IRST DIVISION We need your response 24 hrs upon receipt of this memorandum.
[G.R. NO. 171703 : September 22, 2006] For your strict compliance.4
ACE PROMOTION AND MARKETING
CORPORATION, Petitioner, v. REYNALDO URSABIA,Respondent.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this Petition for Review on Certiorari under Rule 45 of the
Rules of Court is the August 25, 2005 Decision1 of the Court of Appeals
in CA-G.R. SP No. 84575, reversing the November 27, 2003
Decision2 of the National Labor Relations Commission (NLRC) in NLRC
Case No. V-000473-2002, and holding that respondent was illegally
dismissed by petitioner. Likewise questioned is the appellate court's
February 22, 2006 Resolution3 denying petitioner's motion for
reconsideration.
The facts show that sometime in August, 1994, petitioner Ace
Promotion and Marketing Corporation, a company engaged in the
promotion of various consumer products, commodities, and goods,
hired respondent Reynaldo Ursabia as a company driver assigned to
pick up the products of Nestle Philippines, Inc., for promotion and
marketing.
On July 6, 2001, respondent failed to report for work. Petitioner,
through its area supervisor, Gerry Garcia, issued a Memorandum
dated July 9, 2001, which reads as follows:
MEMORANDUM
To: Mr. Reynaldo S. Ursabia
Fr: Mr. Gerry P. Garcia
Date: July 09, 2001
Subj: Violation of Company Rule
: Abandonment of Work last Jul. 06, 2001
Please explain thru writing why there should be no disciplinary
measure be taken against (sic) on the above-mentioned violation.
When respondent reported back to work on July 9, 2001, he was
personally served with the foregoing memorandum but refused to
acknowledge the same, hence, petitioner sent it through registered
mail to his (respondent) last known address.5
The following day, July 10, 2001, Garcia noticed some damage on the
vehicle assigned to respondent, hence, he issued another
Memorandum which provides:
MEMORANDUM
To: Mr. Reynaldo S. Ursabia
Fr: Mr. Gerry P. Garcia
Date: July 10, 2001
Subj: Destruction of Company Property
After instructing your immediate supervisor to hold your services and
told (sic) you to explain why you abandoned your work last July 6,
2001, instead of explaining reasons, you act (sic) negatively. Pointing
somebody damage the vehicle assigned to you (sic). You didn't
manage to wait for me and explain, you left the office by saying
(sabihin mo kay boss gerry na awol na lang ako). Upon returning back
to the office, we check (sic) the vehicle and found out that the right
front wheel was deflated, we also found out that the sliding door was
slightly damage (sic). It seems that a smooth object is (sic) used in
hitting the vehicle and I think you disconnected some wirings so as not
others may use (sic) the said vehicle. We also found a piece of paper
inserted on the distribution cap.
In this regard, we again require you to explain why you cannot be
Terminated base (sic) on the abovementioned. We need your response
24 hrs upon receipt of this memorandum.
Failure to comply, Matter will be relayed to our attorney for Legal
Actions (sic).6
Service of the said memorandum was done through registered mail to
respondent's last known address.7
Sometime in July 2001, an anonymous note8 was discovered among
the stocks of petitioner containing the words "(Good news) be careful I - Backwages - P 63,000.00
and save youre (sic) life because there's a time to come everybody x x
x will die."9 The examination conducted by the PNP Crime Laboratory II - Separation Pay - 50,400.00
allegedly showed that the handwriting of respondent has significant
similarities with the said handwritten note.10
III - 13th Month - 3,150.00
On August 6, 2001, respondent went to petitioner's office and was Pay
served with a termination letter, which reads:
IV - Service - 1,211.50
It's been a long time now since we send (sic) you several letters Incentive Leave
instructing you to explain why you cannot be terminated for violating
Company Rules. As of this time, we are confident enough that you had
already received all the letters. You were also verbally advice (sic) that P117,761.50
you have to explain why there should be no disciplinary measures be
taken against you. August 6, 2001, you reported to the office, I
personally served you the letters. After reading the contents, you were Plus P11,776.15, ten (10%) percent attorney's fees or a total
advised to acknowledge receipt of the original copies but you refuses aggregate amount of PESOS ONE HUNDRED TWENTY NINE THOUSAND
(sic) to sign. Another violation is the Threat Letter inserted on stocks FIVE HUNDRED THIRTY SEVEN & 65/100 (P129,537.65)
for return. We request (sic) PNP crime lab to examine said Letter. After
a week they come up with the conclusion that said letter is similar with xxx
your handwriting.
SO ORDERED.13
In connection on all of the above (sic), your Services as Company
Driver is hereby Terminated effective August 6, 2001.11 On appeal, the NLRC rendered a decision dated November 27, 2003,
reversing the decision of the Labor Arbiter and disposing as follows:
Again, respondent refused to receive the same prompting petitioner
serve it by registered mail to respondent's last known address. WHEREFORE, premises considered, the decision of Labor Arbiter Jose
G. Gutierrez dated 9 May 2002 is VACATED and SET ASIDE and a new
Meanwhile, the petitioner filed two criminal cases for Malicious Mischief one is entered, to wit:
and Grave Threats against the respondent.12
Ordering respondent Ace Promotion and Marketing Corporation to pay
Displeased with his termination, respondent filed a complaint for illegal complainant his service incentive leave pay in the amount of One
dismissal and non-payment of other monetary benefits. Thousand Two Hundred Eleven and 50/100 (P1,211.50).

On May 9, 2002, Labor Arbiter Jose G. Gutierrez rendered a decision in SO ORDERED.14

favor of respondent. The dispositive portion of which, reads:
In a decision dated August 25, 2005, the Court of Appeals set aside
WHEREFORE, in the light of the foregoing judgment is hereby rendered the decision of the NLRC and held that respondent was illegally
declaring the complainant illegally dismissed from his employment and dismissed. The dispositive portion thereof, reads:
directing the respondent x x x Ace Promotion and Marketing
Corporation to pay complainant the following:
WHEREFORE, the petition is GRANTED. The Decision of the National
Labor Relations Commission dated 27 November 2003 is SET ASIDE
and the decision of the Labor Arbiter Jose G. Gutierrez dated 9 May
2002 is hereby REINSTATED with the modification that the award of
13th month pay is deleted.
SO ORDERED.15
With the denial of its motion for reconsideration on February 22, 2006,
petitioner filed the instant petition.
The issue for resolution is whether there exists a just cause to dismiss
respondent and whether he was accorded procedural due process.
The Labor Arbiter held that respondent was dismissed by petitioner for
the following misdemeanors: (1) abandonment, (2) destruction of
company property, and (3) leaving a note which petitioner interpreted
to be a threat. He ratiocinated that respondent's dismissal was illegal
because no hearing was conducted to allow him (respondent) to
confront petitioner's witnesses.16 The NLRC, on the other hand, ruled
that the dismissal was valid because respondent is guilty of
abandonment.17 This was reversed by the Court of Appeals which held
that the termination of respondent is not valid because his failure to
report for work for a single day did not constitute abandonment and
that the criminal case for grave threats filed against respondent was
dismissed by the prosecutor's office while the case for malicious
mischief was dismissed by the court.18
We agree with the Court of Appeals that respondent cannot be
dismissed for abandonment. To constitute a just and valid ground for
dismissal, abandonment requires the deliberate and unjustified refusal
of the employee to resume his employment. Two elements must be
present, namely: (1) the failure to report for work or absence without
valid or justifiable reason, and (2) a clear intention to sever the
employer-employee relationship. The second element is more
determinative of the intent and must be evinced by overt acts. Mere
absence, not being sufficient, the burden of proof rests upon the
employer to show that the employee clearly and deliberately intended
to discontinue his employment without any intention of returning.19
In the instant case, the subsequent conduct of respondent after he
failed to report for work on July 6, 2001, shows that he had no
intention to sever his employment with petitioner. Record shows that
he went to work on July 9, 2001, which enabled petitioner to
personally serve him the memorandum of even date. While his act of
loitering outside the company premises cannot considered as reporting
for work, it shows an intention to make his services available for
petitioner. More importantly, he formally reported for work on August
6, 2001. All these show that respondent never really wanted to quit his
job. He may be guilty of going on absence without leave, but not
abandonment because the totality of his acts show a clear intention to
return to work.
Likewise, the alleged damage on the company car assigned to
respondent cannot justify his dismissal. Termination is simply
disproportionate to such infraction not only because the extent of the
damage was never proved by petitioner but more importantly, no
substantial evidence was presented to establish the guilt of
respondent. With regard to the "anonymous note" purportedly written
by the latter, petitioner failed to discharge the burden of proving that
the same was indeed a threat and that respondent was the author
thereof.
The foregoing, notwithstanding, we find that respondent should be
dismissed for willful disobedience of the memoranda issued by
petitioner. To be validly dismissed on the ground of willful
disobedience requires the concurrence of at least two requisites: (1)
the employee's assailed conduct must have been willful or intentional,
the willfulness being characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge.20
In the instant case, the failure of respondent to answer the July 9 and
10, 2001 memoranda of petitioner is clearly intentional. He reported to
and loitered outside petitioner's premises but never made any oral or
written reply to the said memoranda. This shows respondent's
wrongful and perverse attitude to defy the reasonable orders which
undoubtedly pertain to his duties as an employee of petitioner.
Similarly in Aquinas School v. Magnaye,21 the Court found just cause
to dismiss the employee for her willful disobedience of the superior's
directives requiring her to explain her absence, violation of school
policy and refusal to subject herself to medical examination. While the
employee therein was held not to be guilty of abandonment, she was
nonetheless held liable for misconduct or willful disobedience to the
lawful orders of the school. Thus:
Complainant had willfully and intentionally refused to comply with the
two principal orders of the school. The non-compliance by complainant
to the first order dated October 10, 1991 which she received on
October 14, 1991, though not excusable, may be rationalized as
resulting from her emotional stress at that time - as explained by her
during the hearing on March 18, 1991. This may well be the 'first
offense' referred to by Complainant in her pleadings. But then,
Complainant was given a second order on the same matter on
November 16, 1991. Again, Complainant did not comply. This second
non-compliance, when she was given the last opportunity to do so,
considering the utter lack of reason or justification for such non-
compliance, can only result from an intentional refusal or willful
disobedience, especially so when it is considered that Complainant had
been certified as no longer under stress and already fit to work. This
second non-compliance has never been justified which clearly indicates
an intention to completely ignore the lawful orders of her superior.
The same can be said about her adamant refusal to submit to medical
examination by the school-designated physician. Complainant was
given the first order on November 6, 1991 to see the physician on
November 7 or 12, at Complainant's option. She does not deny having
received this order. Complainant did not reply to the order; neither did
she see the physician as required.
xxx
The acts of Complainant, in repeatedly refusing to comply with the
lawful and reasonable orders of the School, cannot be considered
simply as acts of simple disobedience. Considering the circumstances
and the sequence of refusals, they cannot but be willful and
intentional. A willful refusal to comply with the superior's lawful and
reasonable orders is a serious misconduct that strikes at the very root
of supervisory authority, which should not be tolerated if organizations
are to maintain order and discipline, both essential to organizational
stability and survival. This dictum finds support in a long line of cases
decided by our Supreme Court.
Moreover, respondent's absence without leave for almost a month
aggravated his infractions. He did not deny petitioner's allegation that
he merely loitered outside the company's premises and did not request
permission to go on leave. While in some cases, the length of service
of the employee is considered to mitigate the imposable penalty, we
cannot apply the same ruling in the instant case. Respondent had
worked with petitioner for almost seven years yet he did not give the
courtesy, if not gratitude due it by complying with its directives and
explaining his conduct either verbally or in writing. Indeed, to hold
that there is no just cause to terminate respondent would demoralize
the rank and file employees who religiously comply with the lawful
orders of their employer. It may encourage respondent to do even
worse and will render a mockery of the rules of discipline that
employees are required to observe. In protecting the rights of the
laborer, courts cannot authorize the oppression or self-destruction of
the employer.22
Nevertheless, the Court finds that respondent was not afforded his
procedural due process rights. In dismissing an employee, the
employer has the burden of proving that the former worker has been
served two notices: (1) one to apprise him of the particular acts or
omissions for which his dismissal is sought, and (2) the other to inform
him of his employer's decision to dismiss him. The first notice must
state that dismissal is sought for the act or omission charged against
the employee, otherwise, the notice cannot be considered sufficient
compliance with the rules.23
In the instant case, the just cause to terminate respondent was his
willful disobedience to the July 9 and July 10, 2001 memoranda of
petitioner. However, he was not given sufficient notice that his
services will be terminated on such grounds. Respondent defied two
memoranda of petitioner. Hence, it is necessary that he be furnished
with a third memorandum informing him that his disobedience to the
previous two memoranda may cause his dismissal. While the July 10,
2001 memorandum stated that he failed to answer the July 9, 2001
directive requiring an explanation for his absence on even date,
petitioner never sent a notice to respondent ordering him to explain
his disobedience to the July 10, 2001 memorandum. Moreover, the
final notice of termination of respondent failed to specify the ground
for his dismissal. It vaguely stated that he is being terminated for
violation of company rules which were not specified by petitioner. It
even added a third ground (i.e., writing a threat), for which
respondent was not given a chance to controvert. Under the
circumstances, we find that petitioner did not sufficiently comply with
the required two notice rule.
In Agabon v. National Labor Relations Commission,24 it was held that
where the dismissal is for a just cause, as in the instant case, 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 violation of his statutory rights. Thus, applying Agabon,
the Court, in Electro System Industries Corporation v. National Labor
Relations Commission25 awarded P30,000.00 to an employee who was
dismissed for just cause but was not afforded due process.
Conformably, respondent in the present case should be indemnified in
the amount of P30,000.00 as nominal damages which we consider as
appropriate under the circumstances.

In its decision, the NLRC held that respondent was validly dismissed
but is entitled to unpaid service incentive leave pay in the amount of
P1,211.50. Since petitioner no longer questioned said award,
affirmance thereof is proper.

WHEREFORE, the petition is GRANTED. The August 25, 2005

Decision and the February 22, 2006 Resolution of the Court of Appeals
in CA-G.R. SP No. 84575, are REVERSED and SET ASIDE. The
November 27, 2003 decision of the National Labor Relations
Commission in NLRC Case No. V-000473-2002 declaring the dismissal
of respondent valid, is REISNTATED with the MODIFICATION that
petitioner is directed to pay respondent P30,000.00 as nominal
damages.

No costs.

