G.R. No. 198350. September 14, 2016.

ATTY. MARCOS D. RISONAR, JR., petitioner, vs. COR JESU COLLEGE and/or EDGARDO S.
ESCURIL, respondents.

Labor Law; Fixed-Term Employees; Article 280 of the Labor Code does not proscribe or prohibit an
employment contract with a fixed period.—At the outset, it bears stressing that the nature of the
petitioner’s employment with CJC, contrary to his assertion, is not a regular employment, but a fixed-
term employment. The validity of a fixed-term employment, as aptly pointed out by the CA, had long
been settled by the Court. Indeed, where the duties of the employee consist of activities which are
necessary or desirable in the usual business of the employer, the parties are not prohibited from agreeing
on the duration of employment. Article 280 of the Labor Code does not proscribe or prohibit an
employment contract with a fixed period. There is nothing essentially contradictory between a definite
period of employment and the nature of the employee’s duty. A contract of employment with a fixed
period necessitates that: (1) the fixed period of employment was knowingly and voluntarily agreed upon
by the parties without any force, duress or improper pressure being brought to bear on the employee and
without any circumstances vitiating consent; or (2) it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral dominance whatever being
exercised by the former on the latter.

Same; Same; The period of employment of fixed-term employees has been fixed prior to engagement while
the project employees’ employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined likewise at the time of the engagement.—Fixed-term
employees are akin to project employees. The period of employment of fixed-term employees has been
fixed prior to engagement while the project employees’ employment has been fixed for a specific project
or undertaking, the completion or termination of which has been determined likewise at the time of the
engagement.

Same; Same; A fixed-term employee, prior to the expiration of the term specified in the employment
contract, may not be dismissed except for a just or an authorized cause provided by law or the
employment contract and after due process has been afforded to the employee.—A project employee
enjoys security of tenure; he may not be dismissed prior to the completion or termination of the project or
undertaking except for a just or authorized cause provided by law and after due process has been
properly complied with. Similarly, fixed-term employees also enjoy security of tenure albeit limited to the
duration of the term indicated in the employment contract. Thus, a fixed-term employ prior to the
expiration of the term specified in the employment contract, may not be dismissed except for a just or an
authorized cause provided by law or the employment contract and after due process has been afforded to
employee.
Same; Illegal Dismissals; Reinstatement; Backwages; The normal consequences of an illegal dismissal
are reinstatement without loss of seniority rights, and payment of backwages computed from the time
compensation was withheld up to the date of actual reinstatement.—The normal consequences of an
illegal dismissal are reinstatement without loss of seniority rights, and payment of backwages computed
the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no
longer viable as an option, separation pay equivalent to one month salary for every year of service should
be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.
However, considering that the petitioner’s second term as the Law School Dean was only for three years
or from June 1, 2007 until May 31, 2010, the monetary awards to which he is entitled as a consequence of
his illegal dismissal are only limited to such period. The petitioner is, thus, entitled to backwages
computed from the time his compensation was withheld until May 31, 2010. Further, considering that
reinstatement is no longer feasible not only because the relationship between the parties already been
strained, but also the term of the petitioner’s second appointment had already lapsed, he is entitled to
separation pay equivalent one (1) month salary for every year of service.

G.R. No. 199683. February 10, 2016.*

ARLENE T. SAMONTE, VLADIMIR P. SAMONTE, MA. AUREA S. ELEPAÑO, petitioners, vs. LA

SALLE GREENHILLS, INC., and BRO. BERNARD S. OCA, respondents.

Labor Law; Regular Employees; Regular employees are of two (2) kinds, namely: (1) those “engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the
employer”; and (2) casual employees who have “rendered at least one (1) year of service, whether such
service is continuous or broken.”—Article 280 of the Labor Code classifies employees into regular,
project, seasonal, and casual: Art. 280. Regular and casual employment.—The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season. An employment
shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any
employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. The provision classifies regular employees into two
kinds (1) those “engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer”; and (2) casual employees who have “rendered at least one year of
service, whether such service is continuous or broken.”
Same; Fixed-Term Employment; A fixed-term employment is allowable under the Labor Code only if the
term was voluntarily and knowingly entered into by the parties who must have dealt with each other on
equal terms not one exercising moral dominance over the other.—A fixed-term employment is allowable
under the Labor Code only if the term was voluntarily and knowingly entered into by the parties who
must have dealt with each other on equal terms not one exercising moral dominance over the other.

Same; Same; Fixed-Term Contracts; Words and Phrases; A fixed-term contract is an employment
contract, the repeated renewals of which make for a regular employment.—A fixed-term contract is an
employment contract, the repeated renewals of which make for a regular employment. In Fuji Television
Network, Inc. v. Espiritu, 744 SCRA 31 (2014), we noted that Fuji’s argument that Espiritu was an
independent contractor under a fixed-term contract is contradictory where employees under fixed-term
contracts cannot be independent contractors because in fixed-term contracts, an employer-employee
relationship exists. Significantly, we ruled therein that Espiritu’s contract indicating a fixed term did not
automatically mean that she could never be a regular employee which is precisely what Article 280 of the
Labor Code sought to avoid. The repeated renewal of Espiritu’s contract coupled with the nature of work
performed pointed to the regular nature of her employment despite contrary claims of Fuji and the
nomenclature of the contract. Citing Dumpit-Murillo v. Court of Appeals, 524 SCRA 290 (2007) and
Philips Semiconductors (Phils.), Inc. v. Fadriquela, 427 SCRA 408 (2004), we declared in Fuji that the
repeated engagement under contract of hire is indicative of the necessity and desirability of the
[employee’s] work in respondent’s business and where employee’s contract has been continuously
extended or renewed to the same position, with the same duties and remained in the employ without any
interruption, then such employee is a regular employee.

Same; Control Test; Time and again, we have held that the power of control refers to the existence of the
power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually
supervise the performance of duties of the employee.—Time and again, we have held that the power of
control refers to the existence of the power and not necessarily to the actual exercise thereof, nor is it
essential for the employer to actually supervise the performance of duties of the employee. It is enough
that the employer has the right to wield that power.

G.R. Nos. 183200-01. June 29, 2016.*

PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION and/or

PAUL AQUINO and ESTER R. GUERZON, petitioners, vs. AMELYN A. BUENVIAJE, respondent.

G.R. Nos. 183253 & 183257. June 29, 2016.*

AMELYN A. BUENVIAJE, petitioner, vs. PHILIPPINE NATIONAL OIL COMPANY-ENERGY

DEVELOPMENT CORPORATION, PAUL A. AQUINO and ESTER R. GUERZON, respondents.
Labor Law; Regular Employees; As an employer, Philippine National Oil Company-Energy Development
Corporation (PNOC-EDC) has an exclusive management prerogative to hire someone for the position,
either on a permanent status right from the start or place him first on probation. In either case, the
employee’s right to security of tenure immediately attaches at the time of hiring.—Buenviaje was hired
as a Marketing Division Manager, a position that performs activities that are usually necessary and
desirable to the business of PNOC-EDC and is thusly, regular. As an employer, PNOC-EDC has an
exclusive management prerogative to hire someone for the position, either on a permanent status right
from the start or place him first on probation. In either case, the employee’s right to security of tenure
immediately attaches at the time of hiring. As a permanent employee, he may only be validly dismissed
for a just or authorized cause. As a probationary employee, he may also be validly dismissed for a just or
authorized cause, or when he fails to qualify as a regular employee in accordance with reasonable
standards made known to him by the employer at the time of his engagement. Apart from the protection
this last ground in the dismissal of a probationary employee affords the employee, it is also in line with
the right or privilege of the employer to choose who will be accorded with regular or permanent status
and who will be denied employment after the period of probation. It is within the exercise of this right
that the employers may set or fix a probationary period within which it may test and observe the
employee’s conduct before hiring him permanently.

Same; Probationary Employees; Words and Phrases; A probationary employee is defined as one who is
on trial by an employer during which the employer determines whether or not he is qualified for
permanent employment.—A probationary employee is defined as one who is on trial by an employer
during which the employer determines whether or not he is qualified for permanent employment. In
general, probationary employment cannot exceed six (6) months, otherwise the employee concerned shall
be considered a regular employee. It is also indispensable in probationary employment that the employer
informs the employee of the reasonable standards that will be used as a basis for his or her regularization
at the time of his or her engagement. If the employer fails to comply with this, then the employee is
considered a regular employee.

Same; Termination of Employment; Requirements for a Valid Dismissal of a Permanent Employee.—

Buenviaje was hired as a permanent employee on February 1, 2004. As a permanent employee, she may
only be dismissed by PNOC-EDC after observing the following substantive and procedural requirements:
1. The dismissal must be for a just or authorized cause; 2. The employer must furnish the employee with
two (2) written notices before termination of employment can be legally effected. The first notice states
the particular acts or omissions for which dismissal is sought while the second notice states the
employer’s decision to dismiss the employee; and 3. The employee must be given an opportunity to be
heard.

Same; Same; Probationary Employees; Aside from just and authorized causes, a probationary employee
may also be dismissed due to failure to qualify in accordance with the standards of the employer made
known to him at the time of his engagement.—A probationary employee also enjoys security of tenure,
although it is not on the same plane as that of a permanent employee. This is so because aside from just
and authorized causes, a probationary employee may also be dismissed due to failure to qualify in
accordance with the standards of the employer made known to him at the time of his engagement.
PNOC-EDC dismissed Buenviaje on this latter ground; that is, Buenviaje allegedly failed to meet the
standards set by the company. In dismissing probationary employees on this ground, there is no need for
a notice and hearing. The employer, however, must still observe due process of law in the form of: 1)
informing the employee of the reasonable standards expected of him during his probationary period at
the time of his engagement; and 2) serving the employee with a written notice within a reasonable time
from the effective date of termination. By the very nature of a probationary employment, the employee
needs to know from the very start that he will be under close observation and his performance of his
assigned duties and functions would be under continuous scrutiny by his superiors. It is in apprising him
of the standards against which his performance shall be continuously assessed where due process lies.
Likewise, probationary employees are entitled to know the reason for their failure to qualify as regular
employees.

Same; Same; Gross Neglect of Duty; Under Article 297 of the Labor Code, an unsatisfactory rating can be
a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Analogous to this
ground, an unsatisfactory performance may also mean gross inefficiency.—Under Article 297 of the
Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and
habitual neglect of duties. Analogous to this ground, an unsatisfactory performance may also mean gross
inefficiency. “Gross inefficiency” is closely related to “gross neglect,” for both involve specific acts of
omission on the part of the employee resulting in damage to the employer or to his business. Failure to
observe prescribed standards of work or to fulfill reasonable work assignments due to inefficiency may
constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or
work quotas, either by failing to complete the same within the allotted reasonable period, or by
producing unsatisfactory results. This management prerogative of requiring standards may be availed of
so long as they are exercised in good faith for the advancement of the employer’s interest.

Same; Same; Same; A single or isolated act of negligence does not constitute a just cause for the
dismissal of the employee.—Gross negligence implies a want or absence of or failure to exercise slight
care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without
exerting any effort to avoid them. As a just cause, it also has to be habitual, which implies repeated failure
to perform one’s duties for a period of time, depending upon the circumstances. A single or isolated act
of negligence, as was shown here, does not constitute a just cause for the dismissal of the employee.

