FIRST DIVISION

NATIONAL LABOR RELATIONS G.R. No. 164376

COMMISSION, ST. JUDE CATHOLIC
SCHOOL, REV. FR. NOEL BEJO, MS.
PRISCILLA LOPEZ, MS. NATIVIDAD Present:
TAN, MS. VILMA LAO, MS. JENNIFER
GIL, MS. REMEDIOS CABANLIT and PANGANIBAN, C.J.
MR. CAMILO GELIDO, Chairperson,
Petitioners, YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
- versus- CHICO-NAZARIO, JJ.

MA. BERNADETTE S. SALGARINO,

Respondent.
Promulgated:

July 31, 2006

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DECISION
CHICO-NAZARIO, J.:

Before us is a Petition for Review of the Decision[1] and Resolution[2] of the Court of Appeals,
dated 21 May 2003 and 1 July 2004, respectively, reversing and setting aside the
Decision[3] dated 28 September 2001, and Resolution[4] dated 29 November 2001 of National
Labor Relations Commission (NLRC), and reinstating the Decision[5] of Labor
Arbiter Edgardo M. Madriaga, dated 11 January 2001, finding petitioners guilty of illegal
dismissal.
The facts are:
In April 1988, respondent Maria Bernadette A. Salgarino was employed by petitioner St.
Jude Catholic School as Mathematics teacher. She was tasked to teach Algebra, Trigonometry,
Statistics and Analytical Geometry for third and fourth year high school students.[6]

On 15 February 1999, or two weeks before the fourth periodical test of that school year,
respondent went on maternity leave. She was expected to be back in petitioner school on 19
March 1999. During her official leave, she conducted make-up tests in her house in order to
improve the grades of some of her students. However, this was done by the respondent
without the prior permission of petitioners. At this same period, her co-teachers, Ms. Maria
Luisa Capistrano (Capistrano), Mrs. Angelita Rivera and Mrs. Michel Bongyad substituted for her
in her classes. On 2 March 1999, the periodical test for Mathematics IV was conducted and the
same was administered by Capistrano, since respondent was still on leave.[7]

One of herein petitioners, Head Teacher Ms. Priscila Lopez (Lopez), instructed the
substitute teachers to check the test papers and compute the grades of the students in Sections
4-A, 4-B and 4-C.[8]

On 9 March 1999, the white sheets or the grading sheets for the 4th year students were
accomplished by the substitute teachers. It was shown that some 4th year students obtained a
failing grade in Math.[9] Subsequently, respondent, while still on leave, requested Capistrano to
deliver to her house the white sheets which contained the grades in Math of respondents
students. Capistrano delivered the white sheets to respondents home through a student named
Eunice Weeguano.[10] Upon receiving them, respondent encircled the failing grades under the
column of Daily Work (DW) and placed a passing grade beside each encircled
grade. Respondent asserted that as the handling teacher, she had the prerogative to pass her
students. She revealed that she required her students to do some projects and conducted
make-up tests for them before she went on maternity leave and to improve the final grades of
the concerned students. She avers that out of valid and humanitarian reasons, she indicated a
passing grade of 75% beside the grades of those with failing grades. Her decision was based
on:

(1) The concerned students could have performed better in

their periodical test if a substitute teacher was assigned during the
two weeks that she was on maternity leave before the examination;

(2) [Respondent] had required her students before she

went on leave to make extra projects and activities and those who
had failing grades made well enough to pull up their grades;

(3) The concerned students have good 4th quarter test

results before she went on leave; and
(4) Had the student[s] with the lowest grade (70%) been
failed x x x, the school would have violated Section 68 (b) of the
Manual of Regulation for Private Schools.[11]

Upon return of the white sheets, the substitute teachers noticed therein the additions
made by respondent. The substitute teachers immediately reported the matter to Lopez who, in
turn, referred the matter to petitioner Rev. Fr. Noel Bejo (Fr. Bejo), SVD, Acting
Director/Principal of petitioner school.[12]
 On 24 March 1999, Fr. Bejo instructed respondent to report to his office. He gave her a
letter which directed her to submit herself to a panel of investigators and explain why she had
allegedly tampered school records, violated school policies and committed misconduct.[13]

On 26 March 1999, respondent was investigated for her act of increasing the grades of
her students while she was on maternity leave. Respondent and the substitute teachers were
allowed to attend and participate in the investigation. The investigation yielded the following
relevant facts[14]:

(1) That respondent increased the grades of her students who failed;

(2) That respondent gave tests in her house to some students;

(3) That respondents reason for giving tests in her house is because she
wanted to help the students who were failing x x x. [S]he wanted to give
considerations and she admitted that it was her fault for asking the students
go to her house;

(4) That respondent admitted changing her students grades before they were
submitted and checked by the school principal;

(5) Respondent x x x argued that she had the right to pass her students.

The investigating panel reached the conclusion that respondent altered her students
grades while she was on leave, which is, according to them, a case of education malpractice or
grave misconduct and grossly prejudicial to the good name of the petitioner school. In
particular, the investigating committee found respondent to have violated Article XV, Section 79
and Article XVII, Section 94, paragraph (b) of the Manual of Regulations for Private Schools, to
wit:

Article XV, Section 79. Basis for Grading. The final grade or rating given
to a pupil or student in a subject should be based solely on his scholastic
performance. Any addition or diminution to the grade in a subject for co-
curricular activities, attendance, or misconduct shall not be allowed, except as
may otherwise be explicitly provided for by an individual school x x x, and
provided further that such adjustments are relevant to the subject content and
requirements x x x.

Article XVII, Section 94, par. (b). Negligence in keeping school or student
records, or tampering with or falsification of the same; x x x.
 On these bases, the members of the investigating committee ruled to terminate
respondents services. On 15 April 1999, a termination letter was served on respondent. On 29
April 1999, respondent filed with the Labor Arbiter a Complaint for illegal dismissal,
proportionate 13th month pay, actual, moral and exemplary damages, and attorneys fees
against petitioners.[15]

In his Decision[16] dated 11 January 2001, Labor Arbiter Edgardo Madriaga ruled that
respondent was illegally dismissed as there was no valid or just cause to terminate her
employment. The relevant portion of the Decision reads:

A teacher has the academic freedom to pass or fail any or all her students
as (sic) per his or her discretion. In this case, the teacher opted for liberality
rather than strictness. There was no proof that she did so out of malice or
immoral considerations. There are liberal or generous teachers and there are so-
called terror teachers who prefer to flunk all their students. They balance each
other out.

