Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 200898 June 15, 2015

BROWN MADONNA PRESS INC., THADDEUS ANTHONY A. CABANGON,

FORTUNE LIFE INSURANCE COMPANY (now Fortune General Insurance
Corporation) and/or ANTONIO CABANGON CHUA, Petitioners,
vs.
MARIA ROSARIO M. CASAS, Respondent.

DECISION

BRION, J.:

Before the Court is the petition for review on certiorari,1 filed by petitioners Brown Madonna
Press, Inc. (BMPI), Thaddeus Anthony Cabangon (Cabangon), Fortune Life Insurance Company
(now Fortune General Insurance Corporation) and/or Anthony Cabangon Chua (Cabangon
Chua), to challenge the decision and resolution of the Court of Appeals (CA) in CA-G.R. SP No.
116539.

Factual Antecedents

This case sprung from respondent Rosario M. Casas's (Casas) parting of ways with BMPI as its
Vice President for Finance and Administration on January 5; 2007. Casas claims she was forced
to leave her work, while the BMPI management asserts that she requested a graceful exit from
the company to avoid an administrative investigation. The facts leading to this dispute are
outlined below.

On May 1, 1984, Casas was hired as an accounting clerk at Fortune General Insurance, a
member of the ALC Group of Companies. She eventually rose from the ranks; on December 1,
2003, she was transferred to BMPI, another ALC member company, as its Vice President for
Finance and Administration.2

On January 5, 2007, Casas met with Cabangon, BMPI’s company president, and Victoria Nava
(Nava), the Vice President for the Central Human Resource Department of the ALC Group of
Companies. During the meeting, Casas was allegedly told not to report to work anymore starting
January 8, 2007, upon the instructions of Cabangon-Chua, ALC’s Chairman Emeritus. Casas
claims that the reason for her abrupt dismissal was not disclosed to her, but she was promised a
separation pay. She thus packed her things and left.3

BMPI, on the other hand, asserts that it was Casas who requested a graceful exit from the
company during the January 5, 2007 meeting. The meeting was supposedly held to confront
Casas about certain complaints against her, and about the growing rift between her and another
company officer. BMPI asserts that Casas opted to leave the company to avoid an administrative
investigation against her and to give her the chance to jumpstart her career outside the company.
She succeeded in convincing Cabangon to grant her some form of financial assistance as they
were friends.4

Casas no longer reported for work on January 8, 2007, and BMPI, for its part, started the
processing of her clearance.5 On May 17, 2007, Casas sent Cabangon-Chua a letter asking for the
reconsideration of his decision to terminate her employment. Cabangon-Chua did not act on this
letter.6

On July 20, 2007, Casas filed a complaint for illegal dismissal and for payment of separation
pay, backwages, retirement benefits and attorney’s fees before the Regional Arbitration Branch.
The complaint was docketed as NLRC LAC 05-001892-08.7

The Labor Arbiter’s Ruling

Labor Arbiter (LA) Fedriel S. Panganiban dismissed Casas’ complaint for lack of merit, and
ordered BMPI to reinstate her to her previous position without payment of backwages.8

The LA found that Casas was not dismissed from work; she instead abandoned her post. Citing
Chong Guan Trading Inc. v. NLRC9 and Security & Credit Investigation, Inc. v. NLRC,10 the LA
held that no illegal dismissal takes place when the employee has not been notified of his
dismissal; in the absence of any positive and overt act of dismissal, the claim of illegal dismissal
cannot be sustained.11

The LA noted that there was no written notice of Casas’ dismissal, and that it was contrary to
sound business practice to verbally terminate an employee facing investigation for reported
irregularities; BMPI had every reason to retain Casas’ services and to proceed with the
investigation against her. Thus, the LA agreed with BMPI’s contention that Casas left her work
to pre-empt the investigation of complaints against her. Her act of packing her things on January
5, 2007, in fact, demonstrated that she no longer intended to return to work.12

Because no illegal dismissal took place, the LA refused to grant Casas her demanded backwages,
separation pay and retirement benefit. Instead, the LA ordered BMPI to reinstate Casas so that a
proper investigation may be conducted on the irregularities she allegedly committed.13

The NLRC’s ruling

Casas appealed the LA’s ruling with the National Labor Relations Commission (NLRC), which
reversed the LA’s finding that Casas had not been illegally dismissed.14

The NLRC found that Casas’ dismissal had been sufficiently established by evidence on record.
Contrary to the petitioners’ allegations, these records show that Casas’ services had been
terminated by BMPI as she was issued a "Clearance and Quitclaim" document that clearly stated
that she would "cease to be connected with the company at the close of office hours on January
16, 2007." This, along with BMPI’s failure to respond to Casas’ May 17, 2007 letter asking for
the reconsideration of her termination, constitute positive and overt acts of dismissal.15

Casas’ dismissal, according to the NLRC, was without just cause and did not have the benefit of
due process. She was never accorded any hearing or even a show-cause notice, despite the
serious allegations charged against her. Instead, the records show only the "Clearance and
Quitclaim" document, which does not explain why her employment relationship with

BMPI would cease. The NLRC also found that Cabangon and Cabangon-Chua acted with malice
and bad faith in dismissing Casas, and thus held them jointly and severally liable withBMPI for
payment of Casas’ monetary award.16

The Court of Appeals’ Decision

The Court of Appeals affirmed the NLRC’s ruling, and held that it did not commit any grave
abuse of discretion in finding that Casas had been illegally dismissed. The CA cited with
approval the NLRC’s ruling that Casas’ dismissal was without cause and failed to comply with
the procedural requirements of the law.17

The CA explained that Casas is presumed innocent until proven guilty of the charges against her.
Since her alleged infractions had not been investigated, it followed that Casas was dismissed
without cause. The CA also noted that BMPI failed to comply with the two written notices
required prior to a lawful termination of an employee, and hence failed to comply with the
procedural due process that the law requires.18

The present petition

BMPI, Cabangon and Cabangon-Chua assail the CA ruling through the present petition for
review on certiorari,19based on the following arguments:

1) Casas voluntarily left the company to preempt an administrative investigation against

her, and to be able to jumpstart a new career.20

2) The clearance and quitclaim document is a standard operating procedure for a person
who has resigned or retired from the company for the protection of the employer. It
establishes that the issue of employment severance has been settled beforehand. In fact,
BMPI cited the clearance and quitclaim document to explain why Casas’ last pay was
temporarily withheld from her.21

3) BMPI denied receipt of Casas’s letter, and claimed that it did not issue any show cause
order against Casas because she left the company to prevent an administrative
investigation against her.

