SERIOUS MISCONDUCT

1.

Maribago Resort vs. Dual, July 20, 2010

G.R. No. 180660 July 20, 2010

Facts: On January 5, 2005, a group of Japanese guests and their companions dined at Maribago Beach
Resorts Poolbar/Restaurant. Captain waiter Alvin Hiyas took their dinner orders comprising of 6 sets of
lamb and 6 sets of fish. As per company procedure, Hiyas forwarded one copy of the order slip to the
kitchen and another copy to Nito Dual. Pursuant to the order slip, fourteen (14) sets of dinner were
prepared by the chef. Hiyas and waiter Genaro Mission, Jr. served 12 set dinners to the guests, and
another 2 sets to their guides free of charge (total of 14 sets of dinner). After consuming their dinner,
the guests paid the amount indicated in their bill and thereafter left in a hurry. The receipt show that
only P3,036.00 was remitted by cashier Dual corresponding to 6 sets of dinner. A discrepancy was
found between the order slip and the receipt issued which prompted petitioner Maribago to ask for an
explanation from Dual and the waiters why they should not be penalized. Clarificatory hearings were
made and it was found out that the guests gave P10,500.00 to Mission as payment for the bill of
P10,100.00. It was discovered later that only P3,036.00 was entered by Dual in the cash register. The
rest of the payment was missing. The original transaction receipt for P10,100.00 was likewise missing
and in its place, only a transaction receipt for P3.036.00 was registered. Upon verification, it was also
found out that the order slip was tampered by Alcoseba to make it appear that only six (6) set dinners
were ordered. Respondent Dual was found guilty of dishonesty for his fabricated statements and for
asking one of the waiters (Mission) to corroborate his allegations. He was terminated for dishonesty
based on his admission that he altered the order slip.

Dual then filed a complaint for illegal dismissal. The Labor Arbiter found that respondents termination
was without valid cause and ruled that respondent is entitled to separation pay. The NLRC set aside the
Labor Arbiters decision and dismissed the complaint. The Court of Appeals however reversed the
decision and resolution of the NLRC. Finding no sufficient valid cause to justify respondents dismissal,
the Court of Appeals ordered petitioner to pay respondent full backwages and separation pay. Thus a
petition for review under Rule 45 was filed in the SC.

ISSUE: Whether or not respondent was illegally dismissed.

HELD: No. Petitioners evidence proved that respondent is guilty of dishonesty and of stealing money
entrusted to him as cashier. Instead of reporting P10,100.00 as payment by the guests for their dinner,
respondent cashier only reported P3,036.00 as shown by the receipt which he admitted to have issued.
Respondents acts constitute serious misconduct which is a just cause for termination under the law.
Theft committed by an employee is a valid reason for his dismissal by the employer. Although as a rule
this Court leans over backwards to help workers and employees continue with their employment or to
mitigate the penalties imposed on them, acts of dishonesty in the handling of company property,
petitioners income in this case, are a different matter.
2.

Nagkakaisang Lakas ng Mangagawa sa Keihin v. Keihin Phils Corp., GR No. 171115, August 9, 2010

DEL CASTILLO, J.:

Petitioner Helen Valenzuela (Helen) was a production associate in respondent Keihin Philippines
Corporation (Keihin), a company engaged in the production of intake manifold and throttle body used
in motor vehicles manufactured by Honda.

It is a standard operating procedure of Keihin to subject all its employees to reasonable search before
they leave the company premises. On September 5, 2003, while Helen was about to leave the
company premises, she saw a packing tape near her work area and placed it inside her bag because it
would be useful in her transfer of residence. When the lady guard on duty inspected Helens bag, she
found the packing tape inside her bag. The guard confiscated it and submitted an incident report dated
September 5, 2003 to the Guard-in-Charge, who, in turn, submitted a memorandum regarding the
incident to the Human Resources and Administration Department on the same date.

The following day, or on September 6, 2003, respondent company issued a show cause notice to Helen
accusing her of violating F.2 of the companys Code of Conduct, which says, "Any act constituting theft
or robbery, or any attempt to commit theft or robbery, of any company property or other associates
property. Penalty: D (dismissal)." Helens supervisor, called her to his office and directed her to explain
in writing why no disciplinary action should be taken against her.

Helen, in her explanation, admitted the offense and even manifested that she would accept whatever
penalty would be imposed upon her. She, however, did not reckon that respondent company would
terminate her services for her admitted offense.

On September 26, 2003, Helen received a notice of disciplinary action informing her that Keihin has
decided to terminate her services. On October 15, 2003, petitioners filed a complaint against
respondent for illegal dismissal, non-payment of 13th month pay, with a prayer for reinstatement and
payment of full backwages, as well as moral and exemplary damages. Petitioners alleged that Helens
act of taking the packing tape did not constitute serious misconduct, because the same was done with
no malicious intent. Keihin, on the other hand, maintained that Helen was guilty of serious misconduct
because there was a deliberate act of stealing from the company.

The Labor Arbiter rendered his Decision dismissing the complaint of illegal dismissal. He brushed aside
petitioners argument that the penalty imposed on Helen was disproportionate to the offense
committed, and held that she indeed committed a serious violation of the companys policies
amounting to serious misconduct. The Labor Arbiter further held that Keihin observed the
requirements of procedural due process in implementing the dismissal of Helen. He ruled that the
following circumstances showed that the company observed the requirements of procedural due
process: a) there was a show cause letter informing Helen of the charge of theft and requiring her to
submit an explanation; b) there was an administrative hearing giving her an opportunity to be heard;
and c) the respondent company furnished her with notice of termination stating the facts of her
dismissal, the offense for which she was found guilty, and the grounds for her dismissal.20

On appeal, the NLRC dismissed the appeal of the petitioners and affirmed in toto the Decision of the
Labor Arbiter. It held that petitioners admitted in their Position Paper that Helen took the packing tape
strewn on the floor near her production line within the company premises. By the strength of
petitioners admission, the NLRC held that theft is a valid reason for Helens dismissal.
However, in a Resolution dated November 2, 2005, the CA dismissed the petition outright for not
having been filed by an indispensable party in interest under Section 2, Rule 3 of the Rules of Court.

ISSUE:

1. Whether, in taking the packing tape for her own personal use, Helen committed serious
misconduct, which is a just cause for her dismissal from service. (substantive aspect of the case)

2. Whether the petition of petitioners is out rightly dismissible for not having been filed by an
indispensable party in interest (procedural aspect of the case)

HELD:

1. Yes. Article 282 of the Labor Code enumerates the just causes for termination. Misconduct is defined
as "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." For serious
misconduct to justify dismissal under the law, "(a) it must be serious, (b) must relate to the
performance of the employees duties; and (c) must show that the employee has become unfit to
continue working for the employer."

In the case at bar, Helen took the packing tape with the thought that she could use it for her own
personal purposes. When Helen was asked to explain in writing why she took the tape, she stated,
"Kumuha po ako ng isang packing tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong
lilipatang bahay." In other words, by her own admission, there was intent on her part to benefit herself
when she attempted to bring home the packing tape in question.

It is noteworthy that prior to this incident, there had been several cases of theft and vandalism
involving both respondent companys property and personal belongings of other employees. In order
to address this issue of losses, respondent company issued two memoranda implementing an intensive
inspection procedure and reminding all employees that those who will be caught stealing and
performing acts of vandalism will be dealt with in accordance with the companys Code of Conduct.
Despite these reminders, Helen took the packing tape and was caught during the routine inspection.
All these circumstances point to the conclusion that it was not just an error of judgment on the part of
Helen, but a deliberate act of theft of company property.

The petitioners also argue that the penalty of dismissal is too harsh and disproportionate to the offense
committed since the value of the thing taken is very minimal. Petitioners cite the case of Caltex
Refinery Employees Association v. National Labor Relations Commission where Arnelio M. Clarete
(Clarete) was found to have willfully breached the trust and confidence reposed in him by taking a
bottle of lighter fluid. In said case, we refrained from imposing the supreme penalty of dismissal since
the employee had no violations "in his eight years of service and the value of the lighter fluid is very
minimal compared to his salary.

After a closer study of both cases, we are convinced that the case of Caltex is different from the case
at hand. Although both Clarete and Helen had no prior violations, the former had a clean record of
eight years with his employer. On the other hand, Helen was not even on her second year of service
with Keihin when the incident of theft occurred. And what further distinguishes the instant case from
Caltex is that respondent company was dealing with several cases of theft, vandalism, and loss of
company and employees property when the incident involving Helen transpired.

Regarding the requirement of procedural due process in dismissal of employees, petitioners argue that
the first notice failed to explain the charge being leveled against Helen. According to the petitioners,
the notice was vague and lacked sufficient definitiveness.

2. It is clear that petitioners failed to include the name of the dismissed employee Helen Valenzuela in
the caption of their petition for certiorari filed with the CA as well as in the body of the said petition.
Instead, they only indicated the name of the labor union Nagkakaisang Lakas ng Manggagawa sa
Keihin (NLMK-OLALIA) as the party acting on behalf of Helen. As a result, the CA rightly dismissed the
petition based on a formal defect.
Under Section 7, Rule 3 of the Rules of Court, "parties in interest without whom no final determination
can be had of an action shall be joined as plaintiffs or defendants." If there is a failure to implead an
indispensable party, any judgment rendered would have no effectiveness.31 It is "precisely when an
indispensable party is not before the court (that) an action should be dismissed. The absence of an
indispensable party renders all subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even to those present."32 The purpose of the rules on joinder
of indispensable parties is a complete determination of all issues not only between the parties
themselves, but also as regards other persons who may be affected by the judgment. A decision valid
on its face cannot attain real finality where there is want of indispensable parties.

3.

John Hancock Life Insurance Corp. vs. Davis, September 3, 2008

G.R. No. 169549 September 3, 2008

FACTS:

Respondent Cantre, an agency administration officer of petitioner corporation was accused

of qualified theft for stealing Patricia Yusecos credit card which the latter used to purchase items in
various stores in the City of Manila. The NBI identified Cantre in a security video obtained from
Abensons Robinsons Place where a proposed transaction was disapproved for giving the wrong
information upon verification. However, the complaint was dismissed by the prosecutor because the
affidavits presented by the NBI was not properly verified.

Meanwhile, petitioner placed respondent under preventive suspension and instructed her to
cooperate with its ongoing investigation. Instead of doing so, however, respondent filed a complaint for
illegal dismissal alleging that petitioner terminated her employment without cause.

The Labor Arbiter found that the respondent committed serious misconduct thus there was a valid
cause for dismissal. Respondent appealed to the NLRC which affirmed the assailed decision. The CA
found that the labor arbiter and NLRC merely adopted the findings of the NBI regarding respondent's
culpability. Because the affidavits of the witnesses were not verified, they did not constitute substantial
evidence. The labor arbiter and NLRC should have assessed evidence independently as
"unsubstantiated suspicions, accusations and conclusions of employers (did) not provide legal
justification for dismissing an employee."

ISSUE: Whether or not there is a valid cause for termination

HELD: Yes. Article 282 of the Labor Code provides:

Article 282. Termination by Employer. - An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobendience by the employee of the lawful orders of his employer or
his representatives in connection with his work;

(e) Other causes analogous to the foregoing.

Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment."
For misconduct to be serious and therefore a valid ground for dismissal, it must be:

1. of grave and aggravated character and not merely trivial or unimportant and

2. connected with the work of the employee.

In this case, petitioner dismissed respondent based on the NBI's finding that the latter stole and used
Yuseco's credit cards. But since the theft was not committed against petitioner itself but against one of
its employees, respondent's misconduct was not work-related and therefore, she could not be
dismissed for serious misconduct.

Nonetheless, Article 282(e) of the Labor Code talks of other analogous causes or those which are
susceptible of comparison to another in general or in specific detail. For an employee to be validly
dismissed for a cause analogous to those enumerated in Article 282, the cause must involve a
voluntary and/or willful act or omission of the employee.

A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an
employee's moral depravity. Theft committed by an employee against a person other than his
employer, if proven by substantial evidence, is a cause analogous to serious misconduct

4.

Yrasuegui vs. PAL October 17, 2008

G.R. No. 168081, October 17, 2008

ARMANDO G. YRASUEGUI VS. PHILIPPINE AIRLINES, INC

REYES, R.T., J.:

Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc.
(PAL). He stands five feet and eight inches (5'8") with a large body frame. The proper weight for a man
of his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as
mandated by the Cabin and Crew Administration Manual of PAL.

The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended
vacation leave from December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently,
petitioner failed to meet the company's weight standards, prompting another leave without pay from
March 5, 1985 to November 1985.After meeting the required weight, petitioner was allowed to return
to work. But petitioner's weight problem recurred. He again went on leave without pay from October
17, 1988 to February 1989.

On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal weight. In line with
company policy, he was removed from flight duty effective May 6, 1989 to July 3, 1989. He was
formally requested to trim down to his ideal weight and report for weight checks on several dates. He
was also told that he may avail of the services of the company physician should he wish to do so. He
was advised that his case will be evaluated on July 3, 1989.