We, therefore, rule that complainant was not dismissed for a valid or just
cause.

She is therefore entitled to reinstatement with backwages, proportionate

13 month pay and 10% thereof as attorneys fees, computed below as follows:
th

xxxx

WHEREFORE, premises considered, complainant is hereby declared to

have been illegally dismissed, and respondent school is hereby directed to
reinstate her and pay her money claims as computed above.

On appeal by petitioners, the NLRC reversed and set aside the Decision of the Labor Arbiter, on
the ground that respondents act of giving failing students higher grades than what they actually
earned is tantamount to serious misconduct which justified her dismissal. The relevant portion
of the NLRC Decision[17] reads:

The very actuations of the complainant first claiming that it was her prerogative
to pull up failing grades, then blaming the substitute teachers for copying the
grades she gave the failing students, and even Mr. Lopez for supposedly
scheming to get rid of her; claiming that she gave the failing students extra
projects before she went on leave, yet failing to reflect the credits they earned
 from the supposed extra projects in the grading sheets are not consistent with
her avowed innocence.

In conclusion, this Commission finds the complainants act of giving failing

students higher grades than what they actually earned to be tantamount to
serious misconduct, which justifies her dismissal. The notion of academic
freedom, which to her credit, she did not raise as a defense, does not excuse her
misconduct.

WHEREFORE, the decision appealed from is hereby REVERSED and the instant
case DISMISSED for lack of merit.

Respondent filed a Motion for Reconsideration of the NLRC Decision which was denied for lack
of merit in a Resolution dated 29 November 2001.[18] Aggrieved, respondent filed a Petition
for Certiorari before the Court of Appeals. The appellate court reversed and set aside the
Decision dated 28 September 2001, and Resolution dated 29 November 2001 of the
NLRC. Reinstating the 11 January 2001 Decision of the Labor Arbiter, the Court of Appeals
ratiocinated:

Absent any proof that the giving of passing grades was done with malice or
immoral considerations, this court has no other choice but to declare that the
herein petitioner [respondent] was illegally dismissed for choosing to be a
considerate mentor to her students. Whether such choice is a mistake of the
teacher should not be visited with a consequence so severe. Indeed, the penalty
of dismissal is unduly harsh considering that the petitioner had been in the
employ of the respondent school for eleven years and it does not appear that
she had a previous derogatory record, notwithstanding the claim there was
alleged breach of trust. The law regards the workers with
compassion. Unemployment brings untold hardships and sorrows upon those
dependent on the wage-earner.

WHEREFORE, for having been issued with grave abuse of discretion, the assailed
decision and resolution of the respondent commission are REVERSED and SET
ASIDE. The Decision of Labor Arbiter Edgardo M. Madriaga is
hereby REINSTATED. [19]

Petitioners moved for a reconsideration thereof, which was denied by the appellate
court [20]
in the Resolution dated 1 July 2004.
 Consequently, on 2 September 2004, petitioners filed before this Court, a Petition for
Review on Certiorari. In our Resolution[21] dated 13 October 2004, we denied the Petition in this
wise:

In accordance with Rule 45 and other related provisions of the 1997

Rules of Civil Procedure, as amended, governing appeals by certiorari to the
Supreme Court, only petitions which are accompanied by or comply strictly with
the requirements specified therein shall be entertained. On the basis thereof, the
Court Resolves to DENY the petition for review on certiorari for petitioners failure
to:

(a) submit a valid affidavit of service of copies of the petition in

accordance with Sections 3 and 5, Rule 45 and Section 5(d), Rule 56 in relation
to Section 13, Rule 13 of the Rules, since the jurat of the attached affidavit of
service does not indicate the affiants community tax certificate numbers or any
competent evidence of affiants identity; and

(b) properly verify the petition in accordance with Section 1, Rule 45 in

relation to Section 4, Rule 7, and submit a valid certification
on nonforum shopping in accordance with Section 4(e), Rule 45 in relation to
Section 5, Rule 7, Section 2, Rule 42 and Sections 4 and 5(d), Rule 56, since only
five (5) of seven (7) petitioners signed the attached verification and certification
of nonforum shopping, and no proof of authority has been shown by affiants to
sign on behalf of petitioner school and co-petitioners x x x.[22]

On 4 April 2005, petitioners filed a Motion for Reconsideration with motion to exclude
Rev. Fr. Noel Bejo and Jennifer Gill as petitioners, alleging therein that:

The reason for the failure of Fr. Bejo and Ms. Gill to sign the verification
and certification of non-forum shopping is the fact that they were impleaded in
the case below merely in their representative capacities. Since they are no longer
connected with the school, they are, for all intents, no longer interested in this
case. The undersigned counsel still included their names in the caption with the
intention to maintain consistency in the caption of the case as Fr. Bejo and Ms.
Gill were also impleaded by herein respondent Salgarino in the Court of Appeals
case she filed. Undersigned counsel now realizes that they should not have
been included as petitioners in this case since there could be no personal liability
on their part. The matter now in issue are limited to backwages and
reinstatement, which concern only the school.[23]
 Thus, we reinstated the Petition but replaced Rev. Fr. Teodoro Gapuz for Fr. Bejo as one
of the petitioners hereof since Fr. Bejo was replaced by Fr. Gapuz as School Director in 2001.[24]
Petitioners raise the following issues for our consideration:

WHETHER OR NOT RESPONDENT LABOR ARBITER MADRIAGA AND THE COURT

OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION TANTAMOUNT TO
LACK OR IN EXCESS OF JURISDICTION WHEN IT FOUND PRIVATE
RESPONDENT SALGARINO TO HAVE BEEN ILLEGALLY DISMISSED
NOTHWITHSTANDING THE FACT THAT PRIVATE RESPONDENT ADMITTED TO
HAVE CHANGED THE FAILING GRADES TO PASSING MARKS OF THIRTY TWO
(32) OF HER STUDENTS WHILE SHE WAS ON MATERNITY LEAVE.