Her voluntary exit also explains BMPI’s non-compliance with the legal notice requirements.22
In her Comment/Opposition23 to BMPI’s petition, Casas maintained that the CA did not err in
finding that she had been illegally dismissed from work. She emphasized that the quitclaim and
clearance document unilaterally prepared by BMPI was evidence of their expectation to sever
her employment,24 and that BMPI failed to present any resignation letter from her to prove that
she voluntarily left her work.25 Lastly, Casas asserted that Cabangon compelled her to quit her
job, in exchange for a retirement package. This package, however, was never granted to her,
despite her compliance with her end of the agreement that she would no longer report to work
after January 5, 2007.26

Issues

The parties’ arguments present to us the sole issue of whether the Court of Appeals erred when it
found no grave abuse of discretion in the NLRC’s ruling that Casas had been illegally dismissed.

The Court's Ruling

The CA did not err in finding that the NLRC did not commit any grave abuse of discretion in its
decision.

Mode of review in illegal dismissal cases

The present petition involves mixed questions of fact and law, with the core issue being one of
fact. This issue – from which the other issues arise relates to the nature of Casas’ termination of
employment relationship with BMPI. Did she voluntarily resign from, or abandon her work at,
BMPI, or was she summarily dismissed by Cabangon?

This question of fact is an issue that we cannot resolved in a Rule 45 petition, except in the
course of determining whether the CA correctly ruled in determining that the NLRC did not
commit grave abuse of discretion. In other words, the question we ask in resolving the present
case is not whether Casas abandoned her work or was illegally dismissed; instead, we ask
whether the CA erred in not finding grave abuse of discretion in the NLRC’s decision finding
that Casas was dismissed from work.27

Should we find that Casas had indeed been summarily dismissed, the next question involves the
nature of her dismissal – did it comply with the procedural and substantial requirements of the
law, or was it an illegal dismissal that should warrant the award to Casas of backwages and
separation pay?

Keen awareness of the lens used to review this question is critical, given the jurisdiction of this
Court and the nature of review employed in labor cases appealed to the Court under Rule 45. The
Court, save for exceptional cases, is not a trier of facts; as a general rule, it resolves only
questions of law. Additionally, the NLRC’s decision is final and executory, and can be reviewed
by the CA only when the NLRC committed a grave abuse of discretion amounting to a lack or
excess of jurisdiction.28
Thus, the CA, in a Rule 65 petition assailing the NLRC’s decision, examines whether the NLRC
acted in such a "capricious and whimsical exercise of judgment so patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law."29 This is
in contrast with appeals reaching the CA through a Rule 45 petition, where it has more leeway in
reviewing both questions of fact and of law, and where the appealed decision may be reversed
because of an error in judgment.30

Once the CA decision reaches the Court through a Rule 45 petition, the question presented
before us carries with it the mode of review applied when the case has been appealed before the
CA. Although we are asked to determine whether the CA committed an error in judgment, we
necessarily have to consider that the judgment made by the CA involves the question of
determining grave abuse of discretion. Unlike other petitions for review on certiorari where we
determine errors of law (and in exceptional cases, errors of fact), our appellate jurisdiction in
labor cases involves the determination of whether there had been an error in finding grave abuse
of discretion on the part of the NLRC.31

With these considerations in mind, the onus probandi in assailing a question of fact as
determined by the NLRC and upheld by the CA becomes heavier. Not only must an exceptional
circumstance allowing the Court to review a question of fact exist; it must also be shown that the
NLRC’s resolution of the factual issue must have been tainted with grave abuse of discretion,
such that the CA erred in affirming it.

Indeed, the labor arbiter and the NLRC in the present case arrived at factual conclusions ―the
LA found that Casas had not been dismissed, but the NLRC reversed this finding. While the
contradicting findings of the LA and the NLRC may be a ground to re-evaluate the factual
question of whether Casas abandoned her work or had been dismissed, we find no reason to
dispute the NLRC’s conclusion.

The CA did not err in affirming the

NLRC’s factual finding that Casas
had been dismissed from work

We support the CA in finding no grave abuse of discretion in the NLRC’s factual conclusion that
Casas had been dismissed from work.

In illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal
was legal.1âwphi1However, to discharge this burden, the employee must first prove, by
substantial evidence, that he had been dismissed from employment.32

The CA, in affirming the NLRC’s conclusion that Casas had been dismissed, gave emphasis to
the existence of two documents on record: first, the unsigned clearance and quitclaim document
unilaterally prepared by BMPI, and second, the letter Casas sent to Cabangon-Chua, asking the
latter to reconsider her termination.

These pieces of evidence sufficiently establish Casas’ dismissal from the company.
The Clearance and Quitclaim document discloses that Casas would "cease to be connected with
the company at the close of office on January 16, 2007." The document, which was even
introduced as evidence by the petitioners, was prepared unilaterally at Cabangon’s instructions. It
shows the company’s intent to sever its employment relationship with Casas. Considered
together with the letter Casas sent Cabangon-Chua asking for her reinstatement on May 17,
2007, these documents back Casas’sr assertion that she was compelled to leave her job on
January 5, 2007.

As their main defense, BMPI and Cabangon claim that they never dismissed Casas from work,
and that she instead requested a graceful exit from the company.

We do not find any merit in the petitioners’ contention.

Jurisprudence has established that employers interposing their employee’s resignation as a

defense from illegal dismissal cases have the burden of proving that the employee indeed
voluntarily resigned.33 Resignation — the formal pronouncement or relinquishment of a position
or office — is the voluntary act of an employee compelled by personal reason(s) to disassociate
himself from employment.34 It is done with the intention of relinquishing an office, accompanied
by the act manifesting this intent.35

In the present case, the petitioners allege that Casas asked for a graceful exit from the company
to avoid an administrative investigation against her. They claim that Casas had grossly failed to
manage and take control of BMPI’s ex-deal assets, which caused the company serious losses.
When Casas was confronted about these reports of mismanagement, she voluntarily resigned
from office in exchange for separation pay.