On February 25, 1989, petitioner underwent weight check. It was discovered that he gained, instead of
losing, weight. He was overweight at 215 pounds, which is 49 pounds beyond the limit. Consequently,
his off-duty status was retained.
On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at his residence
to check on the progress of his effort to lose weight. Petitioner weighed 217 pounds, gaining 2 pounds
from his previous weight. After the visit, petitioner made a commitment to reduce weight in a letter
addressed to Cabin Crew Group Manager Augusto Barrios.

Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained
overweight. On January 3, 1990, he was informed of the PAL decision for him to remain grounded until
such time that he satisfactorily complies with the weight standards. Again, he was directed to report
every two weeks for weight checks.

Petitioner failed to report for weight checks. Despite that, he was given one more month to comply
with the weight requirement. As usual, he was asked to report for weight check on different dates. He
was reminded that his grounding would continue pending satisfactory compliance with the weight
standards.

Again, petitioner failed to report for weight checks, although he was seen submitting his passport for
processing at the PAL Staff Service Division.

On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight check
would be dealt with accordingly. He was given another set of weight check dates. Again, petitioner
ignored the directive and did not report for weight checks. On June 26, 1990, petitioner was required to
explain his refusal to undergo weight checks.When petitioner tipped the scale on July 30, 1990, he
weighed at 212 pounds. Clearly, he was still way over his ideal weight of 166 pounds.

From then on, nothing was heard from petitioner until he followed up his case requesting for leniency
on the latter part of 1992. He weighed at 219 pounds on August 20, 1992 and 205 pounds on
November 5, 1992.

On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of
company standards on weight requirements. He was given ten (10) days from receipt of the charge
within which to file his answer and submit controverting evidence.

On December 7, 1992, petitioner submitted his Answer. Notably, he did not deny being overweight.
What he claimed, instead, is that his violation, if any, had already been condoned by PAL since "no
action has been taken by the company" regarding his case "since 1988." He also claimed that PAL
discriminated against him because "the company has not been fair in treating the cabin crew members
who are similarly situated."

On December 8, 1992, a clarificatory hearing was held where petitioner manifested that he was
undergoing a weight reduction program to lose at least two (2) pounds per week so as to attain his
ideal weight.

On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal
weight, "and considering the utmost leniency" extended to him "which spanned a period covering a
total of almost five (5) years," his services were considered terminated "effective immediately."

His motion for reconsideration having been denied,petitioner filed a complaint for illegal dismissal
against PAL.

Labor Arbiter, NLRC and CA Dispositions

On November 18, 1998, Labor Arbiter ruled that petitioner was illegally dismissed. The Labor Arbiter
held that the weight standards of PAL are reasonable in view of the nature of the job of petitioner.
However, the weight standards need not be complied with under pain of dismissal since his weight did
not hamper the performance of his duties. Assuming that it did, petitioner could be transferred to other
positions where his weight would not be a negative factor. Notably, other overweight employees, i.e.,
Mr. Palacios, Mr. Cui, and Mr. Barrios, were promoted instead of being disciplined.
According to the NLRC, "obesity, or the tendency to gain weight uncontrollably regardless of the
amount of food intake, is a disease in itself." As a consequence, there can be no intentional defiance or
serious misconduct by petitioner to the lawful order of PAL for him to lose weight.

Like the Labor Arbiter, the NLRC found the weight standards of PAL to be reasonable. However, it found
as unnecessary the Labor Arbiter holding that petitioner was not remiss in the performance of his
duties as flight steward despite being overweight. According to the NLRC, the Labor Arbiter should
have limited himself to the issue of whether the failure of petitioner to attain his ideal weight
constituted willful defiance of the weight standards of PAL.

PAL moved for reconsideration to no avail. Thus, PAL elevated the matter to the Court of Appeals (CA)
via a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. The CA reversed the
NLRC. The CA opined that there was grave abuse of discretion on the part of the NLRC because it
"looked at wrong and irrelevant considerations" in evaluating the evidence of the parties.

Our Ruling

The obesity of petitioner is a ground for dismissal under Article 282(e) of the Labor Code.

In the case at bar, the evidence on record militates against petitioner's claims that obesity is a disease.
That he was able to reduce his weight from 1984 to 1992 clearly shows that it is possible for him to
lose weight given the proper attitude, determination, and self-discipline. Indeed, during the
clarificatory hearing on December 8, 1992, petitioner himself claimed that "[t]he issue is could I bring
my weight down to ideal weight which is 172, then the answer is yes. I can do it now."

True, petitioner claims that reducing weight is costing him "a lot of expenses." However, petitioner has
only himself to blame. He could have easily availed the assistance of the company physician, per the
advice of PAL. He chose to ignore the suggestion. In fact, he repeatedly failed to report when required
to undergo weight checks, without offering a valid explanation. Thus, his fluctuating weight indicates
absence of willpower rather than an illness.

In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight
attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his
dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA
correctly puts it, "[v]oluntariness basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his actions. This element runs through
all just causes under Article 282, whether they be in the nature of a wrongful action or omission. Gross
and habitual neglect, a recognized just cause, is considered voluntary although it lacks the element of
intent found in Article 282(a), (c), and (d)."

The dismissal of petitioner can be predicated on the bona fide occupational qualification defense.

Employment in particular jobs may not be limited to persons of a particular sex, religion, or national
origin unless the employer can show that sex, religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide occupational qualification (BFOQ). In the
United States, there are a few federal and many state job discrimination laws that contain an exception
allowing an employer to engage in an otherwise unlawful form of prohibited discrimination when the
action is based on a BFOQ necessary to the normal operation of a business or enterprise.

Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute providing
for it. Further, there is no existing BFOQ statute that could justify his dismissal.

Both arguments must fail.

First, the Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for Disabled Persons
contain provisions similar to BFOQ.
Second, in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia
Government and Service Employee's Union (BCGSEU), this Court held that in order to justify a BFOQ,
the employer must prove that (1) the employment qualification is reasonably related to the essential
operation of the job involved; and (2) that there is factual basis for believing that all or substantially all
persons meeting the qualification would be unable to properly perform the duties of the job.

In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ. BFOQ
is valid "provided it reflects an inherent quality reasonably necessary for satisfactory job performance."

Verily, there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute.
Too, the Labor Arbiter, NLRC, and CA are one in holding that the weight standards of PAL are
reasonable. A common carrier, from the nature of its business and for reasons of public policy, is bound
to observe extraordinary diligence for the safety of the passengers it transports. It is bound to carry its
passengers safely as far as human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.

The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is only logical
to hold that the weight standards of PAL show its effort to comply with the exacting obligations
imposed upon it by law by virtue of being a common carrier.

Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made known
to him prior to his employment. He is presumed to know the weight limit that he must maintain at all
times. In fact, never did he question the authority of PAL when he was repeatedly asked to trim down
his weight. Bona fides exigit ut quod convenit fiat. Good faith demands that what is agreed upon shall
be done. Kung ang tao ay tapat kanyang tutuparin ang napagkasunduan.

Too, the weight standards of PAL provide for separate weight limitations based on height and body
frame for both male and female cabin attendants. A progressive discipline is imposed to allow non-
compliant cabin attendants sufficient opportunity to meet the weight standards. Thus, the clear-cut
rules obviate any possibility for the commission of abuse or arbitrary action on the part of PAL.

Petitioner is entitled to separation pay.

Be that as it may, all is not lost for petitioner

Normally, a legally dismissed employee is not entitled to separation pay. This may be deduced from
the language of Article 279 of the Labor Code that "[a]n employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his actual reinstatement."
Luckily for petitioner, this is not an ironclad rule.

Exceptionally, separation pay is granted to a legally dismissed employee as an act "social justice," or
based on "equity." In both instances, it is required that the dismissal (1) was not for serious
misconduct; and (2) does not reflect on the moral character of the employee.

Here, We grant petitioner separation pay equivalent to one-half (1/2) month's pay for every year of
service. It should include regular allowances which he might have been receiving. We are not blind to
the fact that he was not dismissed for any serious misconduct or to any act which would reflect on his
moral character. We also recognize that his employment with PAL lasted for more or less a decade.
5.

DOLE PHILIPPINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Second Division)
ALFREDO TARROZA, ROGELIO DE LA PEA and LORETO TEJERO, respondents.

G.R. No. L-55413, 25 July 1983

AQUINO, J.:

Alfredo Tarroza, Rogelio de la Pea and Loreto Tejero ("Respondents") were light-wheel tractor
operators in the pineapple field of Dole Philippines, Inc ("Dolefil").

On April 29, 1977, landguards of Dolefil spotted two drums containing crude oil in the farmlot of
Inocencio Asibal which adjoins Dolefil's pineapple field.

Asibal and companion Rogelio Odarve were investigated by the police and stated in their sworn
statements that they bought the crude oil from Respondents and two other Dolefil employees.

Respondents and their two co-employees were charged with qualified theft in the municipal court.
While those cases were pending, Dolefil filed with the Department of Labor an application for clearance
to terminate the employment of Respondents for "stealing or dishonesty," which was granted.

Eight months later, the municipal court of acquitted Respondents of qualified theft while the two other
Dolefil employees were convicted of qualified theft.

After that decision, Respondents filed a complaint for illegal dismissal and for reinstatement with
backwages against Dolefil.

The Labor Arbiter dismissed the complaint and declared as valid, lawful and for a just cause the
termination from employment of Respondents. The NLRC set aside the decision of the Labor Arbiter.

ISSUE: W/N Dolefil is justified in dismissing Respondents.

RULING: Yes.

An employer may terminate an employment for "serious misconduct" or for "fraud or willful breach by
the employee of the trust reposed in him by his employer or representative".

Loss of confidence as a ground for dismissal does not entail proof beyond reasonable doubt of the
employee's misconduct. It is enough that there be some basis for such loss of confidence or that the
employer has reasonable grounds to believe that the employee is responsible for the misconduct and
that the nature of his participation therein rendered him absolutely unworthy of the trust and
confidence demanded by his position.

The eventual conviction of an employee who is prosecuted for his misconduct is not indispensable to
warrant his dismissal by his employer.

On the other hand, the acquittal of an employee in the criminal case filed against him by his employer
does not also guarantee his reinstatement if the employer has lost confidence in him.

A company has the right to dismiss its erring employees if only as a measure of self-protection against
acts inimical to its interest.

INSUBORDINATION

1.

Tongko vs. The Manufacturers Life Insurance Co., Inc. November 7, 2008

G.R. No. 167622, November 07, 2008

Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life
insurance business. Renato A. Vergel De Dios was, during the period material, its President and Chief
Executive Officer. Gregorio V. Tongko started his professional relationship with Manulife on July 1, 1977
by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife.

In the Agreement, it is provided that:

It is understood and agreed that the Agent is an independent contractor and nothing contained herein
shall be construed or interpreted as creating an employer-employee relationship between the
Company and the Agent.
The Company may terminate this Agreement for any breach or violation of any of the provisions hereof
by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the
discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the
right to terminate this Agreement by the Company shall be construed for any previous failure to
exercise its right under any provision of this Agreement.

Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving
to the other party fifteen (15) days notice in writing.

In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he
became a Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife,
consisting of commissions, persistency income, and management overrides. The problem started
sometime in 2001, when Manulife instituted manpower development programs in the regional sales
management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to Tongko
regarding an October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongkos Region was
the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and, as of today,
continues to remain one of the laggards in this area. Other issues were:"Some Managers are unhappy
with their earnings and would want to revert to the position of agents." And "Sales Managers are doing
what the company asks them to do but, in the process, they earn less." Tongko was then terminated.

Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for
illegal dismissalIn the Complaint. In a Decision dated April 15, 2004, Labor Arbiter dismissed the
complaint for lack of an employer-employee relationship.

The NLRC's First Division, while finding an employer-employee relationship between Manulife and
Tongko applying the four-fold test, held Manulife liable for illegal dismissal. Thus, Manulife filed an
appeal with the CA. Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding the
absence of an employer-employee relationship between the parties and deeming the NLRC with no
jurisdiction over the case. Hence, Tongko filed this petition.

Issue:

1. WON Tongko was an employee of Manulife

2. WON Tongko was illegally dismissed.

Held:

1. Yes

In the instant case, Manulife had the power of control over Tongko that would make him its employee.
Several factors contribute to this conclusion.

In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that:

The Agent hereby agrees to comply with all regulations and requirements of the Company as herein
provided as well as maintain a standard of knowledge and competency in the sale of the Company's
products which satisfies those set by the Company and sufficiently meets the volume of new business
required of Production Club membership.Under this provision, an agent of Manulife must comply with
three (3) requirements: (1) compliance with the regulations and requirements of the company; (2)
maintenance of a level of knowledge of the company's products that is satisfactory to the company;
and (3) compliance with a quota of new businesses.

Among the company regulations of Manulife are the different codes of conduct such as the Agent Code
of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement,
which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko
was obliged to obey and comply with the codes of conduct was not disowned by respondents.
Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of
Manulife may already be established. Certainly, these requirements controlled the means and methods
by which Tongko was to achieve the company's goals.

More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform
administrative duties that establishes his employment with Manulife.

Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain
number of agents, in addition to his other administrative functions, leads to no other conclusion that
he was an employee of Manulife.