II

WHETHER OR NOT RESPONDENT LABOR ARBITER MADRIAGA AND THE COURT

OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION TANTAMOUNT TO
LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT PRIVATE
RESPONDENT SALGARINO WAS ENTITLED TO REINSTATEMENT, BACKWAGES,
13TH MONTH PAY AND ATTORNEYS FEES;

III

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING

THE ERRONEOUS DECISION OF THE RESPONDENT LABOR ARBITER;

(A) THE HONORABLE COURT OF APPEALS GRAVELY ABUSED

ITS DISCRETION WHEN IT DID NOT RULE CATEGORICALLY ON
THE ISSUE OF WHETHER OR NOT A TEACHER MAY CHANGE THE
FAILING GRADES TO PASSING MARKS OF HER STUDENTS OR
THAT THE GIVING OF GRADES IS DISCRETIONARY;

(B) THE HONORABLE COURT OF APPEALS COMMITTED A

GLARING ERROR AND/OR ABUSE OF DISCRETION IN RULING
THAT PETITIONERS FAILED TO PROVE THE JUST CAUSE OF
PRIVATE COMPLAINANTS DISMISSAL;

(C) THE HONORABLE COURT OF APPEALS COMMITTED GROSS

ABUSE OF DISCRETION IN RULING THAT THERE WAS NO
 BREACH OF TRUST COMMITTED BY THE ERRANT PRIVATE
RESPONDENT;

(D) THE HONORABLE COURT OF APPEALS COMMITTED GROSS

ABUSE OF DISCRETION IN RULING THAT THE ERRANT TEACHER
HAD THE RIGHT OR DISCRETION TO GIVE PASSING GRADES
OUT OF HUMANITARIAN CONSIDERATIONS.

According to petitioners, Section 79 of the Manual of Regulations for Private Schools

mandates that a students grade should be based solely on his academic performance; that it is
therefore a serious academic malpractice or grave misconduct for respondent to give grades
that are not based on their scholastic performance; that it is a serious misconduct for
respondent to give grades at the time she was still on maternity leave because she has no
moral or legal authority then to do so; that there is nothing in the Manual which states that a
teacher has the discretion or the option as to what grade she will give her students; and that a
teacher has the obligation to determine the grades of students based solely on their academic
performance.

The Labor Code commands that before an employer may legally dismiss an employee from the
service, the requirement of substantial and procedural due process must be complied
with. Under the requirement of substantial due process, the grounds for termination of
employment must be based on just or authorized causes. The following are just causes for the
termination of employment under 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 member of his family or his duly
authorized representative; and

(e) Other causes analogous to the foregoing.

 In the instant case, it appears that since respondent was still on maternity leave, the
substitute teachers conducted the final exams in Math for the 4th year students of
respondent. Upon computation by the substitute teachers of the grades of the said students, it
was shown that some of them obtained failing grades in Math. Subsequently, respondent
requested one of the substitute teachers (Capistrano) to deliver to her house the white sheets
which contained the grades in Math of respondents students. With due respect to, and trust in,
respondent as the handling teacher in Math, Capistrano delivered the white sheets to
respondent through a student named Eunice Weeguano. Upon return of the white sheets, the
substitute teachers discovered that the failing grades under the column of Daily Work (DW)
were encircled and a passing grade was written beside each encircled grade.[25] The substitute
teachers immediately reported the matter to Lopez who referred the matter to
Fr. Bejo. The increase in grades enabled the concerned students to obtain a passing grade in
Mathematics IV, and thus, were able to graduate on time.

Proceeding therefrom, we shall determine whether the aforesaid act of respondent constitutes
serious misconduct which justified her dismissal from employment.

To our mind, the acts of the respondent in increasing the marks and indicating passing
grades on the white sheets of her students while she was on maternity leave; of not having
sought permission from petitioners before conducting the make-up tests in her
house,[26] contrary to the policy of the petitioners that permission should first be granted before
conducting make-up tests that must be conducted in the school premises; of making the
increases in the grades of the students during her maternity leave which is not allowed since
the substitute teachers were the ones authorized to compute and give the grades for the
concerned students; and of invoking humanitarian consideration in doing so which is not a basis
in the Manual of Regulations for Private Schools for grading a student, are all acts of
transgression of school rules, regulations and policies.

Truly, then, respondent had committed a misconduct. However, such misconduct is not
serious enough to warrant her dismissal from employment under paragraph (a) of Article 282 of
the Labor Code.

Misconduct is defined as improper or wrong conduct. It is the transgression of some

established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character and implies wrongful intent and notmere error of judgment. The misconduct
to be serious within the meaning of the act must be of such a grave and aggravated character
and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be
in connection with the work of the employee to constitute just cause from his separation.[27]

In order to constitute serious misconduct which will warrant the dismissal of an

employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act
or conduct complained of has violated some established rules or policies. It is equally important
and required that the act or conduct must have been performed with wrongful intent.

There is no evidence to show that there was ulterior motive on the part of the
respondent when she decided to pass her students. Also, it was not shown that respondent
received immoral consideration when she did the same. From the Labor Arbiter up to this Court,
respondent has maintained her stand that her decision to pass the concerned students was
done out of humanitarian consideration.

Respondent was moved by pity when she learned that some of her students obtained a
failing grade in her subject and, thus, will not graduate on time. Respondent believes that some
of her students obtained a failing grade in her subject because they were not properly prepared
for the 4th periodical exams. She claims that, although the substitute teachers conducted the
4th periodical exams and computed their grades, there were no teachers assigned to conduct
classes, lectures and review before the said exam. Thus, unmindful of the events that may
transpire thereafter, respondent decided to increase the marks of her students and
gave them passing grades.