In our view, the NLRC and CA correctly disregarded these allegations in concluding that Casas
had been terminated from office.

First, the pieces of evidence that the petitioners submitted are insufficient to establish their claim.
To prove that Casas voluntarily abandoned her work, the petitioners submitted affidavits from
their employees, Domingo Almoninia, Jr. and Victoria C. Nava, who both testified to the events
leading to a private conversation between Casas and Cabangon.

Domingo Almoninia, Jr., BMPI’s former Chief Audit Executive, Testified36 that he had informed
Cabangon of reports regarding Casas’s mismanagement of BMPI’s ex-deal assets on January 5,
2007. Casas, together with Vice President for Human Resources Victoria Nava, were then
summoned to Cabangon’s room. According to Almoninia, he witnessed Cabangon confront
Casas regarding reports about her mismanagement and certain unauthorized transactions. In the
course of the discussion, Cabangon allegedly told Casas that the reports against her would have
to be investigated, and instructed her to settle her differences with a certain Mr. Tayag. Casas
asked Cabangon if she was being dismissed, to which the latter answered in the negative. Both
Almoninia and Nava were then asked to leave the room.

Nava, on the other hand, corroborated Almoninia’s narration, and added insinuations that Casas
had been having problems in the company.37
In considering their affidavits, we emphasize that neither Almoninia nor Nava were present in
the private conversation that ensued between Cabangon and Casas, after the confrontation that
they witnessed. This leaves Cabangon’s claim that Casas asked for a graceful exit from the
company uncorroborated; what stands is Casas’ statement contradicting the claim that she had
not been dismissed from her job.

Second, Cabangon failed to provide any documentary evidence supporting Casas’ voluntary
resignation. BMPI failed to show any resignation letter from Casas. The Clearance and
Quitclaim document, which shows Casas’ severance from the company, does not contain her
signature.38 Neither was Casas given any return to work order, notice of infraction, or notice of
termination, all of which could have supported BMPI’s theory that Casas was never prevented
from going back to work.

Third, Cabangon, Almoninia and Nava’s testimonies show that Casas could have entertained the
motive to resign from her work, but does not prove her intent to leave her office. Intent to
relinquish one’s office is determined from the acts of an employee before and after the alleged
resignation. Casas’ acts after allegedly resigning from work negate this intent: she wrote a letter
asking Cabangon-Chua to reconsider her termination from office; she refused to sign the
Clearance and Quitclaim document; and she filed an illegal dismissal case against her employers.

This conclusion brings us to the question of whether the CA erred in affirming the NLRC’s
conclusion that Casas had been illegally terminated from work.

The CA did not err in affirming the

NLRC’s conclusion that Casas’
dismissal violated the procedural
requirements of the Labor Code

In ruling that Casas’ dismissal had been contrary to law, both the CA and the NLRC emphasized
that her sudden termination from office was without just cause and violated procedural due
process.

According to the NLRC, despite the serious allegations that the BMPI lodged against Casas, it
never asked her to explain her acts, and instead opted to sever its employment relations with her.
On this basis alone, the NLRC concluded that Casas’ dismissal had been illegal and non-
compliant with procedural due process.39

The CA affirmed this conclusion by pointing out that Casas had been dismissed prior to any
probe on her reported violation of company rules and regulations.40

In determining whether an employee’s dismissal had been legal, the inquiry focuses on whether
the dismissal violated his right to substantial and procedural due process. An employee’s right
not to be dismissed without just or authorized cause as provided by law, is covered by his right to
substantial due process. Compliance with procedure provided in the Labor Code, on the other
hand, constitutes the procedural due process right of an employee.41
The violation of either the substantial due process right or the procedural due process right of an
employee produces different results. Termination without a just or authorized cause renders the
dismissal invalid, and entitles the employee to reinstatement without loss of seniority rights and
other privileges and full backwages, inclusive of allowances, and other benefits or their monetary
equivalent computed from the time the compensation was not paid up to the time of actual
reinstatement.

An employee’s removal for just or authorized cause but without complying with the proper
procedure, on the other hand, does not invalidate the dismissal. It obligates the erring employer
to pay nominal damages to the employee, as penalty for not complying with the procedural
requirements of due process.42

Thus, two separate inquiries must be made in resolving illegal dismissal cases: first, whether the
dismissal had been made in accordance with the procedure set in the Labor Code; and second,
whether the dismissal had been for just or authorized cause.

There can be no doubt that the procedural requirements had not been complied with in the
present case: shortly after a private conversation between Cabangon and Casas, Casas took her
belongings from the office and left the building. As explained earlier, Casas’s acts after this
private conversation reveal that she had been summarily dismissed: Casas gave no resignation
letter, refused to sign the Clearance and Quitclaim document that the company issued, and sent a
letter asking for her reinstatement.

Notably, the private conversation that led to Casas’s summary dismissal did not conform, in any
way, to the procedural due process requirements embodied in Rule XIV of the Omnibus Rules
Implementing the Labor Code, viz:

RULE XIV Termination of Employment

SECTION 1. Security of tenure and due process. — No workers shall be dismissed except for a
just or authorized cause provided by law and after due process.

SECTION 2. Notice of dismissal.— Any employer who seeks to dismiss a worker shall furnish
him a written notice stating the particular acts or omission constituting the grounds for his
dismissal. In cases of abandonment of work, the notice shall be served at the worker's last known
address.

xxx

SECTION 5. Answer and hearing. — The worker may answer the allegations stated against him
in the notice of dismissal within a reasonable period from receipt of such notice. The employer
shall afford the worker ample opportunity to be heard and to defend himself with the assistance
of his representative, if he so desires.

