

sustained the claims of the petitioner as against the
factually unsubstantiated allegation of loss of trust
and confidence propounded by the respondents.
petitioner was found to have been illegally
dismissed

Ruling of the CA
As the Acting Manager of RBSJIs N. Domingo
branch, the petitioner held a highly sensitive and
critical position which entailed the conscientious
observance of company procedures. Not only was
he unauthorized to issue the clearance, he also
failed to exercise prudence in clearing Jacinto of his
accountabilities given the fact that the same were
yet to be audited. Such omission financially
prejudiced RBSJI and it amounted to gross
negligence and incompetence sufficient to sow in
his employer the seed of mistrust and loss of
confidence
The Courts Ruling
The respondents failed to prove
that the petitioner was dismissed
for a just cause.
The law mandates that before validity can be accorded to a
dismissal premised on loss of trust and confidence, two
requisites must concur, (1) the employee concerned must
be holding a position of trust; and (2) the loss of trust must
be based on willful breach of trust founded on clearly
established facts.[35]
The presence of the first requisite is thus certain. Anent the
second requisite, the Court finds that the respondents failed
to meet their burden of proving that the petitioners
dismissal was for a just cause.
The act alleged to have caused the loss of trust and
confidence of the respondents in the petitioner was his
issuance, without prior authority and audit, of a clearance to
Jacinto who turned out to be still liable for unpaid cash
advances and for an P11-million fraudulent transaction that
exposed RBSJI to suit. According to the respondents, the
clearance barred RBSJI from running after Jacinto. The
records are, however, barren of any evidence in support of
these claims.The absence of the clearance upon which the
contradicting claims of the parties could ideally be resolved,
should work against the respondents.

RBSJI also failed to substantiate its claim that the

petitioners act estopped them from pursuing Jacinto for his
standing obligations. There is no proof that RBSJI
attempted or at least considered to demand from Jacinto
the payment of his unpaid cash advances. Neither was
RBSJI able to show that it filed a civil or criminal suit against
Jacinto to make him responsible for the alleged fraud. There
is thus no factual basis for RBSJIs allegation that it incurred
damages or was financially prejudiced by the clearance
issued by the petitioner.
More importantly, the complained act of the petitioner did
not evince intentional breach of the respondents trust and

confidence. Neither was the petitioner grossly negligent or

unjustified in pursuing the course of action he took.

must be pleaded and proven to warrant the grant of moral

damages, thus:

It cannot be concluded that the petitioner was in any way

prompted by malicious motive in issuing the clearance. He
was also able to ensure that RBSJIs interests are protected
and that Jacinto is pacified. He did what any person placed
in a similar situation can prudently do. He was able to
competently evaluate and control Jacintos demands and
thus prevent compromising RBSJIs image, employees and
clients to an alarming scene.

[M]oral damages are recoverable only where the dismissal

of the employee was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a
manner contrary to morals, good customs or public policy.
Here, the petitioner failed to prove that his dismissal was
attended by explicit oppressive, humiliating or demeaning
acts.
Since no moral damages can be granted under the facts of
the case, exemplary damages cannot also be awarded. [50]

Also, the petitioner did not commit an irregular or prohibited

act. He did not falsify or misrepresent any company record
as it was officially confirmed by Lily that the items covered
by the clearance were truly settled by Jacinto.
The petitioner is entitled to separation
pay in lieu of reinstatement and his back
wages shall earn legal interest. (MAIN ISSUE based on
case list)
In accordance with current jurisprudence, the award of back
wages shall earn legal interest at the rate of six percent
(6%) per annum from the date of the petitioners illegal
dismissal until the finality of this decision. [41]
Thereafter, it shall earn 12% legal interest until fully paid
Thus, based on strained relations, separation pay
equivalent to one (1) month salary for every year of service,
with a fraction of a year of at least six (6) months to be
considered as one (1) whole year, should be awarded in
lieu of reinstatement, to be computed from date of his
engagement by RBSJI up to the finality of this decision. [45]
The award of moral and exemplary
damages is not warranted.
Illegal dismissal, by itself alone, does not entitle the
dismissed employee to moral damages; additional facts