Respondent argued that had she failed the subject students, some of them would be
enrolling in more than two subjects for summer which is not allowed under Section 68(b),
Article XIII of the Manual[28] that provides that a student may enroll in no more than two
subjects during the summer, either for the purpose of making up for subjects previously failed,
or for earning advanced credits in other subjects. Respondent avers that some of the students
with failing grades in Math had also failed in their two Chinese subjects. Hence, to avoid the
violation of the Manual, respondent decided to pass these students.

Based on the foregoing, respondent may have committed an error of judgment in

deciding to pass her students, but it cannot be said that she was motivated by any wrongful
intent in doing so. As such, her misconduct cannot be considered as grave in character which
would warrant her dismissal from employment. We, thus, find her to be guilty only of simple
misconduct. It is settled that a misconduct, which is not serious or grave, cannot be a valid
basis for dismissing an employee.[29]

Special consideration should also be given to the fact that respondent has been in the
employ of petitioners for 10 years or more, and she has no previous derogatory record. Further,
respondent is a recipient of numerous academic excellence awards and recognized by her
students and some of her peers in the profession as a competent teacher. Given the foregoing,
the penalty of dismissal imposed by petitioners on respondent for a first offense seems unduly
harsh and disproportionate to the misconduct being complained of.[30] This Court has
consistently ruled that the penalty to be imposed on an erring employee must be
commensurate with the gravity of his offense.[31]
 In the actual imposition by the employer of the penalties on erring employees, due
consideration must be given to their length of service and the number of violations they have
committed during their employ.[32] Where a penalty less punitive would suffice, whatever
missteps may be committed by labor ought not to be visited with a consequence so
severe.[33] In light of the aforestated considerations, the penalty of dismissal will appear to be
too drastic and unreasonable.

Petitioner invoked Section 94(b), Article XVII of the Manual of Regulations for Private
Schools[34] which provides that the employment of a teacher may be terminated for negligence
in keeping school or student records, or tampering with or falsification of the same. According
to petitioners, respondent violated the said section when she encircled the failing grades under
the DW and indicated a passing grade beside each encircled grade.

Assuming for the sake of argument that respondent had indeed violated Section 94(b) of
the Manual, her dismissal from employment is still invalid. Section 94(b) uses the word may and
not shall. In this jurisdiction, the tendency has been to interpret the word shall or may as the
context or a reasonable construction of the statute in which they are used demands or
requires. As a general rule, the word may when used in statute is permissive only and operates
to confer discretion while the word shall is imperative, operating to impose a duty which may be
enforced.[35] In the case at bar, the use of the word may under Section 94(b) thereof implies
that petitioners are permitted and authorized to terminate the employment of respondent for
tampering or falsification of school records. However, such authority is not absolute. It does not
give petitioners the unlimited power to automatically terminate the employment of respondent.
Such authority is merely permissive and discretionary. Such prerogative cannot be permitted by
this Court if exercised arbitrarily and unfairly to defeat the constitutional protection to
labor. Moreover, as heretofore pointed out, there are circumstances present in this case which
mitigate the misconduct of respondent. It would be different if the word shall is used or the
same is phrased in a negative manner. In such a case, the dismissal of respondent is
mandatory and automatic.[36] We find no exception to deviate from this general rule of statutory
construction.

Petitioners argue that the Labor Arbiter erred in ruling that respondent, as a teacher,
has the academic freedom to pass or fail any or all students per his or her discretion.

We agree, however, with the Court of Appeals that the issue of academic freedom is
misplaced in this labor case. Academic freedom of faculty members refer to the freedom of
teachers from control of thought or utterance of his academic research, findings or conclusions,
and has nothing to do with the discretion of teachers to pass or fail any or all her students
according to his discretion.[37] Hence, we find no compelling reason to determine the same.
 Finally, petitioners contend that when respondent tampered the grades of her students,
she willfully breached the trust and confidence reposed upon her by petitioners, thus, her
dismissal is valid under paragraph (c) of Article 282 of the Labor Code.
We deviate.

In several cases, we made pronouncements that loss of confidence as a ground for

validly dismissing an employee under Article 282 of Labor Code applies only to employees
occupying positions of trust and confidence or those routinely charged with the care and
custody of the employers money or property. In the case of Mabeza v. National Labor Relations
Commission,[38] we ruled that:

[L]oss of confidence should ideally apply only to cases involving employees

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

Likewise, in the case of Concorde Hotel v. Court of Appeals,[39] we declared that:

Loss of confidence applies only to cases involving employees who occupy

positions of trust and confidence, or those situations where the employee is
routinely charged with the care and custody of the employers money or property
x x x.

In the instant case, it is clear that respondent is neither a managerial employee or one
vested with the powers or prerogatives to lay down management prerogatives. Nor one
belonging to the class of cashiers, auditors, property custodians, or those, who, in the normal
and routine exercise of their functions, regularly handle significant amounts of money or
property.

It is now settled that petitioners failed to comply with the requirement of substantial due
process in terminating the employment of respondent. We will now determine whether
petitioners had complied with the procedural aspect of lawful dismissal.

In the termination of employment, the employer must (a) give the employee a written
notice specifying the ground or grounds of termination, giving to said employee reasonable
opportunity within which to explain his side; (b) conduct a hearing or conference during which
the employee concerned, with the assistance of counsel if the employee so desires, is given the
opportunity to respond to the charge, present his evidence or rebut the evidence presented
against him; and (c) give the employee a written notice of termination indicating that upon due
consideration of all circumstances, grounds have been established to justify his termination.[40]

Petitioners had complied with all of the above stated requirements as shown by the
following established facts:

On 24 March 1999, petitioner Fr. Bejo instructed respondent to report to

the formers office. He gave her a letter which instructed her to submit herself to a panel and
explain why she had allegedly tampered school records and violated school policies.[41]
On 26 March 1999, petitioners conducted an investigation on the matter which was held
at the New Guidance Office of the petitioner School. The panel of investigators were composed
of petitioners Fr. Bejo, Ms. VilmaLao (Registrar), Mrs. Naty Tan, (Guidance Office Head), Lopez,
Mr. Camilo Gelido, Mrs. Jennifer Gill, Ms. Remedios Cabanlit (High School Coordinators). Also
present during the investigation were respondent and the substitute teachers. Petitioner
Fr. Bejo propounded the following questions to respondent:

1. Why did you ask students to take their tests in your house?

2. Why did you make changes in the grades in class record and white sheets
even before they were checked by Ms. Lopez?

3. Why was there a big discrepancy in the grades?

4. Why did you ask a student to bring the white sheets to your house? These
are official school documents.

Respondent was allowed to answer the abovementioned questions. She explained and
defended her acts. After the investigation, petitioners deliberated as to their course of action in
resolving respondents case.Subsequently, petitioners decided to dismiss the respondent from
employment for violating Sections 79 and 94 of the Manual of Regulations for Private Schools,
and for undue disregard of school policies.[42]
On 15 April 1999, a termination letter was served by petitioners on respondent.[43]
While petitioners had complied with the procedural aspect of due process in terminating
the employment of respondent, they failed to comply with the substantive aspect of due
process as the act complained of does not constitute serious misconduct. Hence, we still hold
that the dismissal is illegal.
 It must be emphasized at this point that the onus probandi to prove the lawfulness of
the dismissal rests with the employer. In termination cases, the burden of proof rests upon the
employer to show that the dismissal is for just and valid cause. Failure to do so would
necessarily mean that the dismissal was not justified and therefore was illegal.[44] In the instant
case, petitioners failed to discharge the burden of proving the legality and validity of
respondents dismissal.

We are not unmindful of the equally important right of petitioners, as employer, under
our Constitution to be protected on their property and interest. However, the particular
circumstances attendant in the instant case convinced us that the supreme penalty of dismissal
upon respondent is not justified. The law regards the workers with compassion. Even where a
worker has committed an infraction of company rules and regulations, a penalty less punitive
than dismissal may suffice. This is not only because of the laws concern for the
workingman. There is, in addition, his family to consider. Unemployment brings untold
hardships and sorrows on those dependent upon the wage-earner.[45]

As a caveat, it would do well for respondent to act more conscientiously and with more
regard to the policies of petitioners in the future. A repetition or similar misconduct may call for
a more severe penalty in the future.

Finally, there being no evidentiary support for the claim of respondent for damages, the
same was correctly denied by the Labor Arbiter and Court of Appeals.

WHEREFORE, the Petition for Review is DENIED. The Decision of the Court of Appeals
dated 21 May 2003 and its Resolution dated 1 July 2004 in CA-G.R. SP No. 69955, are
hereby AFFIRMED. Petitioners are hereby ORDERED to reinstate respondent to her former
position or its equivalent without loss of seniority rights or privileges plus full backwages
computed from the time her salaries were withheld until she is finally reinstated. With costs.

[1]
Penned by Associate Justice Perlita J. Tria Tirona with Associate
Justices Oswaldo D. Agcaoili and Edgardo F. Sundiam, concurring.
[27]
Department of Labor Manual, Sec. 4343.01; Ha Yuan Restaurant v. National Labor Relations
Commission, G.R. No. 147719, 27 January 2006, 480 SCRA 328, 331-332,
citing Colegio de San Juan de Letran-Calamba v. Villas, 447 Phil. 692, 699 (2003).
[28]
1992 Manual of Regulations for Private Schools, Article XIII, Section 68. Advanced Subjects
and Back Subjects. As a general rule, a student shall not be permitted to take any
advanced subject until he has satisfactorily passed the prerequisite subject or
subjects. However, in the case of students in the secondary level, the following rules
shall apply:
xxxx
b. A student may enroll in no more than two subjects during the summer, either
for the purpose of making up for subjects previously failed, or for earning advanced
credits in other subjects. x x x
[29]
Radio Communications of the Philippines, Inc. v. National Labor Relations Commission, 327
Phil. 838, 849 (1996).
[30]
Maranaw Hotels and Resorts Corp. v. Court of Appeals, G.R. No. 103215, 6 November 1992,
215 SCRA 501, 505.
[31]
Philippine Telegraph and Telephone Corporation v. National Labor Relations Commission,
G.R. No. 80600, 21 March 1990, 183 SCRA 451, 456.
[32]
Tanduay Distillery Labor Union v. National Labor Relations Commission, G.R. No. 73352, 6
December 1994, 239 SCRA 1, 7.
[33]
Meracap v. International Ceramics Mfg. Co., Inc., No. L-48235-36, 30 July 1979, 92 SCRA
412, 417, citing the case of Almira v. B.F. Goodrich Philippines, Inc., 157 Phil. 111, 121
(1974).
1992 Manual of Regulations for Private Schools, Article XVII, Section 94. Causes of
[34]

Terminating Employment. In addition to the just causes enumerated in the Labor Code,
the employment of school personnel, including faculty, may be terminated for any of the
following causes:
xxxx
b. Negligence in keeping school or student records, or tampering
with or falsification of the same; x x x.
[35]
Dizon v. Encarnacion, 119 Phil. 20, 22-23 (1963).
[36]
Bersabal v Salvador, No. L-35910, 21 July 1978, 84 SCRA 176, 179-180.
[37]
Garcia v. The Faculty Admission Committee, Loyola School of Theology, G.R. No. L-
40779, 28 November 1975, 68 SCRA 277, 285.
[38]
338 Phil. 386, 395-396 (1997).
[39]
414 Phil. 897, 906 (2001).
[40]
Agabon v. National Labor Relations Commission, G.R. No. 158693, 17 November 2004, 442
SCRA 573, 608; Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the
Labor Code.
[41]
CA rollo, p. 12.
[42]
Id. at 21 and 274.
[43]
Id. at 100-101.
[44]
Royal Crown Internationale v. National Labor Relations Commission, G.R. No. 78085, 16
October 1989, 178 SCRA 569, 578.
[45]
Almira v. B.F. Goodrich Philippines, Inc., supra note 33 at 21-22.
 Republic of the Philippines
SUPREME COURT
Baguio City

SECOND DIVISION

G.R. No. 189456 April 2, 2014

CHIANG KAI SHEK COLLEGE and CARMELITA ESPINO, Petitioners,

vs.
ROSALINDA M. TORRES, Respondent.