Same; Same; Two-notice Rule; For termination of employees based on just causes, the employer must
furnish the employee with two (2) written notices before termination of employment can be effected: a
first written notice that informs the employee of the particular acts or omissions for which his or her
dismissal is sought, and a second written notice which informs the employee of the employer’s decision
to dismiss him.—PNOC-EDC would also be in violation of procedural due process if Buenviaje were
dismissed on the purported ground of gross negligence or inefficiency. For termination of employees
based on just causes, the employer must furnish the employee with two (2) written notices before
termination of employment can be effected: a first written notice that informs the employee of the
particular acts or omissions for which his or her dismissal is sought, and a second written notice which
informs the employee of the employer’s decision to dismiss him. In considering whether the charge in the
first notice is sufficient to warrant dismissal under the second notice, the employer must afford the
employee ample opportunity to be heard. Although Buenviaje indeed received two (2) letters from
PNOC-EDC regarding her termination, these letters fall short of the two (2) notices required under the
law. The first letter sent to Buenviaje failed to apprise her of the particular acts or omissions on which her
dismissal was based. It was merely a bare statement that Buenviaje’s performance failed to meet PNOC-
EDC’s minimum requirements. True, Buenviaje replied to the first letter, but considering that it did not
specify the acts or omissions warranting her dismissal but only served to inform her of her termination,
Buenviaje was not afforded a reasonable and meaningful opportunity to explain her side.

Same; Same; Separation Pay; Reinstatement; Strained Relations; There are instances when reinstatement
is no longer feasible, such as when the employer-employee relationship has become strained. In these
cases, separation pay may be granted in lieu of reinstatement, the payment of which favors both
parties.—An employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement. However, there are instances when reinstatement is no
longer feasible, such as when the employer-employee relationship has become strained. In these cases,
separation pay may be granted in lieu of reinstatement, the payment of which favors both parties.

Same; Same; Same; Separation pay or financial assistance may also be granted to a legally terminated
employee as an act of social justice and equity when the circumstances so warrant.—Separation pay or
financial assistance may also be granted to a legally terminated employee as an act of social justice and
equity when the circumstances so warrant. In awarding financial assistance, the interests of both the
employer and the employee must be tempered, if only to approximate what Justice Laurel calls justice in
its secular sense. As the term suggests, its objective is to enable an employee to get by after he has been
stripped of his source of income from which he relies mainly, if not, solely.

Same; Same; Attorney’s Fees; Considering that she was forced to litigate in order to assert her rights,
Buenviaje is entitled to attorney’s fees in the amount of ten percent (10%) of the total award of
backwages.—It is a well-settled rule that in actions for recovery of wages, or where an employee was
forced to litigate and, thus, incur expenses to protect his rights and interests, attorney’s fees may be
granted pursuant to Article 111 of the Labor Code. Considering, therefore, that she was forced to litigate
in order to assert her rights, Buenviaje is entitled to attorney’s fees in the amount of ten percent (10%) of
the total award of backwages.

Same; Same; Moral Damages; The claim for moral damages cannot be justified solely upon the premise
that the employer fired his employee without just cause or due process. Additional facts must be pleaded
and proven to warrant the grant of moral damages under the Civil Code, these being, that the act of
dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner contrary
to morals, good customs, or public policy; and, of course, that social humiliation, wounded feelings,
grave anxiety, etc., resulted therefrom.—The claim for moral damages cannot be justified solely upon the
premise that the employer fired his employee without just cause or due process. Additional facts must be
pleaded and proven to warrant the grant of moral damages under the Civil Code, these being, that the act
of dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner contrary
to morals, good customs, or public policy; and, of course, that social humiliation, wounded feelings,
grave anxiety, etc., resulted therefrom. Bad faith “implies a conscious and intentional design to do a
wrongful act for a dishonest purpose or moral obliquity.” Bad faith must be proven through clear and
convincing evidence. This is because bad faith and fraud are serious accusations that can be so
conveniently and casually invoked, and that is why they are never presumed. They amount to mere
slogans or mudslinging unless convincingly substantiated by whoever is alleging them.

Same; Same; Exemplary Damages; Exemplary damages, on the other hand, may be granted when the
dismissal of the employee was done in a wanton, oppressive or malevolent manner.—Exemplary
damages, on the other hand, may be granted when the dismissal of the employee was done in a wanton,
oppressive or malevolent manner.

Same; Same; Illegal Dismissals; Liability of Corporate Officers; Obligations incurred as a result of the
directors’ and officers’ acts as corporate agents, are not their personal liability but the direct
responsibility of the corporation they represent. As a rule, they are only solidarily liable with the
corporation for the illegal termination of services of employees if they acted with malice or bad faith.—
A corporation, as a juridical entity, may act only through its directors, officers and employees.
Obligations incurred as a result of the directors’ and officers’ acts as corporate agents, are not their
personal liability but the direct responsibility of the corporation they represent. As a rule, they are only
solidarily liable with the corporation for the illegal termination of services of employees if they acted with
malice or bad faith. To hold a director or officer personally liable for corporate obligations, two (2)
requisites must concur: (1) it must be alleged in the complaint that the director or officer assented to
patently unlawful acts of the corporation or that the officer was guilty of gross negligence or bad faith;
and (2) there must be proof that the officer acted in bad faith.

G.R. No. 192571. July 23, 2013.*

ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. FEIST, MARIA

OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G. ALMAZAR, petitioners, vs.
PEARLIE ANN F. ALCARAZ, respondent.

Remedial Law; Civil Procedure; Forum Shopping; Certification Against Forum Shopping; The prohibition
against forum shopping is different from a violation of the certification requirement under Section 5,
Rule 7 of the Rules of Court.—At the outset, it is noteworthy to mention that the prohibition against
forum shopping is different from a violation of the certification requirement under Section 5, Rule 7 of the
Rules of Court. In Sps. Ong v. CA, 384 SCRA 139 (2002), the Court explained that: x x x The distinction
between the prohibition against forum shopping and the certification requirement should by now be too
elementary to be misunderstood. To reiterate, compliance with the certification against forum shopping is
separate from and independent of the avoidance of the act of forum shopping itself. There is a difference
in the treatment between failure to comply with the certification requirement and violation of the
prohibition against forum shopping not only in terms of imposable sanctions but also in the manner of
enforcing them. The former constitutes sufficient cause for the dismissal without prejudice [to the filing]
of the complaint or initiatory pleading upon motion and after hearing, while the latter is a ground for
summary dismissal thereof and for direct contempt.

Same; Same; Same; Forum shopping takes place when a litigant files multiple suits involving the same
parties, either simultaneously or successively, to secure a favorable judgment.—Forum shopping takes
place when a litigant files multiple suits involving the same parties, either simultaneously or successively,
to secure a favorable judgment. It exists where the elements of litis pendentia are present, namely: (a)
identity of parties, or at least such parties who represent the same interests in both actions; (b) identity of
rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity with
respect to the two preceding particulars in the two (2) cases is such that any judgment that may be
rendered in the pending case, regardless of which party is successful, would amount to res judicata in the
other case.

Same; Same; Same; Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff who files a case
should provide a complete statement of the present status of any pending case if the latter involves the
same issues as the one that was filed.—Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff
who files a case should provide a complete statement of the present status of any pending case if the
latter involves the same issues as the one that was filed. If there is no such similar pending case, Section
5(a) of the same rule provides that the plaintiff is obliged to declare under oath that to the best of his
knowledge, no such other action or claim is pending.

Labor Law; Probationary Employees; A probationary employee, like a regular employee, enjoys security
of tenure. However, in cases of probationary employment, aside from just or authorized causes of
termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular employee in accordance with the
reasonable standards made known by the employer to the employee at the time of the engagement.—A
probationary employee, like a regular employee, enjoys security of tenure. However, in cases of
probationary employment, aside from just or authorized causes of termination, an additional ground is
provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement. Thus, the services of an employee who has been
engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized
cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.

Same; Same; If the employer fails to inform the probationary employee of the reasonable standards upon
which the regularization would be based on at the time of the engagement, then the said employee shall
be deemed a regular employee.—Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor
Code provides that if the employer fails to inform the probationary employee of the reasonable standards
upon which the regularization would be based on at the time of the engagement, then the said employee
shall be deemed a regular employee, viz.: (d) In all cases of probationary employment, the employer shall
make known to the employee the standards under which he will qualify as a regular employee at the
time of his engagement. Where no standards are made known to the employee at that time, he shall be
deemed a regular employee. In other words, the employer is made to comply with two (2) requirements
when dealing with a probationary employee: first, the employer must communicate the regularization
standards to the probationary employee; and second, the employer must make such communication at
the time of the probationary employee’s engagement. If the employer fails to comply with either, the
employee is deemed as a regular and not a probationary employee.

Same; Same; An employer is deemed to have made known the standards that would qualify a
probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the
employee of what he is expected to do or accomplish during the trial period of probation.—An employer
is deemed to have made known the standards that would qualify a probationary employee to be a
regular employee when it has exerted reasonable efforts to apprise the employee of what he is expected
to do or accomplish during the trial period of probation. This goes without saying that the employee is
sufficiently made aware of his probationary status as well as the length of time of the probation. The
exception to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids,
cooks, drivers, or messengers. Also, in Aberdeen Court, Inc. v. Agustin, 456 SCRA 32 (2005), it has been
held that the rule on notifying a probationary employee of the standards of regularization should not be
used to exculpate an employee who acts in a manner contrary to basic knowledge and common sense in
regard to which there is no need to spell out a policy or standard to be met. In the same light, an
employee’s failure to perform the duties and responsibilities which have been clearly made known to him
constitutes a justifiable basis for a probationary employee’s non regularization.

Same; Same; Basic knowledge and common sense dictate that the adequate performance of one’s duties
is, by and of itself, an inherent and implied standard for a probationary employee to be regularized; such
is a regularization standard which need not be literally spelled out or mapped into technical indicators
in every case.—Verily, basic knowledge and common sense dictate that the adequate performance of
one’s duties is, by and of itself, an inherent and implied standard for a probationary employee to be
regularized; such is a regularization standard which need not be literally spelled out or mapped into
technical indicators in every case. In this regard, it must be observed that the assessment of adequate
duty performance is in the nature of a management prerogative which when reasonably exercised — as
Abbott did in this case — should be respected. This is especially true of a managerial employee like
Alcaraz who was tasked with the vital responsibility of handling the personnel and important matters of
her department.

Same; Same; If the termination is brought about by the failure of an employee to meet the standards of
the employer in case of probationary employment, it shall be sufficient that a written notice is served the
employee, within a reasonable time from the effective date of termination.—A different procedure is
applied when terminating a probationary employee; the usual two-notice rule does not govern. Section 2,
Rule I, Book VI of the Implementing Rules of the Labor Code states that “[i]f the termination is brought
about by the x x x failure of an employee to meet the standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is served the employee, within a reasonable time
from the effective date of termination.”

Same; Company Policy; A company policy partakes of the nature of an implied contract between the
employer and employee.— A company policy partakes of the nature of an implied contract between the
employer and employee. In Parts Depot, Inc. v. Beiswenger, 170 S.W.3d 354 (Ky. 2005), it has been held
that: [E]mployer statements of policy . . . can give rise to contractual rights in employees without
evidence that the parties mutually agreed that the policy statements would create contractual rights in the
employee, and, hence, although the statement of policy is signed by neither party, can be unilaterally
amended by the employer without notice to the employee, and contains no reference to a specific
employee, his job description or compensation, and although no reference was made to the policy
statement in pre-employment interviews and the employee does not learn of its existence until after his
hiring. Toussaint, 292 N.W.2d at 892. The principle is akin to estoppel. Once an employer establishes an
express personnel policy and the employee continues to work while the policy remains in effect, the
policy is deemed an implied contract for so long as it remains in effect. If the employer unilaterally
changes the policy, the terms of the implied contract are also thereby changed.