The solidary liability of individual

respondents as corporate officers
must be recalled.
individual respondents cannot be made solidarily liable with
RBSJI for the illegal dismissal. A corporation has its own
legal personality separate and distinct from those of its
stockholders, directors or officers. Hence, absent any
evidence that they have exceeded their authority, corporate
officers are not personally liable for their official acts.
Corporate directors and officers may be held solidarily liable
with the corporation for the termination of employment only
if done with malice or in bad faith.
The award of 13th month pay is incorrect.
Being a managerial employee, the petitioner is not entitled
to 13th month pay.
The award of attorneys fees is proper.
It is settled that where an employee was forced to litigate
and, thus, incur expenses to protect his rights and interest,
the award of attorneys fees is legally and morally
justifiable.[54] Pursuant to Article 111 of the Labor Code, ten
percent (10%) of the total award is the reasonable amount
of attorneys fees that can be awarded.

23.BERNADETH LONDONIO AND JOAN CORCORO, PETITIONERS, VS. BIO RESEARCH, INC. AND WILSON Y.
ANG, RESPONDENTS.

Petitioners Bernadeth E. Londonio (Bernadeth) and

Joan T. Corcoro (Joan) were hired by respondent
Bio Research Inc. (Bio Research) as graphic/visual
artists.
Bio Research informed its employees including
petitioners it would be severing their employment
with the company.
Bio Research filed an Establishment Termination
Report[2] with the Department of Labor and
Employment (DOLE) stating that it was retrenching
18 of its employees including petitioners due to
redundancy and to prevent losses.
Joan accepted her retrenchment pay in the sum of
P9,990.14 and executed a Quitclaim and Waiver
Bernadeth refused to accept hers.
Petitioners later filed a complaint for illegal
dismissal, moral and exemplary damages and
attorney's fees against respondent Bio Research
and its co-respondent President/CEO Wilson Y.
Ang (Ang).
Petitioners claimed that their dismissal was done in
bad faith and tainted with malice, being retaliatory in
nature, following the filing by Bernadeth of a
complaint against Jose Ang, Jr. (Jose), one of Bio
Research's managers, for a sexual harassment
incident that occurred in his office on February 19,
2005.
To refute Bio Research's claim that it had been
incurring business losses, Joan cited the
recommendation for her regularization on April 12,
2005, 18 days before she received a copy of the
Memorandum of April 30, 2005.

Labor Arbiter and NLRC ruled in favor of petitioners

Court of Appeals pronounced that Joan could no
longer question the legality of her dismissal in light
of her execution of the quitclaim and waiver. It
deleted the award of moral and exemplary
damages.[11]

HELD:
Bio Research did not only fail to "submit in evidence its
audited financial statements to show its financial condition
prior to and at the time it enforced its retrenchment
program"; it also failed to show that it adopted fair and
reasonable standards in ascertaining who would be retained
or dismissed among it employees.[16]
It is, however, with respect to the appellate court's ruling
that Joan is, on account of her execution of the waiver and
quitclaim, estopped from questioning her dismissal that this
Court takes exception.
An employee's execution of a final settlement and receipt of
amounts agreed upon do not foreclose his right to pursue a
claim for illegal dismissal.[17] For, as reflected above, Joan
was illegally retrenched. She is thus entitled to
reinstatement without loss of seniority rights and privileges,
as well as to payment of full backwages from the time of her
separation until actual reinstatement, less the amount of
P9,990.14 which she received as retrenchment pay.
As for the deletion by the appellate court of the award of
moral and exemplary damages, the same is in order too,
petitioners having failed to substantiate their claim that their
dismissal was made in bad faith.

24. PLASTIMER INDUSTRIAL CORPORATION AND TEO KEE BIN, PETITIONERS, VS. NATALIA C. GOPO, KLEENIA R.
VELEZ, FILEDELFA T. AMPARADO, MIGNON H. JOSEPH, AMELIA L. CANDA, MARISSA D. LABUNOS, MELANIE T.
CAYABYAB, MA. CORAZON DELA CRUZ, AND LUZVIMINDA CABASA, RESPONDENTS.