DECISION

PEREZ, J.:

Assailed in this Petition for Review is the 29 May 2009 Decision1 and 2 September 2009
Resolution2 of the Court of Appeals in CA-G.R. SP No. 105576 declaring respondent Rosalinda
M. Torres constructively dismissed and awarding her separation pay. The challenged Decision
and Resolutior: reversed and set aside the Decision of the National Labor Relations Commission
(NLRC).

The facts are as follow:

Petitioner Chiang Kai Shek College is a private educational institution that offers elementary to
college education to the public. Individual petitioner Carmelita Espino is the Vice-President of
the school. Respondent had been employed as a grade school teacher of the school from July
1970 until 31 May 2003. The manner of her severance from employment is the matter at hand.

Respondent was accused of leaking a copy of a special quiz given to Grade 5 students of
HEKASI (HEKASI 5). HEKASI stands for Heograpiya, Kasaysayan at Sibika (Geography, History
and Civics). Petitioners came to know about the leakage from one of the teachers of HEKASI 5,
Aileen Benabese (Ms. Benabese). Ms. Benabese narrated that after giving a special quiz, she
borrowed the book of one of her students, Aileen Regine M. Anduyan (Aileen), for the purpose
of making an answer key. When she opened Aileens book, a piece of paper fell. Said paper
turned out to be a copy of the same quiz she had just given and the same already contained
answers.

Ms. Benabese informed the schools Assistant Supervisor Mrs. Gloria Caneda (Mrs. Caneda)
about the incident. Mrs. Caneda conferred with Assistant Supervisor Encarnacion Koo (Mrs.
Koo), who was in charge of the HEKASI area, and Supervisor Luningning Tibi (Ms. Tibi). Mrs.
Koo confronted respondent, who had initially denied leaking the test paper but later on
admitted that she gave the test paper to Mrs. Teresita Anduyan (Mrs. Anduyan), her co-teacher
and the mother of Aileen. Respondent and Mrs. Anduyan were both directed to submit their
written statement on the incident.

Respondent explained that she was busy checking the writing workbook when somebody
handed her the special quiz for HEKASI 5, thus:

Yesterday morning, before the bell rings, I was busy checking the writing workbook when
somebody handed me the special quiz for Hekasi 5. I placed them on the table and continued
with what Im doing. Mrs. Anduyan got one paper and read it. When I finished checking the
books I got the papers and went upstairs forgetting about the paper Mrs. Anduyan got.

Then, this morning (July 30), Mrs. Koo confronted me about the two answered test papers of
Aileen Anduyan, I knew one of them was the paper Mrs. Anduyan borrowed from me. I
admitted it to Mrs. Koo and I was so sorry and apolog[e]tic for any carelessness and for what
happened.3 Mrs. Anduyan, in her statement dated 17 August 2002, denied that she took the
test paper from petitioner without the latters permission:

Last July 29, 2000 it happened in the Faculty Rm.

This event was not intensional [sic] it just happened. I just asked Mrs. Torres to look for the
special quiz in Hekasi, but she gave it to me and I let my daughter to [sic] see the test paper
and she answered it.4

On 5 August 2002, Mrs. Koo, Mrs. Caneda and Ms. Tibi executed a written statement stating
that when confronted by Mrs. Koo, respondent initially denied leaking a copy of the quiz but
later on admitted to doing the same.5

In three (3) separate Letters,6 Mrs. Koo, Mrs. Caneda and Ms. Tibi stated that respondent
admitted to Mrs. Koo that she leaked the special quiz and directed respondent and Mrs.
Anduyan to give their comment.

Mrs. Anduyan, in her Comment dated 19 August 2002, denied that she asked for the special
quiz from respondent and that the latter forgot about the paper that she allegedly took. Mrs.
Anduyan stated:

x x x Doon po sa salita ni Gng. Gloria Caneda na ayon kay Gng. Rosalinda Torres "I asked for
the special quiz # 1 in Hekasi 5" ay wala pong katotohanan. Tulad din po ng sinabi ni Gng.
Rosalinda Torres "She went upstairs forgetting about the paper that I got" ay hindi po rin totoo.

Sa katunayan, ito po ang tunay na nangyari noong Hulyo 29, 2002 ng umaga sa Faculty Room.
Totoo pong nagche-check ng Writing Book si Gng. Torres nang hiniraman ko yuon Special Quiz
#1 sa Hekasi 5. Ang sabi ko "Linda, patingin nga ng test ninyo" So, ibinigay naman niya ito
"willingly" at hindi ko kinuha tulad ng kanyang salaysay. Sabi ko pahiram at hindi ko kinuha ng
walang pahintulot. Sa katunayan inabot niya ito sa akin. Nagulat nga ako ng sabihin niya sa iyo
na lang. So, kinuha ko po at umakyat na ako sa room ko x x x. (Italics supplied).7

Respondent submitted her Comment. She insisted that Mrs. Anduyan asked her to see the
special quiz. She was not aware that Mrs. Anduyan did not return the copy of the special quiz
back to her. She made the following statement:

x x x While I was very busy and deeply engrossed with my checking, Mrs. Teresita Anduyan
approached my desk. By chance, Mrs. Anduyan saw copies of the Special Quiz # 1 on my desk.
Mrs. Anduyan told me, "Patinghin, pabasa lang." Among faculty members, it is usual that
teachers look into the type of questions to be given to pupils without necessarily divulging
them. I did not expect that Mrs. Anduyan would be divulging test questions, since she is a
faculty member herself and is bound to such duty of confidentiality.

When I finished checking the Writing Workbooks, I took all copies of the Special Quizzes that
were handed over to me and left to attend my first class last 29 July 2002. I did not intend for
Mrs. Anduyan to have a copy of Special Quiz # 1. I am not even aware that Mrs. Anduyan took
a copy of Special Quiz # 1. It did not occur to me that Mrs. Anduyan could have taken a copy of
the test. Neither did I hand over a copy of the test questions with the answers already indicated
therein.