SO ORDERED.
 THIRD DIVISION
[G.R. NO. 167345 : November 23, 2007]
e PACIFIC GLOBAL CONTACT CENTER, INC. and/or JOSE
VICTOR SISON, Petitioners, v. MA. LOURDES
CABANSAY, Respondent.
DECISION
NACHURA, J.:
Established in our labor law jurisprudence is the principle that while
compassion and human consideration should guide the disposition of
cases involving termination of employment, since it affects one's
means of livelihood, it should not be overlooked that the benefits
accorded to labor do not include compelling an employer to retain the
services of an employee who has been shown to be a gross liability to
the employer.1
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court assailing the January 10, 2005 Decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 83248, and the March 7,
2005 Resolution3 denying the motion for reconsideration thereof.
The facts are undisputed. Respondent Ma. Lourdes Cabansay
(Cabansay) was hired as Senior Traning Manager of ePacific Global
Contact Center, Inc. with a monthly salary of P38,000.00 on April 18,
20014and became a regular employee on August 1, 2001. In March
2002, respondent was tasked to prepare a new training process for the
company's Telesales Trainees.5
After reviewing the training module prepared by respondent, Mr.
Rosendo S. Ballesteros (Ballesteros), the company's Senior Vice
President-Business Development Group, found that the same did not
contain any changes and that they were not ready to present it.6 He
thus instructed respondent through an electronic mail (e-mail) to
postpone the presentation and the implementation of the new training
process.7 Ballesteros further emphasized that the Department needed
more time to teach the trainees on how to get leads, focus on
developing their telemarketing skills and acquire proper motivation.8
In response to Ballesteros's e-mail instructions, Cabansay wrote, also
via e-mail, as follows:
From: Miami Cabansay
Sent: Friday, April 05, 2002 7:58 AM
To: Ro Ballesteros; Lorna Garcia - ePacific
Cc: 'Butch Nievera'
Subject: RE: dlp.new training process presentation.04042002
Importance: High
Sensitivity: Confidential
Ro, the presentation is going to be discussed in detail. As we discussed
yesterday i (sic) SPECIFICALLY told you that I WILL DISCUSS the new
training process and explain it to them in detail. Didn't you see the last
past (sic) of the 5-day classroom training, (sic) the last day includes
PROSPECTING, that's where the CCA trainees will be taught how to get
leads both local and abroad.
The criteria for the evaluation? It's already done by Richie, we re going
to distribute the hard copies and discuss it in DETAIL in this
afternoon's briefing.
This is a very simple presentation and I WILL NOT POSTPONE it today,
it's very easy to comprehend and as per YOUR INSTRUCTION we will
be implementing it next week, so when should we present this to the
TLs?cra lawlibrary
Let's not make SIMPLE THINGS COMPLICATED.
I will go on with the presentation this afternoon.9
Adversely reacting to respondent's attitude, Ballesteros sent Cabansay
a memo on April 6, 2002, informing the latter that he found her
message to be a clear act of insubordination, causing him to lose his
trust and confidence in her as Manager of the Training
Department.10 He then asked respondent to explain in writing why she
should not be terminated as a consequence of her acts.11
Meanwhile, no presentation of the training module was made on April
5, 2002 because the Senior Manager for Telesales, Ms. Lorna Garcia,
on instruction of Ballesteros, informed all the participants that the
same was postponed because Management was not yet ready to
present the module.12
Clarifying that this was merely a case of miscommunication and that
she had no intention to disregard the order to postpone the
implementation of the new training process, Cabansay submitted two
memoranda dated April 8 and 11, 2002.13
However, on April 11, 2002, the same day she submitted her second
explanation, Cabansay received a memorandum from the HR
Department/Office of the President notifying her that she had been
terminated from the service effective immediately for having
committed an act of insubordination resulting in the management's
loss of trust and confidence in her.14
Respondent, thus, filed a case for illegal dismissal docketed as NLRC-
NCR-04-02441-02 with the Labor Arbitration Branch of the National
Labor Relations Commission (NLRC). In her position paper,15 she
sought, among others, payment of full backwages, separation pay,
actual, moral and exemplary damages, cash equivalent of vacation and
sick leave, 13th month pay, and attorney's fees.16
On September 2, 2002, Labor Arbiter (LA) Madjayran H. Ajan rendered
his Decision17 dismissing the complaint. The Labor Arbiter ruled that
reading Cabansay's e-mail message between the lines would clearly
show that she willfully disobeyed the order of Ballesteros.18 The her
claim for 13th month pay, as well as for the cash equivalent of her sick
and vacation leave, the LA ruled that she impliedly agreed, when she
did not object, to the company's submission that the pro-rated
equivalent of her 13th month pay was already paid to her and that she
did not meet the company's conditions for conversion to cash of her
leave credits.19 The dispositive portion of the LA's Decision reads:
WHEREFORE, premises all considered, judgment is hereby rendered
DISMISSING the complaint for lack of merit. Finding the termination of
the complainant valid and legal. (sic)
All other claims are Dismissed for lack of merit.
SO ORDERED.20
On appeal, the NLRC, in its August 29, 2003 Resolution in NLRC NCR
CA No. 033624-02,21 affirmed the decision of the LA. The Commission
ruled that Ballesteros's order to postpone the implementation of the
training module was reasonable, lawful, made known to Cabansay and
pertained to the duties which she had been engaged to
discharge.22 However, her reply' "xxx I WILL NOT POSTPONE it today
xxx Let's not make SIMPLE THINGS COMPLICATED" was a willful
defiance of the lawful order of her superior.23 Since her position as
Senior Training Manager carries with it the highest degree of
responsibility in upholding the interest of her employer and in setting a
standard of discipline among officers and employees, the company had
a valid cause to dismiss Cabansay when she deliberately disobeyed the
order of Ballesteros resulting in the latter's loss of trust and confidence
in her.24 The NLRC further ruled that the company sufficiently afforded
her due process prior to her dismissal.25 Consequently, she should not
be reinstated to her job or be paid separation pay, backwages, moral
and exemplary damages and attorney's fees.26The NLRC disposed of
the case as follows:
WHEREFORE, premises considered, Complainant's appeal is
DISMISSED for lack of merit. The Labor Arbiter's assailed Decision in
the above-entitled case is hereby AFFIRMED en toto.
SO ORDERED.27
When her motion for reconsideration was denied by the
NLRC,28 Cabansay filed a petition for certiorariunder Rule 65 before the
CA docketed as CA-G.R. SP No. 83248.29
On January 10, 2005, the appellate court rendered its
Decision30 granting the petition. The CA ruled that Cabansay's
termination could be justified neither by insubordination nor loss of
trust and confidence. A perusal of the e-mail instructions sent by
Ballesteros to her would show that, although the alleged order to
postpone the presentation of the training module was reasonable and
lawful, it was not clearly made known to her. The phrase "I don't think
[we are ready to present this to all TL]" could not be deemed an order
as it merely suggested an opinion.31 Moreover, the e-mail reply of
Cabansay cannot be considered an act of willful defiance or
insubordination. The language used was not harsh and no rude
remarks or demeaning statements were made. She was only
explaining her view on the matter, which could not be considered
unlawful considering that she was also a managerial employee clothed
with discretionary powers. Clearly, her acts did not constitute the
"wrongful and perverse attitude" that otherwise would sanction
dismissal. And even if she were guilty of insubordination, such minor
infraction should not merit the ultimate and supreme penalty of
dismissal.32 The fallo of the CA Decision reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition at bench
must be, as it hereby is, GRANTED. The challenged resolutions of the
NLRC dated August 29, 2003 and January 19, 2004 are hereby
NULLIFIED and SET ASIDE. Petitioner is declared to have been illegally
dismissed by private respondent company. Private respondent is
hereby ordered to pay petitioner full backwages, separation pay and
attorney's fees. To this end, this case is REMANDED to the Labor
Arbiter for the computation of the separation pay, backwages and
other monetary awards to petitioner. Without special pronouncement
as to costs.
SO ORDERED. 33
Petitioner ePacific duly filed a motion for reconsideration34 but this was
denied by the appellate court in the March 7, 2005 Resolution.35
The said denial prompted petitioners to come to us raising the
following grounds:
x x x (T)hat there is a prima facie evidence of grave abuse of
discretion on the part of the Hon. Court of Appeals in finding that the
complainant was illegally dismissed on the bases of the evidence
presented.
That the Hon. Court of Appeals erred in applying the pertinent laws in
the instant case.
The Hon. Court of Appeals had decided a question of substance in the
instant case, not theretofore determined by the Hon. Supreme Court
and that the Court of Appeals had decided in a way not in accord with
law or with applicable decisions of the Supreme Court.
The Hon. Court of Appeals has so far departed from the accepted usual
course of judicial proceedings.36
The main issue to be resolved in this case is whether or not
respondent Cabansay was illegally dismissed.
We have consistently ruled in a plethora of cases that, in Petitions for
Review on Certiorari under Rule 45 of the Rules of Court, only
questions of law may be raised,37 except if the factual findings of the
appellate court are mistaken, absurd, speculative, conjectural,
conflicting, tainted with grave abuse of discretion, or contrary to the
findings culled by the court of origin.38 As the findings and conclusions
of the LA and the NLRC, in this case, starkly conflict with those of the
CA, we are constrained to delve into the records and examine the
questioned findings.
After a careful review of the records and considering the arguments of
the parties, the Court finds the petition impressed with merit.
Both the Labor Arbiter and the NLRC were unanimous in their findings
that respondent was validly dismissed. In arriving at this conclusion,
the LA and the NLRC examined the e-mail correspondence of
Ballesteros and the respondent. They found that Ballesteros made a
lawful order to postpone the implementation of the new training
process, yet respondent incorrigibly refused to heed his instructions
and sent an e-mail to him stating that she would go on with its
presentation. Such an act of insubordination resulted in the
management's loss of trust and confidence in her. This is a finding
which the Court does not wish to disturb.
Oft-repeated is the rule that appellate courts accord the factual finding
of the labor tribunal not only respect but also finality when supported
by substantial evidence,39 unless there is showing that the labor
tribunal arbitrarily disregarded evidence before them or
misapprehended evidence of such nature as to compel a contrary
conclusion if properly appreciated.40 Substantial evidence has been
defined to be such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, and its absence is shown
not by stressing that there is contrary evidence on record, direct or
circumstantial, for the appellate court cannot substitute its own
judgment or criterion for that of the labor tribunal in determining
wherein lies the weight of evidence or what evidence is entitled to
belief.41
In the instant case, we find that the labor tribunal did not arbitrarily
disregard or misapprehend the evidence. Its finding that respondent
was validly dismissed is likewise warranted by substantial evidence.
Thus, we agree with petitioner's stance that the findings of the LA, as
affirmed by the NLRC, should not have been set aside by the appellate
court. Deference to the expertise acquired by the labor tribunal and
the limited scope granted in the exercise of certiorari jurisdiction
restrain any probe into the correctness of the LA's and the NLRC's
evaluation of evidence.42
The petitioners anchor their termination of respondent's services on
Article 282, paragraphs (a) and (c), of the Labor Code, as amended,
which provides:
ARTICLE 282. TERMINATION BY EMPLOYER
An employer may terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work;
xxx
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
Willful disobedience or insubordination necessitates the concurrence of
at least two requisites: (1) the employee's assailed conduct must have
been willful, that is, characterized by a wrongful and perverse attitude;
and (2) the order violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties which he had
been engaged to discharge.43 On the other hand, loss of trust and
confidence, to be a valid ground for dismissal, must be based on a
willful breach of trust and founded on clearly established facts. A
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. It must rest on
substantial grounds and not on the employer's arbitrariness, whims,
caprices or suspicion; otherwise, the employee would eternally remain
at the mercy of the employer. Loss of confidence must not also be
indiscriminately used as a shield by the employer against a claim that
the dismissal of an employee was arbitrary. And, in order to constitute
a just cause for dismissal, the act complained of must be work-related
and show that the employee concerned is unfit to continue working for
the employer.44
In the case at bar, the reasonableness and lawfulness of Ballesteros's
order is not in question, so is its relation to the duties of respondent.
What is disputed herein is rather its clarity. Respondent Cabansay
contends that the directive was not clearly made known to her:
Ballesteros's order was to postpone the implementation but not the
presentation of the new training process/module to the team leaders.
Respondent's contention is untenable. It should be noted that what is
involved in the directive is the new training process, which logically
cannot be implemented without being presented or communicated to
the team leaders of the company. Thus, when Ballesteros ordered the
cessation of its implementation, there can be no other inference than
that he wanted to postpone the presentation of the training process
which was then already scheduled. Evident further in Ballesteros's e-
mail is that he did not find any changes in the new module; hence, he
wanted the implementation thereof to be deferred and instructed
respondent to consult with the other managers to gather more input.
Be that as it may, respondent cannot belie the fact that she well-
understood the directive for her to postpone the presentation of the
module, as she herself acknowledged in her e-mail reply to SVP
Ballesteros that she would "discuss the new training process and
explain it to them in detail" in the afternoon on that day, thus, she
would not postpone the scheduled presentation. There is no doubt,
therefore, that the order of Ballesteros was clearly made known to
respondent.
As to the willfulness of her conduct, the same is manifest in her e-mail
reply, which, as it is written, is characterized by abject aggressiveness
and antagonism: the e-mail has a begrudging tone and is replete with
capitalized words eliciting her resolve to indeed contravene the SVP's
directive. Thus, she categorically said, "This is a very simple
presentation and I WILL NOT POSTPONE it today, it's very easy to
comprehend and as per YOUR INSTRUCTION we will be implementing
it next week, so when should we present this to the TLs? Let's not
make SIMPLE THINGS COMPLICATED. I will go on with the
presentation this afternoon."
While respondent Cabansay was a managerial employee, a Senior
Training Manager entrusted with the delicate matter of molding the
minds and characters of call center agents and team leaders, and
clothed with discretion to determine what was in the best interest of
the company, her managerial discretion was not without limits. Its
parameters were contained the moment her discretion was exercised
and then opposed by the immediate superior officer/employer for
being against the policies and welfare of the company. Hence, any
action in pursuit of the discretion thus opposed ceased to be
discretionary and could be considered as willful disobedience.45
Indeed, by refusing to postpone the presentation and implementation
of the new training process, respondent intentionally, knowingly and
purposely, without justifiable excuse, breached the trust and
confidence reposed in her by her employer. To present and discuss a
training module, which is deemed by management as still inadequate
in its content, will certainly not only waste the time, effort and energy
of the participants in the discussion but will also entail losses on the
part of the company.
It is of no moment that the presentation did not push through, and
that no actual damage was done by respondent to the company. The
mere fact that respondent refused to obey the reasonable and lawful
order to defer the presentation and implementation of the module
already gave a just cause for petitioners to dismiss her. Verily, had it
not been for the timely intervention of the Telesales Senior Manager,
under the instructions of the SVP, harm could have been done to
company resources.
Let it be stressed that insofar as the application of the doctrine of trust
and confidence is concerned, jurisprudence has distinguished the
treatment of managerial employees or employees occupying positions
of trust and confidence from that of rank-and-file personnel. With
respect to the latter, loss of trust and confidence as a ground for
dismissal requires proof of involvement in the alleged events in
question, but as regards managerial employees, the mere existence of
a basis for believing that such employee has breached the trust of his
employer would suffice for his or her dismissal.46 For this purpose,
there is no need to present proof beyond reasonable doubt. It is
sufficient that there is some basis for the loss of trust or that the
employer has reasonable ground to believe that the employee is
responsible for the misconduct which renders him unworthy of the
trust and confidence demanded by his position.47 Respondent's
conduct, in this case, is sufficient basis for the company to lose its
trust and confidence in her. Under the circumstances, the company
cannot be expected to retain its trust and confidence in and continue
to employ a manager whose attitude is perceived to be inimical to its
interests. Unlike other just causes for dismissal, trust in an employee,
once lost, is difficult, if not impossible to regain.48
As to the respondent's argument that petitioners failed to comply with
the requirements of statutory due process, we do not agree. Before
the services of an employee can be validly terminated, the employer
must furnish him with two written notices: (a) a written notice served
on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain
his side; and, (b) a written notice of termination served on the
employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination.49
In this case, the facts are clear that petitioners, through Ballesteros,
informed respondent in the April 6, 2002 memo that the company
found her message to be a clear act of insubordination leading to the
company's loss of trust and confidence in her as a manager of the
training department. In the same memo, petitioners asked her to
explain her side in writing. After the respondent submitted her two
memoranda-explanations successively on April 8 and 11, 2002,
petitioners served her the notice of her termination. Verily, petitioners
complied with the requirement of statutory due process in the
dismissal of respondent. The fact that the letter of termination or the
second notice was received by respondent on April 11, 2002, on the
same day she submitted her second explanation, does not put to
naught petitioners' observance of the requirement of due process. It
has to be noted that from April 8, 2002, when respondent had her
chance to explain her side, petitioners were contemplating for several
days and presumably were considering her reasons before they finally
dismissed her. In any case, the essence of due process is that a party
be afforded a reasonable opportunity to be heard and to submit any
evidence he may have in support of his defense.50
IN VIEW OF ALL THE FOREGOING, the petition is GRANTED. The
January 10, 2005 Decision and the March 7, 2005 Resolution of the
Court of Appeals in CA-G.R. SP No. 83248 are REVERSED AND SET
ASIDE. The Decision of the Labor Arbiter, as affirmed by the NLRC,
dismissing the respondent's complaint for illegal dismissal is
REINSTATED.
 FIRST DIVISION
[G.R. No. 143397. August 6, 2002.]
SANTIAGO ALCANTARA, JR., Petitioner, v. THE COURT OF
APPEALS and THE PENINSULA MANILA, INC., Respondents.
DECISION
KAPUNAN, J.:
Petitioner Santiago Alcantara, Jr., an employee of respondent The
Peninsula Manila, Inc., seeks the reversal of the decision and
resolution of the Court of Appeals upholding his dismissal for willful
disobedience. At the time of his dismissal, petitioner worked as
Commis II of the Food and Beverage Department of the Peninsula
Manila Hotel, Inc. He was also a Director of the National Union of
Workers in Hotels Restaurants and Allied Industries (NUWHRAIN)-
Manila Peninsula Chapter. chanrob1es v irt ua1 1a w 1ibra ry
The controversy stems from a Memorandum dated August 7, 1998
issued by respondent Hotel prohibiting the union from using the union
office from midnight until 6:00 in the morning. The union office was
located in the hotel premises. The text of said memorandum reads:
It has been observed that the Union Offices are being used for
recreation and sleeping purposes. Please be informed that the subject
premises must not be utilized for any other purpose other than
legitimate union activities.
We wish to serve notice that the Union Office/s shall be used for
official union business only and for no other purpose without the
written consent of the Management. Management reserves the right to
inspect said premises for verification and checking for compliance to
this directive.
Effective immediately, you are hereby directed to transact official
union business starting 6:00 in the morning until midnight of the same
day. The union office/s must be closed from 12:00 midnight to 6:00
o’clock in the morning.
For your guidance and strict compliance. 1
On August 18, 1998, at about 1:30 in the morning, petitioner was
seen inside the union office with Conrad Salanguit and a certain Ma.
Theresa Cruz. They left the office at about 2:20 in the morning of the
same day.
On August 20, 1998, petitioner and a male companion were seen
entering the union office. Later that evening, petitioner was again seen
in the office, seated with both legs resting on a table. His male
companion, who turned out to be Mr. Salanguit, was lying on the
bench. The office lights were off. DPO Lt. Caronan approached
petitioner and reminded him of the Memorandum dated August 7,
1998. Petitioner and Mr. Salanguit refused to leave, however, and
replied, "Consult that to our President because we gave a reply to that
memorandum." Both petitioner and Mr. Salanguit stayed in the office
until 3:30 in the morning of August 21, 1998.
chanrob1es vi rtual law lib rary
On August 28, 1998, Arsenio Olmedilla, Sous Chef-Production, sent a
memorandum to petitioner informing him about the Security
Department Report dated August 21, 1998. The memorandum stated
that he was seen inside the union office between midnight until the
morning of the following day and directed him to submit his written
explanation within 24 hours from receipt thereof.
Petitioner submitted his letter-explanation dated August 28, 1998
intimating that the Memorandum prohibiting the use of the union office
chanro b1es vi rt ual 1aw li bra ry
was inconsistent with the CBA and was necessarily ineffective.
Petitioner argued that inasmuch as the Hotel operated 24 hours a day,
the union office should be available whenever the union found it
necessary. This was how the CBA had always been applied. Petitioner
also pointed out that the charge against him did not pertain to his
duties in the Hotel. He claimed he used the union office only during his
breaks or when he was off duty.
On November 26, 1998, at around 12:50 until 5:50 in the morning,
petitioner was again seen lying on the bench inside the union office.
DPO Lt. Caronan politely informed him again about the existing
Memorandum and asked him to leave. Petitioner refused and left the
union office only at around 5:50 in the morning of November 26,
1998.
In a Memorandum to petitioner dated December 7, 1998, Mr. Noel
Silva, Assistant Food and Beverage Manager informed petitioner that
Security had reportedly seen him lying on the bench at the basement
rank-and-file union office on November 26, 1998 in violation of the
Memorandum dated August 7, 1998. Petitioner was required to explain
in writing why no disciplinary action should be taken against him.
On December 9, 1998, petitioner sent a letter to Mr. Silva explaining
that the union had contested the Memorandum dated August 7, 1998.
He reiterated that the Memorandum was unreasonable and unlawful.
Petitioner invoked Section 4, Article IV of the Collective Bargaining
Agreement (CBA) between the Union and the Hotel, stating that the
hotel shall provide the Union with an office for its exclusive use. He
further argued that the Memorandum constituted unlawful interference
with the employees’ right to self-organization.
On January 4, 1999, private respondent sent petitioner a Notice of
Termination for alleged willful and blatant refusal to comply with a
lawful and valid order (HRD Memorandum dated August 7, 1998)
issued by his employer.
Meanwhile, the Union threatened to go on strike unless the
memorandum in question was lifted and petitioner reinstated.
Respondent requested the National Conciliation and Mediation Board to
intervene and conduct preventive mediation proceedings.
Subsequently, the Union and the Hotel forged a Memorandum of
Agreement dated February 4, 1999 stating: chanrob 1es vi rtual 1aw lib rary
IN THE INTEREST OF INDUSTRIAL PEACE AND HARMONY, the parties
hereby agreed to the following: chan rob1es v irt ual 1aw l ibra ry
1. That a committee composed of 6 members (3 from each Union; 3
from the Company) shall decide the HMO upon the expiration of the
existing contract.
2. The union will use its Office strictly related to legitimate activities
for twenty-four (24) hours;
3. The termination issue of Mr. Santiago Alcantara shall be referred to
AVA NOEL G. SANCHEZ. In the meantime that the resolution of the
issue is pending before the VA, he will receive his basic salary and
service charge which shall be credited against the award of
backwages, if any;
4. The parties will exert best efforts to facilitate the early resolution of
VA case within one month.
WHEREFORE, this Preventive Mediation case is considered SETTLED
and DROPPED from the business calendar of this Office. 2
chanrob1e s virtua1 1aw 1ib rary
On April 5, 1999, Voluntary Arbitrator Noel G. Sanchez, to whom the
termination case was referred, rendered a decision the dispositive
portion of which reads: chan rob1e s virtual 1aw l ibra ry
WHEREFORE, judgment is hereby rendered declaring the dismissal of
SANTIAGO ALCANTARA as ILLEGAL and directing the Company to
reinstate him to his former position without loss of seniority right and
other privileges. Considering the agreement between the parties dated
February 4, 1999, which provides that pending resolution of this case,
complainant shall continue to receive his basic pay and share in
service charges, there is no need to award backwages on the
assumption that said items have been and continue to be paid. chan rob1es v irt ua1 1aw 1 ibra ry
SO ORDERED. 3
The Hotel filed a motion for reconsideration of the decision of the
Voluntary Arbitrator dated April 5, 1999. The motion was denied in a
Resolution dated April 30, 1999.
On May 26, 1999, the Hotel brought the case to the Court of Appeals
by way of a petition for review under Rule 43, alleging that the
Voluntary Arbitrator erred in finding that the dismissal of petitioner
was legal.
On November 24, 1999, the Court of Appeals rendered its Decision,
the dispositive portion of which reads: chan rob1e s virtual 1aw l ibra ry
WHEREFORE, premises considered, the instant petition is hereby
GIVEN DUE COURSE and accordingly GRANTED. The Decision dated
April 5, 1999 and the Resolution dated April 30, 1999, both rendered
by public respondent Noel G. Sanchez, Voluntary Arbitrator in the case
entitled "In Re: Voluntary Arbitration of the Labor Dispute at the
Peninsula Manila National Union of Workers in Hotel Restaurant and
Allied Industries (NUWHRAIN) — Manila Peninsula Chapter and
Santiago Alcantara v. The Peninsula Manila," docketed as NGS-VA-99-
0216, are hereby ANNULLED and SET ASIDE. 4
Petitioner moved for the reconsideration of the decision of the Court of
Appeals. The Court of Appeals denied petitioner’s motion for
reconsideration in a Resolution dated May 16, 2000.
Hence, this petition.
Petitioner assigns two errors, namely: chanrob 1es vi rtua l 1aw lib rary
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN
IGNORING SECTION 2, RULE 43 OF THE 1997 RULES OF CIVIL
PROCEDURE.
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN RULING
THAT PETITIONER ALCANTARA’S DISMISSAL IS VALID, CONTRARY TO
ESTABLISHED JURISPRUDENCE PERTAINING TO DISMISSALS BASED
ON WILLFUL DISOBEDIENCE. 5
Petitioner claims that Rule 43 of the 1997 Rules of Civil Procedure is
inapplicable as a mode of appeal to the Court of Appeals from
judgments issued by a voluntary arbitrator pursuant to Book Five, Title
VII-A of the Labor Code, as amended. Rule 43, it is submitted, only
allows appeals from judgments of particular quasi-judicial agencies
and voluntary arbitrators authorized by law and not those judgments
and orders issued under the Labor Code. chanrob1es vi rtua 1 1aw 1ib rary
The Court of Appeals correctly rejected this argument. In Luzon
Development Bank v. Association of Luzon Development Bank
Employees, 6 cited by respondent court, we held:
In Volkschel Labor Union, Et Al., v. NLRC, Et Al., on the settled
premise that the judgments of courts and awards of quasi-judicial
agencies must become final at some definite time, this Court ruled that
the awards of voluntary arbitrators determine the rights of parties;
hence, their decisions have the same legal effect, as judgments of a
court. In Oceanic Bic Division (FFW), Et. Al. v. Romero, Et Al., this
Court ruled that "a voluntary arbitrator by the nature of her functions
acts in a quasi-judicial capacity." Under these rulings, it follows that
the voluntary arbitrator, whether acting solely or in a panel, enjoys in
law the status of a quasi-judicial agency but independent of, and apart
from, the NLRC since his decisions are not appealable to the latter.
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902,
provides that the Court of Appeals shall exercise:
"x x x
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-
judicial agencies, instrumentalities, boards or commissions, including
the Securities and Exchange Commission, the Employees’
Compensation Commission and the Civil Service Commission, except
chan rob1e s virt ual 1aw l ibra ry
j gc:cha nrob les.co m.ph
those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of this
Act and of subparagraph (1) of the third paragraph and subparagraph
(4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
x x x"
Assuming arguendo that the voluntary arbitrator or the panel of
voluntary arbitrators may not strictly be considered as a quasi-judicial
agency, board or commission, still both he and the panel are
comprehended within the concept of a "quasi-judicial instrumentality."
It may even be stated that it was to meet the very situation presented
by the quasi-judicial functions of the voluntary arbitrators here, as well
as the subsequent arbitrator/arbitral tribunal operating under the
Construction Industry Arbitration Commission, that the broader term
"instrumentalities" was purposely included in the above-quoted
provision.cha nrob 1es vi rtua 1 1aw 1ib rary
An "instrumentality" is anything used as a means or agency. Thus, the
terms governmental "agency" or "instrumentality" are synonymous in
the sense that either of them is a means by which a government acts,
or by which a certain government act or function is performed. The
word "instrumentality," with respect to a state, contemplates an
authority to which the state delegates governmental power for the
performance of a state function. An individual person, like an
administrator or executor, is a judicial instrumentality in the settling of
an estate, in the same manner that a sub-agent appointed by a
bankruptcy court is an instrumentality of the court, and a trustee in
bankruptcy of a defunct corporation in an instrumentality of the state.
The voluntary arbitrator no less performs a state function pursuant to
a governmental power delegated to him under the provisions therefor
in the Labor Code and he falls, therefore, within the contemplation of
the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. . . .
Petitioner argues, however, that Luzon Development Bank is no longer
good law because of Section 2, Rule 43 of the Rules of Court, a new
provision introduced by the 1997 revision. The provision reads: chan rob1es v irt ual 1aw l ibra ry
SEC. 2. Cases not covered. — This Rule shall not apply to judgments
or final orders issued under the Labor Code of the Philippines.
The provisions may be new to the Rules of Court but it is far from
being a new law. Section 2, Rule 42 of the 1997 Rules of Civil
Procedure, as presently worded, is nothing more but a reiteration of
the exception to the exclusive appellate jurisdiction of the Court of
Appeals, as provided for in Section 9, Batas Pambansa Blg. 129, 7 as
amended by Republic Act No. 7902: 8
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-
judicial agencies, instrumentalities, boards or commissions, including
the Securities and Exchange Commission, the Employees’
Compensation Commission and the Civil Service Commission, except
those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of this
Act and of subparagraph (1) of the third paragraph and subparagraph
(4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Court took into account this exception in Luzon Development Bank
but, nevertheless, held that the decisions of voluntary arbitrators
issued pursuant to the Labor Code do not come within its ambit: chanro b1es vi rtua l 1aw li bra ry
. . . The fact that [the voluntary arbitrator’s] functions and powers are
provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as
contemplated therein. It will be noted that, although the Employees’
Compensation Commission is also provided for in the Labor Code,
Circular No. 1-91, which is the forerunner of the present Revised
Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the Court of Appeals under the
foregoing rationalization, and this was later adopted by Republic Act
No. 7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of
arbitrators should likewise be appealable to the Court of Appeals, in
line with the procedure outlined in Revised Administrative Circular No.
1-95, just like those of the quasi-judicial agencies, boards and
commissions enumerated therein.
This would be in furtherance of, and consistent with, the original
purpose of Circular No. 1-91 to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities not
expressly excepted from the coverage of Sec. 9 of B.P. 129 by either
the Constitution or another statute. Nor will it run counter to the
legislative intendment that decisions of the NLRC be reviewable
directly by the Supreme Court since, precisely, the cases within the
adjudicative competence of the voluntary arbitrator are excluded from
the jurisdiction of the NLRC or the labor arbiter.
The introduction of the provisions of Section 2, Article 42 of the
Revised Rules of Civil Procedure, therefore, did not alter our ruling in
Luzon Development Bank. chanrob1es v irt ua1 1 aw 1ibra ry
We come now to the issue of petitioner’s dismissal. Willful
disobedience of the employer’s lawful orders, as a just cause for the
dismissal of an employee, envisages the concurrence of at least two
requisites: (1) the employee’s assailed conduct must have been willful
or intentional, the willfulness being characterized by a "wrongful and
perverse attitude;" and (2) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to
the duties which he had been engaged to discharge. 9
Petitioner avers that his dismissal for willful disobedience is
unwarranted because: (1) the Memorandum dated August 7, 1998 is
not in connection with the duties which the employee had been
engaged to discharge; (2) the same Memorandum is not reasonable
and lawful; and (3) petitioner did not exhibit a "wrongful and perverse
attitude" in disobeying said Memorandum.
Petitioner further posits that the use of the union office has no
connection whatsoever with petitioner’s duties as Commis II, one of
the kitchen personnel. However, as respondent points out, every
employee is charged with the implicit duty of caring for the employer’s
property; consequently, he is bound to obey the reasonable and lawful
orders of the employer regulating the use and preservation thereof.
Thus, this Court has upheld the dismissal of an employee for violation
of a rule prohibiting employees from using company vehicles for
private purpose without authority from management. 10 This is not
only to prevent loss on the part of the employer but also to prevent
injury to the employees as well as the customers of the employer.
Whether the Memorandum in question is reasonable and lawful is
beside the point. Company policies and regulations are, unless shown
to be grossly oppressive or contrary to law, generally binding and valid
on the parties and must be complied with until finally revised or
amended unilaterally or preferably through negotiation or by
competent authority. 11 The Court explained the rationale for this rule
in GTE Directories Corporation v. Sanchez: 12
To sanction disregard or disobedience by employees of a rule or order
laid down by management, on the pleaded theory that the rule or
order is unreasonable, illegal, or otherwise irregular for one reason or
another, would be disastrous to the discipline and order that it is in the
interest of both the employer and his employees to preserve and
maintain in the working establishment and without which no
meaningful operation and progress is possible. Deliberate disregard or
disobedience of rules, defiance of management authority cannot be
countenanced. This is not to say that the employees have no remedy
against rules or orders they regard as unjust or illegal. They may
object thereto, ask to negotiate thereon, bring proceedings for redress
against the employer before the Ministry of Labor. But until and unless
the rules or orders are declared to be illegal or improper by competent
authority, the employees ignore or disobey them at their peril. It is
impermissible to reverse the process: suspend enforcement of the
orders or rules until their legality or propriety shall have been subject
of negotiation, conciliation, or arbitration.
x x x petitioner, a union officer, interpreted such regulation as an unlawful
To repeat, it would be dangerous doctrine indeed to allow employees
to refuse to comply with rules and regulations, policies and procedures
laid down by their employer by the simple expedient of formally
challenging their reasonableness or the motives which inspired them,
or filing a strike notice with the Department of Labor and Employment,
or, what amounts to the same thing, to give the employees the power
to suspend compliance with company rules or policies by requesting
that they be first subject of collective bargaining. It would be well nigh
impossible under these circumstances for any employer to maintain
discipline in its establishment. This is, of course, intolerable. For
common sense teaches, as Mr. Justice Gregorio Perfecto once had
occasion to stress, that:jgc:chanrob les.com. ph
"Success of industries and public services is the foundation upon which
just wages may be paid. There cannot be success without efficiency.
There cannot be efficiency without discipline. Consequently, when
employees and laborers violate the rules of discipline they jeopardize
not only the interest of the employer but also their own. In violating
the rules of discipline they aim at killing the hen that lays the golden
eggs. Laborers who trample down the rules set for an efficient service
are, in effect, parties to a conspiracy, not only against capital but also
against labor. The high interest of society and of the individuals
demand that we should require everybody to do his duty. That
demand is addressed not only to employer but also to employees." cralaw vi rtua 1aw lib rary
The subject Memorandum is not grossly oppressive. It is not patently
contrary to law. While petitioner argues that its application was
discriminatory — the two employees found with him in the union room
were not at all subjected to disciplinary action — the Memorandum
was not discriminatory on its face. Petitioner’s violation of his
employer’s order, prior to its revocation, was therefore inexcusable.
1ibra ry
chanrob 1es vi rtua 1 1aw
Nevertheless, we agree with petitioner that his behavior did not
constitute the "wrongful and perverse attitude" that would sanction his
dismissal. The surrounding circumstances indicate that petitioner was
motivated by his honest belief that the Memorandum was indeed
unlawful and unreasonable. Previous practice allowed the use of the
union office 24 hours a day. Section 1, Article III of the Collective
Bargaining Agreement for 1996-2001 provided that, "All practices. . .
not expressly provided for in this Agreement which are presently being
enjoyed by the employees. . . shall be continued by the HOTEL. . . ."
Moreover, the Memorandum regulated the use of the union office and
interference with legitimate union activities. Viewed in this light,
petitioner’s attitude can hardly be characterized as "wrongful and
perverse." While these circumstances do not justify his violation of the
regulation, they do not justify his dismissal either.
The Hotel cites previous infractions committed by petitioner as
additional grounds for his dismissal. The Court finds these to be
nothing more than belated rationalizations; the Hotel did not refer to
these violations in its Notice of Termination to petitioner.
The subject Memorandum purports to" [secure] the hotel against
damage to property" in consonance with the hotel’s "concern to keep
the premises peaceful, orderly and safe." In short, it is a safety
regulation. Under respondent’s House Code of Discipline, the "failure to
observe. . . safety rules/requirements of the hotel" is a "Class A
Offense," the third violation of which the same Code imposes a three-
day suspension.
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED.
The Decision of the Court of Appeals dated November 24, 1999 and
Resolution of the same court dated May 16, 2000 are SET ASIDE. The
Peninsula Manila, Inc. is ordered to immediately reinstate petitioner
Santiago Alcantara, Jr. to his former, or an equivalent, position without
loss of seniority and other rights and to pay him back wages from the
time of his dismissal to the time of actual reinstatement less the value
of wages for three days constituting the period of his suspension.
SO ORDERED.
 THIRD DIVISION
G.R. No. 198093, July 28, 2014
FLP ENTERPRISES INC. – FRANCESCO SHOES/EMILIO
FRANCISCO B. PAJARO, Petitioners, v.MA. JOERALYN D. DELA
CRUZ AND VILMA MALUNES, Respondents.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court filed by petitioners FLP Enterprises, Inc.- Francesco Shoes
(FLPE) and Emilio Francisco B. Pajaro against respondents Ma.
Joeralyn D. Dela Cruz and Vilma Malunes assailing the Court of
Appeals (CA) Decision1 dated February 22, 2011 and Resolution2 dated
August 9, 2011 in CA-G.R. SP No. 113326. The CA annulled and set
aside the September 30, 20093 and January 11, 20104 Resolutions of
the National Labor Relations Commission (NLRC) affirming the
December 8, 2008 Decision5 of the Labor Arbiter (LA) which dismissed
respondents’ complaint for illegal dismissal.
The factual and procedural antecedents of the instant case are as
follows:
Petitioner FLPE hired respondent Dela Cruz in 1991 and respondent
Malunes in 1998 as sales ladies and assigned them both at its Alabang
Town Center store in Muntinlupa City. On March 10, 2008, at around
10:00 a.m., it was discovered that the store’s sales proceeds for March
7 to March 9, 2008, amounting to P26,372.75, were missing. The
investigating authorities found that it resulted from an “inside job”
since the cash register remained closed and there was no indication of
forced entry into the store. FLPE thus required respondents to explain
in writing why they should not be terminated. It contended that
respondents clearly violated its company policy prohibiting sales
proceeds from being stored in the cash register. Accordingly, Dela
Cruz and Malunes submitted their respective written
explanations. They both denied the existence of such company policy
and having knowledge thereof.
FLPE thereafter removed respondents from service, which took effect
on May 26, 2008. Aggrieved, respondents filed a complaint for illegal
dismissal with money claims against the company.
On December 8, 2008, the LA dismissed respondents’ claim and held
that FLPE was able to sufficiently prove that respondents were guilty of
habitually violating the company standard procedure on safekeeping of
cash collection. The dispositive portion of the LA Decision thus
reads:
chan roblesv irtuallaw lib rary
WHEREFORE, the instant complaint for illegal dismissal is hereby
dismissed considering that the complainants were dismissed for just
cause. The claim for overtime pay, ECOLA, separation pay and
backwages is denied for lack of basis. Respondent FLP Enterprises,
Inc., is ordered to pay proportionate 13th month pay for the year 2008
in the amount of ?3,921.67 for each complainant. Respondent Emilio
Francisco Pajaro is absolved from liability.
All other claims are denied for lack of basis.
SO ORDERED.6
Upon appeal, the Third Division of the NLRC affirmed the LA Decision
in its entirety. Subsequently, respondents elevated the case to the
CA, imputing grave abuse of discretion on the NLRC’s part.
On February 22, 2011, the CA set aside the NLRC ruling and
pronounced respondents as having been illegally dismissed by
FLPE. Thus: chanrob lesvi rtua llawlib ra ry
WHEREFORE, the instant petition for certiorari is GRANTED. The
assailed Resolutions of the public respondent National Labor Relations
Commission are ANNULLED and SET ASIDE. Judgment is hereby
rendered declaring that petitioners Joeralyn D. Dela Cruz and Vilma M.
Malunes were illegally dismissed from employment by the private
respondent FLP Enterprises, Inc. Said private respondent is
accordingly held liable to pay petitioners: chan roblesv irtuallaw lib rary
(1) backwages computed from the time of their dismissal on May 26,
2008 until the finality of this Decision;
(2) separation pay, in lieu of reinstatement, computed at the rate of
one (1) month pay for every year of service from the time of their
employment up to the finality of this Decision;
(3) proportionate 13th month pay for the year 2008 in the amount of
P3,921.67;
(4) attorney’s fees equivalent to 10% of their total monetary award;
and,
(5) legal interest of twelve percent (12%) per annum of the total
monetary awards computed from the finality of this Decision, until
their full satisfaction.
This case is remanded to the labor arbiter for computation, with
reasonable dispatch, of petitioners’ total monetary awards.
SO ORDERED.7
FLPE filed a Motion for Reconsideration, but the CA denied it for lack of
merit.
Thereafter, FLPE filed this petition to finally settle the singular issue of
whether it validly dismissed respondents Dela Cruz and Malunes. It
contends that because of the several previous incidents of theft in its
retail outlets, it formulated a policy on October 23, 2003, requiring its
sales staff to keep the sales proceeds in the stockroom instead of the
cash register. It maintains that said policy was properly announced,
posted, and implemented in all its retail outlets, particularly in Alabang
Town Center. Despite that, respondents still refused to comply.
The Court finds the instant petition to be without merit.
The settled rule is that the Court’s jurisdiction in a petition for review
on certiorari under Rule 458 is limited to reviewing only errors of law,
unless the factual findings complained of are not supported by
evidence on record or the assailed judgment is based on a gross
misapprehension of facts.9 The case at bar assails the propriety of the
CA decision in finding the existence of grave abuse of discretion in the
NLRC ruling. Grave abuse of discretion, amounting to lack or excess of
jurisdiction, is the capricious and whimsical exercise of judgment which
must be so patent and so gross as to amount to an evasion of a
positive duty or to a virtual refusal to perform the duty enjoined or to
act at all in contemplation of law.10
After a thorough review of the case, the Court finds no cogent reason
to deviate from the CA’s determination of grave abuse of discretion on
the NLRC and its consequent substitution of its own ruling over that of
the latter. Generally, the findings of facts and conclusion of quasi-
judicial agencies like the NLRC are entitled to great weight and
respect, and even clothed with finality and deemed conclusive upon
the parties and binding on the Court, as long as they are supported by
substantial evidence.11 The findings of fact of an administrative
agency, which has acquired expertise in the particular field of its
endeavor, are accorded great weight on appeal. This rule, however, is
not absolute and admits of certain well-recognized exceptions, such as
when, as in this case, the labor tribunals’ findings of fact are not
supported by substantial evidence. The CA may then make its own
independent evaluation of the facts, even if it may be contrary to that
of the LA and the NLRC. Also, where the contesting party's claim
appears to be clearly meritorious, or where the broader interest of
justice and public policy so requires, the court may, in
a certiorari proceeding, correct the error committed. The CA, in view
of its expanded jurisdiction over labor cases, may look into the records
of the case and re-examine the questioned findings if it considers the
same to be necessary to arrive at a just and equitable decision.12
It is a fundamental rule that an employee can be discharged from
employment only for a valid cause. Here, both the LA and the NLRC
found that respondents have been validly terminated for gross and
habitual neglect of duties, constituting just cause for termination under
Article 282 of the Labor Code. As a valid ground for dismissal under
said provision, neglect of duty must be both gross and habitual. Gross
negligence entails want of care in the performance of one’s duties,
while habitual neglect imparts repeated failure to perform such duties
for a period of time, depending on the circumstances.13
Substantial evidence is also necessary for an employer to effectuate
any dismissal. Uncorroborated assertions and accusations by the
employer would not suffice, otherwise, the constitutional guaranty of
security of tenure would be put in jeopardy.14
In this case, as the CA correctly ruled,15 in order to sustain herein
respondents’ dismissal, FLPE must show, by substantial evidence, that
the following are extant:chan roble svirtuallaw lib rary
1) the existence of the subject company policy;
2) the dismissed employee must have been properly informed of said
policy;
3) actions or omissions on the part of the dismissed employee
manifesting deliberate refusal or wilful disregard of said company
policy; and
4) such actions or omissions have occured repeatedly.