The Antecedent Facts

The Personnel and Administration Manager of

Plastimer issued a Memorandum informing all its
employees to downsize and reorganize its business
operations due to withdrawal of investments and
shares of stocks which resulted in the change of its
corporate structure.
Plastimer and PICCB, the incumbent sole and
exclusive collective bargaining representative of all
rank and file employees, entered into a
Memorandum of Agreement (MOA)
Plastimer submitted to the Department of Labor and
Employment (DOLE) an Establishment Termination
Report containing the list of the employees affected
by the reorganization and downsizing.
Respondents, signed individual "Release Waiver
and Quitclaim."
Respondents filed a complaint for illegal dismissal
with prayer for reinstatement and full backwages,
underpayment of separation pay, moral and
exemplary damages and attorney's fees.
Respondents alleged that they did not voluntarily
relinquish their jobs and that they were required to
sign the waivers and quitclaims without giving them
an opportunity to read them and without explaining
their contents.
Respondents further alleged that Plastimer failed to
establish the causes/valid reasons for the
retrenchment and to comply with the one-month
notice to the DOLE as well as the standard
prescribed under the Collective Bargaining
Agreement between Plastimer and the employees.
Petitioners countered that the retrenchment was a
management prerogative and that respondents got
their retrenchment or separation pay even before
the effective date of their separation from service.
The Decisions of the Labor Arbiter and the NLRC
Petitioners were able to prove that there was a substantial
withdrawal of stocks that led to the downsizing of the
workforce and respondents claimed their separation pay in
accordance with the MOA. Respondents could not claim
ignorance of the contents of the waivers and quitclaims
because they were assisted by the union President and
their counsel in signing them.
The Decision of the Court of Appeals

Reversed the NLRC decision. there was no valid cause for

retrenchment. Plastimer failed to use a reasonable and fair

standard or criteria in ascertaining who would be dismissed
and who would be retained among its employees. MOA
between Plastimer and PICCB only recognized the need for
partial retrenchment and the computation of retrenchment
pay without disclosing the criteria in the selection of the
employees to be retrenched.
The Ruling of this Court
One-Month Notice of Termination of Employment
Plastimer submitted the notice of termination of employment
to the DOLE on 26 May 2004. However, notice to the
affected employees were given to them on 14 May 2004 or
30 days before the effectivity of their termination from
employment on 13 June 2004. While notice to the DOLE
was short of the one-month notice requirement, the affected
employees were sufficiently informed of their retrenchment
30 days before its effectivity. Petitioners' failure to comply
with the one-month notice to the DOLE is only a procedural
infirmity and does not render the retrenchment illegal.
The failure to fully comply with the one-month notice of
termination of employment did not render the retrenchment
illegal but it entitles respondents to nominal damages.
Validity of Retrenchment
An independent auditor confirmed petitioners' losses for the
years 2001 and 2002. Records showed that the net income
of P6,185,707.05 for 2003 was not even enough for
petitioners to recover from the P52,904,297.88 loss in
2002.[15] Article 283 of the Labor Code recognizes
retrenchment to prevent losses as a right of the
management to meet clear and continuing economic threats
or during periods of economic recession to prevent
losses.[16] There is no need for the employer to wait for
substantial losses to materialize before exercising ultimate
and drastic option to prevent such losses. [17]
Validity of Waivers and Quitclaims
The Court has ruled that a waiver or quitclaim is a valid and
binding agreement between the parties, provided that it
constitutes a credible and reasonable settlement, and that
the one accomplishing it has done so voluntarily and with a
full understanding of its import.[18]
Respondents were sufficiently apprised of their rights under
the waivers and quitclaims that they signed.

25. Art. 283 (Retrenchment) Genuino Ice Company vs. Lava, GR#190001 (March 23, 2011)
Republic of the Philippines
G.R. No. 190001
March 23, 2011
GENUINO ICE COMPANY, INC., HECTOR S. GENUINO and EDGAR A. CARRIAGA, Petitioners,
vs.
ERIC Y. LAVA and EDDIE BOY SODELA, Respondents.