Same; Termination of Employment; Nominal Damages; Case law has settled that an employer who
terminates an employee for a valid cause but does so through invalid procedure is liable to pay the latter
nominal damages.—Case law has settled that an employer who terminates an employee for a valid cause
but does so through invalid procedure is liable to pay the latter nominal damages. In Agabon v. NLRC
(Agabon), 442 SCRA 573 (2004), the Court pronounced that where the dismissal is for a just cause, the
lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However,
the employer should indemnify the employee for the violation of his statutory rights. Thus, in Agabon,
the employer was ordered to pay the employee nominal damages in the amount of P30,000.00.

Same; Same; If the dismissal is based on a just cause under Article 282 of the Labor Code (now Article
296) but the employer failed to comply with the notice requirement, the sanction to be imposed upon him
should be tempered because the dismissal process was, in effect, initiated by an act imputable to the
employee; if the dismissal is based on an authorized cause under Article 283 (now Article 297) but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employer’s exercise of his management prerogative.—It was
explained that if the dismissal is based on a just cause under Article 282 of the Labor Code (now Article
296) but the employer failed to comply with the notice requirement, the sanction to be imposed upon him
should be tempered because the dismissal process was, in effect, initiated by an act imputable to the
employee; if the dismissal is based on an authorized cause under Article 283 (now Article 297) but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employer’s exercise of his management prerogative. Hence, in Jaka,
where the employee was dismissed for an authorized cause of retrenchment — as contradistinguished
from the employee in Agabon who was dismissed for a just cause of neglect of duty — the Court ordered
the employer to pay the employee nominal damages at the higher amount of P50,000.00.

Corporation Law; Liability of Corporate Directors; Requisites to Hold Corporate Directors, Trustees or
Officers Personally Liable for Corporate Acts.—It is hornbook principle that personal liability of
corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful act of
the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when
there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (b)
they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not
forthwith file with the corporate secretary their written objection; (c) they agree to hold themselves
personally and solidarily liable with the corporation; or (d) they are made by specific provision of law
personally answerable for their corporate action.

Civil Law; Bad Faith; It is a well-settled rule that bad faith cannot be presumed and he who alleges bad
faith has the onus of proving it.—A judicious perusal of the records show that other than her unfounded
assertions on the matter, there is no evidence to support the fact that the individual petitioners herein, in
their capacity as Abbott’s officers and employees, acted in bad faith or were motivated by ill will in
terminating Alcaraz’s services. The fact that Alcaraz was made to resign and not allowed to enter the
workplace does not necessarily indicate bad faith on Abbott’s part since a sufficient ground existed for
the latter to actually proceed with her termination. On the alleged loss of her personal belongings, records
are bereft of any showing that the same could be attributed to Abbott or any of its officers. It is a well-
settled rule that bad faith cannot be presumed and he who alleges bad faith has the onus of proving it. All
told, since Alcaraz failed to prove any malicious act on the part of Abbott or any of its officers, the Court
finds the award of moral or exemplary damages unwarranted.

G.R. No. 182255. June 15, 2015.*

PETRON CORPORATION, petitioner, vs. ARMZ CABERTE, ANTONIO CABERTE, JR., MICHAEL
SERVICIO,** ARIEL DEVELOS, ADOLFO GESTUPA, ARCHIE PONTERAS, ARNOLD BLANCO,
DANTE MARIANO,*** VIRGILIO GALOROSA, and CAMILO TE,**** respondents.
Labor Law; Labor-only Contracting; Substantial Capital; Words and Phrases; As defined under Article
106 of the Labor Code, labor-only contracting, a prohibited act, is an arrangement where the contractor,
who does not have substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, supplies workers to an employer and the workers recruited are performing
activities which are directly related to the principal business of such employer.—As defined under
Article 106 of the Labor Code, labor-only contracting, a prohibited act, is an arrangement where the
contractor, who does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, supplies workers to an employer and the workers recruited
are performing activities which are directly related to the principal business of such employer.

Same; Job Contracting; Words and Phrases; Permissible or legitimate job contracting or subcontracting
refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or
subcontractor the performance or completion of a specific job, work, or service within a definite or
predetermined period, regardless of whether such job, work, or service is to be performed or completed
within or outside the premises of the principal.—Permissible or legitimate job contracting or
subcontracting, on the other hand, “refers to an arrangement whereby a principal agrees to put out or
farm out with the contractor or subcontractor the performance or completion of a specific job, work, or
service within a definite or predetermined period, regardless of whether such job, work, or service is to
be performed or completed within or outside the premises of the principal. A person is considered
engaged in legitimate job contracting or subcontracting if the following conditions concur: (a) the
contractor carries on a distinct and independent business and partakes the contract work on his account
under his own responsibility according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with the performance of his work except as
to the results thereof; (b) the contractor has substantial capital or investment; and (c) the agreement
between the principal and the contractor or subcontractor assures the contractual employees’ entitlement
to all labor and occupational safety and health standards, free exercise of the right to self-organization,
security of tenure, and social welfare benefits.”

Same; Same; Labor-only Contracting; To determine whether a contractor is engaged in labor-only

contracting or permissible job contracting, “the totality of the facts and the surrounding circumstances
of the case are to be considered.”—To determine whether a contractor is engaged in labor-only
contracting or permissible job contracting, “the totality of the facts and the surrounding circumstances of
the case are to be considered.” Petron contends that the CA erred in ruling that ABC is a labor-only
contractor since respondents failed to prove that ABC is not an independent contractor. The contention,
however, is incorrect. The law presumes a contractor to be a labor-only contractor and the employees are
not expected to prove the negative fact that the contractor is a labor-only contractor. Thus, it is not
respondents but Petron which bears the burden of establishing that ABC is not a labor-only contractor
but a legitimate independent contractor. As held in Alilin v. Petron Corporation, 725 SCRA 342 (2014),
“where the principal is the one claiming that the contractor is a legitimate contractor, the burden of
proving the supposed status of the contractor rests on the principal.”
Same; Labor-only Contracting; Substantial Capital; Elements of Labor-only Contracting.—A contractor
is deemed to be a labor-only contractor if the following elements are present: (i) the contractor does not
have substantial capital or investment to actually perform the job, work or service under its own account
and responsibility; and (ii) the employees recruited, supplied or placed by such contractor are performing
activities which are directly related to the main business of the principal. Conversely, in proving that
ABC is not a labor-only contractor, it is incumbent upon Petron to show that ABC has substantial capital
or investment and that respondents were performing activities which were not directly related to Petron’s
principal business.

Same; Same; Same; “Substantial capital or investment,” under Section 5, Rule VIII-A, Book III of the
Omnibus Rules Implementing the Labor Code (Implementing Rules), as amended by Department Order
No. 18-02, does not include those which are not actually and directly used in the performance of the job
contracted out.—Anent substantial investment in the form of equipment, tools, implements, machineries
and work premises, Petron likewise failed to show that ABC possessed the same. Instead, what is evident
in the records was that ABC had been renting a forklift from Petron in order to carry out the job of
respondents. This only shows that ABC does not own basic equipment needed in the performance of
respondents’ job. Similarly and again as correctly held by the CA, the fact that ABC leased a property for
the establishment of its Bacolod office is immaterial since it was not shown that it was used in the
performance or completion of the job contracted out. “Substantial capital or investment,” under Section 5,
Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code (Implementing Rules), as
amended by Department Order No. 18-02, does not include those which are not actually and directly
used in the performance of the job contracted out.

Same; Same; The repeated and continuing need for the performance of the job is sufficient evidence of the
necessity, if not indispensability of the activity to the business.—Gestupa, Ponteras, Develos, Blanco and
Mariano were LPG fillers and maintenance crew; Caberte was an LPG operator supervisor; Te was a
warehouseman and utility worker; and Servicio and Galorosa were tanker receiving crew and utility
workers. Undoubtedly, the work they rendered were directly related to Petron’s main business, vital as
they are in the manufacture and distribution of petroleum products. Besides, some of the respondents
were already working for Petron even before it engaged ABC as a contractor in 1996. Albeit it was made
to appear that they were under the different contractors that Petron engaged over the years, respondents
have been regularly performing the same tasks within the premises of Petron. This “the repeated and
continuing need for the performance of the job is sufficient evidence of the necessity, if not
indispensability of the activity to the business.”

Same; Same; A finding that a contractor is a ‘labor-only’ contractor is equivalent to declaring that there
is an employer-employee relationship between the principal and the employees of the supposed
contractor, and the ‘labor-only’ contractor is considered as a mere agent of the principal, the real
employer.—It is clear that Petron failed to discharge its burden of proving that ABC is not a labor-only
contractor. Consequently, and as warranted by the facts, the Court declares ABC as a mere labor-only
contractor. “A finding that a contractor is a ‘labor-only’ contractor is equivalent to declaring that there is
an employer-employee relationship between the principal and the employees of the supposed contractor,
and the ‘labor-only’ contractor is considered as a mere agent of the principal, the real employer.”
Accordingly in this case, Petron is declared to be the true employer of respondents who are considered
regular employees in view of the fact that they have been regularly performing activities which are
necessary and desirable to the usual business of Petron for a number of years.

Same; Reinstatement; Separation Pay; If reinstatement is no longer feasible, respondents are entitled to
receive separation pay equivalent to one (1) month salary for every year of service.—With respect to
respondents’ dismissal, Petron claimed that the same sprang from the termination or conclusion of the
service contracts it entered into with ABC. As earlier held, respondents are considered regular employees.
In cases of regular employment, an employer may only terminate the services of an employee for just or
authorized causes under the law. As the reason given by Petron for dismissing respondents does not
constitute a just or authorized cause for termination, the latter are declared to have been illegally
dismissed. Respondents are thus entitled to all the remedies of an illegally dismissed employee, i.e.,
backwages and reinstatement, or if no longer feasible, separation pay. The CA is thus correct in ruling
that respondents are entitled to reinstatement without loss of seniority rights and other privileges.
However, if reinstatement is no longer feasible, respondents are entitled to receive separation pay
equivalent to one month salary for every year of service. In addition, respondents are entitled to full
backwages from the time they were not allowed to work on July 1, 1999 up to actual reinstatement or
finality of this Decision as the case may be.

G.R. No. 209499. January 28, 2015.*

MA. CHARITO C. GADIA, et al. , petitioners, vs. SYKES ASIA, INC./CHUCK SYKES/MIKE
HINDS/MICHAEL HENDERSON, respondents.

Remedial Law; Special Civil Actions; Certiorari; Grave Abuse of Discretion; To justify the grant of the
extraordinary remedy of certiorari, petitioners must satisfactorily show that the court or quasi-judicial
authority gravely abused the discretion conferred upon it.—At the outset, it must be stressed that to
justify the grant of the extraordinary remedy of certiorari, petitioners must satisfactorily show that the
court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of
discretion connotes judgment exercised in a capricious and whimsical manner that is tantamount to lack
of jurisdiction. To be considered “grave,” discretion must be exercised in a despotic manner by reason of
passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty
or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.

Same; Same; Same; Same; Labor Law; In labor disputes, grave abuse of discretion may be ascribed to the
National Labor Relations Commission (NLRC) when, inter alia, its findings and the conclusions reached
thereby are not supported by substantial evidence.—In labor disputes, grave abuse of discretion may be
ascribed to the NLRC when, inter alia, its findings and the conclusions reached thereby are not supported
by substantial evidence. This requirement of substantial evidence is clearly expressed in Section 5, Rule
133 of the Rules of Court which provides that “in cases filed before administrative or quasi-judicial
bodies, a fact may be deemed established if it is supported by substantial evidence, or that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.”