SECTION 6. Decision to dismiss. — The employer shall immediately notify a worker in writing
of a decision to dismiss him stating clearly the reasons therefor.
Cabangon failed to show any written notice provided to Casas informing her of the charges
against her, and neither had she been informed in writing of her dismissal and the reasons behind
it.

Even assuming arguendo that Casas had indeed voluntarily abandoned her work – an
uncorroborated claim by Cabangon – Cabangon had the duty to give Casas a written notice of the
grounds leading to her dismissal.

Thus, Cabangon failed to comply with the two-notice requirement under the law, resulting in a
violation of Casas’s right to procedural due process. This conlusion leads us to the next query:
whether her dismissal was for just cause.

The CA did not err in finding no

grave abuse of discretion in the
NLRC’s decision to hold that Casas
had been dismissed without just
cause

According to the CA, Casas’s dismissal had not been for just cause, because at the time she was
dismissed, not one of the charges against her had been proven. Casas was, at the time of her
dismissal, presumed innocent until proven guilty; thus, there existed no just cause to terminate
her employment at the time she was summarily dismissed.43

In reaching this conclusion, the CA reviewed whether the NLRC acted with grave abuse of
discretion in holding that Casas’s dismissal had no just cause. The NLRC, in its decision, held
that Casas’s dismissal had not been for just cause because she was not even allowed to explain
the supposed acts that had been inimical to BMPI’s interests.44

In affirming the NLRC’s decision, the CA clarified the application of procedural and substantial
due process in the present case: Casas had not been given the two-notice requirement in the law,
and hence, her procedural due process rights had been violated. And because not one of the
allegations against her had been proven at the time she was summarily dismissed, there existed
no cause to terminate her services.

We find that the CA did not err in making this ruling.

To reiterate, the CA reviews the decision of the NLRC using the prism of grave abuse of
discretion, and not through an appeal. Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction. In other
words, power is exercised in an arbitrary or despotic manner so patent or so gross that it amounts
to an evasion of a positive duty or to a virtual refusal to act at all in contemplation of law.

Thus, for a decision to be in grave abuse of discretion, it should involve not just an error of law
or an error of fact, but errors that are so patent or gross that the decision reached is a decision
that had not been made in contemplation of law at all.
No such error exists in the present case.

We have, in the past, affirmed the NLRC in ruling that an employee’s act not proven at the time
he had been dismissed does not constitute just cause for his dismissal.45 In other words, for an act
to justify an employee’s dismissal, it should have been proven, with substantial evidence,46 at the
time he was dismissed. Otherwise, the dismissal would not be for just cause.

This conclusion finds support in cases emphasizing that an unsubstantiated accusation will not
ripen into a holding that there is just cause for dismissal.47 A mere accusation of wrongdoing is
not sufficient cause for a valid dismissal of an employee. The facts for which a dismissal is based
should be backed by substantial evidence at the time the employee is dismissed, and not at the
time his dismissal is being questioned before the courts.

In the present case, the petitioners allege that Casas had committed various infractions that
would have warranted disciplinary action against her. At the time that Casas was dismissed,
however, these alleged infractions were mere speculations. The present petition for review on
certiorari admits this reality in two instances: first, in the body of the petition itself stating that at
the time of the January 5, 2007 meeting, disciplinary proceedings had yet to be initiated against
Casas and that the reports against her would still have to be verified;48 and second, through its
annexes,49which provided that the result of the investigation in the ex-deal assets that Casas
allegedly mismanaged was produced only on February 17, 2007, or a full month after Casas’
dismissal.

Thus, at the time Cabangon asked Casas to leave her employment, all he had as basis for Casas’s
dismissal were speculations. Worse, Cabangon’s summary dismissal of Casas left her with little
opportunity to adequately defend herself from the allegations against her.

In these lights, we support the CA in holding that Casas’ summary dismissal had not been for
just cause.

Just cause must be proven with

substantial evidence at the time of
dismissal

At its core, substantive due process guarantees a right to liberty that cannot be taken away or
unduly constricted, except through valid causes provided in the law.50

The concepts of procedural and substantive due process had been carried over and applied to
illegal dismissal cases, although notably, employers are not governmental bodies to which these
rights usually refer. Agabon v. NLRC51 described the due process required in dismissing
employees as statutory – requirements that the law imposes on employers to comply with, in
contrast to constitutional due process rights that guarantee against overreach from the
government.

Although statutory in nature, the procedural and substantive due process requirements in illegal
dismissal cases stem from the protection that the Constitution provides labor – the Constitution
has tasked the State to promote the workers’ security of tenure, humane conditions of work, and
a living wage.52 These guarantees, as well as a host of other rights and responsibilities,53 find
implementation through the Labor Code, which fleshed out the concept of security of tenure54 as
the continuance of regular employment until an employee's services are terminated because of
just or authorized causes enumerated in the law.

Thus, despite the differences in origin and application between constitutional due process rights
and the statutory requirements in the Labor Code, we have applied concepts implementing
constitutional due process rights to the statutory due process requirements of the Labor Code.
We did this in the present case, when we emphasized the need for substantial evidence to support
the just cause for the employee's dismissal at the time her services were terminated. In the same
way that the crime charged against an accused must first be proven before his or her right to
liberty is taken away, or that a government employee's infraction must first be proven before the
accused is deprived of the right to continue !o hold office, so too, must just cause against an
employee be proven before he or she may be deprived of a means of livelihood. Otherwise, the
employee's right to substantive due process would be violated.

In these lights, and in order to give full effect to the embodiment of substantive due process in
illegal dismissal cases, it is necessary to rule, that an employee, in this present case Casas, cannot
be terminated from service without sufficient substantial evidence of the just cause that would
merit her dismissal.

WHEREFORE, premises considered, the petition is DISMISSED, and the Court of Appeals
decision in CA-G.R. SP No. 116539 is AFFIRMED.

SO ORDERED.