FLPE claims that its company policy that requires its sales managers
and staff to keep the sales proceeds in a shoebox in the stockroom
and not inside the cash register, have been in existence since October
23, 2003. As proof, it presented the following Memorandum: chanroblesv irt uallawl ibra ry
TO : ALL MANAGERS & STAFF
FROM : EMILIO FRANCISCO B. PAJARO
RE : SAFEKEEPING OF CASH SALES & COLLECTIONS
DATE : October 23. 2003
Nais naming pa-alalahanan ang lahat tungkol sa ating policy na ang
benta ay dapat itago sa box ng sapatos sa loob ng stockroom.
At kung sino ang nagtago ay s’ya lang ang [nakakaalam] kung saan
n’ya ito inilagay.
Announced & Posted.16
However, FLPE failed to establish that such a company policy actually
exists, and if it does truly exist, that it was, in fact, posted and/or
disseminated accordingly. Neither is there anything in the records
which reveals that the dismissed respondents were informed of said
policy. The company vehemently insists that it posted, announced,
and implemented the subject Safekeeping Policy in all its retail stores,
especially the one in Alabang Town Center. It, however, failed to
substantiate said claim. It could have easily produced a copy of said
memorandum bearing the signatures of Dela Cruz and Malunes to
show that, indeed, they have been notified of the existence of said
company rule and that they have received, read, and understood the
same. FLPE could likewise have simply called some of its employees
to testify on the rule’s existence, dissemination, and strict
implementation. But aside from its self-serving and uncorroborated
declaration, and a copy of the supposed policy as contained in the
October 23, 2003 Memorandum, FLPE adduced nothing more.
In termination cases, the burden of proof rests on the employer to
show that the dismissal is for a just cause.17 The one who alleges a
fact has the burden of proving it; thus, FLPE should prove its allegation
that it terminated respondents for a valid and just cause. It must be
stressed that the evidence to prove this fact must be clear, positive,
and convincing.18 When there is no showing of a clear, valid, and legal
cause for the termination of employment, the law considers the matter
a case of illegal dismissal.19 Unfortunately, FLPE miserably failed to
discharge this burden. To rule otherwise and simply allow the
presumption as to the existence and dissemination of the supposed
company policy would lead to a proliferation of fabricated notices, and
entice further abuse by unscrupulous persons. Workers could then be
arbitrarily terminated without much of an effort, running afoul of the
State’s clear duty to show compassion and afford the utmost
protection to laborers.
Assuming arguendo that respondents were aware of the alleged
company policy, FLPE failed to prove that they are guilty of
disobedience amounting to gross and habitual neglect of duty. On
March 9, 2008, Dela Cruz did not even report to work because it was
her rest day. As for Malunes, she admitted putting the sales proceeds
inside the cash register but she only did so upon the instructions of the
store manager, who is basically part of management. There is likewise
want of competent evidence showing that respondents have
repeatedly violated said policy in the past.
True, an employer has the discretion to regulate all aspects of
employment and the workers have the corresponding obligation to
obey company rules and regulations. Deliberately disregarding or
disobeying the rules cannot be countenanced, and any justification
that the disobedient employee might put forth is deemed
inconsequential.20 However, the Court must emphasize that the
prerogative of an employer to dismiss an employee on the ground of
willful disobedience to company policies must be exercised in good
faith and with due regard to the rights of labor.21
For lack of any clear, valid, and just cause in terminating respondents’
employment, FLPE is indubitably guilty of illegal dismissal. The rate of
interest, however, should be changed to 6% starting July 1, 2013,
pursuant to the Bangko Sentral ng Pilipinas Circular No. 799, Series of
2013.22
WHEREFORE, the instant petition is DENIED. The Court of Appeals
Decision dated February 22, 2011 and Resolution dated August 9,
2011 in CA-G.R. SP No. 113326 are hereby AFFIRMED with
MODIFICATION. Petitioners FLP Enterprises, Inc.-Francesco Shoes
and Emilio Francisco B. Pajaro are ORDERED to PAY respondents Ma.
Joeralyn D. Dela Cruz and Vilma Malunes, among others, legal interest
 of twelve percent (12%) per annum of the total monetary awards, SMC checks payable to SMC employees;
computed from judicial demand until June 30, 2013, and six percent
(6%) per annum from July 1, 2013, and another six percent (6%) per RDBP checks payable to SMC employees;
annum from the time of the finality of this Decision until their full
satisfaction. Uncrossed dividend checks.
THIRD DIVISION
"Encashments must be made by the payees themselves. The check
must be endorsed by the payee by affixing his/her signature at the
[G.R. No. 149416. March 14, 2003.]
back of the same.

CARMELITA V. SANTOS, Petitioner, v. SAN MIGUEL "Other items such as SMCESALA, SSS, personal checks are not
CORPORATION, Respondent. accepted. . . ." (Emphasis ours)

DECISION On January 10, 1991, respondent SMC, through its Cash Management
Department, noticed that petitioner encashed her three (3) personal
checks in various Metro Manila Sales Offices, thus: chanrob1es v irt ual 1aw l ibra ry

SANDOVAL-GUTIERREZ, J.: 1. On December 17, 1990, petitioner Carmelita Santos encashed at

respondent’s Makati Sales Office her personal check (UCPB Check No.
036716 dated December 15, 1990) payable to respondent in the
amount of P150,000.00. The check was returned by the bank because
This petition for review on certiorari 1 filed by Carmelita V. Santos
it was drawn against insufficient funds. Three days later, or on
challenges the Decision of the Court of Appeals in CA-G.R. SP 64223
December 20, 1990, petitioner paid respondent in cash for the
dated July 4, 2001 and its Resolution dated August 9, 2002. 2
dishonored check.
The factual milieu is as follows:
2. On January 2, 1991, petitioner encashed at respondent’s Pasig
chanrob1es v irt ual 1aw li bra ry

Sales Office another personal check (UCPB Check No. 036718 dated
On September 15, 1987, respondent San Miguel Corporation (SMC)
December 20, 1990) payable to cash in the amount of P140,045.00.
appointed petitioner Carmelita V. Santos as Finance Director of its
When presented for payment, the check was dishonored by the drawee
Beer Division for Luzon Operations.
bank due to insufficient funds. Petitioner redeemed the check only on
January 19, 1991.
On September 6, 1989, respondent’s Cash Department issued a
Memorandum prohibiting the encashment of personal checks at
3. On January 19, 1991, petitioner encashed at respondent’s Diliman
respondent’s Plants and Sales Offices. 3 The Memorandum reads:
Sales Office another personal check (UCPB Check No. 036737 dated
chanro b1es vi rtua 1 1aw 1ib ra ry