2. Yes

In its Petition for Certiorari dated January 7, 2005[26] filed before the CA, Manulife argued that even if
Tongko is considered as its employee, his employment was validly terminated on the ground of gross
and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of
Manulife. Manulife stated:

In the instant case, private respondent, despite the written reminder from Mr. De Dios refused to shape
up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative
of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed
to perform a very fundamental duty, and that is to yield obedience to all reasonable rules, orders and
instructions of the Company, as well as gross failure to reach at least minimum quota, the termination
of his engagement from Manulife is highly warranted and therefore, there is no illegal dismissal to
speak of.

It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single
iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko
disobeyed. More importantly, Manulife did not point out the specific acts that Tongko was guilty of that
would constitute gross and habitual neglect of duty or disobedience. Manulife merely cited Tongko's
alleged "laggard performance," without substantiating such claim, and equated the same to
disobedience and neglect of duty.

Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of
proving the validity of the termination of employment rests on the employer. Failure to discharge this
evidential burden would necessarily mean that the dismissal was not justified, and, therefore, illegal.

The Labor Code provides that an employer may terminate the services of an employee for just cause
and this must be supported by substantial evidence. The settled rule in administrative and quasi-
judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of
an employer's dismissal of an employee, and not even a preponderance of evidence is necessary as
substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of
evidence or relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed
to identify the specific acts by which Tongko's employment was terminated much less support the
same with substantial evidence. To repeat, mere conjectures cannot work to deprive employees of
their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed.

Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being
its employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however,
Manulife clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of
illegal dismissal.
2.

Areno vs. Skycable

G.R. No. 180302

Facts:
On January 17, 1995, petitioner was employed as a cable technician by respondent Skycable PCC-
Baguio. On January 17, 2002, an accounting clerk of respondent, Soriano, sent to the human resource
manager a letter-complaint against petitioner alleging that on two separate occasions, the latter
spread false rumors about her (the first in the middle of 2001 and the second on December 22, 2001).
On January 27, 2002, she was again insulted by petitioner when the latter approached her and said
that she was seen going out with Aldrin Estrada, their field service supervisor, at Central Park, Baguio
City. During that incident, petitioner uttered, Ikaw lang ang nakakaalam ng totoo with malicious
intent and in a provocative manner. Soriano averred that petitioners unscrupulous behavior
constituted serious and grave offense in violation of the companys Code of Discipline.

On the same day, respondent issued a Memorandum requiring petitioner to submit an explanation
within 76 hours from notice thereof. Petitioner submitted his written explanation dated January 23,
2002 denying all the allegations in Sorianos letter-complaint and further denying having uttered the
statement imputed on him.

An administrative investigation was accordingly conducted on January 31, 2002. In a Memo dated
February 6, 2002, the investigating committee found petitioner guilty of having made malicious
statements against Soriano during the January 7, 2002 conversation, which is categorized as an
offense under the Company Code of Discipline. Consequently, petitioner was suspended for three days
without pay effective February 13-15, 2002. The Memo was allegedly served on February 7, 2002 but
petitioner refused to sign it.

Notwithstanding the suspension order, however, petitioner still reported for work on February 13,
2002. By reason thereof, respondent sent petitioner a letter denominated as 1st Notice of Termination
requiring him to explain in writing why he should not be terminated for insubordination. On February
18, 2002, petitioner inquired from respondent whether he is already dismissed or merely suspended
since he was refused entry into the company premises on February 14, 2002. Respondent replied that
petitioner was merely suspended and gave him additional time to tender his written explanation to the
1st Notice of Termination.

On March 2, 2002, petitioner again wrote to respondent, this time requesting for further investigation
on his alleged act of spreading rumors against Soriano in order for him to confront his accuser and
present his witnesses with the assistance of counsel. Respondent denied the request reiterating that
there has been substantial compliance with due process and that a reinvestigation is moot because the
suspension was already served.

Anent the new charge of insubordination, petitioner submitted to respondent his written explanation
averring that he still reported for work on the first day of his suspension because the accusation of
Soriano is baseless and her testimony is hearsay. Besides, according to petitioner, he did not defy any
order related to his duties, no representative of the management prevented him from working and that
reporting to work without being paid for the service he rendered on that day did not in any way affect
the companys productivity.

On March 15, 2002, an investigation on the insubordination case was conducted which was attended
by the parties and their respective counsels. Through a Final Notice of Termination dated April 1,
2002, petitioner was dismissed from service on the ground of insubordination or willful disobedience in
complying with the suspension order.

Issue: WON petitioner was validly dismissed from work due to insubordination.

Held:

As a just cause for dismissal of an employee under Article 282 of the Labor Code, willful disobedience
of the employers lawful orders requires the concurrence of two elements: (1) the employees assailed
conduct must have been willful, i.e., characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee, and must pertain to
the duties which he had been engaged to discharge. Both requisites are present in the instant case. It
is noteworthy that upon receipt of the notice of suspension, petitioner did not question such order at
the first instance. He immediately defied the order by reporting on the first day of his suspension.
Deliberate disregard or disobedience of rules by the employee cannot be countenanced. It may
encourage him to do even worse and will render a mockery of the rules of discipline that employees
are required to observe.

Petitioner was served the first notice of termination and was given time to submit his written
explanation. A hearing was conducted wherein both parties with their respective counsels were
present. After finding cause for petitioners termination, a final notice apprising him of the decision to
terminate his employment was served. All things considered, respondent validly dismissed petitioner
for cause after complying with the procedural requirements of the law.

Petition denied

3.
EDI-Staffbuilders vs. NLRC

G.R. No. 145587 October 26, 2007

Facts:

Petitioner EDI is a corporation engaged in recruitment and placement of OFWs. ESI is another
recruitment agency which collaborated with EDI to process the documentation and deployment of
private respondent to Saudi Arabia.

Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work for OAB, in Riyadh,
Kingdom of Saudi Arabia.

It appears that OAB asked EDI through its October 3, 1993 letter for curricula vitae of qualified
applicants for the position of Computer Specialist.7 In a facsimile transmission dated November 29,
1993, OAB informed EDI that, from the applicants curricula vitae submitted to it for evaluation, it
selected Gran for the position of Computer Specialist. The faxed letter also stated that if Gran agrees
to the terms and conditions of employment contained in it, one of which was a monthly salary of SR
(Saudi Riyal) 2,250.00 (USD 600.00), EDI may arrange for Grans immediate dispatch.

After accepting OABs offer of employment, Gran signed an employment contract that granted him a
monthly salary of USD 850.00 for a period of two years. Gran was then deployed to Riyadh, Kingdom of
Saudi Arabia on February 7, 1994.

Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salaryhis employment
contract stated USD 850.00; while his POEA Information Sheet indicated USD 600.00 only. However,
through the assistance of the EDI office in Riyadh, OAB agreed to pay Gran USD 850.00 a month.

After Gran had been working for about five months for OAB, his employment was terminated through
OABs July 9, 1994 letter, on the following grounds:

1. Non-compliance to contract requirements by the recruitment agency primarily on your salary and
contract duration.

2. Non-compliance to pre-qualification requirements by the recruitment agency[,] vide OAB letter ref.
F-5751-93, dated October 3, 1993.

3. Insubordination or disobedience to Top Management Order and/or instructions (non-submittal of

daily activity reports despite several instructions).

On July 11, 1994, Gran received from OAB the total amount of SR 2,948.00 representing his final pay,
and on the same day, he executed a Declaration releasing OAB from any financial obligation or
otherwise, towards him.

After his arrival in the Philippines, Gran instituted a complaint, on July 21, 1994, against ESI/EDI, OAB,
Country Bankers Insurance Corporation, and Western Guaranty Corporation with the NLRC, National
Capital Region, Quezon City, which was docketed as POEA ADJ (L) 94-06-2194 for underpayment of
wages/salaries and illegal dismissal.

Issue:

1. WON Grans dismissal is justifiable by reason of incompetence, insubordination, and disobedience

2. WON GRAN WAS AFFORDED DUE PROCESS PRIOR TO TERMINATION.

3. WON GRAN IS ENTITLED TO BACKWAGES FOR THE UNEXPIRED PORTION OF HIS CONTRACT.
Held:

1. In cases involving OFWs, the rights and obligations among and between the OFW, the local
recruiter/agent, and the foreign employer/principal are governed by the employment contract. A
contract freely entered into is considered law between the parties; and hence, should be respected. In
formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy.

In the present case, the employment contract signed by Gran specifically states that Saudi Labor Laws
will govern matters not provided for in the contract (e.g. specific causes for termination, termination
procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply to the contract,
Saudi Labor Laws should govern all matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law applied to a dispute or case has the
burden of proving the foreign law. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. He is
presumed to know only domestic or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus, the
International Law doctrine ofpresumed-identity approach or processual presumption comes into play.
Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign
law is the same as ours. Thus, we apply Philippine labor laws in determining the issues presented
before us.

In illegal dismissal cases, it has been established by Philippine law and jurisprudence that the
employer should prove that the dismissal of employees or personnel is legal and just.

Section 33 of Article 277 of the Labor Code states that:

ART. 277. MISCELLANEOUS PROVISIONS

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations promulgated
pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the workers to contest the validity or legality of his
dismissal by filing a complaint with the regional branch of the National Labor Relations Commission.
The burden of proving that the termination was for a valid or authorized cause shall rest on the
employer.

Petitioners imputation of incompetence on private respondent due to his insufficient knowledge in

programming and zero knowledge of the ACAD system based only on the above mentioned letters,
without any other evidence, cannot be given credence.

An allegation of incompetence should have a factual foundation. Incompetence may be shown by

weighing it against a standard, benchmark, or criterion. However, EDI failed to establish any such
bases to show how petitioner found Gran incompetent.

In addition, the elements that must concur for the charge of insubordination or willful disobedience to
prosper were not present.

In Micro Sales Operation Network v. NLRC, we held that:

For willful disobedience to be a valid cause for dismissal, the following twin elements must concur: (1)
the employees 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.

EDI failed to discharge the burden of proving Grans insubordination or willful disobedience. As
indicated by the second requirement provided for in Micro Sales Operation Network, in order to justify
willful disobedience, we must determine whether the order violated by the employee is reasonable,
lawful, made known to the employee, and pertains to the duties which he had been engaged to
discharge. In the case at bar, petitioner failed to show that the order of the company which was
violatedthe submission of Daily Activity Reportswas part of Grans duties as a Computer
Specialist. Before the Labor Arbiter, EDI should have provided a copy of the company policy, Grans job
description, or any other document that would show that the Daily Activity Reports were required for
submission by the employees, more particularly by a Computer Specialist.

Even though EDI and/or ESI were merely the local employment or recruitment agencies and not the
foreign employer, they should have adduced additional evidence to convincingly show that Grans
employment was validly and legally terminated. The burden devolves not only upon the foreign-based
employer but also on the employment or recruitment agency for the latter is not only an agent of the
former, but is also solidarily liable with the foreign principal for any claims or liabilities arising from the
dismissal of the worker.

Thus, petitioner failed to prove that Gran was justifiably dismissed due to incompetence,
insubordination, or willful disobedience.

2. Under the twin notice requirement, the employees must be given 2 notices before their
employment could be terminated: (1) a first notice to apprise the employees of their fault, and (2) a
second notice to communicate to the employees that their employment is being terminated. In
between the first and second notice, the employees should be given a hearing or opportunity to
defend themselves personally or by counsel of their choice.

A careful examination of the records revealed that, indeed, OABs manner of dismissing Gran fell short
of the two notice requirement. While it furnished Gran the written notice informing him of his dismissal,
it failed to furnish Gran the written notice apprising him of the charges against him, as prescribed by
the Labor Code. Consequently, he was denied the opportunity to respond to said notice. In addition,
OAB did not schedule a hearing or conference with Gran to defend himself and adduce evidence in
support of his defenses. Moreover, the July 9, 1994 termination letter was effective on the same day.
This shows that OAB had already condemned Gran to dismissal, even before Gran was furnished the
termination letter. It should also be pointed out that OAB failed to give Gran the chance to be heard
and to defend himself with the assistance of a representative in accordance with Article 277 of the
Labor Code. Clearly, there was no intention to provide Gran with due process. Summing up, Gran was
notified and his employment arbitrarily terminated on the same day, through the same letter, and for
unjustified grounds. Obviously, Gran was not afforded due process.

Pursuant to the doctrine laid down in Agabon, an employer is liable to pay nominal damages as
indemnity for violating the employees right to statutory due process. Since OAB was in breach of the
due process requirements under the Labor Code and its regulations, OAB, ESI, and EDI, jointly and
solidarily, are liable to Gran in the amount of PhP 30,000.00 as indemnity.

3. We reiterate the rule that with regard to employees hired for a fixed period of employment, in
cases arising before the effectivity of R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act) on
August 25, 1995, that when the contract is for a fixed term and the employees are dismissed without
just cause, they are entitled to the payment of their salaries corresponding to the unexpired portion of
their contract.59 On the other hand, for cases arising after the effectivity of R.A. No. 8042, when the
termination of employment is without just, valid or authorized cause as defined by law or contract, the
worker shall be entitled to the full reimbursement of his placement fee with interest of 12% per annum,
plus his salaries for the unexpired portion of his employment contract or for 3 months for every year of
the unexpired term whichever is less.