Labor Law; “Project Employees” and “Regular Employees,” Distinguished.—Article 294 of the Labor
Code, as amended, distinguishes a project-based employee from a regular employee as follows: Art. 294.
Regular and casual employment.—The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season. x x x x (Emphasis and underscoring supplied) In Omni
Hauling Services, Inc. v. Bon, 734 SCRA 270 (2014), the Court extensively discussed how to determine
whether an employee may be properly deemed project-based or regular, to wit: A project employee is
assigned to a project which begins and ends at determined or determinable times. Unlike regular
employees who may only be dismissed for just and/or authorized causes under the Labor Code, the
services of employees who are hired as “project[-based] employees” may be lawfully terminated at the
completion of the project. According to jurisprudence, the principal test for determining whether
particular employees are properly characterised as “project[-based] employees” as distinguished from
“regular employees,” is whether or not the employees were assigned to carry out a “specific project or
undertaking,” the duration (and scope) of which were specified at the time they were engaged for that
project. The project could either be (1) a particular job or undertaking that is within the regular or usual
business of the employer company, but which is distinct and separate, and identifiable as such, from the
other undertakings of the company; or (2) a particular job or undertaking that is not within the regular
business of the corporation. In order to safeguard the rights of workers against the arbitrary use of the
word “project” to prevent employees from attaining a regular status, employers claiming that their
workers are project[-based] employees should not only prove that the duration and scope of the
employment was specified at the time they were engaged, but also, that there was indeed a project.

G.R. No. 221897. November 7, 2016.*

ISIDRO QUEBRAL, ALBERTO ESQUILLO, RENANTE SALINSAN, JEROME MACANDOG,

EDGARDO GAYORGOR, JIM ROBERT PERFECTO, NOEL PERFECTO, DENNIS PAGAYON, and
HERCULANO MACANDOG, petitioners, vs. ANGBUS CONSTRUCTION, INC. and ANGELO
BUSTAMANTE, respondents.
Remedial Law; Petition for Review on Certiorari; In a Rule 45 review, the Supreme Court (SC) examines
the correctness of the Court of Appeal’s (CA’s) Decision in contrast with the review of jurisdictional
errors under Rule 65.—In a Rule 45 review, the Court examines the correctness of the CA’s Decision in
contrast with the review of jurisdictional errors under Rule 65. Furthermore, Rule 45 limits the review to
questions of law.

Labor Law; Appeals; Grave Abuse of Discretion; In labor cases, grave abuse of discretion may be
ascribed to the National Labor Relations Commission (NLRC) when its findings and conclusions are not
supported by substantial evidence.—In labor cases, grave abuse of discretion may be ascribed to the
NLRC when its findings and conclusions are not supported by substantial evidence, which refers to that
amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion.

Remedial Law; Petition for Review on Certiorari; The issue of the timeliness of the filing of the appeal is
a factual issue that requires a review of the evidence presented on when the appeal was actually filed,
thus, generally not covered by a Rule 45 review.—On the procedural aspect, the Court notes that the issue
of the timeliness of the filing of the appeal is a factual issue that requires a review of the evidence
presented on when the appeal was actually filed. Thus, it is generally not covered by a Rule 45 review.

Same; Civil Procedure; Section 3, Rule 13 of the Rules of Court provides that where pleadings are filed by
registered mail, the date of mailing as shown by the post office stamp on the envelope or the registry
receipt shall be considered as the date of filing.—Section 3, Rule 13 of the Rules of Court provides that
where pleadings are filed by registered mail, the date of mailing as shown by the post office stamp on the
envelope or the registry receipt shall be considered as the date of filing. Based on this provision, the date
of filing is determinable from two sources: (1) from the post office stamp on the envelope or (2) from the
registry receipt, either of which may suffice to prove the timeliness of the filing of the pleadings.

Same; Same; When the photocopy of a registry receipt bears an earlier date but is not authenticated, the
later date stamped on the envelope shall be considered as the date of filing.—The Court previously ruled
that if the date stamped on one is earlier than the other, the former may be accepted as the date of filing.
This presupposes, however, that the envelope or registry receipt and the dates appearing thereon are
duly authenticated before the tribunal where they are presented. When the photocopy of a registry
receipt bears an earlier date but is not authenticated, the Court held that the later date stamped on the
envelope shall be considered as the date of filing.

Labor Law; Project Employees; Unlike regular employees who may only be dismissed for just and/or
authorized causes under the Labor Code, the services of employees who are hired as project-based
employees may be lawfully terminated at the completion of the project.—A project-based employee is
assigned to a project which begins and ends at determined or determinable times. Unlike regular
employees who may only be dismissed for just and/or authorized causes under the Labor Code, the
services of employees who are hired as project-based employees may be lawfully terminated at the
completion of the project.

Same; Same; Employers claiming that their workers are project-based employees have the burden to
prove that these two (2) requisites concur: (a) the employees were assigned to carry out a specific project
or undertaking; and (b) the duration and scope of which were specified at the time they were engaged for
such project.—To safeguard the rights of workers against the arbitrary use of the word “project” to
preclude them from attaining regular status, jurisprudence provides that employers claiming that their
workers are project-based employees have the burden to prove that these two requisites concur: (a) the
employees were assigned to carry out a specific project or undertaking; and (b) the duration and scope of
which were specified at the time they were engaged for such project.

Same; Same; When no other evidence is offered, the absence of employment contracts raises a serious
question of whether the employees were sufficiently apprised at the start of their employment of their
status as project employees.—The Court previously ruled that although the absence of a written contract
does not by itself grant regular status to the employees, it is evidence that they were informed of the
duration and scope of their work and their status as project employees at the start of their engagement.
When no other evidence is offered, the absence of employment contracts raises a serious question of
whether the employees were sufficiently apprised at the start of their employment of their status as
project employees.

Same; Section 11, Rule X, Book III of the Omnibus Rules Implementing the Labor Code requires the
employer to keep all employment records in the main or branch office where the employees are
assigned.—Section 11, Rule X, Book III of the Omnibus Rules Implementing the Labor Code (Rules)
requires the employer to keep all employment records in the main or branch office where the employees
are assigned. It also prohibits the keeping of employees’ records elsewhere.

Same; Project Employees; The submission of the termination report to the Department of Labor and
Employment (DOLE) “may be considered” only as an indicator of project employment.—It is clear that
the submission of the termination report to the DOLE “may be considered” only as an indicator of project
employment. By the provision’s tenor, the submission of this report, by and of itself, is therefore not
conclusive to confirm the status of the terminated employees as project employees, especially in this case
where there is a glaring absence of evidence to prove that petitioners were assigned to carry out a specific
project or undertaking, and that they were informed of the duration and scope of their supposed project
engagement, which are, in fact, attendant to the first two (2) indicators of project employment in the same
DOLE issuance above cited.
G.R. No. 199554. February 18, 2015.*

ZENAIDA PAZ, petitioner, vs. NORTHERN TOBACCO REDRYING CO., INC., and/or ANGELO
ANG, respondents.

Labor Law; Article 280 of the Labor Code and jurisprudence identified three (3) types of employees.—
Article 280 of the Labor Code and jurisprudence identified three types of employees, namely: “(1) regular
employees or those who have been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer; (2) project employees or those whose employment has
been fixed for a specific project or undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be performed
is seasonal in nature and the employment is for the duration of the season; and (3) casual employees or
those who are neither regular nor project employees.”

Same; Regular Seasonal Employees; The workers of La Union Tobacco Redrying Corporation in Abasolo
v. National Labor Relations Commission, 346 SCRA 293 (2000), were considered regular seasonal
employees since they performed services necessary and indispensable to the business for over twenty (20)
years, even if their work was only during tobacco season.—Mercado, Sr. v. National Labor Relations
Commission, 201 SCRA 332 (1991), did not consider as regular employees the rice and sugar farmland
workers who were paid with daily wages. This was anchored on the Labor Arbiter’s findings that
“petitioners were required to perform phases of agricultural work for a definite period, after which their
services [were] available to any farm owner.” This court explained that the proviso in the second
paragraph of Article 280 in that “any employee who has rendered at least one year of service, whether
such service is continuous or broken, shall be considered a regular employee” applies only to “casual”
employees and not “project” and regular employees in the first paragraph of Article 280. On the other
hand, the workers of La Union Tobacco Redrying Corporation in Abasolo v. National Labor Relations
Commission, 346 SCRA 293 (2000), were considered regular seasonal employees since they performed
services necessary and indispensable to the business for over 20 years, even if their work was only during
tobacco season. This court applied the test laid down in De Leon v. National Labor Relations
Commission, 176 SCRA 615 (1989), for determining regular employment status.

Same; Termination of Employment; Retirement; Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee whereby the latter, after reaching a certain
age, agrees to sever his or her employment with the former.—“Retirement is the result of a bilateral act of
the parties, a voluntary agreement between the employer and the employee whereby the latter, after
reaching a certain age, agrees to sever his or her employment with the former.” Article 287, as amended,
allows for optional retirement at the age of at least 60 years old. Consequently, if “the intent to retire is
not clearly established or if the retirement is involuntary, it is to be treated as a discharge.”
Same; Same; Backwages; An award of full backwages is inclusive of allowances and other benefits or
their monetary equivalent, from the time their actual compensation was withheld.—An award of full
backwages is “inclusive of allowances and other benefits or their monetary equivalent, from the time
their actual compensation was withheld. . . .” Backwages, considered as actual damages, requires proof of
the loss suffered. The Court of Appeals found “no positive proof of the total number of months that she
actually rendered work.” Nevertheless, petitioner Paz’s daily pay of P185.00 was established. She also
alleged that her employment periods ranged from three to seven months.

Same; Same; An employer may provide for retirement benefits in an agreement with its employees such
as in a Collective Bargaining Agreement (CBA).—An employer may provide for retirement benefits in an
agreement with its employees such as in a Collective Bargaining Agreement. Otherwise, Article 287 of the
Labor Code, as amended, governs. Since respondent NTRCI failed to present a copy of a Collective
Bargaining Agreement on the alleged retirement policy, we apply Article 287 of the Labor Code, as
amended by Republic Act No. 7641.

Same; Same; Separation Pay; The amount of separation pay is based on two (2) factors: the amount of
monthly salary and the number of years of service.—This court in Philippine Tobacco Flue-Curing &
Redrying Corp. v. National Labor Relations Commission, 300 SCRA 37 (1998), explained its computation
of separation pay as follows: The amount of separation pay is based on two (2) factors: the amount of
monthly salary and the number of years of service. Although the Labor Code provides different
definitions as to what constitutes “one year of service,” Book Six does not specifically define “one year of
service” for purposes of computing separation pay. However, Articles 283 and 284 both state in
connection with separation pay that a fraction of at least six months shall be considered one whole year.
Applying this to the case at bar, we hold that the amount of separation pay which respondent members
of the Lubat and Luris groups should receive is one-half (1/2) their respective average monthly pay
during the last season they worked multiplied by the number of years they actually rendered service,
provided that they worked for at least six months during a given year. The formula that petitioner
proposes, wherein a year of work is equivalent to actual work rendered for 303 days, is both unfair and
inapplicable, considering that Articles 283 and 284 provide that in connection with separation pay, a
fraction of at least six months shall be considered one whole year. Under these provisions, an employee
who worked for only six months in a given year — which is certainly less than 303 days — is considered
to have worked for one whole year. . . . Finally, Manila Hotel Company v. CIR did not rule that seasonal
workers are considered at work during off-season with regard to the computation of separation pay. Said
case merely held that, in regard to seasonal workers, the employer-employee relationship is not severed
during off-season but merely suspended.

Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; Petitions for review
pursuant to Rule 45 of the Rules of Court can raise only questions of law.—Petitions for review pursuant
to Rule 45 of the Rules of Court can raise only questions of law. Generally, this court accords great respect
for factual findings by quasi-judicial bodies, even according such findings with finality when supported
by substantial evidence.
Labor Law; The Supreme Court (SC) has discussed that “labor law determinations are not only
secundum rationem but also secundum caritatem.”—We agree with the Court of Appeals that petitioner
Paz’s circumstances “indubitably merit equitable concessions, via the principle of ‘compassionate justice’
for the working class.” Petitioner Paz worked for respondent NTRCI for close to three decades. She had
no record of any malfeasance or violation of company rules in her long years of service. Her advanced
age has rendered her weak and lessened her employment opportunities. Eastern Shipping Lines, Inc. v.
Sedan, 486 SCRA 565 (2006), awarded Sedan with financial assistance equal to one-half-month pay for
every year of service. Sedan was hired as a 3rd marine engineer and oiler from 1973 until his last voyage
in 1997. On the other hand, petitioner Paz was a seasonal employee who worked for periods ranging
from three to seven months a year. This court thus finds the following Court of Appeals formula for
financial assistance as equitable: one-half-month pay multiplied by 29 years in service and then divided
by 2. This court has discussed that “labor law determinations are not only secundum rationem but also
secundum caritatem.” The award of P60,356.25 as financial assistance will serve its purpose in providing
petitioner Paz sustenance and comfort after her long years of service.

Remedial Law; Special Civil Actions; Certiorari; The general rule is that certiorari does not lie to review
errors of judgment of a quasi-judicial tribunal since the judicial review does not go as far as to examine
and assess the evidence of the parties and to weigh their probative value.—The general rule is that
certiorari does not lie to review errors of judgment of a quasi-judicial tribunal since the judicial review
does not go as far as to examine and assess the evidence of the parties and to weigh their probative value.
However, the CA may grant the petition when the factual findings complained of are not supported by
the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice;
when the findings of the NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a
just decision of the case.

Labor Law; Management Prerogative; While an employer is given a wide latitude of discretion in
managing its own affairs, in the promulgation of policies, rules and regulations on work-related
activities of its employees, and in the imposition of disciplinary measures on them, the exercise of
disciplining and imposing appropriate penalties on erring employees must be practiced in good faith and
for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the
rights of employees under special laws or under valid agreements.—While an employer is given a wide
latitude of discretion in managing its own affairs, in the promulgation of policies, rules and regulations
on work-related activities of its employees, and in the imposition of disciplinary measures on them, the
exercise of disciplining and imposing appropriate penalties on erring employees must be practiced in
good faith and for the advancement of the employer’s interest and not for the purpose of defeating or
circumventing the rights of employees under special laws or under valid agreements. The reason being
that — Security of tenure of workers is not only statutorily protected, it is also a constitutionally
guaranteed right. Thus, any deprivation of this right must be attended by due process of law. This means
that any disciplinary action which affects employment must pass due process scrutiny in both its
substantive and procedural aspects. The constitutional protection for workers elevates their work to the
status of a vested right. It is a vested right protected not only against state action but against the arbitrary
acts of the employers as well. This court in Philippine Movie Pictures Workers’ Association v. Premier
Productions, Inc., categorically stated that “[t]he right of a person to his labor is deemed to be property
within the meaning of constitutional guarantees.” Moreover, it is of that species of vested constitutional
right that also affects an employee’s liberty and quality of life. Work not only contributes to defining the
individual, it also assists in determining one’s purpose. Work provides for the material basis of human
dignity.

Same; Termination of Employment; Dismissal from employment has two facets: first, the legality of the
act of dismissal, which constitutes substantive due process; and, second, the legality of the manner of
dismissal, which constitutes procedural due process.—Dismissal from employment has two facets: first,
the legality of the act of dismissal, which constitutes substantive due process; and, second, the legality of
the manner of dismissal, which constitutes procedural due process. The burden of proof rests upon the
employer to show that the disciplinary action was made for lawful cause or that the termination of
employment was valid. In administrative and quasi-judicial proceedings, the quantum of evidence
required is substantial evidence or “such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Thus, unsubstantiated suspicions, accusations, and conclusions of the
employer do not provide legal justification for dismissing the employee. When in doubt, the case should
be resolved in favor of labor pursuant to the social justice policy of our labor laws and the 1987
Constitution.

Same; Same; Misconduct; For misconduct or improper behavior to be a just cause for dismissal, (a) it
must be serious; (b) it must relate to the performance of the employee’s duties; and (c) it must show that
the employee has become unfit to continue working for the employer.—Misconduct is improper or wrong
conduct; it is the transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The
misconduct, to be serious within the meaning of the Labor Code, must be of such a grave and aggravated
character and not merely trivial or unimportant. Thus, for misconduct or improper behavior to be a just
cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the employee’s duties;
and (c) it must show that the employee has become unfit to continue working for the employer.

Same; Same; Even if a just cause exists, the employer still has the discretion whether to dismiss the
employee, impose a lighter penalty, or condone the offense committed.—Even if a just cause exists, the
employer still has the discretion whether to dismiss the employee, impose a lighter penalty, or condone
the offense committed. In making such decision, the employee’s past offenses may be taken into
consideration.

Same; Same; Insubordination; Not every case of insubordination or willful disobedience by an employee
reasonably deserves the penalty of dismissal because the penalty to be imposed on an erring employee
must be commensurate with the gravity of his or her offense.—This Court finds the penalty of dismissal
too harsh. Not every case of insubordination or willful disobedience by an employee reasonably deserves
the penalty of dismissal because the penalty to be imposed on an erring employee must be commensurate
with the gravity of his or her offense. Petitioner’s termination from employment is also inappropriate
considering that he had been with respondent company for seven (7) years and he had no previous
derogatory record. It is settled that notwithstanding the existence of a just cause, dismissal should not be
imposed, as it is too severe a penalty, if the employee had been employed for a considerable length of
time in the service of his or her employer, and such employment is untainted by any kind of dishonesty
and irregularity.

Same; Same; An employer is duty-bound to exert earnest efforts to arrive at a settlement of its differences
with the employee.—An employer is duty-bound to exert earnest efforts to arrive at a settlement of its
differences with the employee. While a full adversarial hearing or conference is not required, there must
be a fair and reasonable opportunity for the employee to explain the controversy at hand. Finally, the
termination letter issued by respondent miserably failed to satisfy the requisite contents of a valid notice
of termination. Instead of discussing the facts and circumstances to support the violation of the alleged
company rule that imposed a penalty of dismissal, the letter merely repeats the self-serving accusations
stated in Memorandum dated April 3, 2009.

Same; Preventive Suspension; Preventive suspension may be legally imposed against an employee whose
alleged violation is the subject of an investigation. The purpose of suspension is to prevent harm or
injury to the company as well as to fellow employees.—Preventive suspension may be legally imposed
against an employee whose alleged violation is the subject of an investigation. The purpose of suspension
is to prevent harm or injury to the company as well as to fellow employees. The pertinent rules dealing
with preventive suspension are found in Sections 8 and 9 of Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code, which read: SEC. 8. Preventive suspension.—The employer may place the
worker concerned under preventive suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his coworkers. SEC. 9. Period of
suspension.—No preventive suspension shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may
extend the period of suspension provided that during the period of extension, he pays the wages and
other benefits due to the worker. In such case, the worker shall not be bound to reimburse the amount
paid to him during the extension if the employer decides, after completion of the hearing, to dismiss the
worker.

Same; Same; Preventive suspension is justified where the employee’s continued employment poses a
serious and imminent threat to the life or property of the employer or of the employee’s coworkers.—
Preventive suspension is justified where the employee’s continued employment poses a serious and
imminent threat to the life or property of the employer or of the employee’s coworkers. Without this kind
of threat, preventive suspension is not proper. Here, it cannot be said that petitioner posed a danger on
the lives of the officers or employees of respondent or their properties. Being one of the Operation Staff,
which was a rank and file position, he could not and would not be able to sabotage the operations of
respondent. The difficulty of finding a logical and reasonable connection between his assigned tasks and
the necessity of his preventive suspension is apparent from the fact that even respondent was not able to
present concrete evidence to support its general allegation.

G.R. No. 187226. January 28, 2015.*

CHERYLL SANTOS LEUS, petitioner, vs. ST. SCHOLASTICA’S COLLEGE WESTGROVE and/or SR.
EDNA QUIAMBAO, OSB, respondents.

Remedial Law; Civil Procedure; Appeals; Points of law, theories, issues, and arguments not brought to
the attention of the trial court ought not to be considered by a reviewing court, as these cannot be raised
for the first time on appeal.—“It is well-established that issues raised for the first time on appeal and not
raised in the proceedings in the lower court are barred by estoppel. Points of law, theories, issues, and
arguments not brought to the attention of the trial court ought not to be considered by a reviewing court,
as these cannot be raised for the first time on appeal. To consider the alleged facts and arguments
belatedly raised would amount to trampling on the basic principles of fair play, justice, and due process.”

Department of Education; Schools; Section 57 specifically empowers the Department of Education

(DepEd) to promulgate rules and regulations necessary for the administration, supervision and
regulation of the educational system in accordance with the declared policy of Batas Pambansa (BP)
Bilang 232.—The 1992 MRPS, the regulation in force at the time of the instant controversy, was issued by
the Secretary of Education pursuant to BP 232. Section 70 of BP 232 vests the Secretary of Education with
the authority to issue rules and regulations to implement the provisions of BP 232. Concomitantly,
Section 57 specifically empowers the Department of Education to promulgate rules and regulations
necessary for the administration, supervision and regulation of the educational system in accordance
with the declared policy of BP 232. The qualifications of teaching and nonteaching personnel of private
schools, as well as the causes for the termination of their employment, are an integral aspect of the
educational system of private schools. Indubitably, ensuring that the teaching and nonteaching personnel
of private schools are not only qualified, but competent and efficient as well goes hand in hand with the
declared objective of BP 232 — establishing and maintaining relevant quality education. It is thus within
the authority of the Secretary of Education to issue a rule, which provides for the dismissal of teaching
and nonteaching personnel of private schools based on their incompetence, inefficiency, or some other
disqualification.

Remedial Law; Civil Procedure; Appeals; In a petition for review under Rule 45 of the Rules of Court,
such as the instant petition, where the Court of Appeals’ (CA’s) disposition in a labor case is sought to
be calibrated, the Court’s review is quite limited.—In a petition for review under Rule 45 of the Rules of
Court, such as the instant petition, where the CA’s disposition in a labor case is sought to be calibrated,
the Court’s review is quite limited. In ruling for legal correctness, the Court has to view the CA decision
in the same context that the petition for certiorari it ruled upon was presented to it; the Court has to
examine the CA decision from the prism of whether it correctly determined the presence or absence of
grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC decision
on the merits of the case was correct.