January 19, 1990) in the amount of P150,000.00. This check was

"TO: ALL DIVISION FINANCE OFFICERS
accepted for payment.
FROM: E. E. NOEL
On January 24, 1991, respondent commenced an audit investigation of
the personal checks encashed by petitioner at its sales offices. Pending
SUBJECT: CHECK ENCASHMENTS AT PLANTS/SALES OFFICES
the audit investigation, petitioner agreed to take a fifteen-day vacation
leave from January 25 to February 14, 1991.
"This is to reiterate our policy with regard to check encashment at SMC
Plants and Sales Offices. The following are the only items accepted for
On January 29, 1991, petitioner received from respondent an inter-
such accommodation:
office memorandum requiring her to explain in writing why no
chanrob 1es vi rtual 1aw lib rary

disciplinary action should be taken against her in view of her

unauthorized encashment of her three personal checks at respondent’s
sales offices. 4
In a reply-memorandum dated January 31, 1991, petitioner admitted
that she encashed three personal checks at respondent’s sales offices
but claimed that such act was not irregular since all personnel in
respondent’s Beer Division were allowed to encash their personal
checks at any sales office upon clearance from the region management
concerned. She stated that her encashment of personal checks had
prior clearance. She further clarified that only two of the three checks
she encashed were dishonored for insufficiency of funds, but she
promptly funded the checks upon receipt of notice of such dishonor,
thereby causing no damage to Respondent. 5
Meanwhile, respondent obtained a copy of the audit results and
learned that aside from petitioner’s reported encashment of three
personal checks, she had previously encashed fifty (50) personal
checks from June 13, 1989 to January 19, 1991 in varying amounts,
from P1,500.00 to P20,000.00, which were not endorsed by the Sales
Operations Manager or the Region Finance Officer. Additionally,
petitioner encashed two other personal checks in the amounts of
P150,000.00 on December 12, 1990, and P100,000.00 on December
27, 1990. 6
After receiving such report, respondent SMC formed an Investigating
Panel to conduct a full-blown investigation of petitioner’s encashment
of personal checks and to determine: (1) whether the region
management gave prior consent to the transactions; (2) whether the
person or persons who accepted or encashed the personal checks were
in fact authorized to do so; (3) if there is any policy, procedure and/or
accommodation for the encashment of personal checks and the
extent/amount and frequency of such; and (4) the loss or damage
accruing to respondent, if any. 7 The Investigating Panel was
composed of Ernesto S. Escalante, SMC Director of Human Resources
and Administration, as Chairman, and Jesus Domingo and Jo Christie
Punsalang, as members. chanrob1es v irt ua1 1aw 1i bra ry
In the meantime, on or February 15, 1991, petitioner returned from
her vacation leave and reported for work. To her surprise, she found
that she had been transferred from her room on the 16th Floor of the
Pacific Star Building to a cubicle on the 19th Floor of the same
building. There, she shared a space with the secretary of respondent’s
Quality Service Manager and spent each day doing nothing for no
assignment was given to her.
Subsequently, petitioner received two inter-office memoranda 8
informing her of the commencement of an administrative investigation
pertaining to her encashment of her personal checks and that she was
relieved of her present assignment/position until the conclusion of the
investigation. 9
At the first investigative hearing on February 27, 1991, petitioner
appeared but requested a postponement of five days to enable her to
submit a supplemental letter to the Investigating Panel.
On March 5, 1991, petitioner submitted a letter-explanation accusing
respondent of prejudging her case. She claimed to have been
unceremoniously relieved of her duties and forced to go on vacation
leave effective January 25, 1991. She demanded that she be re-
assigned to her former position as Finance Director within three (3)
days from notice. 10
At the next scheduled hearing on March 6, 1991, petitioner appeared
without her counsel. Considering her desire to be assisted by counsel
during the investigation, the hearing was reset to March 15, 1991.
On March 15, 1991, petitioner called the Investigating Panel by phone,
expressing her doubts on its impartiality. Despite notice, she refused
to attend subsequent hearings. The Investigating Panel considered her
refusal as a waiver of her right to be heard and thus continued the
investigation in her absence.
On March 21, 1991, the Investigating Panel reported its findings as
follows:
jgc:c hanrobles. com.ph
". . . the Investigating Panel finds the encashment by Ms. Santos of
her personal checks with the region/sales offices as highly irregular
transactions to the detriment of the Company.
"The audit made on the personal check encashments by Ms. Santos at
the Makati, Cubao and Diliman Sales Offices show that she has been
encashing personal checks as early as June 1989 which were not
endorsed by the sales operations manager or the region finance
officer. Four (4) of these checks were dishonored for having been
drawn against insufficient funds but all were subsequently paid by Ms.
Santos in cash. Further, in addition to the December 15, 1990 and
December 20, 1990 bouncing checks of Ms. Santos, she encashed on
December 12, 1990 a personal check for P150,000.00, on December
27, 1990, for P100,000.00, and on January 19, 1991, yet another
personal check for P150,000.00. In all, her personal check
encashments for that short period from December 12, 1990 to January
19, 1991 totalled P670,045.00.
"These encashments from December 12, 1990 to January 19, 1991 not
only violated the policy reiterated in the Cash Management
Department Memo dated September 6, 1989, but even the alleged
practice permitting Payroll 2 personnel to encash their personal
checks. The Investigating Panel does not think that the approval of the
region finance officer and the sales operations manager, who
respectively allowed the encashments of the December 15, 1990 and
December 20, 1990 bouncing checks, would cure the irregularity of
said encashments. These managerial personnel are not only lower in
rank in relation to Ms. Santos in her capacity as Finance Director, but
their authority is limited by the alleged practice itself: they cannot
permit Ms. Santos’ check encashments beyond her monthly salary. chanrob1e s virtua1 1aw 1ib rary
"At the worst, the council of the Investigating Panel finds the facts to
sustain prima facie that the personal check encashments by Ms.
Santos constitute estafa through misappropriation or with abuse of
confidence under Article 315, Paragraph 1(b) of the Revised Penal
Code.
". . . the Investigating Panel finds that Ms. Santos abused her position
thereby giving ground for the Company’s loss of trust and confidence
upon her and her dismissal from the Company. Ms. Santos is a
managerial employee. As Finance Director, Ms. Santos holds a position
of trust and confidence. She is entrusted with the custody, handling,
care and protection of Company funds. She is the highest ranking
managerial employee for the finance function of the Luzon Beer
Operations — third level from the Division Manager. She has functional
control over all the plant and region finance officers, including cashiers
within Luzon operations. As Finance Director, prudence should have
dictated upon Ms. Santos caution and circumspection particularly as
she performs the delicate and sensitive task of handling the finances of
the Company. But this she did not do.
"Except for the two instances where the region finance manager and
sales operations manager separately allowed the encashment by Ms.
Santos of her personal checks, all the other checks were encashed by
Ms. Santos without permission from the region management. In the
two instances where clearance was given, the regional finance
manager said that Ms. Santos is her superior that he just complied
with her request, while the manager for sales operations said that he
trusted Ms. Santos, she being a Finance Director. Even then, these
managers acted beyond their authority in giving the permission to Ms.
Santos in view of the amounts involved." 11
The Investigating Panel recommended that petitioner Santos be
terminated from employment. The Panel further advised the
management to reprimand the regional finance officer and sales
operations manager who permitted the encashment of petitioner’s
personal checks.
In a memorandum dated April 5, 1991, respondent adopted the
findings of the Investigating Panel and informed petitioner of her
termination from employment for abuse of position as Finance
Director, engaging in highly irregular transactions to the detriment of
the company and employer’s loss of trust and confidence. 12
Five days before the end of the administrative investigation, or on
March 15, 1991, petitioner filed with the Labor Arbiter a complaint for
constructive dismissal against respondent SMC and Ernesto S.
Escalante, Chairman of the Investigating Panel. The complaint was
later amended to illegal dismissal. 13
On April 24, 1996, Labor Arbiter Dominador M. Cruz rendered
judgment dismissing the complaint for lack of merit, 14 thus: jgc:chanrob les.co m.ph
"WHEREFORE, judgment is hereby rendered, dismissing the instant
case for lack of merit.
"However, for humanitarian considerations, respondent is directed to
give complainant financial assistance equivalent to one month pay.
"SO ORDERED." 15
On June 10, 1996, petitioner interposed an appeal to the National
Labor Relations Commission (NLRC). 16 Respondent, for its part, filed
a partial appeal.
chanrob1e s virtua1 1aw 1ib rary
On June 30, 1999, the NLRC promulgated a decision reversing that of
the Labor Arbiter. 17 The NLRC held that respondent SMC was
estopped from questioning petitioner’s encashment of personal checks,
having allowed such practice for several years prior to the present
case. Further, respondent deprived petitioner of due process by
belatedly including her prior encashments in the administrative
complaint, upgrading the charge to abuse of position. This effectively
deprived her of her right to be notified of a clear statement of the
cause for termination and prevented her from refuting a more serious
charge. The NLRC likewise doubted the impartiality of the Investigating
Panel considering that it was formed after she had been constructively
dismissed by demotion. The NLRC disposed of the case in this
manner: jgc:chanro bles. com.ph
"WHEREFORE, in the light of the foregoing, the Decision of the Labor
Arbiter dated 24 April 1996 is hereby REVERSED and in view hereof,
another judgment is entered: chan rob1es v irt ual 1aw l ibra ry
1. Ordering respondents to pay complainant’s severance pay of one
(1) month per year of service, computed from date of hire on 1
January 1985 until finality of this Decision;
2. Ordering respondents to pay complainant’s full backwages based on
her last basic monthly salary of P34,000.00 per month, including
allowances and other benefits of their monetary equivalent from date
of her constructive dismissal on 24 January 1991 until finality of this
Decision;
3. Ordering respondents to pay. moral damages of P500,000.00 and
exemplary damages of P500,000.00 and attorney’s fees of 10% of the
total monetary award;
4. Dismissing respondents’ appeal for utter lack of merit.
"The Research and Examination Division of this Commission is required
to compute the foregoing for purposes of execution.
"SO ORDERED." 18
On September 8, 1999, respondent SMC filed with the NLRC a motion
for reconsideration 19 but it was denied in a resolution dated
December 29, 2000. 20
On April 6, 2001, respondent filed with the Court of Appeals a petition
for certiorari under Rule 65 of the Revised Rules of Court, with prayer
for a temporary restraining order and/or preliminary injunction,
docketed as CA-G.R. SP No. 64223. 21
On July 4, 2001, the Court of Appeals rendered its Decision annulling
and setting aside that of the NLRC, 22 thus:
"WHEREFORE, premises considered, the present petition is hereby
GIVEN DUE COURSE and the writ prayed for, accordingly GRANTED.
The Decision dated June 30, 1999 and Resolution dated December 29,
2000 of public respondent National Labor Relations Commission in
NLRC NCR CA Case No. 010929-96 (NLRC Case No. 00-03-01688-91)
are hereby both ANNULLED and SET ASIDE and a new one is hereby
entered DISMISSING the Complaint for utter lack of merit." cralaw virtua1aw l ibra ry
Petitioner filed with the Court of Appeals a motion for reconsideration,
23 but the same was denied on August 9, 2001. 24
Hence, this recourse.
Petitioner basically raises the issue that respondent SMC dismissed her
from employment without just cause and violated her right to due
process.
The petition is bereft of merit.
Under the Labor Code, a valid dismissal from employment requires
that: (1) the dismissal must be for any of the causes expressed in
Article 282 of the Labor Code and (2) the employee must be given an
opportunity to be heard and to defend himself. 25 Article 282(c) of the
same Code provides that "willful breach by the employee of the trust
reposed in him by his employer" is a cause for the termination of
employment by an employer. 26 This ground should be duly
established. 27 Substantial evidence is sufficient as long as such loss
of confidence is well-founded or if the employer has reasonable ground
to believe that the employee concerned is responsible for the
misconduct and her act rendered her unworthy of the trust and
confidence demanded of her position. 28 It must be shown, though,
that the employee concerned holds a position of trust. 29 The betrayal
of this trust is the essence of the offense for which an employee is
penalized. 30
Petitioner argues that her position as Finance Director of respondent’s
Beer Division is not one of trust but one that is merely functional and
advisory in nature. She possesses no administrative control over the
plants and region finance officers, including cashiers. She reports to
two superiors.
Petitioner’s argument is misplaced. As Finance Director, she is in
charge of the custody, handling, care and protection of respondent’s
jgc:chanrob les.com. ph funds. The encashment of her personal checks and her private use of
such funds, albeit for short periods of time, are contrary to the
fiduciary nature of her duties.
Moreover, petitioner has functional control over all the plant and
region finance officers, including cashiers, within the Luzon Operations
Area. In fact, she is the highest ranking managerial employee for the
finance section of the Luzon Beer Division Operations. Obviously, her
position is a factor in abetting the encashment of her personal
checks.chanrob1e s virtua1 1aw 1ib rary
Indeed, we find substantial ground for respondent’s loss of confidence
in petitioner. She does not deny encashing her personal checks at
respondent’s sales offices and diverting for her own private use the
latter’s resources. The audit investigation accounted for all the checks
she encashed, some of which were dishonored for insufficiency of
funds. The Investigating Panel concluded that petitioner not only
encashed her personal checks at respondent’s sales offices, but also
used company funds to temporarily satisfy her insufficient accounts.
This Court has held that misappropriation of company funds, although
the shortages had been fully restituted, is a valid ground to terminate
the services of an employee of the company for loss of trust and
confidence. 31
Petitioner contends that she was "singled out in this case" for refusing
to accede to the sexual advances of her superior, Francisco Gomez de
Liano. She also cites the prolonged practice of other payroll personnel,
including persons in managerial levels, who encashed personal checks
but remained unpunished by Respondent. She asserts that her
administrative superiors even encouraged her to encash her checks at
the nearest sales office since her appearance at the bank for
encashment would entail undue digression from her daily work routine.
Prolonged practice of encashing personal checks among respondent’s
payroll personnel does not excuse or justify petitioner’s misdeeds. Her
willful and deliberate acts were in gross violation of respondent’s policy
against encashment of personal checks of its personnel, embodied in
its Cash Department Memorandum dated September 6, 1989. She
cannot feign ignorance of such memorandum as she is duty-bound to
keep abreast of company policies related to financial matters within
the corporation. Equally unmeritorious are her claims that the acts
complained of are regular, being with the knowledge and consent of
her superiors, Francisco Gomez de Liano and Ben Jarmalala, and that
she is being charged because she resisted the sexual advances of her
superior. Suffice it to state that she could have proved these matters
during the investigation had she attended the proceedings.
On petitioner’s contention that she was denied due process — To be
sure, an employee cannot be dismissed from employment without
according to him the constitutional right to due process whether he be
a rank and file or a managerial employee. 32 Failure to comply with
the procedural requirements for terminating one’s employment taints
the dismissal with illegality. This procedure is mandatory and any
judgment reached by management without that compliance can be
considered void and inexistent. 33
In this case, petitioner was required to explain in writing why no
disciplinary action should be taken against her. She was also notified
that a full-blown administrative investigation will be conducted and
was advised that she should be represented by counsel. She submitted
to the Investigating Panel a letter-explanation and a supplemental
response to the administrative complaint against her. At her request,
the investigation was postponed twice to enable her to procure the
services of counsel. Yet, she vehemently refused to participate in the
administrative investigation. She cannot now claim denial of due
process considering that she was afforded the opportunity to be
present (with counsel) during the investigation and to present her
evidence. The essence of due process is that a party be afforded a
reasonable opportunity to be heard and to submit any evidence he
may have in support of his defense. 34
The Labor Code provides the following procedure to be observed in
terminating the services of an employee based on just causes as
defined in Article 282 of the Code: chanro b1es vi rt ual 1aw li bra ry
(a) A written notice must be served on the employee specifying the
ground or grounds for termination and giving him reasonable
opportunity within which to explain his side;
(b) A hearing or conference shall be conducted during which the
employee concerned, with the assistance of counsel if he so desires, is
given an opportunity to respond to the charge, present his evidence or
rebut the evidence presented against him; and
(c) A written notice of termination must be served on the employee
indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.
Procedural due process requires the employer to give the employee
two notices. First is the notice apprising him of the particular acts or
omissions for which his dismissal is sought. Second is the subsequent
notice informing him of the employer’s decision to dismiss him. 35
Records show that the petitioner received the required twin notices.
The first notice states:
jgc:chanro bles.c om.ph
"TO: MS. CARMELITA V. SANTOS DATE: 01 Feb 1991
FROM: A.O. VILLA-ABRILLE, JR.
SUBJECT: LETTER/MEMO – Jan. 31, 1991
x x x
"What can be readily seen and as accepted by you is the fact that your
personal checks were encashed in the region/sales office which were
returned by the bank concerned to SAN MIGUEL CORPORATION due to
"DAIF" .
"Since all other circumstances mitigating or aggravating are not yet
established and there are conflicting statements as to "authorized or
unauthorized encashments", I have requested for a formal
investigation to be undertaken so as due process is allowed.
x x x" 36
The above notice was followed by a more detailed supplemental
notice, thus: jgc:chanrob les.c om.ph
"TO: MS. CARMELITA V. SANTOS DATE: Feb. 22, 1991
FROM: E. S. Escalante
SUBJECT: jgc:chanroble s.com.p h
"Further to the memo dated February 1, 1991 of Mr. Alberto O. Villa-
Abrille, Jr., please be informed that an administrative investigation will
be conducted on February 27, 2:00 p.m. at the Workshop Room I, 5th
Floor, Hanston Building.
"As discussed, we hereby confirm our agreement that while the
administrative investigation is pending, you will be holding office at the
19th Floor, PSB (SMQMS staff unit).
"You will be investigated for ‘abuse of position by engaging in highly
irregular transactions to the detriment of the company tantamount to
loss of trust and confidence’. In view of the nature of the offense, we
agreed that you shall be given duties and assignments as
circumstances warrant.
x x x" 37
The second notice, given after the conclusion of the administrative
investigation, enumerates the administrative offenses committed by
petitioner and informs her that her employment is terminated "for just
and valid cause," thus: chanrob1es vi rt ua1 1aw 1i bra ry
"TO: MS. CARMELITA V. SANTOS DATE: APR. 5, 1991
FROM: A.O. VILLA-ABRILLE, JR.
SUBJECT: jgc:chanroble s.com.p h
"Please be informed that based on its investigation, the Investigating
Panel found that you abused your position as Finance Director by
engaging in highly irregular transactions to the detriment of the
Company, giving ground for the Company to lose its trust and
confidence in you, which constitutes just cause for your dismissal
pursuant to our Policies and Procedures on Employee Conduct in
relation to Article 282 of the Labor Code, as follows: chanrob 1es vi rtua l 1aw lib ra ry
1. You encashed, without prior approval from proper Management
authority, your following personal checks: chanrob1e s virtual 1aw lib rary
Check No. Date of Encashment Amount
UCPB #036708 December 12, 1990 P150,000.00
UCPB #036726 December 27, 1990 100,000.00
UCPB #036737 January 19, 1991 150,000.00
x x x
"Your personal check encashments are in clear violation of Company
policy as reiterated in the Cash Management Memorandum dated
September 6, 1989 which prohibits such encashments.
"The investigating panel, therefore, found that your check
encashments are highly irregular transactions to the detriment of the
Company and which you perpetrated in grave abuse of your position
as Finance Director. It is the recommendation of the Investigating
Panel that you should be dismissed from the service or terminated for
just and valid cause, with forfeiture of any and all benefits, including,
but not limited to, separation benefits.

"Conformably with the foregoing findings and recommendations of the

Investigating Panel, please be informed that you are hereby
terminated for just and valid cause effective immediately, with
forfeiture of any and all benefits, including, but not limited to,
separation benefits, without prejudice to our right of filing criminal
charges against you.

(Sgd.)

A. O. VILLA-ABRILLE, JR." 38

In sum, in dismissing petitioner, respondent SMC did not deprive her

of her right to due process. Her dismissal is with just cause. Her
encashment of her three personal checks at respondent’s sales offices
violated respondent’s trust and confidence reposed in her, even
without considering her other fifty personal checks she encashed at
respondent’s sales offices. An employer cannot be compelled to retain
an employee who is guilty of acts inimical to the interests of the
employer. 39 A company has the right to dismiss its employees as a
measure of protection, more so in the case of supervisors or personnel
occupying positions of responsibility. 40

WHEREFORE, the petition is DENIED. The assailed Decision of the

Court of Appeals in CA-G.R. SP 64223 dated July 4, 2001 and its
Resolution dated August 9, 2002 are AFFIRMED.