On 30 July 2002, when Mrs. Koo confronted me about this incident what I relayed to her are
the circumstances as explained above. In my written narration dated 30 July 2002 and during
my conversation with Mrs. Koo, I did not admit that I intentionally gave Mrs. Anduyan a copy of
the test paper. I was candid to relay to Mrs. Koo the relevant circumstances that led to the
subject incident. To clarify, I expressed my concern that Mrs. Anduyan could have taken a copy
of the test paper without my permission and without my knowledge.8

An administrative hearing was conducted on 28 August 2002 wherein respondent and Mrs.
Anduyan were asked questions by the Investigating Committee relative to the leakage of test
paper.

On 30 August 2002, the Investigating Committee held a meeting and found respondent and
Mrs. Anduyan guilty of committing a grave offense of the school policies by leaking a special
quiz. As shown in the Minutes of the Meeting on 30 August 2002, the Committee decided to
impose the penalty of one-month suspension without pay on respondent and forfeiture of all
the benefits scheduled to be given on Teachers Day.9

According to petitioners, their Investigating Committee had actually decided to terminate

respondent and had in fact prepared a memorandum of termination,10 but respondent allegedly
pleaded for a change of punishment in a short letter dated 5 September 2002, to wit:
Request for change of punishment from termination to suspension and I am resigning at the
end of the school year.

Mrs. Rosalinda M. Torres11

Petitioners acceded to the request and suspended respondent and Mrs. Anduyan effective 16
September to October 2002. The duo was directed to report to work on 4 November
2002.12 Respondent continued her employment from 4 November 2002 until the end of the
school year on 26 March 2003.

On 14 February 2003 however, respondents counsel sent a letter to petitioners containing the
following demands:

(1) To pay backwages to Mrs. Torres for the period of 16 September 2002 to 31 October
2002 at the rate of her current salary of Sixteen Thousand Three Hundred Thirty-Five
Pesos (16,335.00) or the total amount of at least TWENTY-FOUR THOUSAND FIVE
HUNDRED TWO PESOS and 50/100 (24,502.50);

(2) To pay Mrs. Torres her September bonus given by the Alumni Association that was
released last September 2002 during the Teachers Recognition Day in the amount of at
least THREE THOUSAND PESOS (3,000.00);

(3) To pay Mrs. Torres her "Teachers Day Gift" given by the Students Council of the
Elementary Department that was released last September 2002 during the Teachers
Recognition Day in the amount of at least SIX HUNDRED PESOS (600.00);

(4) To cease and desist from calling for our clients resignation at the end of School Year
2002-2003 or on 31 May 2003

(5) Moral damages in the amount of at least TWO HUNDRED FIFTY THOUSAND PESOS
(250,000.00); and

(6) Exemplary damages in the amount of at least TWO HUNDRED FIFTY THOUSAND
PESOS (250,000.00).13

Petitioners, through counsel, wrote to respondents counsel asserting that respondent was
being terminated but the latter requested that "she be suspended instead on condition that she
will tender her voluntary resignation at the end of the school year."14

On 10 June 2003, respondent filed a complaint for constructive dismissal and illegal suspension
with the Labor Arbiter. She also sought payment of unpaid salary, backwages, holiday pay,
service incentive leave pay, 13th month pay, separation pay, retirement benefits, damages and
attorneys fees.15
In her Position Paper, respondent alleged that she was forced and pressured to submit the
written request for a change of penalty and commitment to resign at the end of the school
year. She was threatened by the school management with immediate dismissal from service if
she did not submit the written statement. She claimed that she was not formally charged with
any offense and she was not served a copy of the notice of the schools decision to terminate
her services.

Petitioners insisted that respondent voluntarily resigned. Petitioners averred that respondent
was accorded her right to due process prior to her termination. A formal investigation was
conducted during which respondent was given the opportunity to defend herself and confront
her accusers.

On 3 February 2004,16 Labor Arbiter Eduardo J. Carpio dismissed respondents complaint for
lack of merit. The Labor Arbiter deemed respondents suspension coupled with petitioners
allowance of respondents resignation at the end of the school year as generous acts
considering the offense committed. The Labor Arbiter held that there was no constructive
dismissal because respondent was not coerced nor pressured to write her resignation letter.

On appeal, the Second Division of the NLRC rendered a Decision17 affirming the Labor Arbiters
findings but ordering petitioners to pay respondent separation pay equivalent to one-half (1/2)
month salary for every year of service on the grounds of equity and social justice.

Respondent elevated the case to the Court of Appeals. On 29 May 2009, the Court of Appeals
reversed the NLRC Decision and Resolution. The dispositive portion provides:

WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision
dated July 26, 2007 of the NLRC and Resolution dated July 1, 2008 in NLRC NCR CA No.
039879-04 are hereby REVERSED and SET ASIDE and a new one rendered as follows:

1. Declaring petitioner Rosalinda M. Torres to have been constructively dismissed;

2. Ordering private respondents to pay petitioner her separation pay equivalent to one
(1) month salary for every year of service with a fraction of at least six (6) months being
considered as one (1) whole year, full backwages and other privileges and benefits, or
their monetary equivalent, computed from the time of her dismissal on June 1, 2003
until her retirement or the finality of this Decision, whichever comes first;

3. Retirement benefits pursuant to the schools Retirement Plan;

4. Moral and Exemplary damages in the amount of 10,000.00 each; and

5. 10% of the total award as Attorneys fees.

The case is hereby ordered remanded to the Labor Arbiter for computation of the foregoing
monetary awards due the petitioner.18

The Court of Appeals ruled that petitioner did not voluntarily resign but was constructively
dismissed. The appellate court cited respondents years in service; her consistent denials of the
accusations against her; her alleged resignation letter which did not contain any reason for her
resignation; and the unsigned memorandum of termination which militate against the
voluntariness of resignation. The appellate court also foreclosed any interpretation that
respondent was validly dismissed for a just cause because respondent was already meted the
penalty of suspension without pay and forfeiture of her bonuses. The appellate court found it
unjust to penalize respondent twice for the same offense.