In the present case, the employment contract provides that the employment contract shall be valid for
a period of 2 years from the date the employee starts to work with the employer. Gran arrived in
Riyadh, Saudi Arabia and started to work on February 7, 1994; hence, his employment contract is until
February 7, 1996. Since he was illegally dismissed on July 9, 1994, before the effectivity of R.A. No.
8042, he is therefore entitled to backwages corresponding to the unexpired portion of his contract,
which was equivalent to USD 16,150.

4.

G.R. No. 179001 : August 28, 2013

MZR INDUSTRIES, MARILOU R. QUIROZ AND LEA TIMBAL, Petitioners, v. MAJEN COLAMBOT, Respondent.

PERALTA,J.:

FACTS:

Petitioner Marilou Quiroz, Owner and Vice-President for Finance and Marketing of MZR, hired
respondent Majen Colambot (Colambot) as messenger. However, beginning 2002, Colambot's work
performance started to deteriorate. Petitioners issued several memoranda to Colambot for habitual
tardiness, negligence, and violations of office policies.He was also given written warnings for
insubordination committed on several occasions.

Despite multiple warnings, Colambot failed to mend his ways. Hence, a notice of suspension for
insubordination and negligence was issued against Colambot. Colambot was subsequently suspended
from Nov. 26- Dec 6, 2004 for insubordination.

Petitioners claimed they waited for Colambot to report back for work on December 7, 2004, but they
never heard from him anymore. Later, petitioners were surprised to find out that Colambot had filed a
complaint for illegal dismissal, illegal suspension, underpayment of salaries, holiday pay, service
incentive pay, 13th month pay and separation pay.

Petitioners, however, insisted that while Colambot was suspended due to insubordination and
negligence, they maintained that they never terminated Colambot's employment. They added that
Colambot's failure to report for work since December 7, 2004 without any approved vacation or sick
leave constituted abandonment of his work, but they never terminated his employment. Petitioners
further emphasized that even with Colambot's filing of the complaint against them, his employment
with MZR has not been terminated.

LA ruled in favor of respondent, holding the latter has been illegally dismissed and that there was no
abandonment as there was no deliberate intent on the part of Colambot to sever the employer-
employee relationship. The Labor Arbiter likewise noted that Colambot should have been notified to
return back to work, which petitioner failed to do.
On appeal, the NLRC reversed the decision and pointed out that Colambot's complaint was
unsupported by any evidence and was not even made under oath, thus, lacking in credibility and
probative value. The NLRC further believed that Colambot abandoned his work due to his refusal to
report for work after his suspension. The failure of MZR to notify Colambot to return back to work is not
tantamount to actual dismissal.

Colambot filed a motion for reconsideration, but was denied. Thus, via a petition for certiorari under
Rule 65 of the Rules of Court, before the CA. The CA reversed the NLRC decision. The appellate court
ruled that Colambot was illegally dismissed based on the grounds that : (1) MZR failed to prove
abandonment on the part of Colambot, and (2) MZR failed to serve Colambot with the required written
notices of dismissal.

ISSUE: Whether or not Colambot was illegally dismissed.

HELD: No. CA decision reversed and set aside.

Labor Law

In illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid
or authorized cause, in the present case, however, the facts and the evidence do not establish a prima
facie case that the employee was dismissed from employment. Before the employer must bear the
burden of proving that the dismissal was legal, the employee must first establish by substantial
evidence the fact of his dismissal from service. If there is no dismissal, then there can be no question
as to the legality or illegality thereof.

In the present case, other than Colambot's unsubstantiated allegation of having been verbally
terminated from his work, there was no evidence presented to show that he was indeed dismissed
from work or was prevented from returning to his work. In the absence of any showing of an overt or
positive act proving that petitioners had dismissed respondent, the latter's claim of illegal dismissal
cannot be sustained as the same would be self-serving, conjectural and of no probative value.

A review of the Notice of Suspension dated November 25, 2004 shows that respondent was merely
suspended from work for 6 days, there was, however, no evidence that Colambot was terminated from
work.

While the same appeared to contain a warning of termination should Colambot fail to improve his
behavior, it is likewise apparent that there was also a specific instruction for him to report back to
work, on December 7, 2004, upon serving his suspension. The subject of the Letter, i.e., "Suspension
due to Insubordination," the wordings and content of the letter is a clear-cut notice of suspension, and
not a notice of termination. The notice of suspension may have contained warnings of termination, but
it must be noted that such was conditioned on the ground that Colambot would fail to improve his
attitude/behavior. There were no wordings whatsoever implying actual or constructive dismissal. Thus,
Colambot's general allegation of having been orally dismissed from the service as against the clear
wordings and intent of the notice of suspension which he signed, we are then inclined to believe that
there was no dismissal.

Neither could the petitioners be blamed for failing to order respondent to return back to work. Records
show that Colambot immediately filed the complaint for illegal dismissal on December 16, 2004, or just
a few days when he was supposed to report back to work on December 7, 2004. For petitioners to
order respondent to report back to work, after the latter had already filed a case for illegal dismissal,
would be unsound.

However, while the Court concurs with the conclusion of the NLRC that there was no illegal dismissal,
no dismissal having actually taken place, the Court does not agree with its findings that Colambot
committed abandonment of work.
Labor Law

This Court consistently held that to constitute abandonment of work, two elements must be present :
first, the employee must have failed to report for work or must have been absent without valid or
justifiable reason; and second, there must have been a clear intention on the part of the employee to
sever the employer-employee relationship manifested by some overt act.

In the instant case, other than Colambot's failure to report back to work after suspension, petitioners
failed to present any evidence which tend to show his intent to abandon his work. It is a settled rule
that mere absence or failure to report for work is not enough to amount to abandonment of work.
There must be a concurrence of the intention to abandon and some overt acts from which an
employee may be deduced as having no more intention to work.

These circumstances, taken together, the lack of evidence of dismissal and the lack of intent on the
part of the respondent to abandon his work, the remedy is reinstatement but without backwages.
However, considering that reinstatement is no longer applicable due to the strained relationship
between the parties and that Colambot already found another employment, each party must bear his
or her own loss, thus, placing them on equal footing.

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5.

NISSAN MOTORS PHILS., INC. vs. VICTORINO ANGELO G.R. No. 164181, 14 September 2011

FACTS:

Angelo was employed by Nissan as one of its payroll staff. His sick leave and vacation leave resulted
in the non-preparation of the payroll for that particular period.

He then received a Memorandum informing him that the company is considering his dismissal from
employment on the grounds of serious misconduct, willful disobedience and gross neglect of duties. He
was then placed on preventive suspension effective immediately. Unsatisfied with his answer, they
then issued a Notice of Termination.

ISSUE:

Whether or not an employee dismissed on just cause may be entitled to separation pay.

RULING:
Yes. 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. As a general rule, an employee who has been dismissed for
any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation
pay. Although by way of exception, the grant of separation pay or some other financial assistance may
be allowed to an employee dismissed for just causes on the basis of equity, inspired by compassionate
and social justice.

LOSS OF TRUST AND CONFIDENCE / BREACH / FRAUD

1.

Uniwide Sales Warehouse Club vs. NLRC, February 29, 2008

G.R. No. 154503 February 29, 2008

FACTS:

Amalia Kawada, a Full Assistant Store Manager received a Memorandum issued by the
Store Manager Apduhan summarizing the various reported incidents signifying unsatisfactory
performance on the latter's part which include the commingling of good and damaged items, sale of a
voluminous quantity of damaged toys and ready-to-wear items at unreasonable prices, and failure to
submit inventory reports. Another Memorandum was issued which claimed that the answers given by
the private respondent were all hypothetical and did not answer directly the allegations attributed to
her. Apduhan sent another Memorandum seeking from the private respondent an explanation
regarding the incidents reported by Uniwide employees and security personnel for alleged irregularities
committed by the private respondent such as allowing the entry of unauthorized persons inside a
restricted area during non-office hours, falsification of or inducing another employee to falsify
personnel or company records, sleeping and allowing a non-employee to sleep inside the private office,
unauthorized search and bringing out of company records, purchase of damaged home furnishing
items without the approval from superior, taking advantage of buying damaged items in large
quantity, alteration of approval slips for the purchase of damaged items and abandonment of work. In
a letter, private respondent answered the allegations made against her.

On July 27, 1998, private respondent sought medical help from the company physician, Dr. Zambrano,
due to complaints of dizziness. Finding private respondent to be suffering from hypertension, Dr.
Zambrano advised her to take five days sick leave.

Subsequently, private respondent was able to obtain from Dr. Zambrano a certificate of fitness to work,
which she presented to Apduhan the following day. It turned out that Dr. Zambrano inadvertently wrote
"Menia," the surname of the company nurse, in the medical certificate instead of private respondent's
surname. Thereafter, private respondent claims that Apduhan shouted at her and prevented her from
resuming work because she was not the person referred to in the medical certificate. After private
respondent left Apduhan's office, Apduhan's assistant approached the private respondent to get the
certification so that it may be photocopied. When she refused to give the certification, private
respondent claims that Apduhan once again shouted at her which caused her hypertension to recur
and eventually caused her to collapse. Private respondent's head hit the edge of the table before she
fell down on the ground for which she suffered contusions at the back of her head.

On August 2, 1998, Apduhan issued a Memorandum, advising Kawada of a hearing scheduled on

August 12, 1998 and warning her that failure to appear shall constitute as waiver and the case shall be
submitted for decision based on available papers and evidence.

On August 3, 1998, private respondent filed a case for illegal dismissal before the Labor Arbiter (LA).

On August 8, 1998, Apduhan sent a letter addressed to private respondent, which the latter received
on even date, advising private respondent to report for work, as she had been absent since August 1,
1998; and warning her that upon her failure to do so, she shall be considered to have abandoned her
job.

On September 1, 1998, Apduhan issued a Memorandum stating that since private respondent was
unable to attend the scheduled August 12, 1998 hearing, the case was evaluated on the basis of the
evidence on record; and enumerating the pieces of evidence of the irregularities and violations of
company rules committed by private respondent, the latter's defenses and the corresponding findings
by Uniwide. Kawada was thereafter terminated from her employment on the grounds of violations of
Company Rules, Abandonment of Work and loss of trust and confidence.

The Labor Arbiter denied the complaint of Kawada for lack of merit while the NLRC on appeal reversed
the decision of the Labor Arbiter ordering UNiwide to pay separation pay, backwages and moral and
exemplary damages. According to the NLRC, private respondent was subjected to inhuman and anti-
social treatment oppressive to labor. Private respondent received successive memoranda from
Apduhan accusing the former of different infractions, some of which offenses complainant was
informed of only a year after the alleged commission. Further, Apduhan's ill will and motive to edge
private respondent out of her employ was displayed by Apduhan's stubborn refusal to allow private
respondent to continue her work on the flimsy excuse that the medical certificate did not bear her
correct surname, while Apduhan knew for a fact that the same could not have referred to another
person but to private respondent.

Also, the NLRC observed that private respondent was not afforded due process by petitioners because
the former was not given an opportunity to a fair hearing in that the investigation was conducted after
private respondent had been constructively dismissed; and that there was no point for private
respondent to still attend the investigation set on August 12, 1998 after her constructive dismissal on
July 31, 1998 and after she had already filed her complaint.

ISSUE:

Whether or not resondent was constructively dismissed.

HELD: No. Case law defines constructive dismissal as a cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee.

The test of constructive dismissal is whether a reasonable person in the employee's position would
have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal
but made to appear as if it were not. In fact, the employee who is constructively dismissed may be
allowed to keep on coming to work. Constructive dismissal is therefore a dismissal in disguise. The law
recognizes and resolves this situation in favor of employees in order to protect their rights and
interests from the coercive acts of the employer.

The Court finds that private respondent's allegation of harassment is a specious statement which
contains nothing but empty imputation of a fact that could hardly be given any evidentiary weight by
this Court. Private respondent's bare allegations of constructive dismissal, when uncorroborated by the
evidence on record, cannot be given credence.

The right to impose disciplinary sanctions upon an employee for just and valid cause, as well as the
authority to determine the existence of said cause in accordance with the norms of due process,
pertains in the first place to the employer. Precisely, petitioners gave private respondent successive
memoranda so as to give the latter an opportunity to controvert the charges against her. Clearly, the
memoranda are not forms of harassment, but petitioners' compliance with the requirements of due
process.

The July 31, 1998 confrontation where Apduhan allegedly shouted at private respondent which caused
the latter's hypertension to recur and eventually caused her to collapse cannot by itself support a
finding of constructive dismissal by the NLRC and the CA. Even if true, the act of Apduhan in shouting
at private respondent was an isolated outburst on the part of Apduhan that did not show a clear
discrimination or insensibility that would render the working condition of private respondent
unbearable.

On petitioners' claim of abandonment by private respondent, well-settled is the rule that to constitute
abandonment of work, two elements must concur: (1) the employee must have failed to report for
work or must have been absent without valid or justifiable reason, and (2) there must have been a
clear intention on the part of the employee to sever the employer-employee relationship manifested by
some overt act. 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.

Private respondent's failure to report for work despite the August 8, 1998 letter sent by Apduhan to
private respondent advising the latter to report for work is not sufficient to constitute abandonment. 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.

Private respondent mistakenly believed that the successive memoranda sent to her from March 1998
to June 1998 constituted discrimination, insensibility or disdain which was tantamount to constructive
dismissal. Thus, private respondent filed a case for constructive dismissal against petitioners and
consequently stopped reporting for work.