SO ORDERED.
 SECOND DIVISION
G.R. No. 197598 : November 21, 2012
MIRANT (PHILIPPINES) CORPORATION, Petitioner, v. DANILO A.
SARTO, Respondent.
DECISION
BRION, J.:
This is a petition for review on certiorari1 assailing the decision2 dated
ςrνl l ςrνl l
March 29, 2011 and the resolution3 dated July 11, 2011 of the Court
ς rνll
of Appeals (CA) in CA-G.R. SP No. 112975.
On December 7, 2005, respondent Danilo A. Sario filed a
complaint4 for illegal dismissal, backwages, damages and attorneys
ς rν ll
fees against the petitioner, Mirant (Philippines) Corporation
(company), and its officers, namely: Ronald Harris, President; Thomas
J. Sliman, Jr., Executive Vice-President for Operations; and Alejandro
Lito Aprieto, Officer-in-Charge, Materials Management Department
(MMD). The company owns shares in Mirant Sual Corporation and
Mirant Pagbilao Corporation which operate power stations in the
provinces of Pangasinan and Quezon. Sario worked for the company as
procurement officer from March 1998 to October 2005. As
procurement officer, he was tasked to:
a. Perform the entire purchasing process of a Stations set of materials,
parts, equipment, and/or project;
b. Receive Purchase Requisition Form ("PRF") assignments through the
Q4 system (Q4 PR downloading process);
c. Identify vendors/suppliers to be invited and set bid periods and
deadlines for bid submission. Coordinate technical issues with end-
users and prepare Request for Quotation ("RFQ") packages. Send
RFQs to vendors and initiate RFQ confirmation status. Resolve
commercial issues with vendors (RFQ process);
d. Receive quotes/bids. Review tenders and resolve commercial issues
with vendors. Perform Tender Analysis Summary revisions when
necessary;
e. Secure and evaluate justification for single tender transactions in
accordance with the MMD manual. Coordinate price, payment and
delivery terms with vendor (Single tender process);
f. Prepare Purchase Orders ("PO"). Check if approval of PO is according
to limits of authority. Monitor PO status. If necessary, prepare Tender
Analysis Addendum ("TAA") and PO revisions. Keep PO status in Q4
updated (PO processing); and
g. Coordinate vendor performance with plant end-user. Provide
information on vendor performance to be used in the vendor
performance evaluation. Resolve disputes arising out of vendor
deliveries between end-user and vendor. Recommend appropriate
sanctions for vendor infractions (Vendor management).5 ςrν ll
Allegedly, at the time material to the case, the company discovered
that some of its employees had been involved in the rampant practice
of favoring certain suppliers, thereby seriously impairing transparency
in its procurement process and compromising the quality of purchased
materials. To curb the practice, the company issued the 2002 MMD
Policies and Procedures Manual (2002 Procurement Manual)6 for the
ςrν ll
guidance of its employees and officers in soliciting bid quotations and
proposals from vendors, suppliers and contractors. The 2002
Procurement Manual was duly disseminated and it became effective in
January 2002. It was disseminated through seminars.
The 2002 Procurement Manual was replaced by the 2004 Procurement
Policies and Procedures Manual (2004 Procurement Manual)7 which ςrν ll
was disseminated and which became effective on August 31, 2004.
Again, seminars were conducted and a proficiency examination was
administered to familiarize the company buyers/procurement officers
and the team leaders with the 2004 Procurement Manual. Sario took
the proficiency examination on September 28, 2004.
On September 8, 2005, Sario received a Show Cause Notice8 from the ς rνll
company, advising him that based on an internal audit, he was found
to have committed the following violations:
1. Non-compliance with the Minimum Bid/Quotation Requirements;
xxx
2. Non-compliance with the Single Tender Justification Requirement;
xxx
3. No Evidence of Independent Approval of the PRF;
xxx
4. No Evidence of Authorized Recommendation or Approval of the PO;
xxx
5. PO not Awarded to the lowest Bidder; and
xxx
6. No TAS Attached.
Sario was given ten (10) days, or until September 18, 2005, to explain
why no disciplinary action should be taken against him for the
violations. He was also notified that an investigation would be
conducted on the matter. He was placed on preventive suspension
pending the investigation. He submitted his written explanation on
September 17, 2005,9 through his lawyer, Angel H. Gatmaitan.
ςrνl l
At the administrative hearing on October 6, 2005, Sario argued that he
could not be faulted for not complying with the 2004 Procurement
Manual because it was never properly disseminated (rolled out) and
neither did he take the proficiency examination on the manual. He
admitted, however, that he failed to comply with the procurement
procedures laid out in the manual due to his desire to meet the quota
imposed by his supervisors.
On October 25, 2005, Sliman sent Sario a letter10 informing him of
ς rνll
the termination of his employment for his failure to comply with the
standard operating procedures/instructions; for his serious misconduct
or willful disobedience of the lawful orders of the company in
connection with his work; and for his gross and habitual neglect of his
duties. The company found Sario liable for his failure to comply with
the 2002 and 2004 Procurement Manuals, especially his unabated
practice of sending Requests for Quotation (RFQs) to suppliers who
have a history of not responding to requests or of not sending quotes.
The practice, the company lamented, resulted in the issuance of
purchase orders to the lone bidders.
Sario, on the other hand, argued before the Labor Arbiter that he was
a mere rank-and-file employee with no discretion in the procurement
of materials; his work was merely recommendatory as it was subject
to the approval of his supervisor and other company officers. He
pointed out that the show cause notice to him was the first and only
communication from the company calling his attention to his alleged
infractions. He stressed that at any rate, he should have been meted a
lighter penalty, such as suspension, considering his length of service
with the company, without a derogatory record.
The Compulsory Arbitration Rulings
In a decision dated November 28, 2006,11 Labor Arbiter Arden S. Anni
ς rν ll
declared Sario to have been illegally dismissed. Consequently, he
ordered: (1) Sarios immediate reinstatement without loss of seniority
rights and other privileges; and (2) the company, Sliman and Aprieto,
jointly and severally, to pay Sario back wages, moral damages of Two
Hundred Thousand Pesos (P200,000.00), exemplary damages of One
Hundred Thousand Pesos (P100,000.00) and 10% of the total
monetary award as attorneys fees. Labor Arbiter Anni absolved Harris
from liability.
Labor Arbiter Anni stressed that the 2002 and 2004 Procurement
Manuals have no commensurate penalties for any breach of their
provisions and that Sarios dismissal was neither due to fraud nor
willful breach of the trust reposed on him by his employer. He noted
that there was nothing on record to support the companys contention
that Sario, as procurement officer, exercised sufficient discretion so as
not to be bound by what his superiors required him to do. In any
event, Labor Arbiter Anni found Sarios dismissal too harsh a penalty,
considering his almost eight years of service, without a derogatory
record, with the company.
The respondents appealed to the National Labor Relations Commission
(NLRC). On June 30, 2009, the NLRC reversed the labor arbiters
ruling12 and dismissed the complaint for lack of merit. It found that
ςrν ll
Sario was dismissed on valid grounds and was afforded due process.
The labor tribunal was not convinced by Sarios defense that if he
indeed violated the companys procurement procedures, the resulting
transactions were nevertheless approved by his superiors, thereby
negating his liability. It emphasized that by the nature of his job, Sario
was at the forefront of the companys procurement program and it was
incumbent upon him to exercise care in the performance of his duties.
He cannot, therefore, shield himself from liability with the argument
that his actions bore the approval of his superiors.
Sario moved for reconsideration, but the NLRC denied the motion in a
resolution rendered on November 27, 2009.13 He then sought relief
ς rν ll
from the CA, through a petition for certiorari under Rule 65 of the
Rules of Court.
The CA Decision
In its decision of March 29, 2011,14 the CA granted the petition. It set
ςrν ll
aside the NLRC rulings and reinstated the Labor Arbiters decision, with
modifications. It deleted the award of moral and exemplary damages,
and absolved Harris, Sliman and Aprieto from liability in the case. Like
the Labor Arbiter, it found the penalty of dismissal meted on Sario too
harsh.
The appellate court opined that while Sario appeared to be passing the
blame on his superiors, it recognized some merit in his stance. It
stressed that Sarios supervisors and managers should have seen his
mistakes and corrected them at the earliest opportunity; they should
have provided checks and balances to ensure strict compliance with
the companys procedures, but they failed in that respect.
The company moved for partial reconsideration, but the CA denied the
motion; hence, the present recourse.
The Petition
The company prays that the petition be granted, contending that the
CA gravely erred when it reversed the NLRCs decision of June 30,
200915 and reinstated the labor arbiters ruling that Sario was illegally
ς rνll
dismissed. It insists, on the contrary, that Sario was validly dismissed
for having committed repeated violations of the companys 2002 and
2004 Procurement Manuals (27 times), especially his unabated
practice of sending RFQs to non-responding suppliers. The violations, it
adds, are indicative of a bigger scheme to compromise the companys
bidding process.
The company submits that its 2002 and 2004 Procurement Manuals
were intended to eliminate corrupt practices in its MMD and to ensure
transparency in its procurement activities. Sarios repeated violations
of the 2002 and 2004 Procurement Manuals effectively emasculated
their objectives and unduly compromised the interests of the company
and those dealing with it. It thus posits that there is sufficient basis to
consider Sarios disregard of the 2002 and 2004 Procurement Manuals
as a willful disobedience to the companys lawful orders, which is a just
cause for his dismissal under Article 282 of the Labor Code.
The company disputes the CAs finding that Sario exercised no
discretion in his work and that his actions were, in any event, subject
to the approval of his superiors. It points out that Sarios duties
involved the procurement of materials at the most economical cost,
and ensuring their timely, safe and expeditious delivery; observing the
highest ethical standards, and adhering to the companys policies and
sound business practice. He was also tasked to identify the
vendors/suppliers to be invited, to set bid periods and deadlines for bid
submission, to send RFQs, to initiate RFQ confirmation status, and to
resolve commercial issues with vendors. All these tasks, the company
posits, require the exercise of discretion.
The company insists that Sario cannot be allowed to escape the
consequences of his transgressions. It maintains that the alleged
shortcomings of Sarios superiors with respect to his violations do not
make the violations right. Also, the violations were not a mere
mistake; they formed a pattern of a deliberate disregard of the 2002
and 2004 Procurement Manuals as they were committed not just on a
single day, but within a period covering January 2004 to May 2005.
Lastly, the company avers that Sario made a false assertion during the
administrative investigation when he denied that he took the
proficiency examination pertaining to the 2004 Procurement Manual
when, in fact, he took the examination in September 2004. This
falsehood, the company asserts, compounds the several infractions he
had committed.
The Case for Sario
In compliance with the Courts directive,16 Sario filed his Comment17on
ςrν ll
June 8, 2012, praying for a denial of the petition on the following
grounds: (1) the petition raises no genuine question of law, but only
questions of fact, in violation of the Rules of Court;18 and (2) the CA
ςrνll
committed no reversible error in its assailed decision as it was
supported by more than substantial evidence.
With respect to the procedural issue, Sario contends that the petition
abounds with factual issues rather than with any clear and distinct
question of law; with the petitions narration of his violations,19 the ς rν ll
Court is being asked to "review the factual issues" already passed
upon by the CA. In a Reply20 dated June 22, 2012, the company
ςrνl l
denied that the petition raises only questions of fact and not of law.
On the merits of the case, Sario maintains that the CA decision "was
not concocted out of thin air"21 as it was shored up by more than
ςrνl l
substantial evidence that he was illegally dismissed. He posits that the
appellate court committed no error in holding that his dismissal was
too harsh a penalty for his mistakes, considering that he was not even
reprimanded nor warned of his infractions and, while the company
claims that he violated the 2002 Procurement Manual, he was
punished only after the 2004 Procurement Manual took effect.
The Courts Ruling
The procedural question
Is the petition dismissible because it raises only questions of fact and
not of law as Sario claims? The records indicate otherwise. The facts
are largely not in dispute. From the labor arbiter to the NLRC and then
to the CA, the discussions centered on Sarios violations of the
companys 2002 and 2004 Procurement Manuals, violations which
provided the cause for his dismissal. Sario himself did not deny the
violations. As the company argues, the petition focuses on the error
the CA committed in the application of the law on the set of violations
committed by Sario, which constitutes willful violations of the
companys lawful orders.
There is a question of law in a given case when the doubt or difference
arises as to what the law is on a certain state of facts; there is a
question of fact when the doubt or difference arises as to the truth or
falsehood of alleged facts. "For a question to be one of law, it must
involve no examination of the probative value of the evidence
presented by the litigants or any of them,"22 which we find to be the
ςrν ll
situation in this case. In any event, even if we were to consider that
the petition raises only factual issues, we still find it necessary to
review the case, in view of the divergence of the factual findings
between the CA and the NLRC.23 Based on these divergent factual
ςrνll
findings, the NLRC found that Sario had been validly dismissed, while
the CA declared illegal the termination of his employment.
The merits of the case
We find the petition meritorious.
Under the law, the burden of proving that the termination of a workers
employment was for a valid or authorized cause rests on the
employer.24 In this case, the company was able to prove that Sarios
ςrν ll
dismissal was for a valid cause. Through his repeated violations of the
companys 2002 and 2004 Procurement Manuals, Sario committed a
serious misconduct or willful disobedience of the lawful directives or
orders of his employer, constituting a just cause for termination of
employment.25 ς rνll
Sario was not an ordinary rank-and-file employee. He was a
procurement officer. While he did not occupy a high position in the
company hierarchy, the nature of his work made him, as the company
avers, a vital cog in its procurement program. The effectiveness of the
program depended in no small measure on the people running it, i.e.,
from the lowliest employee to the highest official. Sario was one of
these people and he was occupying, not a lowly but, a middle position.
This position carries with it responsibilities which only he can, and
should, answer for.
As the records show, Sario failed to faithfully discharge his duties as
procurement officer. These duties26 placed him at the early but critical
ς rνll
stage of the companys procurement process. The very first one in the
list of his duties at once suggests the heavy responsibility he had to
bear and the sensitiveness of his functions, considering that he had to
"perform the entire purchasing process of a Stations set of materials,
parts, equipment, and/or project."27 Flowing from this catch-all
ςrνl l
statement, Sarios activities consisted of (1) receiving purchase
requisition form assignments; (2) identifying the vendors/suppliers to
be invited, setting bid periods and deadlines for bid submission,
including the RFQ process coordinating critical issues with end-users
and preparing the RFQ package, sending RFQs to vendors and
initiating RFQ confirmation status, and resolving commercial issues
with vendors; (3) receiving quotes/bids, reviewing tenders and
performing tender analysis summary when necessary; (4) securing
and evaluating justification for single tender transactions, and
coordinating price, payment and delivery terms with vendors; (5)
preparing purchase orders and checking of approval of purchase
orders in accordance with the limits of authority; and (6) coordinating
vendor performance evaluation, resolving disputes between end-users
and vendors, and recommending appropriate sanctions for infractions
committed by the vendors.
Over a span of almost one-and-a-half years, from January 2004 to
May 2005 (not two years as the company claims), Sario committed
27violations of the 2002 and 2004 Procurement Manuals in critical
areas of the procurement process, in particular, non-compliance with
the minimum bid/quotation requirements, non-compliance with the
single tender justification requirement, failure to provide proof of
approval of the purchase requisition form, failure to provide proof of
authorized recommendation of the purchase order, failure to award
purchase order to the lowest bidder, and no tender analysis
summary.28 ςrν ll
We understand the companys serious concerns over Sarios repeated
violations of the 2002 and 2004 Procurement Manuals. Indeed, these
violations cannot but compromise the integrity of the companys
procurement process. A prime concern is "Sarios unabated practice of
sending RFQs to non-responding suppliers,"29 instead of "to other
ς rν ll
accredited suppliers who could respond to xxx said request."30 It
ςrνll
submits that in so doing, Sario did not comply with the minimum
bid/quotation requirements for the purchase orders, not to mention
that he also favored certain suppliers over the others. In such a case,
it points out, the bidding process becomes a farce; it defeats the real
purpose of bidding, which is to secure the best possible price.
Given the critical and sensitive role Sario played in the companys
procurement program, we appreciate why the company has employed
all legal means to terminate his services. Sarios continued
employment has become inimical to its business interests which rely
critically on the effectiveness and integrity of its procurement
procedure. We can, therefore, also understand why it had to issue the
2002 and 2004 Procurement Manuals to ensure that the procedure is
not compromised. To be sure, the company has the prerogative to
issue the 2002 and 2004 Procurement Manuals.
As the NLRC aptly noted, "the issuance of the 2002 and 2004
Procurement Manuals was a reasonable and valid exercise of
management prerogative xxx to curb the rampant practice of some
unscrupulous employees to favor some suppliers over the others in the
award of Purchase Orders."31 "Any employee may be dismissed for
ςrν ll
violation of a reasonable company rule or regulation for the conduct of
the latters business."32
ςrνll
Sarios transgressions cannot be
mitigated by the supposed approval
of his actions by his superiors
Like the labor arbiter, the CA spared Sario from being separated from
the service on the ground that the penalty of dismissal is too harsh for
him or is disproportionate to his infractions. It faulted the company for
not even reprimanding or warning Sario of his mistakes. It also blamed
his superiors, who approved his actions, for their failure to detect his
mistakes and to correct them at the earliest opportunity.
We disagree. Sario has to account for his own actions. The
circumstance that his recommendations were approved by his
superiors does not erase the fact that he repeatedly violated the 2002
and 2004 Procurement Manuals. He was well aware of his duties and
their parameters, based on the 2002 and 2004 Procurement Manuals.
He committed the violations for one-and-a-half years. These repeated
violations can only indicate a willful disobedience to reasonable
company rules and regulations.
We thus find no basis for the CAs ruling which, in effect, condoned
Sarios grave infractions against the company. To our mind, this is a
reversible error.
Based on the facts, the law and jurisprudence, Sario deserves to be
dismissed for willful disobedience. In Gold City Integrated Port
Services, Inc. v. NLRC,33 the Court stressed that willful disobedience
ςrνl l
of an employee contemplates the concurrence of at least two
requisites: the employees assailed conduct must have been willful or
intentional, the willfulness being characterized by a "wrongful and
perverse attitude"; and the order violated must have been reasonable,
lawful and made known to the employee, and must pertain to the
duties which he had been engaged to discharge. We find the two
requisites present in this case.

Sarios repeated violations of the companys 2002 and 2004

Procurement Manuals lawful orders in themselves as they provide the
dos and, necessarily, the donts of a procurement officer constitute
willful disobedience. He committed the repeated violations because he
knew or was confident that he would not get caught since his actions
were being approved, as he claims, by his superiors, evidencing
wrongful or perverse intent. While the Constitution urges the
moderation of the sanction that may be applied to an employee where
a penalty less punitive would suffice, as the Court pronounced in
Marival Trading, Inc. v. NLRC,34 cited by the CA, we do not believe
ςrνll

that such a moderation is proper in this case. Sario has become unfit
to remain in employment. A contrary view would be oppressive to the
employer. "The law, in protecting the rights of the laborer, authorizes
neither oppression nor self-destruction of the employer."35 ςrνl l

WHEREFORE, premises considered, the petition is GRANTED. The

appealed decision and resolution of the Court of Appeals are SET
ASIDE. The complaint is DISMISSED for lack of merit. ςrα lαωl ιbrαr

SO ORDERED.
 SECOND DIVISION
[G.R. No. 77457. February 5, 1990.]
ANITA LLOSA-TAN, Petitioner, v. SILAHIS INTERNATIONAL
HOTEL, CARMELITO REGALADO, VANESSA SUATENGCO AND
NESTOR FAMATIGAN, Respondents.
Mario A. Aguinaldo for Petitioner.
Felipe P. Fuentes, Jr. for Private Respondents.
DECISION
PARAS, J.:
This is a petition for certiorari seeking to set aside: (1) the decision
dated May 28, 1984 of the National Labor Relations Commission in
NLRC Case No. NCR-10-6699-82 reversing the decision of the Labor
Arbiter dated March 22, 1983 which had ordered the reinstatement of
complainant to her position but without any award of backwages and
(2) resolutions: (a) dated July 15, 1986 and (b) January 26, 1987 of
the same Commission denying the first and second motions for
reconsideration respectively, of the said decision for lack of merit.
The antecedent facts of the case are as follows: chanrob 1es vi rtual 1aw lib rary
The complainant was front office cashier of Silahis International Hotel
since November 2, 1976 until her questioned dismissal on October 30,
1982. She is also a member of the Silahis International Hotel
Employees Union.
Since 1977, the Silahis International Hotel, respondent herein, had a
standing corporate policy (Corporate Policy No. 014) which reads:
CASHING OF CHECKS
"It has been observed that employees frequently make use of our
units’ facilities for cashing checks, personal or otherwise, even when a
number of these checks unfortunately bounce to the detriment of SMC
and its affiliates.
"When a check bounces, management in effect extends credit to the
employee. In order to minimize these losses, it has no other recourse
but to effect salary deductions.
"Henceforth, all cashiers of SMC and its affiliates are hereby instructed
to refuse the cashing of personal checks of employees and officials,
endorsement by any executive of the Sulo Management Company, or
Philippine Village Hotel or Silahis International Hotel or Sulo Hotel
notwithstanding.
"This policy is intended for uniform application at all levels, in SMC as
well as all its affiliates in order to preclude any element of
discrimination." (Rollo, pp. 41-42).
On August 22, 1982, while petitioner was on duty, she was
approached by Mr. Fernando Gayondato, the general cashier of Puerto
Azul Beach Resort — a sister company of Silahis International Hotel
and nephew of the Executive Vice President, to encash two (2) US
dollar checks with a combined value of US $1,200.00 or P10,389.60.
These checks were drawn by Mr. Reynaldo Vicencio and were payable
to cash. Although petitioner politely explained the existence of Policy
No. 014 prohibiting such transactions, Gayondato persisted and
assured that the presentation of aforesaid checks to the front office
cashier was upon instructions of the Executive Vice President.
Thus, Petitioner, eventually encashed the aforesaid checks,
notwithstanding Corporate Policy No. 014. Thereafter, the said checks
bounced.
On October 1, 1982, respondent Vanessa Suatengco issued a
memorandum to the petitioner requiring her to explain in writing why
she should not be terminated for encashing the two (2) personal
checks without proper authorization. In the same memorandum,
petitioner was put under preventive suspension effective October 2,
1982. In due time, petitioner submitted her letter of explanation
(Rollo, pp. 84-85), explaining the circumstances under which the
encashment was made as follows: jgc:c han robles. com.ph
chanro b1es vi rtua l 1aw lib ra ry
"x x x
"2. Mr. Gayondato wanted to encash said checks with her and he
thereupon affixed his signature at the back thereof. Undersigned asked
him if he knows the drawer thereof, and he assured her that he knows
personally Mr. Reynaldo M. Vicencio, being a close friend and a
frequent guest at Puerto Azul, and the said checks were fully funded;

"3. Undersigned explained to Mr. Gayondato that there is an existing
policy prohibiting encashment of checks with the front office cashier
without the written endorsement of any of the top officials mentioned
in Corporate Policy No. 014. However, Mr. Gayondato repeatedly
assured undersigned that said checks had already been shown by him
earlier to EVP Trinidad Diaz-Enriquez, her auntie, and he was advised
to present the same to the front office cashier of Silahis, as he needed
the Philippine currency equivalent thereof to meet some urgent
disbursements in Puerto Azul;
"4. Because of His being the General Cashier of Puerto Azul, and his
being a very close relative to EVP Trinidad Diaz-Enriquez, and his
repeated assurances that the checks were already passed upon by EVP
Trinidad Diaz-Enriquez, and considering his representation for his need
for cash to meet certain urgent disbursements in Puerto Azul, and the
expected foreign exchange income that will accrue to Silahis,
undersigned was finally constrained in good faith to allow encashment
of said dollar checks;
"5. Previously, undersigned refused to allow encashment of a check
issued in favor of Mr. Johannes Jahms, Resident Manager of Silahis,
due to her adherence to said Corporate Policy No. 014. Instead of
being praised and commended, undersigned received a memorandum
from management which in effect reprimanded her for following said
policy and she almost got dismissed for being inflexible and not using
her sound discretion on the matter. When she took up the matter with
Mr. F. S. Famatigan, Jr., he then advised undersigned to be flexible
and use her sound discretion in future similar cases. Hence, this is also
one of the compelling reasons why undersigned allowed encashment of
the aforesaid dollar checks, as she was apprehensive then that she
might again be reprimanded for not being flexible and not exercising
her sound discretion; . . . ." cralaw virtua 1aw lib rary
Despite petitioner’s explanation in the aforesaid letter, her services
were terminated effective October 30, 1982. cralawnad
Subsequently, petitioner filed a complaint against respondents for
illegal dismissal. On March 22, 1983, Labor Arbiter Virginia G. Son
rendered a decision, the dispositive portion of which reads as
follows:jgc:c hanrobles. com.ph
"WHEREFORE, premises considered the respondents are hereby
ordered to reinstate the complainant to her position without loss of
seniority rights but without any award of backwages. The complaint for
unfair labor practice is dismissed for lack of merit." (Rollo, pp. 4-5)
Respondent Hotel appealed the decision of the Labor Arbiter to the
National Labor Relations Commission which was opposed by the
petitioner (Rollo, p. 5).
On May 28, 1984, the National Labor Relations Commission rendered a
decision setting aside the decision of the Labor Arbiter dated March 22,
1983 and dismissing the complaint for illegal dismissal for lack of merit
(Rollo, p. 14).
Petitioner, however, filed a motion for reconsideration in the National
Labor Relations Commission on June 22, 1986 which was denied on
July 15, 1986 (Rollo, p. 20).
On July 29, 1986, petitioner filed her second motion for
reconsideration which was likewise denied on January 26, 1987 for
lack of merit (Rollo, p. 24).
Hence, this petition.
The Second Division of this Court, in its resolution dated April 2, 1987
without giving due course to the petition, required respondents to
comment (Rollo, p. 30), which was filed on May 22, 1987 by public
respondent (Rollo, p. 40), and on July 17, 1987, by respondent Hotel
(Rollo, p. 61).
After all the required pleadings had been filed in this case, this Court
in its resolution dated January 20, 1988 resolved to give due course to
the petition and to consider this case submitted for decision (Rollo, p.
120).
In her petition, petitioner assigned the following alleged errors: c hanro b1es vi rt ual 1aw li bra ry
I
THE NLRC ERRED IN FINDING THAT THE PETITIONER WAS GUILTY OF
NEGLIGENCE.
II
THE NLRC FAILED TO CONSIDER THAT DISMISSAL IS TOO HARSH
CONSIDERING THE REASONS THAT PROMPTED THE ENCASHMENT.
III
THE NLRC FAILED TO CONSIDER THE FACT THAT THE DISMISSAL OF
THE PETITIONER WAS PATENTLY ILLEGAL, NOT ONLY BECAUSE IT
WAS UNSUPPORTED BY A LEGITIMATE REASON BUT BECAUSE SHE
WAS DEPRIVED OF HER RIGHT TO DUE PROCESS AS SANCTIONED BY
THE COLLECTIVE BARGAINING AGREEMENT (CBA FOR BREVITY)
EXECUTED BETWEEN RESPONDENT HOTEL AND THE UNION WHERE
THE PETITIONER WAS A MEMBER. (Rollo, p. 5)
The pivotal issue of this case is whether or not the acts of petitioner
constitute gross negligence resulting in a valid ground for the
termination of her employment. chanrob les vi rtua l lawlib rary
Petitioner contends that the National Labor Relations Commission
erred in finding that she was guilty of gross negligence encashing the
dollar checks in question, citing that the Labor Arbiter in her decision
made no finding of negligence, rather the Labor Arbiter noted that the
petitioner’s act of encashing the checks was motivated by good faith.
Further, the exceptions to Corporate Policy No. 014 were sometimes
allowed, upon the concurrence of two conditions, to wit: chanro b1es vi rtual 1aw lib rary
1. Approval of the Assistant Manager as the Officer-in-Charge.
2. Official use or benefit.
Said conditions were found to exist and warranted the relaxation of
Company Policy No. 014 (Rollo, p. 6).
On the other hand, respondent hotel alleged that the encashment of
the two (2) dollar checks is clearly prohibited by the Corporate Policy
No. 014 and despite the knowledge of this policy, petitioner admittedly
encashed the aforementioned checks which resulted in a great
financial loss to respondent Hotel and such act of the petitioner
indisputably constitutes gross negligence which warranted the
termination of her employment.
The petition is impressed with merit.
Gross negligence has been defined as the want of any or slight care
(Caunan v. Compania General de Tabacos, 56 Phil. 547) or the utter
disregard of consequences (Marinduque Iron Mines Agents, Inc. v.
WCC, 99 Phil. 485 [1956]).
Admittedly, the encashment of the checks in question is a violation of
Policy No. 014 of said hotel. But as found by the Labor Arbiter, it was
established that: (a) complainant was not motivated by bad faith; (b)
Policy No. 014 is not strictly or consistently enforced but has been
relaxed repeatedly to meet business exigencies; and (c) complainant’s
encashment of the checks in question was not only with the knowledge
but with clearance from her superiors who are more knowledgeable as
to the circumstances under which the enforcement of the same may
be relaxed.
More specifically, the findings of the Labor Arbiter read: jgc:cha nro bles.com. ph
"It does not appear from the records, however, that the complainant
had intended to cause damage to the company in encashing the
checks. Instead, what appears is that complainant was motivated only
by good faith.
"Neither do the respondents accuse complainant of bad faith. From the
records, it would even appear that the respondents had initially
condoned complainant’s acts. In the first place, respondents admitted
that Policy No. 014 is not strictly and consistently enforced. This policy
had been relaxed repeatedly to meet business exigencies.
Respondents, although not informed beforehand, had knowledge of the
encashment of the checks. If we are to believe the affidavit of Samuel
Grulla, the Assistant Manager of Silahis International Hotel, he was
‘notified of the transaction after encashment of the dollar checks by
Mrs. A. Tan when she approached me and informed me about the
same, as Mr. Gayondato who presented the check for encashment was
about to leave the cashier’s counter.’ If complainant’s encashment of
the checks came to the knowledge of management, no action,
however, was taken by the company against the complainant. It was
only after the checks bounced and when the injury to the company
made manifest that the company took actions. Under this
circumstance, this Office believes that the company is estopped from
imposing the severe penalty of dismissal on the complainant." (p. 15,
Rollo)
Moreover, it cannot be said that complainant was precipitate or that
she has acted in utter disregard of consequences. On the contrary, she
refused to encash subject checks despite the request of Mr.
Gayondato, the general cashier of Puerto Azul, but was persuaded only
upon the assurances of the latter that such was the wish of the
Executive Vice President and that said encashment was necessary to
meet certain disbursements in Puerto Azul. In addition, she informed
personally Mr. Samuel Grulla, Assistant Manager of the Silahis
International Hotel, of said encashment, who also told her that such is
"alright." The truth of this statement was attested to by said official in
his affidavit dated January 4, 1983 (Annex "B", Rollo, p. 27). chanroblesv irt ualawli bra ry
Finally, against the background of her previous experience when she
refused to encash a similar check for Mr. Katte, the Food and Beverage
Manager of Silahis International Hotel, and that she was reprimanded
by the management of the Silahis International Hotel for her refusal,
as well as threatened with suspension or dismissal from her job,
coupled with the advice of Mr. Nestor Famatigan, Jr., Silahis
International Hotel Comptroller, to use her discretion in handling
similar requests in the future, it is not at all surprising that she opted
to take subject course of action.
arbiter’s finding of facts. It has been ruled time and again that finding
of facts of the Labor Arbiters is conclusive on the Supreme Court if
supported by substantial evidence (Reyes v. Philippine Duplication,
Inc., 109 SCRA 489 [1981]).
However, it is axiomatic that where there is a finding of illegal
dismissal, petitioner is entitled not only to reinstatement but also
award of backwages (Alzosa v. NLRC, 120 SCRA 611 [1983]; Atlas
Consolidated Mining & Dev. Corp. v. NLRC, 167 SCRA 759 [1988]).
Accordingly, also recently, this Court holding that NLRC gravely abused
its discretion in setting aside the decision of the Labor Arbiter and in
granting respondent company clearance to dismiss the petitioner,
ruled that petitioner is entitled to reinstatement and to payment of full
backwages from date of termination but not more than a maximum of
three (3) years (Jaballas v. Const. & Dev. Corp. of the Phils., 165
SCRA 716 [1988]).

