Gross Inefficiency/Gross Neglect of Duty

Dr. Phylis Rio v. Colegio De Sta. Rosa-Makati and/or Sr. Marilyn Gustilo
G.R. No. 189629, August 06, 2014
In 1993, petitioner doctor was hired by respondent school as a part-time school
physician and was required to report to work for 4 hours every week. In 2002, through a
memorandum from respondent Directress, Rio was informed of a new work schedule.
Nevertheless, she wrote back refusing
the unilateral change in her work schedule.
Subsequently, respondent Gustilo charged her and the school nurse of grave misconduct,
dishonesty and/or gross neglect of duty detrimental not only to the school but, principally,
to the health and well-being of the pupils. She was made to answer on the following issues:
(1) there were dates when a medical examination was supposed to have been conducted
and yet the dates fell on weekends; (2) failure to conduct medical examination on all
students for two (2) to five (5) consecutive years; (3) lack of medical records on all
students; and (4) students having medical records prior to their enrollment. Petitioner
denied the charges through a letter.
Subsequently, she filed a complaint for constructive dismissal and illegal suspension
against respondents. The Labor Arbiter ruled in favor of petitioner and Alonzo and held that
they were illegally dismissed. However, the NLCR reversed the decision and ruled that
petitioner and Alonzos actions were to the detriment of the health and safety of the
students. A petition for certiorari was made before the CA but the same was denied.
ISSUE: Whether or not the dismissal is valid.
YES. The dismissal is valid. Gross inefficiency is closely related to gross neglect
because both involve specific acts of omission resulting in damage to another. Gross neglect
of duty or gross negligence refers to negligence characterized by the want of even slight
care, acting or omitting to act in a situation where there is a duty to act, not inadvertently
but willfully and intentionally, with a conscious indifference to consequences insofar as other
persons may be affected. The Supreme Court held that petitioners actions fall within the
purview of such definition. It was not refuted that (1) there were dates when a medical
examination was supposed to have been conducted and yet the dates fell on weekends; (2)
failure to conduct medical examination on all students for two (2) to five (5) consecutive
years; (3) lack of medical records on all students; and (4) students having medical records
prior to their enrollment. Although petitioner claimed that discrepancies were due to the loss
of the cabinet key (cabinet contains the official medical records), she never bothered to get
it be opened for two years which only showed that she had no need to use the files
contained therein. Hence, she had been grossly inefficient and negligent for failing to
provide a proper system of maintaining and updating the students medical records over the
years of her employment with the respondent.

Entitlement to Separation Pay: Closure due to serious business losses

Benson Industries Employees Union-ALU-TUCP et. al. v. Benson, Industries, Inc.
G.R. No. 200746, August 06, 2014
Respondent Benson Industries sent its employees, including petitioners, a notice
informing them of their intended termination from employment, to be effected on the
ground of closure and/or cessation of business operations. In consequence, the majority of
Bensons employees resigned and accepted Bensons payment of separation pay computed
at 15 days for every year of service, as per the parties Memorandum of Agreement.
Nevertheless, petitioners proffered a claim a claim for the payment of additional separation
pay at the rate of four days for every year of service on the basis of the existing CBA
executed by and between the Union and Benson which states that [Benson] shall pay to
any employee/laborer who is terminated from the service without any fault attributable to
him, a Separation Pay equivalent to not less than nineteen (19) days pay for every year of
service based upon the latest rate of pay of the employee/laborer concerned. The Voluntary
Arbitrator ruled in favor of the petitioners but held that respondent was indeed in a state of
insolvency which justified its closure and/or cessation of business operations. On appeal, the
VAs ruling was reversed and deleted the award of additional separation benefits equivalent
to 4 days of work for every year of service. It held that despite the express provision in the
CBA stating that Benson should pay its employees who were terminated without their fault
separation benefits equivalent to at least 19 days pay for every year of service, Benson
cannot be compelled to do so considering its current financial status.
ISSUE: Whether or not the deletion the award to petitioners of additional separation
benefits equivalent to 4 days of work for every year of service.
NO. While serious business losses generally exempt the employer from paying
separation benefits, it must be pointed that the exemption only pertains to the obligation of
the employer under Article 297 of the Labor Code. This is because of the laws express
parameter that mandates payment of separation benefits in case of closures or cessation of
operations of establishment or undertaking not due to serious business losses or financial
reverses. However, when the obligation to pay separation pay is not sourced from law, but
from contract, such as an existing CBA between the employer and its employees, an
examination of the latters provisions becomes necessary in order to determine the
governing the parameters for the said obligation. When the parties agree as to the grant of
such separation benefits irrespective of the employers financial position, then the obligatory
force of that contract prevails and its terms should be carried out to its full effect. When it is
clear and unambiguous and is not contrary to law, morals, good customs, public order or
public policy, it becomes the law between the parties and compliance therewith is mandated
by the express policy of the law.
In the case at hand, it was not shown that the CBA was forged between the parties
contrary to law, etc. Hence, the parties to the CBA must be presumed to have assumed the
risks of unfavorable developments. Moreover, it is only in absolutely exceptional changes of
circumstances that equity demands assistance for the debtor company.