Petitioner GICI hired the respondents Eric Y. Lava

and Eddie Boy Sodela (respondents) as ice plant
machine operators
due to the continuous decline of demand for ice
products, the company was forced to shut down a
part of its plant facilities and operations, and to
implement a work rotation or reduction of workdays
program affecting its seven (7) workers (including
the present respondents).
On September 30, 2005, GICI, through its personal
manager, issued a memorandum ordering the
deletion of the respondents names from the work
schedule. The memorandum had the effect of
banning the respondents from entering the
company premises. The respondents reacted to this
move by filing a complaint for illegal dismissal with
the Labor Arbiter (LA).
petitioners alleged that the respondents were
contractual employees who were under the control
of VICAR General Contractor & Management
Services (VICAR), and L.C. Moreno General
Contractor & Management Services (MORENO),
argue that there is no employer-employee
relationship between GICI and the respondents so
that the latter have no cause of action against the
petitioners
petitioners reason that due to the partial shut-down
of the company, GICI was excused from complying
with the 30-day notice or clearance requirement
under the law
LA - rejected the petitioners argument and declared
that the respondents adduced convincing evidence
that they were the employees of GICI - ruled that
the respondents were validly retrenched - due to
the continuous decline in the sales output of the ice
plant, the temporary shut down had become
permanent and GICI had no alternative but to trimdown its manpower requirements - found that GICI
failed to comply with the procedural requirements
for a valid retrenchment. - awarded the
respondents their separation pay equivalent to onehalf (1/2) month salary for every year of service in
accordance with Art. 283 of the Labor CodE
NLRC reversed illegally dismissed
CA - petitioners failed to prove that GICI incurred or
was about to incur financial losses leading to the
retrenchment it undertook; no documentary
evidence was in fact presented to support the
retrenchment claim - no documentary evidence was
in fact presented to support the retrenchment claim

ISSUE : whether there had been a valid retrenchment (and

hence, a valid termination of the respondents service).
RULING: AFFIRMED
Under Article 283 of the Labor Code, there are
three (3) basic requisites for a valid
retrenchment, namely: (a) proof that the
retrenchment is necessary to prevent losses or
impending losses; (b) service of written notices
to the employees and to the DOLE at least one
(1) month prior to the intended date of
retrenchment; and (c) payment of separation pay
equivalent to one (1) month pay, or at least onehalf (1/2) month pay for every year of service,
whichever is higher
no reason to reverse the NLRC and CA findings
that no documentary evidence exists in the records
to substantiate the claimed business losses; in fact,
the petitioners also failed to show its financial
conditions prior to and at the time GICI enforced its
retrenchment program
full backwages and separation pay in lieu of
reinstatement
respondents were illegally dismissed as the
employer failed to prove that their dismissal was for
a duly authorized cause
CA decision is incomplete as it failed to specify the
separation pay to be awarded to the respondents
as well as the reckoning point for the computation
of the backwages
FF Marine Corporation11 tells us that the separation
pay shall be computed at one (1) month pay (for
those with one year or less of service), or one-half
(1/2) month pay for every year of service (for those
with more than a year of service), whichever is
higher, a fraction of at least six (6) months being
considered one whole year.12 The backwages shall
be computed from the date of termination of service
(September 30, 2005) until the finality of this Courts
decision
Eric Lava shall be awarded full backwages from
September 30, 2005 until the finality of this Courts
Decision. Separation pay in lieu of reinstatement
shall be computed at 1 month pay for every year of
service, with years of service reckoned from the
respondents first day of employment up to the
finality of this Decision

26. Art. 283 (Separation pay) Reno Foods vs. Nagkakaisang Lakas ng Manggagawa, GR#164016 (March 15, 2010)
RENO FOODS, INC., AND/OR VICENTE KHU, PETITIONERS, VS. NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM) KATIPUNAN ON BEHALF OF ITS MEMBER, NENITA CAPOR, RESPONDENT
There is no legal or equitable justification for awarding
financial assistance to an employee who was dismissed for
stealing company property. Social justice and equity are not
magical formulas to erase the unjust acts committed by the
employee against his employer. While compassion for the
poor is desirable, it is not meant to coddle those who are
unworthy of such consideration

FACTS:

Reno Foods, Inc. (Reno Foods) is a manufacturer

of canned meat products of which Vicente Khu is
the president
Respondent Nenita Capor (Capor) was an
employee of Reno Foods until her dismissal on
October 27, 1998
On October 19, 1998, the guard on duty found six
Reno canned goods wrapped in nylon leggings
inside Capor's fabric clutch bag
filed a complaint-affidavit against Capor for qualified
theft, On April 5, 1999, a Resolution[3] was issued
finding probable cause for the crime charged
(NLM) - Katipunan filed on behalf of Capor a
complaint for illegal dismissal and money claims
against petitioners AND prayed that Capor be paid
her full backwages as well as moral and exemplary
damages
Capor alleged that she was unaware that her clutch
bag contained the pilfered canned products claimed that petitioners might have planted the
evidence against her so it could avoid payment of
her retirement benefits, as she was set to retire in
about a year's time
LA Capor guilty of Serious Misconduct (just cause
for termination)
Under Article 232 of the Labor Code, an employer
may terminate the services of an employee for just
cause, such as serious misconduct
LA- theft of company property is tantamount to
serious misconduct; as such, Capor is not entitled
to reinstatement and backwages, as well as moral
and exemplary damages. - not entitled to
separation pay
NLRC affirmed - but added an award of financial
assistance
CA affirmed award of financial assistance despite
claim of petitioner citing PLDT v NLRC that theft of
company property is a form of serious misconduct
under Article 282(a) of the Labor Code for which no
financial assistance in the form of separation pay
should be allowed

ISSUE:
whether the NLRC committed grave abuse of
discretion amounting to lack or excess of
jurisdiction in granting financial assistance to an
employee who was validly dismissed for theft of
company property
RULING:
CA and NLRC Annuled and Set Aside , LA
-reinstated

Conviction in a criminal case is not necessary to

find just cause for termination of employment
Capor thus claims that her acquittal in the criminal
case proves that petitioners failed to
presentsubstantial evidence to justify her
termination from the company. She therefore asks
for a finding of illegal dismissal and an award of
separation pay equivalent to one month pay for
every year of service
petitioners argue that the dismissal of a criminal
action should not carry a corresponding dismissal of
the labor action since a criminal conviction is
unnecessary in warranting a valid dismissal for
employment.
Capor was acquitted in criminal case based on
reasonable doubt
the trial judge entertained doubts regarding the guilt
of Capor because of two circumstances: (1) an
ensuing labor dispute (though it omitted to state the
parties involved), and (2) the upcoming retirement
of Capor. The trial judge made room for
the possibility that these circumstances couldhave
motivated petitioners to plant evidence against
Capor so as to avoid paying her retirement benefits.
The trial court did not categorically rule that the acts
imputed to Capor did not occur
Where doubt exists, even if only a shred, the Court
must and should set the accused free."
Criminal cases require proof beyond reasonable
doubt while labor disputes require only substantial
evidence, which means such relevant evidence as
a reasonable mind might accept as adequate to
justify a conclusion.
The lower courts found substantial evidence to
conclude that Capor had been validly dismissed for
dishonesty or serious misconduct
The award of separation pay is not warranted
under the law and jurisprudence
We find no justification for the award of separation
pay to Capor. This award is a deviation from
established law and jurisprudence
The law is clear. Separation pay is only warranted
when the cause for termination is not attributable to
the employee's fault, such as those provided in
Articles 283 and 284 of the Labor Code, as well as
in cases of illegal dismissal in which reinstatement
is no longer feasible
It is not allowed when an employee is dismissed for
just cause such as serious misconduct
Jurisprudence has classified theft of company
property as a serious misconduct and denied the
award of separation pay to the erring employee
It is true that there have been instances when the
Court awarded financial assistance to employees
who were terminated for just causes, on grounds of
equity and social justice like in the case of PLDT v
NLRC - In that case, the court recognized the
harsh realities faced by employees that forced
them, despite their good intentions, to violate
company policies, for which the employer can