Verily, complainant was placed under most difficult circumstances and
she deserves the full protection of the law.
It is well settled that dismissal based on loss of trust and confidence
arising from alleged misconduct of employee, is not to be used as a
shield to dismiss an employee arbitrarily (Callanta v. Carnation
PREMISES CONSIDERED, the assailed decision of the National Labor
Relations Commission is hereby DISMISSED, and SET ASIDE and
private respondent Silahis International Hotel is ordered to reinstate
petitioner Anita Llosa-Tan to her former position or similar position
without loss of seniority rights with full backwages beginning October
30, 1982 for a period of three (3) years therefrom. chan roble s law lib rary

Philippines, Inc., 145 SCRA 268 [1986]). Although the power to

dismiss is a normal prerogative of the employer, the same is not SO ORDERED.
without limitations (Rance v. NLRC, 163 SCRA 279 [1988]). The right
of the employer must not be exercised arbitrarily and without just
cause. Otherwise, the constitutional guarantee of security of tenure of
the workers would be rendered nugatory. While dismissing or laying
off of an employee is a management’s prerogative, it must
nevertheless be done without abuse of discretion (Atlas Consolidated
Mining Corp. v. NLRC, G.R. No. 75755, November 24, 1988).
Furthermore, the right of employer to freely select or discharge his
employees is regulated by the State, because the preservation of the
lives of the citizens is a basic duty of the State, more vital than the
preservation of the corporate profit (Euro-Linea, Phils., Inc. v. NLRC,
156 SCRA 78 [1987]). In addition, security of tenure is a right of
paramount value guaranteed by the Constitution and should not be
denied on mere speculation (Tolentino v. NLRC, 152 SCRA 717
[1987]). Protection to labor and social justice provisions of the
Constitution and the labor laws and rules and regulations are
interpreted in favor of the exercise of labor rights (Euro-Linea, Phils.,
Inc. v. NLRC, supra.

Based on the foregoing, there is no compelling reason to disturb the

 SECOND DIVISION
[G.R. NO. 153510 : February 13, 2008]
R.B. MICHAEL PRESS and ANNALENE REYES
ESCOBIA, Petitioners, v. NICASIO C. GALIT,Respondent.
DECISION
VELASCO, JR., J.:
The Case
Year in, year out, a copious number of illegal dismissal cases reach the
Court of Appeals (CA) and eventually end up with this Court. This
Petition for Review under Rule 45 registered by petitioners R.B.
Michael Press and Annalene Reyes Escobia against their former
machine operator, respondent Nicasio C. Galit, is among them. It
assails the November 14, 2001 Decision of the CA in CA-G.R. SP No.
62959, finding the dismissal of respondent illegal. Likewise challenged
is the May 7, 2002 Resolution denying reconsideration.
The Facts
On May 1, 1997, respondent was employed by petitioner R.B. Michael
Press as an offset machine operator, whose work schedule was from
8:00 a.m. to 5:00 p.m., Mondays to Saturdays, and he was paid PhP
230 a day. During his employment, Galit was tardy for a total of 190
times, totaling to 6,117 minutes, and was absent without leave for a
total of nine and a half days.
On February 22, 1999, respondent was ordered to render overtime
service in order to comply with a job order deadline, but he refused to
do so. The following day, February 23, 1999, respondent reported for
work but petitioner Escobia told him not to work, and to return later in
the afternoon for a hearing. When he returned, a copy of an Office
Memorandum was served on him, as follows:
To : Mr. Nicasio Galit
From : ANNALENE REYES-ESCOBIA
Re : WARNING FOR DISMISSAL; NOTICE OF HEARING
This warning for dismissal is being issued for the following offenses:
(1) habitual and excessive tardiness
(2) committing acts of discourtesy, disrespect in addressing superiors
(3) failure to work overtime after having been instructed to do so
(4) Insubordination - willfully disobeying, defying or disregarding
company authority
The offenses you ve committed are just causes for termination of
employment as provided by the Labor Code. You were given verbal
warnings before, but there had been no improvement on your conduct.
Further investigation of this matter is required, therefore, you are
summoned to a hearing at 4:00 p.m. today. The hearing wills
determine your employment status with this company.
(SGD) ANNALENE REYES-ESCOBIA
Manager1
On February 24, 1999, respondent was terminated from employment.
The employer, through petitioner Escobia, gave him his two-day salary
and a termination letter, which reads:
February 24, 1999
Dear Mr. Nicasio Galit,
I am sorry to inform you that your employment with this company has
been terminated effective today, February 24, 1999. This decision was
not made without a thorough and complete investigation.
You were given an office memo dated February 23, 1999 warning you
of a possible dismissal. You were given a chance to defend yourself on
a hearing that was held in the afternoon of the said date.
During the hearing, Mrs. Rebecca Velasquez and Mr. Dennis Reyes,
were present in their capacity as Production Manager and Supervisor,
respectively.
Your admission to your offenses against the company and the
testimonies from Mrs. Velasquez and Mr. Reyes justified your dismissal
from this company,
Please contact Ms. Marly Buita to discuss 13th-Month Pay
disbursements.
Cordially,
(SGD) Mrs. Annalene Reyes-Escobia2
Respondent subsequently filed a complaint for illegal dismissal and
money claims before the National Labor Relations Commission (NLRC)
Regional Arbitration Branch No. IV, which was docketed as NLRC Case
No. RAB IV-2-10806-99-C. On October 29, 1999, the labor arbiter
rendered a Decision,
WHEREFORE, premises considered, there being a finding that
complainant was illegally dismissed, respondent RB MICHAEL
PRESS/Annalene Reyes-Escobia is hereby ordered to reinstate
complainant to his former position without loss of seniority rights and
other benefits, and be paid his full backwages computed from the time
he was illegally dismissed up to the time of his actual reimbursement.
All other claims are DISMISSED for lack of evidence.
SO ORDERED.3
On January 3, 2000, petitioners elevated the case to the NLRC and
their appeal was docketed as NLRC NCR CA No. 022433-00. In the
April 28, 2000 Decision, the NLRC dismissed the appeal for lack of
merit.
Not satisfied with the ruling of the NLRC, petitioners filed a Petition
for Certiorari with the CA. On November 14, 2001, the CA rendered its
judgment affirming with modification the NLRC's Decision, thus:
WHEREFORE, the petition is DISMISSED for lack of merit. The
Decision of public respondent is accordingly modified in that the basis
of the computation of the backwages, 13th month pay and incentive
pay should be respondent's daily wage of P230.00; however,
backwages should be computed from February 22, 1999 up to the
finality of this decision, plus the 13th month and service incentive leave
pay.4
The CA found that it was not the tardiness and absences committed by
respondent, but his refusal to render overtime work on February 22,
1999 which caused the termination of his employment. It ruled that
the time frame in which respondent was afforded procedural due
process is dubitable; he could not have been afforded ample
opportunity to explain his side and to adduce evidence on his behalf. It
further ruled that the basis for computing his backwages should be his
daily salary at the time of his dismissal which was PhP 230, and that
his backwages should be computed from the time of his dismissal up
to the finality of the CA's decision.
On December 3, 2001, petitioners asked for reconsideration5 but was
denied in the CA's May 7, 2002 Resolution.
Persistent, petitioners instituted the instant petition raising numerous
issues which can be summarized, as follows: first, whether there was
just cause to terminate the employment of respondent, and whether
due process was observed in the dismissal process; and second,
whether respondent is entitled to backwages and other benefits
despite his refusal to be reinstated.
The Court's Ruling
It is well settled that findings of fact of quasi-judicial agencies, like the
NLRC, are accorded not only respect but even finality if the findings
are supported by substantial evidence. This is especially so when such
findings of the labor arbiter were affirmed by the CA.6 However, this is
not an iron-clad rule. Though the findings of fact by the labor arbiter
may have been affirmed and adopted by the NLRC and the CA as in
this case, it cannot divest the Court of its authority to review the
findings of fact of the lower courts or quasi-judicial agencies when it
sees that justice has not been served, more so when the lower courts
or quasi-judicial agencies' findings are contrary to the evidence on
record or fail to appreciate relevant and substantial evidence
presented before it.7
Petitioners aver that Galit was dismissed due to the following offenses:
(1) habitual and excessive tardiness; (2) commission of discourteous
acts and disrespectful conduct when addressing superiors; (3) failure
to render overtime work despite instruction to do so; and (4)
insubordination, that is, willful disobedience of, defiance to, or
disregard of company authority.8 The foregoing charges may be
condensed into: (1) tardiness constituting neglect of duty; (2) serious
misconduct; and (3) insubordination or willful disobedience.
Respondent's tardiness cannot be considered condoned by
petitioners
Habitual tardiness is a form of neglect of duty. Lack of initiative,
diligence, and discipline to come to work on time everyday exhibit the
employee's deportment towards work. Habitual and excessive
tardiness is inimical to the general productivity and business of the
employer. This is especially true when the tardiness and/or
absenteeism occurred frequently and repeatedly within an extensive
period of time.
In resolving the issue on tardiness, the labor arbiter ruled that
petitioners cannot use respondent's habitual tardiness and
unauthorized absences to justify his dismissal since they had already
deducted the corresponding amounts from his salary. Furthermore, the
labor arbiter explained that since respondent was not subjected to any
admonition or penalty for tardiness, petitioners then had condoned the
offense or that the infraction is not serious enough to merit any
penalty. The CA then supported the labor arbiter's ruling by
ratiocinating that petitioners cannot draw on respondent's habitual
tardiness in order to dismiss him since there is no evidence which
shows that he had been warned or reprimanded for his excessive and
habitual tardiness.
We find the ruling incorrect.
The mere fact that the numerous infractions of respondent have not
been immediately subjected to sanctions cannot be interpreted as
condonation of the offenses or waiver of the company to enforce
company rules. A waiver is a voluntary and intentional relinquishment
or abandonment of a known legal right or privilege.9 It has been ruled
that "a waiver to be valid and effective must be couched in clear and
unequivocal terms which leave no doubt as to the intention of a party
to give up a right or benefit which legally pertains to him."10 Hence,
the management prerogative to discipline employees and impose
punishment is a legal right which cannot, as a general rule, be
impliedly waived.
In Cando v. NLRC,11 the employee did not report for work for almost
five months when he was charged for absenteeism. The employee
claimed that such absences due to his handling of union matters were
condoned. The Court held that the employee did not adduce proof to
show condonation coupled with the fact that the company eventually
instituted the administrative complaint relating to his company
violations.
Thus it is incumbent upon the employee to adduce substantial
evidence to demonstrate condonation or waiver on the part of
management to forego the exercise of its right to impose sanctions for
breach of company rules.
In the case at bar, respondent did not adduce any evidence to show
waiver or condonation on the part of petitioners. Thus the finding of
the CA that petitioners cannot use the previous absences and tardiness
because respondent was not subjected to any penalty is bereft of legal
basis. In the case of Filipio v. The Honorable Minister Blas F.
Ople,12 the Court, quoting then Labor Minister Ople, ruled that past
infractions for which the employee has suffered the corresponding
penalty for each violation cannot be used as a justification for the
employee's dismissal for that would penalize him twice for the same
offense. At most, it was explained, "these collective infractions could
be used as supporting justification to a subsequent similar offense." In
contrast, the petitioners in the case at bar did not impose any
punishment for the numerous absences and tardiness of respondent.
Thus, said infractions can be used collectively by petitioners as a
ground for dismissal.
The CA however reasoned out that for respondent's absences,
deductions from his salary were made and hence to allow petitioners
to use said absences as ground for dismissal would amount to "double
jeopardy."
This postulation is incorrect.
Respondent is admittedly a daily wage earner and hence is paid based
on such arrangement. For said daily paid workers, the principle of "a
day's pay for a day's work" is squarely applicable. Hence it cannot be
construed in any wise that such nonpayment of the daily wage on the
days he was absent constitutes a penalty.
Insubordination or willful disobedience
While the CA is correct that the charge of serious misconduct was not
substantiated, the charge of insubordination however is meritorious.
For willful disobedience to be a valid cause for dismissal, these two
elements must concur: (1) the employee's assailed conduct must have
been willful, that is, characterized by a wrongful and perverse attitude;
and (2) the order violated must have been reasonable, lawful, made
known to the employee, and must pertain to the duties which he had
been engaged to discharge.13
In the present case, there is no question that petitioners' order for
respondent to render overtime service to meet a production deadline
complies with the second requisite. Art. 89 of the Labor Code
empowers the employer to legally compel his employees to perform
overtime work against their will to prevent serious loss or damage:
Art. 89. EMERGENCY OVERTIME WORK
Any employee may be required by the employer to perform overtime
work in any of the following cases:
xxx
(c) When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or damage to
the employer or some other cause of similar nature;
xxx
In the present case, petitioners' business is a printing press whose
production schedule is sometimes flexible and varying. It is only
reasonable that workers are sometimes asked to render overtime work
in order to meet production deadlines.
Dennis Reyes, in his Affidavit dated May 3, 1999, stated that in the
morning of February 22, 1999, he approached and asked respondent
to render overtime work so as to meet a production deadline on a
printing job order, but respondent refused to do so for no apparent
reason. Respondent, on the other hand, claims that the reason why he
refused to render overtime work was because he was not feeling well
that day.
The issue now is, whether respondent's refusal or failure to render
overtime work was willful; that is, whether such refusal or failure was
characterized by a wrongful and perverse attitude. In Lakpue Drug Inc.
v. Belga, willfulness was described as "characterized by a wrongful and
perverse mental attitude rendering the employee's act inconsistent
with proper subordination."14 The fact that respondent refused to
provide overtime work despite his knowledge that there is a production
deadline that needs to be met, and that without him, the offset
machine operator, no further printing can be had, shows his wrongful
and perverse mental attitude; thus, there is willfulness.
Respondent's excuse that he was not feeling well that day is
unbelievable and obviously an afterthought. He failed to present any
evidence other than his own assertion that he was sick. Also, if it was
true that he was then not feeling well, he would have taken the day
off, or had gone home earlier, on the contrary, he stayed and
continued to work all day, and even tried to go to work the next day,
thus belying his excuse, which is, at most, a self-serving statement.
After a re-examination of the facts, we rule that respondent
unjustifiably refused to render overtime work despite a valid order to
do so. The totality of his offenses against petitioner R.B. Michael Press
shows that he was a difficult employee. His refusal to render overtime
work was the final straw that broke the camel's back, and, with his
gross and habitual tardiness and absences, would merit dismissal from
service.
Due process: twin notice and hearing requirement
On the issue of due process, petitioners claim that they had afforded
respondent due process. Petitioners maintain that they had observed
due process when they gave respondent two notices and that they had
even scheduled a hearing where he could have had explained his side
and defended himself.
We are not persuaded.
We held in Agabon v. NLRC:
Procedurally, (1) if the dismissal is based on a just cause under Article
282, the employer must give the employee two written notices and a
hearing or opportunity to be heard if requested by the employee
before terminating the employment: a notice specifying the grounds
for which dismissal is sought a hearing or an opportunity to be heard
and after hearing or opportunity to be heard, a notice of the decision
to dismiss; and (2) if the dismissal is based on authorized causes
under Articles 283 and 284, the employer must give the employee and
the Department of Labor and Employment written notices 30 days
prior to the effectivity of his separation.15
Under the twin notice requirement, the employees must be given two
(2) notices before his employment could be terminated: (1) a first
notice to apprise the employees of their fault, and (2) a second notice
to communicate to the employees that their employment is being
terminated. Not to be taken lightly of course is the hearing or
opportunity for the employee to defend himself personally or by
counsel of his choice.
In King of Kings Transport v. Mamac,16 we had the occasion to further
elucidate on the procedure relating to the twin notice and hearing
requirement, thus:
(1) The first written notice to be served on the employees should
contain the specific causes or grounds for termination against them,
and a directive that the employees are given the opportunity to submit
their written explanation within a reasonable period. "Reasonable
opportunity" under the Omnibus Rules means every kind of assistance
that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a
period of at least five (5) calendar days from receipt of the notice to
give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint. Moreover,
in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the
charge against the employees. A general description of the charge will
not suffice. Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which among the grounds
under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be
given the opportunity to: (1) explain and clarify their defenses to the
charge against them; (2) present evidence in support of their
defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are
given the chance to defend themselves personally, with the assistance
of a representative or counsel of their choice. Moreover, this
conference or hearing could be used by the parties as an opportunity
to come to an amicable settlement.
(3) After determining that termination of employment is justified, the
employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the
charge against the employees have been considered; and (2) grounds
have been established to justify the severance of their employment.
In addition, if the continued employment poses a serious and
imminent threat to the life or property of the employers or of other
employees like theft or physical injuries, and there is a need for
preventive suspension,17 the employers can immediately suspend the
erring employees for a period of not more than 30 days.
Notwithstanding the suspension, the employers are tasked to comply
with the twin notice requirement under the law. The preventive
suspension cannot replace the required notices.18 Thus, there is still a
need to comply with the twin notice requirement and the requisite
hearing or conference to ensure that the employees are afforded due
process even though they may have been caught in flagrante or when
the evidence of the commission of the offense is strong.
On the surface, it would seem that petitioners observed due process
(twin notice and hearing requirement): On February 23, 1999
petitioner notified respondent of the hearing to be conducted later that
day. On the same day before the hearing, respondent was furnished a
copy of an office memorandum which contained a list of his offenses,
and a notice of a scheduled hearing in the afternoon of the same day.
The next day, February 24, 1999, he was notified that his employment
with petitioner R.B. Michael Press had been terminated.
A scrutiny of the disciplinary process undertaken by petitioners leads
us to conclude that they only paid lip service to the due process
requirements.
The undue haste in effecting respondent's termination shows that the respondent nominal damages in the amount of PhP 30,000 for
termination process was a mere simulation the required notices were violation of respondent's right to due process.
given, a hearing was even scheduled and held, but respondent was not
really given a real opportunity to defend himself; and it seems that No costs.
petitioners had already decided to dismiss respondent from service,
even before the first notice had been given.
SO ORDERED.
Anent the written notice of charges and hearing, it is plain to see that
there was merely a general description of the claimed offenses of
respondent. The hearing was immediately set in the afternoon of
February 23, 1999 the day respondent received the first notice.
Therefore, he was not given any opportunity at all to consult a union
official or lawyer, and, worse, to prepare for his defense.