SECOND DIVISION

November 23, 2016

G.R. No. 207315

INTERADENT ZAHNTECHNIK PHILIPPINES, INC., BERNARDINO G. BANTEGUI,

JR. and SONIA J. GRANDEA, Petitioners
vs.
REBECCA F. SIMBILLO, Respondent

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 assails the January 4, 2013 Decision2 and May 24; 2013
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 120474, which set aside the March
24, 20114 and May 19, 20115Resolutions of the National Labor Relations Commission (NLRC)
in NLRC LAC No. 12-003076-10. The NLRC affirmed the October 29, 2010 Decision6 of the
Labor Arbiter declaring respondent Rebecca F. Simbillo's (Simbillo) dismissal by petitioners
Interadent Zahntechnik Philippines, Inc. (Interadent) and its officers Bernardino G. Bantegui, Jr.
(Bantegui) and Sonia J. Grandea (Grandea), as President and Human Resource & Organizational
Development Manager, respectively, valid on the ground of loss of trust and confidence.

Antecedent Facts

Simbillo worked at Interadent as a rank-and-file employee from May 2, 2004 up to March 2006.
In April 2008, she was rehired by Interadent as its Accounting Manager. On April 16, 2010) she
was promoted to the position of Finance and Accounting Manager. She was also Interadent' s
Treasurer upon being elected by the Board of Directors on March 31, 2010.

On July 23, 2010, Interadent sought a company-wide implementation of the following security
meas1rres: body frisking and bag/personal items inspection of all employees upon ingress and
egress of office, disconnection of all USB ports and prohibition of cellular phone usage.7 The
immediate implementation of these security procedures was brought about by an alleged leakage
of security information uncovered by Interadent's external auditors.

On July 28, 2010, upon the directive of Bantegui, all network and internet connections in
Interadent's Accounting Department were removed and disabled. Simbillo's electronic mail
(email) account was likewise suspended.8

On July 29, 2010, petitioners served Simbillo a Memorandum9 (Notice to Explain) requiring her
to submit a written explanation and to attend an administrative hearing on August 2, 2010,
regarding a message she posted on her Facebook account "referring to company concerns with
the Bureau of Internal Revenue (BIR) and insulting statements against a co-worker." In the
Notice to Explain, Sirr1billo was reminded that as Treasurer, as well as Finance and Accounting
Manager, she should observe the highest degree of confidentiality in handling sensitive
information. She was preventively suspended for seven days effective July 29, 2010 to August 6,
2010.

On the following day, Simbillo, through counsel, wrote a reply-letter10 arguing that she was
already constructively dismissed even prior to her receipt of the Notice to Explain considering
the discriminatory acts committed by petitioners starting July 23, 2010 when certain security
procedures were directed exclusively and solely against her. Simbillo claimed that the Notice to
Explain was defective and was only used to disguise the intent to dismiss her; hence there was no
need for her to submit an answer or attend the hearing. Simbillo further asserted that she
committed no violation of any rule or law relative to the message she posted on her personal and
private Facebook account that would justify any disciplinary action.

In a letter11 dated August 6, 2010, petitioners extended Simbillo's suspension up to August 25,
2010 in view of her failure to submit a written explanation and to attend the scheduled hearing.
In a reply-letter12 dated August 9, 2010, Simbillo reiterated her claim of constructive dismissal
and that there was no need for her to answer and attend the hearing.
On August 9, 2010, Simbillo filed with the Labor Arbiter a Complaint13 for constructive illegal
dismissal, non-payment of service incentive leave pay, 13th month pay, illegal suspension, claims
for moral and exemplary damages and attorney's fees against petitioners.

On August 24, 2010, petitioners issued a Second Notice14 informing Simbillo of her termination
from service effective August 25, 2010 on the ground of loss of trust and confidence. Petitioners
found Simbillo to have disclosed sensitive and confidential information when she posted on her
Facebook account on July 15, 2010, the following:

Sana maisip din nila na ang kompanya kailangan ng mga taong di tulad nila, nagtatrabaho at di
puro #$, *% ang pinaggagagawa, na kapag super demotivated na yung tao nayun baka iwan
narin nya ang kawawang kumpanya na pinagpepyestahan ng mga b ).!'.....: Wala na ngang
credibility wala pang conscience, portraying so respectable and so religious pa. Hay naku
talaga, nakakasuka, puro nalang animus lucrandi ang laman ng isip.15

Parties' Respective Positions

Simbillo asserted that her dismissal was without just cause or compliance with procedural due
process since the alleged loss of trust and confidence was based on self-serving allegations and
mere speculation. She averred that the Facebook entry cannot support the charge of breach of
trust since it did not mention Interadent or any of its personnel. She maintained that the message
actually pertained to a friend's predicament in another company. She explained that the tenn "ng
mga b_i_r" in the Facebook message was short for "bwitre" and certainly did not refer to the
BIR. She claimed that the sentiments that she expressed did not refer to herself or her work. She
denied having been penalized for a past infraction which involved disclosure of confidential
information.

Petitioners, for their part, denied Simbillo' s claim of constructive dismissal for absence of proof.
They asserted that the security measures were implemented company-wide without favoring or
discriminating against anyone.

Moreover, Simbillo was terminated for a valid and just cause and with compliance with
procedural due process. As a managerial and confidential employee of Interadent, the highest
degree of professionalism and confidentiality was expected of Simbillo and the presence of the
basis for the loss of the trust and confidence reposed upon her has warranted her dismissal.
Petitioners posited that Simbillo's Facebook message implying that the BIR is "feasting on" the
company was derogatory because it compromised the company's reputation, making it
vulnerable to ridicule and suspicion particularly in its dealings with government agencies. Such
act violated the company's Code of Conduct as well as the Code of Ethics for Professional
Accountants. Furthermore, Simbillo's second infraction of divulging sensitive and confidential
financial information has merited the penalty of termination.

Petitioners maintained that they observed due process by serving Simbillo both the Notice to
Explain and the Second Notice of Termination. Simbillo was afforded the opportunity to answer
but instead waived her chance to do so by opting not to submit an answer and attend the hearing.
Ruling of the Labor Arbiter

In a Decision16 dated October 29, 2010, the Labor Arbiter ruled that Simbillo was not
constructively dismissed because she failed to prove her claim of discrimination. The security
measures were implemented as part of management prerogative to preserve the integrity of
Interadent's network system and encompassed all employees as gleaned from a poster17 Simbillo
herself submitted. The Labor Arbiter sustained Simbillo's preventive suspension since her
continued presence during investigation posed an imminent threat to the company's confidential
information and records.