rightfully terminate their employment. For these

instances, the award of financial assistance was
allowed. But, in clear and unmistakable language,
we also held that the award of financial assistance
shall not be given to validly terminated employees,
whose offenses are iniquitous or reflective of some
depravity in their moral character. When the
employee commits an act of dishonesty, depravity,
or iniquity, the grant of financial assistance is
misplaced compassion. It is tantamount not only to
condoning a patently illegal or dishonest act, but an
endorsement thereof. It will be an insult to all the
laborers who, despite their economic difficulties,
strive to maintain good values and moral conduct
Court not persuaded by Capor's argument that
despite the finding of theft, she should still be
granted separation pay in light of her long years of
service with petitioners
Although long years of service might generally be
considered for the award of separation benefits or
some form of financial assistance to mitigate the
effects of termination, this case is not the
appropriate instance for generosity
length of service and a previously clean
employment record cannot simply erase the gravity
of the betrayal exhibited by a malfeasant employee
it may be said that betrayal by a long-time
employee is more insulting and odious for a fair
employer
SC - While we sympathize with Capor's plight,
being of retirement age and having served

petitioners for 39 years, we cannot award any

financial assistance in her favor because it is not
only against the law but also a retrogressive public
policy. We have already explained the folly of
granting financial assistance in the guise of
compassion in the following pronouncements:
x x x Certainly, a dishonest employee cannot be
rewarded with separation pay or any financial
benefit after his culpability is established in two
decisions by competent labor tribunals, which
decisions appear to be well-supported by evidence.
To hold otherwise, even in the name of
compassion, would be to send a wrong signal not
only that "crime pays" but also that one can enrich
himself at the expense of another in the name of
social justice. And courts as well as quasi-judicial
entities will be overrun by petitioners mouthing
dubious pleas for misplaced social justice. Indeed,
before there can be an occasion for compassion
and mercy, there must first be justice for all.
Otherwise, employees will be encouraged to steal
and misappropriate in the expectation that
eventually, in the name of social justice and
compassion, they will not be penalized but instead
financially rewarded. Verily, a contrary holding will
merely encourage lawlessness, dishonesty, and
duplicity. These are not the values that society
cherishes; these are the habits that it abhors

27. Art. 284 (Disease-related separation) Villaruel vs. Guan, GR#169191 (June 1, 2011)
ROMEO VILLARUEL, PETITIONER, VS. YEO HAN GUAN, DOING BUSINESS UNDER THE NAME AND STYLE YUHANS
ENTERPRISES, RESPONDENT
Facts:
Petitioner filed for payment of separation pay
against Yuhans Enterprises
Petitioners allegations:
o that in June 1963, he was employed as a
machine operator by Ribonette
Manufacturing Company, an enterprise
engaged in the business of manufacturing
and selling PVC pipes and is owned and
managed by herein respondent Yeo Han
Guan
o ver a period of almost twenty (20) years,
the company changed its name four times
o Starting in 1993 up to the time of the filing
of petitioner's complaint in 1999, the
company was operating under the name of
Yuhans Enterprises
o He remained in the employ of respondent
o on October 5, 1998, he got sick and was
confined in a hospital
o on December 12, 1998, he reported for
work but was no longer permitted to go
back because of his illness
o he asked that respondent allow him to
continue working but be assigned a lighter
kind of work but his request was denied;
instead, he was offered a sum of
P15,000.00 as his separation pay;
however, the said amount corresponds only
to the period between 1993 and 1999
petitioner prayed that he be granted separation pay
computed from his first day of employment in June
1963 - respondent refused
Aside from separation pay, petitioner prayed for the
payment of service incentive leave for three years
Respondent:
petitioner was hired as machine operator
from March 1, 1993 until he stopped
working sometime in February 1999
ground - he was suffering from illness
after his recovery, petitioner was directed to
report for work, but he never showed up
Respondent was later caught by surprise
when petitioner filed the instant case for
recovery of separation pay
Respondent claimed that he never
terminated the services of petitioner and
that during their mandatory conference, he
even told the latter that he could go back to
work anytime but petitioner clearly
manifested that he was no longer interested
in returning to work and instead asked for
separation pay
LA in favor of petitioner
Ordered respondents to pay separation benefits
equivalent to one-half () month salary per year
of service, a fraction of six months equivalent to one
year to herein complainant based on the
complainant's length of service reckoned from June
1963 up to October 1998 as provided under Article