Regarding the February 23, 1999 afternoon hearing, it can be inferred

that respondent, without any lawyer or friend to counsel him, was not
given any chance at all to adduce evidence in his defense. At most, he
was asked if he did not agree to render overtime work on February 22,
1999 and if he was late for work for 197 days. He was never given any
real opportunity to justify his inability to perform work on those days.
This is the only explanation why petitioners assert that
respondent admitted all the charges.

In the February 24, 1999 notice of dismissal, petitioners simply

justified respondent's dismissal by citing his admission of the offenses
charged. It did not specify the details surrounding the offenses and the
specific company rule or Labor Code provision upon which the
dismissal was grounded.

In view of the infirmities in the proceedings, we conclude that

termination of respondent was railroaded in serious breach of his right
to due process. And as a consequence of the violation of his statutory
right to due process and following Agabon, petitioners are liable jointly
and solidarily to pay nominal damages to the respondent in the
amount of PhP 30,000.19

WHEREFORE, premises considered, the November 14, 2001 CA

Decision in CA-G.R. SP No. 62959, the April 28, 2000 Decision of the
NLRC in NLRC NCR CA No. 022433-00, and the October 29, 1999
Decision of the Labor Arbiter in NLRC Case No. RAB IV-2-10806-99-C
are hereby REVERSED and SET ASIDE. The Court declares
respondent's dismissal from employment VALID and LEGAL.
Petitioners are, however, ordered jointly and solidarily to pay
 SECOND DIVISION
G.R. No. 202621, June 22, 2016
ZAIDA R. INOCENTE, Petitioner, v. ST. VINCENT FOUNDATION
FOR CHILDREN AND AGING, INC./VERONICA
MENGUITO, Respondents.
DECISION
BRION, J.:
In this petition for review on certiorari,1 we resolve the challenge to
the February 27, 2012 decision2 and the July 11, 2012 resolution3 of
the Court of Appeals (CA) in CA-G.R. Sp No. 118576.
The CA's February 27, 2012 decision affirmed the October 28, 2010
decision4 of the National Labor Relations Commission (NLRC) in NLRC
LAC Case No. 05-001025-10 (NLRC NCR Case No. 07-10270-09) as it,
in turn, affirmed the November 27, 2009 decision5 of the Labor Arbiter
(LA).
The LA's November 27, 2009 decision denied the complaint for illegal
dismissal filed by petitioner ZaidaR. Inocente for lack of merit.
The Factual Antecedents
Respondent St. Vincent Foundation for Children and Aging, Inc. (St.
Vincent) is a non-stock, non-profit foundation engaged in providing
assistance to children and aging people and conducting weekly social
and educational activities among them. It is financially supported by
the Kansas based Catholic Foundation for Children and Aging (CFCA),
a Catholic foundation dedicated to promoting Christian values and
uplifting the welfare of the children all over the world. Respondent
Veronica Menguito is St. Vincent's President/Directress (collectively,
they shall be referred to as respondents).
In 2000, St. Vincent hired Zaida as Program Assistant; it promoted her
as Program Officer the following year. Zaida, then single, was known
as Zaida Febrer Ranido. Zaida's duties as program officer included the
following: monitoring and supervising the implementation of the
programs of the foundation, providing training to the staff and
sponsored members, formulating and developing program policies for
the foundation, facilitating staff meetings, coordinating and
establishing linkages with other resource agencies and persons, as well
as preparing St. Vincent's annual program plan and budget, and year-
end reports.
In 2001, Zaida met Marlon D. Inocente. Marlon was then assigned at
St. Vincent's Bataan sub-project. In 2002, Marlon was transferred to
St. Vincent's sub-project in Quezon City. Zaida and Marlon became
close and soon became romantically involved with each other.
In September 2006, St. Vincent adopted the CFCA's Non-Fraternization
Policy; it reads in full:
chanRoble svirtual Lawlib ra ry
CFCA Policy 4.2.2.3. Non-Fraternization Policy
While CFCA does not wish to interfere with the off-duty and
personal conduct of its employees, to prevent unwarranted sexual
harassment claims, uncomfortable working relationships, morale
problems among other employees, and even the appearance of
impropriety, employees who direct and coordinate the work of others
are strongly discouraged from engaging in consensual romantic or
sexual relationships with any employee or volunteer of
CFCA.6 [Emphasis supplied]
Despite St. Vincent's adoption of the Non-Fraternization Policy, Zaida
and Marlon discretely continued their relationship; they kept their
relationship private and unknown to St. Vincent even after Marlon
resigned in July 2008.
On February 19, 2009, Zaida experienced severe abdominal pain
requiring her to go to the hospital. The doctor later informed her that
she had suffered a miscarriage. While confined at the hospital, Zaida
informed St. Vincent of her situation. Menguito verbally allowed Zaida
to go on maternity leave until April 21, 2009. Zaida was released from
the hospital two days after her confinement.
On March 31, 2009, Zaida was again confined at the hospital for
ectopic pregnancy. Zaida, thereafter, underwent surgery7 to have one
of her fallopian tubes removed. She was discharged from the hospital
on April 4, 2009.
On May 18, 2009, Zaida received from St. Vincent a letter8 dated May
14, 2009 and signed by Menguito requiring her to explain in writing
why no administrative action should be taken against her. St. Vincent
charged her with violation of the CFCA Non-Fraternization Policy and of
the St. Vincent's Code of Conduct provisions prohibiting: (1) acts
against agency interest and policy by indulging in immoral and
indecent act; (2) acts against persons by challenging superiors'
authority, threatening and intimidating co-employees, and exerting
undue influence on subordinates to gain personal benefit; and (3)
violations within the terms of employment by doing an act offensive to
the moral standard of the Foundation.
In her May 19, 2009 reply-letter, Zaida defended that: (1) her
relationship with Marlon started long before St. Vincent's Non-
Fraternization Policy took effect; (2) Marlon was no longer connected
with St. Vincent since 2008; (3) her relationship with Marlon is not
immoral as they were both of legal age and with no impediments to
marry; (4) they kept their relationship private and were discreet in
their actions; (5) Marlon stayed at her place only to take care of her
while she was sick; and (6) they already planned to get married as
soon as she recovers and their finances improve.
Zaida's explanation failed to convince St. Vincent. In the letter dated
May 30, 2009,9 St. Vincent terminated Zaida's employment
for immorality, gross misconduct and violation of St. Vincent's Code of
Conduct.
Zaida and Marlon were subsequently married on June 23, 2009.10 chanro bleslaw
On July 14, 2009, Zaida filed before the LA her complaint for illegal
dismissal, with prayer for reinstatement, backwages, moral and
exemplary damages and litigation expenses.
The Labor Tribunal's Rulings
In its decision11 dated November 27, 2009, the labor arbiter (LA)
dismissed Zaida's complaint for lack of basis. The LA found that,
despite the implementation of the Non-Fraternization Policy in 2006,
Zaida maintained Eind concealed from St. Vincent her relationship with
Marlon. The LA pointed out that as a program officer, Zaida was under
the obligation to observe this Policy and to inform her employer of her
relationship. Her acts, therefore, could be characterized as an act of
dishonesty constituting willful breach of trust and confidence justifying
her dismissal.
The LA also found the dismissal compliant with the due process
requirements of two notices, each of which properly apprised Zaida of
the specific acts that formed the basis for her dismissal.
In its October 28, 2010 decision,12 the NLRC agreed with the LA's
findings. It additionally pointed out that Zaida's act of continuing her
intimate relationship with Marlon despite the implementation of the
Non-Fraternization Policy constituted not only immoral conduct; it also
prejudiced the interest of St. Vincent as it set a bad example not only
to her subordinates but also to the children-beneficiaries of St.
Vincent. Her act, therefore, amounted to serious misconduct justifying
her dismissal.
The NLRC denied Zaida's motion for reconsideration13 in its January
11, 2011 resolution.14 The denial prompted
Zaida's certiorari petition15 before the CA.
The CA's Ruling
The CA denied Zaida's certiorari petition for lack of merit.16 chan robles law
The CA agreed that Zaida's dismissal was valid, reiterating that Zaida's
act of continuing her relationship with Marlon despite the
implementation of the Non-Fraternization Policy, and without the
benefit of marriage, went against the very policy of promoting
Christian values that she was charged to uphold. Her subsequent
marriage to Marlon did not help her situation as, under the
circumstances, it appeared more of an afterthought intended to
circumvent St. Vincent's rules and code of conduct.
Lastly, the CA declared that her dismissal was not due to her
pregnancy and, therefore, did not violate Article 137(2) of the Labor
Code. Rather, her pregnancy was merely the operative act that led to
the discovery of her immoral conduct.
Zaida filed the present petition after the CA denied her motion for
reconsideration17 in the CA's July 11, 2012 resolution.18 cha nro blesla w
The Petition
Zaida considers St. Vincent's Non-Fraternization Policy to be an invalid
exercise of its management prerogative. She argues that the Policy is
unreasonable; it infringes on the constitutional rights of persons as it
seeks to control even those conduct committed outside of the
workplace and beyond office hours. She contends that her relationship
with Marlon, who ceased to be connected with St. Vincent since 2008
and which relationship they had kept private, clearly goes beyond
aspects of the employment and St. Vincent's legitimate business
interests - matters which it could validly regulate under its
management prerogative.
She also argues that the charge of loss of trust and confidence was
without clear legal and factual basis as St. Vincent failed to meet the
standards that would justify loss of trust and confidence. She points
out that:
First, as Program Officer, she merely recommends, but does not
chanRoble svirtual Lawlib ra ry
formulate, program policies; the responsibility to formulate would have
made her position as one of trust and confidence. Neither was she
invested with confidence on delicate matters, nor charged with the
custody or care of St. Vincent's assets and properties.
Second, St. Vincent dismissed her for immorality, gross misconduct
and violation of the Code of Conduct. The labor tribunals' finding of
willful breach of trust and confidence, therefore, smacks of bad faith as
it deprived her of the opportunity to properly answer the charge.
Third, the acts of fraternization and pregnancy outside of marriage
which the respondents used as grounds for her dismissal are not work
related and do not render her unfit to continue working for St. Vincent.
Fourth, her relationship with Marlon started long before St. Vincent
implemented its Non-Fraternization Policy; it should not retroactively
apply to her.
And fifth, at the time of her dismissal, Marlon had long ceased to be
St. Vincent's employee such that the respondents could not validly use
their relationship and the Non-Fraternization Policy as grounds for her
dismissal.
Further, Zaida argues that, as worded, St. Vincent's Non-Fraternization
Policy does not altogether prohibit consensual romantic or sexual
relationships between employees and/or volunteers of CFCA, but
merely discourages such relationships. The Policy, in fact, does not
even require full disclosure (of such relationships) that could have
otherwise justified the respondents in terminating her employment on
the ground of dishonesty. Granting arguendo that her relationship with
Marlon and her pregnancy outside of marriage could be considered
immoral, the respondents failed to prove that these acts were
prejudicial or detrimental to their interests.
Finally, Zaida argues that her dismissal constitutes discrimination
against women. She points out that at the time the respondents
dismissed her, allegedly for immorality, she was still recovering from
her miscarriage. The respondents' act, therefore, clearly violated
Article 137(2) of the Labor Code, Republic Act No. 9710 (the Magna
Carta of Women) and the Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW).
The Case for the Respondents
The respondents counter19 that Zaida's petition should be denied
outright because it is procedurally flawed; it raises: (1) factual issues
that are prohibited under Rule 45 of the Rules of Court; and (2) new
issues that cannot be raised only on appeal. Findings of fact of the
labor tribunals are conclusive and should no longer be disturbed,
especially when, as in this case, they are affirmed by the CA.
In any case, the respondents submit that the Non-Fraternization Policy
was issued in the valid exercise of management prerogative. It was
intended to "prevent unwarranted sexual harassment claims,
uncomfortable working relationships, morale problems among other
employees, and even the appearance of impropriety."
Zaida's employment was terminated not because of her violation of its
policy, and certainly not because of her pregnancy that could
otherwise have contravened the laws prohibiting discrimination against
women. Rather, her employment was terminated because of
immorality constituting serious misconduct and willful breach of trust
and confidence - grounds that the Labor Code provides as just causes
for dismissal.
The Court's Ruling
We grant the petition.
I. Procedural issue: jurisdictional limitations of the Court's
Rule 45 review of the CA's Rule 65 decision in labor cases
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.
In determining this legal correctness, we examine the CA decision in
the same context that it determined the presence or the absence of
grave abuse of discretion in the NLRC decision that it reviewed, not on
the basis of whether the NLRC decision was correct on the merits. In
simple terms, we test the CA's decision within the same context that
the Rule 65 petition was presented before it.
Under this approach, the question that we ask is: Did the CA correctly
determine whether the NLRC committed grave abuse of discretion in
ruling on the case?20 chanrob leslaw
We point out as well that underlying this jurisdictional limitation of our
Rule 45 review is the legal reality that in the review of the labor
tribunals' rulings, the courts generally accord respect to their factual
findings and the conclusions that they draw from them in view of the
tribunals' expertise in their field. There is also the legal reality that the
NLRC decision brought before the CA under the original certiorariaction
is already final and executory and can only be reversed on a finding of
grave abuse of discretion.
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.
To be sure, the rule that precludes an inquiry into the correctness of
the labor tribunals' appreciation and assessment of the evidence, and
the conclusions drawn from them, is not without exceptions. The
Court, in the past, has recognized that certain exceptional situations
require a review of the labor tribunals' factual findings and the
evidence. When there is a showing that the NLRC's factual findings and
conclusions were arrived at arbitrarily, as when its judgement was
based on misapprehension or erroneous apprehension of facts or on
the use of wrong or irrelevant considerations21 - situations that are
tainted with grave abuse of discretion -the Court may review these
factual findings.
Finally, we should not forget that a Rule 45 review is an appeal from
the ruling of the CA on pure questions of law. We do not admit and
review questions of facts unless necessary to determine whether the
CA correctly affirmed the NLRC decision for lack of grave abuse of
discretion.
In the present case, the labor tribunals ruled that Zaida's intimate
relationship with Marlon out of wedlock (resulting in her failed
pregnancy) and her continuation and concealment of this relationship
despite the implementation of the Non-Fraternization Policy,
constituted immorality and dishonesty that, taken together, justified
her dismissal on the ground of serious misconduct and willful breach of
trust and confidence. The CA fully agreed with the labor tribunals'
findings and conclusions.
Using the above analysis as guide, we are convinced that the CA
grievously erred in upholding the NLRC's ruling. To our mind, the NLRC
gravely abused its discretion when it declared that the acts imputed
against Zaida were sufficient bases for her dismissal.
II. Substantive issue: validity of Zaida's dismissal
A. Burden of proof in dismissal situations
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.22 The failure on
the part of the employer to discharge this burden renders the
dismissal invalid.
Articles 282, 283, and 284 (now Articles 296, 297 and 298)23 of the
Labor Code enumerates the grounds that justifies the dismissal of an
employee. These include: serious misconduct or willful disobedience,
gross and habitual neglect of duty, fraud or willful breach of trust,
commission of a crime, and causes analogous to any of these, all
under Article 282; closure of establishment and reduction of personnel,
under Article 283; and disease, under Article 284.
Article 277 (now Article 291) of the Labor Code, and Books V and VI of
the Omnibus Rules Implementing the Labor Code, on the other hand,
lay down the procedural requirements of a valid dismissal. These are:
(1) written notice specifying the ground or grounds for the dismissal;
(2) ample opportunity for the employee to be heard and defend
himself; and (3) written notice of termination stating that upon due
consideration of all the circumstances, grounds have been established
to justify his dismissal.
We recognize, in this respect, that of these two requisites for a valid
dismissal, the presence or absence of just or authorized cause is the
more crucial. The absence of a valid cause automatically renders any
dismissal action invalid, regardless of the employer's observance of the
procedural due process requirements.
B. Presence or Absence of Valid Cause for the dismissal
Based on the notice to explain and on the termination letter, we find
that St. Vincent essentially dismissed Zaida for: (1) engaging in
intimate out-of-wedlock relationship with Marlon which it considered
immoral; (2) her failure to disclose the relationship to the
management - an omission violating its Non-Fraternization Policy
which it characterized as gross misconduct; and (3) violating its Code
of Conduct, i.e. committing acts against her superiors' authority and
her co-employees, violating the terms of her employment, and
engaging in immoral conduct that goes against its interest as a
Christian institution.
In their respective decisions, the LA, the NLRC, and the CA found the
dismissal valid on the ground of loss of trust and confidence and
serious misconduct.
The LA, the NLRC, and the CA considered Zaida's act of maintaining
her relationship with Marlon, despite the implementation of the Non-
Fraternization Policy, immoral act that is prejudicial to St. Vincent's
interests and which amounted to serious misconduct. They also
considered her failure to disclose the relationship as an act of
dishonesty that willfully breached St. Vincent's trust.
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)24 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.
We shall separately address these grounds in the discussions below.
On the charge of immorality and
engaging in conduct prejudicial to the
interest of St. VincentWe find the NLRC's findings of immorality or of
committing acts prejudicial to the interest of St. Vincent to be
baseless.
The totality of the attendant circumstances
must be considered in determining whether
an employee's conduct is immoralImmorality pertains to a course of
conduct that offends the morals of the community.25 It connotes cralawred
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.26 chan roble slaw
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.27 chan robles law
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.28 chanrobles law
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.29 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,30 and of the applicable laws.
In dismissal situations, the sufficiency
of a conduct claimed to be immoral
must be judged based on secular,
not religious standards.
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.31chan roble slaw
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.
Significantly, even the timeline of the events in this case supports our
observation that their intimate relations was founded on love, viz:
Zaida and Marlon met in 2002 and soon become sweethearts; St.
Vincent adopted the Non-Fraternization policy in September 2006;
Marlon resigned from St. Vincent in July 2008; in February 2009,
Zaida had the miscarriage that disclosed to St. Vincent Zaida's
relationship with Marlon; and St. Vincent terminated Zaida's
employment in May 2009.
Clearly from this timeline, Zaida and Marlon have long been in their
relationship (for about four years) by the time St. Vincent adopted the
Policy; their relationship, by that time and given the turn out of the
events, would have already been very serious. To be sure, no
reasonable person could have expected them to sever the relationship
simply because St. Vincent chose to adopt the Non-Fraternization
Policy in 2006. As Zaida aptly argued, love is not a mechanical
emotion that can easily be turned on and off. This is the lesson
Shakespeare impressed on us in Romeo and Juliet - a play whose
setting antedated those of Marlon and Zaida by about 405 hundred
years.32chanro bleslaw
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.33 chanro bles law
To use an example more recent than Shakespeare's, if the Court did
not consider the complained acts in Escritor immoral, more so should
the Court in this case not consider Zaida's consensual intimate
relationship with Marlon immoral.
Zaida's relationship with Marlon was not
an act per se prejudicial to the interest
of St. Vincent.
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 discrete 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.
Moreover, aside from the relationship that St. Vincent considered to be
immoral, it did not specify, nor prove any other act or acts that Zaida
might have committed to the prejudice of St. Vincent's interest. A
mere allegation that Zaida committed act or acts prejudicial to St.
Vincent's interest, without more, does not constitute sufficient basis
for her dismissal.
On the charge of violation of the Non-
Fraternization Policy
Neither can we agree with the NLRC's findings that Zaida's relationship
with Marlon violated St. Vincent's Non-Fraternization Policy.
For reference, we reiterate below the Policy's provisions:
chanRoble svirtual Lawlib ra ry
CFCA Policy 4.2.2.3. Non-Fraternization Policy
While CFCA does not wish to interfere with the off-duty and
personal conduct of its employees, to prevent unwarranted sexual
harassment claims, uncomfortable working relationships, morale
problems among other employees, and even the appearance of
impropriety, employees who direct and coordinate the work of
others are strongly discouraged from engaging in consensual
romantic or sexual relationships with any employee or
volunteer of CFCA.34 [Emphasis supplied]
A reading of the Policy's provisions shows that they profess to touch
only on on-duty conduct of its employees. Contrary to the
respondents' arguments, too, the CFCA employees who direct or
coordinate the work of others are only "strongly discouraged from
engaging in consensual romantic or sexual relationships with any
employee or volunteer of CFCA. " It does not prohibit them, (either
absolutely or with qualifications) from engaging in consensual romantic
or sexual relationships.
To discourage means "to deprive of courage or confidence: dishearten,
deject; to attempt to dissuade from action: dampen or lessen the
boldness or zeal of for some action."35 chanrobles law
To prohibit, on the other hand, means "to forbid by authority or
command: enjoin, interdict; to prevent from doing or accomplishing
something: effectively stop; to make impossible: disbar, hinder,
preclude."36 cha nrob leslaw
While "to discourage" and "to prohibit" are essentially similar in that
both seek to achieve similar ends,i.e., the non-happening or non-
accomplishment of an event or act, they are still significantly different
in degree and in terms of their effect and impact in the realm of labor
relations laws.
The former - "to discourage" - may lead the actor i.e., the employee,
to disfavor, disapprobation, or some other unpleasant consequences,
but the actor/employee may still nonetheless do or perform the
"discouraged" act. If the actor/employee does or performs the
"discouraged" act, the employee may not be subjected to any
punishment or disciplinary action as he or she does not violate any
rule, policy, or law.
In contrast, "to prohibit" will certainly subject the actor/employee to
punishment or disciplinary action if the actor/employee does or
performs the prohibited act as he or she violates a rule, policy or law.
From this perspective, a St. Vincent employee who directs or
coordinates the work of other St. Vincent employee or volunteer, and
who engages in a consensual romantic or sexual relationship with a St.
Vincent employee or volunteer will not violate the Non-Fraternization
Policy unless circumstances are shown that the act goes beyond the
usual norms of morality. For example, the employees' ascendancy or
supervising authority, over another employee with whom he or she
had a relationship, and the undue advantage taken because of this
ascendancy or authority, if shown, would lead to a different conclusion.
At most, the employee may be considered to have committed an act
that is frowned upon; but certainly, the employee does not commit an
act that would warrant his or her dismissal.
In addition, an examination of the Policy's provisions shows that it
does not require St. Vincent's employees to disclose any such
consensual romantic or sexual relationships to the management. In
fact, nowhere in the records does it show that St. Vincent employees
are under any obligation to make the disclosure, whose violation would
subject the employee to disciplinary action.
Accordingly, the failure of a St. Vincent employee to disclose to the
management his or her consensual romantic or sexual relationship
with another employee or volunteer does not constitute a violation of
the Non-Fraternization Policy.
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.
On the charge of violation of the Code of Conduct
provisions prohibiting acts against agency
interest, acts against persons, and violations
of the terms of employment
We also do not find sufficient basis for Zaida's dismissal for violation of
the Code of Conduct provisions prohibiting: acts against agency
interest by indulging in immoral and indecent act; acts against persons
by challenging superiors' authority, threatening and intimidating co-
employees and exerting undue influence on subordinates to gain
personal benefit; and violations of the terms of employment by doing
an act offensive to the moral standards of the foundation.
We point out in this respect that the charges of violating the Code of
Conduct provisions prohibiting acts against agency interest and
violations of the terms of employment are both premised on the
alleged immoral and indecent acts committed by Zaida in engaging in
consensual romantic or sexual relationship with Marlon. Since Zaida
did not violate the Non-Fraternization Policy, these other charges were
clearly unwarranted and baseless.
In the same vein, we likewise find no sufficient basis for Zaida's
dismissal for allegedly violating the Code of Conduct provisions
prohibiting acts against persons. While St. Vincent claimed, in the May
28, 2009 Notice of Termination, that Zaida "exerted undue influence
on [her co-workers and subordinates] to favor [herself] and/or Mr.
Inocente", it did not specify in what manner and to what extent she
unduly influenced her co-workers and subordinates for hers and
Marlon's benefit.
To justify a dismissal based on the act of "exert[ing] undue influence,"
the charge must be supported by a narration of the specific act/s she
allegedly committed by which she unduly influenced her co-worker and
subordinates, of the dates when these act/s were committed, and of
the names of the co-workers and/or subordinates affected by her
alleged actions. The respondents, however, miserably failed to
establish these relevant facts. In other words, the charge of exerting
undue influence is a conclusion that was not supported by any factual
or evidentiary basis.
Dismissal on the ground of serious misconduct
and willful breach of trust and confidence
Based on the above considerations, we find Zaida's dismissal illegal for
lack of valid cause. St. Vincent failed to sufficiently prove its charges
against Zaida to justify her dismissal for serious misconduct and loss
of trust and confidence.
a. Serious misconduct
Misconduct has been defined as improper or wrong conduct. It is the
transgression of some established or definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error of judgment. To be serious, the
misconduct must be of such grave or aggravated character and not
merely trivial and unimportant; it must be connected with the
employee's work to constitute just cause for separation.37 chan roble slaw
Thus, 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.38 chanrob leslaw
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.
b. Willful breach 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, lay-off, 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.39 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.40 chan rob l eslaw
We clarify, however, that it is the breach of the employer's trust, not
the specific employee act/s which the employer claims caused the
breach, which the law requires to be willful, knowingly and
purposefully done by the employee to justify the dismissal on the
ground of loss of trust and confidence.
In Vitarich Corp. v. NLRC,41 we laid out the guidelines for the
application of the doctrine of loss of confidence, namely: (1) the loss
of confidence should not be simulated; (2) it should not be
used as a subterfuge for causes which are improper, illegal or
unjustified; (3) it should not be arbitrarily asserted in the face
of overwhelming evidence to the contrary; and (4) it must be
genuine, not a mere afterthought to justify earlier action taken
in bad faith.42 In short, there must be an actual breach of duty which
must be established by substantial evidence.43 chan roble slaw
We reiterated these guidelines in Nokom v. National Labor Relations
Commission,44 Fujitsu Computer Products Corp. of the Phils, v. Court
of Appeals,45Lopez v. Keppel Bank Philippines, Inc,46 citing Nokom, and
Lima Land, Inc., et al. v. Cuevas.47chanroble slaw
In the present case, we agree that Zaida indeed held a position of
trust and confidence. Nonetheless, we cannot support the NLRC's
findings that she committed act/s that breached St. Vincent's trust.
Zaida's relationship with Marlon, to reiterate, was not wrong, illegal, or
immoral from the perspective of secular morality; it is also not
prohibited by the Non-Fraterni2^ation Policy nor is it required, by the
Policy, to be disclosed to St. Vincent's management or officials. In
short, Zaida did not commit any act or misconduct that willfully,
intentionally, or purposely breached St. Vincent's trust.
Notably, St. Vincent did not charge Zaida with, nor terminate her
employment for, willful breach of trust. Rather, it charged her with
violation of the Non-Fraternization Policy and of the Code of Conduct,
and dismissed her for immorality, gross misconduct, and violation of
the Code of Conduct - none of which implied or suggested willful
breach of trust.
In this regard, we reiterate, with approval, Zaida's observations on this
point: the labor tribunals' findings of willful breach of trust and
confidence shows clear bad faith as it effectively deprived her of an
opportunity to rebut any charge of willful breach of trust.
C. Compliance with the Procedural Due Process Requirements
All three tribunals agreed, in this case, that the due process
requirements, as laid out under Article 277 of the Labor Code and its
IRR, were sufficiently observed by St. Vincent in its dismissal action.
We disagree with the three tribunals.
As pointed out above, St. Vincent did not specify in what manner and
to what extent Zaida unduly influenced her co-workers 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 co-worker and
subordinates, of the dates when these act/s were committed, and of
the names of the co-workers 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.
In light of these findings, we find the NLRC in grave abuse of its
discretion in affirming the LA's ruling as it declared that St. Vincent
complied with the due process requirements.
Specifically, the NLRC capriciously and whimsically exercised its
judgment by using the wrong considerations and by failing to consider
all relevant facts and evidence presented by the parties, as well as the
totality of the surrounding circumstances, as it upheld Zaida's
dismissal. Consequently, we find the CA in grave error as it affirmed
the NLRC's ruling; the CA reversibly erred in failing to recognize the
grave abuse of discretion which the NLRC committed in concluding that
Zaida's dismissal was valid.