Labor Law; Termination of Employment; Disgraceful and Immoral Conduct; The fact of the petitioner’s
pregnancy out of wedlock, without more, is not enough to characterize the petitioner’s conduct as
disgraceful or immoral.—The labor tribunals concluded that the petitioner’s pregnancy out of wedlock,
per se, is “disgraceful and immoral” considering that she is employed in a Catholic educational
institution. In arriving at such conclusion, the labor tribunals merely assessed the fact of the petitioner’s
pregnancy vis-à-vis the totality of the circumstances surrounding the same. However, the Court finds no
substantial evidence to support the aforementioned conclusion arrived at by the labor tribunals. The fact
of the petitioner’s pregnancy out of wedlock, without more, is not enough to characterize the petitioner’s
conduct as disgraceful or immoral. There must be substantial evidence to establish that premarital sexual
relations and, consequently, pregnancy out of wedlock, are indeed considered disgraceful or immoral.

Same; Same; Same; The determination of whether a conduct is disgraceful or immoral involves a two (2)-
step process: first, a consideration of the totality of the circumstances surrounding the conduct; and
second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the
society generally considers moral and respectable.—The determination of whether a conduct is
disgraceful or immoral involves a two-step process: first, a consideration of the totality of the
circumstances surrounding the conduct; and second, an assessment of the said circumstances vis-à-vis the
prevailing norms of conduct, i.e., what the society generally considers moral and respectable. That the
petitioner was employed by a Catholic educational institution per se does not absolutely determine
whether her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to determine
whether the petitioner’s pregnancy out of wedlock is considered disgraceful or immoral in accordance
with the prevailing norms of conduct.

Same; Same; Same; That the distinction between public and secular morality and religious morality is
important because the jurisdiction of the Court extends only to public and secular morality.—In Estrada
v. Escritor, 408 SCRA 1 (2003), an administrative case against a court interpreter charged with disgraceful
and immoral conduct, the Court stressed that in determining whether a particular conduct can be
considered as disgraceful and immoral, the distinction between public and secular morality on the one
hand, and religious morality, on the other, should be kept in mind. That the distinction between public
and secular morality and religious morality is important because the jurisdiction of the Court extends
only to public and secular morality. The Court further explained that: The morality referred to in the law
is public and necessarily secular, not religious x x x. “Religious teachings as expressed in public debate
may influence the civil public order but public moral disputes may be resolved only on grounds
articulable in secular terms.” Otherwise, if government relies upon religious beliefs in formulating public
policies and morals, the resulting policies and morals would require conformity to what some might
regard as religious programs or agenda. The nonbelievers would therefore be compelled to conform to a
standard of conduct buttressed by a religious belief, i.e., to a “compelled religion,” anathema to religious
freedom. Likewise, if government based its actions upon religious beliefs, it would tacitly approve or
endorse that belief and thereby also tacitly disapprove contrary religious or nonreligious views that
would not support the policy. As a result, government will not provide full religious freedom for all its
citizens, or even make it appear that those whose beliefs are disapproved are second-class citizens.
Expansive religious freedom therefore requires that government be neutral in matters of religion;
governmental reliance upon religious justification is inconsistent with this policy of neutrality. In other
words, government action, including its proscription of immorality as expressed in criminal law like
concubinage, must have a secular purpose. That is, the government proscribes this conduct because it is
“detrimental (or dangerous) to those conditions upon which depend the existence and progress of human
society” and not because the conduct is proscribed by the beliefs of one religion or the other. Although
admittedly, moral judgments based on religion might have a compelling influence on those engaged in
public deliberations over what actions would be considered a moral disapprobation punishable by law.
After all, they might also be adherents of a religion and thus have religious opinions and moral codes
with a compelling influence on them; the human mind endeavors to regulate the temporal and spiritual
institutions of society in a uniform manner, harmonizing earth with heaven. Succinctly put, a law could
be religious or Kantian or Aquinian or utilitarian in its deepest roots, but it must have an articulable and
discernible secular purpose and justification to pass scrutiny of the religion clauses.

Same; Same; Same; The proscription against “disgraceful or immoral conduct” under Section 94(e) of the
1992 Manual of Regulations for Private Schools (MRPS), which is made as a cause for dismissal, must
necessarily refer to public and secular morality.—It bears stressing that the right of an employee to
security of tenure is protected by the Constitution. Perfunctorily, a regular employee may not be
dismissed unless for cause provided under the Labor Code and other relevant laws, in this case, the 1992
MRPS. As stated above, when the law refers to morality, it necessarily pertains to public and secular
morality and not religious morality. Thus, the proscription against “disgraceful or immoral conduct”
under Section 94(e) of the 1992 MRPS, which is made as a cause for dismissal, must necessarily refer to
public and secular morality. Accordingly, in order for a conduct to be considered as disgraceful or
immoral, it must be “‘detrimental (or dangerous) to those conditions upon which depend the existence
and progress of human society’ and not because the conduct is proscribed by the beliefs of one religion or
the other.”

Same; Same; Same; Premarital sexual relations between two consenting adults who have no impediment
to marry each other, and consequently, conceiving a child out of wedlock, gauged from a purely public
and secular view of morality, does not amount to a disgraceful or immoral conduct under Section 94(e) of
the 1992 Manual of Regulations for Private Schools (MRPS).—Admittedly, the petitioner is employed in
an educational institution where the teachings and doctrines of the Catholic Church, including that on
premarital sexual relations, is strictly upheld and taught to the students. That her indiscretion, which
resulted in her pregnancy out of wedlock, is anathema to the doctrines of the Catholic Church. However,
viewed against the prevailing norms of conduct, the petitioner’s conduct cannot be considered as
disgraceful or immoral; such conduct is not denounced by public and secular morality. It may be an
unusual arrangement, but it certainly is not disgraceful or immoral within the contemplation of the law.
To stress, premarital sexual relations between two consenting adults who have no impediment to marry
each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public and
secular view of morality, does not amount to a disgraceful or immoral conduct under Section 94(e) of the
1992 MRPS.

Same; Same; Burden of Proof; Settled is the rule that in termination cases, the burden of proving that the
dismissal of the employees was for a valid and authorized cause rests on the employer.—Settled is the
rule that in termination cases, the burden of proving that the dismissal of the employees was for a valid
and authorized cause rests on the employer. It is incumbent upon the employer to show by substantial
evidence that the termination of the employment of the employees was validly made and failure to
discharge that duty would mean that the dismissal is not justified and therefore illegal. “Substantial
evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, even if other minds equally reasonable might
conceivably opine otherwise.”

Same; Same; Security of Tenure; Words and Phrases; Security of tenure is a right which may not be
denied on mere speculation of any unclear and nebulous basis.—Indubitably, bare allegations do not
amount to substantial evidence. Considering that the respondents failed to adduce substantial evidence
to prove their asserted cause for the petitioner’s dismissal, the labor tribunals should not have upheld
their allegations hook, line and sinker. The labor tribunals’ respective findings, which were arrived at
sans any substantial evidence, amounts to a grave abuse of discretion, which the CA should have
rectified. “Security of tenure is a right which may not be denied on mere speculation of any unclear and
nebulous basis.”

Same; Management Prerogative; The exercise of management prerogative is not absolute as it must be
exercised in good faith and with due regard to the rights of labor.—The Court has held that
“management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations, transfer of employees, work
supervision, layoff of workers and discipline, dismissal and recall of workers. The exercise of
management prerogative, however, is not absolute as it must be exercised in good faith and with due
regard to the rights of labor.” Management cannot exercise its prerogative in a cruel, repressive, or
despotic manner.

Same; Illegal Dismissals; Reinstatement; Separation Pay; Strained Relations; In cases of illegal
dismissal, the accepted doctrine is that separation pay is available in lieu of reinstatement when the
latter recourse is no longer practical or in the best interest of the parties.—Having established that the
petitioner was illegally dismissed, the Court now determines the reliefs that she is entitled to and their
extent. Under the law and prevailing jurisprudence, “an illegally dismissed employee is entitled to
reinstatement as a matter of right.” Aside from the instances provided under Articles 283 and 284 of the
Labor Code, separation pay is, however, granted when reinstatement is no longer feasible because of
strained relations between the employer and the employee. In cases of illegal dismissal, the accepted
doctrine is that separation pay is available in lieu of reinstatement when the latter recourse is no longer
practical or in the best interest of the parties.

Same; Same; Backwages; Employees who are illegally dismissed are entitled to full backwages, inclusive
of allowances and other benefits or their monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their actual reinstatement but if reinstatement
is no longer possible, the backwages shall be computed from the time of their illegal termination up to
the finality of the decision.—“Employees who are illegally dismissed are entitled to full backwages,
inclusive of allowances and other benefits or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement but if
reinstatement is no longer possible, the backwages shall be computed from the time of their illegal
termination up to the finality of the decision.” Accordingly, the petitioner is entitled to an award of full
backwages from the time she was illegally dismissed up to the finality of this decision.

Same; Same; Moral Damages; Exemplary Damages; The petitioner is not entitled to moral and exemplary
damages; The records of this case are bereft of any clear and convincing evidence showing that the
respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the petitioner.—The
petitioner is not entitled to moral and exemplary damages. “A dismissed employee is entitled to moral
damages when the dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or
is done in a manner contrary to good morals, good customs or public policy. Exemplary damages may be
awarded if the dismissal is effected in a wanton, oppressive or malevolent manner.” “Bad faith, under the
law, does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, or a breach of a known duty through some motive or interest
or ill will that partakes of the nature of fraud.” “It must be noted that the burden of proving bad faith
rests on the one alleging it” since basic is the principle that good faith is presumed and he who alleges
bad faith has the duty to prove the same. “Allegations of bad faith and fraud must be proved by clear and
convincing evidence.” The records of this case are bereft of any clear and convincing evidence showing
that the respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the petitioner.
That the petitioner was illegally dismissed is insufficient to prove bad faith. A dismissal may be contrary
to law but by itself alone, it does not establish bad faith to entitle the dismissed employee to moral
damages. The award of moral and exemplary damages cannot be justified solely upon the premise that
the employer dismissed his employee without cause.

Same; Same; Attorney’s Fees; The petitioner is entitled to attorney’s fees in the amount of ten percent
(10%) of the total monetary award pursuant to Article 111 of the Labor Code.—The petitioner is entitled
to attorney’s fees in the amount of ten percent (10%) of the total monetary award pursuant to Article 111
of the Labor Code. “It is settled that where an employee was forced to litigate and, thus, incur expenses to
protect his rights and interest, the award of attorney’s fees is legally and morally justifiable.”

G.R. No. 187417. February 24, 2016.*

CHRISTINE JOY CAPIN-CADIZ, petitioner, vs. BRENT HOSPITAL AND COLLEGES, INC.,
respondent.

Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; Rule 46, Section 3 of the
Rules of Court states the contents of a petition filed with the Court of Appeals (CA) under Rule 65, viz.,
“the petition shall x x x indicate the material dates showing when notice of the judgment or final order
or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was
filed and when notice of the denial thereof was received.”—Rule 46, Section 3 of the Rules of Court states
the contents of a petition filed with the CA under Rule 65, viz., “the petition shall x x x indicate the
material dates showing when notice of the judgment or final order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial
thereof was received.” The rationale for this is to enable the CA to determine whether the petition was
filed within the period fixed in the rules. Cadiz’s failure to state the date of receipt of the copy of the
NLRC decision, however, is not fatal to her case since the more important material date which must be
duly alleged in a petition is the date of receipt of the resolution of denial of the motion for
reconsideration, which she has duly complied with.