284 of the Labor Code, the same computed by the

Computation and Examination Unit which we
hereby adopt and approved (sic) as our own in the
amount of NINETY-ONE THOUSAND FOUR
HUNDRED FORTY-FIVE PESOS (P91,445.00);
and to pay service incentive leave equivalent to
fifteen days' salary in the amount of THREE
THOUSAND FIFTEEN PESOS (P3,015.00).
NLRC affirmed
CA partially granted deleted award of
separation and retained the award for service
incentive leave
ISSUE: whether petitioner is entitled to separation pay
under the provisions of the Labor Code and whether
respondent, in fact, dismissed petitioner from his
employment

Article 284 - An employer may terminate the

services of an employee who has been found to
be suffering from any disease and whose
continued employment is prohibited by law or is
prejudicial to his health as well as to the health
of his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1)
month salary or to one-half () month salary
for every year of service whichever is greater, a
fraction of at least six months being considered
as one (1) whole year.
clearly presupposes that it is the employer who
terminates the services of the employee found to be
suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to
his health as well as to the health of his coemployees. It does not contemplate a situation
where it is the employee who severs his or her
employment ties
Both lower tribunals merely concluded that
petitioner is entitled to separation pay under Article
284 of the Labor Code without any explanation no
convincing justification and rationalization
Court agrees with the CA in its observation of
the following circumstances as proof that
respondent did not terminate petitioner's
employment: first, the only cause of action in
petitioner's original complaint is that he was
"offered a very low separation pay"; second,
there was no allegation of illegal dismissal, both
in petitioner's original and amended complaints
and position paper; and, third, there was no
prayer for reinstatement
Court finds that petitioner was the one who
initiated the severance of his employment
relations with respondent. It is evident from the
various pleadings filed by petitioner that he never
intended to return to his employment with
respondent on the ground that his health is failing
petitioner did not ask for reinstatement. In fact,
he rejected respondent's offer for him to return to
work tantamount to resignation

based on the foregoing, the Court finds that the

award of P50,000.00 to petitioner as financial
assistance is deemed equitable under the
circumstances is defined as the voluntary act of an
employee who finds himself in a situation where he
believes that personal reasons cannot be sacrificed
in favor of the exigency of the service and he has
no other choice but to disassociate himself from his
employment.
there is no provision in the Labor Code which
grants separation pay to voluntarily resigning
employees
the rule is that an employee who voluntarily resigns
from employment is not entitled to separation pay,
except when it is stipulated in the employment
contract or CBA, or it is sanctioned by established
employer practice or policy
Since petitioner was not terminated from his
employment and, instead, is deemed to have
resigned therefrom, he is not entitled to separation
pay under the provisions of the Labor Code.

The court however, in a number of cases, has

granted financial assistance to separated
employees as a measure of social and
compassionate justice and as an equitable
concession. Taking into consideration the factual
circumstances obtaining in the present case, the
Court finds that petitioner is entitled to this kind of
assistance
o Reasons: he is in the employ of respondent for
more than 35 years, there is no evidence on
record to show that petitioner has any
derogatory record during his long years of
service with respondent and that his
employment was severed not by reason of any
infraction on his part but because of his failing
physical condition and the willingness of
respondent to give him financial assistance
based on the foregoing, the Court finds that the
award of P50,000.00 to petitioner as financial
assistance is deemed equitable under the
circumstances
affirmed CA

28. NELSON A. CULILI v EASTERN TELECOMMUNICATIONS PHILIPPINES, INC.

Facts:

HELD:
Petitioner was employed as Technician in Field
Operations Department; and was promoted to
Senior Technician in Service Quality Department.
His basic Salary increased.
Under RA7925 and EO109, Respondent was
required to establish landlines to Metro Manila and
certain provinces.
Due to interconnection problems with PLDT, poor
subscriptions, cancellations thereof and other
business difficulties, respondent was forced to halt
its roll out of 129,000 landlines already allocated to a
number of its employees.
Due to business losses, respondent implemented
"Right Sizing Program" (RSP) which has two phases:
first, reduction of its workforce to only those
necessary and which could be sustained; second, a
company-wide reorganization.
In the first phase, respondent offered its employees
who rendered at least 15 years of service a Special
Retirement Program which comprise of the following:
o option to voluntary retire at an earlier age;
and
o 2.5 months' salary for every year of service
Petitioner did not avail of the package offered by the
respondent
In the second phase, the Service Quality Department
was abolished. Petitioner's unit was absorbed by the
Business Consumer Accounts Department. This
abolition rendered the petitioner's function
unnecessary due to redundancy.
Respondent terminated the services of petitioner
due to redundancy.
Petitioner filed a complaint against respondent and
its officers for Illegal dismissal, unfair labor practice,
and money claims.