Petitioners moved for reconsideration but it was denied in a Resolution issued on 2 September
2009.

We are called upon to determine whether or not in this case the schools act of imposing the
penalty of suspension instead of immediate dismissal from service at the behest of the erring
employee, in exchange for the employees resignation at the end of the school year, constitutes
constructive dismissal.

There is before us a reassertion by the parties of their positions taken below.

Petitioners point out that in respondents handwritten letter dated 5 September 2002, she
offered to voluntarily resign at the end of the school year, provided that her punishment be
changed from termination to suspension. Petitioners claim that respondent, who was faced with
immediate termination of her employment, bargained for a better exit. Petitioners deny forcing,
coercing or pressuring respondent into writing said letter.

Respondent, on the other hand, averred that individual petitioner forced her to write the written
request for a change of the action on the charges against her, from dismissal to suspension and
eventual resignation. Respondent reiterates that she never intended to resign but due to
intense pressure from individual petitioner who threatened that she will not receive her
monetary benefits, she was pressured to write the alleged resignation letter.

Resignation is the voluntary act of an employee who is in a situation where one believes that
personal reasons cannot be sacrificed for the favor of employment, and opts to leave rather
than stay employed. It is a formal pronouncement or relinquishment of an office, with the
intention of relinquishing the office accompanied by the act of relinquishment. As the intent to
relinquish must concur with the overt act of relinquishment, the acts of the employee before
and after the alleged resignation must be considered in determining whether, he or she, in fact,
intended to sever his or her employment.19
Respondent had admitted to leaking a copy of the HEKASI 5 special quiz.1wphi1 She
reluctantly made the admission and apologized to Mrs. Koo when the latter confronted her. She
admitted during the 28 August 2002 hearing of executing two (2) contradictory statements. On
30 August 2002, the Investigating Committee found respondent guilty of leaking a copy of the
special quiz. Based on this infraction alone, Chiang Kai Shek College would have been justified
to validly terminate respondent from service. As Associate Justice Antonio T. Carpio
emphasized, academic dishonesty is the worst offense a teacher can make because teachers
caught committing academic dishonesty lose their credibility as educators and cease to be role
models for their students. More so that under Chiang Kai Shek College Faculty Manual, leaking
and selling of test questions is classified as a grave offense punishable by
dismissal/termination.20

On 5 September 2002, respondent was verbally informed by Mrs. Caneda, Mrs. Carmelita
Espino and Ms. Tibi that she was being dismissed from service. Before the Investigating
Committee could formalize respondents dismissal, respondent handwrote a letter requesting
that the penalty be lowered from dismissal to suspension in exchange for respondents
resignation at the end of the school year.

We do not find anything irregular with respondents handwritten letter. The letter came about
because respondent was faced with an imminent dismissal and opted for an honorable
severance from employment. That respondent voluntarily resigned is a logical conclusion.
Justice Arturo D. Brion correctly observed that respondents infraction and the inevitable and
justifiable consequence of that infraction, i.e., termination of employment, induced her to resign
or promise to resign by the end of the s0chool year.

Given the indications of voluntary resignation, we rule that there is no constructive dismissal in
this case. There is constructive dismissal when there is cessation of work, because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion
in rank or a diminution in pay and other benefits. Aptly called a dismissal in disguise or an act
amounting to dismissal but made to appear as if it were not, constructive dismissal may,
likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes
so unbearable on the part of the employee that it could foreclose any choice by him except to
forego his continued employment.21 There was here no discrimination committed by petitioners.
While respondent did not tender her resignation wholeheartedly, circumstances of her own
making did not give her any other option. With due process, she was found to have committed
the grave offense of leaking test questions. Dismissal from employment was the justified
equivalent penalty. Having realized that, she asked for, and was granted, not just a deferred
imposition of, but also an acceptable cover for the penalty.

Respondents profession, the gravity of her infraction, and the fact that she waited until the
close of the school year to challenge her impending resignation demonstrate that respondent
had bargained for a graceful exit and is now trying to renege on her obligation. Associate
Justice Antonio T. Carpio accordingly noted that petitioners should not be punished for being
compassionate and granting respondent's request for a lower penalty. Put differently,
respondent should not be rewarded for reneging on her promise to resign at the end of the
school year. Otherwise, employers placed in similar situations would no longer extend
compassion to employees. Compromise agreements, like that in the instant case, which lean
towards desired liberality that favor labor, would be discouraged.

Based on the foregoing disquisition, we reverse.

WHEREFORE, premises considered, the Petition is GRANTED. The 29 May 2009 Decision and 2
September 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 105576 are REVERSED
and SET ASIDE. The 26 July 2007 Decision rendered by the NLRC is REINSTATED.

SO ORDERED.

Footnotes

1
Penned by Associate Justice Estela M. Perlas-Bernabe (now Supreme Court Associate
Justice) with Associate Justices Mario L. Guaria Ill and Myrna Dimaranan Vidal,
concurring. Rollo, pp. 58-70.

17
Penned by Commissioner Angelita A. Gacutan with Commissioners Raul T. Aquino and
Victoriano R. Calaycay, concurring. Id. at 399-408.

19
Bilbao v. Saudi Arabian Airlines, G.R. No. 183915, 14 December 2011, 622 SCRA 540,
549 citing BMG Records (Phils.) Inc. v. Aparecio, 559 Phil. 80, 94 (2007); Nationwide
Security and Allied Services, Inc. v. Valderama, G.R. No. 186614, 23 February 2011, 644
SCRA 299, 307-308.

21
Gemina, Jr. v. Bankwise Inc. (Thrift Bank), G.R. No. 175365, 23 October 2013, citing
Verdadero v. Barneys Autolines Group of Companies Transport, Inc., G.R. No. 195428,
29 August 2012, 679 SCRA 545, 555, citing further Morales v. Harbour Centre Port
Terminal, Inc., G.R. No. 174208, 25 January 2012, 664 SCRA 110, 117-118.