The Labor Arbiter also ruled that Simbillo was validly dismissed. He held that there was no need
for an actual leakage of confidential information for Simbillo to be held accountable; her mere
laxity and carelessness in posting a statement on her Facebook account that exposed the
company to ridicule already rendered her unworthy of the trust and confidence reposed on her.
The dispositive portion of the Decision reads:

WHEREFORE, premises considered, we uphold the legality of the dismissal of complainant. No

pronouncement as to costs.18

Ruling of the National Labor Relations Commission

In a Resolution19 dated March 24, 2011, the NLRC affirmed the ruling of the Labor Arbiter that
Simbillo was not constructively dismissed but was validly dismissed for loss of trust and
confidence. The NLRC held that the Facebook entry was "indeed alanning" as it compromised
Interadent's reputation and was sufficient basis for the finding of willful breach of trust. It also
ruled that Simbillo was not denied due process and that she was the one who did not avail herself
of the opportunity to explain her side. The dispositive portion of the NLRC ruling reads as
follows:

WHEREFORE, premises considered, the appeal is hereby DISMISSED, and the appealed
decision AFFIRMED.

SO ORDERED.20

Simbillo filed a Motion for Reconsideration which was, however, denied in the NLRC
Resolution21 dated May 19, 2011.

Ruling of the Court of Appeals

Aggrieved, Simbillo filed a Petition for Certiorari22 before the CA ascribing upon the NLRC
grave abuse of discretion amounting to lack or in excess of jurisdiction in upholding the legality
of her dismissal.

The CA, in a Decision23 dated January 4, 2013, found merit in Simbillo's Petition.1âwphi1 It
ruled that to constitute a valid cause for dismissal, the breach of trust should be willful and
intentional, which petitioners failed to prove in this case. It rejected petitioners' allegation that
Simbillo divulged confidential company information. It noted that the Facebook entry did not
contain any corporate record or confidential information but was mere1y "a vague expression of
feelings or opinion towards a person or entity, which was not even identified with certainty ."24 It
pointed out that the term "b_i_r_" in the entry cannot be construed as the acronym "B.I.R." or the
Bureau of Internal Revenue. Finding no willful breach of trust, the CA held that Simbillo's
dismissal was illegal and ordered the payment of her separation pay in lieu of reinstatement due
to strained relations of the parties plus backwages. The dispositive portion of the CA Decision
reads:

WHEREFORE, the instant petition of GRANTED. The Resolutions dated March 24, 2011 and
May 19, 2011 of the National Labor Relations Commission, are hereby SET ASIDE. Finding
private respondent InteraDent Zahntechnik Philippines, Inc. to have dismissed petitioner
Rebecca Simbillo without valid or just cause, InteraDent is hereby ordered to pay her a
separation pay in lieu of reinstatement, of one (1) month salary for every year of service plus full
backwages, inclusive of allowances and other benefits or their monetary equivalent from the time
her compensation was withheld until the finality of this decision.

SO ORDERED.25

Petitioners filed a Motion for Reconsideration but was denied by the CA in its Resolution26 dated
May 24, 2013.

Hence, petitioners filed this Petition for Review on Certiorari27 and a Motion for Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction28 to restrain the
implementation of the CA Decision and Resolution.

Issues

Petitioners raise the question on whether the CA may reverse the factual declarations of both the
Labor Arbiter and the NLRC that there was substantial evidence of willful and intentional breach
of trust. According to petitioners, the CA has no power to revisit the findings of fact of the
NLRC by making the following erroneous interpretations in its Decision; a) that the Facebook
entry "does not contain any corporate record or confidential information;" b) that the entry is "[a
]t worst, x x x a vague expression of feelings or opinion towards a person or entity, which was
not even identified with certainty;"29 and (c) that the term "b_ i_r_ " "does not, in any way,
represent the acronym 'B.I.R.' or Bureau of Internal Revenue."30 In essence, they insist that, on
account of such Facebook post, Simbillo has failed to observe the degree of cautiousness
expected of a manager like herself and therefore may be dismissed on the ground of loss of trust
and confidence.

Our Ruling

The Petition lacks merit.

As a rule, factual findings of quasi-judicial agencies such as the NLRC are generally accorded
not only respect but also finality because of the special knowledge and expertise gained by these
agencies from handling matters under their specialized jurisdiction.31 However, well-settled is
the rule that for want of substantial basis, in fact or in law, these factual findings cannot be given
the stamp of finality and conclusiveness normally accorded to it.32 Hence, the CA can review the
factual findings or legal conclusions of the NLRC and "is not proscribed from 'examining
evidence anew to determine whether the factual findings of the NLRC are supported by the
evidence presented and the conclusions derived therefrom accurately ascertained' ."33 In the
exercise of its power to review decisions of the NLRC, the CA can make its own factual
determination when it finds that the NLRC gravely abused its discretion in overlooking or
disregarding the evidence which are material to the controversy.34 In the instant case, the Court
agrees with the CA that the conclusions arrived at by the Labor Arbiter and the NLRC are
manifestly erroneous because the evidence does not support their findings.

As a managerial employee, the existence of a basis for believing that Simbillo has breached the
trust of petitioners justifies her dismissal.35 However, to be a valid ground, loss of trust and
confidence must be based on willful breach of trust, that is, done intentionally, knowingly and
purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly,
heedlessly, or inadvertently. 36

It bears emphasizing that the right of an employer to dismiss its employees on the ground of loss
of trust and confidence must not be exercised arbitrarily, For loss of trust and confidence to be a
valid ground for dismissal, it must be substantial and founded on clearly established facts. Loss
of confidence must not be used as a subterfuge for causes which are improper, illegal or
unjustified; it must be genuine, not a mere afterthought, to justify earlier action taken in bad
faith. Because of its subjective nature, this Court has been very scrutinizing in cases of dismissal
based on loss of trust and confidence because the same can easily be concocted by an abusive
employer. x x x37

In this case, the act alleged to have caused the loss of trust and confidence of petitioners in
Simbillo was her Facebook post which supposedly suggests that Interadent was being "feasted
on" by the BIR and also contains insulting statements against a co-worker and hence has
compromised the reputation of the company. According to petitioners, there was disclosure of
confidential information that gives the impression that Interadent is under investigation by the
BIR for irregular transactions. However, we agree with the CA's observation that the Facebook
entry did not contain any corporate record or any confidential information. Otherwise stated,
there was really no actual leakage of information. No company information or corporate record
was divulged by Simbillo.