The Court finds that petitioners were not able to establish that private respondent deliberately refused
to continue her employment without justifiable reason. To repeat, the Court will not make a drastic
conclusion that private respondent chose to abandon her work on the basis of her mistaken belief that
she had been constructively dismissed by Uniwide.

Nonetheless, the Court agrees with the findings of the LA that the termination of private respondent
was grounded on the existence of just cause under Article 282 (c) of the Labor Code or willful breach
by the employee of the trust reposed on him by his employer or a duly authorized representative.
Private respondent occupies a managerial position. As a managerial employee, mere existence of a
basis for believing that such employee has breached the trust of his employer would suffice for his
dismissal.

2.Uniwide Sales Warehouse Club vs. NLRC, February 29, 2008

G.R. No. 154503 February 29, 2008

FACTS:

Amalia Kawada, a Full Assistant Store Manager received a Memorandum issued by the Store
Manager Apduhan summarizing the various reported incidents signifying unsatisfactory performance
on the latter's part which include the commingling of good and damaged items, sale of a voluminous
quantity of damaged toys and ready-to-wear items at unreasonable prices, and failure to submit
inventory reports. Another Memorandum was issued which claimed that the answers given by the
private respondent were all hypothetical and did not answer directly the allegations attributed to her.
Apduhan sent another Memorandum seeking from the private respondent an explanation regarding the
incidents reported by Uniwide employees and security personnel for alleged irregularities committed
by the private respondent such as allowing the entry of unauthorized persons inside a restricted area
during non-office hours, falsification of or inducing another employee to falsify personnel or company
records, sleeping and allowing a non-employee to sleep inside the private office, unauthorized search
and bringing out of company records, purchase of damaged home furnishing items without the
approval from superior, taking advantage of buying damaged items in large quantity, alteration of
approval slips for the purchase of damaged items and abandonment of work. In a letter, private
respondent answered the allegations made against her.

On July 27, 1998, private respondent sought medical help from the company physician, Dr. Zambrano,
due to complaints of dizziness. Finding private respondent to be suffering from hypertension, Dr.
Zambrano advised her to take five days sick leave.

Subsequently, private respondent was able to obtain from Dr. Zambrano a certificate of fitness to work,
which she presented to Apduhan the following day. It turned out that Dr. Zambrano inadvertently wrote
"Menia," the surname of the company nurse, in the medical certificate instead of private respondent's
surname. Thereafter, private respondent claims that Apduhan shouted at her and prevented her from
resuming work because she was not the person referred to in the medical certificate. After private
respondent left Apduhan's office, Apduhan's assistant approached the private respondent to get the
certification so that it may be photocopied. When she refused to give the certification, private
respondent claims that Apduhan once again shouted at her which caused her hypertension to recur
and eventually caused her to collapse. Private respondent's head hit the edge of the table before she
fell down on the ground for which she suffered contusions at the back of her head.

On August 2, 1998, Apduhan issued a Memorandum, advising Kawada of a hearing scheduled on

August 12, 1998 and warning her that failure to appear shall constitute as waiver and the case shall be
submitted for decision based on available papers and evidence.

On August 3, 1998, private respondent filed a case for illegal dismissal before the Labor Arbiter (LA).

On August 8, 1998, Apduhan sent a letter addressed to private respondent, which the latter received
on even date, advising private respondent to report for work, as she had been absent since August 1,
1998; and warning her that upon her failure to do so, she shall be considered to have abandoned her
job.

On September 1, 1998, Apduhan issued a Memorandum stating that since private respondent was
unable to attend the scheduled August 12, 1998 hearing, the case was evaluated on the basis of the
evidence on record; and enumerating the pieces of evidence of the irregularities and violations of
company rules committed by private respondent, the latter's defenses and the corresponding findings
by Uniwide. Kawada was thereafter terminated from her employment on the grounds of violations of
Company Rules, Abandonment of Work and loss of trust and confidence.

The Labor Arbiter denied the complaint of Kawada for lack of merit while the NLRC on appeal reversed
the decision of the Labor Arbiter ordering UNiwide to pay separation pay, backwages and moral and
exemplary damages. According to the NLRC, private respondent was subjected to inhuman and anti-
social treatment oppressive to labor. Private respondent received successive memoranda from
Apduhan accusing the former of different infractions, some of which offenses complainant was
informed of only a year after the alleged commission. Further, Apduhan's ill will and motive to edge
private respondent out of her employ was displayed by Apduhan's stubborn refusal to allow private
respondent to continue her work on the flimsy excuse that the medical certificate did not bear her
correct surname, while Apduhan knew for a fact that the same could not have referred to another
person but to private respondent.

Also, the NLRC observed that private respondent was not afforded due process by petitioners because
the former was not given an opportunity to a fair hearing in that the investigation was conducted after
private respondent had been constructively dismissed; and that there was no point for private
respondent to still attend the investigation set on August 12, 1998 after her constructive dismissal on
July 31, 1998 and after she had already filed her complaint.

ISSUE:

Whether or not resondent was constructively dismissed.

HELD: No. Case law defines constructive dismissal as a cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee.

The test of constructive dismissal is whether a reasonable person in the employee's position would
have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal
but made to appear as if it were not. In fact, the employee who is constructively dismissed may be
allowed to keep on coming to work. Constructive dismissal is therefore a dismissal in disguise. The law
recognizes and resolves this situation in favor of employees in order to protect their rights and
interests from the coercive acts of the employer.

The Court finds that private respondent's allegation of harassment is a specious statement which
contains nothing but empty imputation of a fact that could hardly be given any evidentiary weight by
this Court. Private respondent's bare allegations of constructive dismissal, when uncorroborated by the
evidence on record, cannot be given credence.

The right to impose disciplinary sanctions upon an employee for just and valid cause, as well as the
authority to determine the existence of said cause in accordance with the norms of due process,
pertains in the first place to the employer. Precisely, petitioners gave private respondent successive
memoranda so as to give the latter an opportunity to controvert the charges against her. Clearly, the
memoranda are not forms of harassment, but petitioners' compliance with the requirements of due
process.

The July 31, 1998 confrontation where Apduhan allegedly shouted at private respondent which caused
the latter's hypertension to recur and eventually caused her to collapse cannot by itself support a
finding of constructive dismissal by the NLRC and the CA. Even if true, the act of Apduhan in shouting
at private respondent was an isolated outburst on the part of Apduhan that did not show a clear
discrimination or insensibility that would render the working condition of private respondent
unbearable.

On petitioners' claim of abandonment by private respondent, well-settled is the rule that to constitute
abandonment of work, two elements must concur: (1) the employee must have failed to report for
work or must have been absent without valid or justifiable reason, and (2) there must have been a
clear intention on the part of the employee to sever the employer-employee relationship manifested by
some overt act. 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.

Private respondent's failure to report for work despite the August 8, 1998 letter sent by Apduhan to
private respondent advising the latter to report for work is not sufficient to constitute abandonment. 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.

Private respondent mistakenly believed that the successive memoranda sent to her from March 1998
to June 1998 constituted discrimination, insensibility or disdain which was tantamount to constructive
dismissal. Thus, private respondent filed a case for constructive dismissal against petitioners and
consequently stopped reporting for work.

The Court finds that petitioners were not able to establish that private respondent deliberately refused
to continue her employment without justifiable reason. To repeat, the Court will not make a drastic
conclusion that private respondent chose to abandon her work on the basis of her mistaken belief that
she had been constructively dismissed by Uniwide.

Nonetheless, the Court agrees with the findings of the LA that the termination of private respondent
was grounded on the existence of just cause under Article 282 (c) of the Labor Code or willful breach
by the employee of the trust reposed on him by his employer or a duly authorized representative.

Private respondent occupies a managerial position. As a managerial employee, mere existence of a

basis for believing that such employee has breached the trust of his employer would suffice for his
dismissal.

3.

G.R. No. 164640 June 13, 2008

CYNTHIA GANA, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, ABOITIZ HAULERS,
INC., and CARL **WOZNIAK, respondents.

AUSTRIA-MARTINEZ, J.:

FACTS: On December 1, 1996, Cynthia Gana (petitioner) commenced her employment as marketing
manager of Total Distribution and Logistics System, Inc. (TDLSI), another sister company of Aboitiz
Transport, Aboitiz Container and Aboitiz Haullers, respondent company. As marketing manager,
petitioner received a monthly salary of P20,000.00 plus a monthly allowance of P15,000.00; and she
availed herself of the company car plan.

On August 15, 1997, petitioner was transferred from TDLSI to respondent company retaining the same
position as marketing manager.

On April 21, 1998, petitioner was required by private respondent Carl Wozniak (Wozniak), the Senior
Vice-President and General Manager of Aboitiz Haulers, to explain in writing why she should not be
penalized for having violated company rules on offenses against company interest. Wozniak directed
her to appear in an investigation to be conducted by the company and defend herself with respect to
the electronic mails (e-mails) she sent to an official of Trans-America, divulging various confidential
information about the business operations and transactions of Aboitiz Container which are detrimental
to the said company.

On April 24, 1998, petitioner, through her counsel, sent a letter to Wozniak denying the charges
against her.

In a letter dated May 22, 1998, Wozniak informed petitioner that her explanations during the
investigation with respect to the charges leveled against her were found to be unacceptable; that she
was found guilty of Betrayal of Confidential Information which constitutes sufficient reason for the
company to lose the high degree of trust and confidence which it reposed upon her as its manager;
and that as a result, her employment with respondent company has been terminated.

Petitioner then filed a Complaint for illegal dismissal with the National Labor Relations Commission
(NLRC) in Quezon City. On June 14, 1999, the Labor Arbiter (LA) rendered a Decision finding respondent
company guilty of illegally dismissing petitioner.

On appeal, the NLRC set aside the Decision of the LA. Petitioner filed a Motion for Reconsideration but
the same was denied by the NLRC in its Order promulgated on May 3, 2002.
Petitioner then filed a petition for certiorari with the CA questioning the Decision and Order of the
NLRC.On April 30, 2004, the CA promulgated its presently assailed Decision dismissing the petition for
certiorari and affirming the questioned Decision and Order of the NLRC.

Petitioner filed a Motion for Reconsideration but it was denied by the CA in its Resolution dated July 26,
2004.

ISSUE: Whether Petitioner is illegally dismissed.

HELD:

HELD: NO. Petitioner relies on the conclusion of the LA that there is no sufficient evidence to justify
petitioner's termination from employment on the ground of loss of trust and confidence. However,
evidence shows otherwise. The LA cited private respondent's letter terminating petitioner from her
employment to prove that respondent company failed to show sufficient evidence to establish the
charges against petitioner. Contrary to the conclusion of the LA, it is very clear in the said letter that
respondent company enumerated the facts and circumstances upon which petitioner's termination was
based. Pertinent portions of the letter are as follows:

Last April 22, 1998, an investigation was conducted in order to give you the chance to present your
side of matters that were contained in the letter to explain dated April 21, 1998 that was sent to you
and which you received last April 21, 1998 also.

During the said investigation, it was established that:

a) You sent email messages/reports to Leslie Leow of Transamerica last March 9, 1998 and March 25,
1998 regarding the company's internal problems with the truckers, depot and special permit to load
(spl) and the rates charge[d] by ACSI to its customers.

b) You sent again email message last April 16, 1998 to Leslie Leow concerning the complaints of Mr.
Carmelo Garcia regarding the company's poor services which puts the company's credibility to deliver
good service in question.

c) You have literally provided Transamerica information about the inefficiencies and inflexibility of the
company in catering to the needs of the customer.

d) The Officers of the company only learned of the complaints of Mr. Carmelo Garcia because of your
email messages to Transamerica.

e) You declared that your loyalty is to Transamerica and not to your employer, AHI.

The settled rule is that the mere existence of a basis for believing that a managerial employee has
breached the trust of the employer justifies dismissal.

Petitioner does not deny having sent the subject e-mails to Trans-America. The Court finds no error in
the conclusion of the CA that petitioner's intention in sending these e-mails was to inform Trans-
America of the supposed inefficiency in the operations of respondent company as well as the
company's poor services to its clients. These pieces of information necessarily diminish the credibility
of respondent company and besmirch its reputation. In fact, Trans-America wrote Wozniak expressing
its disappointment in the services that the Aboitiz companies were rendering.

Hence, respondent company cannot be faulted for having lost its trust and confidence in petitioner and
in refusing to retain her as its employee considering that her continued employment is patently
inimical to respondent company's interest. The law, in protecting the rights of labor, authorizes neither
oppression nor self-destruction of an employer company which itself is possessed of rights that must
be entitled to recognition and respect.
4.

Enriquez vs. BPI

Feb 12, 2008

FACTS:

Enriquez and Sia were the branch manager and assistant branch manager, respectively of
the BPI- Bacolod Singcang Branch. Enriquez had been an employee thereon for 32 years and Sia for
29 years.