ILLEGAL DISMISSAL
Under the law, as a rule, an employee may be terminated for
reasons involving measures taken by the employer due to
installation of labor saving device, redundancy, retrenchment
to prevent losses, or the cessation of operation. Except when
the purpose was to circumvent the provisions of this chapter.
The requirements of a valid redundancy are the following:
first, good faith of the employer in abolishing the redundant
position; second, fair and reasonable criteria in ascertaining
what positions are to be declared redundant, such as but not
limited to: preferred status, efficiency and seniority.
In this case, respondent's being upfront with its employees
about its plan to implement RSP will evidently rule out bad
faith on its part. It also chose positions based on efficiency,
economy, versatility and flexibility. It split the Service Quality
Department into two different departments, abolished the
position of Senior technician, and transferred its functions to
different positions who are capable of performing the task
which belonged to petitioner.
Therefore, since the respondent satisfied the requisites for
valid termination due to redundancy, there was no illegal
dismissal on the part of the respondent.
UNFAIR LABOR PRACTICE
Under the law, unfair labor practice are the practices of the
employee, or the bargaining agent, that violates the rights of
its employees to self-organization. In this case, respondent's
RSP did not deprive the rights of its employees to self
organization. RSP was not motivated by ill-will. Moreover, the
burden of proving is from the one who alleges. Petitioner has
no proof of bad faith on the part of the respondent. Therefore,
there was no unfair labor practice.
DUE PROCESS

ISSUE/s:
1. WON there is illegal dismissal
2. WON dismissal constituted unfair labor practice
3. WON there is procedural due process to as basis for
the award for nominal damages

Under the case law, employer who have authorized cause to

terminate employees may do so for as long as it conforms to
procedural due process. Otherwise, the employer may be
liable for nominal damages. In this case, redundancy is
proven to be existent; and redundancy is an authorized
cause for terminating an employee. However, respondent did
not comply with the notice requirements. THere is no
procedural due process. Hence, respondent was liable for
nominal damages.

29. GENERAL MILLING CORPORATION v VIOLETA VIAJAR

FACTS:

Petitioner was gradually downsizing its VisMin

operations on Cebu which led to the termination of
the services of 13 employees for redundancy .
Respondent was one of the 13 employees.
On Oct. 30, 2003, respondent received a LetterMemorandum informing her that her services were
no longer needed. Effective Nov. 30, 2003.
The following day, respondent was barred from
entering the premises of the respondent; and denied
access to her office computer.
On Nov. 7, 2003, she was asked to sign "Application
for Retirement and Benefits." Respondent refused.
The respondent hired 15 new employees.
Respondent filed for Illegal dismissal and damages.

ISSUE:

HELD:

Under Art 283 of the Labor Code, redundancy was one of the
authorized causes for dismissal. Factors which indicates
redundancy were the following: over hiring of workers,
decreased volume of business, and dropping of product line
or service activity previously manufactured or undertaken by
the enterprise. Moreover, determination whether a particular
position is redundant is an exercise of business judgment on
the part of the employer. Except, if it violates the law, arbitrary
or malicious. It should also be based on evidence to
substantiate redundancy.
In this case, the proof submitted by the petitioner were
insufficient to terminate the respondent for redundancy. It did
not submitted proof of business slowdown. Moreover,
respondent substantiated the proof that the petitioner hired
several employees after the prior employees were laid off.
Further, the demand for her to sign the "Application for
Retirement and Benefits" also contravenes the fact that she
was terminated due to redundancy.

WON there was redundancy

Therefore, there was no valid redundancy to speak of.
Respondent was illegally dismissed.