Pleadings and Practice; Registry Receipts; What the rule requires is that the registry receipt must be
appended to the paper being served. Clearly, mere indication of the registry receipt numbers will not
suffice.—The CA also dismissed the petition for failure to attach the registry receipt in the affidavit of
service. Cadiz points out, on the other hand, that the registry receipt number was indicated in the petition
and this constitutes substantial compliance with the requirement. What the rule requires, however, is that
the registry receipt must be appended to the paper being served. Clearly, mere indication of the registry
receipt numbers will not suffice. In fact, the absence of the registry receipts amounts to lack of proof of
service. Nevertheless, despite this defect, the Court finds that the ends of substantial justice would be
better served by relaxing the application of technical rules of procedure. With regard to counsel’s failure
to indicate the place where the IBP and PTR receipts were issued, there was substantial compliance with
the requirement since it was indicated in the verification and certification of non-forum shopping, as
correctly argued by Cadiz’s lawyer.

Labor Law; Termination of Employment; Disgraceful and Immoral Conduct; Whether a conduct is
considered disgraceful or immoral should be made in accordance with the prevailing norms of conduct,
which, as stated in Leus v. St. Scholastica’s College Westgrove, 748 SCRA 378 (2015), refer to those
conducts which are proscribed because they are detrimental to conditions upon which depend the
existence and progress of human society.—Jurisprudence has already set the standard of morality with
which an act should be gauged — it is public and secular, not religious. Whether a conduct is considered
disgraceful or immoral should be made in accordance with the prevailing norms of conduct, which, as
stated in Leus v. St. Scholastica’s College Westgrove, 748 SCRA 378 (2015), refer to those conducts which
are proscribed because they are detrimental to conditions upon which depend the existence and progress
of human society. The fact that a particular act does not conform to the traditional moral views of a
certain sectarian institution is not sufficient reason to qualify such act as immoral unless it, likewise, does
not conform to public and secular standards. More importantly, there must be substantial evidence to
establish that premarital sexual relations and pregnancy out of wedlock is considered disgraceful or
immoral.

Same; Same; Same; As declared in Leus v. St. Scholastica’s College Westgrove, 748 SCRA 378 (2015),
“there is no law which penalizes an unmarried mother by reason of her sexual conduct or proscribes the
consensual sexual activity between two unmarried persons; that neither does such situation
contravene[s] any fundamental state policy enshrined in the Constitution.”—The totality of the
circumstances of this case does not justify the conclusion that Cadiz committed acts of immorality.
Similar to Leus, Cadiz and her boyfriend were both single and had no legal impediment to marry at the
time she committed the alleged immoral conduct. In fact, they eventually married on April 15, 2008.
Aside from these, the labor tribunals’ respective conclusion that Cadiz’s “indiscretion” “scandalized the
Brent community” is speculative, at most, and there is no proof adduced by Brent to support such
sweeping conclusion. Even Brent admitted that it came to know of Cadiz’s “situation” only when her
pregnancy became manifest. Brent also conceded that “[a]t the time [Cadiz] and Carl R. Cadiz were just
carrying on their boyfriend-girlfriend relationship, there was no knowledge or evidence by [Brent] that
they were engaged also in premarital sex.” This only goes to show that Cadiz did not flaunt her
premarital relations with her boyfriend and it was not carried on under scandalous or disgraceful
circumstances. As declared in Leus, “there is no law which penalizes an unmarried mother by reason of
her sexual conduct or proscribes the consensual sexual activity between two unmarried persons; that
neither does such situation contravene[s] any fundamental state policy enshrined in the Constitution.”
The fact that Brent is a sectarian institution does not automatically subject Cadiz to its religious standard
of morality absent an express statement in its manual of personnel policy and regulations, prescribing
such religious standard as gauge as these regulations create the obligation on both the employee and the
employer to abide by the same.

Same; Management Prerogative; The doctrine of management prerogative gives an employer the right to
“regulate, according to his own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, the time, place and manner of work, work supervision, transfer of
employees, layoff of workers, and discipline, dismissal, and recall of employees.”—The doctrine of
management prerogative gives an employer the right to “regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work assignments, working methods, the time,
place and manner of work, work supervision, transfer of employees, layoff of workers, and discipline,
dismissal, and recall of employees.” In this case, Brent imposed on Cadiz the condition that she
subsequently contract marriage with her then boyfriend for her to be reinstated. According to Brent, this
is “in consonance with the policy against encouraging illicit or common-law relations that would subvert
the sacrament of marriage.” Statutory law is replete with legislation protecting labor and promoting
equal opportunity in employment. No less than the 1987 Constitution mandates that the “State shall
afford full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.”

Same; Magna Carta for Women; Republic Act (RA) No. 9710 or the Magna Carta for Women protects
women against discrimination in all matters relating to marriage and family relations, including the
right to choose freely a spouse and to enter into marriage only with their free and full consent.—With
particular regard to women, Republic Act No. 9710 or the Magna Carta for Women protects women
against discrimination in all matters relating to marriage and family relations, including the right to
choose freely a spouse and to enter into marriage only with their free and full consent. Weighed against
these safeguards, it becomes apparent that Brent’s condition is coercive, oppressive and discriminatory.
There is no rhyme or reason for it. It forces Cadiz to marry for economic reasons and deprives her of the
freedom to choose her status, which is a privilege that inheres in her as an intangible and inalienable
right. While a marriage or no-marriage qualification may be justified as a “bona fide occupational
qualification,” Brent must prove two factors necessitating its imposition, viz.: (1) that the employment
qualification is reasonably related to the essential operation of the job involved; and (2) that there is a
factual basis for believing that all or substantially all persons meeting the qualification would be unable
to properly perform the duties of the job. Brent has not shown the presence of neither of these factors.
Perforce, the Court cannot uphold the validity of said condition.

Same; Termination of Employment; Illegal Dismissals; Backwages; Separation Pay; Generally, the
computation of backwages is reckoned from the date of illegal dismissal until actual reinstatement. In
case separation pay is ordered in lieu of reinstatement or reinstatement is waived by the employee,
backwages is computed from the time of dismissal until the finality of the decision ordering separation
pay.—The Court also finds that Cadiz is only entitled to limited backwages. Generally, the computation
of backwages is reckoned from the date of illegal dismissal until actual reinstatement. In case separation
pay is ordered in lieu of reinstatement or reinstatement is waived by the employee, backwages is
computed from the time of dismissal until the finality of the decision ordering separation pay.
Jurisprudence further clarified that the period for computing the backwages during the period of appeal
should end on the date that a higher court reversed the labor arbitration ruling of illegal dismissal. If
applied in Cadiz’s case, then the computation of backwages should be from November 17, 2006, which
was the time of her illegal dismissal, until the date of promulgation of this decision. Nevertheless, the
Court has also recognized that the constitutional policy of providing full protection to labor is not
intended to oppress or destroy management. The Court notes that at the time of Cadiz’s indefinite
suspension from employment, Leus was yet to be decided by the Court.

Labor Law; View that the values expressed in the Constitution cannot be completely ignored in the just
adjudication of labor cases.—I agree with my esteemed colleague Justice Bienvenido L. Reyes’
application of the doctrine in Leus v. St. Scholastica’s College Westgrove, 748 SCRA 378 (2015). I take this
opportunity to contribute to the analysis for cases similar to this and Leus where women’s fundamental
rights are pitted against an employer’s management prerogatives. While the ponencia views the issue
from the perspective of public and secular morality, there is also a constitutional dimension to this case
that should be considered. This is a woman’s right to personal autonomy as a fundamental right. The
Constitution protects personal autonomy as part of the Due Process Clause in the Bill of Rights. Indeed,
the Bill of Rights cannot be invoked against private employers. However, the values expressed in the
Constitution cannot be completely ignored in the just adjudication of labor cases.

Same; Pregnancy Outside of Wedlock; View that in Christine Joy’s case, her decision to continue her
pregnancy outside of wedlock is a constitutionally protected right. It is therefore not only moral, it is
also a constitutional value that this Court is duty-bound to uphold.—Leus and the ponencia explain that
in determining whether a particular conduct may be considered as immoral in the public and secular
sense, courts must follow a two-step process. First, courts must consider the totality of the circumstances
surrounding the conduct and second, courts must assess these circumstances vis-à-vis the prevailing
norms of conduct or what society generally considers as moral. I propose that in ascertaining whether the
public holds a particular conduct as moral, the Constitution is a necessary and inevitable guide. The
Constitution is an expression of the ideals of the society that enacted and ratified it. Its bill of rights, in
particular, is an embodiment of the most important values of the people enacting a Constitution. Values
that find expression in a society’s Constitution are not only accepted as moral, they are also fundamental.
Thus, I propose that in ascertaining whether an act is moral or immoral, a due consideration of
constitutional values must be made. In Christine Joy’s case, her decision to continue her pregnancy
outside of wedlock is a constitutionally protected right. It is therefore not only moral, it is also a
constitutional value that this Court is duty-bound to uphold.

Constitutional Law; Right to Liberty; View that jurisprudence directs us to the conclusion that the
constitutional right to liberty does not merely refer to freedom from physical restraint. It also includes
the right to be free to choose to be, in the words of Justice Fernando, a “unique individual.”—
Jurisprudence directs us to the conclusion that the constitutional right to liberty does not merely refer to
freedom from physical restraint. It also includes the right to be free to choose to be, in the words of Justice
Fernando, a “unique individual.” This necessarily includes the freedom to choose how a person defines
her personhood and how she decides to live her life. Liberty, as a constitutional right, involves not just
freedom from unjustified imprisonment. It also pertains to the freedom to make choices that are
intimately related to a person’s own definition of her humanity. The constitutional protection extended to
this right man dates that beyond a certain point, personal choices must not be interfered with or unduly
burdened as such interference with or burdening of the right to choose is a breach of the right to be free.

Same; Same; Termination of Employment; Constructive Dismissal; View that in constructively

dismissing Christine Joy and promising her reinstatement provided she marries her boyfriend, Brent has
breached not a mere statutory prohibition but a constitutional right.—The Labor Code contains
provisions pertaining to stipulations against marriage. Specifically, Article 134 states that it is unlawful
for employers to require as a condition for employment or continuation of employment that a woman
employee shall not get married. This provision also prohibits the dismissal of a woman employee by
reason of her marriage. This Court, in the case of Philippine Telegraph and Telephone Company v.
NLRC, 272 SCRA 596 (1997), has applied this provision and found illegal the dismissal of a woman
employee because of a condition in her contract that she remains single during her employment.
Christine Joy’s case involves the reverse, albeit the effect is as burdensome and as odious. In
constructively dismissing Christine Joy and promising her reinstatement provided she marries her
boyfriend, Brent has breached not a mere statutory prohibition but a constitutional right. While as I have
already explained, there is jurisprudence to the effect that the Bill of Rights cannot be invoked against a
private employer, Brent’s act of invoking the MRPS and the Labor Code brings this case within the ambit
of the Constitution. In arguing that immorality is a just cause for dismissal under the MRPS and the
Labor Code, Brent is effectively saying that these government issuances violate the constitutional right to
personal liberty and privacy. This interpretation cannot be countenanced. The Constitution is deemed
written into these government issuances and as such, they must be construed to recognize the protection
vested by the Bill of Rights.

G.R. No. 202621. June 22, 2016.*

ZAIDA R. INOCENTE, petitioner, vs. ST. VINCENT FOUNDATION FOR CHILDREN AND AGING,
INC./VERONICA MENGUITO, respondents.