On December 27,2002, their branch experienced a heavy volume of transactions owing to the fact that
it was the last banking day of the year. When banking hours came to a close, teller Geraldine
Descartin (Descartin) purportedly discovered that she had a cash shortage of P36,000.00. It was later
admitted by a co-teller Fregil that the shortage was incurred because Descartin had temporarily
borrowed the money that week to pay her financial obligations but intended to return the same on the
first week of January. Teller Fregil reported the matter to Sia and Enriquez, both of whom suggested
that teller Descartin fill the shortage with a loan from her family. Teller Descartin replied that her family
did not have the money, she instead borrowed the amount from her in-laws. Thus, at 5:21 p.m., teller
Descartin posted the unsigned withdrawal slip for the amount of P36,000.00 against the joint account
of her parents-in-law. As the amount exceeded the floor limit for tellers which would require the
approval of a superior officer, either Enriquez or Sia approved the transaction at 5:22 p.m. as reflected
on the account records. Teller Descartin thereafter left the bank to secure the signature of her mother-
in-law Remedios and returned at past 7:00 p.m. with the signed withdrawal slip.

An investigation was made by the BPI head office and petitioners were directed to show cause to
explain in writing why they should not be sanctioned for conflict of interest and breach of trust. Later
on, petitioners were dismissed from employment on grounds of breach of trust and confidence and
dishonesty.

Hence, a complaint was filed for illegal dismissal. The Labor Arbiter rendered a decision that
petitioners had been illegally dismissed ordering respondents to pay full backwages and moral and
exemplary damages amounting to more than 7million pesos. On appeal, The NLRC reversed the
decision but ordered respondents to give petitioners financial assistance equivalent to one-half
months pay for every year of service.

ISSUE:

Whether or not petitioners were illegally dismissed.

HELD: No. There is no denying that loss of trust and confidence is a valid ground for termination of
employment. Hence, the basic requisite for dismissal on the ground of loss of confidence is that the
employee concerned holds a position of trust and confidence or is routinely charged with the care and
custody of the employers money or property. Moreover, the breach must be related to the
performance of the employees function. Also, it must be shown that the employee is a managerial
employee, since the term trust and confidence is restricted to said class of employees. The failure of
petitioners to report the cash shortage of teller Descartin, even if done in good faith, nonetheless
resulted in their abetting the dishonesty committed by the latter. Under the personnel policies of
respondent bank, this act of petitioners justifies their dismissal even on the first offense. Even
assuming the version of petitioners as the truth, the fact remains that they willfully decided against
reporting the shortage that occurred. As a result, in either situation, petitioners acts have caused
respondents to have a legitimate reason to lose the trust reposed in them as senior managerial
employees. Their participation in the cover-up of the misconduct of teller Descartin makes them
unworthy of the trust and confidence demanded by their positions.

5.

SCHOOL OF THE HOLY SPIRIT OF QUEZON CITY AND/OR SR. CRIS PINA A. TOLENTINO, S.SP.S.,
PETITIONERS, VS. CORAZON P. TAGUIAM, RESPONDENT.

DECISION

QUISUMBING, J.:

Facts:

Respondent Corazon P. Taguiam was the Class Adviser of Grade 5-Esmeralda of the petitioner, School
of the Holy Spirit of Quezon City. On March 10, 2000, the class president, wrote a letter to the grade
school principal requesting permission to hold a year-end celebration at the school grounds. The
principal authorized the activity and allowed the pupils to use the swimming pool. In this connection,
respondent distributed the parent's/guardian's permit forms to the pupils.

Respondent admitted that Chiara Mae Federico's permit form was unsigned. Nevertheless, she
concluded that Chiara Mae was allowed by her mother to join the activity since her mother personally
brought her to the school with her packed lunch and swimsuit.

Before the activity started, respondent warned the pupils who did not know how to swim to avoid the
deeper area. However, while the pupils were swimming, two of them sneaked out. Respondent went
after them to verify where they were going.

Unfortunately, while respondent was away, Chiara Mae drowned.

Petitioners issued a Notice of Administrative Charge to respondent for alleged gross negligence and
required her to submit her written explanation. Thereafter, petitioners conducted a clarificatory
hearing which respondent attended. Respondent also submitted her Affidavit of Explanation.

Petitioners dismissed respondent on the ground of gross negligence resulting to loss of trust and
confidence.

In dismissing the complaint, the Labor Arbiter declared that respondent was validly terminated for
gross neglect of duty. He opined that Chiara Mae drowned because respondent had left the pupils
without any adult supervision. He also noted that the absence of adequate facilities should have
alerted respondent before allowing the pupils to use the swimming pool. The Labor Arbiter further
concluded that although respondent's negligence was not habitual, the same warranted her dismissal
since death resulted therefrom.

Respondent appealed to the NLRC which, however, affirmed the dismissal of the complaint.

Aggrieved, respondent instituted a petition for certiorari before the Court of Appeals, which ruled in her
favor. The appellate court observed that there was insufficient proof that respondent's negligence was
both gross and habitual

Issue: Whether respondent's dismissal on the ground of gross negligence resulting to loss of trust and
confidence was valid.

Held:

Under Article 282 of the Labor Code, gross and habitual neglect of duties is a valid ground for an
employer to terminate an employee. Gross negligence implies a want or absence of or a failure to
exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. Habitual neglect implies repeated failure to
perform one's duties for a period of time, depending upon the circumstances.

Our perusal of the records leads us to conclude that respondent had been grossly negligent. First , it is
undisputed that Chiara Mae's permit form was unsigned. Yet, respondent allowed her to join the
activity because she assumed that Chiara Mae's mother has allowed her to join it by personally
bringing her to the school with her packed lunch and swimsuit.

The purpose of a permit form is precisely to ensure that the parents have allowed their child to join the
school activity involved. Respondent cannot simply ignore this by resorting to assumptions.
Respondent admitted that she was around when Chiara Mae and her mother arrived. She could have
requested the mother to sign the permit form before she left the school or at least called her up to
obtain her conformity.

Second, it was respondent's responsibility as Class Adviser to supervise her class in all activities
sanctioned by the school. Thus, she should have coordinated with the school to ensure that proper
safeguards, such as adequate first aid and sufficient adult personnel, were present during their activity.
She should have been mindful of the fact that with the number of pupils involved, it would be
impossible for her by herself alone to keep an eye on each one of them.

As it turned out, since respondent was the only adult present, majority of the pupils were left
unsupervised when she followed the two pupils who sneaked out. In the light of the odds involved,
respondent should have considered that those who sneaked out could not have left the school
premises since there were guards manning the gates. The guards would not have allowed them to go
out in their swimsuits and without any adult accompanying them. But those who stayed at the pool
were put at greater risk, when she left them unattended by an adult.

Notably, respondent's negligence, although gross, was not habitual. In view of the considerable
resultant damage, however, we are in agreement that the cause is sufficient to dismiss respondent.
This is not the first time that we have departed from the requirements laid down by the law that
neglect of duties must be both gross and habitual. In Philippine Airlines, Inc. v. NLRC, we ruled that
Philippine Airlines (PAL) cannot be legally compelled to continue with the employment of a person
admittedly guilty of gross negligence in the performance of his duties although it was his first offense.
In that case, we noted that a mere delay on PAL's flight schedule due to aircraft damage entails
problems like hotel accommodations for its passengers, re-booking, the possibility of law suits, and
payment of special landing fees not to mention the soaring costs of replacing aircraft parts. In another
case, Fuentes v. National Labor Relations Commission, we held that it would be unfair to compel
Philippine Banking Corporation to continue employing its bank teller. In that case, we observed that
although the teller's infraction was not habitual, a substantial amount of money was lost. The deposit
slip had already been validated prior to its loss and the amount reflected thereon is already considered
as current liabilities in the bank's balance sheet. Indeed, the sufficiency of the evidence as well as the
resultant damage to the employer should be considered in the dismissal of the employee. In this case,
the damage went as far as claiming the life of a child.

GROSS AND HABITUAL NEGLIGENCE

1.

[G.R. No. 165565, July 14, 2008]

SCHOOL OF THE HOLY SPIRIT OF QUEZON CITY AND/OR SR. CRIS PINA A. TOLENTINO, S.SP.S.,
PETITIONERS, VS. CORAZON P. TAGUIAM, RESPONDENT.

DECISION

QUISUMBING, J.:

Facts:
Respondent Corazon P. Taguiam was the Class Adviser of Grade 5-Esmeralda of the petitioner, School
of the Holy Spirit of Quezon City. On March 10, 2000, the class president, wrote a letter to the grade
school principal requesting permission to hold a year-end celebration at the school grounds. The
principal authorized the activity and allowed the pupils to use the swimming pool. In this connection,
respondent distributed the parent's/guardian's permit forms to the pupils.

Respondent admitted that Chiara Mae Federico's permit form was unsigned. Nevertheless, she
concluded that Chiara Mae was allowed by her mother to join the activity since her mother personally
brought her to the school with her packed lunch and swimsuit.

Before the activity started, respondent warned the pupils who did not know how to swim to avoid the
deeper area. However, while the pupils were swimming, two of them sneaked out. Respondent went
after them to verify where they were going.

Unfortunately, while respondent was away, Chiara Mae drowned.

Petitioners issued a Notice of Administrative Charge to respondent for alleged gross negligence and
required her to submit her written explanation. Thereafter, petitioners conducted a clarificatory
hearing which respondent attended. Respondent also submitted her Affidavit of Explanation.

Petitioners dismissed respondent on the ground of gross negligence resulting to loss of trust and
confidence.

In dismissing the complaint, the Labor Arbiter declared that respondent was validly terminated for
gross neglect of duty. He opined that Chiara Mae drowned because respondent had left the pupils
without any adult supervision. He also noted that the absence of adequate facilities should have
alerted respondent before allowing the pupils to use the swimming pool. The Labor Arbiter further
concluded that although respondent's negligence was not habitual, the same warranted her dismissal
since death resulted therefrom.

Respondent appealed to the NLRC which, however, affirmed the dismissal of the complaint.

Aggrieved, respondent instituted a petition for certiorari before the Court of Appeals, which ruled in her
favor. The appellate court observed that there was insufficient proof that respondent's negligence was
both gross and habitua

Issue: Whether respondent's dismissal on the ground of gross negligence resulting to loss of trust and
confidence was valid.

Held:

Under Article 282 of the Labor Code, gross and habitual neglect of duties is a valid ground for an
employer to terminate an employee. Gross negligence implies a want or absence of or a failure to
exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. Habitual neglect implies repeated failure to
perform one's duties for a period of time, depending upon the circumstances.

Our perusal of the records leads us to conclude that respondent had been grossly negligent. First , it is
undisputed that Chiara Mae's permit form was unsigned. Yet, respondent allowed her to join the
activity because she assumed that Chiara Mae's mother has allowed her to join it by personally
bringing her to the school with her packed lunch and swimsuit.

The purpose of a permit form is precisely to ensure that the parents have allowed their child to join the
school activity involved. Respondent cannot simply ignore this by resorting to assumptions.
Respondent admitted that she was around when Chiara Mae and her mother arrived. She could have
requested the mother to sign the permit form before she left the school or at least called her up to
obtain her conformity.
Second, it was respondent's responsibility as Class Adviser to supervise her class in all activities
sanctioned by the school. Thus, she should have coordinated with the school to ensure that proper
safeguards, such as adequate first aid and sufficient adult personnel, were present during their activity.
She should have been mindful of the fact that with the number of pupils involved, it would be
impossible for her by herself alone to keep an eye on each one of them.

As it turned out, since respondent was the only adult present, majority of the pupils were left
unsupervised when she followed the two pupils who sneaked out. In the light of the odds involved,
respondent should have considered that those who sneaked out could not have left the school
premises since there were guards manning the gates. The guards would not have allowed them to go
out in their swimsuits and without any adult accompanying them. But those who stayed at the pool
were put at greater risk, when she left them unattended by an adult.

Notably, respondent's negligence, although gross, was not habitual. In view of the considerable
resultant damage, however, we are in agreement that the cause is sufficient to dismiss respondent.
This is not the first time that we have departed from the requirements laid down by the law that
neglect of duties must be both gross and habitual. In Philippine Airlines, Inc. v. NLRC, we ruled that
Philippine Airlines (PAL) cannot be legally compelled to continue with the employment of a person
admittedly guilty of gross negligence in the performance of his duties although it was his first offense.
In that case, we noted that a mere delay on PAL's flight schedule due to aircraft damage entails
problems like hotel accommodations for its passengers, re-booking, the possibility of law suits, and
payment of special landing fees not to mention the soaring costs of replacing aircraft parts. In another
case, Fuentes v. National Labor Relations Commission, we held that it would be unfair to compel
Philippine Banking Corporation to continue employing its bank teller. In that case, we observed that
although the teller's infraction was not habitual, a substantial amount of money was lost. The deposit
slip had already been validated prior to its loss and the amount reflected thereon is already considered
as current liabilities in the bank's balance sheet. Indeed, the sufficiency of the evidence as well as the
resultant damage to the employer should be considered in the dismissal of the employee. In this case,
the damage went as far as claiming the life of a child.

2.

G.R. Nos. 180849 and 187143

PHILIPPINE NATIONAL BANK, Petitioner, v. DAN PADAO, Respondent.

MENDOZA, J.:

FACTS:

On August 21, 1981, Padao was hired by PNB as a clerk at its Dipolog City Branch. He was later
designated as a credit investigator in an acting capacity on November 9, 1993. He was ultimately
promoted to the position of Loan and Credit Officer IV.