Simbillo' s failure to substantiate her claim that the Face book entry was posted for a friend who
consulted her on a predicament she has with her company and that the term "b_i_r_" represents '
' bwitre" will not weaken her case against petitioners. It must be emphasized at this point that in
illegal dismissal cases, the burden of proof is upon the employer to show that the employee's
dismissal was for a valid cause.38 "The employer's case succeeds or fails on the strength of its
evidence and not on the weakness of that adduced by the employee, in keeping with the principle
that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence
presented by them."39The Facebook entry did not mention any specific name of
employer/company/ government agency or person. Contrary to petitioners' insistence, the
intended subject matter was not clearly identifiable. As acknowledged by petitioners themselves,
Simbillo's Facebook account contained a list of her former and present employers. If anything,
the entry would merely merit some suspicion on the part of Interadent being the present
employer, but it would be far-fetched to conclude that Interadent may be involved in anomalous
transactions with the BIR. Clearly, petitioners' theory was based on mere speculations.

If at all, Simbillo can only be said to have acted "carelessly, thoughtlessly, heedlessly or
inadvertently" in making such a comment on Facebook; however, such would not amount to loss
of trust and confidence as to justify the termination of her employment. When the breach of trust
or loss of confidence conjectured upon is not borne by clearly established facts, as in this case,
such dismissal on the ground of loss of trust and confidence cannot be upheld.

Petitioners’ contention that Simbillo’s second offense of divulging confidential company

information merits her termination deserves scant consideration.1âwphi1 Other that self-serving
allegations of petitioners, there was no concrete proof that Simbillo had a past infraction
involving disclosure of confidential information of the company. If indeed Simbillo has been
found guilty for not being trustworthy due to an incident that happened in July 2009 as alleged
by petitioners, she should not have been promoted to a higher position as Finance and
Accounting Manager in April 2010 and elected as Treasurer in March 2010. Moreover, she was
given salary and merit increases for the period covering June 2009-May 2010,40 which is an
indication of her high performance rating.

All told, we find no reversible error on the CA in finding that Simbillo was illegally dismissed.
The allegation of loss of trust and confidence was not supported by substantial evidence, hence,
we find Simbillo 's dismissal unjustified. A lighter penalty would have sufficed for Simbillo's
laxity and carelessness. As this Court has held, termination of employment is a drastic measure
reserved for the most serious of offenses.41

WIIEREFORE, the Petition is DENIED. The January 4, 2013 Decision and May 24, 2013
Resolution of the Court of Appeals in CA-G.R. SP No. 120474 are AFFIRMED.

SO ORDERED.

FIRST DIVISION

G.R. No. 215555, July 29, 2015

CENTRAL AZUCARERA DE BAIS, INC. AND ANTONIO STEVEN L.

CHAN, Petitioners, v. JANET T. SIASON, Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated March 14, 2014 and the
Resolution3 dated November 25, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 130708,
which affirmed the Decision4 dated December 26, 2012 and the Resolution5 dated April 30, 2013
of the National Labor Relations Commission (NLRC) in NLRC LAC No. 07-001998-12
declaring respondent Janet T. Siason (Siason) to have been constructively dismissed by
petitioners Central Azucarera de Bais, Inc. (CABI) and Antonio Steven L. Chan (Chan), the
incumbent president of CABI (collectively, petitioners).

The Facts

The instant case stemmed from a complaint for illegal dismissal, nonpayment of wages,
separation pay, service incentive leave pay, retirement benefits, emergency cost of living
allowance, with damages and attorney's fees filed by Siason against petitioners before the NLRC,
docketed as NLRC-NCR-CASE No. 11-17043-11.6redarclaw

Siason alleged that sometime in July 1988, petitioners hired her as a Purchasing Assistant, and
eventually, promoted her to the position of Purchasing Officer.7 On October 3, 2011, Chan
confronted her on the propriety of the delivery of a machine part via air freight in lieu of a
previously approved sea freight. She responded by explaining to Chan that such delivery
benefited the company, but the latter considered the same as a "big infraction of the rules and
regulations of [CABI]."8 Later that day, Siason received a letter9 signed by Chan informing her
that she had been committing various purchasing policy violations over the past 12 months
which are very unfavorable to CABI, and that the management could no longer tum a blind eye
on such violations; as such, she should tender her immediate resignation from CABI, "rather than
[to] force [his] hand."10 On October 4, 2011, Siason received another letter,11 this time from
CABI's legal officer, Atty. Suzette A. Ner-Tiangco (Atty. Ner-Tiangco), following up the
former's action regarding Chan's letter. Consequently, Siason wrote a resignation letter,12 stating
that she was tendering her resignation because Chan told her to do so. However, petitioners
refused to accept the same,13 thus, Siason was constrained to draft another resignation
letter14 which was acceptable to petitioners. On November 14, 2011, Siason filed the instant
complaint against petitioners alleging that Chan forced her to resign as shown by his October 3,
2011 letter.15redarclaw

In their defense,16 petitioners claimed that Siason was not constructively dismissed since she
voluntarily resigned from CABI.17 They explained that CABI's accounting department audited
the purchases made by Siason and discovered irregularities in the procurement of several
supplies, such as when she increased price quotations without the approval of CABI or of the
supplier concerned.18 They then averred that in view of her long tenure in CABI and close
relationship with Chan, she was given the option of resigning instead of facing an administrative
investigation which would eventually result in her termination.19Lastly, they asserted that Siason
shredded all company documents in her possession and made unauthorized deletion of files
stored in her office-issued computer in order to cover her misdeeds.20redarclaw