Remedial Law; Civil Procedure; Petition for Review on Certiorari; In a Rule 45 review of a Court of
Appeals (CA) Labor decision rendered under Rule 65 of the Rules of Court, what Supreme Court (SC)
reviews are the legal errors that the CA may have committed in arriving at the assailed decision, in
contrast with the review for jurisdictional errors that underlie an original certiorari action.—In a Rule
45 review of a CA Labor decision rendered under Rule 65 of the Rules of Court, what we review are the
legal errors that the CA may have committed in arriving at the assailed decision, in contrast with the
review for jurisdictional errors that underlie an original certiorari action.

Same; Special Civil Actions; Certiorari; A Rule 65 certiorari proceeding is an extraordinary remedy aimed
solely at correcting errors of jurisdiction or acts committed without jurisdiction, or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack of jurisdiction.—In resolving the
present Rule 45 petition, we are therefore, bound by the intrinsic limitations of a Rule 65 certiorari
proceeding: it is an extraordinary remedy aimed solely at correcting errors of jurisdiction or acts
committed without jurisdiction, or in excess of jurisdiction, or with grave abuse of discretion amounting
to lack of jurisdiction. It does not address mere errors of judgement, unless the error transcends the
bounds of the tribunal’s jurisdiction. As defined, “grave abuse of discretion” refers to the arbitrary or
despotic exercise of power due to passion, prejudice or personal hostility; or the whimsical, arbitrary or
capricious exercise of power that amounts to an evasion or refusal to perform a positive duty enjoined by
law or to act at all in contemplation of law.

Labor Law; Termination of Employment; Burden of Proof; In every dismissal situation, the employer
bears the burden of proving the existence of just or authorized cause for the dismissal and the observance
of due process requirements.—In every dismissal situation, the employer bears the burden of proving the
existence of just or authorized cause for the dismissal and the observance of due process requirements.
This rule implements the security of tenure of the Constitution by imposing the burden of proof on
employers in termination of employment situations. The failure on the part of the employer to discharge
this burden renders the dismissal invalid.

Same; Same; Same; Loss of Trust and Confidence; The employer must show that the employee indeed
committed act/s constituting breach of trust or serious misconduct, which acts the courts must gauge
within the parameters defined by the law and jurisprudence.—Willful breach of trust (or loss of
confidence as interchangeably referred to in jurisprudence) and serious misconduct are just causes for the
dismissal of an employee under Article 282(a) and (c), respectively, (now Article 296) of the Labor Code.
To justify the employee’s dismissal on these grounds, the employer must show that the employee indeed
committed act/s constituting breach of trust or serious misconduct, which acts the courts must gauge
within the parameters defined by the law and jurisprudence. To place our discussions in proper
perspective, the determination of whether Zaida was validly dismissed on the ground of willful breach of
trust and serious misconduct requires the prior determination of, first, whether Zaida’s intimate
relationship with Marlon was, under the circumstances, immoral; and second, whether such relationship
is absolutely prohibited by or is strictly required to be disclosed to the management under St. Vincent’s
Non-Fraternization Policy.

Same; Same; Immorality; Immorality pertains to a course of conduct that offends the morals of the
community. It connotes conduct or acts that are willful, flagrant or shameless, and that shows
indifference to the moral standards of the upright and respectable members of the community.—
Immorality pertains to a course of conduct that offends the morals of the community. It connotes conduct
or acts that are willful, flagrant or shameless, and that shows indifference to the moral standards of the
upright and respectable members of the community. Conducts described as immoral or disgraceful refer
to those acts that plainly contradict accepted standards of right and wrong behavior; they are prohibited
because they are detrimental to the conditions on which depend the existence and progress of human
society. Notwithstanding this characterization, the term “immorality” still often escapes precise
definition; the determination of whether it exists or has taken place depends on the attendant
circumstances, prevailing norms of conduct, and applicable laws. In other words, it is the totality of the
circumstances surrounding the conduct per se viewed in relation with the conduct generally accepted by
society as respectable or moral, which determines whether the conduct is disgraceful or immoral. The
determination of whether a particular conduct is immoral involves: (1) a consideration of the totality of
the circumstances surrounding the conduct; and (2) an assessment of these circumstances in the light of
the prevailing norms of conduct, i.e., what the society generally considers moral and respectable, and of
the applicable laws.

Same; Same; Same; In general, in determining whether the acts complained of constitute “disgraceful and
immoral” behavior under our laws, the distinction between public and secular morality on the one hand,
and religious morality, on the other hand, should be kept in mind.—In general, in determining whether
the acts complained of constitute “disgraceful and immoral” behavior under our laws, the distinction
between public and secular morality on the one hand, and religious morality, on the other hand, should
be kept in mind. This distinction as expressed — albeit not exclusively — in the law, on the one hand, and
religious morality, on the other, is important because the jurisdiction of the Court extends only to public
and secular morality. In this case, we note that both Zaida and Marlon at all times had no impediments to
marry each other. They were adults who met at work, dated, fell in love and became sweethearts. The
intimate sexual relations between them were consensual, borne by their love for one another and which
they engaged in discreetly and in strict privacy. They continued their relationship even after Marlon left
St. Vincent in 2008. They took their marriage vows soon after Zaida recovered from her miscarriage, thus
validating their union in the eyes of both men and God. All these circumstances show the sincerity and
honesty of the relationship between Zaida and Marlon. They also show their genuine regard and love for
one another — a natural human emotion that is neither shameless, callous, nor offensive to the opinion of
the upright and respectable members of the secular community. While their actions might not have
strictly conformed with the beliefs, ways, and mores of St. Vincent — which is governed largely by
religious morality — or with the personal views of its officials, these actions are not prohibited under any
law nor are they contrary to conduct generally accepted by society as respectable or moral.

Same; Same; Same; The voluntary intimacy between two (2) unmarried adults, where both are not under
any impediment to marry, where no deceit exists, and which was done in complete privacy, is neither
criminal nor so unprincipled as to warrant disciplinary action.—We thus reiterate that mere private
sexual relations between two unmarried and consenting adults, even if the relations result in pregnancy
or miscarriage out of wedlock and without more, are not enough to warrant liability for illicit behavior.
The voluntary intimacy between two unmarried adults, where both are not under any impediment to
marry, where no deceit exists, and which was done in complete privacy, is neither criminal nor so
unprincipled as to warrant disciplinary action.

Same; Same; Same; Since Zaida and Marlon’s relationship was not per se immoral based on secular
morality standards, St. Vincent carries the burden of showing that they were engaged in an act
prejudicial to its interest and one that it has the right to protect against.—Since Zaida and Marlon’s
relationship was not per se immoral based on secular morality standards, St. Vincent carries the burden
of showing that they were engaged in an act prejudicial to its interest and one that it has the right to
protect against. We reiterate, in this respect, that Zaida and Marlon were very discreet in their
relationship and kept this relationship strictly private. They did not flaunt their affections for each other
at the workplace. No evidence to the contrary was ever presented. Zaida and Marlon’s relationship, in
short, was almost completely unknown to everyone in St. Vincent; the respondents in fact even admitted
that they discovered the relationship only in 2009. Significantly, St. Vincent has fully failed to expound on
the interest that is within its own right to protect and uphold. The respondents did not specify in what
manner and to what extent Zaida and Marlon’s relationship prejudiced or would have prejudiced St.
Vincent’s interest. To be sure, the other employees and volunteers of St. Vincent know, by now, what had
happened to Zaida and the circumstances surrounding her dismissal. But, the attention which the
relationship had drawn could hardly be imputed to her; if at all, it was the respondents’ actions and
reactions which should be blamed for the undesired publicity.

Same; Same; Same; As explicitly worded, the Policy “does not wish to interfere with the off-duty and
personal conduct of its employees,” and only strongly discourages (thus still technically allows)
consensual romantic or sexual relationships; it does not prohibit such relationships.—Based on these
considerations, we find that Zaida clearly did not violate the Non-Fraternization Policy when she
continued her relationship with Marlon despite the Policy’s adoption in 2006. As explicitly worded, the
Policy “does not wish to interfere with the off-duty and personal conduct of its employees,” and only
strongly discourages (thus still technically allows) consensual romantic or sexual relationships; it does
not prohibit such relationships. No evidence furthermore has been shown indicating Zaida’s abuse of her
supervisory position, before or after the Policy was put in place. Her failure, therefore, to observe the
Policy or to otherwise disclose the relationship, which continued even after the adoption of the Policy,
did not constitute a violation of company policy to justify her dismissal.

Same; Same; Serious Misconduct; For an employee to be validly dismissed on the ground of serious
misconduct, the employee must first, have committed misconduct or an improper or wrong conduct. And
second, the misconduct or improper behavior is: (1) serious; (2) relate to the performance of the
employee’s duties; and (3) show that the employee has become unfit to continue working for the
employer.—For an employee to be validly dismissed on the ground of serious misconduct, the employee
must first, have committed misconduct or an improper or wrong conduct. And second, the misconduct or
improper behavior is: (1) serious; (2) relate to the performance of the employee’s duties; and (3) show that
the employee has become unfit to continue working for the employer. As we explained above, Zaida’s
relationship with Marlon is neither illegal nor immoral; it also did not violate the Non-Fraternization
Policy. In other words, Zaida did not commit any misconduct, serious or otherwise, that would justify her
dismissal based on serious misconduct. Moreover, St. Vincent failed to show how Zaida’s relationship
with Marlon affected her performance of her duties as a Program Officer and that she has become unfit to
continue working for it, whether for the same position or otherwise. Her dismissal based on this ground,
therefore, is without any factual or legal basis.

Same; Same; Loss of Trust and Confidence; Willful breach of trust, as just cause for the termination of
employment, is founded on the fact that the employee concerned: (1) holds a position of trust and
confidence, i.e., managerial personnel or those vested with powers and prerogatives to lay down
management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline
employees; or (2) is routinely charged with the care and custody of the employer’s money or property, i.e.,
cashiers, auditors, property custodians, or those who, in normal and routine exercise of their functions,
regularly handle significant amounts of money or property.—Willful breach of trust, as just cause for the
termination of employment, is founded on the fact that the employee concerned: (1) holds a position of
trust and confidence, i.e., managerial personnel or those vested with powers and prerogatives to lay
down management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline
employees; or (2) is routinely charged with the care and custody of the employer’s money or property,
i.e., cashiers, auditors, property custodians, or those who, in normal and routine exercise of their
functions, regularly handle significant amounts of money or property. In any of these situations, it is the
employee’s breach of the trust that his or her position holds which results in the employer’s loss of
confidence. Significantly, loss of confidence is, by its nature, subjective and prone to abuse by the
employer. Thus, the law requires that the breach of trust — which results in the loss of confidence —
must be willful. The breach is willful if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or
inadvertently.

Same; Same; Undue Influence; For the charge of “exerting undue influence” to have validly supported
Zaida’s dismissal, it should have been supported by a narration of the specific act/s she allegedly
committed by which she unduly influenced her coworker and subordinates, of the dates when these act/s
were committed, and of the names of the coworkers and/or subordinates affected by her alleged
actions.—As pointed out above, St. Vincent did not specify in what manner and to what extent Zaida
unduly influenced her coworkers and subordinates for hers and Marlon’s benefit with regard to the
charge of committing acts against persons. For the charge of “exert[ing] undue influence” to have validly
supported Zaida’s dismissal, it should have been supported by a narration of the specific act/s she
allegedly committed by which she unduly influenced her coworker and subordinates, of the dates when
these act/s were committed, and of the names of the coworkers and/or subordinates affected by her
alleged actions. The specification of these facts and matters is necessary in order to fully apprise her of all
of the charges against her and enable her to present evidence in her defense. St. Vincent’s failure to make
this crucial specification in the notice to explain and in the termination letter clearly deprived Zaida of
due process.