In 1994, PNB became embroiled in a scandal involving "behest loans" as anomalous loans were being
granted by its officers. In line with this, Padao was administratively charged with Dishonesty, Grave
Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best Interest of the Service, and violation
of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act). The case against Padao was grounded on his
having allegedly presented a deceptively positive status of the business, credit standing/rating and
financial capability of 13 loan applicants. After due investigation, PNB found Padao guilty of gross and
habitual neglect of duty and ordered him dismissed from the bank. Padao appealed to the banks Board
of Directors. Velasco, Padaos colleague, was also held guilty of the offenses charged, and was similarly
meted the penalty of dismissal. Her motion for reconsideration, however, was later granted by the
bank, and she was reinstated.

ISSUES

I. Whether the position of a credit investigator is one imbued with the trust and confidence of the
employer

II. Whether the act of falsifying the credit and appraisal reports and that of affixing ones signature in a
false report by another is one and the same degree of misconduct which warrants the same penalty

HELD:

While it is an employers basic right to freely select or discharge its employees, if only as a measure of
self-protection against acts inimical to its interest, the law sets the valid grounds for termination as
well as the proper procedure to be followed when terminating the services of an employee.

Thus, in cases of regular employment, the employer is prohibited from terminating the services of an
employee except for a just or authorized cause. Such just causes for which an employer may terminate
an employee are enumerated in Article 282 of the Labor Code: (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 family member of his family or his duly authorized representative; and (e) Other causes
analogous to the foregoing. Further, due process requires that employers follow the procedure set by
the Labor Code. Under Art. 277, workers may be dismissed only for a just cause and enjoy the right of
due process which includes notice and the ample opportunity to be heard and to defend his or her
side.

In this case, Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b)
of the Labor Code. Gross negligence connotes want of care in the performance of ones duties, while
habitual neglect implies repeated failure to perform ones duties for a period of time, depending on the
circumstances. Padao was accused of having presented a fraudulently positive evaluation of the
business, credit standing/rating and financial capability 13 loan applicants.

The role that a credit investigator plays in the conduct of a banks business cannot be overestimated.
The amount of loans to be extended by a bank depends upon the report of the credit investigator on
the collateral being offered. If a loan is not fairly secured, the bank is at the mercy of the borrower who
may just opt to have the collateral foreclosed. If the scheme is repeated a hundredfold, it may lead to
the collapse of the bank.

Padao's repeated failure to discharge his duties as a credit investigator of the bank amounted to gross
and habitual neglect of duties under Article 282 (b) of the Labor Code. He not only failed to perform
what he was employed to do, but also did so repetitively and habitually, causing millions of pesos in
damage to PNB. Thus, PNB acted within the bounds of the law by meting out the penalty of dismissal,
which it deemed appropriate given the circumstances.

The CA was correct in stating that when the violation of company policy or breach of company rules
and regulations is tolerated by management, it cannot serve as a basis for termination. Such ruling,
however, does not apply here. The principle only applies when the breach or violation is one which
neither amounts to nor involves fraud or illegal activities. In such a case, one cannot evade liability or
culpability based on obedience to the corporate chain of command.

Padao, in affixing his signature on the fraudulent reports, attested to the falsehoods contained therein.
Moreover, by doing so, he repeatedly failed to perform his duties as a credit investigator
3.

MANSION PRINTING and CHENG VS. BITARA DIGEST

December 19, 2016 ~ vbdiaz

TOPIC: GROSS AND HABITUAL NEGLECT OF DUTY (ART. 282[B])

MANSION PRINTING and CHENG VS. BITARA

G.R. No. 168120

January 25, 2012

FACTS:

Mansion Printing Center is a single proprietorship engaged in the printing of quality self-adhesive
labels, brochures, posters, stickers, packaging and the like.

Mansion engaged the services of Bitara as a helper (kargador). Respondent was later promoted as the
companys sole driver tasked , among others, to deliver the products to the clients within the delivery
schedules.

Petitioners aver that the timely delivery of the products to the clients is one of the foremost
considerations material to the operation of the business. It being so, they closely monitored the
attendance of respondent. They noted his habitual tardiness and absenteeism.

Petitioners issued a Memorandum requiring respondent to submit a written explanation why no

administrative sanction should be imposed on him for his habitual tardiness, to which he replied. But
despite respondents undertaking to report on time, however, he continued to disregard attendance
policies.

respondent filed a complaint for illegal dismissal against the petitioners before the Labor Arbiter.

ISSUE: Was there gross and habitual neglect of duty on the part of Bitara, warranting his dismissal from
service

HELD: YES; there is no illegal dismissal

Valiao v. Court of Appeals is instructive:

xxx It bears stressing that petitioners absences and tardiness were not isolated incidents but
manifested a pattern of habituality. xxx The totality of infractions or the number of violations
committed during the period of employment shall be considered in determining the penalty to be
imposed upon an erring employee. The offenses committed by him should not be taken singly and
separately but in their totality. Fitness for continued employment cannot be compartmentalized into
tight little cubicles of aspects of character, conduct, and ability separate and independent of each
other.

In Valiao, we defined gross negligence as want of care in the performance of ones dutiesand
habitual neglect as repeated failure to perform ones duties for a period of time, depending upon the
circumstances. These are not overly technical terms, which, in the first place, are expressly
sanctioned by the Labor Code of the Philippines, to wit:
ART. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:

(b) Gross and habitual neglect by the employee of his duties;

Bitaras weekly time record for the first quarter of the year 2000 revealed that he came late 19 times
out of the 47 times he reported for work. He also incurred 19 absences out of the 66 working days
during the quarter. His absences without prior notice and approval from March 11-16, 2000 were
considered to be the most serious infraction of all because of its adverse effect on business operations.

Clearly, even in the absence of a written company rule defining gross and habitual neglect of duties,
respondents omissions qualify as such warranting his dismissal from the service.

NOTES:

We cannot simply tolerate injustice to employers if only to protect the welfare of undeserving
employees. As aptly put by then Associate Justice Leonardo A. Quisumbing:

Needless to say, so irresponsible an employee like petitioner does not deserve a place in the
workplace, and it is within the managements prerogative xxx to terminate his employment. Even as
the law is solicitous of the welfare of employees, it must also protect the rights of an employer to
exercise what are clearly management prerogatives. As long as the companys exercise of those rights
and prerogative is in good faith to advance its interest and not for the purpose of defeating or
circumventing the rights of employees under the laws or valid agreements, such exercise will be
upheld
4.

G.R. No. 179648 : August 7, 2013

PHILIPPINE NATIONAL BANK, Petitioner, v. MARY SHEILA ARCOBILLAS, Respondent.

DEL CASTILLO, J.:

FACTS:

On May 15, 1998, the PNB Foreign Currency Denomination-Savings Account (FCD-S/A) No. 305703555-
1 of Avelina Nomad-Spoor (Nomad-Spoor) was credited with US$138.00. However, instead of posting
its peso equivalent ofP5,517.10, Arcobillas, the assigned administrative teller at PNB Bacolod-Lacson
branch, erroneously posted US$5,517.10, resulting in an overcredit of US$5,379.10. Said amount was
later withdrawn by Nomad-Spoor on May 29, 1998 and June 8, 1998 to the damage of PNB in the
amount ofP214,641.23.

The misposting was discovered only about seven months later. After investigation by PNB, Arcobillas
was administratively charged with neglect of duty.

In her Affidavitexecuted on May 5, 1999, Arcobillas admitted her mistake, apologized for it, and stated
that she did not benefit from the unintentional misposting. She narrated that she erroneously posted
US$5,517.10, instead ofP5,517.10, which figure represents the peso value of US$138.00. She honestly
believed that the US$5,517.10 was correct because when added to the other on-line dollar transaction
of US$1,004.60 the result was US$6,521.70, which tallied with the tellers machine reading. Arcobillas
further explained that the heavy workload that day, a Friday coinciding with payroll day, plagued with
intermittent power interruptions, brought on a severe headache which greatly affected her work
performance.

On February 24, 2000, PNBs Administrative Adjudication Panel found Arcobillas guilty of gross neglect
of duty and meted upon her the penalty of forced resignation with benefits, to take effect immediately
upon her receipt thereof. Upon denial of her plea for reconsideration, Arcobillas instituted a
Complaintfor illegal dismissal with money claims against PNB, PNBs Senior Manager Reynald A. Rey
and Senior Vice-President Rosauro C. Macalagay.

In a Decisiondated December 27, 2002, the Labor Arbiter found no sufficient evidence to establish
gross and habitual negligence. The Labor Arbiter noted (1) Arcobillass performance rating of "Very
Satisfactory" (VS) from January 1994 to December 1997 and her promotion to Bank Teller III in
December 1995 despite having been suspended for one month in October 1995 due to the similar
infraction of misposting; (2) her garnering a VS rating from January-June 1998 and July-December 1999
despite the pendency of the administrative charge that led to her eventual dismissal; and, (3) that the
misposting was committed without malice, bad faith or dishonest motive. The Labor Arbiter also
pointed out that the resulting damage could not be solely attributed to Arcobillas. The Bank
Accountant, Financial Management Specialist, and those comprising the branch accounting unit failed
to observe the banks internal control measures of validating and verifying the banks daily transactions.
Had they done so, the said misposting could have been discovered at the earliest opportunity.

PNB appealed to the NLRC and argued in its Memorandum on Appealthat malice, bad faith or dishonest
motive is not a requirement before an employer could validly dismiss its employee on the ground of
neglect of duty. It posited that Arcobillass admission of her negligence and her prior commission of the
same infraction of misposting justify her termination from employment for gross and habitual neglect
of duty. It argued that the Labor Arbiters reliance on Arcobillass performance rating is misplaced
because her dismissal is not grounded on loss of trust and confidence.
On August 31, 2004, the NLRC rendered a Decisionaffirming with modification the Labor Arbiters
Decision. While it concurred with the Labor Arbiters ruling that there was no sufficient ground to
dismiss Arcobillas since the misposting was not deliberately done and hence does not constitute gross
and habitual neglect, it nevertheless declared her not entirely faultless and free from any penalty less
punitive than termination. The NLRC thus pronounced Arcobillas, as well as those other employees who
were remiss in validating/ verifying the banks transactions, equally liable for the financial losses
suffered by PNB.

PNB received a copy of the said Decision on October 14, 2004.Without filing a Motion for
Reconsideration, PNB filed a Motion for Extension of Time to File Petition for Certiorariuntil December
23, 2004. On said date, PNB filed its Petition for Certioraribefore the CA. Subsequently on May 25,
2005, the NLRC issued an Entry of Final Judgment declaring its August 31, 2004 Decision final and
executory as of October 19, 2004.

Despite the non-filing of a Motion for Reconsideration with the NLRC, the CA took cognizance of PNBs
Petition for Certiorari. Nevertheless, it dismissed the same in a Decisiondated November 15, 2006. It
agreed with the findings of both the Labor Arbiter and the NLRC that Arcobillass negligence cannot be
considered gross and habitual as to warrant her dismissal from employment. First, Arcobillas exercised
ordinary diligence in her work when she checked and tallied her on-line dollar transactions with the
tellers machine reading. Second, Arcobillass heavy workload and severe headache mitigated the
mistake committed. Third, the misposting was an isolated act of negligence and was not committed
repeatedly as to constitute habit. The CA likewise sustained the monetary awards as computed by the
Labor Arbiter but modified the NLRC Decision in that it made PNB shoulder 40% of the loss it sustained
and Arcobillas to pay the remaining 60% instead of Arcobillas being equally liable with PNBs other
employees tasked to validate the tellers transactions. The CA reasoned that PNB is just as negligent in
its selection and supervision of employees for it has the fiduciary duty to insure that its employees
exercise the highest standard of integrity in the performance of their duties.

PNB filed a Motion for Reconsiderationwhile Arcobillas, a Motion for Partial Reconsideration.Both, were,
however, denied by the CA in a Resolution dated August 17, 2007.

ISSUES:

1. Whether or not private respondents dismissal on the ground of habitual negligence was justified
under Article 282 of the Labor Code?

2. Whether or not the Court of Appeals can correct the evaluation of the evidence by, or the factual
findings of the NLRC in a petition for certiorari?

3. Whether or not the Court of Appeals can delve on an issue that was not raised by the parties?

HELD: Court of Appeals decision is set aside.

REMEDIAL LAW

PNBs failure to file a Motion for Reconsideration with the NLRC before filing its Petition for Certiorari
before the CA is a fatal infirmity.

At the outset, the Court notes that after PNB received a copy of the August 31, 2004 Decision of the
NLRC on October 14, 2004, it did not file any Motion for Reconsideration such that the said Decision
became final and executory on October 19, 2004. Instead, PNB went directly to the CA to assail the
NLRC Decision through a Petition for Certiorari under Rule 65 of the Rules of Court which the said court
took cognizance of.