WHEREFORE, in light of these considerations, we hereby GRANT the

petition. We REVERSE and SET ASIDE the decision dated February
27, 2012 and the resolution dated July 11, 2012 of the Court of
Appeals in CA-G.R. SP No. 118576. We declare petitioner Zaida R.
Inocente as illegally dismissed.

SO ORDERED. chanRoblesvirt ual Lawlib rary

 THIRD DIVISION
[G.R. No. 164181 : September 14, 2011]
NISSAN MOTORS PHILS., INC., PETITIONER, VS. VICTORINO
ANGELO, RESPONDENT.
DECISION
PERALTA, J.:
This is to resolve the Petition for Review[1] dated July 10, 2004 of
petitioner Nissan Motors Phils., Inc. (Nissan) assailing the
Decision[2] dated March 24, 2004 of the Court of Appeals (CA) and the
latter's Resolution[3] dated June 9, 2004.
The records contain the following antecedent facts:
Respondent Victorino Angelo was employed by Nissan on March 11,
1989 as one of its payroll staff. On April 7 to 17, 2000, respondent
was on sick leave, thus, he was not able to prepare the payroll for the
said period. Again, on April 27 and 28, 2000, respondent was on an
approved vacation leave which again resulted in the non-preparation
of the payroll for that particular period.
On May 8, 2000, respondent received a Memorandum[4] from the
petitioner containing the following:
This is to inform you that the Company is considering your dismissal
from employment on the grounds of serious misconduct, willful
disobedience and gross neglect of duties.
It appears that on April 10, 2000, Monday, which was the supposed
cut-off date for payroll purposes for the April 15 payroll, you went
home early without finishing your work and requested for a referral
letter from the company clinic to E. Delos Santos Hospital claiming
that you are not feeling well.
On April 11, Tuesday, you did not report for work, without any notice
to the company or to any of your immediate superior section head,
department head and division head. A phone call was made to your
home, but the company could not make any contact.
On April 12, Wednesday, you reported for work but went home early
claiming that you were again not feeling well. You were reminded of
the coming payday on Friday, April 14, and you said you will be able to
finish it on time and that you will just continue/finish your work the
following day.
On April 13, Thursday, you again did not report for work without any
notice to the company just like what you did last Tuesday. Your
immediate superior, sensing that you did not finish your task, tried to
contact you but to no avail, as you were residing in Novaliches and
your home phone was not in order. So we decided to open your
computer thru the help of our IT people to access the payroll program.
On April 14, Friday (payday), we were still doing the payroll thru IT
because we could not contact you. Later in the day, the Company
decided to release the payroll of employees the following day as we
already ran out of time and the Company just based the net pay of the
employees on their March 15 payroll. Naturally, the amount released
to the employees were not accurate as some got more than (sic),
while some got less than what they were supposed to receive.
Consequently, many employees got angry, as the Company paid on a
Saturday, (in practice we do not release salary on a Saturday as it is
always done in advance, i.e., Friday) and majority got lesser amount
than what they were supposed to receive. In addition, the employees
were not given their payslip where they can base the net pay they
received.
When you reported for work on Tuesday, April 18, we had a meeting
and you were advised to transfer your payroll task to your immediate
superior, which you agreed. The time table agreement was 2 payroll
period, meaning April 30 and May 15 payroll.
Still on April 18, Tuesday, you filed an application for vacation leave
due to your son's graduation on April 27 and 28. Because it is again
payroll time, we advised that your leave will be approved on the
condition that you will ensure that the payroll is finished on time and
[you] will make a proper turn over to your immediate superior before
your leave. You agreed and your leave was approved.
On April 24, Monday, you were reminded you should start on your
payroll task because you will be on leave starting April 27, Thursday,
you said yes.
On April 25, Tuesday, you were again reminded on finishing the payroll
and the turn over again and you said yes.

On April 26, Wednesday, you were again reminded on the same
matter and, in fact, Mr. AA del Rosario reminded you also on the
matter about 5:30 p.m. And you promised him that the task will be
finished by tomorrow (sic) and will just leave the diskette in your open
drawer. You were left in the office until 6:00 p.m.
On April 27, Thursday, you were already on leave and your superior,
Mr. M. Panela, found out that the diskette only contained the amount
and name of employees, but not the account number. Likewise, the
deductions from salaries was not finished, the salaries of contractuals,
apprentices were also not finished. Since the bank only reads account
numbers of employees, we experienced delay in the payroll
processing. You even promised to call the office i.e., M Panela to give
additional instructions not later than 12:00 noon on the same day, but
you did not do so. In fact, the direct phone line of Mr. AA del Rosario
was given to you by your officemate so you can call the office directly
and not thru long distance.
work, saying after their 15 days of work they received only less than
P200 while some even received only P80.
The manufacturing operation was hampered completely in the month
of April and the first week of May because of these several incidents.
In sum, the company has suffered massive loss of opportunity to sell
because of failure to produce in the production area due to non-
availability of workers rendering overtime, high absenteeism rate
among plant direct workers primarily due to the payroll problem. It
came at a time when NMPI sales [are] just starting to pick up due to
the introduction of the new model Sentra Exalta. The loss is simply too
overwhelming.
Accordingly, you are hereby given a period of three (3) days from
receipt hereof to submit your written answer.
In the meantime, you are hereby placed on preventive suspension
effective immediately.

On April 28, Friday, after exhaustive joint efforts done by Welfare A hearing will be conducted by Mr. AA del Rosario, on May 13, 2000 at
Management Section and IT Division, we were able to finally release 9:00 a.m. at the Company's conference room (Fairlady).
the payroll thru the bank, but many employees got lower amount than
what they have expected, as in fact at least 43 employees out of 360
Respondent filed a Complaint[5] for illegal suspension with the
got salaries below P1,000.00, among them about 10 people got no
Department of Labor and Employment (DOLE) on May 12, 2000.
salary primarily due to wrong deduction and computation done by you.
Again, many people got angry to the management's inefficient
Petitioner conducted an investigation on May 13, 2000, and concluded
handling of their payroll.
that respondent's explanation was untrue and insufficient. Thus, on
June 13, 2000, petitioner issued a Notice of Termination.[6]
On May 2, Tuesday, you did not report for work, again you said you
are not feeling well, but the information to us came very late at about
Respondent amended his previous complaint against petitioner on June
noon time.
22, 2000, to include the charge of illegal dismissal.[7] On September
29, 2000, the Labor Arbiter rendered a Decision[8] dismissing
On May 3, Wednesday, you reported for work, and was instructed to
respondent's complaint for lack of merit. Undaunted, respondent
finish the payslips for the payroll periods April 15 and April 30. You
brought the case to the National Labor Relations Commission (NLRC),
said yes, and you promised not to go home on that day without
which eventually rendered a Resolution[9] dated February 14, 2002
finishing the payslips. Later, you decided on your own to just compute
dismissing the appeal and affirming the Labor Arbiter's Decision.
the payslip on a monthly basis instead of the usual semi-monthly basis
Respondent's motion for reconsideration of the NLRC resolution was
as is the customary thing to do. As a result thereof, an error in the tax
subsequently denied on May 13, 2002.[10]
withholding happened and again resulted in another confusion and
anger among employees, as in fact for two (2) consecutive days, May
Aggrieved, respondent filed a petition for certiorari[11] under Rule 65 of
3 and May 4, the plant workers refused to render overtime.
the Rules of Court with the CA and the latter granted the same petition
in its Decision dated March 24, 2004, the dispositive portion of which
As a consequence of all these, the manufacturing employees,
reads:
numbering about 350 people or about 65% of [Nissan's total
population], since April 16, have started to decline rendering overtime
WHEREFORE, the petition is GRANTED. The assailed resolutions dated
February 14, 2002 and May 13, 2002 are REVERSED and SET ASIDE.
The petitioner is hereby reinstated and the private respondents are
ordered to pay him backwages from the time of his illegal dismissal.
SO ORDERED.
Unsatisfied with the decision of the CA, Nissan filed a motion for
reconsideration, which was denied by the same court in a Resolution
dated June 9, 2004.
Thus, the present petition, to which the petitioner cites the following
grounds:
A for misconduct or improper behavior to be a just cause for dismissal,
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW
WHEN IT OVERTURNED THE FACTUAL FINDINGS OF BOTH THE LABOR
ARBITER AND THE NLRC WHICH ARE BASED ON SUBSTANTIAL
EVIDENCE.
B that the language used by respondent in his Letter-Explanation is akin
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW
WHEN IT DISREGARDED PRIVATE RESPONDENT'S SERIOUS
MISCONDUCT AND INSUBORDINATION, AND DECIDED THE CASE
ONLY ON THE CHARGE OF GROSS AND HABITUAL NEGLIGENCE.
C
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN
IGNORING PRIVATE RESPONDENT'S MISCONDUCT WHICH, IF EVER IT
DOES NOT JUSTIFY DISMISSAL BECAUSE OF HIS 11-YEAR SERVICE
NONETHELESS LIMITS THE AWARD OF BACKWAGES.[12]
The petition is meritorious.
Petitioner argues that the factual findings of the Labor Arbiter and the
NLRC should have been accorded respect by the CA as they are based
on substantial evidence. However, factual findings of administrative
agencies are not infallible and will be set aside if they fail the test of
arbitrariness.[13] In the present case, the findings of the CA differ from
those of the Labor Arbiter and the NLRC. The Court, in the exercise of
its equity jurisdiction, may look into the records of the case and re-
examine the questioned findings.[14]
The Labor Code provides that an employer may terminate the services
of an employee for a just cause.[15] Petitioner, the employer in the
present case, dismissed respondent based on allegations of serious
miscounduct, willful disobedience and gross neglect.
One of the just causes enumerated in the Labor Code is serious
misconduct. Misconduct is improper or wrong conduct.[16] 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.[17]Such misconduct,
however serious, must nevertheless be in connection with the
employee's work to constitute just cause for his separation.[18] Thus,
(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.[19]
Going through the records, this Court found evidence to support the
allegation of serious misconduct or insubordination. Petitioner claims
to a manifest refusal to cooperate with company officers, and resorted
to conduct which smacks of outright disrespect and willful defiance of
authority or insubordination. 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.[20] The Letter-
Explanation[21] partly reads:
Again, it's not negligence on my part and I'm not alone to be blamed.
It's negligence on your part [Perla Go] and A.A. Del Rosario kasi,
noong pang April 1999 ay alam ninyo na hindi ako ang dapat may
responsibilidad ng payroll kundi ang Section Head eh bakit hindi ninyo
pinahawak sa Section Head noon pa. Pati kaming dalawa sa payroll,
kasama ko si Thelma. Tinanggal nyo si Thelma. Hindi nyo ba naisip na
kailangan dalawa ang tao sa payroll para pag absent ang isa ay may
gagawa. Dapat noon nyo pa naisip iyan. Ang tagal kong gumawa ng
trabahong hindi ko naman dapat ginagawa.
This Court finds the above to be grossly discourteous in content and
tenor. The most appropriate thing he could have done was simply to
state his facts without resorting to such strong language. Past
decisions of this Court have been one in ruling that accusatory and
inflammatory language used by an employee to the employer or
superior can be a ground for dismissal or termination.[22]
Another just cause cited by the petitioner is willful disobedience. One
of the fundamental duties of an employee is to obey all reasonable
rules, orders and instructions of the employer. Disobedience, to be a
just cause for termination, must be willful or intentional, willfulness
being characterized by a wrongful and perverse mental attitude
rendering the employee's act inconsistent with proper subordination. A
willful or intentional disobedience of such rule, order or instruction
justifies dismissal only where such rule, order or instruction is (1)
reasonable and lawful, (2) sufficiently known to the employee, and (3)
connected with the duties which the employee has been engaged to
discharge.[23] This allegation of willful disobedience can still be adduced
and proven from the same Letter-Explanation cited earlier.
Petitioner also dismissed respondent because of gross or habitual
negligence. Neglect of duty, to be a ground for dismissal, must be both
gross and habitual.[24] In finding that petitioner was able to adduce
evidence that would justify its dismissal of respondent, the NLRC
correctly ruled that the latter's failure to turn over his functions to
someone capable of performing the vital tasks which he could not
effectively perform or undertake because of his heart ailment or
condition constitutes gross neglect. It stated that:
x x x Be it mentioned and emphasized that complainant cannot be
faulted for his absences incurred on 10, 11, 13, 14, 17, 27 and 28 of
April 2000 as he went on official leave on said dates. Except for the
last two dates mentioned (27 and 28 April 2000), health problem
compelled complainant to be on sick leave of absence on the foregoing
dates. It is not the complainant's liking, in other words, to be afflicted
with any form of heart ailment which actually caused him to incur such
leave of absences. Complainant's pellucid fault, however, lies on his
failure to effect the "much-needed" turn over of functions to someone
capable of performing the vital task(s) which he could not effectively
perform or undertake because of his heart ailment or condition.
Indeed, the trouble(s) "felt" by management and the employees
concerned on the payday of 15 April 2000 may seem justified under
the circumstances as complainant indeed has gotten ill and in fact
went on sick leave of absence prior to said payday. The same,
however, certainly does not hold true as to the trouble(s) and chaos
felt and which occurred on the payday of 30 April 2000 as diligence
and prudence logically and equitably required complainant to have
effected the necessary turn over of his functions to someone capable
of taking over his assigned task(s) even perhaps on a merely
temporary basis. The preparation of payroll, especially that of a big
business entity such as herein respondent company, certainly involves
serious, diligent, and meticulous attention of the employee tasked of
performing such function and a company definitely could not let either
negligence or absence of the employee concerned get in the way of
the performance of the undertaking of such, otherwise, serious
repercussion(s) would be the logical and unavoidable consequences;
such is what befell the respondents. Be it mentioned at this juncture
that under the circumstances herein then prevailing, it would seem
just logical and in keeping with the natural "reflexes," so to speak, of a
business entity, to require an incapable employee tasked to perform a
vital function, to effect the necessary turn over of functions of such
employee to someone capable. Be it further emphasized, however,
that even assuming that no formal directive was given by the company
to the employee concerned for the turn over of the latter's functions,
said employee should have taken the initiative of so doing considering
the importance of the task(s) he is performing. Hence, failure to do so
would clearly be tantamount to serious neglect of duty, a valid ground
in terminating employment relations.[25]
Gross negligence connotes want of care in the performance of one's
duties. Habitual neglect implies repeated failure to perform one's
duties for a period of time, depending upon the circumstances. On the
other hand, fraud and willful neglect of duties imply bad faith on the
part of the employee in failing to perform his job to the detriment of
the employer and the latter's business.[26]
It must be emphasized at this point that the onus probandi to prove
the lawfulness of the dismissal rests with the employer. In termination
cases, the burden of proof rests upon the employer to show that the
dismissal is for just and valid cause. Failure to do so would necessarily
mean that the dismissal was not justified and, therefore, was
illegal.[27] In this case, both the Labor Arbiter and the NLRC were not
amiss in finding that the dismissal of respondent was legal or for a just
cause based on substantial evidence presented by petitioner.
Substantial evidence, which is the quantum of proof required in labor
cases, is that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion.[28]
However, although the dismissal was legal, respondent is still entitled
to a separation pay as a measure of financial assistance, considering
his length of service and his poor physical condition which was one of
the reasons he filed a leave of absence. As a general rule, an
employee who has been dismissed for any of the just causes
enumerated under Article 282[29] of the Labor Code is not entitled to
separation pay.[30] Although by way of exception, the grant of
separation pay or some other financial assistance may be allowed to
an employee dismissed for just causes on the basis of equity.[31] This
concept has been thoroughly discussed in Solidbank Corporation v.
NLRC,[32] thus:
The reason that the law does not statutorily grant separation pay or
financial assistance in instances of termination due to a just cause is
precisely because the cause for termination is due to the acts of the
employee. In such instances, however, this Court, inspired by
compassionate and social justice, has in the past awarded
financial assistance to dismissed employees when
circumstances warranted such an award.
Consequently, the Decision dated March 24, 2004 of the Court of
Appeals and the latter's Resolution dated June 9, 2004 are
hereby REVERSED AND SET ASIDE and the Decision dated
September 29, 2000 of the Labor Arbiter and its Resolution dated
February 14, 2002 are hereby REINSTATED with
the MODIFICATION that petitioner shall award respondent his
separation pay, the computation of which shall be based on the
prevailing pertinent laws on the matter.
SO ORDERED.

In Central Philippines Bandag Retreaders, Inc. v. Diasnes,[33] this Court

discussed the parameters of awarding separation pay to dismissed
employees as a measure of financial assistance, viz:

To reiterate our ruling in Toyota, labor adjudicatory officials and the

CA must demur the award of separation pay based on social justice
when an employee's dismissal is based on serious misconduct or willful
disobedience; gross and habitual neglect of duty; fraud or willful
breach of trust; or commission of a crime against the person of the
employer or his immediate family - grounds under Art. 282 of the
Labor Code that sanction dismissals of employees. They must be most
judicious and circumspect in awarding separation pay or financial
assistance as the constitutional policy to provide full protection to labor
is not meant to be an instrument to oppress the employers. The
commitment of the Court to the cause of labor should not embarrass
us from sustaining the employers when they are right, as here. In fine,
we should be more cautious in awarding financial assistance to the
undeserving and those who are unworthy of the liberality of the
law.[34]

Thus, in Philippine Commercial International Bank v. Abad,[35] this

Court, having considered the circumstances present therein and as a
measure of social justice, awarded separation pay to a dismissed
employee for a just cause under Article 282. The same concession was
given by this Court in Aparente, Sr. v. National Labor Relations
Commission[36] and Tanala v. National Labor Relations Commission.[37]

WHEREFORE, the Petition for Review dated July 10, 2004 of

petitioner Nissan Motors Phils., Inc. is hereby GRANTED.