The LA Ruling

In a Decision21 dated May 24, 2012, the Labor Arbiter (LA) dismissed Siason's complaint for
lack of merit. Nevertheless, Siason was awarded separation pay equivalent to one (1) month pay
for every year of service in the amount of P923,210.00 in the interest of equity and
compassion.22redarclaw
In ruling for petitioners, the LA found that petitioners did not constructively dismiss Siason,
since the latter voluntarily resigned from her job. In this relation, the LA opined that if Siason
really had no intention to resign, no amount of persuasion or instruction shall suffice to compel
her to tender her resignation.23 Her voluntary resignation notwithstanding, the LA opted to award
separation pay in Siason's favor in view of her long tenure in CABI as well as her humility,
respect, and obedience to the instruction of her superior when she was asked to
resign.24redarclaw

Dissatisfied, both parties appealed25 to the NLRC. Specifically, petitioners questioned the award
of separation pay in Siason's favor, while the latter assailed the finding that she voluntarily
resigned.26redarclaw

The NLRC Ruling

In a Decision27 dated December 26, 2012, the NLRC reversed the LA ruling and held that
petitioners constructively dismissed Siason.

Accordingly, it ordered petitioners to pay Siason the aggregate amount of P1,736,041.95

representing backwages, separation pay, and attorney's fees.28redarclaw

Contrary to the LA's findings, the NLRC found that Chan coerced Siason to resign, as may be
gleaned from his October 3, 2011 letter addressed to the latter. Further, the NLRC pointed out
that petitioners' disposition to force Siason into resignation became more evident when taken in
conjunction with Atty. Ner-Tiangco's October 4, 2011 letter pressuring Siason to tender her
immediate resignation.29redarclaw

Petitioners moved for reconsideration30 which was, however, denied in a Resolution31 dated
April 30, 2013. Aggrieved, they elevated the case to theCA via petition for certiorari.32redarclaw

The CA Ruling

In a Decision33 dated March 14, 2014, the CA affirmed the NLRC ruling. It held that petitioners
constructively dismissed Siason, considering that the latter would not have resigned from her job
had it not been for the pressure exerted by Chan on her.34 The CA added that Siason's filing of a
complaint for constructive dismissal right after her severance from office negated the
voluntariness of her resignation.35redarclaw

Petitioners moved for reconsideration,36 which was, however, denied in a Resolution37 dated
November 25, 2014; hence, this petition.

The Issue Before the Court

The issue for the Court's resolution is whether or not the CA correctly affirmed the NLRC ruling
finding Siason to have been constructively dismissed by petitioners.

Essentially, petitioners contend that there is no constructive dismissal to speak of, given that they
merely afforded Siason the option to have a "graceful exit" by tendering her resignation instead
of facing administrative investigation and eventual sanctions for the irregularities she committed
regarding the purchase of supplies.38 For her part, Siason maintains that petitioners forced her to
resign from CABI, and thus, she was constructively dismissed.39redarclaw

The Court's Ruling

The appeal is meritorious.

Resignation is the formal pronouncement or relinquishment of a position or office. It is the

voluntary act of an employee who is in a situation where he believes that personal reasons cannot
be sacrificed in favor of the exigency of the service, and he has then no other choice but to
disassociate himself from employment. The intent to relinquish must concur with the overt act of
relinquishment; hence, the acts of the employee before and after the alleged resignation must be
considered in determining whether he in fact intended to terminate his employment. In illegal
dismissal cases, it is a fundamental rule that when an employer interposes the defense of
resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily
resigned.40redarclaw

In contrast, constructive dismissal exists where 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.41 It must be noted, however, that bare allegations of
constructive dismissal, when uncorroborated by the evidence on record, cannot be given
credence.42redarclaw

Guided by the foregoing considerations, the Court finds that the CA erred in affirming the NLRC
ruling, which found Siason to have been constructively dismissed by petitioners.

A judicious review of the records reveals that CABI's accounting department indeed made an
audit of the purchases made by the company through its Purchasing Officer, Siason. This
resulted in the discovery of a number of questionable discrepancies in several purchasing
transactions undertaken by Siason, consisting in different price quotations for identical items
contained in various purchase documents prepared by Siason herself.43redarclaw

Taking into consideration Siason's long tenure at CABI, as well as her close relationship with
Chan, the latter sent her the October 3, 2011 letter asking her to resign "rather than [to] force
[his] hand"44 - which should be construed as Chan telling Siason to resign or be faced with an
administrative complaint. On October 4, 2011, Atty. Ner-Tiangco sent Siason another letter,
essentially confirming if the latter was going to resign or if she is subjecting herself to an
administrative investigation. Ultimately, Siason chose to tender her resignation to save herself
from the trouble of besmirching her employment record.

The foregoing facts belie Siason's argument that petitioners constructively dismissed her. These
circumstances show that she was given the option to voluntarily resign from CABI, instead of
dealing with an investigation which might result in her dismissal. Verily, Chan's decision to give
Siason a graceful exit rather than to file an action for redress is perfectly within the discretion of
the former; as it is not uncommon that an employee is permitted to resign to avoid the
humiliation and embarrassment of being terminated for just cause after the exposure of her
malfeasance.45 It is settled that there is nothing reprehensible or illegal when the employer grants
the employee a chance to resign and save face rather than smear the latter's employment
record,46 as in this case.

In sum, petitioners did not constructively dismiss Siason; but rather, the latter voluntarily
resigned from her job in order to avoid a full-blown administrative trial regarding her misdeeds
which could potentially result in her termination for just cause. While it may be said that she did
not tender her resignation wholeheartedly, circumstances of her own making did not give her any
other option but to voluntarily do so.47 Therefore, in view of her voluntary resignation from
CABI, she is not entitled to any separation pay in the absence of any agreement with petitioners
providing for such.48redarclaw

WHEREFORE, the petition is GRANTED. The Decision dated March 14, 2014 and the
Resolution dated November 25, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 130708
are hereby REVERSED and SET ASIDE. Accordingly the Decision dated May 24, 2012 of the
Labor Arbiter in NLRC-NCR-CASE No. 11-17043-11
is REINSTATED with MODIFICATION in that the award of separation pay is DELETED.

SO ORDERED.cral