The Court recognizes that "the finality of the NLRCs Decision does not preclude the filing of a Petition
for Certiorari under Rule 65 of the Rules of Court. That the NLRC issues an entry of judgment after the
lapse of ten (10) days from the parties receipt of its Decision will only give rise to the prevailing partys
right to move for the execution thereof but will not prevent the CA from taking cognizance of a Petition
for Certiorari on jurisdictional and due process considerations."However, it is a well-established rule
that "a Motion for Reconsideration is an indispensable condition before an aggrieved party can resort
to the special civil action for certiorari. The rationale for the rule is that the law intends to afford the
NLRC an opportunity to rectify such errors or mistakes it may have committed before resort to courts
of justice can be had. Of course, the rule is not absolute and jurisprudence has laid down exceptions
when the filing of a Petition for Certiorari is proper notwithstanding the failure to file a Motion for
Reconsideration,"such as:

(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;

(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon
by the lower court, or are the same as those raised and passed upon in the lower court;

(c) where there is an urgent necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject matter of the action is
perishable;

(d) where, under the circumstances, a Motion for Reconsideration would be useless;

(e) where petitioner was deprived of due process and there is extreme urgency for relief;

(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relied
by the trial court is improbable;

(g) where the proceedings in the lower court are a nullity for lack of due process;

(h) where the proceeding was ex parte or in which the petitioner had no opportunity to object; and,

(i) where the issue raised is one purely of law or where public interest is involved.

Here, PNB did not at all allege to which of the above-mentioned exceptions this case falls. Neither did it
present any plausible justification for dispensing with the requirement of a prior Motion for
Reconsideration before the NLRC.

Despite this, the CA still took cognizance of PNBs Petition for Certiorari and ignored this significant
flaw.It bears to stress that the filing of a Motion for Reconsideration is not a mere technicality of
procedure.It is a jurisdictional and mandatory requirement which must be strictly complied with.Thus,
PNBs "failure to file a Motion for Reconsideration with the NLRC before availing [itself] of the special
civil action for certiorari is a fatal infirmity."In view thereof, the CA erred in entertaining the Petition for
Certiorari filed before it. It follows, therefore, that the proceedings before it and its assailed Decision
are considered null and void.Hence, the final and executory Decision of the NLRC dated August 31,
2004 stands.

There was no sufficient basis to hold Arcobillas administratively liable for gross and habitual neglect of
duty.

Even assuming that the CA could validly entertain PNBs Petition, no sufficient basis exists for the said
court to overturn or at the least, modify the NLRC Decision.

LABOR LAW

Taking into consideration the circumstances attendant to Arcobillass infraction, the NLRC correctly
affirmed the Labor Arbiters finding that there was no sufficient basis to hold her guilty of gross and
habitual neglect of duty which would justify her termination from employment. To warrant removal
from service, the negligence should be gross and habitual.Although it was her second time to commit
misposting (i.e., the first misposting was in 1995 while the second misposting was committed in 1998),
Arcobillass act cannot be considered as gross as to warrant her termination from employment. Gross
neglect of duty "denotes a flagrant and culpable refusal or unwillingness of a person to perform a
duty."It "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."As aptly held by the
labor tribunals, the misposting was not deliberately done as to constitute as gross negligence. Rather,
it was a case of simple neglect brought about by carelessness which, as satisfactorily explained by
Arcobillas, was the effect of her heavy workload that day and the headache she was experiencing.

As to the modification made by the CA, it may be recalled that it ordered PNB and Arcobillas to share
the financial losses ofP214,641.23 in a 40-60 ratio. It ruled that PNB is partly liable for its loss for being
negligent in the selection and supervision of its employees, applying the ruling made by this Court in
The Consolidated Bank & Trust Corp. v. Court of Appealsand Philippine Bank of Commerce v. Court of
Appeals.In the said cases, the banks were made to shoulder part of the loss suffered by its clients due
to the negligence of its employees under the principle of respondeat superior or command
responsibility. The Court ruled that the banks have a fiduciary relationship with its client and must be
answerable for any breach in their contractual duties to its clients.

We, however, find that the CA erred in applying the ruling in these cases since they involve different
sets of facts and are not decisive of the instant case. In both the cited cases, the banks, through their
employees, were negligent, and this caused damage to their clients. These differ from the instant case
in that the resulting damage here was caused to PNB and not to its clients. And as PNB certainly has
the right to expect diligence from its employeesand has the prerogative to discipline them for acts
inimical to its interests, the NLRC is justified in allocating the loss suffered by it among those
employees who proved to be negligent in their respective duties.

With respect to Arcobillass claims for unpaid salaries and other benefits, suffice it to state that the
monetary awards granted by the Labor Arbiter as affirmed by the NLRC are already final and binding
due to her failure to file an appeal to question these awards. Her contention that she is entitled to
affirmative relief since she raised these issues in her Comment to PNBs Petition for Certiorari and
Memorandum before the CA cannot lie in consonance with our earlier pronouncement that all
proceedings before the CA are considered null and void. Moreover, it has been held that "[a]n appellee
who is not an appellant may assign errors in her brief where her purpose is to maintain the judgment,
but [she] cannot seek modification or reversal of the judgment or claim affirmative relief unless [she]
has also appealed."Thus, we cannot grant her any affirmative relief. The monetary awards to which she
is entitled are only confined to those contained in the dispositive portion of the Labor Arbiters Decision
as affirmed by the NLRC, as follows :

1) full backwages inclusive of allowances and other benefits or their monetary equivalent from
March 16, 2000 to date of promulgation of this Decision;

2) 13th month pay for the year 1999;

3) unpaid salaries for the period February 2000 to March 15, 2000; and

4) 10% attorney's fee.

Finally, we note that the NLRC Decision declared that the financial loss be equally shouldered by
Arcobillas and "by those who are directly responsible in the validation/verification of Arcobillass
transaction as teller." Considering, however, that these other employees were not made parties to this
case, then this Decision cannot be enforced with regard to them. In short, this Decision is enforceable
only with respect to Arcobillas.
5.

Gross inefficiency is a just case since it is closely related to gross neglect.

International School of Manila v. International School Alliance of Educators (ISAE)

G.R. No. 167286, 05 February 2014

FACTS:

Complainant Evangeline Santos filed a labor complaint for illegal dismissal against her employer
defendant International School Manila and Brian McCauley. Previously, complainant was first hired by
the School in 1978 as a full-time Spanish language teacher. After filing for a leave of one academic
year, she agreed to teach the only available Spanish class and four other classes of Filipino.

Since it was her first time to teach Filipino, the Schools high school administrators observed the way
she conducted her classes. The results of the observations on her classes were summarized in
Classroom Standards Evaluation Forms accomplished by the designated observers. In accordance with
said forms, Santos was evaluated in the areas of Planning, the Teaching Act, Climate, Management and
Communication.

Subsequently, after making observations, the Assistant Principal completed his Classroom Standards
Evaluation Form. He remarked that the lesson plan that Santos provided was written with little detail
given. Santos was also noted as needing improvement in the following criteria: (1) uses effective
questioning techniques; (2) is punctual and time efficient; (3) states and enforces academic and
classroom behavior expectations in a positive manner; and (4) reinforces appropriate behavior. Hill also
stated that Santoss management of the class left much to be desired. Hill added that [t]he beginning
and the end of the class were poorly structured with students both coming late and leaving early with
no apparent expectations to the contrary. Almost similar remarks were made on the Spanish class of
Santos.

After another observation on the Filipino classes, the new Assistant Principal noted that Santos needed
improvement on certain areas. Thereafter, Santos was made to undergo a remediation phase of the
evaluation process through a Professional Growth Plan. After the implementation of the plan, there
were noticeable improvements on Santos. However, the positive reviews were gradually replaced by
renewed concerns on her planning. Thus, a written notice to explain was sent to complainant
directing her to explain in writing why her employment from the School should not be terminated
because of her failure to meet the criteria for improvement set out in her Professional Growth Plan and
her substandard performance as a teacher.

In response, Santos blamed the School for her predicament. She said that, in the last few years, she
had been forced to teach Filipino, a subject which she had no preparation for. The School allegedly
made this happen against her objections and despite the fact that she had no training in Filipino
linguistics and literature. Santos also asked for clarification on why she was being asked to explain and
the reasons therefor.

Thereafter, a series of conferences were held to clarify matters. Afterwards, the management rendered
a decision terminating her employment.

HELD:

Defendants were not liable. Termination was valid and legal. In all cases involving termination of
employment, the burden of proving the existence of the above just causes rests upon the employer.
The quantum of proof required in these cases is substantial evidence, that is, such relevant evidence
that a reasonable mind might accept as adequate to support a conclusion, even if other equally
reasonable minds might conceivably opine otherwise.

Citing jurisprudence, the concept of gross negligence connotes want or absence of or failure to
exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. Fraud and willful neglect of duties imply bad
faith of the employee in failing to perform his job, to the detriment of the employer and the latters
business. On the other hand, habitual neglect implies repeated failure to perform ones duties for a
period of time, depending upon the circumstances.

Further, in dismissing an employee for gross and habitual neglect of duties, the negligence should not
merely be gross, it should also be habitual.

Meanwhile, gross inefficiency, while not stated in the Labor Code, falls within the purview of other
causes analogous to the foregoing. Hence, it is a just cause to terminate an employee. Citing caselaw,
one is analogous to another if it is susceptible of comparison with the latter either in general or in
some specific detail; or has a close relationship with the latter. Gross inefficiency is closely related to
gross neglect, for both involve specific acts of omission on the part of the employee resulting in
damage to the employer or to his business. [In a previous case], this Court ruled that failure to observe
prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may
constitute just cause for dismissal.

In this case, the actuations of Santos cannot constitute gross and habitual neglect of her duties. From
the very beginning of her tenure as a teacher of the Filipino language, the recurring problem observed
of Santos was that her lesson plans lacked details and coherent correlation to each other, to the
course, and to the curriculum, which in turn affected how lessons and instructions were conveyed to
the students. After Santos was placed in a Professional Growth Plan on March 29, 1996, petitioners
observed a noticeable improvement on her part. In his memo dated May 24, 1996, then Assistant
Principal Loy even stated that Santoss improvement was a result of her positive attitude in
approaching her growth plan. Unfortunately, though, Santos could not sustain this progress. Not long
after, the School administrators were again admonishing Santos for her vague lesson plans that lacked
specifics.

However, based on records, the inadequacies of Santos as a teacher did not stem from a reckless
disregard of the welfare of her students or of the issues raised by the School regarding her teaching.
Far from being tainted with bad faith, Santoss failings appeared to have resulted from her lack of
necessary skills, in-depth knowledge, and expertise to teach the Filipino language at the standards
required of her by the School. Consequently, defendants sufficiently proved the charge of gross
inefficiency, which warranted the dismissal of Santos from the School.
As previously held, it is the prerogative of the school to set high standards of efficiency for its
teachers since quality education is a mandate of the Constitution. As long as the standards fixed are
reasonable and not arbitrary, courts are not at liberty to set them aside. Further, this is also in in line
with the academic freedom accorded to schools.

Going further, the CBA between ISAE and the School for the years 1992-1995 also recognized the
exclusive right of the School to hire and appoint qualified faculty subject to such reasonable rules and
regulations as it may prescribe, as well as the right of the School to discipline its faculty and
determine reasonable levels of performance. Section 8 of Appendix A of the CBA also states that [a]ll
faculty members must meet the high standard of performance expected by the SCHOOL and abide by
all its policies, procedures and contractual terms.

Here, it is not accurate to state that Santos was dismissed by the School for inefficiency on account of
the fact that she was caught only once without a lesson plan. The documentary evidence submitted by
[defendants], the contents of which we laid down in detail in our statement of facts, pointed to the
numerous instances when Santos failed to observe the prescribed standards of performance set by the
School in several areas of concern, not the least of which was her lack of adequate planning for her
Filipino classes. Said evidence established that the School administrators informed Santos of her
inadequacies as soon as they became apparent; that they provided constructive criticism of her
planning process and teaching performance; and that regular conferences were held between Santos
and the administrators in order to address the latters concerns. In view of her slow progress, the
School required her to undergo the remediation phase of the evaluation process through a Professional
Growth Plan. Despite the efforts of the School administrators, Santos failed to show any substantial
improvement in her planning process. Having failed to exit the remediation process successfully, the
School was left with no choice but to terminate her employment.

Lastly, it must be pointed out that Santos voluntarily agreed to teach the Filipino classes given to her
when she came back from her leave of absence. Said classes were not forced upon her by the School.
This much she admitted in the hearing of the case before the Labor Arbiter. She stated therein that for
the school year 1993-1994, she was given the option to teach only one Spanish class and not have any
Filipino teaching loads. She, however, said that if she took that option she would have been underpaid
and her salary would not have been the same. Moreover, for the school years 1994-1995 and 1995-
1996, she made known to the School that she did not prefer a change in teaching assignment. Thus,
when she consented to take on the Filipino classes, it was Santoss responsibility to teach them well
within the standards of teaching required by the School, as she had done previously as a teacher of
Spanish. Failing in this, she must answer for the consequences.

While employees who were validly terminated are ordinarily not entitled to separation pay, an
exception is when the court finds justification in applying the principle of social justice according to
the equities of the case. In this case, the Court finds equitable and proper the award of separation
pay in favor of Santos in view of the length of her service with the School prior to the events that led to
the termination of her employment. To recall, Santos was first employed by the School in 1978 as a
Spanish language teacher. During this time, the records of this case are silent as to the fact of any
infraction that she committed and/or any other administrative case against her that was filed by the
School. Thus, an award of separation pay equivalent to one-half (1/2) month pay for every year of
service is awarded in favor of Santos on grounds of equity and social justice.